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Pinkus v. Sirius XM Radio Inc.

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

May 23, 2017

BINYAMIN PINKUS, Plaintiff,
v.
SIRIUS XM RADIO INC., Defendant/Third-Party Plaintiff,
v.
DIALAMERICA MARKETING, INC., JNET COMMUNICATIONS LLC d/b/a SERVICOM LLC, THE RESULTS COMPANIES LLC, CAREER HORIZONS, INC. d/b/a TELESERVICES DIRECT, IPACESETTERS, LLC, and CONVERGYS CORPORATION f/k/a STREAM INTERNATIONAL, INC., Third-Party Defendants.

          MEMORANDUM OPINION AND ORDER

          Gary Feinerman, Judge

         Binyamin Pinkus sued Sirius XM Radio, Inc. (“SiriusXM”), alleging violations of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. Doc. 1. SiriusXM answered and brought third-party indemnification claims against several companies that made telemarketing calls for it. Doc. 11. One of the third-party defendants, DialAmerica Marketing, Inc., has moved to dismiss the third-party claims against it on jurisdictional grounds and, in the alternative, for forum non conveniens. Doc. 59. The motion is granted.

         Background

         Because DialAmerica has moved to dismiss on jurisdictional grounds and for forum non conveniens rather than on the merits, the relevant background includes not only the third-party complaint, but also the evidentiary materials submitted by both sides. Because no party has requested an evidentiary hearing, the court must accept SiriusXM's undisputed factual averments and must resolve all genuine factual disputes in its favor. See uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 423-24 (7th Cir. 2010); Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 783 (7th Cir. 2003); Diamond Mortg. Corp. of Ill. v. Sugar, 913 F.2d 1233, 1245 (7th Cir. 1990); Saylor v. Dyniewski, 836 F.2d 341, 342 (7th Cir. 1988).

         In November 2016, Pinkus brought this suit against SiriusXM, alleging that it violated the TCPA-in particular, 47 U.S.C. § 227(b)(1)(A)(iii)-when it attempted to solicit him by calling his cell phone using an automated telephone dialing system (“ATDS”) and prerecorded messages. Doc. 1 at ¶¶ 10, 19. As permitted by Federal Rule of Civil Procedure 14(a)(1), SiriusXM filed a third-party complaint against six vendors with whom it had contracted to make sales calls. Doc. 11.

         Relevant here, SiriusXM alleges that DialAmerica breached its contractual duties to SiriusXM by failing to “indemnify and hold SiriusXM harmless” against Pinkus's claims. Doc. 11 at ¶ 105. SiriusXM's Master Services Agreement (“MSA”) with DialAmerica required DialAmerica to “comply with all applicable Federal, state and local laws and regulations in connection with the performance of its obligations under this Agreement.” Id. at ¶ 30. The MSA's indemnification clause required DialAmerica to:

indemnify, defend and hold SiriusXM harmless from and against all claims, suits, actions, damages, settlements, liabilities, losses, expenses and costs arising out of, in connection with or based upon … any breach of this Agreement, including breach of any obligation, duty, representation or warranty made herein, or … the willful misconduct or negligence of DialAmerica.

Id. at ¶ 37 (brackets omitted). The MSA's choice of law and forum selection clause stated: “This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its choice of law rules. Each Party hereby submits to the exclusive jurisdiction of courts located in the State of New York.” Doc. 60-1 at ¶ 13.3.

         Discussion

         DialAmerica argues that the MSA's forum selection clause, which identifies New York as the exclusive forum for disputes arising under the MSA, mandates dismissal of SiriusXM's third-party claims against it on forum non conveniens grounds. Doc. 60 at 11-15. DialAmerica also contends that SiriusXM's third-party claims are unripe and, alternatively, that the court should relinquish jurisdiction over them under 28 U.S.C. § 1367(c). Id. at 15-21. Although questions of subject matter jurisdiction generally must be resolved prior to other issues, the Supreme Court has carved a narrow exception, holding that “a federal court has leeway to choose among threshold grounds for denying audience to a case on the merits.” Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 431 (2007) (internal quotation marks omitted). Among those threshold grounds is forum non conveniens. See id. at 431-32; In re LimitNone, LLC, 551 F.3d 572, 576 (7th Cir. 2008). The court exercises its discretion to begin with forum non conveniens.

         If a valid forum selection clause governs a dispute, it should be “given controlling weight in all but the most exceptional cases, ” and “the party defying the forum-selection clause … bears the burden of establishing that [dismissal] is unwarranted.” Atl. Marine Const. Co. v. U.S. Dist. Ct. for the W. Dist. of Tex., 134 S.Ct. 568, 581 (2013) (first brackets in original, second brackets added). SiriusXM does not dispute that the MSA's forum selection clause is valid as a general matter, nor does it dispute that if it had sued DialAmerica as a first-party plaintiff, the clause would govern. SiriusXM argues instead that because Pinkus, not it, chose this forum, Rule 14(a)-which permits a defendant to file a complaint as a third-party plaintiff against a non- party, which then becomes a third-party defendant-overrides the forum selection clause and permits its third-party claims against DialAmerica to proceed in this District as part of this case. Doc. 76 at 10-17.

         In support, SiriusXM cites cases for the proposition that third-party defendants generally have no right to object to venue. Doc. 76 at 10-13. Those cases are inapposite; DialAmerica does not assert that venue is improper under 28 U.S.C. § 1391, but rather that it and SiriusXM have specifically agreed to a different forum for MSA-related disputes between them. Doc. 78 at 9. So the court must decide whether DialAmerica may invoke the MSA's forum selection clause where, as here, SiriusXM did not choose this forum but instead was brought here by Pinkus.

         In urging the court to answer that question in the negative, SiriusXM relies primarily on American Licorice Co. v. Total Sweeteners, Inc., 2014 WL 892409 (N.D. Cal. Mar. 4, 2014), which held that “Rule 14 overrides venue considerations.” Id. at *6. In so holding, American Licorice acknowledged that “[t]he parties d[id] not cite, nor could the Court find, legal authority that decides the priority between a forum selection clause and a Rule 14 impleader claim.” Ibid. Absent such authority, the court reasoned that the policy of judicial efficiency underlying Rule 14(a) would be undermined if a forum selection clause could override it. Ibid.

         DialAmerica cites several decisions that reach the opposite result and enforce forum selection clauses invoked by third-party defendants against third-party plaintiffs. See, e.g., Global Quality Foods, Inc. v. Van Hoekelen Greenhouses, Inc., 2016 WL 4259126, *5 (N.D. Cal. Aug. 12, 2016) (expressly rejecting American Licorice); Robrizine v Big Lots Stores, Inc., 2016 WL 3459733 (N.D. Ill. June 24, 2016). The court agrees with those decisions. Although judicial efficiency is important, the Supreme Court has instructed that forum selection clauses should be enforced “in all but the most exceptional cases.” Atl. Marine Const. Co., 134 S.Ct. at 581. And because “[c]onsiderations of judicial economy alone do not permit [courts] to ignore a presumptively valid forum selection clause, ” Global Quality Foods, Inc. 2016 WL 4259126 at *5 (internal quotation marks ...


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