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Trans World Transportation, Services, L.L.C. v. Union Pacific Railroad Co.

United States District Court, Tenth Circuit

August 20, 2013

TRANS WORLD TRANSPORTATION, SERVICES, L.L.C., Plaintiff,
v.
UNION PACIFIC RAILROAD COMPANY, Defendant.

MEMORANDUM AND ORDER

KATHRYN H. VRATIL, District Judge.

In the District Court of Wyandotte County, Kansas, Trans World Transportation Services, L.L.C. brought this action against Union Pacific Railroad Company. Petition For Breach Of Contract (Doc. #7-1) filed March 27, 2013. Defendant removed the case to federal court based on diversity jurisdiction. Notice Of Removal (Doc. #1) filed March 21, 2013. This matter comes before the Court on defendant's Motion To Dismiss For Improper Venue Under Federal Rule 12(b)(3) (Doc. #6) filed March 27, 2013. For the reasons stated below, the Court sustains defendant's motion.

Legal Standards

The Court considers a motion to dismiss for improper venue under Rule 12(b)(3), Fed.R.Civ.P. See Riley v. Kingsley Underwriting Agencies, Ltd. , 969 F.2d 953, 956 (10th Cir. 1992). Plaintiff bears the burden of establishing that venue is proper. Black & Veatch Constr., Inc. v. ABB Power Generation, Inc. , 123 F.Supp.2d 569, 572 (D. Kan. 2000). The Court resolves all factual disputes in plaintiff's favor. Id . In ruling on the motion, the Court may consider matters outside the pleadings without converting it to a motion for summary judgment. Topliff v. Atlas Air, Inc. , 60 F.Supp.2d 1175, 1176 (D. Kan. 1999).

Factual Background

On or about July 1, 2010, the parties entered into a written contract for plaintiff to provide major intermodal tire, trailer and chassis repair work to defendant. The contract includes a provision for arbitration, choice of law and choice of forum as follows:

Section 6. ENFORCEABILITY, CHOICE OF LAW, CHOICE OF FORUM.
This Agreement shall be governed, construed, and enforced in accordance with the laws of the State of Nebraska. The arbitration mechanism set forth in this agreement shall be instituted and maintained only in Omaha, Nebraska and the parties consent to their participation in such arbitration procedures in that forum.

Contract For Work Or Services, attached as Exhibit 1 to Petition For Breach Of Contract (Doc. #7-1) at 11. Section 23 of the contract provides that in the event of a "disagreement between the parties as to the interpretation or implementation of [the] Agreement, " the parties shall follow a prescribed arbitration procedure. Id. at 19.

Trans World brought suit in the District Court of Wyandotte County, Kansas for breach of contract and breach of the duty of good faith. As noted, Union Pacific removed the case to federal court, see Notice of Removal (Doc. #1), and now asks this Court to dismiss the action for improper venue based on the arbitration, choice of law and choice of forum clause.

Analysis

A federal court exercising diversity jurisdiction determines the application of a forum selection clause under federal law. Black & Veatch , 123 F.Supp.2d at 577; see Stewart Org. v. Rioch Corp. , 487 U.S. 22, 27 (1988). Forum selection clauses are prima facie valid and Courts should enforce them unless a party can show that enforcement would be unreasonable or unjust. Bremen v. Zapata Off-Shore Co. , 407 U.S. 1, 10 (1972) (admiralty case). Plaintiff therefore bears a heavy burden to overcome the forum selection clause. Id. at 14. An enforceable forum selection clause must "clearly confine the litigation to specific tribunals at the exclusion of all others." SBKC Serv. Corp. v. 1111 Prospect Partners, L.P. , 105 F.3d 578, 582 (10th Cir. 1997).

Defendant asserts that the parties are required to engage in arbitration in Nebraska and that the District of Nebraska is the only proper forum for this action. Motion To Dismiss at 1 (Doc. #6). Plaintiff contends that this case does not fall within the arbitration provision. Plaintiff Trans World Transportation Services, LLC's Suggestions In Opposition to Defendant's Union Pacific Railroad Company's Motion To Dismiss For Improper Venue Under Federal Rule 12(b)(3) (Doc. #8) filed April 16, 2013. Plaintiff primarily asserts two arguments: (1) the arbitration clause does not ...


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