Court Opinion

ID: 2669511
Source: CourtListenerOpinion
Date Created: 2014-04-10 20:09:14.502523+00
Date Added: 2024-06-11T09:18:03.100581
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ___________

                                      No. 13-3269
                                      ___________

                                  DOLORES DAWES,
                                            Appellant

                                            v.

         PUBLISH AMERICA LLLP, A Limited Liability Limited Partnership;
                  PUBLISH AMERICA, INC., A Corporation
                  ____________________________________

                     On Appeal from the United States District Court
                         for the Eastern District of Pennsylvania
                           (D.C. Civil Action No. 11-cv-06912)
                      District Judge: Honorable C. Darnell Jones, II
                      ____________________________________

                 Submitted Pursuant to Third Circuit LAR 34.1(a)
                                 March 4, 2014
       Before: RENDELL, GREENAWAY, JR. and ALDISERT, Circuit Judges

                             (Opinion filed: April 10, 2014)
                                     ___________

                                       OPINION
                                      ___________

PER CURIAM

       Dolores Dawes appeals the District Court’s order granting a motion to dismiss

filed by Publish America, LLLP and Publish America, Inc. (“Publish America”). For the

reasons below, we will affirm the District Court’s order.
                                             1
       In June 2003, Dawes, a Pennsylvania resident, assigned the right to publish and

sell her book, A Child’s Intuition, to Publish America, a company based in Maryland.

The next year, a dispute arose between the parties concerning whether Publish America

was performing its duties under the contract. In 2005, Dawes filed suit in state court in

Maryland, seeking an accounting of the sales of the book and the royalties due. The

matter was arbitrated, and in May 2007, Dawes was awarded royalties based on the sale

of seven copies of the book. In 2009, Dawes filed a claim for copyright infringement in

the United States District Court for the Eastern District of Pennsylvania. The District

Court dismissed the claim because Dawes had never registered the copyright. Dawes

appealed, and we affirmed, holding that Dawes “submitted no proof that she had

registered her copyright or that Publish America had infringed upon her copyright after

their contract was terminated.” Dawes-Lloyd v. Publish America, LLLP, 441 F. App’x

956, 957 (3d Cir. 2011) (not precedential).

       Dawes filed the instant action in November 2011, alleging that Publish America

fraudulently induced her to enter into the contract, breached the contract by failing to

register her copyright, and infringed her copyright by selling the book without her

permission. Publish America filed a motion to dismiss or for summary judgment. The

District Court granted the motion to dismiss, citing Federal Rules of Civil Procedure

12(b)(2) (lack of personal jurisdiction) and 12(b)(6) (failure to state a claim upon which

                                              2
relief can be granted), as well as 28 U.S.C. § 1406(a) (pertaining to “venue in the wrong

division or district”). Dawes appealed.1

       The District Court held that dismissal was mandated by a forum selection clause in

the contract, which provided that “Author and Publisher irrevocably submit to the

jurisdiction of any Maryland State or Federal court sitting in the City of Frederick over

any suit related to this agreement.”2 This was error, however, because the forum

selection clause – which did not make jurisdiction in Maryland exclusive – was

permissive, not mandatory.3 See Dunne v. Libbra, 330 F.3d 1062, 1063 (8th Cir. 2003)

1
  We note that specific personal jurisdiction has been established through the contractual
relationship between Publish America and Dawes. See Remick v. Manfredy, 238 F.3d
248, 256 (3d Cir. 2001) (stating that “we expressly acknowledged that in many instances,
personal jurisdiction can arise primarily from a nonresident defendant’s contract with a
forum resident.”).
2
 The contract also provided that “[a]ll unresolved disputes and controversies of any kind
and nature within the scope of this agreement . . . shall be submitted to an Arbitrator . . . .
The arbitration shall be conducted in the City of Frederick, Maryland . . ., and the
decision of the arbitrator shall be final and binding on the parties to the proceeding,
subject only to the right of judicial relief as prescribed by law. This agreement shall be
governed and construed in accordance with the laws of the State of Maryland.” Publish
America did not file a motion to compel arbitration. See Gray Holdco, Inc. v. Cassady,
654 F.3d 444, 451 (3d Cir. 2011) (discussing waiver of right to compel arbitration).
3
  If the forum selection clause was mandatory, it would be entitled to a presumption of
enforceability. See M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972)). But
that presumption can be overcome when, as here, “extraordinary circumstances unrelated
to the convenience of the parties” clearly disfavor a transfer. Atlantic Marine Const. Co.,
Inc. v. U.S. Dist. Court for W. Dist. of Tx., 134 S. Ct. 568, 581 (2013); see also Martinez
v. Bloomberg LP, -- F.3d --, 2014 WL 114252, at *5-6 (2d Cir. 2014) (factoring
mandatory-permissive analysis into Atlantic Marine approach). Transfer under the forum
selection clause would be useless because, as described below, Dawes’s claims are
plainly barred.
                                               3
(noting distinction between permissive and mandatory forum selection clauses); see also

Global Satellite Commc’n Co. v. Starmill U.K. Ltd., 378 F.3d 1269, 1272 (11th Cir.

