Court Opinion

ID: 9959868
Source: CourtListenerOpinion
Date Created: 2024-04-12 20:00:56.059921+00
Date Added: 2024-06-11T08:18:57.227310
License: Public Domain

RECOMMENDED FOR PUBLICATION
                                Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                       File Name: 24a0084p.06

                     UNITED STATES COURT OF APPEALS
                                  FOR THE SIXTH CIRCUIT

                                                             ┐
 FIREXO, INC.,
                                                             │
                                   Plaintiff-Appellant,      │
                                                              >        No. 23-3085
                                                             │
        v.                                                   │
                                                             │
 FIREXO GROUP LIMITED,                                       │
                                  Defendant-Appellee.        │
                                                             ┘

    Appeal from the United States District Court for the Northern District of Ohio at Toledo.
                     No. 3:21-cv-02336—Jack Zouhary, District Judge.

                                   Argued: October 18, 2023

                               Decided and Filed: April 12, 2024

                 Before: BATCHELDER, GRIFFIN, and LARSEN, Circuit Judges.

                                      _________________

                                            COUNSEL

ARGUED: Paul Belazis, MALONE, AULT & FARELL, Toledo, Ohio, for Appellant. Jason J.
Blake, CALFEE, HALTER & GRISWOLD, LLP, Columbus, Ohio, for Appellee. ON BRIEF:
Paul Belazis, MALONE, AULT & FARELL, Toledo, Ohio, for Appellant. Jason J. Blake, John
F. Fisher, CALFEE, HALTER & GRISWOLD, LLP, Columbus, Ohio, for Appellee.

        BATCHELDER, J., announced the judgment, in which LARSEN, J., joined, and
delivered the lead opinion in which LARSEN, J., joined in part. LARSEN, J. (pp. 35–37),
delivered a separate opinion concurring in part and in the judgment. GRIFFIN, J. (pp. 38–45),
delivered a separate dissenting opinion.
 No. 23-3085                       Firexo, Inc. v. Firexo Grp. Ltd.                         Page 2

                                       _________________

                                            OPINION
                                       _________________

          ALICE M. BATCHELDER, Circuit Judge. A corporate defendant in a civil lawsuit
moved to dismiss the plaintiff’s action based on a contractual forum-selection clause even
though the plaintiff was not a signatory to that contract. The district court applied the so-called
“closely related” doctrine, found that the plaintiff was sufficiently closely related to the contract
for the court to apply and enforce the forum-selection clause against that non-signatory plaintiff,
and dismissed the action. The plaintiff appeals, arguing that the district court applied the wrong
law, and correspondingly the wrong analytical approach, to determine the contract’s
applicability.   Ultimately, we agree and for the reasons that follow, we REVERSE and
REMAND.

                                            I. FACTS

          Firexo Group Limited (“FGL”) is a British company that makes fire extinguishers. In
2019, FGL partnered with Scot Smith (of Port Clinton, Ohio) to sell its fire extinguishers in the
United States. FGL and Smith entered a contract titled “Shareholder Agreement” (though it is
referred to therein, by the district court, and hereinafter as the “Joint Venture Agreement” or
“JVA”), through which Smith purchased from FGL 70% of its wholly owned subsidiary, Firexo
Corporation, already incorporated in Florida. Firexo was not a signatory to the JVA.

          The JVA has a forum-selection clause designating England or Wales as the “exclusive
jurisdiction to settle any dispute or claim that arises out of or in connection with this agreement
or its subject matter or formation.” This language appears very broad: i.e., “any dispute . . . in
connection with.” For perspective, consider “two categories of terms describing the scope of a
forum selection clause. The narrower category includes terms such as ‘arise out of,’ ‘arise from,’
or ‘arising under,’ whereas the broader category includes terms such as ‘in connection with,’
‘relating to,’ or ‘associated with.’” Prod. Res. Grp., L.L.C. v. Martin Pro., A/S, 907 F. Supp. 2d
401, 412 (S.D.N.Y. 2012) (citing Phillips v. Audio Active Ltd., 494 F.3d 378, 389 (2d Cir.
2007)).
 No. 23-3085                         Firexo, Inc. v. Firexo Grp. Ltd.                        Page 3

       In 2021, based on its ongoing and worsening problems with FGL’s fire extinguishers,
Firexo sued FGL in an Ohio court. In its complaint, Firexo claimed breach of contract based on
an oral “sole distributorship agreement,” breach of the duty of good faith, breach of the
warranties of fitness and merchantability, misrepresentation, and fraud in the inducement. The
complaint did not name Smith as a plaintiff, nor did it reference the JVA or the Uniform
Commercial Code. FGL removed the case to federal court based on diversity and then, relying
on the JVA’s forum selection of England or Wales, moved to dismiss. The district court granted
the motion. Firexo, Inc. v. Firexo Grp. Ltd., No. 3:21-cv-2336, 2023 WL 2772388 (N.D. Ohio
Jan. 26, 2023).

       The determinative question was, and is, whether plaintiff Firexo, which is essentially the
product of FGL’s and Smith’s joint venture, is bound by the terms of the JVA even though it is
not a party (signatory) to the JVA. Certain provisions of the JVA are relevant to this dispute:

       Overview:
       A.         [FGL] and [Smith] have agreed to form and jointly own a new company,
                  the Joint Venture Company (the ‘JVC’ [i.e., Firexo]);
       B.         [Firexo] will carry on business in accordance with the terms and
                  conditions of this agreement; and,
       C.         [FGL] and [Smith] will exercise their rights in relation to [Firexo] in
                  accordance with the terms and conditions of this Agreement
       Purpose:
       2.1        The Business of [Firexo] is the sale and distribution of [FGL]’s fire
                  extinguishing products within the [United States].
       Investment:
       6.1        [Smith] shall invest one million seven hundred thousand British pounds
                  sterling (£1,700,000.00) in consideration for seventy (70) shares [i.e., 70%
                  ownership] of [Firexo].
       Parties’ Relationship per the JVA:
       26.1       All transactions entered into between either party and [Firexo] shall be
                  conducted in good faith and on the basis set out or referred to in this
                  agreement or, if not provided for in this agreement, as may be agreed by
                  the parties and, in the absence of such agreement, on an arm’s length
                  basis.
 No. 23-3085                       Firexo, Inc. v. Firexo Grp. Ltd.                         Page 4

       Third-Party Rights:
       30.1    This agreement is made for the benefit of the parties and their successors
               and permitted assigns and is not intended to benefit, or be enforceable by,
               anyone else.
       Choice of Law:
       33.1    This agreement and any dispute or claim arising out of or in connection
               with it or its subject matter or formation shall be governed by and
               construed in accordance with the laws of England and Wales.
       Forum-Selection Clause:
       33.2    Each party irrevocably agrees that the courts of England and Wales shall
               have exclusive jurisdiction to settle any dispute or claim that arises out of
               or in connection with this agreement or its subject matter or formation.

       Three things about this contract bear recognition or brief discussion. One, the crux of the
JVA is that FGL sold 70% of Firexo to Smith for £1,700,000, ergo offer, acceptance, and
consideration. But if Firexo received some benefit from the JVA, other than Smith’s new partial
ownership, that benefit is not evident. That is, if Firexo had been a signatory party to the JVA
and agreed to be bound by its provisions, it is not evident what consideration Firexo would have
received for doing so. Two, because FGL owned Firexo and sold 70% of it to Smith, if Firexo
had been a signatory party to the JVA, it is not clear here whether Firexo would have contracted
with FGL or with Smith.        And three, while the JVA sets out Smith’s and FGL’s mutual
agreement to engage in a certain business, namely the sale and distribution of FGL’s fire
extinguishers in the United States, the JVA does not specify any terms, such as price, quantity,
quality, or duration. According to Firexo, the subsequent oral “sole distribution agreement”
established those terms.

       The district court determined that even though Firexo was not a signatory to the JVA, the
JVA’s forum-selection clause applied because Firexo and its claims were so “closely related” to
the JVA that it was “foreseeable” that the clause would apply. Firexo, 2023 WL 2772388, at *1.
That is, even though the JVA contained no terms governing Firexo’s and FGL’s business
relationship, it was necessarily foreseeable to Firexo that any lawsuit arising out of or related to
its business with FGL (i.e., the distribution of FGL’s fire extinguishers) had to be filed in a court
 No. 23-3085                          Firexo, Inc. v. Firexo Grp. Ltd.                               Page 5

in England or Wales, and decided pursuant to English law. To support this determination, the
district court adopted the Fifth Circuit’s somewhat novel four-factor test for “closely related”:

        (1) common ownership between the signatory and the non-signatory,
        (2) direct benefits obtained from the contract at issue,
        (3) knowledge of the agreement generally, and
        (4) awareness of the forum selection clause particularly.

Id. at *2 (quoting Franlink Inc. v. BACE Servs., Inc., 50 F.4th 432, 442 (5th Cir. 2022)). The
district court then found those factors were satisfied based on several articulated facts, including:

        • The JVA specified [that] the purpose of Firexo would be the ‘sale and
          distribution of FGL’s fire extinguishing products within the United States.’
        • Smith agreed in the JVA to carry out Firexo’s business in accordance with the
          terms of the JVA.
        • Smith agreed to exercise his rights relating to Firexo consistent with the terms
          of the JVA.
        • Smith and FGL are the original and only investors in Firexo.[1]
        • Smith is the majority shareholder and Executive Officer of Firexo and is
          directing this lawsuit.

Id. (editorial marks omitted). The district court held that “[b]ecause Firexo is so ‘closely related’
to the dispute between Smith and FGL, it was ‘foreseeable’ that it w[ould] be bound by the
JVA’s forum-selection clause,” id. at *3, and dismissed the case for lack of jurisdiction.

                                      II. BACKGROUND LAW

        A. Forum Selection Clauses—Existence, Enforceability, Applicability, and Effect

        Existence. The parties to a contract may agree to litigate any or all potential future
disputes in a particular forum via a “forum-selection clause.” See Southland Corp. v. Keating,
465 U.S. 1, 7 (1984); M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12 (1972) (“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.”). This is often a bargained-

        1To be clear, FGL incorporated Firexo and sold (via the JVA) 70% to Smith. So FGL is the only original
incorporator and investor. As a purchaser that paid its money to FGL, Smith was not a Firexo “investor.”
 No. 23-3085                           Firexo, Inc. v. Firexo Grp. Ltd.                                Page 6

for provision.2 Id. at 16 (“It is equally possible that the contract price took this [forum-selection
clause] into account.”).

        Enforceability. In the Sixth Circuit, “[f]ederal law governs the enforceability of a forum-
selection clause in a diversity suit.” Boling v. Prospect Funding Holdings, LLC, 771 F. App’x
562, 568 (6th Cir. 2019) (citing Wong v. PartyGaming Ltd., 589 F.3d 821, 828 (6th Cir. 2009)).
“The party opposing the forum selection clause bears the burden of showing that the clause
should not be enforced.” Wong, 589 F.3d at 828 (citation omitted). To determine whether a
forum-selection clause is enforceable, the district court considers:

        (1) whether the clause was obtained by fraud, duress, or other unconscionable
            means;
        (2) whether the designated forum would ineffectively or unfairly handle the suit;
            and
        (3) whether the designated forum would be so seriously inconvenient such that
            requiring the plaintiff to bring suit there would be unjust.

Wong, 589 F.3d at 828 (paragraph breaks inserted; citation omitted); see also Cadle Co. v.
Reiner, Reiner & Bendett, P.C., 307 F. App’x 884, 886 (6th Cir. 2009) (“[A] forum selection
clause originating from an arms-length commercial transaction is valid and enforceable absent
fraud, overreaching, or circumstances under which enforcement would be unreasonable or
unjust.”). Sometimes, the first enforceability factor is alternatively considered as a separate
question of validity.       And note the overlap between this test for forum-selection-clause
enforceability (factors two and three) and forum non conveniens, as is discussed further in
Section II.B, infra.

        “The enforceability of a forum-selection clause [] is a question of law that we review de
novo.” Boling, 771 F. App’x at 568-69 (citing Wong, 589 F.3d at 826, and Preferred Cap., Inc.
v. Assocs. in Urology, 453 F.3d 718, 721 (6th Cir. 2006)), albeit with the presumption that
“[c]ourts should uphold a forum-selection clause unless there is a strong showing that the clause
should be set aside,” id. at 567-68 (citing Wong, 589 F.3d at 828).

        2A modified analysis applies when it is not bargained. See Carnival Cruise Lines, Inc. v. Shute, 499 U.S.
585 (1991).
 No. 23-3085                         Firexo, Inc. v. Firexo Grp. Ltd.                          Page 7

          Applicability. Whether and how a contract provision applies to the parties or claims in a
lawsuit is generally a matter of contract interpretation, but gauging the applicability (or scope) of
forum-selection clauses is an open question in the Sixth Circuit. See Wieland Copper Prod.,
LLC v. Actian Corp., No. 3:21-cv-755, 2022 WL 18638816, at *3 (W.D. Ky. May 4, 2022)
(lamenting that “the Sixth Circuit has not expressly adopted an analytical approach [for]
determining the applicability of a forum-selection clause” and asserting that it had “not located a
case from the Sixth Circuit that offers definitive guidance on the applicability question”).

