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declining to address the transfer issue where plaintiffs raised possibility of transfer in reply brief, but neither party engaged in any § 1404 analysis
Summary of this case from Dorsey v. Northern Life Insurance Co.Opinion
Case No. 5:01-CV-42
March 4, 2002
OPINION
Plaintiff, Viron International Corporation ("Viron"), filed its complaint against defendants, David Boland, Incorporated ("Boland") and Harden Enterprises, Inc. ("Harden"), on or about March 21, 2001, in the Ingham County Circuit Court alleging claims for breach of contract. Defendants removed the case to this Court on April 18, 2001, based upon diversity jurisdiction. Now before the Court is defendants' motion to dismiss, or in the alternative, to transfer venue, pursuant to Fed.R.Civ.P. 12(b)(3) and 28 U.S.C. § 1406(a). The Court heard oral argument on defendants' motion on December 10, 2001, and for the reasons set forth below, denies the motion.
In September of 2001, the case was reassigned from Judge Gordon J. Quist to Judge David W. McKeague.
I. Background
Viron is a Michigan corporation with its principal place of business in Michigan. Boland and Harden are both Florida corporations with their principal places of business in Florida. Viron is engaged in the business of manufacturing and selling pollution control devices and related equipment. Boland is a contractor specializing in federal government construction projects. Harden is also a contractor. On or about February 1, 2000, Viron and Harden entered into an agreement (the "Harden Agreement"), pursuant to which Viron agreed to manufacture and sell to Harden four industrial fans, along with various fan controllers, foundations, anchors, and field quality control services for the fan units. On or about February 2, 2000, Viron and Boland entered into an agreement (the "Boland Agreement"), pursuant to which Viron agreed to fabricate and supply exhaust stacks, stainless steel ductwork, and various foundation supports, drains, guy wires, and engineering services. The goods and services to be provided by Viron under both contracts were to be incorporated into a ventilation and pollution control system in the Bioassay Laboratory currently under construction in Aiken, South Carolina.
The Harden Agreement and the Boland Agreement both contain the following provision:
Applicable Laws. The Contract shall be governed by, subject to, and construed according to the laws of the State of Florida. Seller shall comply with all applicable federal, state and local laws. Sole venue for any litigation arising hereunder shall be in a court in Orange or Brevard County, Florida. The prevailing party shall be entitled to its costs, legally taxable or otherwise and its reasonable attorneys' fees in any litigation arising hereunder.
(Harden Agreement ¶ 9; Boland Agreement ¶ 9.) Viron filed the instant suit after Harden and Boland failed to pay Viron for worked performed and equipment supplied pursuant to the Agreements. Defendants have filed the instant motion for dismissal or transfer, arguing that the forum selection clause in the Agreements renders Orange or Brevard County, Florida the only proper venue for litigation arising under the Agreements.
II. Discussion
At the forefront of the instant motion is the parties' dispute as to whether defendants' motion is procedurally correct. Viron argues that defendants' motion must fail because it is based upon the wrong statutory provision. Defendants bring their motion pursuant to Fed.R.Civ.P. 12(b)(3) and 28 U.S.C. § 1406(a). Rule 12(b)(3) authorizes motions to dismiss based upon improper venue. Similarly, 28 U.S.C. § 1406(a) provides that "[t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." The only difference between Rule 12(b)(3) and § 1406(a) is that § 1406(a) allows a court to dismiss a case or transfer it to an appropriate federal venue, whereas Rule 12(b) only permits dismissal. It is clear from the language of Rule 12(b)(3) and § 1406(a) that those provisions apply only where venue in the initial court is improper. Viron argues that defendants' motion must be denied because venue in this Court is proper and, therefore, defendants cannot obtain relief under Rule 12(b)(3) or § 1406(a). Rather, Viron asserts, the only basis for defendants' motion is 28 U.S.C. § 1404(a). Defendants, however, have not moved for transfer of venue pursuant to 28 U.S.C. § 1404(a). That statute provides:
In fact, defendants contend that the factors used by courts when conducting an analysis under 28 U.S.C. § 1404(a) are irrelevant in this case because they are proceeding under 28 U.S.C. § 1406(a). See Defendants' Reply Brief in Support of Motion to Dismiss, or in the Alternative, to Transfer Venue at 7.
