Jiangsu Hongyuan Pharm. Co. v. DI Global Logistics Inc.

Decision Date05 February 2016
Docket NumberCase No. 15-22306-CIV-GAYLES
Citation159 F.Supp.3d 1316
CourtU.S. District Court — Southern District of Florida
Parties Jiangsu Hongyuan Pharmaceutical Co., Ltd., Plaintiff, v. DI Global Logistics Inc., Defendant.

Eduardo E. Dieppa, III, Dieppa Law Firm, P.A., Hialeah, FL, for Plaintiff.

Eric Paul Gros-Dubois, EPGD Attorneys at Law, P.A., Coral Gables, FL, for Defendant.

ORDER

DARRIN P. GAYLES

, UNITED STATES DISTRICT JUDGE

THIS CAUSE comes before the Court on Defendant DI Global Logistics, Inc.'s (“DI Global”) Motion to Dismiss Plaintiff's First Amended Complaint [ECF No. 14]. This case concerns the scope and effect of a forum selection clause designating China, contained in a contract between a Florida corporation and a Chinese company (drafted by the Chinese company), on a forum non conveniens analysis. The Plaintiff, Jiangu Hongyuan Pharmaceutical Co., Ltd. (Hongyuan), has brought both contractual and noncontractual claims against DI Global, alleging that DI Global has failed to remit payment for shipments of chemical products. DI Global has moved to dismiss the action, inter alia , under the doctrine of forum non conveniens , arguing that the forum selection clause mandates that this dispute be resolved in China.

The Court has reviewed the pleadings, the briefs, the record, and the applicable law, and has considered the arguments advanced by counsel at two different hearings on the motion. For the reasons that follow, the motion to dismiss shall be granted.1

I. BACKGROUND

Plaintiff Hongyuan is a company registered to do business in China. Am. Compl. ¶ 2. Defendant DI Global is a Florida corporation. Id. ¶ 3. In or around April or May 2013, Hongyuan and DI Global executed an Agency Agreement (the “Agreement”), originally drafted by Hongyuan, through which Hongyuan—for a term of five years—granted DI Global exclusive rights to sell its chemical products in a territory designated as Colombia, Trinidad & Tobago, Brazil, Venezuela, and the United States. Def.'s Mot. Ex. B ¶¶ 1, 10. The Agreement also granted DI Global “all exclusive rights and power of attorney to connect, communicate, negotiate and finalize import and distribution contracts with all private and public establishments” in the prescribed territory. Id. Hongyuan agreed not to sell its products directly to any customers in that territory or indirectly through any brokers or resellers inside or outside the territory. Id. ¶ 2. Hongyuan also granted DI Global the right to sell its products to customers outside the territory who buy those products for use in production of a finished product that is marketed and sold inside the territory. Id. ¶ 3.

According to the Amended Complaint, DI Global requested that Hongyuan ship certain chemical products to it. Am. Compl. ¶ 5. Hongyuan alleges that, pursuant to that request, it remitted “Invoice Number 72” for the shipment of Titanium Dioxide Anatase 3100, seeking payment in the amount of $210,000.00. Id. ¶ 6. DI Global allegedly accepted the invoice but did not pay it in full. Id. ¶¶ 7-8. Hongyuan states that it has repeatedly demanded payment from DI Global, but that DI Global has refused to pay the amount due and has “default [ed] under the terms of the sales purchase agreement.” Id. ¶ 14.

On June 26, 2015, former Plaintiff Jiangsu Hongyuan Pharmaceutical Corp. filed a three-count complaint against DI Global, alleging claims for breach of contract, account stated, and unjust enrichment. Because the former Plaintiff was incorporated in Florida, DI Global filed a motion to dismiss alleging, inter alia , that this Court lacked subject matter jurisdiction over this case because the parties were not diverse. An Amended Complaint was filed on August 5, 2015, replacing Jiangsu Hongyuan Pharmaceutical Corp. with the current Plaintiff, Hongyuan.

DI Global filed a renewed motion to dismiss on August 17, 2015, pursuant to Federal Rules of Civil Procedure 12(b)(3)

, alleging improper venue, and 12(b)(6), alleging that the Amended Complaint fails to state a claim for which relief can be granted. In its reply, DI Global acknowledged that a Rule 12(b)(3) motion for improper venue was not the appropriate vehicle through which to move for dismissal and requested that the Court view its motion as a motion to dismiss under the doctrine of forum non conveniens . In support of the forum non conveniens argument, DI Global pointed to the text of Article 6 of the Agreement, titled “Governing Law,” which provides:

This agreement shall only be governed by Chinese law. In the event of any disputes between the parties the People's Court of Jiangsu (China) shall be empowered to take cognizance of it, unless coercive law prescribes another court.

