W. KEITH WATKINS, Chief District Judge.
Plaintiff AEP Industries, Inc., ("AEP") has a plant in Montgomery, Alabama, that manufactures flexible plastic packaging products. In 2013, AEP wished to purchase plastic bag manufacturing equipment that met certain specifications. Defendant Thiele Technologies, Inc. ("Thiele") agreed to manufacture the equipment for AEP. AEP contends that the equipment Thiele manufactured did not meet its specifications; that some of the equipment was never delivered; and that Thiele committed fraud and breach of warranty by failing to manufacture equipment that met Thiele's express and implied representations, promises, and warranties. (Doc. # 1.)
Before the court are Thiele's motion to transfer venue and motion to dismiss. (Doc. # 11.) Upon consideration of the motions, the court concludes that the motion to transfer venue is due to be granted. Therefore, the court will not rule on the motion to dismiss.
The court exercises subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a)(2). AEP is a Delaware corporation with its principal place of business in New Jersey. Thiele is a Minnesota corporation with its principal place of business in Minneapolis, Minnesota. Among the damages AEP seeks is a refund of $1,835,375.10 AEP paid Thiele for manufacturing equipment that AEP contends is defective. (Doc. # 1 ¶18.) Thus, the amount in controversy exceeds $75,000.00. Personal jurisdiction is not contested.
AEP's claims for breach of contract, breach of warranty, and fraud concern a contract between AEP and Thiele for the manufacture and delivery of certain equipment to AEP's Montgomery, Alabama plastics manufacturing plant; the contract was consummated in Montgomery, Alabama; and Thiele delivered, installed, and modified a substantial portion of the equipment at AEP's Montgomery plant, where it remains to this day. Therefore, venue is proper. 28 U.S.C. § 1391(b)(2) ("A civil action may be brought in . . . a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated."); Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Tex., 134 S.Ct. 568, 578 (2013) ("[V]enue is proper so long as the requirements of § 1391(b) are met, irrespective of any forum-selection clause.").
A forum-selection clause "does not render venue in a court `wrong' or `improper'" under the statutes governing venue in federal courts. Atl. Marine, 134 S. Ct. at 579. However, a valid forum selection clause may be enforced through a motion to transfer based on the doctrine of forum non conveniens. Id. at 580-81. For cases in which the transferor and transferee forums are both within the federal court system, the doctrine is codified at 28 U.S.C. § 1404(a). Id. at 580. Section 1404(a) provides:
28 U.S.C. § 1404(a).
Ordinarily, a court considering a § 1404(a) motion considers a number of factors relating to the convenience of the parties and the public interest to decide whether, on balance, a transfer would serve "`the convenience of parties and witnesses'" and be "`in the interest of justice.'" Atl. Marine, 134 S. Ct. at 581 (quoting 28 U.S.C. § 1404(a)). Those factors include:
Manuel v. Convergys Corp., 430 F.3d 1132, 1135 n.1 (11th Cir. 2005).
However, when the parties have a contract that contains a valid forum selection clause, "[t]he calculus changes." Atl. Marine, 134 S. Ct. at 581. Then, "the overarching consideration under § 1404(a) is whether a transfer would promote `the interest of justice,'" and the court gives the forum selection clause "`controlling weight in all but the most exceptional cases.'" Id. (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 31 (1988)).
Atl. Marine, 134 S. Ct. at 581-82 (citations omitted).
Because the applicable standard of review turns on whether the parties have a "valid forum-selection clause," Atl. Marine, 134 S. Ct. at 581, the court must first determine whether the parties' contract in this case contains such a clause. This determination turns on whether the contract includes Paragraph 11 of Thiele's November 25, 2013 proposal labeled "Governing Law and Venue For Legal Actions." (Doc. # 12-1 at 28 ¶ 11.)
Paragraph 11 contains not only a forum selection clause, but also a choice-of-law provision, which provides that "the contract . . . shall be interpreted and construed in accordance with the laws of the state where [Thiele] manufactures the products." (Doc. # 12-1 at 27 ¶ 11.) It is undisputed that Thiele manufactured the equipment in Green Bay, Wisconsin, Fergus Falls, Minnesota, and Reedley, California.
On November 25, 2013, Thiele sent AEP a proposal to manufacture plastic-bag-making equipment. (Doc. # 12-1 at 7.) Thiele designated the proposal as number 13-10-56279 R3. (Doc. # 12-1 at 7.) Thiele's proposal included detailed terms, such as specifications and prices for the various components of the equipment to be manufactured, a statement that the offer would be valid for thirty days, a proposed shipping date, and other terms and conditions of sale such as warranties and provisions governing testing materials, shipment, and contract cancellation. (Doc. # 12-1 at 7-27.) The proposal expressly indicated that it was intended to serve as the parties' contract. (See, e.g., Doc. # 12-1 at 27 ¶ 11 (provision in the "Terms and Conditions" section of the proposal discussing "the contract between Seller and Purchaser, including these Terms and Conditions of Sale").)
