J.G. v. Rustic Pathways, LLC

Background

Rustic Pathways, LLC and Sabot Family Companies moved to dismiss J.G.’s First Amended Complaint for improper venue and failure to state a claim. Alternatively, they sought transfer to the Northern District of Ohio based on a forum-selection clause in an agreement between J.G. and Rustic. The parties agreed that the clause stated that related legal actions “must be filed in state court in Lake County, Ohio,” which would be the sole jurisdiction and venue for legal proceedings.

The defendants argued for dismissal under Federal Rule of Civil Procedure 12(b)(3) and 28 U.S.C. § 1406(a), or transfer under 28 U.S.C. § 1404(a). In their reply, they also argued for enforcement of the clause and transfer to Lake County, Ohio state court. J.G. argued that the clause did not support dismissal under Rule 12(b)(3) and that transfer under § 1404(a) was inappropriate because the clause was invalid.

Court’s analysis

The court stated that the parties’ arguments did not match the governing legal framework. A forum-selection clause does not make the current venue “wrong” or “improper,” so it is not a basis for dismissal under Rule 12(b)(3) or § 1406(a).

The court distinguished between clauses selecting federal and state forums. Section 1404(a) governs transfer to another federal district when the relevant conditions are met, including when a forum-selection clause points to another federal forum. A clause pointing to a state or foreign forum is instead analyzed under the forum non conveniens doctrine. That doctrine is a basis for dismissal so the case may be refiled in the proper forum; it does not authorize transfer.

Because the clause here pointed to Ohio state court, the court stated that it could not enforce the clause by transferring the case to the Northern District of Ohio under the forum-selection-clause analysis. The court also noted that the parties had not presented arguments addressing dismissal under forum non conveniens. It further requested briefing on whether transfer under § 1404(a) might be proper for a reason other than the forum-selection clause.

Order

The court ordered J.G. and the defendants each to file a supplemental brief by April 22, 2024. The briefs were limited to five pages and had to address the application of forum non conveniens and the propriety of transfer to the Northern District of Ohio under § 1404(a) for reasons other than the forum-selection clause.

The court also stayed all other pending deadlines while it considered the defendants’ motion to dismiss. This order requested additional briefing and stayed deadlines; it did not grant or deny the motion to dismiss or transfer.