Def.'s Mot. Ex. B ¶ 12. DI Global contends that this language constitutes a forum selection clause that mandates that this action be heard in China. Hongyuan made no argument in its opposition against DI Global's forum non conveniens allegation, other than that “there is no legal or contractual obligation forcing Plaintiff to sue in China.” Pl.'s Opp'n at 6. After reviewing the pleadings, and following a telephonic hearing held on December 30, 2015, the Court ordered the parties to provide additional briefing on the forum non conveniens issue. See ECF No. 22. The Plaintiff filed its brief on January 12, 2016, and the Defendant filed its brief the next day. The Court held a second hearing on the motion on January 25, 2016.

II. LEGAL STANDARD

“Under the doctrine of forum non conveniens , a district court has the inherent power to decline to exercise jurisdiction even when venue is proper.” Vanderham v. Brookfield Asset Mgmt., Inc. , 102 F.Supp.3d 1315, 1318 (S.D.Fla.2015)

(citing Gulf Oil Corp. v. Gilbert , 330 U.S. 501, 506–07, 67 S.Ct. 839, 91 L.Ed. 1055 (1947), superseded by statute on other grounds as recognized in

Am. Dredging Co. v. Miller , 510 U.S. 443, 114 S.Ct. 981, 127 L.Ed.2d 285 (1994) ). Although a court may consider matters outside the pleadings in ruling on a motion to dismiss based on forum non conveniens , it “must draw all reasonable inferences and resolve all factual conflicts in favor of the plaintiff.” Id. (quoting Wai v. Rainbow Holdings , 315 F.Supp.2d 1261, 1268 (S.D.Fla.2004) ) (internal quotation marks omitted). To obtain dismissal for forum non conveniens , the moving party must demonstrate that (1) the public and private factors weigh in favor of dismissal, (2) an adequate alternative forum is available, and (3) the plaintiff can reinstate his suit in the alternative forum without undue inconvenience or prejudice. GDG Acquisitions, LLC v. Government of Belize , 749 F.3d 1024, 1028 (11th Cir.2014).

III. DISCUSSION
A. Viability of the Forum Selection Clause

DI Global, relying on the premise that the language in Article 6 of the Agreement constitutes a valid forum selection clause, argues that this case should be dismissed on forum non conveniens grounds. Before the Court can proceed to the forum non conveniens analysis, however, it must determine whether Article 6 contains a valid, enforceable, and mandatory forum selection clause, as well as whether that clause applies to the dispute in this case.

1. Validity and Enforceability

Forum selection clauses contained in international contracts are presumptively valid and enforceable. M/S Bremen v. Zapata Off Shore Co. , 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972)

.Under Bremen, forum selection clauses in international contracts will be found un enforceable “only when: (1) their formation was induced by fraud or overreaching; (2) the plaintiff effectively would be deprived of its day in court because of the inconvenience or unfairness of the chosen forum; (3) the fundamental unfairness of the chosen law would deprive the plaintiff of a remedy; or (4) enforcement of such provisions would contravene a strong public policy.” Lipcon v. Underwriters at Lloyd's, London , 148 F.3d 1285, 1292 (11th Cir.1998) (citing Bremen , 407 U.S. at 15–18, 92 S.Ct. 1907 ).2

DI Global argues that the forum selection clause in Article 6 withstands all four Bremen

exceptions. Given that [f]or each category, the complaining party bears a heavy burden of demonstrating unreasonableness,” Davis v. Avvo, Inc. , No. 10–2352, 2011 WL 4063282, at *2 (M.D.Fla. Sept. 13, 2011) (citing Carnival Cruise Lines, Inc. v. Shute , 499 U.S. 585, 592, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991) ), and that Hongyuan has advanced no argument on any category, the Court agrees. First, the Agreement was not induced by fraud or overreaching because it was drafted by Hongyuan. Second, Hongyuan will not be deprived of its day in court due to any alleged inconvenience or unfairness because Hongyuan drafted the Agreement and chose to include a clause designating China as the forum. Therefore, Hongyuan either foresaw or should have foreseen any inconvenience it would suffer by being forced to litigate in China at the time it elected to include Article 6 in the Agreement. Third, the chosen law will not deprive Hongyuan of a remedy, because Article 6 clearly states that the agreement shall be governed only by Chinese law, so “the remedy will be determined under the same set of rules no matter where the case is heard”—China or Florida. Rucker v. Oasis Legal Fin., L.L.C. , 632 F.3d 1231, 1237 (11th Cir.2011). And fourth, enforcement of the forum selection clause would not contravene a strong public policy. DI Global has a legitimate interest in limiting the fora in which it can be sued, given the “international character” of the Agreement. See

Sun Trust Bank v. Sun Int'l Hotels, Ltd. , 184 F.Supp.2d 1246, 1262 (S.D.Fla.2001). In light of the realities of present-day commercial international trade, a “forum clause should control absent a strong showing that it should be set aside.” Bremen , 407 U.S. at 13–14, 15, 92 S.Ct. 1907.

Because the forum selection clause passes muster under all four categories of the Bremen

analysis, the clause is both valid and enforceable.

2. Mandatory or Permissive...

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