The parties agree that Thiele's proposal constituted an offer. (See, e.g., Doc. # 16 at 9-10, 16-17 (AEP's brief in opposition to the motion to transfer, characterizing AEP's purchase order as an "acceptance" that contained terms and conditions different from, or in addition to, those in Thiele's proposal/"offer").) See Ala. Code § 7-2-206(1)(a) ("Unless otherwise unambiguously indicated by the language or circumstances: . . . An offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances."); see generally Bergquist Co. v. Sunroc Corp., 777 F.Supp. 1236, 1248-49 (E.D. Pa. 1991) (collecting cases from numerous jurisdictions to explain that, under the UCC, "[t]he general rule is price quotations are not offers, but rather are mere invitations to enter into negotiations or to submit offers. . . . However, if detailed enough, a price quotation can amount to an offer which can be accepted. But to do so, the offer[or] must intend that the contract exist upon acceptance of the offer; that is, it must reasonably appear from the price quotation that assent to that quotation is all that is needed to ripen the offer into a contract. Whether this price quotation is an offer is a question of fact that depends upon the parties' acts, their expressed intent, and the circumstances surrounding each transaction." (citations omitted)).
Thiele's offer contained the following relevant provisions:
(Doc. # 12-1 at 26-27.)
On December 3, 2013, AEP sent Thiele a purchase order for "QUOTE # 3-10-56279 R3." (Doc. # 16-1 at 33.) AEP's purchase order contained the following relevant provision:
(Doc. # 16-1 at 36 ¶ 2 (emphasis added).)
AEP's purchase order did not contain a provision regarding forum selection in the event of a dispute involving the contract. (Doc. # 16-1 at 36.)
Ala. Code 1975 § 7-2-207(a) provides:
AEP does not argue that the purchase order failed to operate as an acceptance on grounds that the purchase order expressly made acceptance conditional on Thiele's assent to AEP's terms. Instead, AEP argues that its purchase order operated as an acceptance that contained terms in addition to, or different from, Thiele's offer. (See Doc. # 16 at 17.) However, AEP does not point to any term in its acceptance that is "in addition to or different from" Thiele's forum selection clause. As AEP points out, its purchase order acceptance did state that "[n]o variations in the . . . provisions of this order [would] be effective," but AEP does not explain which provision of its purchase order, if any, would be "varied" by the forum selection clause in Thiele's earlier proposal.
Alternatively, to the extent that AEP's purchase order could be deemed an acceptance containing terms that are different from or in addition to Thiele's offer, the forum selection clause is nevertheless part of the parties' contract. Alabama's Uniform Commercial Code states:
Ala. Code § 7-2-207(2).
To the extent that AEP's acceptance conflicts with the forum clause in Thiele's offer by virtue of omitting a forum selection clause, the terms of AEP's acceptance are "different from," not "in addition to" Thiele's offer. If read literally, § 7-2-207(2) applies only to additional terms, not different ones. Some states approach § 7-2-207(2) literally; others view § 7-2-207(2) as applying to both different and additional terms. See generally 24 Causes of Action 575 § 24 (describing different jurisdictions' approaches to § 7-2-207(2)). Neither party cites a controlling Alabama case definitively setting forth Alabama's approach to the issue.
Thiele is correct. Under § 7-2-207(2)(c), different or additional terms in the acceptance do not become part of the parties' agreement if the offeror has given notification of objection to the additional terms. Thiele's offer expressly stated that
(Doc. # 12-1 ¶ 1.)
Alternatively, as AEP itself points out, an acceptance negating a forum selection clause would be a material alteration to the terms of the offer and, therefore, would not become part of the parties' contract. (See Doc. # 16 at 18 (citing Duro Textiles, LLC v. Sunbelt Corp., 12 F.Supp.3d 221, 224 (D. Mass. 2014).)
Accordingly, even if AEP's purchase order could be construed as containing "different" terms providing for no forum selection clause, those different terms are excluded from becoming part of the parties' agreement by virtue of § 7-2-207(2)(c). Therefore, to the extent that the provisions of AEP's purchase order are different from the forum selection clause in Thiele's proposal, the provisions of AEP's purchase order are not part of the parties' contract, and the provisions of the Thiele's offer govern.
The forum selection clause provides that exclusive jurisdiction for any legal proceedings involving the contract will lie in "the state or federal courts located in the county or the judicial district" where the equipment was manufactured. In this case, it is undisputed that the equipment was manufactured in Green Bay, Wisconsin, Fergus Falls, Minnesota, and Reedley, California. (Doc. # 12-1 at 4 ¶¶ 14-16.) AEP argues that the equipment was also manufactured in Alabama because, after Thiele manufactured some of the equipment and shipped it to Montgomery, Alabama, engineers and other personnel from Thiele came to Alabama over the course of five months to overhaul the machinery and rewrite software in an attempt to make the equipment meet AEP's specifications. (Doc. # 16-1 at 5 ¶¶ 16, 18. Thiele contends that its work on the equipment constituted "installing" the equipment rather than "manufacturing" it. The only definition the parties provide to establish the meaning of "manufacturing" and "installation" is the following:
(Doc. # 12 at 10 (citing Merriam-Webster's Collegiate Dictionary 648, 757 (11th ed. 2012); Doc. # 16 at 14.)
