1Plaintiff’s claim against the remaining defendant is based on

a different contract that is not the subject of the FSC at issue.

Accordingly, the court’s decision does not affect plaintiff’s suit

against that defendant.

 IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

WILLIAM NOBLE RARE JEWELS, §

a Texas general partnership, §

by and through WILLIAM NOBLE, §

INC., a general partner, §

 §

 §

Plaintiff, §

 § Civil Action No. 3:05-CV-1607-D

VS. §

 §

CHRISTIE’S INC. d/b/a §

CHRISTIE’S FINE ART, §

AUCTIONEERS, INC., et al., §

 §

Defendants. §

MEMORANDUM OPINION

 AND ORDER 

In this motion to dismiss under Fed. R. Civ. P. 12(b)(3) and

28 U.S.C. § 1406(a) based on a mandatory contractual forum

selection clause (“FSC”), the sole question presented is whether

plaintiff’s claims fall within the scope of the FSC. Concluding

that they do, the court grants the motion and dismisses without

prejudice plaintiff’s action against the moving defendant.1

I

This is an action by plaintiff William Noble Rare Jewels

(“Noble”) against defendant Christie’s Inc. d/b/a Christie’s Fine

Art Auctioneers, Inc. (“Christie’s”) and John Doe (“Doe”) arising

from the consignment sale of a sapphire and diamond ring (“Ring”)

 

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2In its state-court petition, Noble states that it “seeks a

declaration of its rights, obligations, and/or status under the

Agreement. . . .” Pet. ¶ 24 (emphasis added). If Noble is seeking

declaratory relief concerning the Agreement, the claim clearly

falls within the FSC. Because in the preceding paragraph of the

petition Noble appears to be relying more generally on Christie’s

“fiduciary obligations,” the court will address that basis for

Noble’s claim for declaratory relief.

3

To decide this motion, the court takes the allegations of

Noble’s petition as true and resolves any factual conflicts in the

documentary submissions in Noble’s favor as the plaintiff. See

Aerus LLC v. Pro Team, Inc., 2005 WL 1131093, at *7-*8 (N.D. Tex.

May 9, 2005) (Lynn, J.) (quoting Smith v. Lucent Techs., Inc., 2004

U.S. Dist. LEXIS 4074, at *37 (E.D. La., Mar. 16, 2004)). 

- 2 -

under the terms of a Consignment Agreement (“Agreement”). Noble

filed suit in Texas state court, and Christie’s removed the case to

this court based on diversity of citizenship. Noble sues

Christie’s for breach of fiduciary duty, and it seeks declaratory

relief concerning Christie’s fiduciary obligations to Noble.2

Noble sues Doe to recover for breach of the contract under which he

agreed to purchase the Ring at auction.

According to Noble’s state-court petition,3

 Christie’s agreed

to sell the Ring at auction. Noble furnished Christie’s an opinion

as to the Ring’s origin. Before the sale, Christie’s sought its

own opinion from the American Gemological Laboratory (“AGL”). The

opinions that Noble and Christie’s obtained both stated that the

origin of the Ring was Kashmir, which increased the value of the

sapphire content of the Ring. Christie’s sold the Ring to Doe at

a May 2005 auction.

Despite the sale and assurances from Christie’s that payment

 

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would be forthcoming, Noble has not received its part of the

proceeds. Christie’s released the Ring to Doe without first

advising Noble, obtaining its approval, or securing payment from

Doe. Christie’s has represented to Noble that Doe took the Ring to

several locations in Europe and purportedly obtained four opinions

concerning the Ring’s origin. Two were purportedly inconclusive;

the other two purportedly opined that the origin is Ceylon.

Sapphires originating from Ceylon are worth significantly less than

those from Kashmir. Christie’s either does not have the opinions

or refuses to disclose them to Noble. On information and belief,

Doe sought the questionable opinions to avoid his promise to

purchase the Ring at auction. Christie’s maintains that Doe has

relied on the opinions to rescind the sale, but it has declined

Noble’s requests to provide copies of the reports. Christie’s

allegedly agreed, without Noble’s consent, to rescind the sale.

