Opinion
CIVIL ACTION NO. 03-1583, SECTION "T", MAGISTRATE "4"
December 17, 2003
ORDER AND REASONS
This cause came for hearing on September 24, 2003, upon the motion of defendant, Independent Radiology Associates, P.L.C. ("Independent") to dismiss without prejudice for improper venue. Oral argument was not entertained by the Court; therefore, the matter was taken under submission on the briefs only. The Court, having studied the record, the legal memoranda submitted by the parties, as well as the applicable law and jurisprudence, is now fully advised in the premises and ready to rule.
I. BACKGROUND:
This case arises out of an attempt by the plaintiff to obtain funds allegedly owed to him by the defendants under a work contract. The plaintiff filed this suit on April 10, 2003 in Louisiana State Court, Twenty-Fourth Judicial District, for the Parish of Jefferson, Louisiana. On June 3, 2003 the defendant removed the plaintiffs state action to this Court based on diversity jurisdiction. The plaintiff then filed a Motion to Remand, which this Court denied.
The issues at question in this motion revolve around the validity and enforce ability of certain provisions found in the "Second Amended and Restated Operating Agreement of Independent Radiology Associates, P.L.C., A Tennessee Member Managed Professional Limited Liability Company" of which the plaintiff was a member. The Operating Agreement, by its own terms, was to supercede any and all other agreements between and among the parties.
The defense seeks enforcement of the forum selection clause contained in the Second Amended and Restated Operating Agreement. The defense argues that under the above mentioned Operating Agreement, the only proper venue for this case would be that of Dyer County, Tennessee. The plaintiff argues that under Louisiana law, the forum selection clause is against public policy, and therefor unenforceable. The defense petitions the Court to dismiss this suit without prejudice thereby allowing the plaintiff to refile it in Tennessee, if he so wishes; whereas the plaintiff argues that the case should remain in this Court.
II. LAW AND ANALYSIS:
28 U.S.C. § 1404(a) states:
For the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.
The burden is on the defendants to demonstrate why the case should be transferred to a different forum. Time, Inc. v. Manning, 366 F.2d 690, 698 (5th Cir. 1966). "Plaintiffs privilege to choose, or not to be ousted from, his chosen forum is highly esteemed." Id., quoting Rodriguez v. Pan American Life Ins. Co., 311 F.2d 429, 434 (5th Cir. 1962). However, the decision to transfer a pending case is committed to the sound discretion of the district court. Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964); Peteet v. Dow Chemical Co., 868 F.2d 1428 (5th Cir. 1989); Sonic Drive-In of Alexandria v. Dronet, 968 F. Supp. 303 (E.D.La. 1997). The trial court must consider "all relevant factors to determine whether or not on balance the litigation would more conveniently proceed and the interests of justice be better served by transfer to a different forum." Sonic, 968 F. Supp. at 304 (quoting Wright Miller, Federal Practice and Procedure, § 2847, at 340 (1986)).
When the transfer motion seeks to enforce a valid and reasonable forum selection clause designating a forum other than that chosen by the plaintiff, the burden shifts to the plaintiff to "persuade the court that the contractual forum is sufficiently inconvenient to justify retention of the dispute." In re Ricoh Corp., 870 F.3d 570, 573 (11th Cir. 1989). The plaintiff must show exceptional facts or circumstances to invalidate the forum selection clause. Id. at 574.
Forum selection clauses originally became presumptively valid in an admiralty context. M/S BREMEN v. Zapata Off-Shore Co., 407 U.S. 1 (1972). The Fifth Circuit has, however, subsequently and on numerous occasions applied the logic in BREMEN to non-admiralty disputes. See Haynsworth v. Lloyd's of London, 121 F.3d 956, 963 (5th Cir. 1998). It is, therefore, now established that the presumption of validity can be applied outside of the maritime context. Seattle-First Nat'l Bank v. Manges, 900 F.2d 795, 799 (5th Cir. 1996). This presumption of validity may, however, be overcome by a clear showing that the clause is "unreasonable under the circumstances." BREMEN, 407 U.S. at 10.
In the instant action, there is a presumptively valid forum selection clause in the Second Amended and Restated Operating Agreement which was signed on behalf of both parties. As such, the burden is on the plaintiff to prove that the selected forum is unreasonable, unfair, or unjust, or to show that the clause is invalid by reason of fraud or that enforcement would contravene a strong public policy of the forum. Santamauro v. Taito do Brazil Industria E. Comercia LTDA, 587 F. Supp. 1312 (E.D. La. 1984).
The plaintiffs sole contention is that the forum selection clause should not be enforced because it contravenes strong Louisiana public policy. The plaintiff asserts, and the Court agrees, that Louisiana has a strong public policy against enforcing forum selection clauses in employment contracts as evidenced by Louisiana Revised Statute § 23:921(A)(2). The contract at issue in this motion, however, is an Operating Agreement for a professional limited liability company and not an employment contract. In Louisiana there is no similar public policy applying to the operating agreements of PLCs as there is to employment contracts. Therefore, the plaintiffs contention is misplaced.
The Court also fails to find any other exceptional facts or circumstances which would invalidate the forum selection clause. The Court finds the plaintiffs contentions of other verbal contracts unpersuasive. The very first article in the agreement clearly states that the agreement was to supercede any and all other agreements between and among the members. Even if there were other verbal contracts, which the Court does not feel the plaintiff has produced enough evidence to show that there were, this written operating agreement would supercede them. By finding that the plaintiff has failed to meet his burden of proof and invalidate the forum selection clause as unreasonable, this cause of action shall be dismissed without prejudice.
The plaintiff makes a second contention, that if this Court was to hold the forum selection clause to be valid, which it has, then the Court must give effect to the choice of law provision in the Operating Agreement and remand the case back to state court. The plaintiff contends that if the choice of law provision is applied then the jurisdictional amount can not be met and this Court is therefore divested of jurisdiction and as such, the case must be remanded. Jurisdiction must be judged at the time of removal. Subsequent events are irrelevant and cannot divest a district court of jurisdiction once it is attached. Saaidi v. State Farm Ins. Co., 1998 WL 856102 (E. D. La. 1998); Smith v. Dialysis Clinic, Inc., 1997 WL 618769 (E.D. La. 1997). This Court has already denied a motion by the plaintiff to remand this case, finding that jurisdiction had attached because the jurisdictional amount has been met. The defense correctly asserts that the Court examines jurisdictional facts at the time of removal and that subsequent events that reduce the amount in controversy to less than the jurisdictional amount do not divest the court of jurisdiction. Pollet v. Travelers Prop. Cas. Ins. Co., 2002 WL 253204 (E.D. La. 2002) citing St. Paul Mercury Ind. Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586 (1938). Applying the appropriate jurisprudence, this Court finds the plaintiffs second argument unpersuasive. Whether this Court would apply the choice of law provision or not is a moot issue because the jurisdictional requirements have already been met and irregardless of the action taken by this Court, it would not divest itself of jurisdiction.
Dr. Chrestman has failed to show any exceptional facts or circumstances which would invalidate the otherwise valid forum selection clause. The plaintiffs second argument is moot because this Court has already denied one motion to remand by the plaintiff finding that jurisdiction has already attached. As such, it is irrelevant what future action is taken by the Court. It is the finding of this Court that this case should be dismissed without prejudice. Accordingly,
IT IS ORDERED that the Motion to Dismiss for Improper Venue, filed on behalf of the defendant, Independent Radiology Associates PLC, is hereby GRANTED and this action is therefore DISMISSED WITHOUT PREJUDICE.