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East Inlet Partners LLC v. GTT Communications Inc.

United States District Court, D. South Carolina, Charleston Division

February 1, 2018

EAST INLET PARTNERS, LLC and TYLER BEAUREGARD, Plaintiffs,
v.
GTT COMMUNICATIONS, INC., Defendant.

          ORDER

          DAVID C. NORTON, UNITED STATES DISTRICT JUDGE

         The following matter is before the court on defendant GTT Communications Inc.'s (“GTT”) motion to change venue, ECF No. 5. For the reasons set forth below, the court transfers the action to the Southern District of New York pursuant to the forum-selection clause.

         I. BACKGROUND

         Tyler Beauregard is the sole owner and member of East Inlet Partners LLC. Plaintiffs East Inlet Partners LLC and Beauregard (collectively, plaintiffs) entered into a contract titled “Agent Agreement” with Perseus Telecom USA, LLC in November 3, 2016. The Agent Agreement allowed Beauregard to serve as an independent contractor to conduct sales of Perseus products, and created a compensation structure that included the payment of commissions. On June 20, 2017, Perseus was sold to GTT. As a condition of the sale, GTT assumed all “contracts, agreements, and liabilities of Perseus.” Soon after the sale, GTT terminated the Agent Agreement with plaintiffs. Plaintiffs have now brought a breach of contract claim against GTT for the alleged breach of an “Agent Agreement” that was entered into by the parties. Plaintiffs request actual and compensatory damages, costs, and “any further relief” related to this breach of contract action.

         The Agent Agreement includes a section titled “Governing Law/Jurisdiction/Venue” that states:

This Agreement shall be governed, interpreted, and enforced by the laws of the State of New York, without giving effect to conflict of law principles. Each party submits to the exclusive jurisdiction of any state or federal court located in the City of New York over any suit, action or proceeding arising out of or relating to or concerning this Agreement.

ECF No. 5, Ex. 2, Agent Agreement.

         On November 16, 2017, GTT filed a motion to change venue, arguing that the Agent Agreement has a forum-selection clause and so this court should transfer the case to the Southern District of New York. ECF No. 5. Plaintiffs filed a response on November 30, 2017, ECF No. 7, and GTT replied on December 7, 2017, ECF No. 9. The motion has been fully briefed and is now ripe for the court's review.

         II. STANDARD

         “Federal law governs a district court's decision to enforce or not enforce a forum selection clause.” Scott v. Guardsmark Sec., 874 F.Supp. 117, 120 (D.S.C. 1995) (citing Stewart Org. v. Ricoh Corp., 487 U.S. 22 (1988)). “Under federal law, a forum selection clause is prima facie valid and enforceable when it is the result of an arm's length transaction by sophisticated business entities absent some compelling and countervailing reason.” SeaCast of Carolinas, Inc. v. Premise Networks, Inc., 2009 WL 5214314, at *2 (D.S.C. Dec. 28, 2009) (citing Atlantic Floor Servs., Inc. v. Wal-Mart Stores, Inc., 334 F.Supp.2d 875, 877 (D.S.C. 2004)). When the parties have agreed to a valid forum-selection clause, a district court should ordinarily transfer the case to the forum specified in that clause. Only under extraordinary circumstances unrelated to the convenience of the parties should a § 1404(a) motion be denied.” Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Tex., 134 S.Ct. 568, 581 (2013).

         A court should enforce a forum-selection clause unless the party opposing enforcement establishes that enforcement is “unreasonable” under the circumstances. SeaCast, 2009 WL 5214314 at *2 (citing Atlantic Floor, 334 F.Supp.2d at 877). Forum-selection clauses may be considered unreasonable if: (1) their formation was induced by fraud or overreaching; (2) the complaining party will essentially be deprived of his day in court because of the grave inconvenience or unfairness of the selected forum; (3) the fundamental unfairness of the chosen law may deprive the plaintiff of a remedy; or (4) their enforcement would contravene a strong public policy of the forum state. Id. (citing Atlantic Floor, 334 F.Supp.2d at 877).

         III. DISCUSSION

         The Agent Agreement includes a section titled “Governing Law/Jurisdiction/Venue” that states:

This Agreement shall be governed, interpreted, and enforced by the laws of the State of New York, without giving effect to conflict of law principles. Each party submits to the exclusive jurisdiction of any state or federal court located in the City of New York over any suit, action or ...

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