Smart Commc'ns Collier, Inc. v. Lowndes Cnty.
| Decision Date | 31 March 2022 |
| Docket Number | 1:21-CV-78-DMB-DAS |
| Citation | 596 F.Supp.3d 612 |
| Parties | SMART COMMUNICATIONS COLLIER, INC., Plaintiff v. LOWNDES COUNTY, MISSISSIPPI ; Lowndes County Sheriff's Office; and Lowndes County Sheriff Eddie Hawkins, in his Official and Individual Capacities, Defendants |
| Court | U.S. District Court — Northern District of Mississippi |
Stephanie McGee Rippee, Watkins & Eager PLLC, Jackson, MS, for Plaintiff.
Courtney Bradford Smith, Sims & Sims, LLC, Columbus, MS, for Defendants.
Before the Court is the defendants’ "Motion to Dismiss, to Transfer and/or Remand for Want of Jurisdiction, or in the Alternative for Forum Non-Conviens[sic]." For the reasons explained below, this case will be dismissed without prejudice.
On May 3, 2021, Smart Communications Collier, Inc. filed a complaint in the United States District Court for the Northern District of Mississippi against Lowndes County, Mississippi, Lowndes County Sheriff's Office, and Lowndes County Sheriff Eddie Hawkins, in his official and individual capacities. Doc. #1. Smart seeks a declaratory judgment determining whether the defendants may properly terminate an agreement under which Smart exclusively provides inmate communication services to the Lowndes County Adult Detention Center. Id.
On May 25, 2021, the defendants filed a "Motion to Dismiss, to Transfer and/or Remand for Want of Jurisdiction, or in the Alternative for Forum Non-Conviens[sic]" on grounds that the agreement "attached to the Plaintiff's Complaint, has a forum selection clause wherein the parties agreed to have this matter in the State Courts of Mississippi." Doc. #7 at PageID 39. Smart responded in opposition to the motion. Doc. #11.1 The defendants did not reply.
It is important to initially address the criteria under which a forum selection clause should be evaluated when a case is filed in federal court but asserted to be subject to a forum selection clause mandating a state court venue. The defendants ask the Court to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12, or to "transfer and/or remand" the case pursuant to 28 U.S.C. § 1404 or, alternatively, for forum non conveniens. Doc. #7 at 1.
Though the defendants move for dismissal pursuant to Rule 12, they fail to specify the subsection on which they rely. To the extent they seek dismissal for lack of subject matter jurisdiction, the Court presumes they invoke Rule 12(b)(1). Motions under Rule 12(b)(1) challenge a court's subject matter jurisdiction. However, "a federal court may dismiss a case on the ground of forum non conveniens without first resolving a threshold issue of jurisdiction." Wellogix, Inc. v. SAP Am., Inc. , 648 F. App'x 398, 400 (5th Cir. 2016) ). Because the defendants’ arguments only relate to the forum selection clause and the United States Supreme Court has explained that "the appropriate way to enforce a forum-selection clause pointing to a state or foreign forum is through the doctrine of forum non conveniens ,"2 the Court declines to further address subject matter jurisdiction.
The defendants also seek relief pursuant to 28 U.S.C. § 1404 but neither their motion nor their memorandum specifies the subsection on which they rely. Section 1404(a) provides that "[f]or 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 where it might have been brought or to any district or division to which all parties have consented." The Court is puzzled as to why the defendants rely on § 1404. They argue that "the parties intended to have this matter heard in Mississippi State Courts" but as the defendants acknowledge, this Court "cannot force a state Court to take this matter" where there has been no prior state court filing. Doc. #8 at 1–2. Accordingly, the Court turns to the defendants’ alternative forum non conveniens argument.
The doctrine of forum non conveniens "entail[s] the same balancing-of-interests standard" as a motion to transfer venue under 28 U.S.C. § 1404(a). Atl. Marine Constr. Co., Inc. v. U.S. Dist. Ct. for the W. Dist. of Tex. , 571 U.S. 49, 61, 134 S.Ct. 568, 187 L.Ed.2d 487 (2013). "In the typical case not involving a forum-selection clause, a district court considering a § 1404(a) motion (or a forum non conveniens motion) must evaluate both the convenience of the parties and various public-interest considerations."3 Id. at 62, 134 S.Ct. 568. "The calculus changes, however, when the parties’ contract contains a valid forum-selection clause, which represents the parties’ agreement as to the most proper forum." Id. at 63, 134 S.Ct. 568.
