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Doe v. Cultural Care

August 3, 2010

JANE DOE AND JOHN DOE, PLAINTIFFS,
v.
CULTURAL CARE, INC., DORTE STROBEL, AND MAUREEN MCDONNELL DEFENDANTS.



The opinion of the court was delivered by: Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER

Plaintiff, Jane Doe, filed a complaint against Defendant Cultural Care, Inc. ("Cultural Care"), and two of its employees [1]. Plaintiff's complaint was filed on behalf of herself and on behalf of her son, John Doe.*fn1 The complaint alleges that Defendants committed fraud, intentionally inflicted emotional distress, and committed various acts of negligence. The Court has jurisdiction based on diversity of citizenship. 28 U.S.C. § 1332. Before the Court is Defendant Cultural Care's motion to dismiss [14] the action for improper venue, pursuant to Federal Rule of Civil Procedure 12(b)(3) and 28 U.S.C. § 1406(a) or, alternatively, to transfer the case to the United States District Court for the District of Massachusetts. For the following reasons, the motion is granted in part and denied in part: although the Court denies Defendant's motion to dismiss the action, the Court grants Defendant's alternative request to transfer the case to the United States District Court for the District of Massachusetts.

I. Background

Defendant Cultural Care is a Massachusetts corporation in the business of placing au pairs with host families in the U.S. Compl. ¶ 7. Defendants Dorte Strobel ("Strobel") and Maureen McDonnell ("McDonnell") are employees of Cultural Care and citizens of Massachusetts. Id. ¶¶ 5-6. In October of 2007, Plaintiff was researching childcare options for her son, John Doe. Id. ¶ 8. Upon seeing an advertisement for Cultural Care, she went to the company's website to investigate. Id. ¶ 9. On or about October 19, 2007, Plaintiff spoke with Strobel, who was at that time acting within the scope of her employment with Cultural Care. Id. ¶ 12. Strobel told Plaintiff that an au pair from Columbia, named Julian, was available. Id. Strobel then informed Plaintiff that if she wished to retain Julian, she would need to pay a fee to Cultural Care that evening and pick Julian up from his current host family-or else he would be returned to Columbia and it could be months before another au pair would be available for placement. Id. ¶ 13. Strobel told Plaintiff that the reason for Julian's dismissal was that the previous placement just "did not work out," and offered to provide her with contact information for Julian's prior host family, but never did so. Id. ¶¶ 14-15. Plaintiff then told Strobel that she would not hire an au pair who was a smoker or drinker, and Strobel assured her that Julian was neither. Id. ¶ 16. Plaintiff then paid Cultural Care's requisite fee and on October 21, 2007 picked Julian up from his prior host family and took him to her home in Lockport, Illinois. Id. ¶ 17.

Shortly after employing Julian, Plaintiff discovered that he was entertaining friends and having parties at her home, and that Julian and his friends were smoking and drinking, all against her express wishes. Compl. ¶ 18. On or about November 30, 2007, Plaintiff complained about Julian's conduct to McDonnell, a Program Director at Cultural Care. Id. ¶ 19. During the conversation, McDonnell refused to remove Julian from Plaintiff's home until a two-week "transition" period had lapsed, during which Plaintiff would have to continue to house Julian notwithstanding her concerns. Id. ¶ 20. Over the course of the next two weeks, Julian physically struck John Doe, sexually abused him, and took nude photographs of him. Id. ¶ 21. Plaintiff subsequently learned that Julian previously had been discharged from a host family in California. Id. ¶ 22.

Plaintiff's complaint contains five counts against all Defendants. Count I alleges negligence for failure to adequately screen, train, or supervise au pairs and to disclose prior employment experience of said au pairs to host families. Count II alleges fraud for misrepresentations and omissions made by Cultural Center prior to Plaintiff's decision to contract with the company. Count III alleges negligent infliction of emotional distress for breach of the same duties pled in Count I. Count IV alleges negligent hiring, supervision, and retention. Count V alleges intentional infliction of emotional distress.

Defendant Cultural Care's motion to dismiss contends that venue does not properly lie in this Court because of a forum selection clause in the parties' agreement. The clause reads in pertinent part: "In the event of any claim, dispute or proceeding arising out of the relationship of [Plaintiff] and [Defendant Cultural Care], or any claim which in contract, tort, or otherwise at law or in equity arises between the parties, whether or not related to this agreement, the parties submit and consent to exclusive jurisdiction and venue of the courts of the Commonwealth of Massachusetts and of the United States District Court for the District of Massachusetts" [14-1, at 3].

