The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CELTIC MARINE CORPORATION CIVIL ACTION
VERSUS NO: 18-8370
BASIN COMMERCE, INC. SECTION: “J”(4)
ORDER AND REASONS
Before the Court is a Motion to Dismiss Under Fed. R. Civ. P. 12(b)(2) or Forum
Non Conveniens (Rec. Doc. 6) filed by Defendant, Basin Commerce, Inc. Plaintiff,
Celtic Marine Corporation, opposes the motion (Rec. Doc. 8). Defendant filed a reply
(Rec. Doc. 12), and Plaintiff filed a sur-reply (Rec. Doc. 18). Having considered the
motion and legal memoranda, the record, and the applicable law, the Court finds that
the motion should be DENIED.
FACTS AND PROCEDURAL HISTORY
This litigation arises out of negotiations and agreements for barges and barge
transportation services to be provided by Plaintiff, a Louisiana corporation, to ship
distillers dry grain for Defendant, a foreign corporation incorporated under the laws
of Minnesota. Beginning on April 26, 2018 following the completion of barge
transportation services pursuant to Contract #0417, representatives of Plaintiff and
Defendant began discussing two additional barges to transport grain from Minnesota
to Louisiana. The record reflects that the negotiations took place via text message
and e-mail. After confirming the booking of the two barges through text message,
Plaintiff’s representative signed a contract entitled “2018 Spot Service Agreement—
Contract #0422” on behalf of Plaintiff and sent the contract to Defendant. Like
Contract #0417, Contract #0422 includes a provision concerning the applicable law
(general maritime law or, if unenforceable, Louisiana law) and a forum selection
clause providing that the federal courts of Louisiana have exclusive jurisdiction over
any disputes arising under, in connection with, or incident to the agreement. Both
contracts also stipulate that the failure to immediately object to the contract “is
acknowledgment of the acceptance of the terms and conditions contained [therein].”
The record reflects that Defendant did not sign or expressly object to Contract #0417
or Contract #0422.
Pursuant to its obligations under Contract #0422, Plaintiff subsequently made
arrangements with vendors to provide services related to cargo. Despite the parties’
agreement regarding timing, the two barges had not been loaded by mid-May 2018.
Representatives of the parties discussed cancellation, but Defendant rejected this
option due to the associated cancellation fees. Instead, the parties agreed that one
barge would be taken off placement and rolled over to June and the other would
remain on placement. Plaintiff then sent Defendant an amendment to Contract #0422
on May 18, 2018, confirming this agreement. The amendment provided that all other
terms and conditions of the agreement remain as originally agreed upon, and it
included language indicating that “[t]he confirmation without immediate notice … is
acknowledgment of the acceptance of the conditions of the confirmation.” Defendant
did not inform Plaintiff of any objection to the amendment.
When neither barge had been loaded by the end of June 2018, Plaintiff
requested payment from Defendant in the amount of $45,800.00 in demurrage and
cancellation fees. On August 29, 2018, Plaintiff informed Defendant that it would file
suit if the matter was not resolved by noon on September 4, 2018. Defendant failed
to respond and instead filed a declaratory action in the United States District Court
for the District of Minnesota. The same day, Plaintiff filed the instant litigation in
this Court for breach of contract and detrimental reliance.
LEGAL STANDARD
Rule 12(b)(2) of the Federal Rules of Civil Procedure permits dismissal of a suit
for lack of personal jurisdiction. Where a defendant challenges personal jurisdiction,
the party seeking to invoke the power of the court bears the burden of proving that
jurisdiction exists. Luv N'Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir.
2006). However, the plaintiff is not required to establish jurisdiction by a
preponderance of the evidence; a prima facie showing is sufficient. Id. The court must
accept the plaintiff’s uncontroverted allegations and resolve all conflicts between the
facts contained in the parties’ affidavits and other documentation in favor of
jurisdiction. Id.
A federal court sitting in diversity must satisfy two requirements to exercise
personal jurisdiction over a nonresident defendant. Pervasive Software Inc. v.
