Opinion ID: 1740033
Heading Depth: 1
Heading Rank: 9

Heading: Mandatory Versus Permissive Forum Selection Clause

Text: As noted above, § 25-415 provides that unless one of the exceptions applies, a court in Nebraska will dismiss an action [i]f the parties have agreed in writing that an action on a controversy shall be brought only in another state . . . . (Emphasis supplied). We note that while the forum selection clause in the lease executed by Thornridge provides that [a]ny legal action concerning this Lease shall be brought in federal or state courts located within or for Montgomery County, Pennsylvania (emphasis supplied), the forum selection clauses in the leases executed by the remaining golf courses provide that [l]essee knowingly and voluntarily consents and submits to the jurisdiction of the Federal and State courts of Pennsylvania for purposes of adjudicating the rights and liabilities of the parties pursuant to the Lease. We determine that while the forum selection clause in the Thornridge lease is a mandatory forum selection clause requiring actions to be brought only in Pennsylvania, the forum selection clauses in the remaining leases are merely permissive forum selection clauses providing that actions may be brought in Pennsylvania, but not requiring that actions be brought only in Pennsylvania or prohibiting actions from being brought in an another appropriate forum. We note that other jurisdictions have distinguished between forum selection clauses that are mandatory in nature and those that are permissive in nature. In Converting/Biophile v. Ludlow Composites, 296 Wis.2d 273, 287-88, 722 N.W.2d 633, 640-41 (Wis.App.2006), the Wisconsin Court of Appeals stated: Clauses in which a party agrees to `submit' to jurisdiction are not necessarily mandatory. [Citation omitted.] Such language means that the party agrees to be subject to that forum's jurisdiction if sued there. It does not prevent the party from bringing suit in another forum. [Citation omitted.] The language of a mandatory clause shows more than that jurisdiction is appropriate in a designated forum; it unequivocally mandates exclusive jurisdiction. [Citation omitted.] Absent specific language of exclusion, an agreement conferring jurisdiction in one forum will not be interpreted as excluding jurisdiction elsewhere. (Emphasis in original.) Under a plain reading, we determine that § 25-415 necessarily makes a similar distinction between mandatory and permissive forum selection clauses when it refers to agreements providing that an action on a controversy shall be brought only in another state. (Emphasis supplied.) In the absence of one of the five listed exceptions, § 25-415 requires dismissal of an action only when the forum selection clause is mandatory. If the forum selection clause is permissive rather than mandatory, § 25-415 does not require dismissal of the Nebraska action. The forum selection clause in the Thornridge lease provides that any action concerning the lease shall be brought in Pennsylvania. We read this forum selection clause to be a mandatory clause requiring that an action with respect to the lease shall be brought only in Pennsylvania. The forum selection clauses in the other seven leases provide only that the parties consent and submit to the jurisdiction of Pennsylvania courts. We read these forum selection clauses to be permissive clauses providing that an action may be brought in Pennsylvania, but not requiring that an action be brought only in Pennsylvania and not prohibiting an action from being brought in another state. Because the forum selection clause in the Thornridge lease is mandatory, we will consider the enforceability of such clause pursuant to § 25-415 in this section of the opinion. Because the forum selection clauses in the remaining leases are permissive, such clauses are not a barrier to an action in Nebraska and we will consider in the following section of this opinion whether dismissal of the action regarding the remaining leases was appropriate on another basis.