Another Choice of Forum, Another Choice of Law: Consensual Adjudicatory Procedure in Federal Court
Another Choice of Forum, Another Choice of Law: Consensual Adjudicator y Procedure in Federal Court
Linda S. Mullenix
Recommended Citation Linda S. Mullenix, Another Choice of Forum, Another Choice of Law: Consensual Adjudicatory Procedure in Federal Court, 57 Fordham L. Rev. 291 (1988). Available at: http://ir.lawnet.fordham.edu/flr/vol57/iss3/1
* Associate Professor of Law, Catholic University of America Law School. B.A.
1971, City College of New York; M. Phil. 1974, Ph.D. 1977, Columbia University; J.D.
1980, Georgetown University Law Center. This Article was written with support from a
summer research grant provided by the Catholic University of America Law School.
Every citizen is entitled to resort to all the courtsof the country, and to
invoke the protection which all the laws or all those courts may afford
him. A man may not barteraway his life or hisfreedom, or his
OTHING is quite as pleasing as a legal doctrine that makes good,
common sense. In a complex litigation system, the idea that people
should be able to agree to where they will sue each other is one such
satisfying proposition. Indeed, so enticing is the notion that people ought
to be able to agree to the terms of any litigation, that federal courts have
eagerly embraced the idea.2
The ability of prospective litigants to choose in advance both the court
that will hear the case and the law that will govern the dispute now
enjoys widespread approval in federal courts.' This was not always so.
Indeed, the current doctrine of consensual adjudicatory procedure
represents a wholesale abandonment of a 100-year taboo against party
autonomy in procedural matters.4 The federal courts have been
unusually quick to cast aside well-established jurisdictional tenets, as well as
the arcane niceties of conflicts principles, and to import contract
principles into the jurisdictional arena.
The doctrine of consensual adjudicatory procedure is now well
entrenched in federal practice and is widely heralded as a form of salutary
progressivism.5 The doctrine is lauded for enhancing the values of
predictability, certainty, security, stability and simplicity.6 With court
approval, party autonomy regarding crucial procedural determinations
flourishes in an increasingly wider range of commercial and
non-commercial settings.7 Some courts verge on the self-congratulatory when
confronted with a forum-selection clause:8 not only is the court able to
carry out the wishes of the parties, but the court also effectively demurs
active participation in a breach of contract. 9 Another benefit, not
incidental, is that the enforcing court successfully accomplishes its own goal
of docket-clearing. The sum of litigation is neither reduced nor
simplified; it is simply shifted someplace else.
Precisely because the doctrine is so basically appealing and universally
accepted, it is anathema to suggest that the doctrine of consensual
procedure is problematic. And yet, as is true of many simple ideas, the
simplicity masks or ignores complex issues. This deceptive little doctrine
has taken root and continues to flourish without much thoughtful
discussion or close analytical scrutiny. The central problem, however, is not
one of inadequate doctrinal development-although this is a serious
deficiency. The central problem is that substantial litigation rights are
sacrificed to enhance purely prudential considerations. Contract principles
now effectively usurp long-standing jurisdictional and conflict-of-laws
rules, but courts and commentators have devoted scant attention to the
deleterious effects of this quiet revolution.
Issues of ConsensualAdjudicatory Procedure
Consensual adjudicatory procedure denotes the ability of potential or
prospective litigants to choose, in advance of any litigation, the court that
will hear the dispute and the law that will govern the substantive merits
of the litigation.10 It is essentially a doctrine of procedural choices by
consent of the parties. These choices and this consent are typically
manifested in "forum-selection clauses" and "choice-of-law clauses"
contained in an agreement between the parties.11 Although these
agreements affect basic procedural rights, their interpretation is
nonetheless irretrievably based in contract law.
The thesis of this Article is that the supremacy of contract law over
long-established jurisdictional doctrines has significantly eroded certain
9. See MitsubishiMotors Corp., 473 U.S. at 628 ("[h]aving made the bargain to
arbitrate, the party should be held to it"); Luce, 802 F.2d at 57 ("what would be
unreasonable and unjust would be to allow one of the [parties] to disregard [the agreement]"
(quoting AVC Nederland B.V. v. Atrium Inv. Partnership, 740 F.2d 148, 156 (2d Cir.
