What Law Governs Forum Selection Clauses

Author:Symeon C. Symeonides
Position:Alex L. Parks Distinguished Chair in Law and Dean Emeritus, Willamette University; LL.B. (Priv. L), LL.B. (Pub. L.), LL.M., S.J.D., LL.D. (h.c.mult.), Ph.D. (h.c.).
Pages:1119-1161
 
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What Law Governs Forum Selection Clauses*
Symeon C. Symeonides*
TABLE OF CONTENTS
Introduction ................................................................................ 1120
I. Scenario 1: Actions Filed in the Chosen Court .......................... 1122
II. Actions Filed in a Court Not ChosenThe
“Seized” Forum .......................................................................... 1126
A. Scenario 2: Contracts Without a Choice-of-Law Clause ..... 1126
B. Scenario 3: Contracts with a Choice-of-Law Clause ........... 1135
1. Cases Applying Forum Law........................................... 1136
2. Cases Applying the Chosen Law .................................. 1139
3. Cases Distinguishing Between Enforceability and
Interpretation ................................................................. 1146
III. Summary, Critique, and Conclusions ......................................... 1150
A. Summary of Judicial Practice .............................................. 1151
B. Separating Enforceability from Interpretation ..................... 1152
C. Law Governing Enforceability ............................................. 1152
D. Defending the Choice of the Lex F ori in Some Cases ......... 1154
Conclusion .................................................................................. 1160
Copyright 2018, by SYMEON C. SYMEONIDES.
* This Article is ded icated to the memory of Professor Athanasios N.
Yiannopoulos, an ingenious law reformer and exemplary scholar of civil and
comparative law. Its subject, conflicts law, was the first of Thanasi’s many loves
and the focus of his first doctoral degree, under the mentorship of the great Albert
Ehrenzweig of U.C. Berkeley. When told that for an i mmigrant, one doctoral
degree was not enough for a teaching career, Thanasi obliged by obtaining a
second one from Cologne University under another giant of conflicts law, Gerhard
Kegel. Since then, working twice as hard as his peers became Thanasi’s modus
operan di. His unsurpassed record of scholarly accomplishments is the product of
that work ethic and his legacy to Louisiana, his adopted homeland.
* Alex L. Parks Distinguished Chair in Law and Dean Emeritus,
Willamette U niversity; LL.B. (Priv. L), LL.B. (Pub. L.), LL.M., S.J.D., LL.D.
(h.c.mult.), Ph.D. (h.c.).
1120 LOUISIANA LAW REVIEW [Vol. 78
INTRODUCTION
A forum selection (“FS”), choice-of-forum, or choice-of-court clause
is an agreement by which the parties submit a dispute to the jurisdiction of
a designated court (the “chosen” court). Before one can properly speak of
such an “agreement,” however, one must first verify that it came into
existence and determine whether it is valid and enforceable. In turn, this
determination may require answering several questions, such as whether
there was a meeting of the minds, whether the parties’ consent was free of
vices, and generally whether the agreement suffers from any defects like
unconscionability or violation of public policy. These questions are
hereinafter referred to as questions of validity or enforceability of the
FS clause.1
If the FS clause is enforceable, the court may have to answer other
questions regarding the meaning, scope, and effect of the clause. Examples
of such questions are whether the clause encompasses pre-contract or non-
contractualin addition to contractualclaims, whether it binds non-
signatories or other third parties, and whether it confers exclusive or
nonexclusive jurisdiction to the chosen courtsometimes referred to as
“mandatory” or “permissive” clauses, respectively. For example, in
certain countries, a FS clause is presumed to be exclusive unless it
provides otherwise, but no such presumption exists in the United States.2
1. This Article uses the terms “validity” and “enforceability” as synonyms.
Some authors distinguish between the two. See William J. Woodward, Jr.,
Constraining Opt-Outs: Shielding Loca l La w and Those It Protects from Adhesive
Choice of Law Clauses, 40 LOY. L.A. L. REV. 9, 1621 (2006); Jason Webb Yackee,
