Opinion

Aquate II, LLC v. Jessica Myers

  • 100 F.4th 1316
Court
Court of Appeals for the Eleventh Circuit
Filed
May 1, 2024
Status
Published
Nature of suit
NEW
Cited by
8 cases
Authority
More cited than 69.6%

noting a forum-selection clause will rarely be invalidated by these factors because it is “after all, a contract between two parties.”

How later courts described this case

  • noting a forum-selection clause will rarely be invalidated by these factors because it is “after all, a contract between two parties.”

Written by the judges who cited it.

The opinion

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[PUBLISH]

In the

United States Court of Appeals

For the Eleventh Circuit

____________________

No. 22-12669

____________________

AQUATE II LLC,

Plaintiff-Appellant,

versus

JESSICA TEDRICK MYERS,

KITUWAH SERVICES LLC,

Defendants-Appellees,

KITUWAH GLOBAL GOVERNMENT GROUP LLC

Defendant.

____________________

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2 Opinion of the Court 22-12669

Appeal from the United States District Court

for the Northern District of Alabama

D.C. Docket No. 5:22-cv-00360-AKK

____________________

Before GRANT, ABUDU, and HULL, Circuit Judges.

GRANT, Circuit Judge:

This case first looks like a run-of-the-mill business dispute—

but closer inspection reveals thorny questions of tribal sovereignty

and contract interpretation. During the competitive bidding

process for a government contract, one tribally owned business

and its employee allegedly stole trade secrets from a competitor,

another tribally owned business. The aggrieved business now

seeks to vindicate its interests in federal court, while the alleged

aggressor attempts to shield itself with tribal sovereign immunity.

Meanwhile, the employee who allegedly stole the secrets says her

employment contract mandates that the claims against her can be

brought only in a designated tribal court. And that contention

raises yet another area of dispute—whether the tribal court even

exists.

We conclude that, because it waived sovereign immunity

for claims related to the federal contracting program, the defendant

tribe can be sued here. As for the former employee, the district

court failed to consider whether the clause naming the allegedly

nonexistent tribal court as the appropriate forum was valid and

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22-12669 Opinion of the Court 3

enforceable. For both reasons, we reverse the district court’s order

dismissing the case and remand for further consideration.

I.

The Small Business Administration’s 8(a) Business

Development Program is designed to assist certain “disadvantaged

business concerns” compete in the American economy. 13 C.F.R.

§ 124.1; see generally 15 U.S.C. § 637(a). To that end, the federal

government sets aside select federal contracts for businesses owned

and controlled by individuals and groups the Small Business Act

declares socially and economically disadvantaged. 15 U.S.C.

§ 637(a)(1), (4)–(6). Among those eligible are small businesses

owned by certain Indian tribes. Id. § 637(a)(4)(A)(i)(II), (ii)(II).

Both businesses here qualify. AQuate II, LLC, is organized

under the authority of the Alabama-Quassarte Tribal Town with

its principal place of business in Huntsville, Alabama. Kituwah

Services, LLC, is organized under the Eastern Band of Cherokee

Indians with its principal place of business in Cherokee, North

Carolina. Both tribal entities compete for and perform federal

contracts under the 8(a) program.

In 2012, AQuate won an 8(a) contract to provide armed

security services aboard the Sea-Based X-Band Radar-1 (SBX-1), a

semi-submersible platform vessel that operates as part of the

ballistic missile defense program. AQuate performed those

services for the length of the five-year contract term and won the

contract again in 2017 for another five-year term.

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4 Opinion of the Court 22-12669

Jessica Myers worked for AQuate from 2013 through 2017

during the initial SBX-1 contract and bid preparation for the

second. As a condition of her employment, Myers signed several

documents governing the use and disclosure of confidential

information, as well as the standard dispute resolution policy for all

Alabama-Quassarte Tribal Town-owned businesses. That policy

contained a clause designating a tribal court as the forum for any

employment disputes:

The tribal court of the Alabama-Quassarte Tribal

Town shall be the exclusive venue for litigation

arising out of Employee’s employment. If there is no

tribal court in existence, then the CFR Court for the

geographic region where Employee works shall be

the exclusive venue for litigation arising out of

Employee’s employment.