1984)); see also Gilbert, supra note 4, at 20-21.
10. See J. Friedenthal, M. Kane & A. Miller, Civil Procedure § 3.5, at 104 (1985).
11. This Article is limited to a discussion of consensual designation of the litigation
forum and governing law. A more comprehensive view of consensual adjudicatory
procedure would entail examination of consent and waiver of various litigation rights
throughout the adjudicatory process. Thus, it is possible to effect consensual waiver of defenses,
objections or causes of action and waiver of the right to an adjudication, through
cognovit clauses, arbitration agreements, consent judgments and settlements. In civil law,
"[v]irtually any adjudication-related right can be waived." Rubin, supra note 6, at 521.
This Article focuses specifically on forum access and governing law because of the due
process concerns implicated in these aspects of adjudicatory procedure. The general
critique developed from these two fundamental litigation elements is equally applicable to
analogous waivable rights. For a comprehensive survey of Waiver possibilities in civil
litigation, see id. at 512-28.
fundamental litigation rights. This is particularly egregious insofar as
various mechanisms for securing consensual adjudicatory procedure are
becoming pervasive throughout a wide array of party relationships."2
Not only has the overlay of contract law confounded jurisdictional
principles, but the doctrine of consensual adjudicatory procedure is
predicated on an analytical confusion of the concepts of jurisdiction, venue,
forum non conveniens and choice-of-law.
The pervasive authority of contract principles in the procedural arena
also has obfuscated a wide variety of troubling issues with regard to these
forum and choice-of-law clauses. For example, it is unclear whether
forum-selection clauses are matters of jurisdiction or venue, and whether
this conceptual distinction makes an analytical difference for courts
construing the validity of such clauses.13 For instance, should such clauses
be construed according to procedural rules or contract principles?14
Assuming that such clauses are valid, there is confusion over the
appropriate remedy for the party seeking enforcement of the clause; choices
include dismissal, stay of jurisdiction, transfer or remand.' 5 And a final
cause for confusion is the relationship of the doctrine of forum non
conveniens to forum-selection clauses. 16
12. See supra note 7 and accompanying text.
13. Thus, one commentator has suggested:
This conceptual difference [between jurisdiction and venue] has not influenced
the analysis ofjurisdiction clauses, and the federal courts deal with the
enforceability of forum-selection clauses in the same manner whether the choice is
between two federal district courts or between a federal court and a foreign court.
Characterization of the issue as one of "venue," however, probably has
influenced the decision of some courts to apply federal rather than state law to the
question whether forum-selection clauses are enforceable.
Gruson, Forum Selection Clauses, supra note 3, at 157-58 (footnotes omitted); see also
Farquharson, supranote 4, at 95-99 (forum non conveniens and jurisdiction approaches);
Gilbert, supra note 4, at 10-11 (distinction between jurisdictional and forum non
conveniens analysis); id. at 42 (effects of venue on forum-selection clauses); Gruson, Forum
Selection Clauses, supra note 3, at 140 (forum-selection clause cannot oust a court of
jurisdiction); id. at 142-43 (forum-selection clause reasonableness determined by factors
similar or identical to forum non conveniens determinants); Reese, supra note 5, at 534
(ouster of jurisdiction concept rejected). For a discussion of the case law construction of
the characterization problem, see infra Part II A.
14. See Stewart Org., Inc. v. Ricoh Corp., 108 S. Ct. 2239 (1988) (forum-selection
clauses governed by matters of federal venue procedure on transfer motion under 28
U.S.C. § 1404(a) (1982)); The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972)
(forumselection clause validity determined by traditional contractual principles). See generally
Gilbert, supranote 4 passim (same); Rubin, supra note 6 passim (contract law
interpretation of civil waivers and due process implications). For a discussion of the effects of
contractual interpretation of forum-selection clauses, see infra Part VI.
