United States Supreme Court Holds That Contractual Forum-Selection Clauses Deserve Near Absolute Deference In Considering Changes of Venue Under 28 U.S.C. § 1404(a)

In Atlantic Marine Construction Co., Inc. v. United States Dist. Ct. for W.D. Tex., No. 12-929, 2013 U.S. LEXIS 8775 (U.S. Dec. 3, 2013), the Supreme Court of the United States held unanimously that when parties have agreed contractually to a valid forum-selection clause, the analysis for a motion to transfer venue under 28 U.S.C. § 1404(a) is adjusted as follows: (1) a court should give no weight to the plaintiff's choice of forum; (2) a court should not consider arguments about the parties' private interests; and (3) if a court transfers a case to the parties' preselected venue, the transferee court will not carry with it the transferring venue's choice-of-law rules. This adjusted Section 1404(a) analysis requires near absolute deference to the forum designated in a valid contractual forum-selection clause. As a result, in all but the most unusual cases a district court will transfer venue to the preselected forum.

Petitioner Atlantic Marine Construction Co., a Virginia Corporation, ("Atlantic") entered into a contract with respondent J-Crew Management, Inc. ("J-Crew") for work on a construction project located in Texas. The contract included a forum-selection clause, which stated that all disputes between the parties will be litigated in Virginia. However, when a dispute relating to payment under the contract arose, J-Crew filed its suit against Atlantic in the United States District Court for the Western District of Texas.

Atlantic moved to transfer venue to the United States District Court for the Eastern District of Virginia under Section 1404(a). Section 1404(a) provides that "for the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division to which all parties have consented." In a typical case (i.e., a case in which the parties have not agreed to a valid forum-selection clause), a court determines whether a transfer of venue is appropriate by balancing a number of factors relating to public-interest considerations and the parties' private interests.

Here,the district court in Texas denied Atlantic's motion to transfer venue. The court held that Atlantic failed to carry its burden of establishing that a transfer would be appropriate based on both public and private-interest factors, one of which was the parties' forum-selection clause. The United States Court of Appeals for the Fifth Circuit affirmed the district court's judgment and held that...