Jefferson Circuit Court, CV-17-902244
PETITION FOR WRIT OF MANDAMUS
BOLIN,
Justice.
Terex
USA, LLC ("Terex"), petitions this Court for a writ
of mandamus directing the Jefferson Circuit Court to enforce
1161113 an outbound forum-selection clause contained in a
distributorship agreement between Terex and Cowin Equipment
Company, Inc. ("Cowin"), and to dismiss Cowin's
action against Terex based on improper venue pursuant to Rule
12(b)(3), Ala. R. Civ. P. We deny the petition.
Facts
and Procedural History
Before
August 2015, Cowin, a heavy-equipment dealer, had served as
an authorized dealer of heavy equipment manufactured by the
Liebherr Group for approximately 30 years. Cowin alleges that
Terex, a heavy-equipment manufacturer, began aggressively
recruiting Cowin to become a dealer of its equipment in
Alabama, Georgia, and Florida. At the time, Warrior Tractor
& Equipment Company, Inc. ("Warrior"), was
serving as the dealer for Terex's equipment in the
region. Based on assurances from Terex that Cowin would be
the only Terex dealer in the territory, Cowin allowed its
relationship with Liebherr Group to expire. In August 2015,
Cowin entered into a distributorship agreement with Terex to
sell Terex heavy equipment in Alabama, Georgia, and Florida.
The agreement contained the following outbound
forum-selection clause:
"The parties agree that this Agreement shall be governed
by and interpreted consistent with the laws of the State of
Georgia. The parties also agree that any dispute arising out
of or in relation to this Agreement shall be exclusively
decided by the United States District Court, Northern
District of Georgia. The parties consent to the exclusive
jurisdiction of the United States District Court, Northern
District of Georgia or, if federal jurisdiction is lacking in
such legal action, in the State Court in Atlanta, Georgia and
waive any and all objections to the jurisdiction or venue of
said Court."
Subsequent
to entering into the distributorship agreement with Cowin,
Terex entered into a new distributorship agreement with
Warrior without providing notice to Cowin that Warrior would
be reentering the heavy-equipment market. Cowin alleges that
Terex's failure to give it notice that Warrior would be
reentering the market is contrary to common industry
practices. On June 2, 2017, Cowin sued Terex and Warrior,
asserting various claims arising from Terex's alleged
violation of the Alabama Heavy Equipment Dealer Act, §
8-21B-1 et seq., Ala. Code 1975 ("the AHEDA").
On July
27, 2017, Terex moved the trial court pursuant to Rule
12(b)(3), Ala. R. Civ. P., to dismiss Cowin's complaint,
arguing that venue in Jefferson County was improper because
of the forum-selection clause in the distributorship
agreement designating either the United States District Court
for the Northern District of Georgia or the Georgia state
court in Atlanta as the proper forum for any dispute between
the parties arising from the distributorship agreement. On
August 15, 2017, Cowin responded to Terex's motion to
dismiss, arguing that the enforcement of the forum-selection
clause would violate a strong public policy set forth in the
AHEDA. On August 17, 2017, Terex filed a response, arguing
that Cowin was asking the trial court to reject the
presumption under Alabama law in favor of outbound
forum-selection clauses without binding precedent; that if
the AHEDA is read in pari materia with the Alabama
Motor Vehicle Franchise Act, § 8-20-1 et seq., Ala. Code
1975 ("the MVFA"), it is clear that the legislature
knows how to prohibit forum-selection clauses in agreements
and it did not do so in the AHEDA; and that the cases relied
upon by Cowin from other jurisdictions address statutes,
unlike the AHEDA, that specifically address outbound
forum-selection clauses. On September 1, 2017, the trial
court denied Terex's motion to dismiss. This petition
followed.
Standard
of Review
"'Mandamus is a drastic and extraordinary writ, to
be issued only where there is (1) a clear legal right in the
petitioner to the order sought; (2) an imperative duty upon
the respondent to perform, accompanied by a refusal to do so;
(3) the lack of another adequate remedy; and (4) properly
invoked jurisdiction of the court.' Ex parte Integon
Corp., 672 So.2d 497, 499 (Ala. 1995)."
Ex parte CTB, Inc., 782 So.2d 188, 190 (Ala. 2000).
"[A]n attempt to seek enforcement of the outbound
forum-selection clause is properly presented in a motion to
dismiss without prejudice, pursuant to Rule 12(b)(3), Ala. R.