15. See Gruson, Forum Selection Clauses,supra note 3, at 137. For a discussion of
the case law involving these various possible remedies, see infra Part II B.
16. See supra note 13 and accompanying text. The common law doctrine of forum
non conveniens has to a large extent been superseded by federal transfer provisions. See
28 U.S.C. §§ 1404, 1406 (1982 & Supp. 1988). Nonetheless, forum non conveniens
analysis predicated on the Supreme Court's articulation of the doctrine in Gulf Oil Corp. v.
Gilbert, 330 U.S. 501 (1947), still enjoys continued vitality in federal court decisions,
including numerous forum-selection clause cases. See 15 C. Wright & A. Miller, Federal
Contractual drafting methods also present a problem. At the broadest
theoretical level, is there a significant difference between prorogation and
derogation clauses 17 and between mandatory and permissive clauses?18
Practice and Procedure § 3828, at 278 (2d ed. 1986). For a discussion of forum-selection
clause cases implicating forum non conveniens analysis, see infra Part II B.
17. Under a derogation clause, the parties have chosen not to allow action in a
jurisdiction, while under a prorogation clause the parties grant or accept a given jurisdiction.
See Aballi, ComparativeDevelopments in the Law of Choice ofForum, 1 N.Y.U. J. Int'l L.
& Pol. 178, 179 (1968); Farquharson, supra note 4, at 86; Gilbert, supra note 4, at 5-6;
Gruson, Forum-Selection Clauses,supra note 3, at 136 & n.7; Lenhoff, The Parties'Choice
of Forum: "'ProrogationAgreements," 15 Rutgers L. Rev. 414, 415-19 (1961); Perillo,
Selected Forum Agreements in Western Europe, 13 Am. J. Comp. L. 162, 162 (1964)
(presented at Proceedings of the 1964 Annual Meeting of the American Foreign Law
Association); Schwind, Derogation Clausesin Latin American Law, 13 Am. J. Comp. L.
157, 167 (1964)
(presented at Proceedings of the 1964 Annual Meeting of the American
Foreign Law Association)
. For a discussion of the prorogation and derogation
framework for construing federal forum-selection clauses, see infra Part III C.
18. Forum-selection and governing law clauses are usually construed according to
traditional contract principles of language construction. See Louisiana Ice Cream
Distrib., Inc. v. Carvel Corp., 821 F.2d 1031, 1033 (5th Cir. 1987) (ambiguous
forum-selection clause); Patten Sec. Corp. v. Diamond Greyhound & Genetics, Inc., 819 F.2d 400,
407 (3d Cir. 1987) (ambiguous combined forum and choice-of-law clause); Hunt Wesson
Foods, Inc. v. Supreme Oil Co., 817 F.2d 75, 77-78 (9th Cir. 1987) (permissive, not
mandatory provision); Jackam v. Hospital Corp. of Am. Mideast Ltd., 800 F.2d 1577,
1581-82 (11th Cir. 1986) (same); Citro Florida, Inc. v. Citrovale, S.A., 760 F.2d 1231,
1232 (11th Cir. 1985) (per curiam) (Brazilian forum-selection clause deemed ambiguous);
Proyeefin de Venezuela, S.A. v. Banco Indus. de Venezuela, 760 F.2d 390, 395-96 (2d
Cir. 1985) (two conflicting forum selection provisions); McDonnell Douglas Corp. v.
Islamic Republic of Iran, 758 F.2d 341, 346-47 (8th Cir.) (distinguishing mandatory
language and construing "should" as ambiguous), cert. denied, 474 U.S. 94
Lessors, Inc. v. Pacific Sewer Maintenance Corp., 739 F.2d 4, 7-8 (1st Cir. 1984)
(ambiguous clause); Yam Indus. Inc. v. Krupp Int'l, Inc., 736 F.2d 125, 129 (4th Cir. 1984)
(two documents with ambiguous and inconsistent provisions); Rockwell Int'l Sys. v.