Because both parties agree on this definition and provide no other, the court concludes that the parties agree that the term "manufacture" is unambigious and that this definition conveys their intent as to the meaning of the term. Therefore, the court will use the parties' definition. See Certain Underwriters at Lloyd's, London v. S. Nat. Gas Co., 142 So.3d 436, 454 (Ala. 2013) (holding that contracts "must be construed to give effect to the intent of the parties and that, if the terms of the contract are clear and unambiguous, there is no need for judicial construction"); see also Homes of Legend, Inc. v. McCollough, 776 So.2d 741, 746 (Ala. 2000) ("`[A]s with any other contract, the parties' intentions control.'" (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985)); Loerch v. Nat'l Bank of Commerce of Birmingham, 624 So.2d 552, 553 (Ala. 1993) (holding that "the intention of the parties controls in construing a written contract," and that, where the contract terms are unambiguous, the parties' intent is derived from the ordinary meaning of the terms of the contract itself).
AEP argues that, after some of the machinery was "installed" in Montgomery, it failed to work as promised. (Doc. # 16 at 11-12.) Therefore, according to AEP, over a period of more than five months, Thiele engineers and personnel came to Montgomery, Alabama, where they "added," "designed," "installed," "modified," "redesigned," "removed," and "replaced" numerous parts of the equipment. (Doc. # 16 at 13-14.) AEP also alleges that Thiele sent computer programmers to Montgomery to "rewrite and redesign the software to correct, add, and delete aspects of the program." (Doc. # 16 at 14.) Thiele does not, however, allege that any of the altered parts or software programs were "ma[de] . . . by hand or by machinery especially . . . systematically with division of labor." (Doc. # 12 at 10; Doc. # 16.) Thiele also does not provide any evidence that the overhauling of the equipment as a whole involved "making" the equipment "by hand or by machinery especially when carried on systematically with division of labor." (Doc. # 12 at 10; Doc. # 16.) Accordingly, it does not appear from this record that any of the alterations to the equipment that occurred in Alabama involved "manufacturing" as defined by the parties. Rather, the modifications Thiele performed in Montgomery were more in the nature of "installation," which, in contrast to manufacturing, the parties define as "mak[ing]" the equipment and its component parts "ready to be used in a certain place." (Doc. # 12 at 10; Doc. # 16.)
Therefore, the forum selection clause does not allow venue to lie in the United States District Court for the Middle District of Alabama.
Pursuant to the forum selection clause, this case may be transferred to a United States District Court in any of three venues: the Sixth Division of the District of Minnesota; the Fresno Division of the Eastern District of California; and the Green Bay Division of the Eastern District of Wisconsin. Thiele seeks a transfer to the United States District Court for the Eastern District of Wisconsin.
AEP does not argue that either of the other two district courts would be more convenient. Further, AEP does not argue that this is an unusual case in which public interest factors weigh against transfer to the Eastern District of Wisconsin. See Atl. Marine, 134 S. Ct. at 581-82 ("[A]s the party defying the forum-selection clause, the plaintiff bears the burden of establishing that transfer to the forum for which the parties bargained is unwarranted. . . . [When parties have agreed to a forum-selection clause,] a district court may consider arguments about public-interest factors only. . . . Because those factors will rarely defeat a transfer motion, the practical result is that forum-selection clauses should control except in unusual cases.").
Accordingly, this case will be transferred to the United States District Court for the Eastern District of Wisconsin, Green Bay Division.
Accordingly, Thiele's Motion to Transfer Venue (Doc. # 11) is GRANTED, and this action is TRANSFERRED to the United States District Court for the Eastern District of Wisconsin, Green Bay Division.
The Clerk of the Court is DIRECTED to take the necessary steps to effectuate the terms of this order.
(Doc. # 16-1 at 36 ¶ 12.)
AEP does not argue that Paragraph 12 of its purchase order is applicable to the court's consideration of the motion to transfer. In fact, AEP does not mention Paragraph 12. Accordingly, for purposes of the motion to transfer, the court will ignore Paragraph 12. Fils v. City of Aventura, 647 F.3d 1272, 1284 (11th Cir. 2011) ("[D]istrict courts cannot concoct or resurrect arguments neither made nor advanced by the parties."); Polk v. Sears, Roebuck, & Co., No. 11-0725-WS-B, 2012 WL 1640708, *3 (S.D. Ala. May 8, 2012) ("It is well-established that courts cannot make a party's arguments for it or `fill in the blanks' on that party's behalf."). Cf. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 672 (10th Cir. 1998) (holding that federal courts "have a limited and neutral role in the adversarial process, and are wary of becoming advocates who comb the record of previously available evidence and make a party's case for it").