Choice of Law Considerations in the Validity & Enforcement of Interna tional
Forum Selection Agreements: Whose Law Applies?, 9 UCLA J. INTL L. & FOREIGN
AFF. 43, 4762 (2004). Although this distinction is valid, it is unnecessary for the
purposes of this Article.
2. T his circumstance exists, for example, under the Brussels I Regulation,
which is in force in 27 countries o f the European Union (“EU”), the parallel
Lugano Con vention, and the Hague Choice of Court Convention of 2005. See
Regulation of the European Parliament and of the Council of 12 December 2012
on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and
Commercial Matters 2012, No. 1215/2012, art. 25(1) (Eng.) [hereinafter Brussels
I]; Convention on Jurisdiction and the Recognition and Enforcement of
Judgments in Civil and Commercial Matters of 30/1 0/2007, art. 23 [hereinafter
Lugano Convention]; Hague Convention on Choice of Court Agreeme nts of 30
June 2005, art. 3( b) [hereinafter Hague Convention]. This convention is in force
in the EU, Mexico, and Singapore. The United States has signed but not ratified
it. See 37: Convention of 30 J une 2005 on Choice of Court Agr eements, HCCH,
2018] WHAT LAW GOVERNS FORUM SELECTION CLAUSES 1121
This Article refers to these questions as questions of inter pretation of the
FS clause.3
Some of these questions are legal, and others are factual; but in either
case, and as long as the case has contacts with more than one statethat
is, a “multistate” case—the court must address the logically antecedent
questionunder which state’s laws should one answer these questions?
This is the choice-of-law question. This inquiry is necessary because, even
with regard to factual questions, the laws of the involved states may differ,
for example, on what inferences to draw from facts, who should bear the
burden of proof, or how to ascertain the parties’ intent.
Under which law should a court determine the enforceability of a FS
clause and which law should the court use in interpreting the clause?
Should the answer to either question differ depending on whether the court
is the one chosen in the FS clause or one not so chosen (the “seized”
court)? If a party files the action in the chosen court, should the court
directly apply the internal law of the forum statethat is, lex fori,
namely its substantive and procedural law exclusive of its conflicts law
or should the court employ a choice-of-law analysis? If the latter, should
that analysis lead to applying the law that governs the underlying
contractlex contractus4which may or may not be the law of the forum
state? If a party files the action in another court, should the court apply the
lex fori, the lex contractus, or the law of the state chosen in the FS clause?
This Article discusses these questions and the struggle of American
courts to come up with the right answers.5 The discussion divides the cases
https://www.hcch.net/en/instruments/conventions/status-table/?cid=98 (last updated
May 2017) [https://perma.cc/KJ8N-SWEE].
3. Logically, a court determines first whether the clause is enforceable and
then, if necessary, undertakes its interpretation. In some cases, however, the court
must interpret the clausefor example, to determine whether it is exclusive or
whether it encompasses the disputed tort claimsbefore deciding its enforceability.
4. Because of the doctrine of separability or severability of the FS clause from
the rest of the contract, it is possible for the clause and the contract to be governed
by different laws. To keep things relatively simple, this Article does not address this
possibility. For the doctrine of separability, see SYMEON C. SYMEONIDES, OXFORD
COMMENTARIES ON AMERICAN LAW: CHOICE OF LAW 46062 (2016).
5. A related issue is whether, in answering these questions, a federal court
sitting in diversity should employ federal or state law standards. This Article does
not discuss this issue. For discussions of this issue, see, for example, Matthew J .
Sorensen, Enforcement of Forum-Selection Clauses in Feder al Court after
Atlantic Marine, 82 FORDHAM L. REV. 2521 (2014); Kelly A. Blair, A Judicial
Solution to the Forum-Selection Clause Enforcement Circuit Split: Giving Erie a
Second Chance, 46 GA. L. REV. 799 (2012); Maxwell J. Wright, Enfor cing
Forum-Selection Clauses: An Examina tion of the Current Disarray of F ederal

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