          As an ordinary matter of contract interpretation, a federal court sitting in diversity begins
with a conflict-of-laws analysis using the law of the State in which it sits to determine the
governing law, and then interprets the contract provision under that law.             See Cassirer v.
Thyssen-Bornemisza Collection Found., 596 U.S. --, 142 S. Ct. 1502, 1509 (2022). That is, the
court first determines the controlling law and then assesses the forum-selection clause under that
law to determine whether and how it applies to the parties and claims in the pending lawsuit.
But the present case is far from the ordinary scenario, and all of this will be addressed fully
herein.

          Effect. A forum-selection clause designating jurisdiction in another forum does not
deprive a federal district court of jurisdiction. Bremen, 407 U.S. at 12; accord Gibson v. Am.
Bankers Ins. Co., 289 F.3d 943, 948 (6th Cir. 2002). It can, however, establish personal
jurisdiction in the selected forum. Preferred Cap., 453 F.3d at 721 (“The use of a forum
selection clause is one way in which contracting parties may agree in advance to submit to the
jurisdiction of a particular court.”). Nor does a forum-selection clause deprive a federal district
court of venue. Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. Dist. of Texas, 571 U.S. 49, 57
(2013) (explaining that “venue is proper so long as the requirements of [28 U.S.C.] § 1391(b) are
met, irrespective of any forum-selection clause”). Instead, the forum-selection clause alters the
venue analysis.

          When the forum-selection clause designates a court “within the federal court system,” the
appropriate mechanism is “a motion to transfer,” pursuant to § 1404(a). Boling, 771 F. App’x at
567 (citing Atl. Marine, 571 U.S. at 59); Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29
(1988) (“Section 1404(a) is intended to place discretion in the district court to adjudicate motions
 No. 23-3085                       Firexo, Inc. v. Firexo Grp. Ltd.                         Page 8

for transfer according to an ‘individualized, case-by-case consideration of convenience and
fairness.’” (citation omitted)). But when the “forum-selection clause indicates that a matter
should be heard by a state or foreign court, then forum non conveniens is the appropriate method
of enforcement.” Boling, 771 F. App’x at 567 (citing Atl. Marine, 571 U.S. at 60-61). And,
under that modified forum-non-conveniens analysis, “[a] valid forum-selection clause will have
‘controlling weight in all but the most exceptional cases.’” Id. at 568 (quoting Atl. Marine, 571
U.S. at 63).

       B. Forum-Non-Conveniens Analysis

       “Forum non conveniens permits a court to decline to exercise jurisdiction even when
jurisdiction is proper.” Boling, 771 F. App’x at 567 (citing Hefferan v. Ethicon Endo-Surgery
Inc., 828 F.3d 488, 492 (6th Cir. 2016)). Ordinarily, in deciding a defendant’s forum-non-
conveniens motion, the district court considers three factors: the degree of deference owed to the
plaintiff’s choice of forum, whether the defendant has shown that an adequate alternative forum
is available, and whether the defendant has shown that the private and public interests dictate that
the plaintiff’s chosen forum would be unnecessarily burdensome.            See Jones v. IPX Int’l
Equatorial Guinea, S.A., 920 F.3d 1085, 1090 (6th Cir. 2019); Hefferan, 828 F.3d at 492.

       But an enforceable forum-selection clause alters the standard forum-non-conveniens
analysis in two critical ways: (1) it flips the burden from the defendant to the plaintiff (“[T]he
plaintiff’s choice of forum merits no weight. Rather, as the party defying the forum-selection
clause, the plaintiff bears the burden of establishing that transfer to the forum for which the
parties bargained is unwarranted.”); and (2) it eliminates any private-interest factors from
consideration (“A court accordingly must deem the private-interest factors to weigh entirely in
favor of the preselected forum.”). Atl. Marine, 571 U.S. at 63 (citations omitted). The “practical
result” is that, because “[p]ublic-interest factors . . . will rarely defeat a transfer motion, . . .
forum-selection clauses will almost always control.” Boling, 771 F. App’x at 568.

       In the Sixth Circuit, the analytical approach to a forum-non-conveniens motion based on a
contractual forum-selection clause has two steps, with the first step being to “determine whether
[the] forum-selection clause is [1] applicable to the claims at issue, [2] mandatory, [3] valid, and
 No. 23-3085                        Firexo, Inc. v. Firexo Grp. Ltd.                        Page 9

[4] enforceable;” and the second step being to “balance[e] the forum-non-conveniens factors.”
Lakeside Surfaces, Inc. v. Cambria Co., LLC, 16 F.4th 209, 215 (6th Cir. 2021) (numbering
added).

          [W]hen assessing a forum-non-conveniens motion relying on a forum-selection
          clause, we first ask several contract-specific questions, including whether the
          forum-selection clause is [1] applicable, [2] mandatory, [3] valid, and
          [4] enforceable. An answer of ‘yes’ to all those questions means Atlantic
          Marine’s modified forum-non-conveniens analysis applies and the plaintiff bears
          the burden of showing that the public factors weigh heavily against dismissal; an
          answer of ‘no’ to any of them means the traditional forum-non-conveniens
          analysis applies instead. We review the district court’s assessment of [those four
          first-step] questions de novo and review its [second-step] balancing of the forum-
          non-conveniens factors for abuse of discretion.

Id. at 216 (citation omitted; numbering added). In this case, the district court determined that the
forum-selection clause was enforceable, whereas Firexo argues that it should have found it was
not applicable. There is no dispute that the JVA’s forum-selection clause is mandatory and
valid.

          “We [] review a district court’s forum non conveniens determination for abuse of
discretion.” Boling, 771 F. App’x at 568. Before we will overturn a district court’s forum-non-
conveniens decision, we must have “a definite and firm conviction that the trial court committed
a clear error of judgment.” Logan v. Dayton Hudson Corp., 865 F.2d 789, 790 (6th Cir. 1989).

          C. The “Closely Related” Doctrine—Origin, Evolution, and Current Condition

          It is axiomatic that, “[t]ypically, only parties to a contract are bound to its terms.”
Ingram Barge Co., LLC v. Zen-Noh Grain Corp., 3 F.4th 275, 277 (6th Cir. 2021); E.E.O.C. v.
Waffle House, Inc., 534 U.S. 279, 294 (2002) (“It goes without saying that a contract cannot bind
a nonparty.”); WashPro Express, LLC v. VERwater Envtl., LLC, 2007 WL 641425, 2007-Ohio-
910, at ¶ 9 (Ohio Ct. App., Mar. 5, 2007) (“[U]nder the basic principles of contract law, a
contractual agreement is unenforceable against a person or entity who was not a party to the
contract.”). But there are certainly exceptions, such as in agency, for third-party beneficiaries, or
via equitable estoppel.     See Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 631 (2009)
(“[T]raditional principles of state law allow a contract to be enforced by or against nonparties to
 No. 23-3085                       Firexo, Inc. v. Firexo Grp. Ltd.                        Page 10

the contract through assumption, piercing the corporate veil, alter ego, incorporation by
reference, third-party beneficiary theories, waiver and estoppel.” (quotation marks and citation
omitted)).

       The exception involved here is most frequently referred to as the “closely related”
doctrine, which “permit[s] non-signatories to an agreement to be bound by, and to enforce,
forum selection clauses where, under the circumstances, the non-signatories enjoyed a
sufficiently close nexus to the dispute or to another signatory such that it was foreseeable that
they would be bound.” Franlink Inc. v. BACE Servs., Inc., 50 F.4th 432, 439 (5th Cir. 2022)
(citations omitted).   This is a federal-common-law doctrine concerning the applicability of
contracts, specifically a contract’s forum-selection clause. And “[a]lthough most circuits have
adopted the closely-related doctrine, they have usually done so without in-depth explanation of
the theory.” Id. (citations omitted).

       Before getting too far, it bears recognizing and acknowledging at the outset that while
this doctrine applies only to forum-selection clauses, it makes those clauses enforceable by and
against non-signatories, i.e., entities who did not sign the contract, likely did not negotiate the
contract, and possibly did not even know about the contract, much less read it. Obviously, this
raises certain fundamental concerns. For one, under the objective theory of contracts, the parties
to a contract must manifest a mutual assent to be bound, supported by consideration. “However,
when applied to enforcement against a non-signatory [], the closely-related[] doctrine renders the
requirement of consideration null.” Lukas A. Anton, C.H. Robinson Worldwide, Inc. v. Fls
Transportation, Inc.: How Minnesota’s Closely-Related-Party Doctrine Undermines Long-
Settled Principles of Contract Law, 35 Hamline L. Rev. 497, 536 (2012). Similarly, “a contract
. . . binding [a] non-signatory [entity] violates that [entity]’s right to refrain from entering into
contracts.” Id. at 534 (“Just as every American citizen enjoys a liberty interest to enter into and
enforce contracts, an implied converse liberty interest exists to refrain from doing so.”). Going a
step further, a plaintiff’s use of the “closely related” doctrine to establish personal jurisdiction
over a non-signatory defendant in the designated forum implicates a constitutional due process
problem by circumventing the minimum-contacts requirement. See, e.g., Truinject Corp. v.
Nestle Skin Health, S.A., No.19-592 2019 WL 6828984, at *11 (D. Del. Dec. 13, 2019) (“As an
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initial matter, I have serious questions about the constitutionality of using the ‘closely related’
test to exercise personal jurisdiction over a non-signatory to a contract with a forum selection
clause.”).   And, as a federal-common-law doctrine of contract interpretation, the “closely
related” doctrine would appear to violate ordinary Erie-doctrine principles. See Section II.D,
infra. But the initial question concerns the origin and, specifically, the source of authority to
justify this doctrine.

        As conventionally understood, the “closely related” doctrine’s first appearance in federal
law comes in a footnote to a 1988 case, Manetti-Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509
(9th Cir. 1988). The contract between Manetti-Farrow and Gucci Parfums had a forum-selection
clause designating Florence, Italy, so when Manetti-Farrow sued Gucci Parfums and its sister
company, Gucci America, in California federal court, raising tort claims, the Gucci defendants
moved to dismiss the case based on the forum-selection clause. Id. at 511. The focus and bulk
of the Manetti-Farrow opinion concerned the related questions of whether the contract’s forum-
selection clause covered the tort claims and how to decide that question, but in a stand-alone
footnote, the court offhandedly addressed the fact that Gucci America was not a signatory to the
contract:

        Manetti-Farrow argues [that] the forum selection clause can only apply to Gucci
        Parfums, which was the only defendant to sign the contract. However, ‘a range of
        transaction participants, parties and non-parties, should benefit from and be
        subject to forum selection clauses.’ Clinton v. Janger, 583 F. Supp. 284, 290
        (N.D. Ill. 1984) (citing Coastal Steel Corp. v. Tilghman Wheelabrator Ltd., 709
        F.2d 190, 202-03 (3d Cir. 1983)). We agree with the district court that the alleged
        conduct of the non-parties is so closely related to the contractual relationship that
        the forum selection clause applies to all defendants.

Id. at 514 n.5 (partial citation omitted; emphasis added). Neither of the two cases cited in that
passage—the first a trust-law case and the other a bankruptcy case—created the “closely related”
doctrine as we know it; both involved non-signatories who were third-party beneficiaries.

        It was another five years before the “closely related” doctrine first appeared as we know
it, in Hugel v. Corp. of Lloyd’s, 999 F.2d 206 (7th Cir. 1993). Hugel and Lloyd’s were parties to
a partnership contract with both forum-selection and choice-of-law clauses (England). When
Lloyd’s improperly disclosed harmful information about Hugel’s two privately owned
 No. 23-3085                       Firexo, Inc. v. Firexo Grp. Ltd.                         Page 12

businesses, GCM and OMI, Hugel sued and Lloyd’s moved to dismiss based on the partnership
contract’s forum-selection clause. All three entities—Hugel, GCM, and OMI—were named
plaintiffs in the lawsuit, but only Hugel had signed the contract with the forum-selection clause.
Thus, GCM and OMI argued that they were not bound by the clause because they had not signed
the contract. In disagreeing, the Seventh Circuit created the “closely related” doctrine as we
know it:

       In order to bind a non-party to a forum selection clause, the party must be ‘closely
       related’ to the dispute such that it becomes ‘foreseeable’ that it will be bound.
       Manetti-Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509, 514 n.5 (9th Cir. 1988);
       Coastal Steel, 709 F.2d at 203. Hugel is President and Chairman of the Board of
       both GCM and OMI. In addition, Hugel owns 99% of the stock of GCM which,
       in turn, owns 100% of the stock of OMI. . . .
       Hugel and Lloyd’s contracted to settle all of their disputes in England. Although
       GCM and OMI were not members of Lloyd’s, in the course of a dispute between
       Hugel and Lloyd’s, Hugel alone involved his two controlled corporations and
       supplied information allegedly belonging to those corporations. The . . .
       corporations owned and controlled by Hugel are so closely related to the dispute
       that they are equally bound by the forum selection clause and must sue in the
       same court in which Hugel agreed to sue.

