1

The Honorable Joan N. Ericksen, United States District Judge for the District

of Minnesota, sitting by designation.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 02-3829

___________

Rainforest Cafe, Inc., *

*

 Appellant, *

* Appeal from the United States

v. * District Court for the

* District of Minnesota.

EklecCo, L.L.C., *

*

 Appellee. *

___________

Submitted: June 13, 2003

Filed: August 15, 2003

___________

Before RILEY, and HEANEY, Circuit Judges, and ERICKSEN,1

 District Judge.

___________

HEANEY, Circuit Judge.

Rainforest Cafe, Inc. (Rainforest) appeals from the district court’s order

dismissing its declaratory judgment action against EklecCo L.L.C. (EklecCo) on the

ground that the proper venue for the suit was New York Supreme Court. We affirm.
2

Mist limited its liability under this assumption agreement to only those assets

and accounts receivable related to the operation of its Palisades Center restaurant. As

part of the agreement, however, Lightning continued to have full, unlimited liability

under the lease as if no assignment had been made.

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BACKGROUND

Rainforest is a Minnesota corporation that operates a chain of theme

restaurants. EklecCo is a real estate development company that operates the Palisades

Center Mall in Clarkstown, New York. In 1996, Rainforest and EklecCo agreed that

Rainforest would open one of its restaurants at the Palisades Center Mall. On August

7, 1996, EklecCo and a wholly owned subsidiary of Rainforest named Rainforest

Cafe, Inc.-Lightning (Lightning) entered into a ten-year lease agreement. Rainforest

guaranteed the first three years of Lightning’s obligations under the lease. The lease

contained a forum selection clause which states:

This Lease, and any dispute concerning this Lease, shall be governed by

the laws of the state of New York and any dispute concerning the

application or any interpretation of any portion of the Lease or the

conduct of the parties shall be brought in the New York Supreme Court,

Onondaga County.

(Appellee’s App. at 47.)

On December 29, 1996, EklecCo and Lightning entered into an assignment

agreement whereby another Rainforest subsidiary, Rainforest Cafe, Inc.-Mist (Mist)

assumed Lightning’s rights and obligations under the Palisades Center lease.2

 On

April 15, 1998, a number of Rainforest subsidiaries, including Lightning, were

merged into Mist, leaving Mist as the surviving corporation. On September 21, 2000,

Rainforest merged Mist and another subsidiary into itself, leaving Rainforest as the

surviving corporation. 
3

The issue of the parties’ obligations under the lease is not before this court.

4

EklecCo timely removed the matter to the district court based on the parties’

diversity of citizenship.

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Meanwhile, the restaurant operating in the Palisades Center Mall was not

performing as Rainforest had hoped. Eventually, a dispute arose as to what

Rainforest’s obligations were under the lease. EklecCo advised Rainforest that as a

result of its corporate restructurings, it was now in the position of Lightning, the

original tenant. Thus, EklecCo maintained that Rainforest had become fully liable

for the entire ten-year lease, rather than simply a guarantor for the first three years of

the term.3

After receiving word of EklecCo’s position, Rainforest filed Articles of

Correction with the Minnesota Secretary of State, contending that it had mistakenly

merged Lightning into Mist, and seeking to correct the matter by deleting reference

to Lightning in its 1998 merger documents. Once the Secretary of State certified

Rainforest’s Articles of Correction, Rainforest instituted this declaratory judgment

action in Minnesota state court, naming EklecCo as the sole defendant.4

 For relief,

Rainforest requested “[a] declaration that Rainforest is not the successor by merger

to the liabilities and obligations of Lightning including those arising from the lease

with EklecCo.” (Appellant’s App. at 107.)
5

Rainforest moved to dismiss under Rules 12(b)(3) and 12(b)(6) of Civil

Procedure. Although not addressed below, we recognize that there is some

controversy as to whether Rule 12(b)(3) or 12(b)(6) is the proper vehicle for bringing

a motion to dismiss based on improper venue when the issue turns on a forum

selection clause in the parties’ underlying contract. See Kerobo v. Southwestern

Clean Fuels, Corp., 285 F.3d 531, 534-36 (6th Cir. 2002) (noting circuit split as to

whether motion to dismiss based on forum selection clause should be brought

pursuant to 12(b)(3) or 12(b)(6)). The question appears to be open in this circuit, and

we need not address it in this appeal since EklecCo has moved under both subsections

of Rule 12.

