Opinion ID: 784676
Heading Depth: 1
Heading Rank: 2

Heading: analysis

Text: 8 We must first determine the proper fashion in which to review this appeal. Clearly, the Orsula and Rideau cases were dismissed pursuant to a Rule 12(b)(3) motion for lack of proper venue under 28 U.S.C. § 1406(a). The Daviken case, however, is somewhat of a mystery. The parties assume that the district court dismissed under a Rule 12(b)(1) motion for lack of subject-matter jurisdiction. Since we disagree with the conclusion that the COGSA statute of limitations is jurisdictional, we review the dismissal of all three cases under 28 U.S.C. § 1406(a) for a lack of proper venue. 1 We may affirm a district court's judgment on alternate grounds found in the record. Latuszkin v. City of Chicago, 250 F.3d 502, 503 (7th Cir.2001); Rowe v. Shake, 196 F.3d 778, 782 (7th Cir.1999); Mendelovitz v. Vosicky, 40 F.3d 182, 187 (7th Cir.1994). 9 Continental challenges two aspects of the district court's dismissal of the suits on venue grounds. First, Continental disagrees with the conclusion that the meaning of the forum-selection clause is clear and the clause required the suit to be brought in Indiana. (Dist. Ct. Op. 8.) Second, Continental disputes the district court's decision to dismiss the actions rather than transferring them to the Northern District of Indiana. For the reasons set forth below, we find both challenges to be unpersuasive. 10
11 A lack of venue challenge, based upon a forum-selection clause, is appropriately brought as a Rule 12(b)(3) motion to dismiss. Frietsch v. Refco, Inc., 56 F.3d 825, 830 (7th Cir.1995); Hugel v. Corporation of Lloyd's, 999 F.2d 206, 207 (7th Cir.1993). 2 Our review of the enforceability and applicability of a forum-selection clause, a contractual term used to select a specific venue, is de novo. Hugel, 999 F.2d at 207. In admiralty cases, 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. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). Recognizing this, Continental does not contest the validity of the forum-selection clause. Instead, Continental argues that the district court erred in its application of the clause. Continental insists that they complied with the clause by filing in the Northern District of Illinois because either (1) the clause provides for two equally appropriate venues; or (2) the clause was ambiguous and should be construed against Fednav, the drafter of the bills of lading. We reject both contentions. 12 In each of the three bills of lading, a forum-selection clause limited venue in the following way: 13 Any action by the Merchant arising out of the goods carried under this Bill of Lading shall, whenever the port of loading or the port of discharge named on the face hereof is in the United States of America, be brought only in the United States District Court having admiralty jurisdiction at the USA port of loading or USA port of discharge, as the case may be, to the exclusion of any other Court or forum. 14 (R., Bills of Lading 501, 502, 509). There is nothing unclear or ambiguous about this contractual provision. The clause calls for suit to be brought in the district court with admiralty jurisdiction at the point of loading or discharge; that single court is the proper forum to the exclusion of all others. 15 It is uncontested that all three shipments of steel were loaded in Belgium, and were discharged at Burns Harbor. It is uncontested that the district court properly took judicial notice of the fact that Burns Harbor is geographically located in Porter County, Indiana. (Dist. Ct. Op. 8.) The Northern District of Indiana, Hammond Division, encompasses Porter County. 28 U.S.C. § 94(a)(3). Of course, the Northern District of Illinois does not include any part of Indiana. 28 U.S.C. § 93(a). There is neither an option to file in multiple venues nor an ambiguity in the forum-selection clause. 16 Continental makes much of the fact that, under customs regulations, Burns Harbor is considered to be within the Port of Chicago. 19 C.F.R. § 101.3; Bureau of Customs, Decision 71-121, Fed.Reg. (May 3, 1971). We agree with the district court that this useful legal and commercial fiction has nothing to do with proper admiralty jurisdiction in federal district courts, and therefore nothing to do with the forum-selection clause at issue.
17 Since venue was not proper in Illinois, Continental is left to argue that the district court should have transferred the cases under 28 U.S.C. § 1406(a), rather than dismissing them and thus effectively barring them under the statute of limitations. The applicable venue statute reads: 18 The 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. 19 28 U.S.C. § 1406(a) (emphasis added). Our review of the district court's application of the interest of justice standard is for a clear abuse of discretion. Willis v. Caterpillar, Inc., 199 F.3d 902, 904 (7th Cir.1999); Hapaniewski v. City of Chicago Heights, 883 F.2d 576, 579 (7th Cir.1989). Hence, we will not second-guess the decision of a district court judge that is in conformity with established legal principles and, in terms of the court's application of those principles to the facts of the case, is within the range of options from which a reasonable trial judge would select. Platinum Home Mortg. Corp. v. Platinum Fin. Group, 149 F.3d 722, 729 (7th Cir. 1998) (quotation omitted). 20 The district court was justified in dismissing, rather than transferring, the suits. The district court reasoned that in a case in which all parties are commercially sophisticated and familiar with the forms of litigation in which they engage, a transfer in the interests of justice is not justified when [t]here was nothing obscure about the proper forum. (Dist. Ct. Op. 8-9.) While dismissing the suit because of a mistake that is easy to commit might be so disproportionate a penalty as to constitute an abuse of discretion, the proper penalty for obvious mistakes that impose costs on opposing parties and on the judicial system is a heavy one. Cote v. Wadel, 796 F.2d 981, 985 (7th Cir.1986). Dismissal was proper; filing in the Northern District of Illinois was an obvious mistake made by a sophisticated party with representation. We will not second-guess the district court when it has not clearly abused its discretion. 21 Furthermore, the dismissal of a cause of action for improper venue under 28 U.S.C. § 1406(a) after the statute of limitations has run does not, on its own, constitute an abuse of discretion. Hapaniewski, 883 F.2d at 578-80 (holding that the lower court did not abuse its discretion in dismissing the suit where the plaintiffs filed in the wrong federal district court, despite the heavy cost of losing the right to sue because of statute of limitations considerations). Congress enacted § 1406(a) to avoid the injustice which had often resulted to plaintiffs from dismissal of their actions merely because they had made an erroneous guess with regard to the existence of some elusive fact of the kind upon which venue provisions often turn. Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962). The district court did not abuse its discretion in finding that the fact upon which venue under the forum-selection clause turned — the location of Burns Harbor — was not elusive.