Opinion ID: 487266
Heading Depth: 1
Heading Rank: 3

Heading: Interpretation of Forum Selection Clause

Text: 11 In their interpretation of the forum selection clause, both the district court and appellee rely heavily on Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 280 (9th Cir.1984), where this court held that a forum selection clause is enforceable: 12 Absent some evidence submitted by the party opposing enforcement of the clause to establish fraud, undue influence, overweening bargaining power, or such serious inconvenience in litigating in the selected forum so as to deprive that party of a meaningful day in court, [such a] provision should be respected as the expressed intent of the parties. 13 In Pelleport, we were concerned with the validity and enforceability of a forum selection clause which provided: [A]ny and all disputes arising out of or in connection with this Agreement shall be litigated only in the Superior Court for Los Angeles, California (and in no other ), and Exhibitor hereby consents to the jurisdiction of said court. Id. at 275 (emphasis added). There was no contention in Pelleport that the language of the forum selection clause did not provide for an exclusive forum. The sole question was whether the clause was valid and enforceable. Here, the sole question is whether the forum selection clause provides for exclusive jurisdiction in the California state court and mandates that the claim be litigated in the state court for Orange County. 14 A primary rule of interpretation is that [t]he common or normal meaning of language will be given to the words of a contract unless circumstances show that in a particular case a special meaning should be attached to it. 4 S. Williston, A Treatise on the Law of Contracts Sec. 618 (W. Jaeger 3d ed. 1961). Here, the plain meaning of the language is that the Orange County courts shall have jurisdiction over this action. The language says nothing about the Orange County courts having exclusive jurisdiction. The effect of the language is merely that the parties consent to the jurisdiction of the Orange County courts. Although the word shall is a mandatory term, here it mandates nothing more than that the Orange County courts have jurisdiction. Thus, Supreme cannot object to litigation in the Orange County Superior Court on the ground that the court lacks personal jurisdiction. Such consent to jurisdiction, however, does not mean that the same subject matter cannot be litigated in any other court. In other words, the forum selection clause in this case is permissive rather than mandatory. 15 In comparison, in cases in which forum selection clauses have been held to require litigation in a particular court, the language of the clauses clearly required exclusive jurisdiction. As noted above, in Pelleport the language used was exclusive and mandatory: this Agreement shall be litigated only in the Superior Court for Los Angeles (and in no other ). Pelleport, 741 F.2d at 725 (emphasis added). In Full-Sight Contact Lens Corp. v. Soft Lenses, Inc., 466 F.Supp. 71, 72 (S.D.N.Y.1978), the court enforced the following language as exclusive: any dispute ... shall be brought in either San Diego or Los Angeles County. (emphasis added). In both of these cases it is clear that the language mandates more than that a particular court has jurisdiction. The language mandates that the designated courts are the only ones which have jurisdiction. Here the language clearly falls short of designating an exclusive forum. 16 Although we are of the opinion that the language is not ambiguous, we would reach the same result if it were ambiguous. Another fundamental rule of contract interpretation is that where language is ambiguous the court should construe the language against the drafter of the contract. Interpetrol Bermuda Ltd. v. Kaiser Aluminum Int'l Corp., 719 F.2d 992, 998 (9th Cir.1983); United States v. Haas and Haynie Corp., 577 F.2d 568, 574 (9th Cir.1978). Hunt drafted the contract. Construing the language against Hunt, we would conclude that the clause does not provide for an exclusive forum. See Citro Florida, Inc. v. Citrovale, S.A., 760 F.2d 1231 (11th Cir.1985); Keaty v. Freeport Indonesia, Inc., 503 F.2d 955 (5th Cir.1974); First Nat'l City Bank v. Nanz, Inc., 437 F.Supp. 184, 187 (S.D.N.Y.1975). 17 Finally, apparently in an attempt to determine the intent of the parties, the district court noted that the inclusion of the language at issue would add nothing to the contract unless it is interpreted to designate an exclusive forum. The court's conclusion was based on its belief that the California courts (both state and federal) would have jurisdiction notwithstanding the clause. Because all events surrounding the contract occurred in New Jersey, and because Supreme does not transact business in California, Supreme argues that it does not have sufficient contacts with the State of California to confer jurisdiction. Hunt argues that there are sufficient facts in the record to establish the necessary contacts. From our review of the record we are convinced that there is insufficient evidence for the trial court to assume that the California courts would have jurisdiction absent the forum selection clause. 2 On the contrary, the affidavits and documents filed in support of Supreme's opposition to Hunt's motion to remand clearly indicates that the purchase orders and delivery of the products were handled by New Jersey representatives in New Jersey offices and plants of both parties. Viewing the record as a whole, the district court's implied finding of sufficient contacts with California is clearly erroneous. We find no reasonable basis for the district court's conclusion that the forum selection clause would be meaningless unless interpreted as mandatory.