Id. at 209-10 (footnote omitted; emphasis added). These two paragraphs comprise the entirety of
the analysis of this issue—just this unexplained, unjustified, and unadorned proclamation that “to
bind a non-party to a forum selection clause, the party must be ‘closely related’ to the dispute
such that it becomes ‘foreseeable’ that it will be bound,” with citation to the ipse dixit footnote in
Manetti-Farrow and the third-party-beneficiary doctrine in Coastal Steel, as discussed above.

       Also, in a footnote to the above passage, Hugel provides an additional ipse dixit
proclamation that would appear to distinguish and negate any reliance on Coastal Steel:

       Plaintiffs argue that the court must make a threshold finding that a non-party to a
       contract is a third-party beneficiary before binding him to a forum selection
       clause. While it may be true that third-party beneficiaries of a contract would, by
       definition, satisfy the ‘closely related’ and ‘foreseeability’ requirements, see e.g.,
       Coastal Steel, 709 F.2d at 203 (refusing to absolve a third-party beneficiary from
       the strictures of a forum selection clause which was foreseeable); Clinton v.
       Janger, 583 F. Supp. 284, 290 (N.D. Ill. 1984), a third-party beneficiary status is
       not required.
 No. 23-3085                             Firexo, Inc. v. Firexo Grp. Ltd.                                   Page 13

Id. at 209 n.7 (emphasis added). That is, after acknowledging that Coastal Steel and Clinton
were based on the third-party-beneficiary doctrine, Hugel says third-party-beneficiary status is
not necessary, but offers no justification, explanation, or even legal citation for that statement.

         Four years later, the “closely related” doctrine appeared in the Sixth Circuit, in Baker v.
LeBoeuf, Lamb, Leiby & Macrae, 105 F.3d 1102, 1106 (6th Cir. 1997). Baker and Lloyd’s had a
partnership contract with a forum-selection clause (England). LeBoeuf was Lloyd’s American
law firm, but was not a party to the contract between Baker and Lloyd’s. After LeBoeuf
provided legal services to Baker, at the direction of Lloyd’s, Baker sued LeBoeuf in federal court
based on diversity, alleging breach of fiduciary duties, negligent representation, and legal
malpractice. When non-signatory LeBoeuf sought to avail itself of (enforce) the Baker-Lloyd’s
partnership contract’s forum-selection clause, a magistrate judge (affirmed by the district court)
considered six possible doctrines, including the “closely related” doctrine, and rejected
LeBoeuf’s argument under each.3 On appeal, the panel recited and summarized the district
court’s (and magistrate judge’s) analysis of the issue under each of the six possible doctrines—
leading one court to quip that “[t]his opinion has something for everyone,” Bugna v. Fike,
80 Cal. App. 4th 229, 234 (Cal. App. 2000)—and affirmed them in toto. Thus, Baker’s entire
discussion on the “closely related” doctrine comprises one, possibly two, sentences, the first
being: “Relying on Hugel, which held that to bind a non-party to a forum selection clause, the
party must be [so] ‘closely related’ to the dispute [] that it becomes ‘foreseeable’ that it will be

         3The magistrate judge’s Report and Recommendation, Baker v. LeBoeuf, Lamb, Leiby & MacRae, No.
1:92-cv-718, 1993 WL 662352 (S.D. Ohio Oct. 7, 1993), raised and analyzed six doctrines: (1) intended third party
beneficiary, id. at *6, 8; (2) forum non conveniens, based on citizenship and “international interests,” id. *7, 11, 12;
(3) agency, considering whether LeBoeuf was a Lloyd’s “entity” or “agent,” id. at *8, 11; (4) estoppel, considering
whether Baker had shown an “intent to be bound” through a “web of standard agreements,” id. at *9, 11; (5) joinder,
considering whether Lloyd’s was an “indispensable party” and the claims against LeBoeuf so “integrally related,”
id. at *10-11; and (6) the “closely related” doctrine, based on Hugel, id. at *9-10. Following a two-paragraph case
summary of Hugel, the Report’s single-paragraph analysis of the “closely related” doctrine says:
         Hugel is a narrow holding, essentially finding that GCM and OMI were alter egos of [Hugel]. In
         the instant action, defendants are neither the alter egos of Lloyd’s nor have they made such a
         claim. As the Seventh Circuit saw it [in Hugel], the issue was whether or not the two corporations
         were so closely related to the dispute between [Hugel] and Lloyd’s that it was foreseeable that
         they too would be bound by the forum selection clause. In the instant action, there is no dispute
         alleged between plaintiffs and Lloyd’s that is the subject matter of the claim against [LeBoeuf].
Id. at *10 (emphasis added). Thus, the magistrate judge construed Hugel as an “alter ego” theory. More to the
point, the magistrate judge gave the “closely related” doctrine little more attention than did the Baker panel.
 No. 23-3085                              Firexo, Inc. v. Firexo Grp. Ltd.                                 Page 14

bound, the [district] court found no such connection in this action.” Baker, 105 F.3d at 1106
(citations and quotation marks omitted). And in a later reference to Hugel’s footnote 7, see
supra, the opinion further reported the district court’s conclusion “that the ‘web of agreements’
between [Baker] and Lloyd’s demonstrates no close connection between LeBoeuf and Lloyd’s
sufficient to require enforcing the forum selection clause in this action.” Id. Baker offers no
justification for, assessment of, or even any opinion about the “closely related” doctrine—it just
recites the district court’s findings and conclusions.

         Thus, as in the Ninth (Manetti-Farrow) and Seventh (Hugel) Circuits, the “closely
related” doctrine appeared in the Sixth Circuit without explanation, justification, or authority
other than citation to Hugel. Unlike in the Ninth and Seventh Circuits, however, in the Sixth
Circuit (Baker) this was not just the first appearance of the “closely related” doctrine; it was also
the last and only appearance of it in the 26 years since.4 And any putative adoption of the
“closely related” doctrine was dicta5—Baker’s simple and unremarkable holding was that the
non-signatory could not enforce the contract’s forum-selection clause. See Ford Motor Co. v.
Kawasaki Kisen Kaisha Ltd., No. 2:21-cv-10119, 2023 WL 5049251, at *8 (E.D. Mich. Aug. 8,
2023) (“There does not appear to be a definitive ruling in the Sixth Circuit as to when a party to a
contract can seek to bind a non-party to a forum selection clause’s jurisdictional mandate. Baker
[] involved a non-signatory defendant seeking to invoke a forum selection clause against

         4Only two Sixth Circuit cases since Baker even brush up against the “closely related” doctrine and neither
appears even to recognize it, much less formally adopt it, specifically apply it, or add anything to it.
         In Wilson v. 5 Choices, LLC, 776 F. App’x 320, 329 (6th Cir. 2019), certain defendants in a civil RICO
action sought to avoid a forum-selection clause because they were not signatories to the contract at issue, and the
panel cited Manetti-Farrow, 858 F.2d at 514 n.5, when discussing the topic of closely related parties. But Wilson
did not apply, or even identify the “closely related” doctrine; it relied on the fact that, at least as alleged in the
complaint, the non-signatories were conspirators with the signatories, and used that conspirator status to apply
agency law, id. at 329 n.7, and equitable estoppel, id. at 329.
         Similarly, in Ingram Barge Co., LLC v. Zen-Noh Grain Corp., 3 F.4th 275, 280 (6th Cir. 2021), the
defendant in a maritime-law action sought to avoid a forum-selection clause because it was not a signatory to the bill
of lading at issue, and the panel cited Baker, 105 F.3d at 1106, as a “see also” in its agency-law analysis. Ingram
Barge did not apply, or even identify the “closely related” doctrine; it first considered and determined that Zen-Noh
was not a third-party beneficiary and then that Zen-Noh did not have an agency relationship with a signatory, to
conclude that Zen-Noh was not a party to the bill of lading.
          It also bears mention that both Wilson (RICO) and Ingram Barge (maritime) were federal-question-
jurisdiction cases, where federal common law is necessarily commonplace. They were not diversity cases.
         5See Section III.C, infra.
 No. 23-3085                           Firexo, Inc. v. Firexo Grp. Ltd.                                  Page 15

signatory plaintiffs.”); Amwear USA, Inc. v. Galls, LLC, No. 5:20-cv-354, 2021 WL 1994228, at
*5 (E.D. Ky. May 18, 2021) (“There is no definitive rule in the Sixth Circuit on when a party to a
contract can seek to bind a non-party to a forum-selection clause.” (footnote and citation
omitted)); ThorWorks Indus. v. E.I. DuPont De Nemours & Co., 606 F. Supp. 2d 691, 697 (N.D.
Ohio 2008) (“The Sixth Circuit has never explicitly held that non-parties who are not third party
beneficiaries can assert rights under a contract. . . . The Sixth Circuit, in Baker [] acknowledged
and distinguished [the Hugel] holding.”).

        Over 15 years would pass before a Circuit Court would issue an opinion addressing the
basis or justification for the “closely related” doctrine.6                In Adams v. Raintree Vacation
Exchange, LLC, 702 F.3d 436 (7th Cir. 2012), Adams sued two defendants, Raintree and
Starwood, in Illinois and those defendants sought dismissal based on a forum-selection clause
(Mexico) in a contract between Adams and DTR, to which neither was a signatory. Rather,
Raintree was DTR’s corporate parent (“more likely the great-grandparent”) and Starwood was
Raintree’s co-conspirator or DTR’s “secret principal.” Id. at 442. The court framed the issue
that was “fundamental to the appeal” as whether “Raintree and Starwood cannot be allowed to
invoke the forum selection clause because they are not parties to the contract in which it
appears.” Id. at 439.

        Albeit in a roundabout way, the court considered applying a “literal approach” that would
exclude any non-signatory, and rejected that approach based on equitable estoppel (i.e., it would
be unfair to permit “a plaintiff [to] defeat a forum-selection clause by its choice of provisions to
sue on, of legal theories to press, and of defendants to name in the suit”) and public policy (i.e.,
ignoring “affiliates of the signatories [] could also undermine the contribution that such clauses
have been praised for making to certainty in commercial transactions, particularly international
transactions”). Id. at 440. Thus, the court considered the “closely related” doctrine:

        A number of cases say that the test for whether a nonparty to a contract containing
        [a forum-selection] clause can nonetheless enforce it (and whether the nonparty
        will be bound by the clause if, instead of suing, it is sued) is whether the nonparty

        6While this is an enlightening analysis of this non-signatory issue, it is essentially all dicta because the
parties had neither raised nor argued it, thus forfeiting it, as the court expressly recognized. Adams v. Raintree
Vacation Exch., LLC, 702 F.3d 436, 439 (7th Cir. 2012) (“We could stop there and affirm, but will trudge on.”).
 No. 23-3085                       Firexo, Inc. v. Firexo Grp. Ltd.                          Page 16

       is ‘closely related’ to the suit. This is a vague standard, but it can be decomposed
       into two reasonably precise principles, which we’ll call ‘affiliation’ and
       ‘mutuality,’ the first being applicable to Raintree and the second to Starwood.

Id. at 439 (citing Hugel and Manetti-Farrow, among others) (citations omitted). That is, the
Adams court broke the “closely related” doctrine into two doctrines: affiliation and mutuality.

       As for its “affiliation doctrine,” the court recognized that “there has to be a reason, rather
than the mere fact of affiliation, for a nonparty to a contract to be able to invoke, or to be bound
by, a clause in it,” id. at 440, and it identified at least three concepts that were tenable under its
facts: equitable estoppel, an analogy to corporate-veil piercing, and agency, id. at 440-42.

       The application of the affiliation doctrine to Raintree is straightforward. Raintree
       is the parent of DTR[] and can therefore enforce the forum selection clause in
       DTR’s contracts with the plaintiffs since the effect is merely to substitute one
       [defendant] for another [defendant] that is [] bound by the forum selection clause
       to which the plaintiffs had agreed. Raintree is not trying by substituting itself for
       DTR to change the forum agreed on in the clause. . . . The plaintiffs by signing
       the contracts containing the forum selection clause agreed to litigate in Mexico
       and Raintree is not trying to alter that agreement.

Id. at 442. So, equity binds signatories to their agreement due to their consent, id. at 440, and
Raintree “is in a sense piercing its own subsidiary’s corporate veil by pretending to be a party to
the subsidiary’s contract,” id. at 441. In this scenario, non-signatory Raintree is enforcing the
forum-selection clause against the signatory plaintiff, via equity, not being bound by it.

       So much for Raintree; what of Starwood? It is not in the ownership chain that
       includes [signatory DTR] . . . [But] [t]he plaintiffs are [] alleging a conspiracy
       between Raintree and Starwood to defraud them, and . . . the suit accuses Raintree
       and Starwood of being secret principals of DTR, their agent in dealing with the
       timeshare buyers and thus in executing the fraud.
       A contract that the agent of secret principals makes with a third party can be
       enforced, at the third party’s option of course (the third party can rescind—get out
       of the contract—if he prefers), against the secret principals.