Citibank, N.A., 719 F.2d 583, 587
(2d Cir. 1983)
(mandatory forum-selection clause);
Zapata Marine Serv. v. O/Y Finnlines, Ltd., 571 F.2d 208, 209 (5th Cir. 1978) (per
curiam) (contract principles utilized to construe ambiguous clause against drafter); Furry
v. First Nat'l Monetary Corp., 602 F. Supp. 6, 8-9 (W.D. Okla. 1984) (permissive versus
mandatory language); Intermountain Sys. v. Edsall Constr. Co., 575 F. Supp. 1195, 1198
(D. Colo. 1983)
(mem.) (mandatory, not permissive clause); Richardson Greenshields
Secs., Inc. v. Metz, 566 F. Supp. 131, 133
(clause held not ambiguous);
Gordonsville Indus., Inc. v. American Artos Corp., 549 F. Supp. 200, 206 (W.D. Va.
1982) (same); City of New York v. Pullman Inc., 477 F. Supp. 438, 443 (S.D.N.Y. 1979)
(contract principles used to construe ambiguous clause against drafter); Randolph Eng'g
Co. v. Fredenhagen Kommandit-Gesellschaft, 476 F. Supp. 1355, 1359-60 (W.D. Pa.
1979) (mem.) (ambiguous forum-selection clause not enforced); International Ass'n of
Bridge Workers Local 348 v. Koski Constr. Co., 474 F. Supp. 370, 372 (W.D. Pa. 1979)
(mem.) (forum-selection clause not mandatory); Taylor v. Titan Midwest Constr. Corp.,
474 F. Supp. 145, 1
48 (N.D. Tex. 1979
) (mandatory versus permissive language
problem); First Nat'l City Bank v. Nanz, Inc., 437 F. Supp. 184, 187 (S.D.N.Y. 1975) (mem.)
(ambiguous clause not mandatory); A. C. Miller Concrete Prods. Corp. v. Quikset Vault
Sales Corp., 309 F. Supp. 1094, 1095 (E.D. Pa. 1970) (ambiguous clause upheld); United
States v. Aetna Casualty & Sur. Co., 38 F.R.D. 418, 420 (N.D. Cal. 1965) (ambiguous
clause cannot oust jurisdiction); see also Gruson, Forum-Selection Clauses,supra note 3,
at 134 & n.3. The abundance of litigation surrounding the basic language construction of
forum-selection and choice-of-law provisions should serve as a warning to attorneys
drafting such clauses. Certainly, the amount of litigation concerning fundamental
lanIn addition, are claims not narrowly covered by the contract clause also
subject to the forum and choice-of-law provisions, or must the lawsuit be
Moreover, these clauses raise complex federalism issues. Initially,
there is the fundamental question whether the Supreme Court has
created a new federal common law of consensual adjudicatory procedure,
governed by federal common law contract rules.2" Beyond this basic
point are an array of vexatious Erie2 1 problems. Adding further
compliguage interpretation calls into serious doubt whether these devices actually enhance the
values of certainty, predictability, security, stability, simplicity and cost minimization.
For a discussion of the application of general contract principles to determine clause
validity, see infra Part VI B.
19. See Farmland Indus., Inc. v. Frazier-Parrott Commodities, Inc., 806 F.2d 848
8th Cir. 1986
) (multiple claims additional reason for non-enforcement of forum-selection
clause); Luce v. Edelstein, 802 F.2d 49 (2d Cir. 1986) (clause enforced in multiple claims
lawsuit); Stewart Org., Inc. v. Ricoh Corp., 779 F.2d 643 (multiple claims not grounds
for unenforceability of clause), vacated, 785 F.2d 896 (11th Cir. 1986), rev'd, 810 F.2d
1066 (11th Cir. 1987) (en banc) (per curiam), aff'd, 108 S. Ct. 2239 (1988); AVC
Nederland B.V. v. Atrium Inv. Partnership, 740 F.2d 148 (2d Cir. 1984) (discussion of fraud
claim in relation to clause); Bense v. Interstate Battery Sys. of Am., 683 F.2d 718 (2d Cir.
