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CECA, LLC v. M Impact South, LLC

United States District Court, N.D. Mississippi, Oxford Division

March 19, 2019

CECA, LLC PLAINTIFF
v.
METAL IMPACT SOUTH, LLC DEFENDANT

          MEMORANDUM OPINION

         This matter is before the Court on Defendant Metal Impact South's motion to transfer venue. Doc. 6. Having considered the matter the Court finds that the motion should be granted.

         Plaintiff CECA contracted with Metal Impact to manufacture metal parts for CECA. CECA alleges that Metal Impact breached that contract by producing defective parts. CECE brought this breach of contract action in the Circuit Court of Tippah County. Metal Impact timely removed, premising jurisdiction on diversity of citizenship.

         Metal Impact now moves to transfer venue to the United States District Court for the Northern District of Illinois. Metal Impact claims that the contract at issue contains an enforceable choice of forum clause designating that court as the venue for all actions arising under the contract. See Supply Agreement, Doc. 6-1 at 3, ¶ 13. CECA filed an untimely response, and the matter is now ripe for review

         Forum-selection Law

         A party may enforce a forum-selection clause through a motion to transfer venue under 28 U.S.C. § 1404(a). Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist of Texas, 571 U.S. 49, 59, 134 S.Ct. 568, 579, 187 L.Ed.2d 487 (2013). Section 1404(a) provides that "For 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." Traditionally, the court considers "both the convenience of the parties and various public-interest considerations." Id. at 62. The Court gives weight to the forum in which the plaintiff chose to initiate the action. Where a valid forum-selection clause exists, however, the court is to give no weight to where the plaintiff chose to sue, id. at 63, and to "deem the private-interest factors to weigh entirely in favor of the preselected forums." Id. at 64. Thus, "a district court may consider arguments about public-interest factors only." Id. Accordingly, unless there are "extraordinary circumstances unrelated to the convenience of the parties," the district court should transfer the case to the court specified in the clause. Id. at 62.

         Analysis

         Although this is a breach of contract action, CECA did not provide with its complaint a contract between the parties. With its motion, Metal Impact provided a Supply Agreement. Doc. 6-1. The Supply Agreement provides that CECA would agree to purchase all products listed in a schedule attached to the agreement from Metal Impact. The contract contains a choice of law and forum selection clause that provides:

Choice of Law and Forum. This Agreement shall be deemed to have been made in the State of Illinois and shall be subject to, and be governed by, the laws of the State of Illinois, and no doctrine of choice of law shall be used to apply any law other than that of the State of Illinois. CECA and MIS hereby irrevocably consent and submit to the exclusive jurisdiction of the state courts of Cook County, Illinois, and the federal courts for the Northern District of Illinois, for all matters under or related to this Agreement. The parties hereto further agree that proper service of process on a party may be made on an agent designated by such party in the State of Mississippi or by certified mail, return receipt requested.

Id. at 3, ¶ 13. Metal Impact asserts that this provision is a valid forum-selection clause.

         CECA's response was filed almost a week after it was due. See L.U. Civ. R. 7(b)(4). CECA neither requested an extension of time to file its response nor did it seek permission to file an out of time response. For that reason alone, Metal Impact's motion is granted.

         Further, CECA's arguments in opposition to transfer are without merit. CECA first contends that the Supply Agreement does not control. This is a breach of contract action. However, CECA has not provided the Court with any other contract between the parties. CECA argues that the Supply Agreement merely controls the price of the parts it orders from Metal Impact and that its cause of action is for a breach in the manufacturing orders it placed.[1]CECA makes the strange argument that Metal Impact does not "produce any goods" but is instead a "manufacturer." Memo, in Resp. Doc. 10 at 6. That argument is obviously wrong. A manufacturer is one who manufactures goods. See Miss. Code Ann. § 75-2-105 ("'Goods' means all things (including specially manufactured goods) which are movable . . . .") (emphasis added). The Supply Agreement controls the purchase of the parts CECA ordered from Metal Impact. Supply Agreement at 1, ¶ 2 ("CECA shall purchase all impact requirements from [Metal Impact] for the products....) (emphasis added).

         CECA next argues that the Supply Agreement is a contract of adhesion and that the forum-selection clause is unconscionable. It asserts that Metal Impact presented the Supply Agreement as part of the price list and that CECA did not have an opportunity to negotiate it.

         A contract of adhesion is a contract "drafted unilaterally by the dominant party and then presented on a 'take-it-or-leave-it' basis to the weaker party who has no real opportunity to bargain about its terms. Such contracts are usually prepared in printed form, and frequently at least some of their provisions are in extremely small print." E. Ford, Inc. v. Taylor, 826 So.2d 709, 716 (Miss. 2002) (quoting Bank of Indiana, Nat'l Ass'n v. Holy-field, 476 F.Supp. 104, 108 (S.D.Miss. 1979) (internal quotation marks omitted). "Contracts of adhesion are not automatically unconscionable." Caplin Enterprises, Inc. v. Arrington, 145 So.3d 608, 615 (Miss. 2014). "However, such a finding 'makes an argument targeting a provision for a substantive unconscionability review easier to prove .... [Thus, it] can make a facially oppressive term presumptively invalid.'" Covenant Health & Rehab, of Picayune, LP v. Estate of Moulds ex rel Braddock, 14 So.3d 695, 701 (Miss. 2009) (quoting Vicksburg Partners, L.P. v. Stephens, 911 So.2d 507, 523 (Miss. 2005)).

         CECA presents no evidence that this a contract of adhesion. CECA itself is a business entity, and it does not show how its bargaining position is less than that of Metal Impact. Moreover, were the Supply Agreement a contract of adhesion, CECA does not establish that the clause is unconscionable. "A forum-selection clause is 'unconscionable only where the stronger party's terms are unnegotiable and the weaker party is prevented by market facts, timing or other pressures from being able to contract with another party, on more favorable terms or to refrain from contracting at all.'" Mount Carmel Ministries v. Seaway Bank & Tr. Co., No. 2:14-CV-184-KS-MTP, 2015 WL 13375901, at *2 (S.D.Miss. Sept. 3, 2015) (quoting East Ford, Inc. v. Taylor,826 So.2d 709, 716 (Miss. 2002)). CECA's only assertion in this regard is that, to find another ...


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