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Navman Wireless North America, Ltd. v. Texas Oilfield Services, LLC

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

March 30, 2017

NAVMAN WIRELESS NORTH AMERICA, LTD. Plaintiff,
v.
TEXAS OILFIELD SERVICES, LLC Defendant.

          MEMORANDUM OPINION

          Samuel Der-Yeghiayan United States District Court Judge.

         This matter comes before the court on Defendant TFS Oilfield Services' (TFS) motion to transfer and motion to dismiss for improper venue. For the following reasons, the motion to transfer is denied and the motion to dismiss for improper venue is denied.

         BACKGROUND

         On October 13, 2015, Plaintiff Navman Wireless North America Ltd. (Navman) and TFS allegedly entered into an Agreement for Navman to install vehicle tracking units (VTU) to TFS' trucking fleet. In exchange, TFS would allegedly receive subscription services from Navman. Navman alleges that TFS failed to compensate Navman for providing these services and installing the VTU equipment. Navman filed a complaint in state court alleging a claim for a breach of contract against TFS. TFS then removed the cause of action to federal court. TFS now moves to dismiss the cause of action for improper venue under Federal Rule of Civil Procedure 12(b)(3)(Rule 12(b)(3)) or transfer the action under 28 U.S.C. § 1404.

         LEGAL STANDARD

         A defendant may move to dismiss the complaint pursuant to the Federal Rule of Civil Procedure 12(b)(3)(Rule 12(b)(3)) for improper venue. In ruling on a motion to dismiss under Rule 12(b)(3), "all conflicts in the affidavits and depositions submitted by the parties must be resolved in favor of the plaintiff." Deluxe Ice Cream Co. v. R.C.H. Tool Corp., 726 F.2d 1209, 1215 (7th Cir.1984). A district court may transfer an action to another district where the action might have been brought pursuant to 28 U.S.C. § 1404(a) (Section 1404(a)) "[f]or the convenience of parties and witnesses, " and if it is "in the interest of justice . . . ." 28 U.S.C. § 1404(a). In order to transfer a case, the transferor court must first find that: (1) venue is proper in the transferor district, see Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 (7th Cir. 1986) (stating that a court "in which a suit is filed with proper venue" may transfer an action pursuant to § 1404(a)), and (2) venue is proper in the transferee district. See 28 U.S.C. § 1404(a)(stating that transfer can only be made to a district in which the action "might have been brought").

         DISCUSSION

         I. Motion to Dismiss

         TFS argues that the court should dismiss the cause of action for improper venue because the forum selection clause in the Agreement is invalid and unenforceable. In "contracts containing a choice of law clause, the law designated in the choice of law clause is used to determine the validity of the forum selection clause." Jackson v. Payday Fin., LLC 764 F.3d 765 (7th Cir. 2014). The parties agree that the contract contains a choice of law provision stating that Illinois law governs the agreement. Under Illinois law, "[a] forum selection clause in a contract is prima facie valid and should be enforced unless the opposing party shows that enforcement would be unreasonable under the circumstances." IFC Credit Corp. v. Rieker Shoe Corp., 881 N.E.2d 382, 389 (Ill.App.Ct. 2007). This is only true for "agreements] reached through arm's-length negotiation between experienced and sophisticated business people." Jackson v. Payday Financial LLC 764 F.3d 765, 777 (7th Cir. 2014). A forum selection clause included in "boilerplate language indicates unequal bargaining power, and the significance of the provision is greatly reduced." Id. To determine reasonableness, Illinois courts typically have looked to six factors: "(1) the law that governs the formation and construction of the contract; (2) the residency of the parties; (3) the place of execution and/or performance of the contract; (4) the location of the parties and their witnesses; (5) the inconvenience to the parties of any particular location; and (6) whether the clause was equally bargained for." Id. The court must consider these factors in determining whether the forum selection clause is reasonable. Id.

         A. Law That Governs the Formation and Construction of the Contract.

         Both parties agree that Illinois law governs the formation and construction of the contract. Therefore, this factor weighs in favor of finding the forum selection clause enforceable.

         B. Residency of the Parties.

         TFS contends that its residency is in Houston, Texas and argues that such fact weighs in favor of transferring the action to the Southern District of Texas. TFS contends that it is headquartered in Texas and alleges that essentially its entire operations take place in Texas. Navman contends that it is a Delaware corporation, with its principal place of business in Illinois. Based on the above facts, a transfer to the Southern District of Texas would simply shift the alleged inconvenience from TFS to Navman. Accordingly, this factor weighs in favor of finding the forum selection clause enforceable.

         C.Place of Execution and Performance of ...


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