CHRISTOPHER A. BOYKO, District Judge.
This matter is before the Court on Defendant Peloton Group, LLC.'s Motion to Dismiss or, in the Alternative, Motion to Transfer (ECF # 4). For the following reasons, the Court grants, in part, Defendant's Motion and transfers the above-captioned case to the United States District Court, District of Massachusetts.
On May 6, 2016, Plaintiff AdvancedEPM Consulting, Inc. filed its Complaint in Cuyahoga County Court of Common Pleas, alleging Tortious Interference, Fraud, Negligent Misrepresentation, Breach of Contract, Promissory Estoppel and Unjust Enrichment claims against Defendant Peloton Group, Inc. Plaintiff alleges Defendant Peloton swindled Plaintiff out of a lucrative contract with third party Navistar International Corp. According to the Complaint, Plaintiff was approached by Navistar to submit a Request for Proposal on Navistar's Hyperion DRM Upgrade/Forecast Project and System Enhancement due to Plaintiff's expertise on Oracle based projects. Defendant got wind of Navistar's solicitation of Plaintiff and proposed a joint venture with Plaintiff on the Navistar Project. As Plaintiff's Complaint acknowledges, Plaintiff and Defendant were parties to a Master Subcontractor Services Agreement ("MSSA") wherein Plaintiff supplied its consultants to work on Peloton Projects. The MSSA contains a forum selection clause requiring all disputes arising under the Agreement or relating to the Agreement be brought in the state or federal courts located in Massachusetts.
On June 17, 2016, Defendant filed its Motion to Dismiss or Transfer. According to Defendant, this dispute arises out of or relates to the MSSA signed by the parties in April 2015. In that Agreement, the parties agreed
The MSSA contains a forum selection clause requiring all actions arising out of or relating to the MSSA be brought in Massachusetts. In particular paragraph 21 of the MSSA reads:
According to Defendant, the Navistar project was not a joint venture but rather a contractor/subcontractor project as contemplated by the MSSA. As evidence, Defendant offers the affidavit of Guy Daniello, CEO of Peloton, who attests that the Navistar project was expressly contemplated by the parties to be subject to the MSSA. Daniello offers an email from Plaintiff's CEO, Todd Rebner, acknowledging that Plaintiff would be the subcontractor and Defendant would be the prime contractor on the Navistar project. Also, Daniello submits a teaming agreement he proposed at the request of Plaintiff that expressly includes the language that it would be subject to the MSSA. The parties never were able to reach terms on the teaming agreement.
Plaintiff opposes the Motion, contending that the Navistar project does not arise from or relate to the MSSA. Navistar approached Plaintiff to submit a RFP. The email from Rebner to Daniello only assigned roles in the Navistar contract and had nothing to do with bringing it under the MSSA. Plaintiff never agreed to a teaming agreement containing the MSSA applicability language.
Plaintiff does not challenge the validity of the forum selection clause nor its enforceability, rather it challenges applying the forum selection clause to Plaintiff's claims.
Defendant seeks to dismiss the action under Fed. R. 12(b)(6) or, in the alternative, asks the Court to Transfer the case pursuant to 28 U.S.C. §1404(a) which reads:
The United States Supreme Court issued a decision on the weight a district court should give a forum selection clause when considering dismissal or transfer. In Atlantic Marine Construction Co. Inc. v. United States District Court for the Western District of Texas, et al., 134 S.Ct. 568 (2013), the Supreme Court first held that the proper mechanism for enforcing a forum selection clause is 28 U.S.C. § 1404(a).
The Supreme Court further held "[w]hen a defendant files such a motion, we conclude, a district court should transfer the case unless extraordinary circumstances unrelated to the convenience of the parties clearly disfavor a transfer." Id. at 581. When a valid and enforceable forum selection clause evidences the parties' intent to bring an action in a particular federal district, the forum selection clause must be given "controlling weight in all but the most exceptional circumstances." Atlantic Marine at 581. "Only under extraordinary circumstances unrelated to the convenience of the parties should a § 1404a motion be denied." Id.
The Supreme Court considered the usual analysis of a § 1404 motion to transfer.
In Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, (1988), the Supreme Court outlined the following factors for courts to consider:
Id. at 29,30.
The existence of a valid forum selection clause changes the above analysis.
