TIMOTHY J. CORRIGAN, District Judge.
Plaintiff Ponte Vedra Gifts & Accessories Company, LLC ("PVG") entered into a service agreement with Defendant APL Logistics LTD ("APL") under which APL contracted to transport merchandise from China to the United States. Ultimately, PVG's merchandise remained in a shipyard in Long Beach, California too long. PVG filed suit in this Court seeking damages resulting from APL's alleged deviation, fraudulent inducement, and conversion. APL moved to dismiss this action based in part on a forum selection clause in the bill of lading that requires disputes over shipments to be adjudicated in the courts of Singapore or the Southern District of New York. PVG maintains the case was properly filed in this Court pursuant to a forum selection clause in the parties' overall agreement. For the reasons set forth herein, the Court concludes that the forum selection clause in the bill of lading governs this action, and this case should be transferred to the Southern District of New York.
PVG and APL entered into a Non-Vessel-Operating Common Carrier Service Arrangement ("NSA") under which APL would arrange for the shipment of PVG's merchandise from China to Ponte Vedra Beach, Florida. APL contracted with another company, Nippon Yusen Kabushiki Kaisha ("NYK"), to provide the ocean voyage portion, and several drayage carriers for the overland transportation. The merchandise was shipped under bills of lading issued by APL from China to Long Beach, California without incident. Upon arrival in Long Beach, PVG alleges that APL's contracted drayage carriers demanded more money to move the merchandise from Long Beach to its final destinations. According to the Complaint, APL neither acquiesced to the demands nor arranged for other carriers to transport PVG's cargo and, as the result, the merchandise remained at Long Beach terminal past the "free time" provided for in the contract between NYK and APL. The Complaint states that the length of the delay in Long Beach led to the ultimate consignee's rejection of the merchandise, and PVG suffered damages including lost profits and loss of goodwill and reputation.
APL moves to dismiss this matter under Rule 12(b)(3), Federal Rules of Civil Procedure, for improper venue based on a forum selection clause in the bill of lading.
APL contends that the forum selection clause in the bill of lading governs this action and requires PVG to litigate its claims in Singapore or the Southern District of New York. APL's position stems from the language in section 6 of the NSA and clause 28 of the bill of lading. Section 6, "CARGO DAMAGE OR LOSS," provides:
(Doc. 15-1 at 5 (emphasis added).) Clause 28 of the bill of lading, entitled "LAW AND JURISDICTION," provides:
(Doc. 15-2 at 6.)
Conversely, PVG asserts that a forum selection clause in the NSA permitting referral of disputes under the NSA to any court of competent jurisdiction governs, and therefore this action was properly filed in this Court. PVG relies on section 9(a) of the NSA, entitled "NSA DISPUTES," which provides:
(Doc. 15-1 at 5-6.) PVG claims that this action involves a dispute which arises "out of or in connection with" the NSA; specifically, APL's failure to perform. (Doc. 16 at 3.) PVG further contends that there is a conflict between NSA section 9(a) and clause 28 in the bill of lading which must be resolved in favor of the NSA due to the language of NSA section 1(a). That section states, in relevant part, "[i]n the event of any conflict among the terms and conditions of this NSA, the bill(s) of lading and the Carrier's applicable tariff(s), the order of governance shall be, first, this NSA, second, the bill(s) of lading, and third, the tariff(s)." (Doc. 15-1 at 3.) APL argues there is no conflict because NSA section 6 deals with cargo damage or loss, including delay, while section 9 deals with the provisions of the NSA itself. (Doc. 19 at 1, 2.) The Court agrees.
The NSA governs the overall relationship of the parties, while the bill of lading contains the specific contractual terms for carriage and delivery of the shipments.
In addition, under ordinary contract principles, more specific provisions, like the clause in the bill of lading, are usually given more weight than general provisions, and interpretations that give meaning and effect to all parts of an agreement are preferred over those which render portions ineffective or meaningless. Restatement (Second) of Contracts § 203(a), (c) (1981). Reading the NSA forum selection clause to apply to disputes over shipments despite the specific language in the bill of lading providing for its application to such disputes would render the forum selection clause in the bill of lading surplusage. Moreover, although PVG asserts that the bill of lading was not separately negotiated or specific to these parties, and therefore the NSA best represents their agreement and relationship, the terms and conditions of the bill of lading are specifically incorporated by reference into the NSA which was signed by PVG.
The language of section 6 also suggests that the forum selection clause in the bill of lading should apply over the general, permissive clause in section 9. Sections 6(a) and (c) of the NSA state "[s]hipments under this NSA shall be subject to all the terms and conditions of Carrier's bill of lading in effect at the time of shipment" and "
The mandatory language of NSA section 6 also specifically governs disputes involving alleged "breach of the contract of carriage" and APL's liability for such breach. (Doc. 15-1 at 5.) PVG's Complaint expressly alleges claims based on APL's alleged breach of the contract of carriage and, as such, is subject to the mandatory forum selection clause in the bill of lading. (
PVG asserts that even if this dispute arises under both the NSA and bill of lading, the Middle District of Florida is the appropriate forum because most witnesses reside within this District, and "litigating this case in New York is gravely difficult and inconvenient for all parties concerned because none of the relevant witnesses are in New York." (Doc. 16 at 4.) While the presumption of validity and enforceability can be defeated upon showing that the forum selection clause is unreasonable under the circumstances,
To invalidate a forum selection clause, the party resisting its enforcement must show that: "(1) its formation was induced by fraud or overreaching; (2) the plaintiff would be deprived of its day in court because of inconvenience or unfairness; (3) the chosen law would deprive the plaintiff of a remedy; or (4) enforcement of the clause would contravene public policy."
Here, PVG has not shown, although it has vaguely alleged, that the agreement was induced by fraud, or that dismissing this case pursuant to the valid and enforceable forum selection clause in the bill of lading contravenes public policy. Nor does the Court find that this case presents an "exceptional situation" that justifies retention of this action in the Middle District of Florida rather than the parties' selected forum. Accordingly, this case belongs in either Singapore or the Southern District of New York as set forth in the parties' agreement. In light of this determination, the Court now turns to PVG's request that, in lieu of dismissal, this case be transferred pursuant to 28 U.S.C. § 1404(a) to the Southern District of New York to preserve PVG's claims that may otherwise be time-barred. (Doc. 16 at 5, 10-11.)
Section 1404(a) "provides a mechanism for enforcement of forum-selection clauses that point to a particular federal district." Atlantic Marine, 134 S. Ct. at 579. Indeed, "[w]hen the parties have agreed to a valid forum-selection clause, a district court should ordinarily transfer the case to the forum specified in that clause. Only under extraordinary circumstances unrelated to the convenience of the parties should a § 1404(a) motion be denied."
Accordingly, it is hereby
1. Defendant's Motion to Dismiss (Doc. 15) is
2. Pursuant to 28 U.S.C. § 1404(a), this action is hereby
3. The Clerk should terminate all pending motions and deadlines, and after transfer has been effectuated should close the file.