Friday & Cox, LLC v. FindLaw

Background

Friday & Cox, LLC sued FindLaw, Reuters Holdings, Inc., and West Publishing Corporation in connection with contracts for services including advertising, website redesign, and search-engine optimization. The complaint asserted two breach-of-contract counts, fraud, a claim under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, and breach of warranty. The defendants removed the case from Pennsylvania state court to the U.S. District Court for the Western District of Pennsylvania.

The defendants then moved to dismiss under Federal Rule of Civil Procedure 12(b)(3) and 12(b)(6), or alternatively to transfer the case under 28 U.S.C. §§ 1404(a) and 1406(a). Their motion relied on forum-selection clauses in FindLaw Master Services Agreements incorporated into order forms signed by Friday & Cox in 2011, 2013, and 2017. Those clauses provided that Minnesota state and federal courts would have exclusive jurisdiction over claims arising from the agreements.

Forum-selection clause

The court applied federal law to determine whether the forum-selection clauses were enforceable. Such clauses are presumed valid unless the party opposing enforcement shows that the clause resulted from fraud, undue influence, or excessive bargaining power; violates the public policy of the forum; or would make litigation so difficult and inconvenient that the party would effectively lose its opportunity to be heard.

The court concluded that Friday & Cox had not made that showing. Its fraud allegations concerned representations about the defendants’ services, not fraud in obtaining the forum-selection clauses. Friday & Cox did not argue or provide evidence that it had not freely agreed to the clauses or that enforcement would violate Pennsylvania or Minnesota public policy. It also expressly stated that it was not challenging Minnesota as an inconvenient forum.

The court further held that the alleged material breach of the contracts did not invalidate the forum-selection clauses. It treated the forum-selection provisions as separate agreements whose validity did not depend on whether the broader contracts had been breached. The court therefore found the clauses valid.

Transfer analysis

Under 28 U.S.C. § 1404(a), a court may transfer a civil case for the convenience of the parties and witnesses and in the interest of justice. When a valid forum-selection clause applies, the court gives no weight to the plaintiff’s preferred forum, treats private convenience factors as favoring the selected forum, and focuses on public-interest factors.

The court found that most public-interest factors were neutral. A Minnesota judgment could be enforced in Pennsylvania; the court found no important practical difference between the forums; both Pennsylvania and Minnesota had an interest in the dispute; and the court found no significant difference in the forums’ public policies. Court congestion weighed slightly against transfer, while the familiarity of Minnesota federal judges with Minnesota law weighed slightly in favor of transfer.

The court concluded that the public-interest factors did not overcome the parties’ agreement to litigate in Minnesota. It granted the defendants’ motion to transfer and ordered the case transferred to the District of Minnesota. Because the case was transferred under § 1404(a), the court did not decide whether dismissal under Rule 12(b)(6) was also available. The clerk was directed to mark the Pennsylvania case closed.