Lexware GmbH & Co. Kg, 688 F.3d 214, 220 (5th Cir. 2012). First, the forum state’s
long-arm statute must confer personal jurisdiction. Second, the exercise of
jurisdiction must not exceed the boundaries of the Due Process Clause of the
Fourteenth Amendment. Id. (citing Mink v. AAAA Dev. LLC, 190 F.3d 333, 335 (5th
Cir. 1999)). The limits of the Louisiana long-arm statute are coextensive with
constitutional due process limits. Jackson v. Tanfoglio Giuseppe, SRL, 615 F.3d 579,
584 (5th Cir. 2010) (citing Walk Haydel & Assocs. v. Coastal Power Prod. Co., 517
F.3d 235, 242-43 (5th Cir. 2008)). Accordingly, the inquiry is whether jurisdiction
comports with federal constitutional guarantees. Id.
The Due Process Clause of the Fourteenth Amendment guarantees that no
federal court may assume jurisdiction in personam of a non-resident defendant unless
the defendant has certain “minimum contacts” with the forum state “such that the
maintenance of the suit does not offend traditional notions of fair play and substantial
justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotations
omitted). Sufficient minimum contacts will give rise to either specific or general
jurisdiction. Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851
(2011).
Specific jurisdiction is limited to adjudication of “issues deriving from, or
connected with, the very controversy that establishes jurisdiction.” Id. In order to
establish specific jurisdiction, a plaintiff must show that “(1) there are sufficient (i.e.,
not ‘random fortuitous or attenuated’) pre-litigation connections between the non-
resident defendant and the forum; (2) the connection has been purposefully
established by the defendant; and (3) the plaintiff’s cause of action arises out of or is
related to the defendant’s forum contacts.” Pervasive Software, 688 F.3d at 221;
accord Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-76 (1985). The defendant
can then defeat the exercise of specific jurisdiction by showing that it would be
unreasonable. Burger King, 471 U.S. at 476-77; Pervasive Software, 688 F.3d at 221-
22.
General jurisdiction, however, does not require a showing of contacts out of
which the cause of action arose. Goodyear, 131 S. Ct. at 2851. A court may assert
general jurisdiction over foreign defendants “to hear any and all claims against
them.” Id. The proper consideration when determining whether general jurisdiction
exists is whether the defendant’s “affiliations with the State are so ‘continuous and
systematic’ as to render [it] essentially at home in the forum State.” Daimler AG v.
Bauman, 134 S. Ct. 746, 761 (2014) (alteration in original) (quoting Goodyear, 131 S.
Ct. at 2851).
PARTIES’ ARGUMENTS AND DISCUSSION
I. Personal Jurisdiction
As mentioned above, Plaintiff bears the burden of making a prima facie
showing that personal jurisdiction is proper. Monkton Ins. Servs., Ltd. v. Ritter, 768
F.3d 429, 431 (5th Cir. 2014). Because this Court did not hold an evidentiary hearing,
Plaintiff is required to present only a prima facie case of personal jurisdiction.
Johnston v. Multidata Sys. Int'l Corp., 523 F.3d 602, 609 (5th Cir. 2008). “Moreover,
on a motion to dismiss for lack of jurisdiction, uncontroverted allegations in the
plaintiff’s complaint must be taken as true, and conflicts between the facts contained
in the parties’ affidavits must be resolved in the plaintiff’s favor for purposes of
determining whether a prima facie case for personal jurisdiction exists.” Id. (quoting
Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir. 1990)). However, the court “will not
‘credit conclusory allegations, even if uncontroverted.’” Sealed Appellant 1 v. Sealed
Appellee 1, No. 14-20204, 2015 WL 4880162, at *3 (5th Cir. Aug. 17, 2015) (quoting
Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 869 (5th Cir.
2001)). Therefore, if a defendant submits affidavit evidence directly contradicting the
plaintiff's jurisdictional allegations, the court “must determine whether the plaintiff[
] ha[s] established a prima facie case of personal jurisdiction through nonconclusory
allegations supported by admissible evidence.” Id.
