contracts

Atlantic Marine Construction Co. v. United States District Court for the Western District of Texas

Issues

  1. Can forum-selection clauses render statutorily proper venue improper?
  2. How much weight should courts give forum-selection clauses under 28 U.S.C. § 1404(a)?

Petitioner, Atlantic, and Respondent, J-Crew, entered into a contract that included a forum-selection clause limiting venue to two courts in Virginia, including a federal court. Contrary to that provision, J-Crew filed suit in the Western District of Texas alleging breach of contract for nonpayment for contracted services. Atlantic asks the Supreme Court to reverse the lower courts and transfer the case to the venue specified by the contract. Atlantic argues that a valid forum-selection clause renders improper any venue not specified in the contract. In opposition, J-Crew contends that proper venue is defined by statute and that a forum-selection clause does not render improper a statutorily permissible forum. This case will resolve the circuit split regarding the enforceability of forum-selection clauses. Specifically, the Supreme Court will determine whether a § 1404(a) transfer is appropriate when a lawsuit is filed in violation of a valid forum-selection clause. This implicates the ability of private parties to contract around federal statutes, raising questions about the limits on the freedom of contract, the ability of plaintiffs to forum-shop, and the capacity for parties to secure a favorable choice-of-law by filing their case first.

Questions as Framed for the Court by the Parties

Following the Court's decision in M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972), the majority of federal circuit courts hold that a valid forum-selection clause renders venue “improper” in a forum other than the one designated by contract. In those circuits, forum-selection clauses are routinely enforced through motions to dismiss or transfer venue under Fed. R. Civ. P. 12(b)(3) and 28 U.S.C. § 1406. The Third, Fifth, and Sixth Circuits, however, follow a contrary rule. This Petition presents the following issues for review:

  1. Did the Court’s decision in Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22 (1988), change the standard for enforcement of clauses that designate an alternative federal forum, limiting review of such clauses to a discretionary, balancing-of-conveniences analysis under 28 U.S.C. § 1404(a)?
  2. If so, how should district courts allocate the burdens of proof among parties seeking to enforce or to avoid a forum-selection clause?

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Facts

In April 2009, Atlantic Marine Construction Company (“Atlantic”) entered into a construction contract with the Army Corps of Engineers to build a child development center at Fort Hood, Texas. See In re Atl. Constr. Co., 701 F.3d 736, 737 (5th Cir.

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Acknowledgments

The authors would like to thank Professor Kevin Clermont of Cornell Law School for his insight into the issues in this case.

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Byrd v. United States

Issues

Does a driver in sole possession of a rental car and with the renter’s permission to operate the car, but not included as a driver on the rental agreement, have a reasonable expectation of privacy that is entitled to constitutional protection?

Terrence Byrd was pulled over by a Pennsylvania police officer for violating a state driving law. Eventually, the officer and another police officer discovered that Byrd was driving a rental car but was not a named driver on the rental agreement. Moreover, the officers also discovered that Byrd had a criminal record that included drug, weapon, and assault charges. Ultimately, the officers asked Byrd for permission to search the car, which they assert that Byrd granted, and, the officers found both heroin and illegal body armor in the car. Byrd challenged the stop and search arguing that it was unlawful. The District Court held that the stop and search was lawful. On appeal, the Third Circuit further recognized that the driver of a rental car who is not listed on the rental agreement did not have a reasonable expectation of privacy. The Supreme Court will likely resolve the Circuit conflict regarding whether a reasonable expectation of privacy exists for a driver in sole possession of a rental vehicle that is not listed as a driver on the rental agreement.

Questions as Framed for the Court by the Parties

The Fourth Amendment protects people from suspicionless searches of places and effects in which they have a reasonable expectation of privacy. Does a driver in sole possession of a rental vehicle reasonably expect privacy in the vehicle where he has the renter’s permission to drive the vehicle but is not listed as an authorized driver on the rental agreement?

In Harrisburg, Pennsylvania, a state police officer pulled petitioner Terrence Byrd over for violating a state driving law. United States v. Byrd at 2. The police officer, eventually accompanied by another officer, found that Byrd was driving a rental car but that Byrd’s name was not on the rental agreement. Id. at 3.

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Coinbase, Inc. v. Suski

Issues

Can a subsequent agreement to a platform’s contest terms alter the terms of an arbitration delegation clause originally agreed to in the platform’s general user agreement?