Id. at 442-43 (citations omitted). That is, Starwood is “affiliated” with the DTR via agency law,
allowing the plaintiff to enforce the forum-selection clause against Starwood as if it were DTR
(i.e., as DTR’s principal). This is where the second part—the “mutuality doctrine”—comes in:
 No. 23-3085                             Firexo, Inc. v. Firexo Grp. Ltd.                                 Page 17

         [F]rom this it follows that Starwood can hold the plaintiffs to the clause in the
         opposite situation and thus defend the suit in Mexico. Were it not for this
         principle of mutuality, the plaintiffs would have a choice of forums, and Starwood
         would not; and that could not have been the intention behind a clause that makes
         Mexico the exclusive forum irrespective of the parties’ domiciles.

Id. at 443 (editorial marks, quotation marks, and citation omitted). So, because the plaintiff
could enforce the forum-selection clause against Starwood (as if it were DTR), mutuality
required that Starwood could reciprocally enforce the clause against the plaintiff (i.e., bind
plaintiff to it).

         The Adams scenarios did not get this far but, given that a non-signatory parent defendant
(such as Raintree) could enforce a forum-selection clause against the signatory plaintiff based on
pseudo corporate-veil piercing (as if it were DTR) and equitable estoppel (enforcing plaintiff’s
consent to Mexico), then presumably mutuality would entitle that same signatory plaintiff to
enforce the forum-selection clause against that same non-signatory parent defendant (Raintree, as
if it were DTR), though it is not entirely clear that mutuality would work like this. That is
because Adams allows a defendant to use mutuality as a shield (to force the “attacking” plaintiff
into the foreign forum to which it consented via contract), whereas this hypothetical uses
mutuality as a sword (to force the non-signatory defendant into the foreign forum to which it
never consented).

         All told, either the defendant or the plaintiff could be either the non-signatory or the
signatory, so there are four scenarios in which one of them invokes the forum-selection clause
against another.7 In the first two scenarios, in which a non-signatory invokes the clause against a
signatory, the signatory has expressly consented to the selected forum and “[t]he non-signatory
[i]s seeking to take advantage of the clause to further its own interests in litigation.” See John F.
Coyle & Robin J. Effron, Forum Selection Clauses, Non-Signatories, and Personal Jurisdiction,
97 Notre Dame L. Rev. 187, 209 (2021). When a non-signatory defendant, “actively seeking the
benefits provided by the forum selection clause,” invokes the clause against a signatory plaintiff,
that defendant is acting as a presumptive alter ego or third-party beneficiary, and enforcement of

         7Presumably, it is possible that both the plaintiff and the defendant could be non-signatories. Certainly the
“closely related” doctrine, by its own terms and empirical application, would not prohibit such an odd scenario.
 No. 23-3085                          Firexo, Inc. v. Firexo Grp. Ltd.                             Page 18

the clause presents no problems concerning consent or due process. Id. at 206. Similarly, when
a non-signatory plaintiff invokes the clause against a signatory defendant, typically “as a basis
for asserting personal jurisdiction over the defendant in the chosen forum,” enforcement of the
clause presents no problems of consent or due process: “the defendant has consented to
jurisdiction in the chosen forum with respect to claims brought by somebody. The question is
whether the defendant has consented to jurisdiction in the chosen forum with respect to claims
brought by this particular plaintiff”—again, acting as an alter ego or third-party beneficiary. Id.
at 208.

          In the third and fourth scenarios, however, “the forum selection clause is being invoked
against the non-signatory,” id. at 209, as a sword rather than a shield. When a signatory
defendant invokes the clause against a non-signatory plaintiff, enforcement of the clause presents
a consent problem—the plaintiff did not expressly consent to that forum inasmuch as it never
signed the contract.8 Id. This correspondingly deprives the non-signatory plaintiff of its “ability
to bring a lawsuit in the forum of [it]s choice,” id., and its “freedom not to contract,” id. at 212.
Finally, when a signatory plaintiff invokes the clause against a non-signatory defendant and uses
it to establish personal jurisdiction in the contractually chosen forum, enforcement of the clause
creates a constitutional due-process problem by circumventing the basic minimum-contacts
requirement. Id. at 214-16. Ordinarily, a plaintiff must satisfy the Supreme Court’s minimum-
contacts test to establish specific personal jurisdiction over an out-of-state (foreign) defendant.
See Int’l Shoe Co. v. Washington, 326 U.S. 310, 320 (1945); World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 295 (1980). “To conclude that a court has personal jurisdiction over a
defendant based solely on that defendant’s connection to a contract, [] is to fundamentally
misunderstand the Supreme Court’s recent caselaw in this area.” Coyle, 97 Notre Dame L. Rev.
at 219.

          Thus, it is not clear that Adams provides legitimate, much less compelling, authority or
justification for the “closely related” doctrine. It does, however, help solidify certain concerns.

         8This is the present-case scenario, wherein signatory defendant FGL invoked the JVA’s forum-selection
clause against non-signatory plaintiff Firexo.
 No. 23-3085                      Firexo, Inc. v. Firexo Grp. Ltd.                        Page 19

       Another five years would pass after Adams before another Circuit Court would question
the basis or application of the “closely related” doctrine. In Wylie v. Kerzner International
Bahamas Ltd., 706 F. App’x 577, 578 (11th Cir. 2017), Mrs. Wyley was injured at a Bahamas
Resort and sued in Florida; the Resort invoked a forum-selection clause (Bahamas) in a waiver
that Mr. Wylie had signed, but Mrs. Wylie had not. The district court enforced the clause against
Mrs. Wylie, finding that it was foreseeable that Mr. Wylie’s signature would bind her, and
dismissed based on forum non conveniens. Id. at 579. On appeal, the Eleventh Circuit held that
the district court had decided enforceability whereas the actual question was applicability:

       [Mrs. Wylie’s] argument is that she never entered into an agreement with the
       defendants—her husband did—so a forum-selection clause within that agreement
       cannot bind her. This goes to the formation of a contract, and whether non-
       signatories can be bound by a related third-party’s contract, not necessarily
       whether a forum-selection clause is enforceable.
       And this potentially presents a problem because, in a diversity case such as this,
       state-law principles generally govern the formation of contracts. Yet, in deciding
       whether to enforce a forum-selection clause, federal law governs even in diversity
       suits.
       It seems to us, then, that the analytical framework (and substantive law)
       governing the forum non conveniens inquiry in this diversity case depends on
       whether the validity of a forum-selection clause is distinct from, and antecedent
       to, its enforceability, or whether the validity of such a clause is just part of the
       federal law of enforceability, as developed in Bremen and expounded upon
       through Atlantic Marine. . . . [T]he Supreme Court has not answered this question.
       And neither have we.

Id. at 579-80 (editorial marks, quotation marks, and citations omitted). This passage uses the
word “validity,” but actually refers to “applicability” as we have used those terms herein.

       The court remanded for consideration of that question. Id. at 580. But on remand the
district court ruled that “[a] traditional forum non conveniens analysis mandates that this case be
dismissed, regardless of whether there is a valid and enforceable forum selection clause binding
Ms. Wylie.” Wylie v. Island Hotel Co. Ltd., No. 15-24113, 2018 WL 3421374, at *2 (S.D. Fla.,
July 13, 2018). In the ensuing appeal, the Eleventh Circuit affirmed on that basis and “d[id] not
address whether the forum-selection clause was valid and enforceable against Ms. Wylie.” Wylie
v. Island Hotel Co. Ltd., 774 F. App’x 574, 580 (11th Cir. 2019). Thus, the question remained
 No. 23-3085                        Firexo, Inc. v. Firexo Grp. Ltd.                        Page 20

open: Is the applicability of a forum-selection clause distinct from and antecedent to its
enforceability; or is its applicability just a part of the federal law of enforceability?

        Meanwhile, another five years would pass before we get the last of our circuit court
opinions about the “closely related” doctrine. In Franlink Inc. v. BACE Servs., Inc., 50 F.4th
432, 436 (5th Cir. 2022), a couple named Wells owned and operated a Florida company named
BACE, through which they and Franlink entered into a franchise agreement with a non-compete
clause and a forum-selection clause (Texas). The Wellses also owned and operated another
Florida company, PayDay, and their adult son, Morton, operated a third Florida company, JTL.
When Franlink discovered that PayDay, Morton, and JTL were all stealing its business, it sued
them in Texas federal court, basing personal jurisdiction on the franchise agreement’s forum-
selection clause, even though these defendants had not signed the franchise agreement. “The
district court held that, under the closely-related doctrine, the non-signatories were inextricably
intertwined and closely related such that it is foreseeable they would be bound to the terms of the
forum-selection clause.” Id. at 439 (quotation marks omitted). On appeal, the Fifth Circuit
acknowledged that it had “never recognized the closely-related doctrine,” and that “[a]lthough
most circuits have adopted the closely-related doctrine, they have usually done so without in-
depth explanation of the theory.” Id. (citations omitted). Thus, the Fifth Circuit endeavored to
do so, explaining that:

        The Seventh Circuit . . . gave three reasons why allowing closely-related non-
        signatories to invoke a forum selection clause is an appropriate equitable theory.
        First, without such a principle, forum selection clauses could easily be evaded.
        Second, forbidding non-signatories to invoke, or to be bound, to these clauses
        would undermine the contribution that forum selection clauses have been praised
        for—providing certainty in commercial transactions.
        Finally, judicial efficiency counsels to recognize the theory as litigating the same
        case in one court is preferable to litigating the same case in two different courts.

Id. at 439-40 (citing Adams, 702 F.3d at 441) (quotation marks and citations omitted; paragraph
breaks inserted). While accepting these prudential-equitable or policy reasons, Franlink also
recognized that unless the non-signatory had “control or involvement in the contract’s origin or
benefits there is precious little basis for applying the closely related parties doctrine.” Id. at 440
(quotation marks and citation omitted). And Franlink sought to satisfy this concern—and
 No. 23-3085                       Firexo, Inc. v. Firexo Grp. Ltd.                          Page 21

somehow correspondingly justify the doctrine—by defining “closely related” based on specific
limiting factors, such as: “The non-signatory’s ownership of the signatory, its involvement in the
negotiations, the relationship between the two parties[,] and whether the non-signatory received a
direct benefit from the agreement.” Id. at 440 (quoting In re McGraw-Hill Glob. Educ. Holdings
LLC, 909 F.3d 48, 63 (3d Cir. 2018)) (editorial and quotation marks omitted). In the end,
Franlink acknowledged that “the closely-related theory is not without its critics,” and listed some
of the concerns identified herein, id. at 440-41, but ultimately concluded:

       Although there is good reason to be dubious of the doctrine, the fact that it has
       been recognized by all other circuits to have considered it, invokes a strong reason
       for us to apply it in this circuit. We, as a court, are always chary to create a circuit
       split. Further, we must acknowledge that the doctrine can serve a purpose in
       producing equitable results, as earlier noted. Thus, prudence and judicial modesty
       caution against singularly swimming against this tide of authority.

Id. at 441 (editorial marks, quotation marks, and citations omitted). So, Franlink determined that
the “closely related” doctrine was an “equitable theory” with commendable purposes and limited
(or limitable) scope, but its real reason for adopting it was that everyone else had.

       Thus, Franlink created a four-factor test for limiting or determining the scope, with the
caveat that, “in line with our general understanding of equitable doctrines, we do not set out a
rigid test for applying the closely-related doctrine,” but rather, set out “a few fundamental factors
. . . that we will consider in determining whether these non-signatories are closely related”:

       (1) common ownership between the signatory and the non-signatory,
       (2) direct benefits obtained from the contract at issue,
       (3) knowledge of the agreement generally and
       (4) awareness of the forum selection clause particularly.

Id. at 442 (paragraph breaks inserted). By way of a footnote, Franlink conceded that, “given the
persuasive concerns about the closely-related doctrine and that there are other avenues or forums
to address [a plaintiff]’s grievances against the non-signatories, a narrow application of the
doctrine is both appropriate and necessary.” Id. at 442 n.8. Applying this four-factor test to each
of its three non-signatory defendants, Franlink found that neither Morton nor JTL was “closely
 No. 23-3085                       Firexo, Inc. v. Firexo Grp. Ltd.                          Page 22

related,” but that PayDay was and, therefore, the franchise agreement’s forum-selection clause
established personal jurisdiction over PayDay in the selected (Texas) forum. Id. at 442.

