Recent Developments in Enforcement of Forum Selection Clauses

In the recent case of Financial Planning Alternatives, Inc. v. De Lage Landen Financial Services, Inc., 2012 WL 2588553 (Mass. App. June 28, 2012), the court affirmed a trial court's dismissal of a lessee's tort and consumer protection claims on the grounds that the lawsuit was brought in the wrong jurisdiction. The court observed that Massachusetts courts generally enforce forum selection clauses, even when included in so-called “contracts of adhesion.” Accordingly, plaintiff was bound by the contract's selection of a Pennsylvania forum.

Such holding was itself unremarkable. For 40 years following the Supreme Court's seminal decision in M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972), courts have repeatedly held that forum selection clauses are valid and enforceable. The more newsworthy aspect of the Financial Planning Alternatives decision was tucked away in a footnote, in which the court commented: “While recognizing and applying the established law that compels the decision in this matter, we are not unmindful of the inequities potentially created by De Lage's use of a boilerplate forum selection clause.” Id. at *2, n. 4. That footnote further alluded to a consent decree entered in a decade-old dispute between Leasecomm Corporation and various federal and state government authorities, in which a lessor agreed to abandon its standard forum selection clause and to institute collection suits where the consumer resided or did business.