When there is a mandatory, enforceable forum selection clause, "the plaintiff's choice of forum merits no weight" and the plaintiff bears the "burden of establishing that § 1404(a) transfer or [forum non conveniens] dismissal is unwarranted." Weber v. PACT XPP Techs., AG , 811 F.3d 758, 767 (5th Cir. 2016) (citing Atl. Marine , 571 U.S. at 63, 134 S.Ct. 568 ). This is because "dismissal ... work[s] no injustice on the plaintiff" because the plaintiff "has violated a contractual obligation by filing suit in a forum other than the one specified in a valid forum-selection clause." Atl. Marine , 571 U.S. at 66 n.8, 134 S.Ct. 568. Additionally, a court "should not consider arguments about the parties’ private interests"4 but instead consider only the "public interest" factors. Id. at 64, 134 S.Ct. 568. Because "a valid forum-selection clause should be given controlling weight in all but the most exceptional cases," public-interest factors will rarely defeat a transfer motion. Id. at 63–64, 134 S.Ct. 568 (alterations omitted). Therefore, the plaintiff's burden to establish that "public-interest factors overwhelmingly disfavor a transfer" is very heavy. Id. at 67, 134 S.Ct. 568.
Where the parties dispute whether the forum selection clause language precludes filing in a federal forum, the forum non conveniens analysis in the Fifth Circuit is:
First, the court's threshold consideration ... is whether the civil action might have been brought in the transferee court. Second, assuming the court decides that threshold question in the affirmative, the court then evaluates whether the clause in question is mandatory, permissive, or ambiguous, applying principles of contract law as necessary. ... Third, if the court concludes that the forum-selection clause is mandatory, then the clause is presumptively enforceable and, to prevent transfer, the party opposed to the motion must meet its "heavy burden" to demonstrate that enforcement of the clause would be unreasonable under the circumstances. If the court concludes that the clause is permissive, however, the court embarks on a typical § 1404(a) analysis and, to succeed on its motion, the party moving for a change of venue must satisfy its burden to demonstrate why the forum should be changed. Alternatively, if the court concludes that the clause is genuinely ambiguous, principles of contract law indicate that the court must construe the clause against the drafting party.
Fleetwood Servs., LLC v. Complete Bus. Sols. Grp., Inc. , No. 3:17-CV-2272, 2018 WL 501184, at *4 (N.D. Tex. Jan. 22, 2018) (internal citations omitted) (collecting authorities).
In 2015, Smart and Lowndes County negotiated the terms of an agreement ("Agreement") under which Smart was to provide Lowndes County with a secure electronic messaging system used by Lowndes County Adult Detention Center inmates. Doc. #1 at 5; Doc. #1-1.
On June 18, 2015, after a meeting between the parties, Smart's Director of Information Technology, Justin Scott, forwarded a draft agreement prepared by Smart to Rick Jones of Lowndes County for review.5 Doc. #11-1 at PageID 69–70.
Several days later, Jones e-mailed Scott indicating the draft agreement had been reviewed and suggested the following changes:
Id. at PageID 69.6 On June 24, 2015, Scott e-mailed Jones a revised draft agreement, indicating the "venue and applicable laws have been updated to Mississippi as requested" and asking Jones to advise if he had "any other questions or concerns." Id. Jones responded on July 9, 2015, that he was in receipt of the revised draft agreement and would get back to Scott if he had any questions. Id. No additional revisions were requested by Lowndes County, and the Agreement executed by Lowndes County was sent by e-mail on July 21, 2015, to Smart's President, Jim Logan.7 Id. at PageID 71. Logan executed the Agreement on August 7, 2015. Doc. #1-1 at 8.
The Agreement allows early termination in several situations and contains a forum selection clause.8 Doc. #1-1 at 4, 6. In a letter dated March 5, 2021, Lowndes County notified Smart of its intent to cancel the Agreement in thirty days. Doc. #1-3 at PageID 25. A disagreement ensued between the parties as to whether the time to terminate the Agreement had passed, resulting in Smart filing the complaint in this case. See Doc. #1 at 7; Docs. #1-4, #1-5.
The defendants seek dismissal of this entire case, contending that "the State Courts of Mississippi are the mandatory, sole jurisdiction for dispute under [the Agreement]." Doc. #8 at 2 (emphasis omitted). Smart agrees the Agreement's forum selection clause is mandatory but disagrees about the scope of the limitations of the phrase "other pertinent Mississippi Courts," arguing the forum selection clause allows filing in both state and federal courts sitting in the geographical bounds of Mississippi. Doc. #12 at 3–5, 7.
Utilizing Mississippi contract interpretation...
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