Summary
In Great White Fleet Ltd. v. DSCV Transport Inc., 2000 WL 1480404, at *2 (S.D.N.Y. 2000), the district court found that the service contract should govern based on contractual language providing that "[a]ll disputes arising out of or by reason of the contract or the relationships created thereby shall be brought by or against the Carrier in the [Eastern District of Louisiana]."
Summary of this case from Calchem Corp. v. Activsea USA LLCOpinion
00 Civ. 4073 (JSM)
October, 2000
Gregory Barnett, Casey Barnett, LLC, New York, NY, For plaintiff.
William F. Krebs, Galland, Kharasch, Greenberg, Fellman Swirsky, P.C., Washington, D.C., For defendant.
OPINION and ORDER
DSCV Transport ("Defendant") seeks to dismiss the complaint pursuant to a forum selection clause contained in its service contract with Great White ("Plaintiff"). For the reasons stated below, this action is hereby transferred to the Eastern District of Louisiana in New Orleans, LA.
On September 3, 1999, the parties executed a maritime service contract (the "Service Contract") that provided for weekly shipments of vehicles and household goods on Plaintiff's vessels. Under the Service Contract, Plaintiff agreed to provide a minimum amount of cargo space and to charge specified freight rates, while Defendant agreed to ship a minimum amount of cargo. The Service Contract and its subsequent amendments governed the parties' relationship for ten months.
Contained in Term 12 of the Service Contract is the following provision:
Refer to Rule 100 of Carrier's Service Contract Tariff — FMC 005 and the subterms thereof, and the Rules and Regulations of the Carrier's FMC Tariff of General Applicability FMC UBCU-003 for any terms of the service contract not otherwise specifically provided for in this section.
Clark Decl. Ex. 1 at 3. Rule 100-G of Carrier's Service Contract Tariff — FMC 005 (the "Service Contract Tariff") provides that "[a]ll disputes arising out of or by reason of the contract or the relationships created thereby shall be brought by or against the Carrier in the United States District Court of the Eastern District of Louisiana in New Orleans, LA." Id. Ex. 4 at 2.
The Carrier's FMC Tariff of General Applicability FMC UBCU- 003 ("FMC UBCU-003") contains a provision governing shipment of freight, and permits the carrier to bring suit connected to a "shipment or transport" in a state or federal court in New York. Id. Ex. 3 at 1. This language also appears in the bills of lading issued for each shipment.
Plaintiff brought this action to recover payments allegedly owed under the Service Contract for numerous shipments. Plaintiff relies on the forum selection clause contained in FMC UBCU-003 in asserting that the Southern District of New York is a proper forum. Defendant, on the other hand, argues that the mandatory Louisiana forum selection clause contained in the Service Contract Tariff governs all disputes arising between the parties that relate to the Service Contract, and that therefore suit in New York is contractually barred. The Court agrees with Defendant.
Both parties conceded at oral argument that the Service Contract incorporates two conflicting forum selection clauses-a mandatory Louisiana forum selection clause contained in the Service Contract Tariff and a permissive New York forum selection clause contained in FMC UBCU-003. In interpreting contract provisions, courts must attempt to identify the parties' intent as expressed in the contractual language. See Misano di Navigazione, SPA v. United States, 968 F.2d 273, 275 (2d Cir. 1992). Plaintiff argues that the more specific New York forum selection clause was intended to govern claims relating to freight shipments, while the more general Louisiana forum selection clause was intended to apply to disputes arising under the Service Contract itself, such as a failure to provide minimum cargo space. However, this argument belies the plain language of the Service Contract and the Service Contract Tariff.
Term 12 of the Service Contract unambiguously incorporates the terms of the Service Contract Tariff, and the Service Contract Tariff unambiguously contains a mandatory forum selection clause requiring that all suits arising out of the Service Contract "or the relationships created thereby" be brought in the Eastern District of Louisiana. Because the Service Contract created and defined the parties' relationship, and the Service Contract Tariff specifically supplies additional terms to the Service Contract, these two documents together evidence the parties' intent that any disputes that arise between them should be litigated in Louisiana. Term 12 goes on to reference FMC UBCU-003 "for any terms of the Service Contract not otherwise specifically provided for in this section." This language can be read as incorporating FMC UBCU-003's terms into the Service Contract to the extent that they do not conflict with those found in FMC-005. But regardless of how one parses the language of Term 12, the broad language of the Louisiana forum selection clause contained in the Service Contract Tariff indicates a clear intention to litigate all disputes in the Eastern District of Louisiana.
Moreover, because the Service Contract and the Service Contract Tariff form the overarching agreement between the parties, its terms are broad enough to govern suits relating to freight shipments, despite Plaintiff's argument that only the more specific freight provision in FMC UBCU-003 and its permissive New York forum selection clause apply to such disputes. See Eastern Fish Co. v. South Pac. Shipping Co., 105 F. Supp.2d 234, 237-38 (S.D.N.Y. 2000). For example, the Service Contract sets forth the freight rates that form the basis for calculating the price of each freight shipment.
Finally, because the permissive New York forum selection clause also appears in the bills of lading that were issued with each shipment, Plaintiff suggests that they operated as an amendment to or waiver of the mandatory forum selection clause contained in the Service Contract. In general, bills of lading are contracts of carriage between the shipper and carrier. See Porky Prods. v. Nippon Express U.S.A., 1 F. Supp.2d 227, 230 (S.D.N.Y. 1997) (citing International Knitwear Co. v. M/V ZIM CANADA, No. 92 Civ. 7508, 1994 WL 924203, at *3 (S.D.N.Y. Oct. 6, 1994)), aff'd, 152 F.3d 920 (2d Cir. 1998). But where the parties' relationship is governed by a separate contact, that contract acts as the contract of carriage and bills of lading are "mere receipts." Associated Metals Minerals Corp. v. S/S Jasmine, 983 F.2d 410, 413 (2d Cir. 1993) (listing cases); Eastern Fish, 105 F. Supp.2d at 238-39 (upholding an arbitration clause contained in a service contract despite the existence of a conflicting forum selection clause in a bill of lading); 2A Benedict on Admiralty § 34, at 4-14 (2000). In addition, a carrier cannot unilaterally alter the terms of a contract by inserting a conflicting term into a bill of lading. See Northern Pac. Ry. Co. v. American Trading Co., 195 U.S. 439, 462-63, 25 S. Ct. 84, 91-92 (1904); Hellenic Lines, Ltd. v. Embassy of Pakistan, 467 F.2d 1150, 1154 (2d Cir. 1972).
Because the above analysis demonstrates that the parties intended that their disputes be litigated in the Eastern District of Louisiana, the only remaining question is whether the Court should dismiss the complaint or transfer this action to that court.
Defendant has moved under Rule 12(b)(2) to dismiss the complaint for lack of personal jurisdiction. Several courts have determined that transfer pursuant to section 1404(a) is the proper disposition of a case where the parties have contractually selected an alternate forum. 28 U.S.C. § 1404(a); see, e.g., Maltz v. Union Carbide Chem. Plastics Co., 992 F. Supp. 286, 295-96 (S.D.N.Y. 1998); Haskel v. FPR Registry, Inc., 862 F. Supp. 909, 912-16 (E.D.N.Y. 1994).
For the foregoing reasons, this case is transferred to the Eastern District of Louisiana in New Orleans, LA.
SO ORDERED.