1982) (antitrust claim construed within intent of contract clause); Crown Beverage Co. v.
Cerveceria Moctezuma, 663 F.2d 886 (9th Cir. 1981) (in multiple claims case involving
antitrust allegations, Sherman Act claims adjudicated but pendent contract claims
dismissed); Copperweld Steel Co. v. Demag-Mannesmann-Bohler, 578 F.2d 953 (3d Cir.
1978) (multiple claims; clause not enforced); Hoffman v. Burroughs Corp., 571 F. Supp.
545 (N.D. Tex. 1982) (combined legal claims; analysis of "related to contract" language);
Hoes of America, Inc. v. Hoes, 493 F. Supp. 1205 (C.D. Ill. 1979) (multiple claims,
multiple remedies; clause enforceable); Kline v. Kawai Am. Corp., 498 F. Supp. 868 (D.
Minn. 1980) (multiple claims; analysis of "arise out of" language); Kolendo v. Jerell,
Inc., 489 F. Supp. 983 (S.D. W. Va. 1980) (mem.) (multiple claims, multiple remedies;
clause not enforced); City of New York v. Pullman, Inc., 477 F. Supp. 438 (S.D.N.Y.
1979) (multiple claims; ambiguous provision enforced); Full-Sight Contact Lens Corp. v.
Soft Lenses, Inc., 466 F. Supp. 71 (S.D.N.Y. 1978) (antitrust and tort claims
encompassed by enforceable contract clause); Cruise v. Castleton, Inc., 449 F. Supp. 564
(S.D.N.Y. 1978) (tort claims encompassed by contract clause).
20. See Juenger, Supreme Court Validationof Forum-Selection Clauses, 19 Wayne L.
Rev. 49, 59-
) (expansive view of The Bremen as applicable to all forum-clause
cases); Maier, The Three FacesofZapata: MaritimeLaw, FederalCommon Law, Federal
CourtsLaw, 6 Vand. J. of Transnat'l L. 387 (1973) (arguing that The Bremen rule may be
limited to maritime and international commercial cases); cf. Reese, supra note 5, at 537
("The Supreme Court's decision in the Zapata case is not of constitutional dimension and
hence does not have binding force in areas governed by state law."). For further
discussion of the federal common law implications of The Bremen, see the discussion infra
Parts I A, VI A-B.
21. Erie R.R. v. Tompkins, 304 U.S. 64 (1938). One question concerns whether
forum-selection clauses are enforceable in federal court when underlying state law
considers them violative of public policy. See Stewart Org., Inc. v. Ricoh Corp., 108 S. Ct. 2239
(1988) (enforcing forum-selection clause even though against state law policy). For an
extensive discussion of Ricoh, see infra Part III; see also Note, supra note 2 (Ricoh case
In addition, are forum-selection clauses substantive or procedural for Erie purposes?
Although the Supreme Court definitively answered that such clauses are procedural when
the issue arises on a 28 U.S.C. § 1404 transfer motion, an extensive Erie debate exists
among the circuits. See Patten Sec. Corp. v. Diamond Greyhound & Genetics, Inc., 819
F.2d 400 (3d Cir. 1987) (forum-clause determined by federal law); Diaz Contracting, Inc.
cation, are choice-of-law clauses substantive for Erie purposes under
Klaxon Co. v. StentorElectric ManufacturingCo., while choice of forum clauses are procedural under Stewart Organization,Inc. v. Ricoh Corp.?22
In contracts with concomitant choice-of-law and forum-selection clauses,
should the choice-of-law provision be interpreted first so as to supply the
rules of construction for the forum-selection clause?23 Furthermore,
what is the relationship of these clauses, and to what extent do they
Federal procedural rules raise other troubling questions. For instance,
the effect of federal enforcement of a choice-of-forum clause with a
consequent transfer is uncertain. Does it make a difference that the transfer
is accomplished under transfer provisions 25 or pursuant to the doctrine
of forum non conveniens?26
Similarly, what happens when a defendant removes the case from state
court to federal court, but the plaintiff requests a remand to enforce a
forum-selection clause?27 Finally, the lower federal courts' construction
of forum and choice-of-law clauses is in disarray, lacking a unified
24. See, e.g., Hoffman v. Burroughs Corp., 571 F. Supp. 545, 550-51 (N.D. Tex. 1982)
(discussion of applicable law under choice-of-law provision); Colonial Leasing Co. v.