(a) For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.28 U.S.C. § 1404(a).
Whether a motion is governed by § 1404(a) or § 1406(a) is a significant issue in determining how a forum selection clause should be enforced because in deciding a § 1404(a) transfer motion, a court must consider and balance a number of factors relating to the private interests of the parties as well as factors affecting the public interest. See Moses v. Business Card Express, Inc., 929 F.2d 1131, 1137 (6th Cir.), cert. denied, 502 U.S. 821 (1991). Viron argues that defendants focus solely upon the forum selection clause without explaining why other § 1404(a) factors support their motion and, thus, defendants' motion must be denied because under Supreme Court precedent a forum selection clause is not dispositive in the § 1404(a) analysis but must be weighed along with other factors relating to convenience of the parties and witnesses. Defendants do not dispute this point, but maintain that Rule 12(b)(3) and/or § 1406(a) provides the proper vehicle for enforcing the forum selection clause.
Viron cites the Supreme Court's decision in Polizzi v. Cowles Magazines, 345 U.S. 663 (1953), and other cases in support of its argument that § 1404(a) is the correct procedural basis for defendants' motion because Pollizi establishes that venue is governed by the removal statute, 28 U.S.C. § 1441(a) , in cases removed to federal district court rather than by the general venue statute, 28 U.S.C. § 1391. Viron contends that under Pollizi, Rule 12(b)(3) and § 1406(a) can never serve as a means for enforcing a forum selection clause because the venue is always proper in the district to which a state court action is removed (assuming that the removal complies with the statutory requirements). Defendants argue that Pollizi and the other cases cited by Viron are not germane to the enforcement of forum selection clauses because those cases did not involve forum selection clauses. Although defendants are correct that Pollizi did not involve a forum selection clause, many courts that have considered forum selection clauses have held that where venue is proper either under § 1391 or § 1441 (in a removal setting), neither § 1406(a) nor rule 12(b)(3) can be a ground for enforcing the clause because a forum selection clause does not render venue improper. On the other hand, courts have also enforced forum selection clauses through § 1406(a) and Rule 12(b)(3). Therefore, Pollizi is of limited guidance in determining the correct procedural vehicle for enforcing a forum selection clause or explaining why some courts enforce forum selection clauses in removed cases by applying § 1406(a), see Int'l Software Sys. v. Amplicon, Inc., 77 F.3d 112 (5th Cir. 1996), while other courts in removed cases consider forum selection clauses under § 1404(a),see Zenith Elec. Corp. v. Kimball Int'l Mfg., Inc., 114 F. Supp.2d 764, 774 (N.D.Ill. 2000). This Court believes that the issue can be correctly decided only by examining cases actually involving enforcement of such clauses.
Hite v. Norwegian Carribean Lines, 551 F. Supp. 390 (E.D.Mich. 1982), and Translinear, Inc. v. Republic of Haiti, 538 F. Supp. 141 (D.D.C. 1982).
Pursuant to 28 U.S.C. § 1441(a),
any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.28 U.S.C. § 1441(a).
In M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972), the Supreme Court held that forum selection clauses "are prima facie valid and should be enforced unless enforcement is shown by the resisting party to be `unreasonable' under the circumstances." 407 U.S. at 10 (footnote omitted). The clause at issue in Bremen was part of a towage contract between international parties. The clause provided that "`[a]ny dispute arising must be treated before the London Court of Justice.'" Id. at 2. The Court rejected the respondent's argument that the clause should not be interpreted to provide for an exclusive forum and instead found that the language was "clearly mandatory and all-encompassing." Id. at 20. Thus, under Bremen, a party seeking to resist a valid forum selection clause has the burden of "show[ing] that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching." Id. at 15. Although Bremen was an admiralty case, courts, including the Sixth Circuit, have extended its holding to non-admiralty cases, including those based upon diversity jurisdiction.See Shell v. R.W. Sturge, Ltd., 55 F.3d 1227, 1229 (6th Cir. 1995); Int'l Software Sys., 77 F.3d at 114.
In Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22 (1988), the Court addressed the issue of whether state or federal law controls a motion to transfer a case to a venue provided in a forum selection clause. 487 U.S. at 24. The plaintiff in that case filed suit in the Northern District of Alabama alleging breach of a dealership agreement. The dealership agreement contained a forum selection clause providing "that any appropriate state or federal district court located in the Borough of Manhattan, New York City, New York, shall have exclusive jurisdiction over any case or controversy" under the agreement. Id. at 24 n. 1. In the district court, the defendant moved either for transfer of the case to the Southern District of New York pursuant to § 1404(a) or to dismiss the case for improper venue pursuant to § 1406(a). The district court denied the motion on the ground that the transfer motion was controlled by Alabama law, which did not favor such provisions. On appeal, a divided panel of the Eleventh Circuit reversed, holding that the forum selection clause was enforceable as a matter of federal law. Subsequently, an en bane panel affirmed the original panel's determination, reasoning that the clause was enforceable as a matter of federal law employing the standards in Bremen. The Supreme Court affirmed, but under slightly different reasoning.
The Court held that when a forum selection clause is offered as a ground for transfer of venue, federal law, as applied through 28 U.S.C. § 1404(a), provides a basis for decision. See id. at 28. Under the Court's analysis, the forum selection clause itself is not controlling, but rather must be considered along with other § 1404(a) factors. A forum selection clause "will be a significant factor that figures centrally in the district court's" transfer analysis, but, like other § 1404(a) transfer factors which must be balanced in the exercise of discretion, "should receive neither dispositive consideration . . . nor no consideration . . . but rather the consideration for which Congress provided in § 1404(a)." Id. at 29-31.
Bremen and Stewart both hold that forum selection clauses are generally enforceable, and Stewart holds that a forum selection clause may be considered as part of a § 1404(a) analysis. However, nothing in the Court's decision in Stewart suggests that § 1404(a) is the exclusive basis for enforcing a forum selection clause. As the Fifth Circuit has recently stated:
Stewart discusses the devices a trial court may employ to transfer an action when one party urges same based on a forum selection clause. The Court found that § 1404(a) is an appropriate vehicle for such a transfer because it allows for an individualized assessment of fairness and convenience, with a forum selection clause being one factor for consideration. Stewart does not mandate that whenever a forum selection clause exists any transfer must fall under § 1404(a).Jackson v. West Telemarketing Corp. Outbound, 245 F.3d 518, 522 (5th Cir. 2001), cert. denied, 122 S.Ct. 394 (2001). A categorical rule that forum selection clauses must be considered under § 1404(a) would be unworkable for one simple reason: all forum selection clauses are not created equal. Often times forum selection clauses allow suit to be brought in state or federal court located within a particular state or within a particular federal district or county within that district. It is also common, however, for forum selection clauses to preclude litigation in all courts except a specific state court or a foreign court, as was the case in Bremen. Where a forum selection clause makes a state court or foreign court the exclusive venue, such that litigation in federal court is precluded, Stewart has no application because § 1404(a) provides no authority for a federal court to transfer a case to a state or foreign court. When presented with those types of clauses, courts have generally held that Stewart is inapplicable to forum selection clauses limiting venue to a state or foreign court. In Jones v. Weibrecht, 901 F.2d 17 (2d Cir. 1990) (per curiam), the Second Circuit declined to apply Stewart to a forum selection clause designating the Supreme Court of New York, Essex County, as the exclusive venue. The court stated:
There is no basis, as Jones would have it, to import the discretionary federal standard of section 1404(a) discussed in Stewart to the instant cases. A motion to transfer an action to another federal district pursuant to section 1404(a) calls for an " `individualized, case-by-case consideration of convenience and fairness.' " Id. at 29, (quoting Van Dusen v. Barrack, 376 U.S. 612, 622, 11 L.Ed.2d 945, 84 S.Ct. 805, 812, (1964)). The same broad-based balancing is not appropriate where, as here, a party seeks to have an action dismissed or remanded to state court, rather than transferred, on the basis of a forum selection clause that purports to preclude litigation from a venue other than a specific state court. Thus, the highly discretionary standard enunciated in Stewart is inapplicable to the enforceability of the forum selection clauses in the instant cases.Id. at 19. The court concluded that the forum selection clause should be enforced under Bremen and affirmed the district court's dismissal of the complaint and remand to state court based upon improper venue. Similarly, in International Software Sys. v. Amplicon, Inc., 77 F.3d 112 (5th Cir. 1996), the Fifth Circuit held that dismissal of a case under § 1406(a) is the proper procedure for enforcing a forum selection clause limiting the agreed venue to state court. Id. at 115; see also Lambert v. Kysar, 983 F.2d 1110, 1113, 1116 (1st Cir. 1993) (affirming dismissal of Massachusetts action pursuant to Rules 12(b)(3) and (6) based upon forum selection clause requiring suit to be brought instate court in Clark County, Washington); Lipcon v Underwriters at Lloyds, London, 148 F.3d 1285, 1289-90 (11th Cir. 1998) (affirming dismissal pursuant to Rule 12(b)(3) based upon forum selection clause making courts of England the exclusive jurisdiction for contractual disputes), cert. denied, 525 U.S. 1093 (1999); BHP Int'l Inv., Inc. v. Online Exch., Inc., 105 F. Supp.2d 493, 496 n. 4 (E.D.Va. 2000) ("Since federal courts lack authority to transfer cases to foreign or state courts, the only method through which such a forum selection clause may be honored is to allow a dismissal for improper venue."). The Sixth Circuit's decisions in Shell v. R. W. Sturge, Ltd., 55 F.3d 1227 (6th Cir. 1995), and Baker v. LeBoeuf, 105 F.3d 1102 (6th Cir. 1997), cited by defendants as support for their reliance on Rule 12(b)(3) and § 1406(a), are consistent with the cases mentioned above because the forum selection clauses in those cases provided for exclusive jurisdiction in English courts. See Shell, 55 F.3d at 1229; Baker, 105 F.3d at 1104. Although venue is technically "proper" in such cases under the applicable venue provision, courts usually apply § 1406(a) or Rule 12(b)(3) without considering whether the forum selection clause actually renders venue improper.
These cases and many more like them refute Viron's assertion thatBremen has been overruled by § 1404(a). Indeed, for the reason discussed above, § 1404(a) could not even be applied in cases falling within the strict confines of Bremen, i.e., admiralty cases and perhaps international cases in which a forum selection clause vests exclusive jurisdiction in a foreign court.
A different situation is presented where the forum selection clause at issue allows for suit in federal court, thus making transfer possible, as in this case. In such cases, many courts have held that § 1404(a), as applied in Stewart, rather than § 1406(a), Rule 12(b)(3), or some other rule, provides the proper mechanism for enforcing a forum selection clause. Those courts reason that a forum selection clause does not render venue (if otherwise proper under 28 U.S.C. § 1391 or 28 U.S.C. § 1441) improper. In Jumara v. State Farm Insurance Co., 55 F.3d 873 (3d Cir. 1995), the district court for the Eastern District of Pennsylvania dismissed the case pursuant to § 1406(a) based upon a forum selection clause which the district court interpreted as permitting suit only in state court in Luzerne County. The Third Circuit held that the district court committed error because it should have considered the forum selection clause (which the Third Circuit interpreted as also allowing suit to be filed in federal court in the district covering Luzerne County) under § 1404(a) rather than § 1406(a). The court reasoned:
The forum selection clause in this case provides that "[s]ole venue for any litigation arising hereunder shall be in a court in Orange or Brevard County, Florida." The Court finds that it is reasonable to interpret this clause as allowing suit in either state or federal court in Florida because the clause specifies "a court" in Brevard County or Orange County, which includes any state or federal court in those counties. See Aarons v. Worldtel Servs, Inc., No. 95 Civ. 8415, 1996 WL 185714, at *1-2 (S.D.N.Y. Apr. 17, 1996) (interpreting forum selection clause providing for "adjudicat[ion] exclusively by a court in Orange County, State of California" as "permit[ting] litigation in federal as well as state court"). (The Court notes that the Orlando division of the United States District Court for the Middle District of Florida is located in Orange County, Florida.)
