Opinion
No. 04 Civ. 5538 (MBM).
February 15, 2005
JAMES F. SWEENEY, III, ESQ., NICOLETTI HORNIG CAMPISE SWEENEY, New York, NY, Attorney for Plaintiff.
VINCENT M. DEORCHIS, ESQ., DEORCHIS PARTNERS LLP, New York, NY, Attorney for Defendant and Cross-Claimant Zim Israel Navigation Co.
CHRISTOPHER P. KELLY, ESQ., REPPERT KELLY SATRIALE LLC, Basking Ridge, NJ, Attorney for Defendants and Cross-defendants Startrans Container Line Ltd. and Star Consolidators Ltd.
OPINION AND ORDER
Wildwood Imports ("Wildwood") sues Zim Israel Navigation Co. ("Zim"), Startrans Container Line Limited, and Star Consolidated Ltd. (collectively "Star Defendants") for damages arising from the alleged mishandling of cargo shipped aboard the vessel M/V Zim Shanghai ("Shanghai"). Star Defendants move to dismiss the complaint for lack of personal jurisdiction and improper venue. Both Wildwood and Zim oppose the motion. For the reasons set forth below, Star Defendants' motion is denied.
I.
On September 8, 2003, Star Defendants, both foreign corporations, were hired to ship cartons of lamp parts from Hong Kong to Norfolk, Virginia. ("Schedule A" attached to Compl.) Wildwood was the consignee and owner of the lamp parts. (Compl. ¶ 7) Star Defendants, as Non-Vessel Operating Common Carriers ("NVOCC"), arranged with Zim, a foreign Vessel Operating Common Carrier ("VOCC") with an office in New York, to perform the ocean carriage aboard the Shanghai. (Wildwood's Mem. of Law in Opp'n to Star's Mot. to Dismiss ("Wildwood Opp'n") at 1-2) NVOCC's "typically consolidate smaller shipments into containers and arrange for ocean transport of the containers by a [VOCC] for the shipper." (Wildwood Opp'n at 1-2) Under this arrangement, an NVOCC is considered the agent of the shipper and cargo owner or consignee. See 46 U.S.C. App. § 1702(17)(B). Zim issued its bill of lading to Star Defendants. (Id.; Ex. B. to Decl. of James Hirn ("Hirn Decl.")) The bill of lading contains a forum selection clause, which provides:
Star Defendants have an office in Boston. (Schedule A).
"`[N]on-vessel-operating common carrier' means a common carrier that does not operate the vessels by which the ocean transportation is provided, and is a shipper in its relationship with an ocean common carrier." See also 46 C.F.R. § 515.2(o)(2) (an NVOCC is "a common carrier that does not operate the vessels by which the ocean transportation is provided, and is a shipper in its relationship with an ocean common carrier").
All and any claims and/or disputes arising under this Bill of Lading or in connection therewith shall be brought before and determined by the courts and in accordance with the law at:
(a) the place where the Carrier has its head office, namely Haifa, Israel OR
(b) if the cargo originates in or is destined for the U.S.A., by the United States District Court for the Southern District of New York, N.Y., U.S.A.
Each of the above courts, respectively, shall have exclusive jurisdiction and therefore, no proceedings shall be brought before any other court.
(Ex. A to Hirn Decl.; Exs. B C to Decl. of James Sweeney ("Sweeney Decl.")) Wildwood alleges that the shipment arrived damaged, in violation of defendants' "obligations and duties as common carriers of merchandise by water for hire." (Compl. ¶ 6) On July 16, 2004, Wildwood commenced this action for $40,938.35 in damages against defendants. On September 17, 2004, Zim filed its answer to Wildwood's complaint as well as a cross-claim against Star Defendants for indemnification or contribution if Zim is found liable. On October 8, 2004, Zim also filed a third-party complaint against Star Defendants, repeating its claim for indemnification or contribution.
II.
This court has subject matter jurisdiction pursuant to 28 U.S.C. § 1333 (maritime and admiralty jurisdiction). On a motion to dismiss for lack of personal jurisdiction, see Fed.R.Civ.P. 12(b)(2), "the plaintiff bears the burden of showing that the court has jurisdiction over the defendants." Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996). At the motion to dismiss stage, "all allegations are construed in the light most favorable to the plaintiff and doubts are resolved in the plaintiff's favor. . . ." A.I. Trade Fin. Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993).
III.
A. Personal Jurisdiction
Star Defendants argue first that the complaint should be dismissed for lack of personal jurisdiction pursuant to the New York general jurisdiction statute for parties "doing business" in New York, N.Y. Civ. Prac. L. § 301, and the New York long-arm statute, id. § 302(a). Wildwood and Zim respond that Star Defendants are bound by the forum selection clause in Zim's bill of lading and hence have waived any objections to personal jurisdiction. The "requirement of personal jurisdiction represents . . . an individual right" and therefore "can, like other such rights, be waived." Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 704 (1984); see also Licensed Practical Nurses, Technicians and Health Care Workers of New York, Inc. v. Ulysses Cruises, Inc., 131 F. Supp.2d 393, 410 (S.D.N.Y. 2000). Thus, "parties to a contract may agree in advance to submit to the jurisdiction of a given court." Ins. Corp. of Ireland, 456 U.S. at 704.