       At the end of the day, the “closely related” doctrine is a federal common law rule of
equitable contract interpretation that is best justified by its practical benefits (or policy purposes)
and the fact that everyone else is doing it. It is not entirely apparent, however, that its benefits
outweigh its concerns, especially the absence of consideration under the objective theory of
contracts or the absence of “minimum contacts” under the constitutional personal-jurisdiction
analysis. Certainly, it is analogous to other doctrines through which contracts are enforced by or
against non-signatories (e.g., alter ego, third-party beneficiary, estoppel), but while that would
support an argument that the doctrine is permissible, it undermines an argument that the doctrine
is necessary. See, e.g., M3 USA Corp. v. Qamoum, No. 20-2903, 2021 WL 2324753, at *12
(D.D.C. June 7, 2021) (opining that “[t]he question, then, is what the ‘closely related’ doctrine
adds to the law”). And, even accepting the doctrine without question, as district courts and other
circuits have done and continue to do, there remains a legitimate issue as to whether a forum-
selection clause’s applicability is distinct from and antecedent to its enforceability, such that the
law of the state and/or the contract (or the combination of the two) determines whether the
forum-selection clause applies to the non-signatory; or whether applicability is just a part of the
federal law of enforceability, such that the federal-common-law “closely related” doctrine
decides.

       D. Analogous Doctrine—Arbitration Clauses

       In general, arbitration clauses are “a particular type of forum selection clause.” Moses v.
Business Card Express, Inc., 929 F.2d 1131, 1138 (6th Cir. 1991); Vimar Seguros y Reaseguros,
S.A. v. M/V Sky Reefer, 515 U.S. 528, 534 (1995) (“foreign arbitration clauses are but a subset of
foreign forum selection clauses”); id at 548 n.7 (Stevens, J., dissenting) (“[T]his distinction is of
little importance; in relevant respects, there is no difference between the two.”).

       Accordingly, courts routinely apply the principles or analyses for one to the other. For
example, in Scherk v. Alberto-Culver Co., 417 U.S. 506, 518-19 (1974), the Court applied the
M/S Bremen forum-selection-clause principles to arbitration clauses because “[a]n agreement to
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arbitrate before a specified tribunal is, in effect, a specialized kind of forum-selection clause.”
See also IAC/InterActiveCorp v. Roston, 44 F.4th 635, 640 (7th Cir. 2022) (“Considering that
arbitration clauses are a species of forum selection clause, we have no problem applying []
arbitration principles to forum selection more generally.” (quotation marks and citations
omitted)); Bahamas Sales Assoc., LLC v. Byers, 701 F.3d 1335, 1342 n.7 (11th Cir. 2012)
(“Although all of the cases we cite concern the application of equitable estoppel to contracts with
arbitration clauses rather than forum-selection clauses, the equitable estoppel analysis is the
same. Arbitration clauses are similar to forum-selection clauses.”); Haynsworth v. The Corp.,
121 F.3d 956, 963 (5th Cir. 1997) (“[W]e [have] rebuffed a similar attempt to distinguish
between arbitration and forum selection/choice-of-law clauses for enforceability purposes . . .
[because] there is little difference between the two.”); Manetti–Farrow, 858 F.2d at 514 n.4
(“Although [the cited case] involved interpretation of the scope of an arbitration clause, we apply
its analysis here because an agreement to arbitrate is actually a specialized forum selection
clause.”).

       With this understanding, consider AtriCure, Inc. v. Meng, 12 F.4th 516, 520 (6th Cir.
2021), in which the defendants sought “to enforce a contract’s arbitration clause even though
they were not parties to, or third-party beneficiaries of, the contract.” In rejecting this effort, we
agreed that there was a time when “courts used the federal policy favoring arbitration to broadly
enforce arbitration contracts in favor of (or against) nonparties under expansive readings of
generic common-law concepts,” id., but “[t]he Supreme Court jettisoned this federal-common-
law approach” in Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630-31 (2009). Id. at 524.
“After Arthur Andersen, circuit courts have recognized that they now must look to the relevant
state’s common law to decide when nonparties may enforce (or be bound by) an arbitration
agreement. To the extent that our [prior] decision[s] suggested that this issue rested on federal
common law, [that] analysis did not survive Arthur Andersen.” AtriCure, 12 F.4th. at 524
(citations omitted).

       Applying Arthur Andersen here, we must start by identifying the state law that
       governs. In a diversity case, the choice-of-law rules of the state in which a district
       court sits (here, Ohio) tell us the law to pick. It is not clear how Ohio courts
       would resolve this choice-of-law question. They follow the Restatement’s
       choice-of-law rules in contract cases. And the Restatement generally respects
 No. 23-3085                           Firexo, Inc. v. Firexo Grp. Ltd.                                  Page 24

        choice-of-law provisions in contracts. That principle would point us to Chinese
        law—the law that the Distribution Agreement incorporates. Yet some courts
        recognize that a contract’s choice-of-law provision should not apply when the
        dispute involves nonparties who did not sign the contract. Perhaps Ohio courts
        would find these decisions persuasive.

Id. at 525 (quotation marks and citations omitted). Because none of the parties had argued for
Chinese law, however, that determination was unnecessary and the AtriCure court simply
applied Ohio law, id., ultimately remanding for the district court to consider an agency theory.
Id. at 534.

        The critical point is that there is no federal common law of contract interpretation for
arbitration clauses. Courts must employ a traditional Erie-doctrine choice-of-law analysis and
interpret the applicability and enforceability of the arbitration clause under the governing law.

                                               III. ANALYSIS

        “We review de novo any decisions concerning choice-of-law and forum-selection
clauses.” Stone Surgical, LLC v. Stryker Corp., 858 F.3d 383, 388 (6th Cir. 2017).

        A. Issue—Is Applicability Separate from and Antecedent to Enforceability?

        Firexo argues that there are two separate steps to analyzing a forum-selection clause:
(1) applicability based on state law (and/or the law of the contract), and (2) enforceability based
on federal common law.9 Under this approach, the JVA does not pass the first step (i.e., apply to
Firexo) because, on its own terms (JVA § 33.1), it operates under English law, and under English
law, a contract applies to only the named parties (signatories) or intended beneficiaries, of which
Firexo is neither; there is no place for the federal-common-law “closely related” doctrine to bring
Firexo within the contract. Therefore, according to Firexo, the district court erred by skipping
the first (applicability) step and relying solely on the second (enforceability) step.

        9Recall that in the Sixth Circuit questions of “enforceability” concern “(1) whether the clause was obtained
by fraud, duress, or other unconscionable means; (2) whether the designated forum would ineffectively or unfairly
handle the suit; and (3) whether the designated forum would be so seriously inconvenient such that requiring the
plaintiff to bring suit there would be unjust.” Wong, 589 F.2d at 828 (citation omitted).
 No. 23-3085                           Firexo, Inc. v. Firexo Grp. Ltd.                               Page 25

        This is the question that was raised by the Eleventh Circuit in Wylie, 706 F. App’x at
579-80, but left unanswered, as discussed in Section II.C, supra. Restated in those terms, Firexo
contends that a forum-selection clause’s applicability is distinct from and antecedent to its
enforceability, so the district court had to begin with the ordinary Erie approach to contract
interpretation, to determine the governing law and then determine applicability under that law.
FGL contends that applicability is just a part of the federal law of enforceability, so the district
court was correct to begin (and end) with the federal common law “closely related” doctrine.

        B. Circuit Split

        There is a circuit split on this question and the Sixth Circuit has yet to formally join either
side.10 On FGL’s side of the split, some Circuits apply federal common law to interpret the
scope or applicability of forum-selection clauses. See Albemarle Corp. v. AstraZeneca UK Ltd.,
628 F.3d 643, 650 (4th Cir. 2010) (“Following the majority rule, we thus conclude that a federal
court interpreting a forum selection clause must apply federal law in doing so.”); Manetti-
Farrow, 858 F.2d at 513 (“Moreover, because enforcement of a forum clause necessarily entails
interpretation of the clause before it can be enforced, federal law also applies to interpretation of
forum selection clauses.”); see also Fouad on behalf of Digital Soula Sys. v. State of Qatar, 846
F. App’x 466, 469 (9th Cir. 2021) (“Federal law applies to interpreting a forum selection
clause.”). In sum, these cases see forum-selection clauses as a purely procedural issue of venue
selection, so questions of scope or applicability fall under enforcement, to be decided by federal
common law.

        On the other side of the split, Firexo argues that the “growing trend” among the Circuit
Courts is to apply the two-step approach. See In re McGraw-Hill Glob. Educ. Holdings LLC,
909 F.3d 48, 58 (3d Cir. 2018); Weber v. PACT XPP Techs., AG, 811 F.3d 758, 770 (5th Cir.
2016); Martinez v. Bloomberg LP, 740 F.3d 211, 217 (2d Cir. 2014); Yavuz v. 61 MM, Ltd., 465
F.3d 418, 430 (10th Cir. 2006); see also John Wyeth & Bro. Ltd. v. CIGNA Int’l Corp., 119 F.3d

        10There is a third “side” to this split, due to the Seventh Circuit’s unique view: “Simplicity argues for
determining the validity and meaning of a forum selection clause . . . by [sole] reference to the law of the
jurisdiction whose law governs the rest of the contract in which the clause appears, rather than making the court
apply two different bodies of law in the same case.” Abbott Labs. v. Takeda Pharm. Co., 476 F.3d 421, 423 (7th
Cir. 2007).
 No. 23-3085                      Firexo, Inc. v. Firexo Grp. Ltd.                         Page 26

1070, 1073 (3d Cir. 1997) (Alito, J., writing) (“The question of the scope of a forum selection
clause is one of contract interpretation.”). The Martinez Court explained its rationale:

       There is no [] federal interest, however, in overriding [the] parties’ contractually
       chosen body of law in favor of uniform federal rules governing the interpretation
       of forum selection clauses. Indeed, such an exercise in federal-common-law-
       making undermines the constitutional allocation of judicial power between the
       state and federal systems established in Erie.
       Contract law—including the rules governing contract interpretation—is
       quintessentially substantive for Erie purposes, and therefore primarily the realm
       of the states. In construing a forum selection clause, a court may confront a wide
       range of contract law issues, from the treatment of ambiguous phrases, to the
       admissibility of parol evidence, to successorship and the rights of third-party
       beneficiaries. Erie warns against an approach that would force federal courts to
       generate a sprawling federal general common law of contracts to govern such
       questions whenever they arise in the context of forum selection clauses.
       The instant case concededly differs from one that poses a typical Erie question,
       both because it arises under federal question jurisdiction, and because the forum
       selection clause here provides for proceedings abroad under foreign law, rather
       than in a particular state’s courts under state law. Yet Erie does not merely
       articulate a choice-of-law rule for federal diversity cases. Rather, the decision
       reflects a constitutional architecture in which the federal judiciary’s common-law-
       making power is confined to restricted areas where a federal rule of decision is
       necessary to protect uniquely federal interests or where Congress has given the
       courts the power to develop substantive law.
       We find no authority for federal courts to generate general rules of contract
       interpretation where the contracting parties have expressly selected another body
       of law to govern their agreement and rely on this law in litigation.

Martinez, 740 F.3d at 221-22 (editorial marks, quotation marks, and citations omitted; paragraph
breaks inserted; emphasis added). The McGraw-Hill Court was a bit more direct:

       [T]he interpretation of a forum selection clause is an analytically distinct concept
       from the enforceability of that clause. The question of the scope of a forum
       selection clause is one of contract interpretation. Our case law directs us to use
       state law to determine the scope of a forum selection clause—that is, whether the
       claims and parties involved in the suit are subject to the clause. State law,
       therefore, typically governs whether the clause covers a particular claim, as well
       as whether the clause applies to a non-signatory as an intended beneficiary or
       closely related party.
 No. 23-3085                       Firexo, Inc. v. Firexo Grp. Ltd.                          Page 27

McGraw-Hill, 909 F.3d at 58 (quotation marks and citations omitted; emphasis added). In sum,
these cases reject the creation of federal common law to interpret contract provisions.

       FGL counters that these cases do not signify a “trend,” and insists that the majority of
courts interpret forum-selection clauses using federal common law, which furthers the Supreme
Court’s policy favoring forum-selection clauses. For support, FGL cites a list of cases in which
federal courts applied the federal-common-law “closely related” doctrine without any mention of
state (or contract designated) law. Firexo answers this the same way Martinez did, which said:

       This Court has likewise at times cited federal law in interpreting a forum selection
       clause, even where the contract at issue also contained a choice-of-law clause.
       There is no indication in any of these decisions, however, that the parties urged
       the application of any specific element of the contractually chosen body of law to
       govern the interpretation of the forum selection clause.
       These cases, then, simply stand for the proposition that litigating parties by their
       acquiescence may induce the trial court to assume that foreign law is similar to
       that of the forum, with the result that a court does not err when it articulates its
       decision by reference to the law of the forum.

Martinez, 740 F.3d at 223 (quotation marks and citations omitted; paragraph break inserted); see
also Wright v. Spaulding, 939 F.3d 695, 707 (6th Cir. 2019) (Thapar, J., concurring)
(“Sometimes it happens almost by accident. For instance, this court followed other circuits
without once stopping to think whether it was taking a wrong turn. We started by assuming that
the out-of-circuit cases might be right. Soon, we assumed they were right.” (citations omitted)).
Because FGL’s cited opinions merely assumed that federal common law applied, without protest
from the opposing party, they do not “hold” that federal common law necessarily applies. Of
course, this same point applies to the courts’ application of the “closely related” doctrine itself.

