Garage door industry magazine for garage door dealers, garage door manufacturers, garage door distributors, garage door installers, loading docks, garage door operators and openers, gates, and tools for the door industry.
Issue link: https://idoi.epubxp.com/i/177021
LegaL&LegisLation; By Brian J. Schoolman Safran Law Offces Picking Where You Get To Fight W hen a dealer has done its work, and still hasn't gotten paid, fling a lawsuit as a last-resort step that sometimes becomes necessary. If you have contracted directly with the property owner, usually you have drafted the contract, and therefore you can control where you would fle the lawsuit. But imagine that your contract tells you that you can't sue in the place you did the work, but instead that you have to go to a state hundreds of miles away. That is the situation facing a subcontractor in a case headed to the U.S. Supreme Court this fall, which could have far-reaching consequences for all companies in the construction industry. In the case of Atlantic Marine Construction Co. v. J-Crew Management, Inc., U.S. Supreme Court Case No. 12-929, the Court will decide whether a forum-selection clause included in the subcontract between the two parties should be enforced as a matter of federal law. This case is of particular importance to subcontractors and suppliers who are often smaller and less fnancially capable of incurring the costs of litigating in another state, and it may even reach consideration of the application of state-specifc laws invalidating forum-selection clauses. For that reason, numerous groups have asked to submit amicus briefs to weigh in on this issue. The project that led to the litigation involved a contract between the Appeals refused to issue a writ of mandamus to direct the transfer. In the briefs fled with the Supreme Court, the parties and the friends of the court took varying positions. Atlantic Marine argued that the forum selection clause was determinative of what venues were right, and which were "wrong," under the federal venue statute. The statute in question states that the district court shall dismiss or transfer a case if it is fled "in the wrong division or district." (emphasis added) Filing the action in the Texas district was "wrong," according to Atlantic, because the forum selection clause in the contract waived the right to litigate in a venue that would otherwise be available under the federal venue statutes. This holding has been adopted by the majority of the federal circuit courts, although not the Fifth Circuit. U.S. Corps of Engineers and Atlantic Marine to build a child development center at Fort Hood in Texas. Atlantic Marine subcontracted with J-Crew to provide certain labor and materials for construction of the project. The subcontract contained a forum selection clause mandating that disputes be litigated in Norfolk, Virginia. J-Crew fled its suit in the Western District of Texas, where the project was located. On a motion to transfer to the federal district including Norfolk, the district court denied the motion, and the Fifth Circuit Court of By contrast, J-Crew argues that a private contract between parties should not be permitted to transcend the federal venue statutes, which defne where proper venue can be located. Section 1404, which was being challenged by the contractor, applies to the most convenient forum, rather than whether or not the suit was in the "wrong" or "improper" venue. Under that statute, the court has discretion, rather than being mandated, to transfer the suit to another venue. The Fifth Circuit's decision determined that a private contract cannot render improper a statutorily-proper venue. Continued on page 13 10 International Door & Operator Industry™