Petitioner Coinbase seeks to reverse the Ninth Circuit’s ruling that a subsequent contract regarding the terms for a contest with the contest platform’s registered users limits the scope of the platform’s general user agreement on arbitration and how that scope is determined. The parties dispute whether original agreement’s text forecloses subsequent modification and whether the Federal Arbitration Act and California contract law govern that determination. The outcome of this case carries implications for contract predictability, the authority of arbitrators, and the power of the Federal Arbitration Act.

Questions as Framed for the Court by the Parties

Whether, where parties enter into an arbitration agreement with a delegation clause, an arbitrator or a court should decide whether that arbitration agreement is narrowed by a later contract that is silent as to arbitration and delegation. 

In January 2018, David Suski opened a Coinbase account. Suski v. Marden-Kane. Upon opening his account, Suski agreed to the arbitration provision listed in the Coinbase User Agreement. Suski v. Coinbase.

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contra proferentem

Contra proferentem is a rule of contract interpretation that states an ambiguous contract term should be construed against the drafter of the contract. The term contra proferentem is derived from a Latin phrase meaning “against the offeror.”  

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DIRECTV, Inc. v. Amy Imburgia et al.

Issues

Can parties to a consumer arbitration agreement incorporate otherwise preempted state law into their agreement, or does the Federal Arbitration Act preempt that law in all cases?

 

The Supreme Court will decide whether an arbitration provision in a Customer Agreement purportedly governed by the Federal Arbitration Act (“FAA”) requires the application of state law preempted by, or independent from, the FAA. See Brief for Petitioner, DIRECTV, Inc. at 1.  DIRECTV argues that the parties intended to arbitrate all disputes, that state law is always subject to the preemptive force of federal law, and that in any  event  the FAA requires courts to resolve ambiguities in favor of arbitration. See id. at 18-19. Imburgia counters that the FAA requires agreements to be interpreted according to their express terms and that courts should interpret the express reference to state law in the agreement as California state contract law, independent from the preemptive force of federal law. See Brief for Respondent, Amy Imburgia et al. at 15. The Court’s decision may affect the enforcement of arbitration agreements in other contexts, as well as impact the way in which state courts interpret arbitration agreements. See Brief of Equal Employment Advisory Council as Amicus Curiae, in Support of Petitioner at 21–25.

Questions as Framed for the Court by the Parties

Did the California Court of Appeal err by holding, in direct conflict with the Ninth Circuit, that a reference to state law in an arbitration agreement governed by the Federal Arbitration Act requires the application of state law preempted by the Federal Arbitration Act?

In September 2008, Amy Imburgia and a class of litigants filed a class action complaint against DIRECTV in California Superior Court, alleging violations of state contract law after receiving a series of early termination fees following the cancellation of their accounts with the company. See Imburgia v. DIRECTV, Inc., 225 Cal. App.

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Epic Systems Corp. v. Lewis

Issues

Does the National Labor Relations Act prohibit the enforcement of agreements between employers and employees requiring individual employees to waive the right to participate in collective litigation, collective actions, and collective arbitration under the Federal Arbitration Act? 

At issue in this case is whether employment contracts barring employees from collectively arbitrating disputes with employers are illegal under the National Labor Relations Act (“NLRA”). Employees argue that preventing collective arbitration interferes with the NLRA’s Section 7 protections of “concerted activity” for “mutual aid and protection”. Employers counter that the Federal Arbitration Act governs the arbitration agreements, under which they are enforceable. Employers also contend that enforcing the agreements protects freedom of contract, thus promoting efficiency and protecting judicial resources. Employees respond that collective arbitration allows them to share the costs and risks of litigation, thereby allowing them to pursue claims that, in the aggregate, may reveal abusive practices by employers. One on hand, freedom of contract in the interest of judicial economy may be harmed if the Court does not uphold the validity of the waivers. On the other hand, if the Court does uphold the validity of the waivers, it will may become more difficult for employees to challenge abusive work practices in their workplaces.

Questions as Framed for the Court by the Parties

Whether the collective-bargaining provisions of the National Labor Relations Act prohibit the enforcement under the Federal Arbitration Act of an agreement requiring an employee to arbitrate claims against an employer on an individual, rather than collective, basis.

The Court here considers three consolidated cases: Epic Systems Corp. v. Lewis, Ernst & Young, LLP v. Morris, et al., and National Labor Relations Board (“NLRB”) v. Murphy Oil USA, Inc. Epic Systems, Ernst & Young, and Murphy Oil (“Employers”) urge the Court to uphold class action and collective arbitration waivers between employers and employees.

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equity

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