Because of "the well-established agency relationship between the shipper and the NVOCC," Glyphics Media, Inc. v. M/V Conti Singapore, No. 02-4398, 2003 WL 1484145, at *7 (S.D.N.Y. Mar. 21, 2003), Wildwood is bound by the forum selection clause in Zim's bill of lading despite not having itself entered into the contract. Id.; see also Jockey Int'l, Inc. v. M/V Leverkusen Express, 217 F. Supp.2d 447, 457 (S.D.N.Y. 2002) (holding that forum selection clause in a bill of lading issued to an NVOCC binds the cargo owner/shipper because the NVOCC acts as the shipper's agent in arranging for the shipment through a VOCC); M. Prusman Ltd. v. M/V Nathanel, 670 F. Supp. 1141, 1142 (S.D.N.Y. 1987) (bill of lading issued by VOCC to NVOCC binds latter to consignee of shipment).
There appears to be no dispute that Zim's bill constitutes the contract of carriage and that the forum selection clause is mandatory. An exclusive or mandatory forum selection clause is presumptively valid.See M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972); New Moon Shipping Co. Ltd. v. MAN B W Diesal AG, 121 F.3d 24, 29 (2d Cir. 1997). The presumption of validity may be overcome only by "a clear showing that the forum selection clause is unenforceable under the circumstances." Ins. Corp. of Hannover v. Latino Americana de Reaseguros, S.A., 868 F. Supp. 520, 529 (S.D.N.Y. 1994) (citing Bremen, 407 U.S. at 10). The party seeking to invalidate the forum selection clause must demonstrate that: (a) the adoption of the clause in the contract "was the result of fraud or overreaching"; (b) the party opposing the clause "will be effectively deprived of a `day in court' due to the grave inconvenience or unfairness of the selected forum"; (c) the "fundamental unfairness of the chosen law may deprive the plaintiff of a remedy"; or (d) the clause "contravene[s] a strong public policy of the forum state."Id. (citations omitted). Star alleges none of the above. Hence, Star Defendants are deemed to have waived their objection to personal jurisdiction. See Atlantic Mut. Ins. Co. v. M/V Humacao, 169 F. Supp.2d 211, 215 (S.D.N.Y. 2001).
B. Venue
"On a motion to dismiss for improper venue pursuant to [ Fed.R.Civ.P.] 12(b)(3), a court must accept the facts alleged in the complaint as true and construe all reasonable inferences in the plaintiff's favor." V.R.S. Indus. v. B.H.P.C. Mktg., No. 01-570, 2001 WL 1297809, at *2 (S.D.N.Y. Oct. 25, 2001) (citation and quotation marks omitted).
Star Defendants contend that venue is improper because (i) not all of the defendants reside in this district and (ii) "it appears that none of the relevant witnesses are located in New York." However, Star Defendants must or should have contemplated this situation when they bound themselves to the forum selection clause in Zim's bill of lading. Moreover, "absent a strong countervailing consideration," "a mandatory clause should prevent a court from ordering a change of venue." Orix Credit Alliance, Inc. v. Mid-South Materials Corp., 816 F. Supp. 230, 233 (S.D.N.Y. 1993); see also Marra v. Papandreou, 216 F.3d 1119, 1123 (D.C. Cir. 2000) ("[A] forum-selection clause is best understood as a potential defendant's ex ante agreement to waive venue objections to a particular forum.") (quoting Northwestern Nat'l Ins. Co. v. Donovan, 916 F.2d 372, 375-76 (7th Cir. 1990)).
Star Defendants appear to move in the alternative for a transfer of venue to the Eastern District of Virginia, ostensibly under 28 U.S.C. § 1406(a). Section 1406, however, applies only where venue is improper, and by virtue of the forum selection clause, venue is proper in this district.
Even if the motion is considered as a motion to transfer under 28 U.S.C. § 1404, it should be denied. A contract clause selecting a forum is entitled to great weight. See Bremen, 407 U.S. at 15. The burden of establishing the need for a change of forum rests on the movant. See Factors, Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir. 1978); Jasol Carpet, Inc. v.Patcraft Commercial Carpet, Inc., No. 96-3064, 1997 WL 97831, at *3 (S.D.N.Y. Mar. 6, 1997). Courts have "broad discretion" to decide motions for transfer, which "are determined upon notions of convenience and fairness on a case-by-case basis." Dwyer v. Gen. Motors Corp., 853 F. Supp. 690, 692 (S.D.N.Y. 1994). Wildwood's choice of forum should not be disturbed unless the balance of factors tips decidedly in favor of a transfer. Jasol Carpet, 1997 WL 97831, at *3.
Star Defendants have not made any showing to justify a transfer. They only have speculated as to the location and availability of witnesses and cite no other difficulties with litigating in this district. Absent a detailed showing, Star Defendants fail to meet their burden "even without the heightened deference standard due a contractual forum clause." Days Inn of Am., Inc. v. L.A., Inc., No. 97-5476, 1998 WL 765182, at *4 (S.D.N.Y. Nov. 3, 1998).
* * *
For the reasons set forth above, Star Defendants' motion to dismiss is denied.SO ORDERED.