Myers resigned in 2017 and took a job as the Director of

Administration for Kituwah. According to AQuate, she also took

copies of contracts, proposals, personnel lists, and other security

information with her—a violation of her confidentiality

commitments.

AQuate intended to seek another five-year contract renewal

for SBX-1 in 2022, but this time so did Kituwah. To help her new

employer construct a winning bid, Myers allegedly contacted her

former colleagues at AQuate to solicit information about the

company’s pricing and compensation structure under the previous

SBX-1 contracts. Kituwah and Myers allegedly intended to use the

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22-12669 Opinion of the Court 5

purported trade secret information and documents Myers took to

compete in the SBX-1 bidding process. And beyond that, Kituwah

and Myers (allegedly) approached AQuate employees with job

offers—contingent, of course, on Kituwah winning the SBX-1

contract.

AQuate sued, alleging that Myers breached her employment

agreements and that she and Kituwah violated both the Defend

Trade Secrets Act of 2016 and the Alabama Trade Secrets Act. 18

U.S.C. § 1836; Ala. Code § 8-27-1 et seq. AQuate requested a

preliminary injunction, and Kituwah and Myers moved to dismiss.

The district court granted the motion to dismiss. First, the

court found that Kituwah had not waived sovereign immunity for

the trade secrets claims because AQuate’s lawsuit did not “relate

to” participation in the 8(a) program. Because it had granted

immunity to Kituwah on those claims, the district court dismissed

the same claims against Myers, finding that Kituwah was a

necessary and indispensable party under Rule 19. See Fed. R. Civ.

P. 19. As for the remaining breach of contract claim against Myers,

the court dismissed for forum non conveniens, concluding that the

dispute resolution policy required the claim to be resolved in the

Alabama-Quassarte Tribal Town court. The district court decided

that question without an evidentiary hearing, relying on the

parties’ assertions in their motions briefing.

AQuate moved for reconsideration. It focused mainly on

the forum question, arguing that the district court erred by

ignoring evidence that the Alabama-Quassarte Tribal Town court

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6 Opinion of the Court 22-12669

did not exist. The court denied that motion, and this appeal

followed.

II.

This Court reviews de novo a district court’s grant of a

motion to dismiss based on sovereign immunity. Motta ex rel. A.M.

v. United States, 717 F.3d 840, 843 (11th Cir. 2013). The district

court’s dismissal for forum non conveniens is reviewed for abuse of

discretion and should be affirmed “unless we find that the district

court has made a clear error of judgment, or has applied the wrong

legal standard.” GDG Acquisitions, LLC v. Gov’t of Belize, 749 F.3d

1024, 1028 (11th Cir. 2014) (GDG Acquisitions I) (quotation omitted).

We review de novo the enforceability of a forum selection clause.

Turner v. Costa Crociere, 9 F.4th 1341, 1345 (11th Cir. 2021).

III.

As a separate sovereign, “an Indian tribe is subject to suit

only where Congress has authorized the suit or the tribe has

waived its immunity.” Kiowa Tribe of Oklahoma v. Mfg. Techs., Inc.,

523 U.S. 751, 754 (1998). The burden is on AQuate, as the party

seeking federal jurisdiction, to show that Kituwah “expressly and

unmistakably waived its right to sovereign immunity from suit.”

Furry v. Miccosukee Tribe of Indians of Florida, 685 F.3d 1224, 1234

(11th Cir. 2012) (quotation omitted).

The 8(a) program, at least as a general matter, requires such

a waiver from participating tribes. So, to take part, a tribally owned

business must adopt an express sovereign immunity waiver—also

known as a “sue and be sued” clause—designating the United

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22-12669 Opinion of the Court 7

States federal courts as “courts of competent jurisdiction for all

matters relating to SBA’s programs including, but not limited to,

8(a) BD [Business Development] program participation, loans, and

contract performance.” 13 C.F.R. § 124.109(c)(1). Kituwah’s

articles of organization include the required language:

The United States Federal Courts are hereby

designated as being among the courts of competent

jurisdiction for all disputes or other matters relating to

this Company’s involvement in programs of the Small

Business Administration, including but not limited to,

8(a) Business Development program participation,

loans, and contract performance. Simply stated, the

Company hereby specifically consents to “sue or be

sued” within the jurisdiction of the Federal Court

System of the United States.