       C. Sixth Circuit Dicta—Baker v. LeBoeuf

       Baker v. LeBoeuf, Lamb, Leiby & Macrae, 105 F.3d 1102, 1106 (6th Cir. 1997), is a
typical example. As discussed in Section II.C, supra, a non-signatory attempted to enforce a
contract’s forum-selection clause and the court rejected that attempt under each of six possible
doctrines, including the “closely related” doctrine. The panel affirmed, and—by doing little
more than referring to it in the opinion—proceeded as if the “closely related” doctrine were law
in the Sixth Circuit. But Baker did not expressly “hold” that it was adopting the “closely related”
 No. 23-3085                           Firexo, Inc. v. Firexo Grp. Ltd.                                Page 28

doctrine—Baker merely said, in its single-sentence analysis of this topic, that the district court
had considered Hugel’s “closely related” test to conclude that the parties were not “closely
related,” and ultimately affirmed that conclusion along with the court’s conclusions on the other
five doctrines.

        Of the principles that we use to distinguish holdings from dicta, two are relevant here.
The first is that to be a “holding,” the statement or conclusion “must contribute to the judgment,”
because “a conclusion that does nothing to determine the outcome is dictum and has no binding
force.” Wright, 939 F.3d at 701. Given that the Baker panel held that the non-signatory could
not enforce the contract (on any conceivable basis), the invocation of the “closely related”
doctrine did not determine the outcome. While the Baker opinion does not contain the hallmark
language of dicta (e.g., “even if” or “assuming” or “accepting”), it easily could: i.e., even if the
“closely related” doctrine applied in the Sixth Circuit, the parties were not closely related. It was
not necessary for the panel to decide whether the “closely related” doctrine was valid, legitimate,
or in any way justifiable.11 And, as the Baker panel expressly disclaimed, it was unnecessary for
it to “consider whether federal or state law applies to this issue, because federal and Ohio law
treat forum selection clauses similarly.” Baker, 105 F.3d at 1105 (citations omitted).

        The other principle is that for a statement or conclusion to be a “holding,” the court must
have “considered the issue and consciously reached a conclusion about it,” because “questions
which merely lurk in the record, neither brought to the attention of the court nor ruled upon, are
not to be considered as having been so decided as to constitute precedents.” Wright, 939 F.3d at
702 (quotation marks and citations omitted). In Baker, even looking to the underlying magistrate
judge’s Report, Baker, 1993 WL 662352 at *10, in conjunction with the panel opinion, Baker,
105 F.3d at 1106, there is no basis to suspect, much less conclude, that the panel consciously
considered the issue of whether to formally adopt the “closely related” doctrine in the Sixth
Circuit, or made a conscious conclusion. See Wright, 939 F.3d at 702; cf. Freed v. Thomas, 976

        11Stated another way: If Baker had argued to the panel that the “closely related” doctrine was not the law
of the Sixth Circuit—or not legitimate federal law at all—the panel could have, and most likely would have,
declined to address that argument because it did not matter to the decision. The panel held that LeBoeuf could not
enforce the contract via the “closely related” doctrine, whether or not the “closely related” doctrine was Sixth
Circuit law.
 No. 23-3085                       Firexo, Inc. v. Firexo Grp. Ltd.                            Page 29

F.3d 729, 740 (6th Cir. 2020) (“As such, it is not clear that the court consciously reached a
conclusion . . . where subsequent readers must infer that the court reached such a conclusion
without any substantive analysis.” (editorial marks, quotation marks, citation, and footnote
omitted)). Nor is this a scenario with a necessarily implicit conclusion, in which “the only way”
the Baker panel could have held that the non-signatory could not enforce the forum-selection
clause was by adopting the “closely related” doctrine in the Sixth Circuit. See Freed, 976 F.3d at
743 (Larsen, J., dissenting).

       Despite appearances and cases that may suggest otherwise, Baker did not adopt the
“closely related” doctrine in the Sixth Circuit. Any allusion to that idea in Baker is dicta.

       D. Courts Must First Decide Applicability Using Erie Principles

       Recall that Firexo’s position (i.e., its side of the circuit split) is that the applicability of a
forum-selection clause is distinct from and antecedent to its enforceability, so courts must use the
Erie approach to contract interpretation to determine the clause’s applicability under that
appropriate law. Even on its own, this is the stronger position, but also, related and relevant
Sixth Circuit law points this way. For one thing, applicability and enforceability are separate
questions under the Sixth Circuit’s approach to analyzing forum-selection clauses for forum non
conveniens. See Lakeside Surfaces, Inc. v. Cambria Co., LLC, 16 F.4th 209, 215 (6th Cir. 2021)
(explaining that “we first ask several contract-specific questions, including whether the forum-
selection clause is applicable, mandatory, valid, and enforceable,” and “[a]n answer of ‘yes’ to
all those questions means” one thing, while “an answer of ‘no’ to any of them means” another
(emphasis added)).

       More importantly, Firexo’s position tracks AtriCure, Inc. v. Meng, 12 F.4th 516, 520 (6th
Cir. 2021), which addressed the applicability of arbitration clauses to non-signatories and held
that there is no federal common law of contract interpretation for arbitration clauses; courts must
use the Erie choice-of-law analysis—and the law dictated thereby—to determine whether an
arbitration clause applies to a non-signatory. Id. at 525. Because arbitration clauses are “a
particular type of forum selection clause,” Moses, 929 F.2d at 1138, courts routinely apply
“arbitration principles to forum selection more generally,” IAC/InterActiveCorp, 44 F.4th at 640.
 No. 23-3085                             Firexo, Inc. v. Firexo Grp. Ltd.                                 Page 30

         And as shown in the prior section, the “closely related” doctrine is a dubious doctrine at
best—a judicial concoction without underlying authority or justification. It appeared ipse dixit
and continues to exist primarily because no court has rejected it. There are, however, established
(and vetted) doctrines for the enforcement of a contract by or against a non-signatory:

         (1) incorporation by reference;
         (2) assumption;
         (3) agency;
         (4) veil-piercing/alter ego;
         (5) estoppel; and
         (6) third-party beneficiary.

Hellenic Investment Fund, Inc. v. Det Norske Veritas, 464 F.3d 514, 517 (5th Cir. 2006). One
consequence of the “closely related” doctrine is to circumvent—and nullify—these doctrines.

         Even recognizing that State courts may craft contract-interpretation common law as they
see fit, those doctrines should be enough—if a party seeking to enforce a contract by or against a
non-signatory cannot satisfy one of those doctrines, courts should adhere to the “ordinary rule”
that a contract binds only its signatories. Either way, under federal common law (the FGL side
of the circuit split), the “closely related” doctrine should not survive as a stand-alone doctrine.12
See Fitness Together Franchise, L.L.C. v. EM Fitness, L.L.C., 2020 WL 6119470, at *4-5 (D.
Colo. Oct. 16, 2020) (“‘Closely related’ appears to be an umbrella term that refers to a variety of
common law doctrines [that] courts use to bind non-signatories to contracts, including third-party
beneficiaries, successors-in-interest, principals of signatory agents, and alter egos.”).

         E. Application

         Under the Erie approach to contract interpretation, a federal court sitting in diversity
begins with a conflict-of-laws analysis using the law of the State in which it sits (here Ohio) to
determine the governing law, and then interprets the contract provision under that law. See

         12Contract interpretation is fundamentally a matter of state law.   See DIRECTV, Inc. v. Imburgia, 577 U.S.
47, 54 (2015). Therefore, nothing in this opinion would (or even could) foreclose a State from creating or adopting
the “closely related” doctrine as the law in that State. In fact, as the concurring opinion explains, some States have
done so. And if the two-step Erie approach were to lead us to the law of such a State, then—barring some
overriding constitutional problem—we would apply that State’s “closely related” doctrine like any other doctrine.
 No. 23-3085                        Firexo, Inc. v. Firexo Grp. Ltd.                       Page 31

Cassirer v. Thyssen-Bornemisza Collection Found., 596 U.S. --, 142 S. Ct. 1502, 1509 (2022).
Ohio follows the Restatement (Second) of Conflicts §§ 187-88 (1971) in contract cases, Ohayon
v. Safeco Ins. Co. of Ill., 747 N.E.2d 206, 208-14 (Ohio 2001), and the Restatement accepts
choice-of-law provisions in contracts, but for two exceptions that do not apply here. See Wise v.
Zwicker & Assocs., P.C., 780 F.3d 710, 715 (6th Cir. 2015). Consequently, in the ordinary
course, Ohio’s law of conflicts would accept the JVA’s choice-of-law provision designating
English law. Despite this ordinary application, the panel in AtriCure, 12 F.4th at 525, demurred:
“It is not clear how Ohio courts would resolve this choice-of-law question . . . [because] some
courts recognize that a contract’s choice-of-law provision should not apply when the dispute
involves nonparties who did not sign the contract . . . [and] [p]erhaps Ohio courts would find
these decisions persuasive.”

       But, either way, the court would not apply federal common law. If the analysis led the
court to reject the JVA’s choice of English law, then Ohio’s law would be “the applicable law in
the absence of an effective choice of law by the parties,” pursuant to Restatement (Second) of
Conflicts § 188(2). See Wise, 780 F.3d at 717. The ultimate outcome is that the court would use
either English law or Ohio law to interpret the JVA as a whole, and the forum-selection clause
specifically, to determine whether it applies to Firexo as a non-signatory to the JVA.

       Because neither Firexo nor FGL argues for Ohio law, however, “[t]he parties’ litigation
choices allow us to avoid this choice-of-law issue.” See AtriCure, 12 F.4th at 525. We can
accept English law as the law governing the interpretation of the JVA’s forum-selection clause.

       Firexo argues that English law generally forbids the enforcement of a contract (including
a forum-selection clause) against a non-signatory. Firexo cites three English cases, but its most
informative and pertinent citation is to a treatise on English Contract Law, which includes this:

                                5. Enforcement Against Third Parties
                               (a) General Rule: Third Party not Bound
               The general rule is that a contract binds only the parties to it. This rule is
       regarded as an aspect of the doctrine of privity; and in so far as A and B cannot by
       a contract between them impose an obligation to perform duties arising under that
       contract on C, the rule may seem to be so obvious that it scarcely needs to be
 No. 23-3085                      Firexo, Inc. v. Firexo Grp. Ltd.                         Page 32

       stated: if a contract between A and B provided that C was to pay £100 to A, no-
       one would suppose that this contract could oblige C to make the payment. The
       point is further illustrated by a case in which the [U.K.] Supreme Court held that a
       contract entered into by a company did not bind a third party merely because that
       person was the company’s controlling shareholder.

Chitty on Contracts (34th ed. 2021) at § 20-147 (footnotes omitted).

       Taking this general rule (and its examples) at face value, the forum-selection clause here
does not apply to Firexo. But, as FGL argues, English law is not peculiar on this premise; the
general rule in American law also limits a contract to only the signatories, but for certain
exceptions under which non-signatories are nonetheless parties to the contract. And English law
likewise recognizes exceptions.     See Chitty at § 20-149 (e.g., noting exceptions arising in
agency, from covenants relating to land, or through liabilities imposed by legislation).

       But, despite its insistence that Firexo “cites generalized concepts of English privity out of
context to hide exceptions directly at play in this appeal,” FGL does not identify a single
exception (i.e., doctrine), much less demonstrate, or even argue, how any exception is “directly
at play” here. See FGL’s Appellee Br. at 22. If one of the English-law exceptions to this rule of
privity applies to the present circumstances, FGL has failed to argue and prove its applicability
here, thereby forfeiting any reliance on it.      This leaves the general rule unrebutted and
controlling.

       Rather than identifying and arguing any specific rule or doctrine that would satisfy an
exception to the English rule of privity, FGL relies on two general statements of English law
quoted in Martinez v. Bloomberg LP, 740 F.3d 211 (2d Cir. 2014). The first is that, as relevant
to the quoted cases, “the proper approach to the construction of clauses agreeing [to] jurisdiction
is to construe them widely and generously,” id. at 225 (quoting UBS AG v. HSH Nordbank AG,
2009 EWCA 585) (editorial marks omitted), and the second is that “any jurisdiction or
arbitration clause in an international commercial contract should be liberally construed, and []
the words ‘arising out of’ should cover every dispute except a dispute as to whether there was
ever a contract at all,” id. at 224 (quoting Fiona Trust & Holding Corp. v. Privalov, 2007 EWCA
20) (editorial marks and quotation marks omitted). But the question in those cases was whether
the claims fell within the language of the clause; there was no question about non-signatories.
 No. 23-3085                             Firexo, Inc. v. Firexo Grp. Ltd.                                  Page 33

All the parties in those three cases were signatories.13 Neither statement of English law (or any
of the three associated cases) applies to the English rule of privity or concerns a non-signatory.