The Court must first determine whether the forum selection clause in the
instant litigation is enforceable. Generally, forum selection clauses “are prima facie
valid and should be enforced unless enforcement is shown by the resisting party to be
‘unreasonable’ under the circumstances.” M/S Bremen v. Zapata Off–Shore Co., 407
U.S. 1 (1972). “Unreasonableness potentially exists where (1) the incorporation of the
forum selection clause into the agreement was the product of fraud or overreaching;
(2) the party seeking to escape enforcement will for all practical purposes be deprived
of his day in court because of the grave inconvenience or unfairness of the selected
forum; (3) the fundamental unfairness of the chosen law will deprive the plaintiff of
a remedy; or (4) enforcement of the forum selection clause would contravene a strong
public policy of the forum state.” Haynsworth v. The Corporation, 121 F.3d 956, 963
(5th Cir. 1997), cert. denied, 523 U.S. 1072 (1998).
In the instant case, the agreement at issue—Contract #0422—includes a forum
selection clause. This is presumptively valid. Moreover, the clause is mandatory
because it provides that the federal courts of Louisiana have exclusive jurisdiction
over any claims and disputes arising under, in connection with, or incident to the
contract. Given that Plaintiff’s claims arise out of the agreement with Defendant, the
forum selection clause applies to the instant litigation. Because a presumptively valid
forum selection clause exists, Defendant bears the burden of proving that the clause
is unenforceable. Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 134
S. Ct. 568, 582 (2013). Defendant attempts to do so by arguing that Contract #0422
is unenforceable because Defendant did not sign the contract and there was,
therefore, no acceptance of Plaintiff’s proposed contractual terms, including the
forum selection clause at issue. (See Rec. Doc. 6-1 at 4). Acknowledging that it is
possible to be bound by an unsigned contract, Defendant asserts that “[t]here is
nothing in the emails and there is no conduct [Plaintiff] can or does point to indicating
[Defendant] showed an intent to be bound by the contractual terms proposed by
[Plaintiff].” (Rec. Doc. 6-1 at 5, 6).
In opposition, Plaintiff argues that this Court may exercise personal
jurisdiction over Defendant because Defendant specifically agreed to waive objections
to personal jurisdiction of Louisiana federal courts and litigate all disputes arising
out of Contract #0422 in federal court in Louisiana. (Rec. Doc. 8 at 8). In response to
Defendant’s argument that it never accepted Contract #0422, Plaintiff contends that
formation of a maritime contract like the one at issue is not subject to formalities; all
that is required is an offer, acceptance, and a meeting of the minds as to material
terms. (Rec. Doc. 8 at 9). Plaintiff notes that it is well-established that oral contracts
are binding on the parties. (Rec. Doc. 8 at 9). Plaintiff argues that the text messages
and phone conversations between representatives for Plaintiff and Defendant created
a contract between the parties. (Rec. Doc. 8 at 9). Specifically, Defendant agreed to
book two barges and agreed to the prices on April 26, 2018 and April 27, 2018,
respectively. (Rec. Doc. 8 at 9). Through phone conversations and text messages
exchanged on May 1, 2018, Plaintiff’s representative confirmed that Defendant had
booked the barges. (Rec. Doc. 8 at 9-10). Accordingly, Plaintiff concludes that a
contract was formed because there was offer, acceptance, and a meeting of the minds
as to the number of barges booked, the weeks the barges would be loaded, and the
price. (Rec. Doc. 8 at 10). Plaintiff emphasizes that Contract #0422 embodied and
formalized the full terms and conditions of the parties’ agreement, but as is
customary in the industry, a signature from a representative of Defendant was not
required. (Rec. Doc. 8 at 10). Plaintiff argues that under One Beacon Ins. Co. v.
Crowley Marine Services, Inc., 648 F.3d 258, 269 (5th Cir. 2011), the contract was
enforceable in the absence of both parties’ signatures because Defendant had
reasonable notice of the terms at issue given their inclusion in Contract #0417 and
manifested assent to those terms by failing to object to any provisions in the contract
and continuing to communicate with Plaintiff about the barges. (Rec. Doc. 8 at 10).
The Court agrees.
