A Victory for Forum-Selection Clauses

A recent United States Supreme Court decision, Atlantic Marine Construction, Inc. v. United States District Court for the Western District of Texas, et al, 134 S. Ct. 568, overturns both the United States District Court for the District of Western Texas and the U.S. Court of Appeals for the Fifth Circuit. After rejecting the legal analysis applied in both the lower court and the appeals court, the Supreme Court concluded that where two parties enter into a contract which contains a forum-selection clause and one party attempts to file an action in a jurisdiction not covered by the forum-selection clause: 1) the party defying the clause has the burden of proving that the forum bargained for is inappropriate; 2) when analyzing whether the venue is proper, there is no consideration to be given to the parties' private interests; and 3) although it is typical to apply the state law of the original court to the transferee court when a transfer of venue occurs, this exception to the choice of law rule shall not apply when dealing with a valid forum-selection clause.