Civ. P., for contractually improper venue. Additionally, we
note that a party may submit evidentiary matters to support a
motion to dismiss that attacks venue. Williams v. Skysite
Communications Corp., 781 So.2d 241 (Ala. Civ. App.
2000), quoting Crowe v. City of Athens, 733 So.2d
447, 449 (Ala. Civ. App. 1999)."
Ex parte D.M. White Constr. Co., 806 So.2d 370, 372
(Ala. 2001). "[T]he review of a trial court's ruling
on the question of enforcing a forum-selection clause is for
an abuse of discretion." Id. (citing
O'Brien Eng'g Co. v. Continental Machs.,
Inc., 738 So.2d 844 (Ala. 1999)).
Discussion
At the
outset, we note that "[a]n outbound forum-selection
clause -- a clause by which parties specifically agree to
trial outside the State of Alabama in the event of a dispute
-- implicates the venue of a court rather than its
jurisdiction. See Ex parte CTB, Inc., 782 So.2d 188
(Ala. 2000); and O'Brien Eng'g Co. v. Continental
Machs., Inc., 738 So. 844, 845 (Ala. 1999)." Ex
parte Leasecomm Corp., 879 So.2d 1156, 1158 (Ala. 2003).
In F.L. Crane & Sons, Inc. v. Malouf Construction
Corp., 953 So.2d 366, 373 (Ala. 2006), this Court held
that "an outbound forum-selection clause raises
procedural issues and is governed by the law of the forum
jurisdiction -- in this case, the law of Alabama."
In
M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10
(1972), the United States Supreme Court held that, for
purposes of federal law, outbound 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." This
Court in Professional Insurance Corp. v. Sutherland,
700 So.2d 347, 351 (Ala. 1997), adopted the Supreme
Court's reasoning, stating that "a forum selection
clause should be enforced so long as enforcing it is neither
unfair nor unreasonable under the circumstances." This
Court has stated that an outbound forum-selection clause is
enforceable unless the party challenging the clause can
clearly establish that enforcement of the clause (1) would be
unfair on the basis that the contract was affected by fraud,
undue influence, or overweening bargaining power or (2) would
be seriously inconvenient for the trial of the action. Ex
parte Leasecomm Corp., 879 So.2d 1156 (Ala. 2003). A
party seeking to dismiss an action filed in Alabama based on
the existence of an outbound forum-selection clause must
initially establish the existence of a contract containing an
outbound forum-selection clause. The burden then shifts to
the party challenging the enforcement of the clause to
establish that enforcement of the clause would be unfair or
unreasonable under the circumstances. Ex parte PT
Solutions Holdings, LLC, 225 So.3d 37 (Ala. 2016). This
Court has noted that "[t]he burden on the challenging
party is difficult to meet." D.M. White
Constr., 806 So.2d at 372.
The
Bremen Court identified four factors that would
invalidate a forum-selection clause: "'(1) its
formation was induced by fraud or overreaching; (2) the
plaintiff would be deprived of its day in court because of
inconvenience or unfairness; (3) the chosen law would deprive
the plaintiff of a remedy; or (4) enforcement of the clause
would contravene public policy.' Krenke [v. Kerzner
Int'l Hotels Ltd.], 579 F.3d [1279] at 1281 [(11th
Cir. 2009)]." Rucker v. Oasis Legal Fin.,
L.L.C., 632 F.3d 1231, 1236 (11th Cir. 2011).
Terex
argues in support of its petition that it has long been
established in Alabama that forum-selection clauses are not
void as against the public policy of Alabama. Terex further
argues that the legislature has not expressed through plain
language in the AHEDA its intention to enact legislation
contrary to Alabama's long-established practice of
holding forum-selection clauses valid and enforceable. Cowin
contends that the legislature has expressed a strong public
policy favoring heavy-equipment dealers that renders the
outbound forum-selection clause unenforceable in this case.
This Court held in Sutherland that outbound
forum-selection clauses "are not void per se as against
the public policy of Alabama." 700 So.2d at 350.
However, this Court also acknowledged in Sutherland
that the state legislature may enact statutory language that
dictates the fundamental public policy of the state on a
given subject. 700 So.2d at 351 ("[I]t can hardly be
doubted that the legislature has the authority to enact a
statute that would prohibit the enforcement of
forum-selection clauses such as those at issue in this case
....").
Because
the AHEDA contains no expressed public policy against
outbound forum-selection clauses, we must construe the
relevant sections of the AHEDA to determine whether the
legislature intended such a public policy. In Blue Cross
&Blue Shield of Alabama, Inc. v. Nielsen,
714 So.2d 293, ...