Summary
ruling that conditional dismissal was improper because plaintiffs, not defendants, should bear any penalty for noncompliance with the forum selection clause
Summary of this case from Coutinho & Ferrostaal, Inc. v. STX Pan Ocean Co.Opinion
No. C 01-04368 WHA
May 8, 2002
ORDER: (1) GRANTING DEFENDANTS' MOTION TO DISMISS; AND (2) VACATING HEARING
In this admiralty case, defendants have moved for dismissal because a forum-selection clause requires plaintiffs to bring their claims in Canada. This order GRANTS defendants' motion to dismiss for lack of jurisdiction. Judgment of dismissal will be entered on defendants' behalf, and the clerk will close the file. The hearing scheduled on this matter for May 16, 2002, is VACATED.
Plaintiff Kiswire Trading, Inc., has brought this action to recover for cargo damage to 102 coils of steel wire it had arranged for the W/V HOEGH MERCHANT to carry from Ulsan, Korea to Long Beach, California. The cargo was transported pursuant to a contract of affreightment evidenced by a bill of lading issued by Pacific Commerce Line. This bill of lading contains the following forum-selection clause (Pease Exh. 1):
The bill of lading is referenced in and attached to the complaint; its authenticity is not in dispute.
4. Jurisdiction.
Any legal proceeding by the Merchant arising in connection with goods carried under this Bill of Lading shall be brought in either the Federal Court of Canada (Vancouver Registry) or the Supreme Court of British Columbia within one year after delivery of the goods at the port of discharge or the date when the goods should have been delivered at such port.
"Merchant" is defined by the Bill of Lading as including the shipper, the receiver, the holder of the Bill of Lading and the owner of the goods ( ibid.).
Defendants argue that the mandatory forum-selection clause means this Court lacks jurisdiction. A forum-selection clause is "prima facie valid and should be enforced unless enforcement is shown by the resisting party to be `unreasonable' under the circumstances." Fireman's Fund Ins. Co. v. M/V DSR Atlantic, 131 F.3d 1336, 1338 (9thee Cir. 1997), quoting The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972). Enforcement t is unreasonable where it would contravene a strong public policy of the forum in which suit is brought. Ibid.
Plaintiffs assert that defendants have waived the protection offered by the clause through their engagement case, i.e., by filing an answer; receiving plaintiffs' initial disclosures; and participating in assisted dispute resolution prior to filing their motion to dismiss.
Defendants have disputed the issue of jurisdiction from the outset of the case. They cited to lack of jurisdiction as an affirmative defense in their answer, filed in February 2002. The next month, after a case management conference with the parties, a scheduling order was issued that explicitly allowed defendants to file a motion based on a forum clause or lack of jurisdiction not later than April 4, 2002. (That order also directed the parties toward alternative dispute resolution for mediation.) Defendants complied with this order, filing their motion on that very date. All in all, defendants have conscientiously and seasonably pursued their jurisdictional defense. Their participation in initial discovery and assisted dispute resolution has not caused them to lose their jurisdictional argument by "formal submission in a cause, or submission through conduct." Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 168 (1939). Cf. Peterson v. Highland Music Inc., 140 F.3d 1313, 1319 (9th Cir. 1998).
In the alternative, plaintiffs request that dismissal be conditioned on defendants' agreement to waive any statute-of-limitations defense they might raise in subsequent Canadian proceedings. This would be improper. As the authority cited by defendants recognize, plaintiffs, not defendants, should bear the penalty (if any) of ignoring the forum-selection clause. Street Sound Around Electronics v. M/V Royal Container, 30 F. Supp.2d 661, 663-64 (S.D.N.Y. 1999).
Defendants' motion to dismiss is GRANTED. The hearing is VACATED. The clerk SHALL close the file.