2004) (“A permissive clause authorizes jurisdiction in a designated forum but does not

prohibit litigation elsewhere,” whereas “[a] mandatory clause . . . dictates an exclusive

forum for litigation under the contract.” (internal quotation marks omitted)). If the

contract does not contain a mandatory forum selection clause, then a forum non

conveniens analysis applies. See Evolution Online Sys., Inc. v. Koninklijke PTT

Nederland N.V., 145 F.3d 505, 509-10 (2d Cir. 1998).

       Although the District Court failed to apply such an analysis here, any error was

harmless. The ends of justice would certainly not be furthered if we forced the District

Court to take more action on a permissive forum selection clause that ultimately will not

affect the outcome of the case. See Lony v. E.I. Du Pont de Nemours & Co., 886 F.2d

628, 632 (3d Cir. 1989) (“In deciding whether to dismiss a case for forum non

conveniens, ‘the ultimate inquiry is where trial will best serve the convenience of the

parties and the ends of justice.’” (quoting Koster v. Lumbermens Mut. Casualty Co., 330

U.S. 518, 527 (1947))). Here, every reasonable adjudicator, regardless of venue, would

dismiss Dawes’s case because, as Publish America correctly alleged, her claims are

clearly barred by the applicable statute of limitations and res judicata. See Ball v.

Famiglio, 726 F.3d 448, 459 n.16 (3d Cir. 2013) (noting that both statute of limitations

and res judicata may be raised in a 12(b)(6) motion to dismiss).

                                              4
       Dawes alleged that Publish America fraudulently induced her to enter into the

contract and breached the contract by failing to register her copyright.4 We agree with

Publish America’s contention that these claims are barred by Maryland’s three-year

statute of limitations.5 See Goodman v. Praxair, Inc., 494 F.3d 458, 463-64 (4th Cir.

2007) (recognizing that breach of contract actions in Maryland are governed by a three-

year statute of limitations); Phillips v. G.D. Searle & Co., 884 F.2d 796, 797 (4th Cir.

1989) (stating that [u]nder the Maryland statutes, actions for . . . fraudulent

misrepresentation are barred three years after the cause of action accrues.” (citing Md.

Cts. & Jud. Proc. Code Ann. § 5-101)); see also Gen. Eng’g Corp. v. Martin Marietta

Alumina, Inc., 783 F.2d 352, 358 n.5 (3d Cir. 1986) (discussing enforceability of a forum

selection clause in Maryland). These claims accrued by 2004, when Dawes stated that

she became aware of Publish America’s alleged failure to “honor” the contract. See

Poffenberger v. Risser, 431 A.2d 677 (Md. 1981) (holding that, under the discovery rule,

“the cause of action accrues when the claimant in fact knew or reasonably should have

4
 To the extent that Dawes alleged that Publish America infringed her copyright by
selling the book without her permission, we agree with Publish America’s assertion in its
motion to dismiss that res judicata bars that claim, which we rejected in a prior suit.
Dawes-Lloyd, 441 F. App’x at 956; Federated Department Stores, Inc. v. Moitie, 452
U.S. 394, 398 (1981) (noting that res judicata bars claims that were actually litigated or
could have been litigated in the prior action).
5
  The contract provided that it would be governed by Maryland law. See footnote 2,
supra. Neither party has alleged that this choice of law provision is invalid or
inapplicable. See Neely v. Club Med Mgmt. Servs., 63 F.3d 166, 180 & n.10 (3d Cir.
1995) (en banc) (concluding that “choice of law issues may be waived”).

                                              5
known of the wrong.”). Accordingly, the fraudulent inducement and breach of contract

claims raised in Dawes’s 2011 complaint are time-barred.6

       For the foregoing reasons, we will affirm the judgment of the District Court.

6
  We also note that there is no merit to Dawes’s assertion that Publish America breached
the contract by failing to register her copyright. Contrary to Dawes’s belief, the contract
did not obligate Publish America to register a copyright. Instead, it merely stated that
“[c]opyright shall be taken out in the name of Author in the United States, and in foreign
countries as the Publisher may deem advisable.” See In re Burlington Coat Factory Sec.
Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (recognizing “an exception to the general rule
[that matters extraneous to the pleadings may not be considered on a motion to dismiss]
is that a document integral to or explicitly relied upon in the complaint may be
considered without converting the motion [to dismiss] into one for summary judgment.”
(citation and internal quotation marks omitted)).
                                               6