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Volume XI, Number 64

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An Inconvenient Agreement: Forum Selection Clauses Will be Enforced

A recent TCPA order from the Middle District of Florida reminds litigants that a valid forum selection clause for disputes “arising out of or relating” to an agreement covers a lot of ground. Certainly enough to move you from the Middle District of Florida to the Southern District of Florida.

In Graham v. Rapid Auto Loans, LLC, Case No. 8:20-cv-2758-T-33AEP, 2021 U.S. Dist. LEXIS 3442 (M.D. Fla. Jan. 7, 2020), Plaintiff Altrisha Graham brought a suit against Rapid Auto Loans, LLC, (“Rapid Auto”) her auto lender, in the Middle District of Florida for claims under the TCPA and the Florida Consumer Collection Practices Act (“FCCPA”).

In response, Rapid Auto filed a motion to dismiss, or alternatively to transfer venue, because Graham’s loan provided:

Any civil action or legal proceeding arising out of or relating to this Agreement shall be brought in the courts of record of the State of Florida in Broward County or the United States District Court, Southern District of Florida, Fort Lauderdale Division.  Id., at *1-2.

In considering the motion brought under 28 U.S.C. § 1404(a), the court recounted that while a court typically considers the convenience of the witnesses and the parties on such a motion, that isn’t the case where there is a valid forum selection clause.  “The calculus changes . . . when the parties’ contract contains a valid forum-selection clause, which ‘represents the parties’ agreement as to the most proper forum.'” Id., at *3 (quoting Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., 571 U.S. 49, 63, 134 S. Ct. 568, 187 L. Ed. 2d 487 (2013) (citation omitted)).  “[A] valid forum selection clause [should be] given controlling weight in all but the most exceptional cases.” Id. (citation omitted).

Graham opposed her lender’s motion, contending the forum selection clause didn’t apply because her claims didn’t relate to the Agreement. The district court swiftly dismissed that argument, stating that while the claims at issue are brought under the TCPA and FCCPA rather than under the agreement, these claims nevertheless relate to the agreement. Graham acknowledges that the allegedly illegal phone calls and text messages were made in an effort to collect on the debt Graham owed Rapid Auto under the agreement. Rapid Auto would not have been contacting Graham but for their relationship created by the loan agreement and Graham’s alleged failure to satisfy her duties under the agreement.  Id., at *6.

 Because Graham failed to put forward an argument that any public interest factors weighed against the transfer, the court enforced the forum selection clause.

Graham serves as a good reminder about the strength of forum selection clauses, and that they will be enforced despite whatever hardships may exist to a Plaintiff in proceeding outside her chosen venue.

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© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume XI, Number 22
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About this Author

Eleanor Hagan Litigation Attorney Squire Patton Boggs Cleveland, OH
Associate

Eleanor Hagan is an associate in the Litigation Practice, where she has a multifaceted practice focused on complex litigation, class action defense and false advertising cases, and internal corporate investigations.

Experienced in resolving disputes in state and federal courts, Eleanor has successfully obtained early dismissal in favor of her clients through dispositive motions and negotiated favorable settlements. Eleanor works to achieve superior, cost-effective results for clients by developing a comprehensive understanding of each client’s unique business priorities and concerns...

216-479-8072
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