The question here is whether AQuate’s lawsuit against Kituwah—

for allegedly stealing trade secrets about AQuate’s 8(a) SBX-1

contract to improve its own bid for that same contract—is a

“matter relating to” Kituwah’s involvement in the 8(a) program.1

It is, so Kituwah’s sovereign immunity waiver applies.

1 No one disputes that Kituwah is a part of the Eastern Band of Cherokee

Indians for the purposes of sovereign immunity, or that Kituwah’s sovereign

immunity waiver is coextensive with the 8(a) program’s waiver requirements.

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8 Opinion of the Court 22-12669

No binding, or even persuasive, authority has established

the scope of 8(a) sovereign immunity waivers. 2 So we will start

from the beginning, with the plain meaning of the phrase “relating

to.” The Oxford English Dictionary defines “relate to” as “[t]o have

some connection with; to stand in relation to.” Relate, Oxford

English Dictionary (online ed.) https://perma.cc/FM2V-S4ZW.

And Black’s Law Dictionary defines “related” as “[c]onnected in

some way; having relationship to or with something else.” Related,

Black’s Law Dictionary (11th ed. 2019). It is no secret that the

ordinary meaning of this term is “a broad one.” Morales v. Trans

World Airlines, Inc., 504 U.S. 374, 383 (1992). That is true across a

range of contexts. In fact, “Congress characteristically employs the

phrase to reach any subject that has a connection with, or reference

to, the topics [a] statute enumerates.” Coventry Health Care of

Missouri, Inc. v. Nevils, 581 U.S. 87, 95–96 (2017) (quotation

omitted). It is hard, candidly, to think of a more capacious term to

use in defining the coverage of a provision.

AQuate’s claims against Kituwah are “related to” Kituwah’s

participation in the 8(a) program. Kituwah participated in the

program by preparing and later submitting a bid for the SBX-1

2 It appears that only three other courts—all out-of-circuit district courts—

have considered this issue, and even those decisions are sparse in their

reasoning. See Applied Scis. & Info. Sys., Inc. v. DDC Constr. Servs., LLC, No. 19-

CV-575, 2020 WL 2738243, at *4–5 (E.D. Va. Mar. 30, 2020); Rassi v. Fed.

Program Integrators, LLC, 69 F. Supp. 3d 288, 292–93 (D. Me. 2014); Hunter v.

Redhawk Network Sec., LLC, No. 17-CV-0962, 2018 WL 4171612, at *6–8 (D. Or.

April 26, 2018).

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22-12669 Opinion of the Court 9

contract, and the allegation that it stole trade secrets to boost its bid

is certainly “connected in some way” to that participation.

It would defy common sense to hold otherwise. Assuming

that AQuate’s allegations are true (as we must when reviewing a

motion to dismiss), Kituwah stole information about AQuate’s

“compensation structure, proposals, contract terms, and bidding

strategies” for the SBX-1 contract—an 8(a) contract. And it did so

to gain a competitive advantage in its own bid for that same 8(a)

contract. In other words, but for its attempt to win the bid for the

8(a) contract, Kituwah would not have used stolen trade secrets or

unlawfully solicited information from current AQuate employees.

That alleged misconduct “relates to” Kituwah’s participation in the

8(a) program.

As a practical matter, it is not obvious what other language

could have been employed to cover this kind of claim if “related

to” were not enough. Indeed, Kituwah’s counsel stated during oral

argument that if the tribe had intended to waive immunity from

suits like AQuate’s, it would have needed to adopt a blanket

immunity waiver for all suits. To the extent that counsel was

trying to suggest that if “related to” is not broad enough to capture

this lawsuit, nothing else would be either, we agree. Perhaps

recognizing as much, Kituwah’s counsel quickly walked that

statement back, saying instead that “the tribe could waive

sovereign immunity as to business tort claims connected to its

efforts to submit a bid on an SBA contract.” But we struggle to see

how that language is anything other than a subset of the language

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10 Opinion of the Court 22-12669