Best, 552 F. Supp. 605, 607 (D. Or. 1982) (analysis confused jurisdiction and
conflict-oflaw); Taylor v. Titan Midwest Constr. Corp., 474 F. Supp. 145, 147 nn. 1-2 (N.D. Tex.
1979) (convoluted Erie/conflicts analysis); see also Felix, Diversity Jurisdiction and
Choice of Law: OfStrangersBearingStale ProductsLiability Claims, 25 S.C.L. Rev. 199,
207-13 (1973); Gilbert, supra note 4, at 43-66; Gruson, Governing-Law Clauses, supra
note 3, at 222-25; Reese, supranote 5, at 537; Note, Conflict ofLaws: "PartyAutonomy"
in Contracts, 57 Colum. L. Rev. 553, at 554-55 (1957).
25. See 28 U.S.C. §§ 1404(a), 1406(a) (1982). For a discussion of the implications of
transfer as a possible remedy, see the discussion infra Parts II A-B.
26. See supra notes 13, 16 and accompanying text. For the effect of a venue transfer
on governing law, see 15 C. Wright & A. Miller, supranote 16, § 3846, at 363-68. In a 28
U.S.C. § 1404(a) action, governing law is generally determined by the rule of Van Dusen
v. Barrack, 376 U.S. 612 (1964). Van Dusen requires that the transferee court apply the
law of the transferor court, including its conflict-of-laws rules, "[b]ut if venue was
improper or personal jurisdiction was lacking in the transferor court, the transferee court
will apply the law that would have been applied if the action had been commenced in the
transferee court." 15 C. Wright & A. Miller, supra note 16, § 3846, at 364-66.
Obviously, these rules have interesting implications for forum-selection cases, where the
transferor court frequently makes no personal jurisdiction determination in enforcing the
27. See 28 U.S.C. §§ 1441-1449 (1982 & Supp. 1988), as amended by H.R. Conf. Rep.
No. 4087, 100th Cong., 2d Sess. (1988) (section 1447(d) specifies particular grounds for
remand). For a discussion of forum-selection clauses in the removal-remand situation
and of pertinent cases, see infra Part IV (discussing 28 U.S.C. § 1441).
28. For a discussion of the growing list of post-Bremen enforceability factors, see
infra Part VI. See generally Gilbert, supra note 4, at 32-42 (court should enforce forum
selection clauses if fair and reasonable according to four factors of reasonableness);
Gruson, Forum Selection Clauses,supra note 3, at 163-85 (two-pronged test under which
plaintiff may avoid contractual forum provision).
At the appellate level, the federal courts have applied three different standards with
regard to enforceability of these clauses. The three standards of review are: clearly
erroneous, abuse of discretion and de novo review. See Diaz Contracting, Inc. v. Nanco
Contracting Corp., 817 F.2d 1047, 1055 (3d Cir. 1987) (clearly erroneous); Sun World
Lines, Ltd. v. March Shipping Corp., 801 F.2d 1066, 1068 n.3 (
8th Cir. 1986
) (abuse of
discretion); Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 280
n.4 (9th Cir. 1984) (abuse of discretion); Zimmerman v. Continental Airlines, 712 F.2d
(3d Cir. 1983)
(abuse of discretion), cert. denied, 464 U.S. 1038 (1984); Mercury
Coal & Coke, Inc. v. Mannesmann Pipe & Steel Corp., 696 F.2d 315, 318 (4th Cir. 1982)
(implicit de novo review); Bense v. Interstate Battery Sys. of Am., 683 F.2d 718, 721 (2d
Cir. 1982) (same); In re Fireman's Fund Ins. Co., 588 F.2d 93, 95 (5th Cir. 1979) (de
novo review); Copperweld Steel Co. v. Demag-Mannesmann-Bohler, 578 F.2d 953, 966
As the discussion below demonstrates, the federal courts have not
clearly thought through all the implications of consensual procedure. A
more cautious approach is needed to justify the deleterious consequences
of party autonomy on jurisdiction and choice of law.