Clearly, venue would be proper in the Middle District of Pennsylvania where the plaintiff resides, the defendant transacts business, the contract was signed, and events triggering the dispute occurred. Venue is also proper, however, in the Eastern District of Pennsylvania, where the defendant transacts business and is therefore subject to personal jurisdiction. See 28 U.S.C. § 1391(c) (venue proper in judicial district in which corporation is doing business); see also Stewart Organization, Inc., 487 U.S. at 29 n. 8, 108 S.Ct. at 2243 n. 8 ("The parties do not dispute that the District Court properly denied the motion to dismiss the case for improper venue under 28 U.S.C. § 1406(a) because respondent apparently does business [there]."). Since venue is proper in the Eastern District where the action commenced, the district court's effective dismissal of the action constituted an error of law. The District Court should instead have applied the appropriate balancing test under 28 U.S.C. § 1404(a) to determine whether the case should proceed in the Eastern District or be transferred to the Middle District.Id. at 878-79 (footnote omitted). Numerous other courts have applied the same reasoning. Licensed Practical Nurses, Technicians Health Care Workers of New York Inc. v Ulysses Cruises, Inc.,
Defendants apparently interpret the clause in the same manner as they seek dismissal or transfer of this case to the United States District Court for the Middle District of Florida. Viron does not disagree with this interpretation. 131 F. Supp.2d 393, 405 (S.D.N.Y. 2000) ("By Act of Congress, a civil action based on diversity of citizenship may be brought in a district where `a substantial part of the events . . . giving rise to the claim occurred,' 28 U.S.C. § 1391(a)(2); no exception is made for cases where the parties have agreed that suit may not be brought in that district."); Huntingdon Eng'g Envtl. Inc. v. Platinum Software Corp., 882 F. Supp. 54, 57 (W.D.N.Y. 1995) ("By statute, venue is proper in this Court. The parties' agreement to litigate in another forum is not a question of venue, but one of contract. Accordingly, this case will not be dismissed or transferred for improper venue under Fed.R.Civ.P. 12(b)(3) and 28 U.S.C. § 1406(a)."); Mead v. Future Med. Publ'g, Inc., No. 1:98CV00554, 1999 WL 1939256, at *2 (M.D.N.C. Feb. 22, 1999) ("Because venue here is proper, defendants' motion for dismissal pursuant to Section 1406(a) must be denied."); BHP Int'l Inv., 105 F. Supp.2d at 496-97 (noting that while the Fourth Circuit has not addressed the issue, "District courts within the Fourth Circuit have almost uniformly held that a motion to dismiss for improper venue is not the correct procedural vehicle for enforcing a forum selection clause when transfer is proper"); Shaw Group, Inc. v. Natkin Co., 907 F. Supp. 201, 203 (M.D.La. 1995) (rejecting the defendant's motion to dismiss under § 1406(a) because "this Court is not a court of improper venue"). InCreditors Collection Bureau v. Access Data, 820 F. Supp. 311 (W.D.Ky. 1993), a case cited by defendants, the court observed that § 1404(a) and § 1406(a) both authorize transfers from one district to another but held that § 1404(a) governed the transfer request because venue was proper in that district. Id. at 312-13.
