Tisdale v. Shell Oil Co.

• Citation: 723 F. Supp. 653
• Decision Date: 27 October 1988
• Docket Number: Civ. A. No. 85-T-230-N.
• Parties: Richard Dean TISDALE and Laura Reilly Tisdale, Plaintiffs, v. SHELL OIL COMPANY, etc., et al., Defendants.
• Court: U.S. District Court — Middle District of Alabama

723 F. Supp. 653

Richard Dean TISDALE and Laura Reilly Tisdale, Plaintiffs, v. SHELL OIL COMPANY, etc., et al., Defendants.

Civ. A. No. 85-T-230-N.

United States District Court, M.D. Alabama, N.D.

July 14, 1987.

On Motion to Alter or Amend October 27, 1988.

Julian McPhillips, McPhillips, De Bardelaben & Hawthorne, Montgomery, Ala., for plaintiffs.

Richard E. Broughton, Ball, Ball, Duke & Matthews, Montgomery, Ala., L. Chris Butler, Shell Oil Co., Houston, Tex., for Shell Oil Co.

James Hampton, McLain & Hampton, Montgomery, Ala., Glen M. Boudreaux, Kirklin, Boudreaux & Joseph, Houston, Tex., for Saudi Petrochemical Co.

MEMORANDUM OPINION

MYRON H. THOMPSON, District Judge.

This cause is now before the court on a motion filed by defendant Saudi Petro-chemical Company (otherwise known as "SADAF"), and joined in by defendant Shell Oil Company, to have this cause dismissed based, first, on a contractual "forum selection clause" and, second, on principles of forum non conveniens. For reasons that follow, the motion should be granted and this cause dismissed, albeit without prejudice.

I.

Plaintiffs Richard D. and Laura R. Tisdale, a married couple, claim that SADAF, acting on behalf of Shell Oil, offered to employ Mr. Tisdale in the Saudi Arabian offices of the two oil companies in August 1984. Mr. Tisdale apparently accepted the offer shortly after it was made, and the couple left for Saudi Arabia sometime thereafter. On approximately January 5, 1985, SADAF and Shell Oil allegedly terminated Mr. Tisdale's employment without justification. Furthermore, according to the Tisdales, SADAF and Shell Oil wrongfully withheld their passports for several days and then prevented them from taking various personal possessions with them. On the basis of these allegations, the Tisdales have sued SADAF, Shell Oil, and several individual employees of the two companies; they charge the defendants with breach of contract, fraud, conversion of property, and false imprisonment.

II.

SADAF employed Mr. Tisdale pursuant to a contract signed by both parties. The contract contained a choice of forum clause requiring that all disputes arising under the contract, which the parties cannot resolve between themselves, must be referred to the Labor Commissions of the Kingdom of Saudi Arabia for resolution. The clause reads that

If at any time any question, dispute, difference, or controversy shall arise between the parties hereto with respect to the provisions of this Contract, the parties shall make a good faith effort to settle such dispute by whatever means they deem appropriate. Any dispute which the parties are unable to amicably settle after such effort shall be referred to the Labor Commissions of the Kingdom of Saudi Arabia. The decision rendered by these authorities shall be final and binding on both parties.

SADAF and Shell Oil contend that this clause requires that the Tisdales bring this lawsuit in Saudi Arabia.

Until recently the law was unsettled in this circuit as to whether Alabama's across-the-board prohibition against enforcement of choice of forum clauses in contracts, as set forth in Redwing Carriers, Inc. v. Foster, 382 So.2d 554, 556 (Ala.1980), was applicable in federal diversity cases, such as this one. See Stewart Organization, Inc. v. Ricoh Corporation, 779 F.2d 643 (11th Cir.), vacated, 785 F.2d 896 (11th Cir.1986). However, recently, on February 23, 1987, the Eleventh Circuit sitting en banc finally resolved this issue, finding that the state's prohibition was not applicable. 810 F.2d 1066 (11th Cir.1987) (per curiam). The appellate court reasoned that federal, rather than state, law determined the effect of forum selection clauses, and, applying the teachings of the Supreme Court in M/S Bremen v. Zapata Off-Shore Company, 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), the court concluded that under federal law there was no blanket prohibition against such clauses. In M/S Bremen, the Supreme Court rejected, as out-moded, the notion that forum selection clauses should be disfavored by courts; instead, the Court advanced that such clauses should be viewed as prima facie valid and should be enforced unless enforcement is shown by the resisting party to be "unreasonable" under the circumstances. Id., at 9-12, 92 S.Ct. at 1913-14. See also Stewart, 810 F.2d at 1069.

