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Exhibit Systems, Inc. v. Pico Art International Pte., Ltd.

United States District Court, N.D. Illinois, Eastern Division

June 25, 2015

Exhibit Systems, Inc., Plaintiff,
v.
Pico Art International Pte., Ltd. et al., Defendants.

MEMORANDUM OPINION AND ORDER

VIRGINIA M. KENDALL, District Judge.

Plaintiff Exhibit Systems, Inc., ("Exhibit") filed suit against Defendants Pico Art International Pte. LTD. ("Pico") and Changi Airport Group Pte. LTD. ("Changi") on January 30, 2015 in the Circuit Court of DuPage County, Illinois. Exhibit served Defendants on March 4, 2015[1] and Defendants timely removed the case to this Court (Dkt. No. 1) on April 2, 2015. See 28 U.S.C. § 1446. Exhibit alleges a breach of contract claim against Pico and an unjust enrichment claim against Changi. After removal, Defendants moved to dismiss the Complaint based on insufficient process and insufficient service of process. (Dkt. No. 7). Exhibit moved the Court to remand (Dkt. No. 18), arguing that the forum selection clause in the agreement between the parties mandates that the parties litigate all disputes in the Circuit Court of DuPage County. Exhibit also requests the Court to award attorneys' fees and costs pursuant to 28 U.S.C. § 1447(c). For the following reasons, the Court grants Exhibit's motion in part. The Court remands the case to the Circuit Court of DuPage County and denies Plaintiff's request for attorneys' fees and costs. Defendants' motion to dismiss is dismissed as moot in light of the remand.

BACKGROUND

The following facts are taken from the Complaint filed in Illinois court.[2]Defendant Changi operates an airport in Singapore. Changi retained the services of Defendant Pico promote the airport at the 2014 World Routes Trade Show (the "Trade Show") in Chicago, Illinois. (Compl. ¶ 3-4). Pico and Changi contracted with Exhibit to design, manufacture, assemble, and disassemble a promotional exhibit for display at the Trade Show. (Compl. ¶ 5). Exhibit alleges that it performed all services required of it under the agreement and that Pico failed to pay all amounts required. (Compl. ¶ 9-10). Exhibit also alleges that Changi has been unjustly enriched as the result of Exhibit's uncompensated services. (Compl. ¶ 19).

Exhibit filed suit against Pico and Changi (collectively, "Defendants") in the Circuit Court of DuPage County, Illinois. Defendants removed the case to this Court. Exhibit now asks the Court to remand the case to state court, arguing that the forum selection clause in Paragraph 6(e) of the agreement mandates that any disputes under the contract be litigated in the Circuit Court of DuPage County. Paragraph 6(e) of the parties' agreement states: "This agreement enforced [ sic ] under Illinois Law and all disputes will be settled under Illinois jurisdiction in DuPage County." (Dkt. No. 1-1 p. 15). Defendants argue that the forum selection clause merely constitutes Defendants' consent to litigate in DuPage County, but does not make that forum exclusive.

LEGAL STANDARD

Though, Exhibit styled its motion as a Rule 12(b)(3) motion to dismiss for improper venue, Rule 12(b)(3) does not provide a basis for remand or dismissal here. Section 1391 of Title 28 of the United States Code dictates whether venue is proper. See Atl. Marine Const. Co. v. United States Dist. Court for W. Dist. of Texas, 134 S.Ct. 568, 577 (2013). The presence of a forum selection clause in the contract between the parties has no effect on the analysis of whether venue is "proper" under § 1391. See id. "A civil action may be brought in... a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred." See § 1391(b)(2). No party disputes that the Trade Show took place in within this District or that the parties entered into their agreement in this district. Thus, venue is "proper" under 28 U.S.C. § 1391 and Rule 12(b)(3) is inapposite.

Instead, the Court enforces a forum selection clause designating a non-federal forum through the doctrine of forum non conveniens. See Atl. Marine, 134 S.Ct. at 580.[3] The application of the doctrine of forum non conveniens involves a two-step inquiry. See Stroitelstvo Bulgaria Ltd. v. Bulgarian-Am. Enter. Fund, 589 F.3d 417, 421 (7th Cir. 2009). First, the Court must determine that an adequate alternative forum is available. "An alternative forum is available' if all parties are amenable to process there and within the forum's jurisdiction" and adequate' "if it provides the plaintiff with a fair hearing to obtain some remedy for the alleged wrong." Id. If such a forum exists, the Court considers whether adjudication in the other forum would best serve the convenience of the parties and the interests of justice. See id. In the context of a forum selection clause the doctrine is modified in that "a district court may consider arguments about public-interest factors only." See Atl. Marine, 134 S.Ct. at 582. Relevant public interest factors include:

the administrative difficulties stemming from court congestion; the local interest in having localized disputes decided at home; the interest in having the trial of a diversity case in a forum that is at home with the law that must govern the action; the avoidance of unnecessary problems in conflicts of laws or in the application of foreign law; and the unfairness of burdening citizens in an unrelated forum with jury duty.

Clerides v. Boeing Co., 534 F.3d 623, 628 (7th Cir. 2008). It is the defendant's burden to show that those factors "overwhelmingly disfavor" enforcement of the forum selection clause. See Atl. Marine, 134 S.Ct. at 581. An agreed upon forum selection clause "should be given controlling weight in all but the most exceptional cases." Id. at 583.

The application of the forum non conveniens doctrine, however, "presupposes the existence of a contractually valid forum selection clause." Atl Marine, 134 S.Ct. at 581 n.5. Under Illinois law, [4] forum selection clauses are valid unless the resisting party shows that litigation of the dispute in the selected venue would be unreasonable. See GPS USA, Inc. v. Performance Powdercoating, 26 N.E.3d 574, 583-84 (Ill.App.Ct. 2015). "The burden of proving the unreasonableness of a selected forum... falls on the party opposing enforcement of the forum selection clause." Brandt v. MillerCoors, LLC, 993 N.E.2d 116, 121 (Ill.App.Ct. 2013). To determine the reasonableness of a forum selection clause, courts should consider six factors: (1) the law governing the formation of the contract; (2) the residency of the parties to the contract; (3) the place of execution and/or performance of the contract; (4) the location of the parties and witnesses participating in the litigation; (5) the inconvenience to the parties of any particular location; and (6) whether the clause was equally bargained for. See GPS USA, 26 N.E.3d at 584. Because the defendant has the burden of showing that the choice of forum is unreasonable, "any factor that is even neutral on the forum question essentially weighs in favor of the forum choice." Id. Additionally, "Illinois law concerning the validity of forum selection clauses is materially the same as federal law." IFC Credit Corp. v. Aliano Bros. Gen Contractors, 437 F.3d 606, 611 (7th Cir. 2006).

DISCUSSION

A. The Forum Selection Clause is Valid ...


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