Murphy v. Schneider National, Inc.

• Decision Date: 21 November 2003
• Docket Number: No. 02-35116.,02-35116.
• Citation: 362 F.3d 1133
• Parties: Charles E. MURPHY, Plaintiff-Appellant, v. SCHNEIDER NATIONAL, INC., a Wisconsin Corporation; Trane Company, a Wisconsin corporation; American Standard Inc., a Delaware Corporation; and Schneider Specialized Carriers, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

362 F.3d 1133

Charles E. MURPHY, Plaintiff-Appellant, v. SCHNEIDER NATIONAL, INC., a Wisconsin Corporation; Trane Company, a Wisconsin corporation; American Standard Inc., a Delaware Corporation; and Schneider Specialized Carriers, Inc., Defendants-Appellees.

No. 02-35116.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted September 9, 2003.

Filed November 21, 2003.

Amended March 22, 2004.

COPYRIGHT MATERIAL OMITTED

Montgomery W. Cobb, Cobb & Bossé, LLP, Portland, OR, for the plaintiff-appellant.

Wade R. Kennon, The Gilroy Law Firm, P.C., Portland, OR, for defendant-appellee Schneider.

James N. Westwood, Leta E. Gorman, Stoel Rives LLP, Portland, OR, for defendant-appellee Trane.

Appeal from the United States District Court for the District of Oregon; Ancer L. Haggerty, District Judge, Presiding. D.C. No. CV-01-00028-HA.

Before: ALDISERT,^* HALL, and GOULD, Circuit Judges.

ORDER

The opinion published at 349 F.3d 1224 (9th Cir.2003) is amended to add the following footnote at the end of the second sentence in Part III.C:

A forum non conveniens motion, as opposed to a motion to transfer based on 28 U.S.C. § 1404(a), is appropriate in this case because, if the forum selection clause is enforced, Murphy will be forced to litigate against Schneider in a Wisconsin state court, rather than in a federal court. See 5A Charles Alan Wright and Arthur R. Miller, Federal Practice and Procedure, § 1352 (2d ed.) ("A federal court will resort to the pre-1948 motion to dismiss for forum non conveniens in those instances which the alternative forum is a state court ....").

A judge of this court sua sponte called for en banc reconsideration. The call failed to receive a majority vote of the active, non-recused judges. No further petition for rehearing or rehearing en banc will be accepted in this case. The Clerk is ordered to issue the mandate forthwith.

IT IS SO ORDERED.

OPINION

GOULD, Circuit Judge:

Plaintiff Charles E. Murphy was injured on premises owned by Defendant Trane Company ("Trane") while Murphy was working as a long haul trucker for Defendant Schneider National, Inc. ("Schneider"). Murphy filed a personal injury action against Schneider and Trane in the United States District Court for the District of Oregon, based on diversity of citizenship. Schneider filed a motion to dismiss the action for improper venue, asserting that venue was proper only in Wisconsin state court because of the forum selection clause in Murphy's employment contract with Schneider. Trane also filed a motion, asserting that Murphy's claims against Trane should be dismissed based on forum non conveniens if the district court enforced the forum selection clause between Murphy and Schneider. The district court enforced the forum selection clause and granted Trane's motion to dismiss based on forum non conveniens. Murphy appeals the dismissal of his action against Schneider and Trane. We have jurisdiction pursuant to 28 U.S.C. § 1291 and we vacate in part and remand.

I

Murphy is a long haul truck operator and a resident of Oregon since 1995. In 1992 he began working for Schneider as a hauler. Murphy's employment with Schneider was pursuant to a 31 page employment contract that, in paragraph 35, contained the following forum selection clause:

Governing Law: Forum.

This agreement shall be governed by and construed in accordance with the laws of the State of Wisconsin and all suits with respect hereto shall be instituted exclusively in the Circuit Court of Brown County, Wisconsin. Independent Contractor consents to the exercise of jurisdiction by this court and the vesting of venue therein. INDEPENDENT CONTRACTOR WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND CONSENTS TO ALL SUCH SERVICE OF PROCESS IN THE MANNER AS PROVIDED IN PARAGRAPH 26, ABOVE.

Murphy has not been formally educated beyond the tenth grade. When Murphy first signed the employment contract with Schneider, two months after he began working for Schneider, he was told that the terms of the contract were not negotiable and that he was required to sign the contract if he wanted to work for Schneider. Each year Murphy signed a new contract with a similar forum selection clause.

