Stewart Organization, Inc. v. Ricoh Corp., Civ. A. No. 84-AR-2460-S.
Decision Date | 30 September 1988 |
Docket Number | Civ. A. No. 84-AR-2460-S. |
Citation | 696 F. Supp. 583 |
Parties | The STEWART ORGANIZATION, INC., et al., Plaintiffs, v. RICOH CORPORATION, et al., Defendants. |
Court | U.S. District Court — Northern District of Alabama |
Janet L. Humphreys, F.A. Flowers, III, Joseph W. Letzer, Burr & Forman, Birmingham, Ala., for plaintiffs.
Ralph H. Yeilding, Mac M. Moorer, Scott M. Phelps, Bradley, Arant, Rose & White, Birmingham, Ala., for defendants.
Pursuant to the mandate of the Court of Appeals for the Eleventh Circuit issued on September 20, 1988, 855 F.2d 762, in response to the mandate of the Supreme Court of the United States in Stewart Organization, Inc. v. Ricoh Corp., ___ U.S. ___, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988), this court has for consideration the motion of defendants, Ricoh Corporation and Ricoh of America, Inc. (Ricoh), to transfer this action to the United States District Court for the Southern District of New York. This motion necessarily invokes 28 U.S.C. § 1404(a).
Plaintiff, The Stewart Organization, Inc. (S.O., Inc.), is an Alabama corporation with its principal place of business in Birmingham, Alabama. Plaintiffs, Walter H. Stewart and James S. Snow, Jr., are both resident citizens of Birmingham, Alabama. They are the controlling shareholders of S.O., Inc. Ricoh is a nationwide manufacturer of copier products. Its principal place of business is in West Caldwell, New Jersey, and it is incorporated in New Jersey. Exactly what distinction, if any, there is between Ricoh Corporation and Ricoh of America, Inc., for the purposes of this case, remains obscure.
On February 12, 1983, in Birmingham, Alabama, Mr. Stewart, on behalf of S.O., Inc., signed a "Ricoh Copier Products Retail Dealer Sales Agreement." This proposed agreement was forwarded to Ricoh and was executed on behalf of Ricoh by John Stuart, Ricoh's senior vice president, located at Ricoh's corporate headquarters in New Jersey. A copy of the fully executed agreement was returned to S.O., Inc., in March of 1983. Paragraph 18.1 of the agreement provides:
Dealer and Ricoh agree that this Agreement, and all documents issued in connection therewith, shall be governed by and interpreted in accordance with the laws of the State of New York. Dealer and Ricoh agree that any appropriate state or federal district court located in the Borough of Manhattan, New York City, New York, shall have exclusive jurisdiction over any case or controversy arising under or in connection with this Agreement and shall be a proper forum in which to adjudicate such case or controversy.
On October 11, 1983, S.O., Inc., entered into another agreement with Ricoh. The only purpose of this second agreement was to expand the geographical territory previously allocated to S.O., Inc., by the February 12, 1983 agreement. This second or superseding agreement, also signed on behalf of Ricoh by Mr. Stuart, contains a provision identical to ¶ 18.1 of the February 12, 1983 agreement.
According to Ricoh, both the February 12 agreement and the October 11 agreement expired on March 31, 1984. On May 7, 1984, Mr. Stewart, on behalf of S.O., Inc., signed yet a third Ricoh dealer sales agreement.1 This 1984 sales agreement does not contain the forum-selection clause. This agreement, if effective, provides that it "is intended to be a final expression, and a complete and exclusive statement regarding the subject matter, of this agreement and supersedes any prior oral statements or agreements between the parties." (Plaintiffs' Ex. No. 1).
S.O., Inc., testifies that this new agreement was forwarded to Ricoh headquarters and was signed on behalf of Ricoh by an authorized agent. (Transcript at 66). Mr. Stewart testified that Bob Banks, an agent for Ricoh located in Ricoh's Atlanta office, told Mr. Stewart that "the contract was back from New Jersey, that it was signed...." (Transcript at 67). Mr. Stewart also testified that he had two telephone conversations with Bill Johnson, Mr. Banks' boss in Ricoh's Atlanta office. According to Mr. Stewart, Mr. Johnson stated that (Transcript at 67-68). No witness on behalf of Ricoh denied the substance of these conversations.
Ricoh stopped sending products to S.O., Inc. On September 28, 1984, S.O., Inc., filed this action alleging breach of contract, breach of warranty, fraud, and federal anti-trust violations.
