Atlantic Marine Construction Co. v. United States District Court for the Western District of Texas

When there is a valid forum selection clause, a district court should alter its analysis of a 28 U.S.C. §1404(a) motion to consider if the party defying the forum selection clause can show extraordinary circumstances unrelated to convenience; the court should not consider the parties private interest; and the transfer of venue will not carry the original venue’s choice-of-law.

Petitioner contracted for a construction project in Texas. The contract contained a forum selection clause stating that all disputes would be litigated in Virginia. When a dispute arose, suit was filed in the Western District of Texas. Petitioner moved to dismiss based on the forum selection clause, arguing that the venue was “wrong” under 28 U.S.C. §1406(a) and “improper” under Federal Rules of Civil Procedure 12(b)(3), and moved to transfer the case to the Eastern District of Virginia under 28 U.S.C. §1404(a). The district court concluded that Petitioner had not met its burden of establishing that transfer was appropriate under §1404(a), which considers public and private interest factors, including, but not limited to the forum selection clause. The Fifth circuit agreed with the district court’s balance of interest analysis of §1404(a).

The Supreme Court reversed and remanded the Fifth Circuit’s decision concluding that when there is a valid forum selection clause, that a district court should alter its analysis of a §1404(a) motion in three ways. First, the court should consider if the party defying the forum selection clause can show extraordinary circumstances unrelated to convenience; second, the court should not consider the parties private interest; and finally, that the transfer of venue will not carry the original venue’s choice-of-law.