Thursday, July 25, 2019

Interesting Ninth Circuit Decision on the Enforceability of Forum-Selection Clauses After Atlantic Marine

Yesterday the Ninth Circuit issued a unanimous decision in Gemini Technologies, Inc. v. Smith & Wesson Corp., which discusses the relationship between the Supreme Court’s 2013 decision in Atlantic Marine, state law on forum-selection clauses, and the Supreme Court’s 1972 decision in Bremen.

Judge Fletcher’s opinion notes that under Bremen “a contractual forum-selection clause is ‘unenforceable if enforcement would contravene a strong public policy of the forum in which suit is brought,’ ” and that Atlantic Marine “does not support” the conclusion that “Bremen’s public policy factor is no longer good law.” “Unsurprisingly then, our sister circuits have consistently held that Bremen continues to provide the law for determining the validity and enforceability of a forum-selection clause.” [Op. at 7]

The panel then rules that Idaho law “clearly states a strong public policy” against enforcement of the forum-selection clause. [Op. at 10] And it clarifies that “satisfaction of Bremen’s public policy factor continues to suffice to render a forum-selection clause unenforceable.” [Op. at 11] Judge Fletcher writes:

Bremen held that “[a] contractual choice-of-forum clause should be held unenforceable if enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision.” 407 U.S. at 15 (emphasis added). We have found nothing in Atlantic Marine that compels a different rule.

It concludes: “We hold that the forum-selection clause at issue here contravenes the strong public policy announced by Idaho Code § 29-110(1) and is therefore unenforceable.” [Op. at 12] 

Download Gemini (9th) 18-35510

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