Shetterly v. Bienstock
- Katherine Failla
- 1:24-cv-04155
- U.S. District Court · Southern District of New York
- 5
In Shetterly v. Bienstock, Judge Failla transferred the action to Delaware because DocGo’s forum-selection clause favored that venue.
Ryne Shetterly, the named defendants, DocGo Inc. as the nominal defendant, and the courts handling the action. The case was transferred from the Southern District of New York to the District of Delaware.
What happened
In Shetterly v. Bienstock, Ryne Shetterly asked the Southern District of New York to transfer his stockholder derivative action to the District of Delaware. He relied on several connections to New York, while DocGo’s incorporation document required certain internal corporate claims to be brought in Delaware. Although the motion cited the wrong transfer statute, the court considered it under the statute used to enforce forum-selection clauses.
The court said the clause required Delaware to receive controlling weight unless public-interest factors strongly opposed enforcement. Neither side argued that enforcement would be unreasonable or unjust, and the court found no exceptional reason to keep the case in New York merely because a related case was pending there. It also found that a Delaware federal court could handle the claims.
Judge Katherine Polk Failla granted the motion and directed the Clerk to transfer the action to the United States District Court for the District of Delaware. The Clerk was also directed to terminate pending motions, adjourn remaining dates, and close the Southern District of New York case.
The detailed version
- Shetterly v. Bienstock · No. 1:24-cv-04155
- Katherine Failla
- Aug. 29, 2024
Background
Ryne Shetterly moved under 28 U.S.C. § 1406(a) to transfer this action from the Southern District of New York to the United States District Court for the District of Delaware. The defendants had not appeared, but Shetterly represented that their counsel had been consulted and that the defendants did not oppose transfer. Shetterly identified New York connections, including DocGo Inc.’s principal place of business, allegations concerning a contract awarded by the City of New York, and a related action pending in the Southern District of New York.
DocGo’s Certificate of Incorporation contained a mandatory forum-selection clause. The clause stated that the exclusive forum for complaints asserting internal corporate claims would be the Delaware Court of Chancery, or, if that court could not or would not exercise jurisdiction, another state court or federal court located in Delaware. Shetterly stated that DocGo’s counsel had represented that DocGo would not waive enforcement of the clause.
Legal standard and analysis
The court explained that 28 U.S.C. §§ 1404(a) and 1406(a) both permit transfer when the receiving federal district is one in which the action could have been brought, but they apply in different circumstances. Section 1406(a) addresses improper venue. Section 1404(a) allows transfer for the convenience of the parties and witnesses and in the interest of justice. Because Shetterly’s motion relied substantially on the forum-selection clause, the court evaluated the motion under § 1404(a), even though the motion cited § 1406(a).
The court stated that a valid forum-selection clause changes the usual § 1404(a) analysis. Parties agreeing to such a clause generally give up the right to argue that the selected forum is inconvenient. The court therefore did not consider private-interest arguments and could consider only public-interest factors. The party opposing the selected forum bears the burden of showing that public-interest factors overwhelmingly disfavor enforcement because enforcement would be unreasonable or unjust.
Here, neither side argued that enforcing the clause would be unreasonable or unjust. Although the defendants had not appeared, the court accepted Shetterly’s counsel’s representation that they did not oppose transfer. The court also found that litigating in Delaware would not inconvenience either party. The related New York litigation did not, by itself, create exceptional circumstances sufficient to overcome the clause’s controlling weight. The court further noted that the complaint was a stockholder derivative action involving claims that a Delaware federal court would be familiar with and equipped to handle.
Disposition
The court granted Shetterly’s motion and directed the Clerk of Court to transfer the action to the United States District Court for the District of Delaware. The Clerk was also directed to terminate all pending motions, adjourn all remaining dates, and close the Southern District of New York case. The order was entered by Judge Katherine Polk Failla.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.