In contrast, some courts have held that transfer of a case pursuant to a forum selection clause should be based upon § 1406(a). In Hoffman v. Buroughs Corp., 571 F. Supp. 545 (N.D.Tex. 1982), the court stated:
While it appears that a transfer on the basis of a forum selection clause may be accomplished pursuant to either [§ 1404(a) or § 1406(a)], this Court is of the opinion that such a transfer is more appropriately treated under section 1406(a). It is true that venue in the plaintiff's chosen court, while contrary to the contractual agreement, may satisfy the legal requirements for venue of 28 U.S.C. § 1391. However, the nature of a motion to enforce a forum selection clause is that venue is wrong in the first instance, see Wright, Miller Cooper, Federal Practice and Procedure § 3847 (1982), and a plaintiff should not be allowed to gain an advantage by bringing suit in the wrong court.Id. at 551. See also Arrow Plumbing Heating, Inc. v. North American Mech. Servs. Corp., 810 F. Supp. 369, 371 (D.R.I. 1993) (stating that "[a] motion under § 1406(a) for improper venue, rather than under § 1404(a) for inconvenience, is appropriate where the moving party seeks to enforce a contractual forum selection clause"), Bonded Inspections, Inc. v. Northrop Grumman Corp., No. Civ. A. 3:98-CV-0214D, 1998 WL 185518, at *2 (N.D.Tex. Apr. 10, 1998) (transferring case under § 1406(a) because "[b]y initiating suit in Texas contrary to the parties' contractual agreement, [the plaintiff] filed suit in the wrong venue").
Still other courts have considered transfer based upon a forum selection clause under both § 1404(a) and § 1406(a) without addressing the improper/proper forum issue. See Jones v. GNC Franchising, Inc., 211 F.3d 495, 497-99 (9th Cir.), cert. denied, 531 U.S. 928 (2000); cf. Hollis v. Florida State Univ., 259 F.3d 1295, 1300 (11th Cir. 2001) (holding that § 1441(a) establishes federal venue in a removed case but noting that a defendant may seek a transfer under § 1404(a) after removal and stating in dicta that "[t]here may even be a basis for requesting a transfer pursuant to § 1406(a)").
The Sixth Circuit has not directly addressed the issue of whether Rule 12(b)(3) or § 1406(a) may be used to enforce a forum selection clause where venue is otherwise proper under 28 U.S.C. § 1391 or 28 U.S.C. § 1441. Defendants suggest that the Sixth Circuit's opinion in Security Watch, Inc. v. Sentinel Systems, Inc., 176 F.3d 369 (6th Cir. 1999), cert. denied, 528 U.S. 1181 (2000), provides support for their position that their motion is proper under Rule 12(b)(3) or § 1406(a). In that case, the district court dismissed the plaintiff's actions upon two grounds, one of which was that a forum selection clause in the parties' contract preluded litigation in Tennessee. The district court apparently did not consider the possibility of transfer, although the clause at issue would have allowed the case to be transferred. See id. at 370 (providing for litigation in certain state or federal courts in Virginia). Analyzing the case under Bremen, the Sixth Circuit affirmed the dismissal of the action against one of the defendants based upon the forum selection clause. The court did not address the procedural basis for the dismissal, but in a footnote stated:
Neither the parties nor the district court specified the subsection of Fed.R.Civ.P. 12(b) that should govern a motion to dismiss based on contractual forum preclusion, and there is some debate among the circuits as to whether dismissal pursuant to Fed.R.Civ.P. 12(b)(1), 12(b)(3), or 12(b)(6) is most appropriate.Id. at 371 n. 2 (citing Lipcon v. Underwriters at Lloyd's London, 148 F.3d 1285, 1289-90 (11th Cir. 1998), cert. denied, 525 U.S. 1093 (1999)).
This Court does not find Security Watch to be instructive or particularly useful in determining whether Rule 12(b)(3) or § 1406(a) applies where venue is proper under the applicable venue statute and the sole basis for transfer or dismissal is a forum selection clause that permits a transfer to another federal district court. First, in Security Watch, the court specifically declined to decide which, if any, of three separate rules of procedure governed the motion. Second, Lipcon v. Underwriters at Lloyd's London, the case cited in the footnote, involved a forum selection clause providing for exclusive jurisdiction in the English courts, and thus, unlike the clause at issue in Security Watch, did not allow for transfer to another federal district court. Finally, it is clear from the opinion in Security Watch that the procedural basis for enforcing the forum selection clause was not even an issue raised by the parties.