Moreover, and more significantly here, the M/S Bremen Court noted the particular importance of forum selection clauses in the context of international contracting. First, the Court emphasized the important role that such clauses play in fostering international trade. The Court observed that "We cannot have trade and commerce in world markets and international waters exclusively on our terms, governed by our laws, and resolved in our courts," id., 407 U.S. at 9, 92 S.Ct. at 1913; the Court explained that "The expansion of American business and industry will hardly be encouraged if, notwithstanding solemn contracts, we insist on a parochial concept that all disputes must be resolved under our laws and in our courts." Id., at 9, 92 S.Ct. at 1912. Second, the Court emphasized the greater practical significance of forum selection clauses in international contracting, over domestic contracting, because of the greater number of possible forums for resolution of disputes and because of the great differences among the laws in these forums. The Court explained that "The elimination of all such uncertainties by agreeing in advance on a forum acceptable to both parties is an indispensable element in international trade, commerce, and contracting." Id., at 13-14, 92 S.Ct. at 1915. The Court then ended that "in light of present-day commercial realities and expanding international trade we conclude that the forum clause should control absent a strong showing that it should be set aside." Id., at 15, 92 S.Ct. at 1916.

Relying on M/S Bremen, the Eleventh Circuit in Stewart articulated a number of circumstances that would satisfy the "strong showing" needed to set aside a forum selection clause in a contract. The first is where "enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision." Id., at 1069, quoting M/S Bremen, 407 U.S. at 15, 92 S.Ct. at 1916. The appellate court specifically found that Alabama has no such strong public policy as would prohibit enforcement of forum selection clauses in federal courts relying on diversity jurisdiction. Stewart, at 1069-70. As a federal district court sitting in Alabama, this court is bound by this finding.

Other circumstances that would justify not enforcing a forum selection clause, according to the M/S Bremen and Stewart Courts, are where the contract is void because it was a product of "fraud, undue influence or overweening bargaining power." M/S Bremen, 407 U.S. at 12, 92 S.Ct. at 1914; see also Stewart, at 1070. Here, the record does not substantiate a finding that the employment contract between Mr. Tisdale and SADAF, or that the forum selection clause in the contract, was a product of fraud; indeed, Mr. Tisdale has presented no evidence whatsoever to that effect.¹

Nor does the record support a finding of such undue influence or unequal bargaining as would justify a court taking the extraordinary step of invalidating an otherwise valid provision in a contract. Admittedly, the contract appears to be a "form" contract, and therefore the forum selection clause could be considered "boilerplate"; however, such contracts are not automatically unenforceable, though in reviewing such contracts a court must be very sensitive to the strong possibility of overweening bargaining power. Mr. Tisdale is college educated in computer science; he has in the past entered into a number of employment relationships, including an employment stint in Saudi Arabia prior to the events at issue here; and his employment experience includes supervising and managing over 100 people at a time, supervising and implementing large "systems" projects, and planning budgets of up to $225 million. Mr. Tisdale appears to be a knowledgeable, sophisticated and worldly person, fully capable of dealing competently and effectively with others, not only on a domestic scale but an international one as well.

Furthermore, the contract that he signed, in its English version, is easily understandable to a lay person; it is very simple, straight-forward, and short, and it avoids legal terminology, using an everyday English vocabulary. The contract was clearly written with the intent that a lay-person be able to understand it easily and fully, and be able to appreciate the legal ramifications of signing it; moreover, the forum selection clause itself is not in fine print or hidden in a mass of verbiage, but instead is a brief clause in bold print openly and readily apparent and intelligible to any one reading the contract.

It would therefore strain belief to infer from these facts that someone of Mr. Tisdale's knowledge and sophistication has been the victim of pressured salesmanship or unfair bargaining power by SADAF when there is not direct evidence of such. See, e.g., Bense v. Interstate Battery System of America, 683 F.2d 718, 722 (2nd Cir.1982). This court must conclude that when Mr. Tisdale signed the contract he knowingly and voluntarily agreed to every provision in the contract.

Finally, a forum selection clause may be invalidated "if the chosen forum is seriously inconvenient for the trial of the action." Stewart, at 1070, quoting M/S Bremen, 407 U.S. at 16, 92 S.Ct. at 1916 (emphasis in original). To meet this requirement, the party opposing the clause must "show that trial in the contractual forum will be so gravely difficult and inconvenient that he will for all practical purposes be deprived of his day in court. Absent that, there is no basis for concluding that it would be unfair, unjust, or unreasonable to hold that party to his bargain." Stewart, at...