in Kituwah’s immunity waiver. Is “connected with” broader than

“related to”? We (and the Supreme Court) think not. See Morales,

504 U.S. at 383–84.

The district court disagreed. It concluded instead that

“AQuate’s claims are not based on Kituwah’s participation in the

8(a) program and do not involve allegations that Kituwah violated

any of the 8(a) program’s requirements.” This conclusion is flawed

for at least two reasons. First, as we have already explained,

preparing and later submitting a bid for an exclusive 8(a) contract

is a form of participation in the 8(a) program, so AQuate’s claim

that Kituwah misappropriated trade secrets for that bid is

necessarily “based on Kituwah’s participation in the 8(a) program.”

Second, neither Kituwah’s waiver, nor the regulation it was based

on, conditioned the waiver of sovereign immunity on Kituwah’s

violation of any specific 8(a) program requirements. See 13 C.F.R.

§ 124.109(c)(1). Kituwah waived immunity for all matters “relating

to” its involvement in the 8(a) program.

AQuate’s trade secrets claims “relate to” Kituwah’s

participation in the 8(a) program and thus fall within the scope of

Kituwah’s immunity waiver. The district court erred in concluding

otherwise. Because we reverse the sovereign immunity dismissal,

we also reverse the dismissal of the trade secrets claims against

Myers; it is no longer even arguably precluded by Rule 19, which

governs the compulsory joinder of indispensable parties. See Fed.

R. Civ. P. 19.

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IV.

Now for the district court’s dismissal of AQuate’s breach of

contract claim against Myers. We first consider—as we must—

whether the forum-selection clause in Myers’s employment

contract is enforceable, and then, if so, whether dismissal for forum

non conveniens was proper on account of that clause.

Procedurally, “the appropriate way to enforce a forum-

selection clause pointing to a state or foreign forum is through the

doctrine of forum non conveniens.” Atlantic Marine Constr. Co. v. U.S.

Dist. Ct. for the W. Dist. of Texas, 571 U.S. 49, 60 (2013). Ordinarily,

to obtain dismissal for forum non conveniens, “the moving party

must show that (1) an adequate alternative forum is available,

(2) the public and private factors weigh in favor of dismissal, and

(3) the plaintiff can reinstate his suit in the alternative forum

without undue inconvenience or prejudice.” GDG Acquisitions LLC

v. Gov’t of Belize, 849 F.3d 1299, 1312 (11th Cir. 2017) (GDG

Acquisitions II) (quotation omitted).

But when there is a valid forum-selection clause, “[t]he

calculus changes.” Atlantic Marine, 571 U.S. at 63. These clauses

should be “given controlling weight in all but the most exceptional

cases.” Id. (quotation omitted). So the usual importance attached

to the plaintiff’s choice of forum evaporates; instead, “as the party

defying the forum-selection clause, the plaintiff bears the burden of

establishing that transfer to the forum for which the parties

bargained is unwarranted.” Id. And rather than considering the

usual panoply of forum non conveniens factors, the district court may

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12 Opinion of the Court 22-12669

only consider arguments about the public interest, including

considerations like “the administrative difficulties flowing from

court congestion; the local interest in having localized

controversies decided at home; and the interest in having the trial

of a diversity case in a forum that is at home with the law.” Id. at

62 n.6 (alteration adopted) (quotation omitted). These factors,

though, “rarely defeat a transfer motion”—the forum-selection

clause will almost always control. Id. at 64.

The enforceability of forum-selection clauses is governed by

federal law. See, e.g., P & S Bus. Machs., Inc. v. Canon USA, Inc., 331

F.3d 804, 807 (11th Cir. 2003); cf. Great Lakes Ins. SE v. Raiders Retreat

Realty Co., 601 U.S. 65, 71–72 (2024). The Supreme Court’s decision

in The Bremen v. Zapata Off-Shore Co. is instructive. 3 407 U.S. 1

(1972). There, the Court explained that 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.” Id. at 10; see also Krenkel v. Kerzner Int’l Hotels Ltd.,

579 F.3d 1279, 1281 (11th Cir. 2009). Following the Court’s

guidance in The Bremen, we look to four factors to evaluate whether

a forum-selection clause should be “invalidated” as unfair or

3 Even if state law were to apply to the validity of a forum-selection clause, it

would not change the analysis here because Alabama has adopted The Bremen’s

test for the enforceability of forum-selection clauses. See Rucker v. Oasis Legal

Fin., LLC, 632 F.3d 1231, 1236 (11th Cir. 2011); Pro. Ins. v. Sutherland, 700 So. 2d

347, 350 (Ala. 1997). We can thus “apply both federal and Alabama law

harmoniously in deciding the validity of the forum selection clause in this

case.” Rucker, 632 F.3d at 1236.