         FGL’s other argument is that several courts (citing two Eleventh Circuit cases, a Seventh
Circuit case, and a district court case)14 have applied the “closely related” doctrine to bind non-
signatories to contracts that contained English choice-of-law provisions, so English law cannot
be used to prevent the application of the “closely related” doctrine. But each of those opinions
applied the “closely related” doctrine without question or protest from the opposing party, or
consideration or assessment of whether the English choice-of-law provision should instead direct
the analysis, so they do not “hold” that the federal-common-law “closely related” doctrine
necessarily trumps the Erie doctrine choice-of-law analysis.15 See also Martinez, 740 F.3d at
223.

         Under the Erie approach, we apply the JVA’s choice of English law to determine whether
the JVA applies to non-signatory Firexo.16 Under English law, as the parties have presented it
here, contracts do not apply to non-signatories. Therefore, the JVA does not apply to Firexo and,
correspondingly, the JVA’s forum-selection clause does not apply to Firexo.

                                                         IV.

         For the forgoing reasons, we REVERSE the judgment of the district court and REMAND
for further proceedings consistent with this opinion.

         13See Martinez, 740 F.3d at 214-15 (describing Martinez’s employment agreement with Bloomberg); UBS
AG v HSH Nordbank AG, 2009 WL 1657158 (Court of Appeal Civil Division, 18 June 2009) (case summary);
Fiona Trust & Holding Corp v Privalov, 2007 WL 2944855 (House of Lords, 17 October 2007) (case summary).
         14The cited cases are Xena Invs., Ltd. v. Magnum Fund Mgmt. Ltd., 726 F.3d 1278, 1285 (11th Cir. 2013);
Lipcon v. Underwriters at Lloyd’s, London, 148 F.3d 1285, 1299 (11th Cir. 1998); Hugel v. Corp. of Lloyd’s, 999
F.2d 206, 209-10 (7th Cir. 1993); Amto, LLC v. Bedford Asset Mgmt., LLC, 168 F. Supp. 3d 556, 569 (S.D.N.Y.
2016).
         15Obviously, the same holds true for Baker v. LeBoeuf. See Section III.C, supra.

         16One extraneous point warrants mention. FGL is a signatory to the JVA, so it expressly consented to both
the forum-selection and choice-of-law clauses, both designating England. Firexo is not a signatory, so it did not
expressly consent to any aspect of the JVA. As it stands, FGL is fighting to enforce one JVA provision and avoid
another: i.e., to enforce the JVA’s forum-selection clause against non-signatory Firexo (against its consent), while at
the same time fighting to prevent enforcement of the choice-of-law clause (England or Wales), despite its own
express consent to that clause. Thus, any consideration of equity or fairness would appear to weigh against FGL.
 No. 23-3085                       Firexo, Inc. v. Firexo Grp. Ltd.                        Page 34

                 ___________________________________________________

                    CONCURRING IN PART AND IN THE JUDGMENT
                 ___________________________________________________

       LARSEN, Circuit Judge, concurring in part and in the judgment. The central issue in this
case is what law governs whether a non-signatory may invoke, or be bound by, a contract’s
forum-selection clause. I agree with Judge Batchelder that, when sitting in diversity, federal
courts must use an Erie/Klaxon choice-of-law analysis and answer the non-signatory question by
reference to the substantive law that analysis yields.

       This conclusion follows from the Supreme Court’s reasoning in Arthur Andersen LLP v.
Carlisle, 556 U.S. 624 (2009), our opinion in AtriCure, Inc. v. Meng, 12 F.4th 516 (6th Cir.
2021), and the federalism principles undergirding the Erie doctrine.          Arthur Andersen and
AtriCure addressed when a non-signatory may be bound by, or may invoke, an arbitration
agreement. In Arthur Andersen, the Supreme Court held that questions “regarding the scope of
agreements (including the question of who is bound by them)” are to be decided by “background
principles of state contract law,” because nothing in the Federal Arbitration Act purported to
displace these state law principles. 556 U.S. at 630. In AtriCure, this court joined other circuits
in “recogniz[ing] that [we] now must look to the relevant state’s common law,” rather than
federal common law principles, “to decide when nonparties may enforce (or be bound by) an
arbitration agreement.” 12 F.4th at 524 (collecting cases). So if the question before us were
whether a non-signatory was bound by an arbitration clause, rather than a forum-selection clause,
we would answer that question in accordance with state-law principles. And, of course, in a
diversity case, resort to state law is the normal rule for questions of contract interpretation,
including “who is bound by” the contract. See Arthur Andersen, 556 U.S. at 630; see generally
Erie R. Co. v. Tompkins, 304 U.S. 64 (1938).

       Given this background, we must ask what reason we would have to treat forum-selection
clauses differently. As a matter of first principles, I see none. After all, an arbitration agreement
is just “a specialized kind of forum-selection clause.” Viking River Cruises, Inc. v. Moriana, 596
U.S. 639, 653 (2022). So one would think that the same law would govern who falls within the
“scope” of each type of agreement.
 No. 23-3085                       Firexo, Inc. v. Firexo Grp. Ltd.                       Page 35

        Does our precedent require a different answer? Not as I see it. I agree with Judge
Batchelder that this court did not adopt the “closely related” doctrine in Baker v. LeBoeuf, Lamb,
Leiby & Macrae, 105 F.3d 1102 (6th Cir. 1997). As she explains, Baker is best read as
assuming, without deciding, that the “closely related” doctrine applied in this circuit. 105 F.3d at
1106.   And Baker expressly noted that it was not deciding “whether federal or state law
applie[d].” Id. at 1105.

        I respectfully disagree with the dissent’s conclusion that Wong v. PartyGaming Ltd., 589
F.3d 821 (6th Cir. 2009), decides this question. Wong held that federal law should govern “the
enforceability of a forum selection clause” because it “implicates federal procedure.” See id. at
827.    But, although we might refer colloquially to the non-signatory question as one of
“enforcement,” see AtriCure, 12 F.4th at 523, the substance of the non-signatory problem (who
may “enforce” against whom) does not map onto the “enforceability” questions that concerned
Wong (whether the clause may be “enforced” at all). See Wong, 589 F.3d at 828 (asking “(1)
whether the clause was obtained by fraud, duress, or other unconscionable means; (2) whether
the designated forum would ineffectively or unfairly handle the suit; and (3) whether the
designated forum would be so seriously inconvenient such that requiring the plaintiff to bring
suit there would be unjust”). And the conclusion that federal law should control the non-
signatory question in forum-selection clauses because it involves “procedure” is hard to square
with Arthur Andersen and AtriCure, which held that state law controls the “who is bound”
question for arbitration clauses, even though arbitration clauses also implicate procedure, see
Viking River Cruises, 596 U.S. at 653, and the FAA specifically “creates substantive federal law
regarding the enforceability of arbitration agreements,” Arthur Andersen, 556 U.S. at 630
(emphasis added). In sum, I agree with Judge Batchelder, and the Second and Third Circuits,
that “whether the claims and parties involved in the suit are subject to the forum selection
clause” is a question of scope (or clause “applicability”) distinct from the “enforceability” of the
clause, and that the scope question should be determined using the ordinary Erie/Klaxon rules.
See Martinez v. Bloomberg LP, 740 F.3d 211, 217–18 (2d Cir. 2014); see also In re McGraw-
Hill Glob. Educ. Holdings LLC, 909 F.3d 48, 58 (3d Cir. 2018) (“State law . . . typically governs
whether the clause covers a particular claim, as well as whether the clause applies to a non-
signatory as an intended beneficiary or closely related party.”).
 No. 23-3085                       Firexo, Inc. v. Firexo Grp. Ltd.                         Page 36

       As for the disposition, I agree with Judge Batchelder’s application of this rule in part
IV.E. Ordinarily, I might favor a remand to allow the district court to consider the English-law
question in the first instance. Nevertheless, on this record I agree that FGL did not adequately
identify or argue that an exception to the general English rule of privity applies here.

       That said, I do not join the lead opinion in full because I see no occasion here to endorse
particular theories of contract law or to discredit the “closely related” test generally. State courts
may choose to hew closely to “‘traditional principles’ of state law allow[ing] a contract to be
enforced by or against nonparties to the contract.” Arthur Andersen, 556 U.S.at 631 (listing, as
examples, “assumption, piercing the corporate veil, alter ego, incorporation by reference, third-
party beneficiary theories, waiver and estoppel” (citation omitted)). But they are also free to
adopt some version of the “closely related” test as a matter of state law. Several states have
arguably done so. See, e.g., Ex parte Killian Constr. Co., 276 So. 3d 201, 209 (Ala. 2018);
Keehan Tennessee Inv., L.L.C. v. Praetorium Secured Fund I, L.P., 71 N.E.3d 325, 333 (Ohio Ct.
App. 2016); Solargenix Energy, LLC v. Acciona, S.A., 17 N.E.3d 171, 185 (Ill. App. Ct. 2014).
Where that is the case, district courts in this circuit sitting in diversity would have to apply that
test as a matter of state law (if the forum state’s choice-of-law rules so dictated). Nothing in
today’s decision should be read to preclude such a possibility. While Judge Batchelder’s opinion
identifies some concerns with the doctrine, they find no basis in the facts here. Due process
concerns, for example, are not at issue today because personal jurisdiction over FGL is not
predicated upon the forum selection clause.

                                          *       *       *

       The central question for our resolution is whether federal common law governs whether a
non-signatory is bound by, or can invoke, a forum-selection clause in a contract. Cf. AtriCure,
12 F.4th at 524. Judge Batchelder’s opinion correctly concludes that the answer is no; instead,
the ordinary Erie/Klaxon rules apply. I concur in this part of the analysis, in the lead opinion’s
application of the rule, and in the judgment.
 No. 23-3085                        Firexo, Inc. v. Firexo Grp. Ltd.                   Page 37

                                        _________________

                                              DISSENT
                                        _________________

       GRIFFIN, Circuit Judge, dissenting.

                                                   I.

       Defendant Firexo Group Limited (FGL), a British company, partnered with Ohio citizen
Scot Smith to sell fire extinguishers in the United States via a joint venture agreement. That
agreement both gave Smith control of one of FGL’s subsidiaries, plaintiff Firexo, Inc., and
designated Firexo as the entity through which Smith would oversee FGL’s American operation.
It also contained choice-of-law and forum-selection clauses, which provided that the laws and
courts of England and Wales would govern “any dispute or claim arising out of or in connection
with” the joint venture agreement.

       Two items not included in the agreement led to litigation and the issue presented on
appeal. First, the agreement did not include any specific details about how Firexo would sell
FGL’s fire extinguishers. Shortly after Smith and FGL signed the joint venture agreement,
Firexo contends—which FGL disputes—it entered into an oral distribution agreement with FGL
making Firexo the exclusive distributor of FGL’s products in the United States. Firexo sold
FGL’s fire extinguishers, but issues with federal consumer safety regulations forced it to issue
recalls and ultimately discontinue its sales efforts.

       This litigation followed.       Smith, an executive officer of Firexo and its majority
shareholder, directed Firexo to file a complaint in Ohio state court that raised several claims
based on FGL’s failure to correct issues with its fire extinguishers and comply with their oral
distribution agreement. FGL removed this case to federal court and moved to dismiss it, arguing
that the joint venture agreement’s forum-selection clause vested exclusive jurisdiction in the
courts of England and Wales.

       Secondly, FGL and Smith were signatories to the agreement; Firexo was not. Firexo
opposed FGL’s motion to dismiss on that basis. The district court enforced the forum-selection
 No. 23-3085                     Firexo, Inc. v. Firexo Grp. Ltd.                      Page 38

clause nonetheless and dismissed the case for lack of jurisdiction, holding that under Baker v.
LeBoeuf, Lamb, Lieby & Macrae, 105 F.3d 1102 (6th Cir. 1997), Firexo was “closely related” to
the joint venture agreement thereby rendering the forum-selection clause enforceable against it.
This timely appeal followed.

                                               II.

       Although FGL moved to dismiss Firexo’s complaint, the precise vehicle with which it
sought to do so is unclear given the motion’s imprecise language and the number of ways a case
can be dismissed based on a forum-selection clause. See Langley v. Prudential Mortg. Cap. Co.,
LLC, 546 F.3d 365, 369 (6th Cir. 2008) (per curiam) (noting the option of either filing a motion
to transfer venue under 28 U.S.C. § 1404(a) or a motion to dismiss under Fed. R. Civ. P.
12(b)(6)); Sec. Watch, Inc. v. Sentinel Sys., Inc., 176 F.3d 369, 371 n.2 (6th Cir. 1999)
(mentioning Rule 12(b)(1), 12(b)(3) and 12(b)(6)). For our purposes, what mechanism FGL
used is immaterial, for “[w]e review the enforceability of a forum selection clause de novo.”
Wong v. PartyGaming Ltd., 589 F.3d 821, 826 (6th Cir. 2009); accord Sec. Watch, Inc., 176 F.3d
at 371 n.2.

                                              III.