Atlantic Marine, at 581.
The Supreme Court described three ways the usual venue analysis changes when there exists a valid forum selection clause. First, plaintiff's choice of forum is accorded no weight because plaintiff is presumed to have expressed its desired forum in the forum selection clause. Second, courts cannot entertain arguments on the parties' private interests as those are now deemed to weigh "entirely" in favor of the choice of forum contained in the forum selection clause. Finally, the law of the state wherein the suit was filed, if different from the forum agreed to in a forum selection clause, will not follow the case upon transfer. Id at 581-82. A motion to dismiss is not the appropriate vehicle for enforcing a forum selection clause. See Lawson Steel Inc. v. All State Diversified Products, Inc., 1:10CV1750 2010 WL 5150159 (N.D. Ohio Dec. 13, 2010). The proper mechanism for enforcing a forum selection clause is 28 U.S.C. § 1404(a).
Here, the plain language of the forum selection clause applies to all claims "over any action to enforce this Agreement, or any dispute arising from or relating to this Agreement." Defendant provides the Court with the affidavit of Daniello saying the Navistar work relates to the MSSA. Defendant further offers the email from Rebner, indicating Plaintiff intended to be the subcontractor on the Navister project. Defendant also offers a draft of the teaming agreement expressly indicating it was subject to the MSSA. Furthermore, Plaintiff's Complaint acknowledges the parties jointly signed and submitted a RFP to Navistar. Lastly, Defendants submit Plaintiff's Complaint in a pending action in Massachusetts containing the following allegation:
Plaintiff only offers the affidavit of Rebner, denying that the MSSA applies and a draft teaming agreement that does not contain any reference to the MSSA. However Plaintiff's draft teaming agreement states "Partner in this case shall act as prime under the SOW and AdvancedEPM shall act as Subcontractor to Partner, subject to the conditions set forth in Article 5 below." Under the MSSA, the parties agreed that if any conflicts arise from an SOW and the MSSA, the MSSA controls.
In light of the above, the Court finds Defendant has met its burden to show that the disputes in the above-captioned case arise or relate to the MSSA. The MSSA governed the parties working relationship regarding subsequent joint proposals. The Navistar project involved a joint proposal on an RFP. Plaintiff acknowledges the parties submitted an RFP to Navistar signed by both Plaintiff and Defendant. Therefore, the Court finds the MSSA's forum selection clause applies.
Plaintiff does not challenge the enforceability or validity of the forum selection clause. Therefore, under Atlantic Marine, the private interest factors are all determined as a matter of law to favor the venue selected by the parties in the forum selection clause. That forum is Massacchusetts. All private interest considerations, such as convenience of the parties and fairness to the parties in light of the forum selection clause, are deemed to favor the forum selected by the parties in a valid and enforceable forum selection clause.
Because the private interest factors are deemed to favor the forum as agreed to by the parties in a valid forum selection clause, the Court must next consider the public interest. Here, the public interest also favors Massachusetts as the appropriate forum. The public interest of "having the trial in a forum that is at home with the state law that must govern the case" favors Massachusetts because the Agreement contains a choice of law clause wherein the parties agreed Massachusetts law would govern disputes. Braman v. Quizno's Franchise Co., LLC, No. 5:07CV2001, 2008 WL 611607, at *6 (N.D. Ohio Feb. 20, 2008) citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-509 (1947). Additionally, the public interest favors transfer because "the public has a strong interest in applying contracts as they are written." PolyOne Corp. v. Teknor Apex Co., No. 1:14CV0078, 2014 WL 4207671, at *6 (N.D. Ohio Aug. 25, 2014) citing First Solar, LLC v. Rohwedder, Inc., No. 3:04CV7518, 2004 WL 2810105 (N.D.Ohio Dec.8, 2004). Plaintiff contracted in advance to litigate disputes in Massachusetts and "courts should not unnecessarily disrupt the parties' settled expectations." Atl. Marine Const. Co., 134 S.Ct. 568 at 583. "[T]he interest of justice is served by holding parties to their bargain." Id.
Therefore, for the foregoing reasons, the Court grants, in part, Defendant's Motion and transfers the case to the United States District Court District of Massachusetts for further adjudication.
IT IS SO ORDERED.