In response to the complaint, Ricoh filed its motion to dismiss or to transfer this action to New York on the grounds of improper venue and forum non conveniens. The motion initially was predicated solely upon the forum-selection clause in the first and second dealer sales agreements, the only two agreements then brought to the attention of this court. Accidentally anticipating the view expressed by Justice Scalia in his dissent in Stewart Organization, Inc. v. Ricoh Corp., ___ U.S. ___, 108 S.Ct. 2239, 2245, 101 L.Ed.2d 22 (1988) (Scalia, J., dissenting), this court held that Alabama law, rather than federal law, governed the validity and enforceability of a forum-selection clause. This court's decision was reversed by the Eleventh Circuit in a split en banc decision. Stewart Organization, Inc. v. Ricoh Corp., 779 F.2d 643 (11th Cir.1986). The Supreme Court granted certiorari in Stewart Organization, Inc. v. Ricoh Corp., ___ U.S. ___, 108 S.Ct. 225, 98 L.Ed.2d 184 (1987), and affirmed the Eleventh Circuit on grounds entirely different from those articulated by the Eleventh Circuit majority. Stewart Organization, Inc., 108 S.Ct. at 2241. The Supreme Court remanded the cause to the Eleventh Circuit, which remanded it to this court.2
This court must now consider Ricoh's motion to transfer this action to the United States District Court for the Southern District of New York in light of the Supreme Court's direction that this court "determine in the first instance the appropriate effect under federal law of the parties' forum-selection clause on respondent's Ricoh's § 1404(a) motion." Id. 108 S.Ct. at 2245.
Burden of Proof.
First, this court must decide which party has the burden of proof on Ricoh's motion to transfer. Ordinarily, the movant who invokes the doctrine of forum non conveniens and seeks a transfer has the burden of proof. See 1A J. MOORE, W. TAGGART & J. WICKER, Moore's Federal Practice ¶ 0.204 (2d ed. 1987). Ricoh would avoid this general rule by arguing that its forum-selection clause shifts the burden of proof to S.O., Inc. Ricoh bases this contention on the so-called Bremen test. See M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). In Bremen, the Supreme Court held that 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." Id. at 10, 92 S.Ct. at 1913 (footnote omitted). Ricoh's contention fails for at least six reasons.
First, Bremen is clearly distinguishable from the instant case. The Supreme Court in Bremen stated:
There is strong evidence that the forum clause was a vital part of the agreement, and it would be unrealistic to think that the parties did not conduct their negotiations, including fixing the monetary terms, with the consequences of the forum clause figuring prominently in their calculations.
Id. at 14, 92 S.Ct. at 1915 (footnote omitted).
In addition, Bremen involved an international contract. The Supreme Court recognized that in such a case parties agreeing "in advance on a forum acceptable to both parties is an indispensable element in international trade...." Id. at 13-14, 92 S.Ct. at 1915. The Court specifically stated in Bremen that it was "not here dealing with an agreement between two Americans to resolve their essentially local disputes in a remote alien forum." Id. at 17, 92 S.Ct. at 1917. The Court clearly narrowed its holding in Bremen, and narrowed Bremen's subsequent application, by stating that the reasons to enforce the forum-selection clause are compelling only if the clause is a result of a "freely negotiated private international agreement, unaffected by fraud, undue influence, or overweening bargaining power...." Id. at 12, 92 S.Ct. at 1914 (footnote omitted) (emphasis supplied). The instant case does not deal with an international contract. There is nothing to demonstrate that the forum-selection clause here was an indispensable part of the agreement. In addition, of course, a central contention of S.O., Inc., is that this contract, including its forum-selection clause, were not freely negotiated and were the product of fraud. (Tr. at 61, 71). In light of the third document that Mr. Stewart signed on May 7, 1984, this court is not sure that the document that finally established whatever relationship there existed between the parties even contains a forum-selection clause. Each of the cases cited by Ricoh to support the application of the Bremen test involves a valid, freely negotiated forum-selection clause. See Brinderson-Newberg Joint Venture v. Pacific Erectors, Inc., 690 F.Supp. 891 (C.D. Cal.1988) ( ); ARH Distributors, Inc. v. ITT Commercial Finance Corp., 1988 WL 17628 (N.D.Ill.1988) ( ); Walker v. Carnival Cruise Lines, Inc., 1987 WL 28413 (N.D.Ill.1987) ( ); Della Pelle v. First Commodity Corp. of Boston, 1987 WL 19936 (E.D.Pa.1987) ( ).
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