Plaintiff has produced sufficient evidence to demonstrate the existence of a
binding contract between the parties and has made a prima facie showing that
personal jurisdiction is, therefore, proper. The Court rejects Defendant’s argument
that its failure to object to the terms of Contract #0422 as specified does not constitute
assent because the parties did not have a course of dealing, as there was no prior
contract between the parties. (Rec. Doc. 12 at 2). The record directly contradicts
Defendant’s assertion, reflecting that the parties had previously entered Contract
#0417 which included provisions identical to the ones at issue mere weeks before
initiating negotiations concerning the instant contract. Neither contract was signed
by Defendant, and Defendant voiced no objections to either contract. Additionally,
the Court notes that when faced with the prospect of cancelling the barges in mid-
May 2018, Defendant did not assert that there was no enforceable contract between
the parties. Instead, the record reflects that Defendant rejected cancellation due to
the associated fees. This further demonstrates Defendant’s assent. Because the forum
selection clause is presumptively valid, the Court finds that Defendant has failed to
show that the clause is unreasonable. Similarly, Defendant did not introduce
evidence to show that Plaintiff fraudulently inserted the clause in the contract, that
Defendant will be deprived of its day in court, or that it will be deprived of a remedy.
Accordingly, the Court concludes that it has personal jurisdiction over the claims in
the instant litigation.
II. Forum Non Conveniens
Defendant argues in the alternative that if this Court determines that it has
personal jurisdiction over the instant litigation, the Court should transfer the case to
Minnesota on the basis of forum non conveniens. “The doctrine of forum non
conveniens presupposes at least two forums where the defendant is amendable to
process and simply furnishes criteria for a choice between them.” McLennan v.
American Eurocopter Corp., Inc., 245 F.3d 403, 424 (5th Cir. 2001). A defendant bears
the burden of proof on all elements of the forum non conveniens analysis. DTEX, LLC
v. BBVA Bancomer, S.A., 508 F.3d 785, 794 (5th Cir. 2007). “Ordinarily a strong
favorable presumption is applied to the plaintiff’s choice of forum.” Id. at 795.
“[U]nless the balance is strongly in favor of the defendant, the plaintiff’s choice of
forum should rarely be disturbed.” Id. (quoting Gulf Oil Corp. v. Gilbert, 330 U.S.
501, 508 (1947)).
A defendant seeking dismissal on the basis of forum non conveniens must first
establish that there is an alternate forum that is both available and adequate.
McLennan, 245 F.3d at 424; see Piper Aircraft Co. v. Reyno, 454 U.S. 235, 254 (1981).
Here, the parties do not dispute that Minnesota is an alternate forum that is available
and adequate. Rather, the parties disagree about whether dismissal is warranted
because certain private and public interest factors weigh in favor of dismissal. Karim
v. Finch Shipping Co., Ltd., 265 F.3d 258, 268 (5th Cir. 2001). The private interest
factors are:
relative ease of access to sources of proof; [the] availability of compulsory
process for attendance of unwilling, and the cost of obtaining attendance
of willing, witness[es]; [the] possibility of view of premises, if view would
be appropriate to the action; and all other practical problems that make
trial of a case easy, expeditious and inexpensive.
McLennan, 245 F.3d at 424. The public interest factors are:
the administrative difficulties flowing from court congestion; the ‘local
interest in having localized controversies decided at home’; the interest
in having the trial of a diversity case in a forum that is at home with the
law that must govern the action; the avoidance of unnecessary problems
in conflict of laws, or in the application of foreign law; and the unfairness
of burdening citizens in an unrelated forum with jury duty.
Piper Aircraft Co., 454 U.S. at 241 n. 6 (quoting Gulf Oil, 330 U.S. at 509). “In the
second step analysis, no one factor is given conclusive weight, but the ‘central focus’
of the forum non conveniens inquiry is on convenience.” Oyuela v. Seacor Marine
(Nigeria), Inc., 290 F.Supp.2d 713, 725 (quoting Dickson Marine Inc. v. Panalpina,
Inc., 179 F.3d 331, 342 (5th Cir. 1999)).
In the instant case, Defendant argues that Minnesota is a more convenient
forum than Louisiana given the relative ease of access to sources of proof. (Rec. Doc.