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unreasonable: “(1) its formation was induced by fraud or

overreaching; (2) the plaintiff would be deprived of its day in court

because of inconvenience or unfairness; (3) the chosen law would

deprive the plaintiff of a remedy; or (4) enforcement of the clause

would contravene public policy.” Krenkel, 579 F.3d at 1281. 4 These

factors will rarely invalidate a forum-selection clause, which is,

after all, a contract between two parties. See id. But if a party can

show that “trial in the contractual forum will be so gravely difficult

and inconvenient that he will for all practical purposes be deprived

of his day in court,” the forum-selection clause will not be

enforceable. The Bremen, 407 U.S. at 18.

Federal courts cannot sidestep our responsibility to consider

this question under The Bremen before applying the forum non

conveniens inquiry as directed by Atlantic Marine. And that order of

operations is nothing new—take Turner v. Costa Crociere. 9 F.4th

1341. There, we considered the district court’s forum non conveniens

dismissal of a class action against an Italian cruise operator. Id. at

1344–45. We first explained the contours of The Bremen, and then

considered whether the plaintiff had shown that enforcement of

the forum-selection clause would be “fundamentally unfair” or

“contravene public policy.” Id. at 1345–47. The answer was no, so

we proceeded to Atlantic Marine and performed the typical forum

4 Our cases have inconsistently used the terms “valid” and “enforceable” when

articulating the effect of The Bremen’s test on forum-selection clauses without

explaining whether, or how, these terms differ. Compare Krenkel, 579 F.3d at

1281, with Turner, 9 F.4th at 1345. Whatever their differences may (or may

not) be, it does not change the result here, so we do not delve into that issue.

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14 Opinion of the Court 22-12669

non conveniens analysis that applies when there is an enforceable

forum-selection clause. Id. at 1347–49. Same goes for Don’t Look

Media LLC v. Fly Victor Ltd., 999 F.3d 1284 (11th Cir. 2021). There,

this Court explained that the forum-selection clause would not be

enforced if the plaintiff could make a “strong showing that

enforcement would be unfair or unreasonable” under The Bremen.

Id. at 1297 (quotation omitted). In that case, too, the plaintiff failed

to make such a showing, so we applied Atlantic Marine and

dismissed the case for forum non conveniens. Id. at 1298–1300.

Many other circuits have followed the same approach. As

the Sixth Circuit explained, because “the presence of a valid and

enforceable forum-selection clause alters the type of forum-non-

conveniens analysis a court must apply, it follows that a court must

first—before balancing the forum-non-conveniens factors—

determine whether a forum-selection clause is applicable to the

claims at issue, mandatory, valid, and enforceable.” Lakeside

Surfaces, Inc. v. Cambria Co., 16 F.4th 209, 215 (6th Cir. 2021); see also

Collins v. Mary Kay, Inc., 874 F.3d 176, 181 (3d Cir. 2017); Weber v.

PACT XPP Techs., AG, 811 F.3d 758, 767, 773–776 (5th Cir. 2016);

Jackson v. Payday Fin., LLC, 764 F.3d 765, 774–76 (7th Cir. 2014);

Gemini Techs., Inc. v. Smith & Wesson Corp., 931 F.3d 911, 914–17

(9th Cir. 2019); Azima v. RAK Inv. Auth., 926 F.3d 870, 874–76 (D.C.

Cir. 2019).

The Seventh Circuit’s decision in Jackson is especially useful

because it also involved a tribal forum. 764 F.3d 765. That case

looked at the validity of an arbitration clause (a type of forum-

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22-12669 Opinion of the Court 15

selection clause) in a loan agreement. Id. at 773–76; see Mitsubishi

Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 630–31

(1985). The clause specified the Cheyenne River Sioux Tribe as the

only arbitral forum for dispute resolution. Jackson, 764 F.3d at 769.