Under the Conditions of Sale that Christie’s follows, buyers such

as Doe are obligated before they bid to satisfy themselves

concerning the condition of property sold, and all property is sold

“as is,” without representation or warranty of any kind by

Christie’s or the seller. A successful bidder accepts personal

responsibility to pay the purchase price and all applicable

charges. Doe agreed to these terms and had the opportunity to

inspect the Ring before the auction. Christie’s ignored the terms

of its Conditions of Sale, thereby preventing the sale of the Ring

 

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to Doe or any legitimate underbidders.

Acting contrary to its duties to Noble, Christie’s insists

that it will include the four opinions that Doe allegedly obtained

in any subsequent offer of sale of the Ring. Christie’s is doing

so despite Doe’s clear motivation, the unknown reputation of the

organizations that purportedly gave their opinions to Doe, the

AGL’s opinion, and the uncertainty whether the opinions Doe

obtained were even based on an examination of the Ring. Christie’s

apparently has readily accepted the questionable opinions that Doe

obtained and has refused to acknowledge the opinion that Noble

obtained, and the one that Christie’s procured from AGL, that show

Kashmir as the true origin of the sapphire.

Noble alleges, based on the foregoing factual allegations,

that Christie’s is liable for breaching its fiduciary duty to

Noble. It also seeks declaratory relief, contending that, pursuant

to Christie’s fiduciary obligations, it must reveal Doe’s identity,

tender copies of the opinions he purportedly obtained, and reject

the opinions and sell the Ring with reference only to the opinion

Christie’s obtained from AGL and/or the one Noble obtained.

II

Christie’s moves to dismiss Noble’s lawsuit based on the

Agreement’s mandatory FSC. The Agreement contains the following

relevant provision:

10. OTHER MATTERS

 

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* * *

(b). This Agreement shall be governed by and

construed in accordance with the laws of

the State of New York. In the event of

any dispute hereunder, (i) the parties

hereby consent to the exclusive

jurisdiction of the courts of the State

of New York and the Federal courts of the

United States of America located in the

Southern District of New York and (ii)

neither party shall be liable to the

other for any special, consequential or

incidental damages.

* * *

D. App. 24 (emphasis added).

Noble maintains that the FSC is narrow and inapplicable to its

claims. It contends that it is suing Christie’s for breaching its

fiduciary duty by (1) refusing to reveal Doe’s identity so that

Noble can pursue claims against him, as Christie’s has suggested,

(2) by releasing the Ring to Doe, especially without payment or

security, and (3) accepting the opinions that Doe obtained. Noble

posits that it seeks declaratory relief that Christie’s must (1)

reveal Doe’s identity, (2) tender to Noble all so-called opinions

Doe obtained regarding the sapphire, and (3) disavow the

questionable opinions that Doe obtained. Noble characterizes its

claims as basically alleging that Christie’s allowed Doe to damage

Noble’s property by seeking to discredit the origin of the sapphire

and then, despite criticizing Doe’s actions, purporting blindly to

accept the opinions Doe says he obtained and ignoring the AGL

opinion that Christie’s secured pre-sale.

 

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4Except for one citation to the definition of “hereunder”

taken from a prior edition of Black’s Law Dictionary, Noble cites

only federal cases in support of its interpretation of the scope of

the FSC. See P. Br. at 7-10.

5In its opening brief, Christie’s clearly relied on federal

law, see D. Br. at 6-11, although it explicitly did so in the

context of enforceability, see, e.g., id. at 6 n.5, before it was

aware that Noble’s opposition would be based on the scope of the

FSC. In fact, in its response brief, Noble challenges Christie’s

motion on the ground that it does not address the scope of the FSC.

See P. Br. at 7.

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Noble posits on several grounds that its claims against

Christie’s fall outside the scope of the FSC. Among its various

arguments, however, it concedes that the FSC applies if its claims

pertain to matters of Christie’s performance under the Agreement.