6-1 at 7, 8). Defendant notes that the barges at issue are located in Minnesota and
the “would-be contract” involves Defendant’s employees located in Minnesota and
Plaintiff’s principal, Tim Klein, located in Illinois. (Rec. Doc. 6-1 at 8). Additionally,
Defendant asserts that Minnesota has a greater interest in this interstate dispute
“because Minnesota has a localized interest in having a local dispute decided at
home.” (Rec. Doc. 6-1 at 8).
In opposition, Plaintiff argues that Defendant has failed to show that dismissal
is warranted for forum non conveniens because neither private and public interest
factors nor the interests of justice favor litigation in Minnesota. (Rec. Doc. 8 at 14-
15). Regarding private interest factors, Plaintiff contends that Plaintiff’s
representatives who were involved in negotiating Contract #0422 and the
amendment thereto are located in Louisiana and Illinois, and there are likely other
individuals in Louisiana who have information regarding the services Plaintiff
obtained to fulfill its obligations under the contract. (Rec. Doc. 8 at 14-15). Plaintiff
also emphasizes that Defendant does business in Louisiana and opted to enter into a
contract with a Louisiana corporation. (Rec. Doc. 8 at 15). Plaintiff asserts that the
parties’ agreement in Contract #0422 to have any disputes heard in federal court in
Louisiana provides further support for a finding that Louisiana is the most
convenient forum. (Rec. Doc. 8 at 15).
Regarding public interest factors, Plaintiff argues that Louisiana has an
interest that is as strong as or stronger than Minnesota’s interest in the litigation
given that it involves a Louisiana corporation and a contract that anticipated
performance partly in Louisiana. (Rec. Doc. 8 at 15). Additionally, Plaintiff notes that
litigating the dispute in Louisiana will avoid potential problems in conflicts of law
since Contract #0422 specifically provides that Louisiana law will apply if general
maritime law is deemed inapplicable. (Rec. Doc. 8 at 15). Plaintiff contends that the
interests of justice are best served by maintaining litigation in this forum because
Defendant’s decision to file a declaratory action in Minnesota after receiving notice
that Plaintiff intended to file suit in Louisiana amounts to a disfavored use of forum
shopping. (Rec. Doc. 8 at 15-16). Finally, Plaintiff points to Judge Magnuson’s ruling
on Plaintiff’s motion to transfer the declaratory action filed by Defendant in the U.S.
District Court for the District of Minnesota as further support for its position. (Rec.
Doc. 18). Plaintiff notes that in denying Plaintiff’s motion to transfer, Judge
Magnuson found that the private interest factors—the convenience of the parties and
the convenience of witnesses—were either neutral or weighed against a transfer.
(Rec. Doc. 18 at 2). Plaintiff also notes Judge Magnuson’s finding that Defendant’s
filing of the declaratory action with notice of Plaintiff's intention to file suit is a “red
flag” that “deserves serious consideration.” (Rec. Doc. 18 at 2). Although Judge
Magnuson ultimately decided that the factors were insufficient to entitle Plaintiff to
a transfer, he indicated that public interest factors and the interests of justice leaned
in favor of transferring the Minnesota litigation to Louisiana. (Rec. Doc. 18 at 2).
Based on the foregoing, the Court concludes that consideration of the private
and public interest factors warrant denial of Defendant’s motion. In reaching his
ruling on Plaintiffs motion to transfer under § 1404(a), Judge Magnuson noted that
“It]he most [Plaintiff] has established is that Louisiana would be an equally
convenient forum.” See Rec. Doc. 16-1 at 7). Here, Defendant has failed to
demonstrate that Minnesota would be an equally convenient forum, much less that
the balance weighs strongly in favor of litigation in Minnesota. Thus, Defendant has
failed to show that Plaintiff's choice of forum should be disturbed. See Gulf Oil Corp.
v. Gilbert, 330 U.S. 501, 508 (1947).
CONCLUSION
Accordingly,
IT IS ORDERED that Defendant’s Motion to Dismiss Under Fed. R. Civ. P.
12(6)(2) or Forum Non Conveniens (Rec. Doc. 6) is DENIED.
New Orleans, Louisiana, this 19th day of July, 2019.
MK
CARES. BARB sl
UNITED STATES DISTRICT JUDGE
13