Opinion ID: 713055
Heading Depth: 2
Heading Rank: 2

Heading: Determining the Dismissal Motion

Text: 8 We return to the question of whether the Bremen test or something different should be applied in a diversity case upon a motion to dismiss. In Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988), an action filed in federal court under diversity jurisdiction, the defendant moved to dismiss or transfer venue based on a forum selection clause. The Court held that federal rather than state law governed this issue, and that under federal law the decision whether to transfer venue is governed by 28 U.S.C. § 1404(a). Id. at 27-29, 108 S.Ct. at 2243. The Court instructed that under this statute the court must make an individualized, case-by-case consideration of convenience and fairness. Id. at 29, 108 S.Ct. at 2244 (citation omitted). It should weigh in the balance a number of case-specific factors, of which the forum selection clause is a significant factor that figures centrally in the district court's calculus. Id. The court should also consider the convenience of the witnesses and those public-interest factors of systemic integrity and fairness under the heading of 'the interest of justice.'  Id. Stewart has been described as a response to lower courts' overly broad application of The Bremen result[ing] in overenforcement of forum-selection clauses. Leandra Lederman, Note, Viva Zapata!: Toward a Rational System of Forum-Selection Clause Enforcement in Diversity Cases, 66 N.Y.U.L.REV. 422, 447 (1991). 5 9 Although we would prefer to apply the same Stewart balancing in diversity cases to motions to dismiss and motions to transfer, the other federal courts have decided otherwise and continue to apply Bremen to motions to dismiss based on a forum selection clause. In Jones v. Weibrecht, 901 F.2d 17 (2d Cir.1990), the court reasoned that [t]here is no basis ... 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.' 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. Id. at 19. (citations omitted). In Manetti-Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509 (9th Cir.1988) the court explained that [o]ur case involves a motion to dismiss, rather than to transfer venue, and because there is no federal rule directly on point the Stewart analysis is inapplicable.. Id. at 512 n. 2 The Second and Ninth Circuits hold that Bremen applies to such motions to dismiss. Jones, 901 F.2d at 18-19; Manetti-Farrow, 858 F.2d at 513. The Fourth Circuit has looked to state law to determine the motion to dismiss. Nutter v. Rents, Inc., 1991 WL 193490, at  5-7 (4th Cir. Oct. 1, 1991). The First and Third Circuits have ruled that they need not reach the issue of whether state or federal law should govern the motion to dismiss, since under either Bremen or applicable state law the result is the same. Lambert v. Kysar, 983 F.2d 1110, 1116-22 (1st Cir.1993); Instrumentation Assocs., Inc. v. Madsen Elecs. (Canada) Ltd., 859 F.2d 4, 6-8 (3d Cir.1988); Crescent Int'l, Inc. v. Avatar Communities, Inc., 857 F.2d 943, 945 (3d Cir.1988). Still other courts have suggested that a motion to dismiss is not an appropriate means of enforcing a forum selection clause, and that instead the motion should be treated as a motion to transfer. Haskel v. FPR Registry, Inc., 862 F.Supp. 909, 915-16 (E.D.N.Y.1994); National Micrographics Sys., Inc. v. Canon U.S.A., Inc., 825 F.Supp. 671, 679 (D.N.J.1993); Page Constr. Co. v. Perini Constr., 712 F.Supp. 9, 10-11 (D.R.I.1989). However, these cases, unlike our own, did not involve a forum selection clause that limited the agreed venue to a state court. 10 We choose to join the other courts rather than to make a circuit split and further complicate this area of the law.