The opinion of the court was delivered by: Castillo, District Judge.
MEMORANDUM OPINION AND ORDER
This lawsuit is a prime example of our present international
economy and how courts must continually strive to honor the laws
and interests of each respective country in international
disputes. Hull 753 Corporation ("Hull"), an Illinois entity,
filed a lawsuit against Elbe Flugzeugwerke ("Elbe"), a German
company, and Sogerma-Socea ("Sogerma"), a French company,
alleging four claims for breach of contract and two claims under
the Illinois Consumer Fraud and Deceptive Trade Practices Act,
815 ILCS 505/1 et seq. Elbe and Sogerma now seek dismissal
arguing that (1) the contract governing this case mandates venue
in Dresden, Germany; (2) Germany would provide a more convenient
forum to litigate this case; and (3) Hull's complaint fails to
state a claim for relief under any of its theories of recovery.
After a thorough review of the record, we conclude that, although
the contract does not require the parties to litigate in Germany,
Germany would provide a more convenient and efficient forum in
which to resolve the issues presented by this lawsuit. Therefore,
we grant Elbe and Sogerma's separate motions to dismiss this case
for forum non conveniens. (R. 61 (Elbe's Mot.); R. 8-1 (Sogerma's
Hull, which leases commercial aircraft to other companies,
contracted with Elbe to convert two passenger airplanes to
freight service aircraft. (Elbe's Mot. to Dismiss Ex. A,
Agreement ("Agreement").) The contract provided that Hull would
the airplanes to Elbe in Toulouse, France at a facility owned by
Sogerma, (Agreement, at § 7.1.1 and Ex. B), and that Sogerma
would perform the conversion as Elbe's agent, (Agreement, at §
2.1.2). Additionally, the contract required Hull to appoint an
on-site project manager to act as the point of contact for
performance issues that arose during performance of the contract.
(Agreement, at §§ 15.1, 16.2, 9.3.) The final provision of the
contract is § 22.10:
This Agreement shall be governed by and construed in
accordance with the laws of the Federal Republic of
Germany. The Uniform Law on the Formation of
Contracts for the Sale of Goods, based upon the
United Nations Convention on Contracts for the
International Sale of Goods, shall not be applicable.
Place of jurisdiction shall be Dresden.
(Agreement, at § 22.10.) Hull filed this lawsuit against Elbe and
Sogerma claiming various material breaches of the Agreement and
violations of the Illinois Consumer Fraud Act.
Elbe and Sogerma seek enforcement of § 22.10, which they
believe is a forum selection clause. Alternatively, they ask us
to dismiss this case under the doctrine of forum non
conveniens.*fn1 We analyze each argument in turn.
It has long been established that "[p]ersonal jurisdiction and
venue are discrete concepts that should be kept separate."
Andrews v. Heinold Commodities, Inc., 771 F.2d 184, 187 (7th
Cir. 1985). Thus, when parties to a contract locate jurisdiction
in a certain court, it does not necessarily follow that they have
agreed to venue only in that court: "where venue is specified
with mandatory or obligatory language, the clause will be
enforced; where only jurisdiction is specified, the clause will
generally not be enforced unless there is some further language
indicating the parties' intent to make venue exclusive." Paper
Express, Ltd. v. Pfankuch Maschinen, 972 F.2d 753, 757 (7th Cir.
1992); see also Frietsch v. Refco, Inc., 56 F.3d 825, 829-30
(7th Cir. 1995) (applying the mandatory versus permissive forum
selection clause distinction and relying, in part, on additional
language to find the contractual provision mandatory). Here, the
contract specifies jurisdiction only, and there is no other
language indicating the parties' intent to make venue exclusive.
Under Seventh Circuit precedent, § 22.10 is a permissive forum
selection clause that allows, but does not require, the parties
to litigate in Dresden.
Elbe and Sogerma argue vociferously and cogently against this
result. But before turning to their contentions, we address an
issue that they could have, but did not, raise: namely, that §
22.10 divests this Court of personal jurisdiction over the
parties by mandating jurisdiction in Dresden. See Andrews, 771
F.2d at 188 ("Personal jurisdiction, unlike subject matter
jurisdiction, may be waived by the parties."). A court lacking
personal jurisdiction is an improper venue to litigate. Id.
("[T]he lack of personal jurisdiction also nullifies . . .
venue."). But Federal Rule of Civil Procedure 12(h)(1) dictates
that a challenge to a court's personal jurisdiction must be
raised at the earliest possible opportunity, either by motion or
in a responsive pleading; if it is not, the issue is waived.
Because Elbe and Sogerma have not pressed this interpretation of
§ 22.10, any challenge to this Court's personal jurisdiction over
the parties is waived. We turn now to the defendants'
First, relying on basic principles of contract interpretation,
Elbe and Sogerma reason that use of the phrase "shall be" in §
22.10 evinces the mandatory nature of the clause. In support of
this assertion, they analogize "[j]urisdiction shall be in
Dresden" to "place of jurisdiction . . . is the registered office
of the trustee, to the extent permissible under the law," which
the Frietsch Court determined was a mandatory forum selection
clause. 56 F.3d at 827 (omission in Frietsch).
Although we agree that, as an intuitive matter, the phrase at
issue here appears even stronger than that in Frietsch, we feel
constrained by Paper Express's very clear statement
distinguishing jurisdiction and venue, as well as the obvious
distinctions between this case and Frietsch. Most importantly,
the contract at issue in Frietsch contained language in
addition to the statement of jurisdiction that, as required under
Paper Express, demonstrated the parties' intent to litigate
only in the place of jurisdiction. Id. at 829 ("The phrase `to
the extent permissible' would have no function if the clause were
not mandatory."). Here, on the other hand, the contract does not
have additional language evincing such intent.
Moreover, not only was the Frietsch contract governed by
German law, but all of the parties were German, the contract was
formed in Germany, and it was written in German. The Seventh
Circuit relied on these facts to conclude that the "the natural
forum" would be Germany, and that the plaintiffs could not
reasonably have expected to litigate issues arising from the
wholly German contract in Illinois. Id. at 929-30. Here, the
contract was written in English, it was formed in Illinois, and
the parties are from three different countries. In contrast to
those in Frietsch, the facts of this case do not ...