II. Legal Standard

A motion to dismiss for improper venue is properly brought pursuant to Federal Rule of Civil Procedure 12(b)(3). See Cont'l Ins. Co. v. M/V Orsula, 354 F.3d 603, 606-607 & n.2 (7th Cir. 2003). In ruling on a motion to dismiss for lack of venue, the court takes the allegations in the complaint as true (unless contradicted by affidavit) and draws all reasonable inferences in favor of Plaintiff. In addition, the Court may examine facts outside of the complaint. See Murphy v. Schneider Nat'l Inc., 362 F.3d 1133, 1138 (9th Cir. 2003); New Moon Shipping Co., Ltd. v. MAN B & W Diesel AG, 121 F.3d 24, 29 (2d Cir. 1997); ISA Chicago Wholesale, Inc. v. Swisher Int'l, Inc., 2009 WL 3152785, at *3 (N.D. Ill. Sept. 25, 2009) (citations omitted). The district court "shall dismiss, or if it be in the interest of justice, transfer" any case filed in the wrong venue "to any district or division in which it could have been brought." 28 U.S.C. § 1406(a).

A motion to dismiss pursuant to Rule 12(b)(3) may be based on the existence of a valid forum selection agreement between the parties. Muzumdar v. Wellness Int'l Network, Ltd., 438 F.3d 759, 760 (7th Cir. 2006); M/V Orsula, 354 F.3d at 606-607. However, the existence of such an agreement does not, standing alone, render a venue improper. Trio Video, LLC v. NTL Capital, LLC, 2007 WL 2230036, at * 3 (N.D. Ill. July 27, 2007); see also Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 n. 8 (1988) (affirming denial of motion to dismiss because venue was proper under 28 U.S.C. § 1391(c) despite the existence of a valid forum selection clause). A forum selection clause does not by itself render venue improper under 28 U.S.C. § 1391 (the general venue statute), because a forum selection clause is an agreement between the parties about which forum is most convenient; yet, proper venueis a statutory question.*fn2 Nonetheless, federal courts generally enforce parties' agreements to litigate in a specified forum. See Northwestern Nat'l Ins. Co. v. Donovan, 916 F.2d 372, 375 (7th Cir. 1990) (citing Heller Fin. Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1293 (7th Cir. 1989) for the proposition that "a valid forum selection clause is a waiver of the right to move for a change of venue on the grounds of inconvenience to the moving party"); Trio Video, 2007 WL 2230036, at * 3 (ruling that a necessary implication of Donovan is that "a valid forum selection clause is a waiver of the right to defend against a motion to transfer to the selected forum on the grounds of inconvenience to the opposing party"). Therefore, if the forum selection clause is valid and enforceable, the district court will accord it weight by transferring the case pursuant to 28 U.S.C. § 1404, even if venue would have been proper under 28 U.S.C. § 1391.*fn3 Trio Video, 2007 WL 2230036, at * 3(transferring a case pursuant to 28 U.S.C. § 1404 upon holding that, although venue was proper, a valid and enforceable forum selection clause warranted transfer on the grounds that parties had already agreed to the most "convenient" forum).

III. Analysis

The parties' briefs anticipate that federal law applies to Defendants' motion, a prediction that, although not definitively decided in this circuit, is both likely correct and an agreement that the parties were permitted to make. Donovan, 916 F.2d at 374 ("Probably, therefore, the parties before us are correct to concede that the issue of [forum-selection] validity is one of federal law, though we need not decide this, since litigants are, within limits not exceeded here, permitted to designate what law shall control their case."). Federal law accords forum selection clauses a presumption of validity. IFC Credit Corp. v. Aliano Bros. Gen. Contractors, Inc., 437 F.3d 606, 610 (7th Cir. 2006). The party opposing its enforcement, therefore, bears the burden of showing that the clause should not be enforced. Shell v. R.W. Sturge, Ltd., 55 F.3d 1227, 1229 (6th Cir. 1995). The Supreme Court has held that forum selection clauses are enforceable, unless the party challenging enforcement of it can "clearly show that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching," or alternatively that "trial in the contractual forum will be so gravely difficult and inconvenient that [the party] will for all practical purposes be deprived of his day in court." Bremen v. Zapata OffShore Co., 407 U.S. 1, 15, 18 (1972). The Seventh Circuit, distilling the Bremen teachings, has recognized some exceptions to the presumption of validity that attaches to forum selection clauses. Bonny v. Society of Lloyd's, 3 F.3d 156, 160 (7th Cir. 1993). The first exception is where incorporation of the clause into the contract was the result of "fraud, undue influence, or overweening bargaining power." Id. The second exception is where "the selected forum is so gravely difficult and inconvenient that [the complaining party] will for all practical purposes be deprived of its day in court." Id. The third exception applies where enforcement of the clause "would contravene strong public policy of the forum in which the suit is brought, declared by statute or judicial decision." Id. Finally, the Seventh Circuit has noted that the presumptive validity of a forum selection clause might be rebutted "[i]f there is inconvenience to some third party * * * or to the judicial system itself." Donovan, 916 F.2d at 378. The applicability of each exception is assessed below.

A. Fraud or Overreaching

The Supreme Court has cast the examination of fraud or overreaching as a question of "fundamental fairness." Carnival Cruise Lines v. Shute, 499 U.S. 585, 595 (1991). Thus, the inclusion of the forum selection clause may be the product of fraud or overreaching if the party that drafted the contract included it merely as a means of discouraging other parties to the contract from pursuing legitimate claims. Id. However, if the forum specified in the contract is one and the same as the drafting party's ...


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