6

Rainforest does not argue to this court that the forum selection clause is

invalid or unenforceable. It solely contends that this declaratory judgment suit is

beyond the scope of the clause.

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EklecCo moved to dismiss based on improper venue.5

 The matter was referred

to a magistrate who recommended that EklecCo’s motion be granted because the case

was essentially about the obligations of the parties under a lease for New York

property. The magistrate also recognized that the lease stated the proper forum for

lease disputes or issues concerning the conduct of the parties was Onondaga County,

New York. The district court adopted the magistrate’s report and recommendation

and dismissed the suit. This appeal followed.

ANALYSIS

Both the magistrate and the district court determined Minnesota was not the

appropriate venue for this action pursuant to 28 U.S.C. § 1391. Rainforest does not

argue that the lower court erred generally in its analysis under § 1391, but instead

limits its argument to the applicability of the forum selection clause in the lease.6

Thus, “[t]he only issue on appeal is a legal issue of contract construction,” Dunne v.

Libbra, 330 F.3d 1062, 1063 (8th Cir. 2003), which we review de novo, Terra Int’l,

Inc. v. Miss. Chem. Corp., 119 F.3d 688, 691-92 (8th Cir. 1997).
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In this case, both parties operate under the assumption that federal law controls

the question of whether this forum selection clause applies. We are inclined to agree,

see Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 31-32 (1988) (holding that in

diversity cases, federal law governs determination of what effect to give forum

selection clause in contract), but acknowledge that this appears to be an open

question, see M.B. Rests., Inc. v. CKE Rests., Inc., 183 F.3d 750, 752 n.4 (8th Cir.

1999) (noting circuit split on issue of whether interpretation of forum selection

clauses in diversity cases is substantive or procedural issue and leaving matter

undecided in Eighth Circuit); see also Excell, Inc. v. Sterling Boiler & Mech., Inc.,

106 F.3d 318, 320-21 (10th Cir. 1997) (leaving open the question of whether state or

federal law controls validity and interpretation of forum selection clauses). Because

the parties have not argued that state law would result in a materially different

outcome, we indulge their suggestion that we interpret the forum selection clause

under federal law. Accord M.B. Rests., Inc., 183 F.3d at 752.

Rainforest, through its subsidiary Lightning, entered into a lease that contains

a mandatory forum selection clause. The clause requires that “any dispute concerning

the application or any interpretation of any portion of the Lease or the conduct of the

parties shall be brought in the New York Supreme Court, Onondaga County.”

(Appellee’s App. at 47 (emphasis added).) Rainforest asserts that this declaratory

judgment action is not about the lease, nor about the conduct of the parties, but rather

only concerns what effect Rainforest’s myriad restructurings have had on its

obligations. This argument is specious at best. First, Rainforest is not merely asking

the court to define the scope of its general obligations. In its complaint, its only

specific prayer for relief is “[a] declaration that Rainforest is not the successor by

merger to the liabilities and obligations of Lightning including those arising from the

lease with EklecCo.” (Appellant’s App. at 107 (emphasis added).) The complaint is

captioned as an action between only two parties: Rainforest as plaintiff, and EklecCo

as defendant, seeking to resolve a dispute between those parties. Essentially,

Rainforest commenced a lawsuit concerning the parties conduct vis-a-vis the lease,
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and sought a declaration that directly deals with the lease. These issues are squarely

covered by the forum selection clause, and we thus hold the district court did not err

in dismissing the suit for improper venue.

CONCLUSION

For the reasons stated herein, we affirm the district court. Having considered

EklecCo’s pending motion to strike sections of Rainforest’s brief, we deny the

motion.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.