This Court believes the following observation by the Sixth Circuit in an unpublished per curiam opinion to be more indicative of how the Sixth Circuit would resolve the issue:
28 U.S.C. § 1406(a) provides for transfer or dismissal when a case is brought where venue is initially "wrong." It does not appear under Ricoh that a forum selection clause makes the venue "wrong" for § 1406 purposes when the action is filed in a district other than that specified in the clause. Ricoh suggests that § 1406(a) applies mainly to those situations when the action is initially brought in a division or district where the statutory requirements for venue ( 28 U.S.C. § 1391) have not been met.Blue Ash Dev., Inc. v. Polan, No. 94-6324, 1996 WL 1828, at *1 n.l (6th Cir. Jan. 2, 1996) (per curiam) (citations omitted). This Court, like many others, agrees with this analysis because it recognizes that venue, in the first instance, is controlled by the applicable federal statute rather than the agreement of the parties. Thus, if venue is proper under either 28 U.S.C. § 1391 or 28 U.S.C. § 1441, it does not become improper simply because there is a forum selection clause. This result makes even more sense where it is the defendant, as the removing party, who chooses the venue. See Serrano v. United States Fire Ins. Co., No. EP-00-CA-255-DB, 2000 WL 33348220, at *2 (W.D.Tex. Nov. 7, 2000) (stating that "the only proper way [for a removing defendant] to assert a challenge to venue, without flouting the venue provisions of 28 U.S.C. § 1441, is to do so pursuant to 28 U.S.C. § 1404(a), rather than 28 U.S.C. § 1406(a)").
Because venue is proper in this Court pursuant to 28 U.S.C. § 1441(a), a motion pursuant to 28 U.S.C. § 1404(a), not § 1406(a), is the proper basis to enforce the forum selection clause in the parties' contract. As noted above, defendants have not moved for transfer pursuant to § 1404(a), although they could have done so. See Stewart, 487 U.S. at 24 (noting that defendant, relying on the contractual forum selection clause, had moved in the district court to transfer the case under 28 U.S.C. § 1404(a) or to dismiss for improper venue under 28 U.S.C. § 1406(a)). Therefore, for the foregoing reasons, the Court will deny defendants' motion to dismiss, or in the alternative, to transfer venue, pursuant to 28 U.S.C. § 1406(a).
Even in the absence of a motion, a court may transfer a case sua sponte pursuant to § 1404(a). Carver v. Knox County, 887 F.2d 1287, 1291 (6th Cir. 1989). The Court declines to do so in this case. In deciding whether to transfer venue under § 1404(a), the Court must examine a number of factors, including convenience of the parties, convenience of the witnesses, and the interests of justice. See Moses v. Business Card Express, Inc., 929 F.2d 1131, 1137 (6th Cir.), cert. denied, 502 U.S. 821 (1991). The parties' briefs do not contain an analysis of the § 1404(a) factors as applied to the facts of this case. See, e.g., Defendants' Reply Brief in Support of Motion to Dismiss, or in the Alternative, to Transfer Venue at 6-7 (declining to discuss § 1404(a) case-specific factors, stating that such factors were not relevant because defendants had filed their motion pursuant to § 1406(a)). Moreover, the parties' responses to the Court's questions at oral argument provide the Court with insufficient information to engage in anything but a speculative analysis of a majority of the § 1404(a) factors. See Kumarelas v. Kumarelas, 16 F. Supp.2d 1249, 1256 (D.Nev. 1998) (declining to sua sponte transfer case under § 1404(a) because parties had not fully briefed the issues and defendant's discussion of the § 1404(a) factors at oral argument was brief).
An Order consistent with this Opinion will be entered.
ORDER
In accordance with the Opinion filed this date,
IT IS HEREBY ORDERED that Defendant's Motion To Dismiss, Or In The Alternative, To Transfer Venue (docket no. 3) is DENIED.