Maxon Engineering Servs., Inc. v. United Sciences, Inc.

34 F. Supp. 2d 97, 1998 U.S. Dist. LEXIS 20845, 1998 WL 954112
CourtDistrict Court, D. Puerto Rico
DecidedDecember 28, 1998
DocketCiv. 98-1861 (JAF)
StatusPublished
Cited by5 cases

This text of 34 F. Supp. 2d 97 (Maxon Engineering Servs., Inc. v. United Sciences, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Maxon Engineering Servs., Inc. v. United Sciences, Inc., 34 F. Supp. 2d 97, 1998 U.S. Dist. LEXIS 20845, 1998 WL 954112 (prd 1998).

Opinion

OPINION AND ORDER

FUSTE, District Judge.

Plaintiff, Maxon Engineering Services, Inc., a corporation duly organized and existing under the laws of Puerto Rico, is engaged in the sale, marketing, distribution, installation, service, and repair of commercial and industrial electrical and mechanical engineering lines. Plaintiff alleges that Defendant, United Sciences, Inc., a Pennsylvania corporation with its principal place of business in Gibsonia, Pennsylvania, violated the provisions of the Puerto Rico Dealer’s Act of 1964 (“Law 76”), 10 L.P.R.A. § 278b-2 (1997), by terminating, without just cause, the International Distributorship Agreement signed between the parties. Plaintiff invokes this court’s diversity jurisdiction under 28 U.S.C. § 1332, and brings this cause of action against Defendant pursuant to Law 75 and Article 1802 of the Puerto Rico Civil Code, 31 L.P.R.A § 5141 (1991). Defendant moves for dismissal due to improper venue pursuant to 28 U.S.C. § 1406(a) or, in the alternative, for a transfer pursuant to 28 U.S.C. § 1404(a). We hold that federal law, specifically 28 U.S.C. § 1404(a), governs the decision to transfer this case to a federal court in Pennsylvania, giving effect to the parties’ forum-selection clause in favor of that jurisdiction.

I.

Facts

Plaintiff and Defendant entered into an International Distributorship Agreement (“Agreement”) on February 29, 1996. Plaintiff was to be the distributor in Puerto Rico for certain industrial products manufactured by Defendant. In June 1997, Defendant terminated the Agreement by replacing Plaintiff as the distributor. Plaintiff brings this cause of action for breach of contract. Defendant moved to dismiss or, in the alternative, to transfer the case to'the United States District Court, Western District of Pennsylvania, on the basis that the Agreement contains: (1) a forum-selection clause specifying the District of Pennsylvania as the appropriate forum to resolve disputes concerning the Agreement, and (2) an arbitration clause. Plaintiff responded that: (1) the forum-selection clause is null and void in light of Law 75, and (2) the arbitration clause does not apply. Given the clauses at issue, we begin by discussing transfer of venue.

II.

Standard for Motion to Transfer Pursuant to 28 U.S.C. § 1404(a)

Section 1404(a) reads: “For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” Federal law, specifically 28 U.S.C. § 1404(a), governs a district court’s decision of whether to give effect to parties’ forum-selection clause and transfer a case to the court specified in the clause. Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 32, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988). Section 1404(a) is intended to place discretion in the district court to adjudicate motions for transfer according to an “individualized, case-by-case consideration of convenience and fairness.” Id. at 29, 108 S.Ct. 2239 (citing Van Dusen v. Barrack, 376 U.S. 612, 622, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964)). A motion to transfer *99 under section 1404(a) thus calls on the district court to balance a number of case-specific factors. Stewart, 487 U.S. at 29, 108 S.Ct. 2239. Such factors include: (1) convenience of the parties; (2) the conveniences of the witnesses; and (3) the relative ease of access to sources of proof. Cianbro Corp. v. Curran-Lavoie, Inc., 814 F.2d 7, 11 (1st Cir.1987). The presence of a forum-selection clause is also a “significant factor that figures centrally in the district court’s calculus.” Stewart, 487 U.S. at 29, 108 S.Ct. 2239.

III.

Analysis Under Section 1404(a)

We find that a transfer of venue to the United States District Court for the Western District of Pennsylvania is appropriate. The Agreement at issue contains a forum-seleetion clause. The language of the forum-selection clause is clear and unambiguous:

The Construction and performance .of this Agreement shall be governed by the laws of the State of Pennsylvania, United States of America. If any provision of -this Agreement is held to be invalid or unenforceable, this Agreement shall be considered divisible as to all such provisions and the balance of this agreement shall continue in full force and effect as though such invalid or unenforceable provisions were not included in this Agreement.

The arbitration clause also contains a forum-selection provision which reads in pertinent part:

The parties agree to submit all disputes, claims, causes of actions and interpretations of this Agreement to the jurisdiction of the Courts of the State of Pennsylvania, United States of America, and Distributor specifically gives its consent to the personal jurisdiction of the Pennsylvania Courts. If the Distributor’s country of origin has ratified The Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958, either party may have a dispute or cause of action determined by binding arbitration, pursuant to the procedure specified in Exhibit “F”, if the party seeking arbitration serves written demand for arbitration on the other party not later than twenty days after a claim or action has been filed with the Pennsylvania court.

The parties clearly and unambiguously intended that any disputes arising under the Agreement be settled in the District Court of Pennsylvania. In both the forum-selection and arbitration clauses the Agreement specifies that the courts of the State of Pennsylvania will have jurisdiction over any disputes regarding the Agreement. In addition, the forum-selection provision found in the arbitration clause states that Plaintiff, as distributor, specifically avails itsélf of the jurisdiction of the District Court of Pennsylvania. Plaintiff has not alleged any fraud or overreaching by the Defendant in the negotiations leading up to or the signing of the contract. We find that the parties freely submitted themselves to the jurisdiction of the District Court of Pennsylvania.

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Bluebook (online)
34 F. Supp. 2d 97, 1998 U.S. Dist. LEXIS 20845, 1998 WL 954112, Counsel Stack Legal Research, https://law.counselstack.com/opinion/maxon-engineering-servs-inc-v-united-sciences-inc-prd-1998.