Rattler Holdings, LLC v. United Parcel Service, Inc.

CourtDistrict Court, D. Montana
DecidedDecember 8, 2020
Docket9:20-cv-00117
StatusUnknown

This text of Rattler Holdings, LLC v. United Parcel Service, Inc. (Rattler Holdings, LLC v. United Parcel Service, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Montana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rattler Holdings, LLC v. United Parcel Service, Inc., (D. Mont. 2020).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA MISSOULA DIVISION

RATTLER HOLDINGS, LLC D/B/A PLANETARY DESIGN, CV 20–117–M–DLC

Plaintiff, ORDER vs.

UNITED PARCEL SERVICE, INC. and UPS SUPPLY CHAIN SOLUTIONS, INC.,

Defendants. Before the Court is Defendants’ Motion to Dismiss Under the Doctrine of Forum Non Conveniens or Alternatively Rule 12(b)(6). (Doc. 8.) On December 3, 2020, the Court held a hearing on this motion. As explained below, the motion is granted. BACKGROUND1 Plaintiff Rattler Holdings, LLC d/b/a/ Planetary Design brought this action against Defendants United Parcel Service, Inc. and UPS Supply Chain Solutions (“SCS”), Inc. alleging negligence, constructive fraud, and negligent misrepresentation. (Doc. 4.) Plaintiff sells travel French presses, drinkware, and

1 Solely for the purpose of resolving this motion, the allegations contained in Complaint are taken as true. other coffee supplies. (Id. at 2.) Defendants are an American multinational package delivery and supply company. (Id.) The dispute concerns a contract that

Plaintiff executed with UPS SCS China (“UPS China”) (who is not a party to this suit), a division of UPS SCS. In the spring of 2017, Plaintiff contacted its UPS representative to explore

the possibility of having its Chinese goods shipped directly from China to its international customers. (Id. at 2–3.) If possible, the deal would eliminate the extra costs and time associated with having all internationally bound Chinese- goods sent first to Plaintiff’s Montana warehouse. (Id.) Over the next few months,

representatives from UPS worked with Plaintiff to establish warehouse and shipping services from China. (Id. at 3.) These conversations resulted in Plaintiff executing a Logistics Services Agreement (“LSA”) with UPS China. (Id. at 4.)

After signing, Plaintiff moved its goods to UPS China’s warehouse and authorized purchase orders from international customers based on the LSA. (Id.) However, these goods were never shipped. (Id.) A representative from UPS initially informed Plaintiff that the shipments were delayed due to overbooking.

(Id. at 5.) Months later, Plaintiff was informed that UPS China was unable to export its products and that shipping services were not covered under the LSA. (See id.) This did not, however, stop UPS China from sending Plaintiff a bill for

its warehousing services. (Id. at 6.) Plaintiff ultimately terminated the LSA and was then informed that it would not be able to recover its goods from UPS China’s warehouse until it paid the outstanding invoices. (Id. at 6–7.) It is unclear whether

these goods have yet been recovered. Plaintiff sued Defendants alleging negligence, constructive fraud, and negligent misrepresentation, and claiming damages from lost sales, replacement

orders, and the lost confidence of its customers. (Id. at 7–11.) Defendants brought this motion to dismiss invoking the LSA’s forum selection clause which provides that any litigation “relating to” the agreement must be brought “in a court of competent jurisdiction in the location of the UPS SCS facility, of China in its sole

jurisdiction[.]” (Doc. 10-1 at 6.) LEGAL STANDARD “[T]he appropriate way to enforce a forum-selection clause pointing to a . . .

foreign forum is through the doctrine of forum non conveniens.” Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 571 U.S. 49, 60 (2013). Federal law applies to the interpretation of a forum selection clause. Yei A. Sun v. Advanced China Healthcare, Inc., 901 F.3d 1081, 1086 (9th Cir.

2018) (citing Doe 1 v. AOL LLC, 552 F.3d 1077, 1081 (9th Cir. 2009)). Under federal law, forum selection clauses “are prima facie valid and should be enforced unless enforcement is shown by the resisting party to be ‘unreasonable’[.]” M/S

Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972). When a contract contains a valid forum selection clause, a court must uphold the clause “unless extraordinary circumstances unrelated to the convenience of the parties clearly

disfavor a transfer.” Atl. Marine Const. Co., 571 U.S. at 52. These “extraordinary circumstances” exist only where: (1) the clause is invalid due to ‘fraud or overreaching,’ (2) ‘enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision,’ or (3) ‘trial in the contractual forum will be so gravely difficult and inconvenient that [the litigant] will for all practical purposes be deprived of his day in court.’ Gemini Techs., Inc. v. Smith & Wesson Corp., 931 F.3d 911, 915 (9th Cir. 2019) (emphasis omitted) (quoting Bremen, 407 U.S. at 15). “[I]n all but the most unusual cases . . . the interest of justice is served by holding parties to their bargain.” Atl. Marine Const. Co., 571 U.S. at 66. DISCUSSION Defendants seek dismissal of the suit by invoking the LSA’s forum selection clause which specifies that any litigation related to the LSA must be brought in China. (Doc. 8.) Alternatively, Defendants assert dismissal is appropriate under

Federal Rule of Civil Procedure 12(b)(6). (Id.) Because the Court concludes the forum selection clause is enforceable, it will not address Defendants’ alternative argument.

Plaintiff initially argued that Defendants could not enforce the forum selection clause because they “are not likely” parties to the LSA. (Doc. 14 at 8– 10.) However, Plaintiff conceded at oral argument that Defendants are parties to the agreement and able to enforce its terms.2 Plaintiff now asserts that the clause is

unenforceable because it violates Montana’s public policy. (Id. at 8.) In response, attempting to avoid the Court’s recent ruling in Swank Enterprises Inc. v. NGM Insurance Co., 2020 WL 1139607 (D. Mont. Mar. 9,

2020), Defendants assert that Montana’s public policy does not prohibit the type of claims raised in this suit. (Doc. 9 at 10.) Thus, there are two issues before the Court: (1) whether the claims raised in this lawsuit implicate Montana’s public policy; and (2) if so, whether the forum selection clause is void.

I. Montana’s public policy encompasses the claims raised in this suit.

Defendants acknowledge this Court’s litany of cases addressing the enforceability of forum selection clauses under Montana law. Indeed, this issue is one the Court has addressed many times, albeit to contrary results. Fayle v. TSYS Merch. Sols., LLC, No. CV 20-72-M-DWM, 2020 WL 3604070, at *2–3 (D. Mont. July 2, 2020) (enforcing a forum selection clause upon concluding that the Montana Supreme Court’s newer caselaw demonstrates that such clauses are not “presumptively void”); Swank Enters., Inc., 2020 WL 1139607, at *5 (invalidating

2 The LSA specifies that Plaintiff, UPS China, and each of UPS China’s “affiliates” are all parties to the agreement. There is now no dispute that Defendants are an “affiliate” of UPS China. a forum selection clause based on Montana’s “unequivocally . . . ‘strong public policy’ against enforcement” of such clauses); Bjorgen v. Marco Techs., LLC, No.

CV 17-134-M-DLC, 2018 WL 2023543, at *4 (D. Mont. May 1, 2018) (upholding a forum selection clause upon finding that Montana’s public policy “is not so strong as to automatically invalidate a [valid] forum-selection clause[.]”);

Frontline Processing Corp. v. Merrick Bank Corp., No.

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