The court began by considering the validity of the clause and found

that enforcement would be unreasonable under the circumstances

because the record had clearly established that the forum did not

exist—the Cheyenne River Sioux Tribe did not involve itself in the

business of arbitration. Id. at 776. Because the court concluded

that the forum was “illusory,” it had “no hesitation” in finding

enforcement to be “unreasonable under M/S Bremen.” Id.

In line with these cases, the district court should have

considered the validity and enforceability of the forum-selection

clause under The Bremen before moving on to the forum non

conveniens analysis. Had the district court conducted that analysis,

it very well might have concluded that enforcing the forum-

selection clause in Myers’s employment contract would be “unfair

or unreasonable under the circumstances.” Krenkel, 579 F.3d at

1281.

AQuate repeatedly argued that the Alabama-Quassarte

Tribal Town court, though designated in the forum-selection

clause, did not exist, and that any evidence of the purported court

was fabricated by an ousted tribal chief in an effort to retain power.

AQuate submitted an affidavit from Famous Marshall, the

Chairman of Economic Development for the Tribal Town, which

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16 Opinion of the Court 22-12669

stated that the tribe’s constitution did not provide for a court

system and that the supposed tribal court was fictitious.

Kituwah and Myers, meanwhile, maintained that the

Alabama-Quassarte Tribal Town court was legitimate. In support,

they submitted two orders allegedly from that court. Suspiciously

absent, however, was any affidavit verifying that these exhibits

were authentic—and the faces of the orders are problematic. To

start, despite being more than four months apart, relating to

different issues, and seemingly binding different parties, both

orders are marked with the same number—22-001. But one

includes it as the “court order” number, while the other lists it as

the case number. If correct, that is an odd coincidence. The orders

also have remarkably different captions and formatting, which

would be surprising to see from a legitimate court. And the

subjects of the two orders are more curious still. The first claims

to ban Famous Marshall and several other members (at least one

of whom is connected to AQuate) from tribal property and offices.

The second “enjoins” AQuate (from doing what, exactly, it does

not say). These orders, in short, lack any indicia of authenticity.

Given this record, we conclude that the district court erred

when it concluded that the record did “not reveal any basis to

suggest” that the so-called orders of the Alabama-Quassarte Tribal

Town court were fraudulent. The record contained an affidavit

testifying that the court was fake and unsupported by the tribe’s

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22-12669 Opinion of the Court 17

governing charter. If that is not a “basis to suggest” that these

orders are fraudulent, we struggle to imagine what would be. 5

We cannot say definitively whether the forum-selection

clause is or is not enforceable—that is for the district court to decide

on remand with an appropriate evidentiary hearing. Of course,

AQuate bears the burden to show enforcement is unreasonable

under the circumstances. But we are confident that, should the

district court determine that the Alabama-Quassarte Tribal Town

court is nonexistent, we, like the Seventh Circuit, would have “no

hesitation concluding that an illusory forum is unreasonable under

M/S Bremen.” Jackson, 764 F.3d at 776. 6

* * *

The district court erred in dismissing the claims against

Kituwah on the basis of sovereign immunity, as well as in

dismissing Myers from the trade secrets claims under Rule 19. The

district court also erred in dismissing the breach of contract claim

against Myers on the basis of forum non conveniens—it failed to

consider the enforceability of the forum-selection clause and to

5 The forum-selection clause in Myers’s contract also specified that, if “there is

no tribal court in existence, then the CFR Court for the geographic region

where Employee works shall be the exclusive venue for litigation arising out

of Employee’s employment.” Oddly, however, neither party made arguments

about the viability of this venue or submitted any evidence in that regard.

Nothing herein precludes the parties from raising this issue on remand.

6 At oral argument, counsel appeared to suggest that a tribal court may exist

now even if it did not when the motion to dismiss was decided. We leave that

for the district court to sort out.

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18 Opinion of the Court 22-12669

consider all the evidence before it. The decision of the district court

is therefore REVERSED and REMANDED for further

proceedings.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.

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