Christie’s maintains on several bases that the FSC applies to

Noble’s causes of action.

III

A

The court need not discuss at length the law of forum

selection clauses. It is undisputed that the FSC is a mandatory

provision, and Noble does not argue against enforcement on the

basis that the clause is unenforceable, i.e., that the FSC is

unreasonable under the circumstances. The single question

presented is whether Noble’s claims for breach of fiduciary duty

and declaratory relief fall within the scope of the FSC.

Noble implicitly maintains,4

 and Christie’s does not dispute

in its reply brief,5 that federal law governs the interpretation of

 

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the scope of the FSC. Accordingly, the court will assume not only

that “[f]ederal law governs the determination of whether an

enforceable forum selection clause exists[,]” Aerus LLC v. Pro

Team, Inc., 2005 WL 1131093, at *1 (N.D. Tex. May 9, 2005) (Lynn,

J.) (citing Haynsworth v. The Corp., 121 F.3d 956, 962 (5th Cir.

1997)), but that federal law controls whether Noble’s lawsuit falls

within the scope of the FSC, see Jones v. GNC Franchising, Inc.,

211 F.3d 495, 497 (9th Cir. 2000) (“In diversity cases, federal law

governs the analysis of the effect and scope of forum selection

clauses.”).

B

“The court must examine the language of the contract to

determine which causes of action are governed by the forum

selection clause.” Aerus, 2005 WL 1131093, at *7 (citing

Marinechance Shipping, Ltd. v. Sebastian, 143 F.3d 216, 222 (5th

Cir.1998); Soil Bldg. Sys. v. CMI Terex Corp., 2004 WL 1283966, at

*5 (N.D. Tex. June 9, 2004) (Fish, C.J.)). “If the substance of

the plaintiff’s claims, stripped of their labels, does not fall

within the scope of the forum selection clause, the clause cannot

apply.” Id. (citations, emphasis, and brackets omitted). 

Other courts that have addressed contractual forum selection

clauses that cover disputes or litigation that arises “hereunder”

have held that they apply to relations that have arisen as a result

of the contract. See Picken v. Minuteman Press Int’l, Inc., 854 F.

 

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6In Picken the FSC provided:

THIS AGREEMENT SHALL BE GOVERNED AS TO

VALIDITY, CONSTRUCTION AND IN ALL OTHER

RESPECTS, BY THE LAWS OF THE STATE OF NEW

YORK, AND IN THE EVENT OF ANY LITIGATION

COMMENCED BY EITHER PARTY HEREUNDER, SUCH

ACTION SHALL BE COMMENCED AND TRIED IN A COURT

OF COMPETENT JURISDICTION IN THE STATE OF NEW

YORK, OR IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NEW YORK, IN THE

COUNTY WHERE LICENSOR HAS ITS HOME OFFICE. THE

PARTIES WAIVE TRIAL BY JURY IN ALL INSTANCES.

Picken, 854 F. Supp. at 910 (bold font omitted; emphasis added).

7

In Aerus the FSC was similar to a hereunder-type clause and

provided:

In the event either Party asserts a breach or

default by the other under the terms of this

Agreement, the jurisdiction, venue, and

applicable law shall be the City of San Diego,

California, United States of America, and this

Agreement shall be deemed to have been signed

at such location to the extent necessary for

such jurisdiction and venue to apply.

Aerus, 2005 WL 1131093, at *3 (emphasis added; brackets omitted).

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Supp. 909, 911-12 (N.D. Ga. 1993)6 (“Reading the word ‘hereunder’

to apply only to a pure breach of contract claim between the

parties would be unduly crabbed and narrow. ‘Hereunder” refers to

the relations that have arisen as a result of this contract.”).7

Under this reasoning, Noble’s claims——which arise from the

contractual relations between Noble and Christie’s——plainly fall

within the scope of the FSC.

But the court need not rely on such reasoning alone to grant

Christie’s motion. This is because Noble concedes that claims that

 

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8As noted above, see supra note 2, despite some ambiguity in

Noble’s petition, its claim for declaratory relief appears to be

based on Christie’s fiduciary obligations. 