       “A forum selection clause in an international agreement should control absent a strong
showing that it should be set aside.” Shell v. R.W. Sturge, Ltd., 55 F.3d 1227, 1229 (6th Cir.
1995) (internal quotation marks omitted).     We enforce a forum-selection clause unless the
opposing party can “clearly show that enforcement would be unreasonable and unjust, or that the
clause was invalid for such reasons as fraud or overreaching.” Id. (citation omitted). “The party
opposing the forum selection clause bears the burden of showing that the clause should not be
enforced.” Wong, 589 F.3d. at 828. Firexo did not satisfy this burden.

                                               A.

       When sitting in diversity, the Erie doctrine generally dictates we are to apply the
substantive law of the state from which the action was removed (here, Ohio). See, e.g., Freeman
v. Bee Mach. Co., 319 U.S. 448, 452 (1943); Gasperini v. Ctr. for Humanities, Inc., 518 U.S.
 No. 23-3085                      Firexo, Inc. v. Firexo Grp. Ltd.                        Page 39

415, 427 (1996).      But we apply federal procedural law, and “forum selection clauses
significantly implicate federal procedural issues.” Wong, 589 F.3d at 827. So, “in [a] diversity
suit,” as here, “the enforceability of the forum selection clause is governed by federal law” due to
the “possibility of diverging state and federal law on an issue of great economic consequence, the
risk of inconsistent decisions in diversity cases, and the strong federal interest in procedural
matters in federal court.” Id. at 827–28. Indeed, as pointed out in Wong, six of our sister
Circuits also consider the enforcement of forum-selection clauses a federal procedural issue
governed by federal law. See Fru-Con Const. Corp. v. Controlled Air, Inc., 574 F.3d 527, 538
(8th Cir. 2009); Doe 1 v. AOL LLC, 552 F.3d 1077, 1083 (9th Cir. 2009) (per curiam); Ginter ex
rel. Ballard v. Belcher, Prendergast & Laporte, 536 F.3d 439, 441 (5th Cir. 2008); Phillips v.
Audio Active Ltd., 494 F.3d 378, 384 (2d Cir. 2007); P & S Bus. Machines, Inc. v. Canon USA,
Inc., 331 F.3d 804, 807 (11th Cir. 2003) (per curiam); Jumara v. State Farm Ins. Co., 55 F.3d
873, 877 (3d Cir. 1995); but see Abbott Labs. v. Takeda Pharm. Co., 476 F.3d 421, 423 (7th Cir.
2007); Yavuz v. 61 MM, Ltd., 465 F.3d 418, 428 (10th Cir. 2006). And since Wong, the Fourth
Circuit has also adopted this approach. Albemarle Corp. v. AstraZeneca UK Ltd., 628 F.3d 643,
650 (4th Cir. 2010). Firexo seeks to avoid the application of federal law by arguing that we
should use English law to determine whether the forum-selection clause applies in this case
before considering enforceability.     Bifurcating the analysis, Firexo claims, is the proper
approach. And, according to Firexo, the forum-selection clause does not apply in this case
because non-signatories cannot be bound by forum-selection clauses under English law.
Appellant Brief at 48–52.

       But this “applicability” argument just relabels a classic “enforceability” question. Courts
routinely view “applicability” as addressing a forum-selection clause’s text to determine its
scope and how to interpret it. See, e.g., Dynamic CRM Recruiting Sols., L.L.C. v. UMA Educ.,
Inc., 31 F.4th 914, 917–18 (5th Cir. 2022) (framing the “applicability” question as one of
contract interpretation); Collins ex rel. herself v. Mary Kay, Inc., 874 F.3d 176, 184–86 (3d Cir.
2017) (same). Conversely, “enforceability” inquiries address whether a party should be bound
by a forum-selection clause. See, e.g., Lakeside Surfaces, Inc. v. Cambria Co., LLC, 16 F.4th
209, 215–20 (6th Cir. 2021) (discussing enforceability as relating to who is bound by a forum-
selection clause without reference to the clause’s text); Wong, 589 F.3d at 827–30 (same); Shell,
 No. 23-3085                         Firexo, Inc. v. Firexo Grp. Ltd.                       Page 40

55 F.3d at 1229–32 (same); see also, e.g., AtriCure, Inc. v. Meng, 12 F.4th 516, 524 (6th Cir.
2021) (discussing, separately from its text, the enforcement of an arbitration clause as a question
of which parties would be bound by the clause); Ginter, 536 F.3d at 441–45 (reviewing the
forum-selection clause’s text when considering whether it applied, but not when considering
whether it was enforceable); Phillips, 494 F.3d at 384–93 (same). In short, questions about
“applicability” focus on the forum-selection clause’s text to determine whether it applies to a
given case.    Enforcement, however, addresses whether the clause should bind the parties
irrespective of the clause’s text.

        Firexo’s “applicability” argument falls squarely on the “enforceability” side of that
divide. It never grapples with the forum-selection clause’s language or makes any argument that
the clause does not apply to its claims. Instead, Firexo’s argument is about whether it can litigate
this case in federal court despite the clause’s plain language only because it did not sign the joint
venture agreement. That argument raises a classic enforceability question—i.e., whether the
forum-selection clause is enforceable against a non-signatory—which, as set forth next, the
federal closely-related-and-foreseeable test is specifically designed to answer.

                                                   B.

        The parties do not dispute that our decision in Baker, the only published case in our
circuit to address the closely-related-and-foreseeable test, governs today’s dispute. 105 F.3d
1102. The plaintiffs in that dispute were American underwriters of Lloyd’s of London and sued
Lloyd’s American attorneys concerning tax advice they received. 105 F.3d at 1102–04. When
joining Lloyd’s, the plaintiffs signed a contract with Lloyd’s containing a forum-selection clause
that stated English courts had exclusive jurisdiction over any claims arising from the business
relationship. Id. at 1104. Although the defendants never signed that contract, they sought to
invoke the forum-selection clause to dismiss the case.          Id.     The district court denied the
defendants’ motion to dismiss, and we affirmed. Id. at 1104–06.

        Baker began its analysis by noting that “[o]ur first inquiry is whether the forum selection
clause . . . even applies in this action.” Id. at 1105. Moving to enforceability, we summarized
the district court’s reasoning before concluding that, “[a]fter reviewing the record and the law,
 No. 23-3085                        Firexo, Inc. v. Firexo Grp. Ltd.                          Page 41

we find ourselves in agreement with the district court and hold that the defendants may not
enforce the forum selection clause.” Id. at 1106.

        Notably, we highlighted that the district court in that matter relied on Hugel v. Corp. of
Lloyd’s, 999 F.2d 206, 209 (7th Cir. 1993), “which held that to bind a non-party to a forum
selection clause, the party must be ‘closely related’ to the dispute such that it becomes
‘foreseeable’ that it will be bound” and that there was “no such connection in this action.”
Baker, 105 F.3d at 1106 (internal quotation marks omitted). While distinguishing related cases,
we concluded that the defendants were “not as closely related to Lloyd’s as [were] the Members’
Agents, Managing Agents, and other . . . [parties] who would have little or no function outside
the Lloyd’s marketplace.” Id. (internal quotation marks omitted; first alteration in original).
Then, “[c]iting Hugel, . . . the [district] court held that the ‘web of agreements’ between the
plaintiffs and Lloyd’s demonstrates no close connection between [the defendants] and Lloyd’s
sufficient to require enforcing the forum selection clause in this action.” Id. at 1106. Hugel
explained that “[w]hile it may be true that third-party beneficiaries of a contract would, by
definition, satisfy the ‘closely related’ and ‘foreseeability’ requirements, a third-party beneficiary
status is not required.” 999 F.2d at 209 n.7 (internal citations omitted).

        We are bound by Baker’s adoption of the closely-related-and-foreseeable test. Cf. United
States v. Willis, 257 F.3d 636, 643 (6th Cir. 2001) (“As the rules of this circuit require, a panel of
this court is bound by the prior published opinions of this circuit unless an inconsistent decision
of the United States Supreme Court requires modification of the decision or this Court sitting en
banc overrules the prior decision.”) (internal quotation marks omitted). True, Baker did not
exhaustively discuss the closely-related-and-foreseeable test or explain its rationale to adopt the
test. But it both expressly stated that it agreed with the district court’s application of the test, and
it addressed the district court’s reliance on Hugel and the closely-related-and-foreseeable test:
because there were insufficient contacts to satisfy that test, the forum-selection clause was not
enforceable. No other test or reasoning supported our disposition, so the adoption of the closely-
related-and-foreseeable test was hardly a “conclusion that does nothing to determine the
outcome . . . and has no binding force.” Wright v. Spaulding, 939 F.3d 695, 701 (6th Cir. 2019)
(emphasis omitted).
 No. 23-3085                       Firexo, Inc. v. Firexo Grp. Ltd.                       Page 42

       Moreover, the focus on the closely-related-and-foreseeable test made it “clear” that we
“intended to rest the judgment” on the test. Id. We considered the application of the test and
consciously adopted it by referencing and agreeing with the district court’s order and did so
without discussing any other legal standard. Our lack of action on the latter further demonstrates
that we must use the closely-related-and-foreseeable test moving forward. So our holding in
Baker relied on the closely-related-and-foreseeable test; it was not a question lurking in the
background. See id. at 702. Given this conclusion, our adoption of the closely-related-and-
foreseeable test in Baker was not dicta and is binding on us.

       Finally, the parties do not question whether Baker controls this case. In fact, Firexo
repeatedly states in its principal brief that the closely-related-and-foreseeable test “is settled
federal law.” Appellant Brief at 4, 29. And because neither party argues that a different test
applies, even if we were not bound by Baker, I would not consider sua sponte whether a different
test should apply. Accordingly, I would apply the closely-related-and-foreseeable test and take
this opportunity to define its parameters.

                                                 C.

       Following Baker, several federal circuit courts have expounded upon what it means to be
closely related and foreseeable. The Fifth Circuit’s decision in Franlink Inc. v. BACE Servs,
Inc., 50 F.4th 432 (5th Cir. 2022), is most persuasive. There, the court “fill[ed] in the blanks”
surrounding the test:

       Borrowing from the precedents, including the Third and Seventh Circuits, we
       extract a few fundamental factors applicable here that we will consider in
       determining whether these non-signatories are closely related: (1) common
       ownership between the signatory and the non-signatory, (2) direct benefits
       obtained from the contract at issue, (3) knowledge of the agreement generally and
       (4) awareness of the forum selection clause particularly.

Id. at 441–42. This test is not “rigid”; rather, it requires “weighing the significance of the facts
relevant to the particular case at hand.” Id. at 442. And it can lead to nuanced results, as
demonstrated in Franlink itself, which concluded that only one of three defendants was bound by
the forum-selection clause. Id. at 442–43. When reaching that holding, the Franlink Court noted
 No. 23-3085                        Firexo, Inc. v. Firexo Grp. Ltd.                     Page 43

that common ownership was a key factor favoring enforcing the forum-selection clause against
the third defendant. Id. at 443.

       I would adopt Franlink’s articulation of the closely-related-and-foreseeable test, which
provides clear guidance for courts moving forward. It is also consistent with how we evaluated
the relationships at issue in Baker to find that forum-selection clause unenforceable. Recall
Baker essentially focused on the first two elements of the Franlink test—the defendants did not
directly benefit from the contract that had the forum-selection clause and there was not a
sufficient connection between the defendants and the agreement (i.e., no common ownership).
Baker, 105 F.3d at 1106. Even though the Baker defendants clearly knew about the forum-
selection clause because they sought to invoke it, they did not have a sufficient connection to the
contract that created the forum-selection clause for the closely-related-and-foreseeable test to
require enforcing the clause. Id.

       Applying Franlink’s factors to this case is straightforward, as all four factors support
enforcing the forum-selection clause here. First, common ownership: “Smith and [FGL] are the
original and only investors” in Firexo. Smith was an executive officer of Firexo and its majority
shareholder. Further, he controlled Firexo to the extent that he directed it to file this lawsuit.
Second, direct benefits:     the joint venture agreement expressly designated Firexo as the
American seller and distributor of FGL’s products. Third and fourth, knowledge and awareness:
the two signatories jointly owned Firexo, and Smith sat on Firexo’s board, so Firexo certainly
knew about the forum-selection clause.

       Firexo’s arguments against enforcement do not grapple with the Franlink factors.
Instead, Firexo repeats its argument that it would not be bound by the forum-selection clause
under English law and argues that its claims bear no relation to the joint venture agreement. But
English law plays no part in this analysis, and Firexo’s claims plainly relate to the joint venture
agreement because that very agreement designated Firexo as the American distributor for FGL’s
products. Indeed, as the district court noted, “[i]t is difficult to imagine a non-signatory that
could be more closely related to a contract.” Given this, Firexo is bound by the forum-selection
clause, and the district court did not err by dismissing the complaint.
 No. 23-3085                    Firexo, Inc. v. Firexo Grp. Ltd.                    Page 44

                                             IV.

       For these reasons, I respectfully dissent.   I would affirm the district court, as our
precedent requires.