E-Alert Case Updates

Forum Selection Clause on Boiler-Plate Work Order Form Is Upheld Resulting in Transfer of Case

Hara v. Hardcore Choppers
CA No.: 12-1062 (RMC) (U.S. Dist. Court for the District of Columbia, November 14, 2012)
by Colleen K. O’Brien, Associate
Semmes, Bowen & Semmes (www.semmes.com)

This case involves the validity and enforceability of a forum selection clause contained in a work order to perform certain redesigns and remanufacturing to Plaintiff Hara’s motorcycle. Plaintiff Hara, a resident of the District of Columbia, contracted with Hardcore Choppers, LLC (hereinafter “Hardcore”) of Virginia, to redesign and remanufacture her motorcycle. Hara thereafter lost control of the motorcycle while operating it and suffered serious injuries from the resulting crash. She blamed the instability of the front end of her motorcycle on Hardcore’s redesign and sued Hardcore in the District of Columbia. Hardcore moved to dismiss or to transfer to the Eastern District of Virginia, arguing that it did not do business in the District so that it was not subject to personal jurisdiction there, and that the contract contained both a forum selection clause and a waiver of liability which precluded the suit. The Court found the forum selection clause to be enforceable, and so it only addressed that issue.

The final work order executed by Plaintiff Hara had a paragraph above the signature line stating that she as the “customer” agreed that any dispute relating to the contract “will be resolved exclusively in the Courts of Virginia.” It also contained a liability waiver purporting to release Hardcore from future liability.

The Court noted that while typically 28 U.S.C. § 1391 controls as to proper venue, that parties can agree otherwise through a forum selection clause. Such clauses should be enforced unless there is a “strong” showing that it should be set aside. The factors to consider from M/S Bremen v. Zapata Off-Shore Co. (The Bremen), 407 U.S. 1, 10, 12 (1972) are: 1) “enforcement would be unreasonable and unjust;” 2) “the clause was invalid for such reasons as fraud or overreaching;” 3) “enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or judicial decision;” or, 4) “trial in the contractual forum would be so gravely difficult and inconvenient that [the plaintiff] will for all practical purposes be deprived of his day in court.” In addition, the presumption in favor of forum selection clauses includes clauses in non-negotiated boilerplate contracts.

Hara argued that the final work order was not the operative contract, because she had signed a prior invoice, which did not contain the venue language quoted above, but did contain the price and listing of work to be done. However, in sworn affidavits, Hardcore personnel testified that the invoice was just a preliminary work order that was subject to change, until the final work order was signed. The Court agreed and concluded that the final work order with its forum selection clause and liability waiver was the operative contract.

In terms of The Bremen factors, the Court concluded that there was no evidence that the enforcement of the forum selection clause would be unreasonable or unjust or that it was invalid for fraud or overreaching. In addition, the third factor, regarding public policy, actually was in Plaintiff’s favor if the suit were transferred to Virginia, since Virginia had a strong public policy against liability waivers and the District of Columbia does not. As to the last convenience factor, the court stated that any difference in litigating in Virginia versus the District of Columbia was negligible.

Because the parties agreed to litigate in Virginia, and because none of The Bremen factors applied, the Court transferred the case to the Eastern District of Virginia.