On or about January 24, 2000, Murphy was injured while picking up a load of air conditioners for Schneider in Lexington, Kentucky, on the premises of Defendant Trane. Murphy sued Trane and Schneider in the United States District Court for the District of Oregon on May 9, 2001. Both the First Amended Complaint and Second Amended Complaint allege that Trane negligently breached its duty to maintain safe working conditions and that Schneider failed to maintain a policy of workers compensation insurance covering Murphy's injuries as required by Oregon's Employers Liability Act. Or.Rev.Stat. § 654.305 et seq. Trane denied liability, but asserted cross-claims against Schneider for indemnification if liable.

On May 18, 2001, Schneider answered Murphy's complaint and asserted as an affirmative defense: "Venue is not proper within this district. The action should be dismissed or, in the alternative, transferred to the district appropriate for actions arising in Lexington, Kentucky." On May 30, 2001, Schneider filed a motion to dismiss the claims against it because of the forum selection clause in the employment contract between Murphy and Schneider. The motion was based on Fed.R.Civ.P. 12(b)(3) and 28 U.S.C. § 1406(a). Trane then filed a motion to dismiss, asserting that the district court should dismiss claims against Trane on grounds of forum non conveniens if the district court granted Schneider's motion to dismiss.

In response to Schneider's motion, Murphy submitted an affidavit in which he stated that he has been unable to work since his injury, that the truck he used for his work had been repossessed, and that he and his wife live on about $2,234 per month in disability payments. Murphy's affidavit further provided that he and his wife have no disposable income, incur $200-300 per month in credit card bills, and make minimum payments on the credit card bills. Because of his financial situation, Murphy stated that he "could not afford to maintain this case if it were in a Wisconsin court," and also that he could not tolerate sitting during an auto trip to Wisconsin. Murphy also argued that if Schneider's claim were dismissed based on the forum selection clause, Murphy's claim against Trane could still go forward in the United States District Court for the District of Oregon, and therefore dismissing Schneider's claim would exacerbate Murphy's financial difficulty by requiring him to litigate against Schneider in Wisconsin and Trane in Oregon.

Schneider challenged Murphy's factual assertion that his disability precluded travel, citing Murphy's medical records. First, Dr. Thomas Hartkop specified that Murphy was disabled from January 24, 2000 to February 16, 2000, at which point Murphy was to start physical therapy. Second, Dr. Jeffrey Louie evaluated Murphy. On April 5, 2000, Dr. Louie restricted Murphy to "[l]ight duties, full time," with the written restriction of "[n]o tarping, not to lift over 20 [lbs.]." On August 21, 2000, Dr. Louie stated that Murphy was unable to return to work pending an MRI and a follow-up appointment. On September 27, 2000, Dr. Louie again restricted Murphy to light full-time duty, with written restrictions of"[n]o lifting over 30 pounds" and "no tarping." Finally, on January 3, 2001, Dr. Louie wrote to Dr. Hartkop stating that Murphy was able to drive but could not tarp.

The district court granted both Schneider's and Trane's motions to dismiss. The district court rejected Murphy's assertions that forcing him to litigate in Wisconsin state court would effectively deny him his day in court. The district court also determined that keeping the lawsuit in the District of Oregon would waste both judicial and individual resources because plaintiff would have to litigate against Schneider in Wisconsin and against Trane in Oregon; Schneider would have to defend against Murphy's claims in Wisconsin and against Trane's cross-claims in Oregon. Murphy appeals the district court's dismissal of claims against Schneider and Trane.

II

The district court's decision to enforce a forum selection clause is reviewed for abuse of discretion. See Kukje Hwajae Ins. Co. v. M/V Hyundai Liberty, 294 F.3d 1171, 1174(9th Cir.2002). Also, because Schneider's motion to enforce a forum selection clause is made pursuant to Fed.R.Civ.P. 12(b)(3), the pleadings need not be accepted as true, Richards v. Lloyd's of London, 135 F.3d 1289, 1292 (9th Cir.1998), and the court may consider facts outside of the pleadings. Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324(9th Cir.1996).

We face a question of first impression in our Circuit as to how the district court should address the controverted facts and evidence underlying Murphy's attempt to resist the enforcement of the forum selection clause. Murphy presented his affidavit evidence that because of his financial and physical limitation, enforcement of the forum selection clause would deprive Murphy of his day in court. That evidence was controverted by Schneider's submission of medical records that cast doubt on the scope of disability asserted. If, on the Rule 12(b)(3) motion, the district court is permitted to weigh the competing evidence and make factual findings to resolve this conflict on the impact of the forum selection clause, then those findings should be entitled to deference on appeal. On the other hand, if the contested facts bearing on the impact of the clause on Murphy are to be treated by analogy to our procedure for assessing facts in a disputed summary judgment motion under Fed.R.Civ.P. 56, then the trial court is obligated to draw all reasonable inferences in favor of the non-moving party and resolve all factual conflicts in favor of the non-moving party.

There is no dispute on the existence of the forum...