- 9 -

pertain to matters of contractual performance fall within a forum

selection clause like the one at issue, i.e., that applies to “any

dispute hereunder.” The question thus becomes whether Noble is

bringing such claims. 

Noble’s breach of fiduciary duty and declaratory relief claims

unquestionably concern matters of Christie’s performance under the

Agreement. Grouped together, the two related causes of action8

posit three categories of complaints: (1) Christie’s is obligated,

but has failed, to reveal Doe’s identity; (2) Christie’s improperly

released the Ring to Doe, without payment or security; and (3)

Christie’s must tender to Noble the opinions that Doe allegedly

obtained and must disavow them, and Christie’s has breached its

fiduciary duty by accepting the opinions. Regardless how Noble

labels these claims, they equate to complaints about Christie’s

performance under its contract with Noble to auction the Ring.

Noble asserts that Christie’s breached its fiduciary duty by

refusing to reveal Doe’s identity, releasing the Ring to Doe, and

accepting the opinions that Doe obtained. Apart from the

Agreement, Christie’s would not have auctioned the Ring or sold it

to Doe, would not have opted to disclose or not to disclose Doe’s

identity, would not have released the Ring to him, and would not

have become involved in the matter of obtaining opinions concerning

 

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- 10 -

the origin of the Ring’s sapphire content. Noble’s claims exist

because of Christie’s alleged acts or omissions in performing under

the Agreement. In fact, under New York City law, Christie’s could

not have auctioned Noble’s personal property except pursuant to a

written agreement. See D. Rep. Br. at 5-6 (quoting Rules of the

City of New York). 

Based on Christie’s fiduciary obligations, Noble also seeks

declaratory relief that Christie’s must reveal Doe’s identity,

tender the opinions Doe obtained regarding the sapphire, and

disavow the opinions. Regardless of the label attached to this

cause of action, Noble is challenging Christie’s performance under

the Agreement. 

Moreover, as noted above, Noble characterizes its claims as

basically alleging that Christie’s allowed Doe to damage Noble’s

property, accepted the opinions Doe obtained, and ignored the AGL

opinion that Christie’s secured. Noble alleges that Christie’s

ignored the terms of its Conditions of Sale, thereby preventing the

sale of the Ring to Doe or any legitimate underbidders. Noble also

requests, as part of its claim for declaratory relief, that

Christie’s be required to sell the Ring with reference only to the

opinion it obtained from AGL and/or the one Noble secured. These

are complaints and requests that concern Christie’s performance of

the Agreement. 

Noble attempts to distinguish its claims from those that

 

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9The court does not suggest that Christie’s properly invoked

such rights. That question involves a merits determination to be

made, if necessary, by the forum prescribed in the Agreement.

- 11 -

relate to contractual performance by arguing that it is complaining

of actions that are neither contemplated nor addressed by the

Agreement. Noble appears to reason that, if Christie’s engaged in

conduct that the Agreement did not allow it to undertake, such

conduct by definition cannot concern performance of the Agreement.

The court disagrees. The touchstone for determining whether Noble

is complaining of Christie’s performance is whether Noble is

challenging an act or omission that Christie’s took or failed to

take in the course of invoking a right or executing an obligation

specified in the contract. Under the Agreement, Christie’s

retained, inter alia, the right to prescribe the conditions of the

sale and to seek the views of experts after the sale. See D. App.

24. Thus in failing to reveal Doe’s identity, releasing the Ring

to him, and failing to disclose or disavow, and instead accepting,

opinions concerning the Ring, Christie’s has undertaken acts or

omissions in the course at least of invoking rights provided it by

the Agreement.9

 

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* * *

For the reasons stated, Christie’s August 19, 2005 motion to

dismiss is granted, and Noble’s suit against Christie’s is

dismissed without prejudice by judgment filed today.

SO ORDERED.

October 24, 2005.

_________________________________

SIDNEY A. FITZWATER

UNITED STATES DISTRICT JUDGE

 

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