Central National-Gottesman, Inc. v. M.V. "GERTRUDE OLDENDORFF"

204 F. Supp. 2d 675, 2002 A.M.C. 1477, 2002 U.S. Dist. LEXIS 9268, 2002 WL 1058061
District Court, S.D. New York·Decided May 22, 2002·No. No. 00 Civ. 6425(RLC)·Published·Cited by 18 cases

Opinion

OPINION

ROBERT L. CARTER, District Judge.

Plaintiff Central National-Gottesman, Inc. (“Gottesman”) brings this admiralty [677] action to recover for damage to a shipment of 1,735 rolls of fluting paper. Defendant EO Oldendorff (“Oldendorff’) moves to dismiss the complaint for improper venue. For the reasons set forth below, the motion is denied.

BACKGROUND

On September 24, 1999, defendant Ol-dendorff issued a bill of lading, numbered LCLB-1, for the carriage and transportation of 1,735 rolls of fluting paper, allegedly tendered in good order and condition, aboard the vessel M.V. GERTRUDE OL-DENDORFF from the port of Laem Cha-bang, Thailand to the port of Long Beach, California. The M.V. GERTRUDE OL-DENDORFF is employed for hire in the common carriage of goods by water and, at all times pertinent to this litigation, was owned, operated, chartered, and controlled by defendant Oldendorff.1 On October 22, 1999, the M.V. GERTRUDE OLDEN-DORFF arrived at the port of Long Beach, California and defendant Olden-dorff discharged plaintiffs shipment of fluting paper. Upon inspection, it was discovered that the shipment had sustained serious physical and water damage. The damaged rolls were subsequently segregated and sold for salvage.

Plaintiff Gottesman as owner, shipper, consignee, and purchaser of the aforesaid shipment of 1,735 rolls of fluting paper instituted this action on its behalf and on behalf of all other interested parties to recover the sum of $600,000 for damage sustained to the shipment. On January 26, 2001, plaintiff Gottesman also commenced an action in the High Court of Justice, Queens Bench Division, London, UK, in which the registered owner of the vessel, New Resolution Shipping Corp., is named as a defendant.

DISCUSSION

When considering a motion to dismiss for improper venue pursuant to Rule 12(b)(3), F.R. Civ. P., the court has to accept facts alleged in the complaint as true and must construe all reasonable inferences in favor of the plaintiff. Dolson v. New York State Thruway Auth., No. 00 Civ. 6439, 2001 WL 363032, at *1 (S.D.N.Y. April 11, 2001) (Carter, J.); Burrell v. State Farm Fire and Cas. Co., No. 00 Civ. 5733, 2001 WL 797461, at *3 (S.D.N.Y. July 12, 2001) (Koeltl, J.). These benefits of construal aside, the plaintiff ultimately bears the burden of showing that venue is proper once it has been challenged. Imagineering, Inc. v. Lukingbeal, No. 94 Civ. 2589, 1996 WL 148431, at *2 (S.D.N.Y. Apr.2, 1996) (Carter, J.).

Defendant Oldendorff argues that venue is improper in this district because of a forum selection clause in the bill of lading calling for the adjudication of all disputes in London. (Defs.’ Mem. of Law at 4-5.) Clause 3 of the bill of lading provides:

Law and Jurisdiction.
[678] Any disputes under the Bill of Lading to be decided in London according to English Law.

(Ryan Aff. Exh. 1.) Oldendorff argues that, given its wording, the forum selection clause is mandatory, thereby barring plaintiff from bringing suit in this district. (Defs.’ Mem. of Law at 4.)

Forum selection clauses, in the context of admiralty actions, are presumptively valid. Thyssen, Inc. v. M/V ALPHA JUPITER, No. 96 Civ. 8734, 1997 WL 882595, at *7 (S.D.N.Y. Aug. 15, 1997) (Koeltl, J.) (citing M/S BREMEN v. Zapata Off-Shore Co., 407 U.S. 1, 15, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972)). So long as the clause is mandatory and exclusive as opposed to permissive, it will be presumed enforceable. See Leasing Service Corp. v. Patterson Enterprises, Ltd., 633 F.Supp. 282, 284 (S.D.N.Y.1986) (Walker, J.); Thyssen, 1997 WL 882595, at *7. Even assuming exclusivity, however, the presumption of validity attaching to a mandatory forum selection clause may be overcome by a clear showing that the clause is unreasonable. M/S Bremen, 407 U.S. at 15, 92 S.Ct. 1907. A clause can be unreasonable if: 1) its incorporation into the agreement was the product of fraud or overreaching; 2) the complaining party will be deprived of its day in court due to the grave inconvenience of the selected forum; 3) the chosen law is manifestly unfair so as to deprive plaintiff of a remedy; or 4) thé clause is in contravention of a strong public policy of the forum state. Roby v. Corp. of Lloyd’s, 996 F.2d 1353, 1363 (2d Cir.1993).

It is clear that the forum selection clause at issue here is mandatory and exclusive. For a forum selection clause to be deemed mandatory, jurisdiction and venue must be specified with mandatory or exclusive language. Thyssen, 1997 WL 882595, at *7. However, in the situation where only jurisdiction is specified, the clause will generally not be enforced without additional language indicating the intent of the parties to make jurisdiction exclusive. John Boutari & Sons, Wines & Spirits, S.A. v. Attiki Importers & Distribs. Inc., 22 F.3d 51, 52 (2d Cir.1994). “Of course if mandatory venue language is employed, the clause will be enforced” even in the absence of language making jurisdiction exclusive. Id. at 53.

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Central National-Gottesman, Inc. v. M.V. "GERTRUDE OLDENDORFF", 204 F. Supp. 2d 675, 2002 A.M.C. 1477, 2002 U.S. Dist. LEXIS 9268, 2002 WL 1058061 (S.D.N.Y. 2002).

204 F. Supp. 2d 675 (Central National-Gottesman, Inc. v. M.V. "GERTRUDE OLDENDORFF") — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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