Friday, February 15, 2013

When Do Forum Selection Clauses Preclude Federal Forum? A Split in the Fourth Circuit

In Ruifrok v. White Glove Rest. Servs., LLC, No. DKC 10-2111, 2010 U.S. Dist. LEXIS 110369 (D. Md. Oct. 18, 2010), Judge Chasanow issued a detailed decision in which he found that, while a forum selection clause specifying a state-court forum does not divest a federal court of jurisdiction, as a prudential matter, federal courts “should give effect to a valid and enforceable forum-selection clause” and remanded the otherwise properly removed case to state court.  See Robert B. Fitzpatrick, Choice of Forum Clauses: Judge Chasanow’s October 18 Opinion in Ruifrok v. White Glove Rest. Servs., LLC, “Fitzpatrick on Employment Law” (Oct. 27, 2010) (available at:

Judge Motz faced a similar issue in Rihani v. Teen Express Distrib., LLC, 711 F. Supp. 2d 557 (D. Md. 2010).  In Rihani, Judge Motz granted employer’s motion to dismiss under Rule 12(b)(3) for improper venue based on its argument that the forum selection clause precluded a federal forum.  Judge Motz’s decision in this regard departs from that of Judge Cacheris in Nahigian v. Juno-Louduon, LLC, 661 F. Supp. 2d 563 (E.D. Va. 2009), in which Judge Cacheris found that a similar forum selection clause limited only the geographic location of the suit, and did not contain any limit on the sovereign able to decide the suit. 

In Match Factors, Inc. v. Mickey B. Henson Enters., No. 4:10-cv-00062, 2011 U.S. Dist. LEXIS 36931 (E.D.N.C. March 1, 2011), Magistrate Judge David W. Daniel of the federal district court for the Eastern District of North Carolina noted disagreement between Judge Motz’s decision in Rihani, and that of Judge Cacheris in Nahigian.   Match Factors, 2011 U.S. Dist. LEXIS 36931 at *25-*27.  The Match Factors court noted the conclusion in Rihani that the Nahigan court had “relied implicitly on one of two unacceptable premises: (1) that “the sole venue shall be Loudoun County” actually meant “the sole venue shall be Loudoun County or a court with venue over Loudon County,” or (2) that a geographic forum selection clause could not also create a de facto sovereignty limit[]” and went on to apply the reasoning in Rihani, rather than Nahigan to the facts before it.

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