Neat Solutions and Untidy Problems
In the rush to embrace a doctrine of consensual adjudicatory
procedure, the federal courts have eagerly chosen the simple, neat solution.
Unfortunately, the problems involved in consensual arrangements are
not so tidy, and the courts have created a hodgepodge of principles and
rationales to justify the doctrine.
Neither the Supreme Court nor the lower federal courts have done an
admirable job of delineating a coherent and justifiable theory of
consensual adjudicatory procedure. Due process requirements that normally
inform jurisdictional analysis have evaporated in favor of expediency.
Courts permit contract principles to replace carefully crafted
jurisdictional rules. Essentially, the courts have evaded troubling questions: can
parties contract away fundamental attributes of sovereignty or due
process protection? If the Supreme Court has been unwilling to permit first
amendment concerns to inform jurisdictional analysis, 9 why should
contract principles effectively trump jurisdictional law? If the Supreme
Court has repeatedly asserted that choice-of-law issues should not guide
jurisdiction or venue analysis,30 why should the choice-of-law tail wag
the jurisdictional dog31 when contract clauses are present?
Additionally, the standards governing consensual adjudicatory
procedure, derived from The Bremen v. Zapata Off-Shore Co.32 and
subsequent federal court cases, obviate realistic inquiry into boilerplate
contractual arrangements. The Bremen and its progeny effectively
supersede conventional standards for jurisdiction, venue, transfer and forum
non conveniens, imposing variegated standards for forum selection not
(3d Cir. 1978) (clearly erroneous); Furbee v. Vantage Press, Inc., 464 F.2d 835, 837 (D.C.
Cir. 1972) (abuse of discretion).
29. See Calder v. Jones, 465 U.S. 783, 790 (1984) ("We also reject the suggestion that
First Amendment concerns enter into the jurisdictional analysis. The infusion of such
considerations would needlessly complicate an already imprecise inquiry."); Keeton v.
Hustler Magazine, Inc., 465 U.S. 770, 780 n.12 (1984) ("[W]e reject categorically the
suggestion that invisible radiations from the First Amendment may defeat jurisdiction
otherwise proper under the Due Process Clause.").
30. See Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 821 (1985) ("The issue of
personal jurisdiction over plaintiffs in a class action is entirely distinct from the question
of the constitutional limitations on choice of law.... ."); Piper Aircraft Co. v. Reyno, 454
U.S. 235, 247 (1981) (possibility of change in substantive law under conflicts rules should
not be given conclusive or substantial weight in forum non conveniens inquiry); Hanson
v. Denckla, 357 U.S. 235, 254 (1958) ("The issue is personal jurisdiction, not choice of
31. Keeton v. Hustler Magazine, Inc., 682 F.2d 33, 36 (1st Cir. 1982) ("[TIhe New
Hampshire tail is too small to wag so large an out-of-state dog."), rev'd, 465 U.S. 770
32. 407 U.S. 1 (1972). See discussion infra Part I.
contemplated by those rules or doctrines. Indeed, the imposition of
contract principles on forum selection rules has, in many instances, stood
jurisdictional principles on their head: traditional deference to the
plaintiff's choice of forum must yield to the defendant's invocation of contract
law, while conversely a defendant must yield due process protections
when the plaintiff seeks enforcement of a forum-selection provision. 33
Even more troubling is the cavalier manner in which courts gloss over
the implications of consensual adjudicatory procedure for fundamental
concepts of sovereignty and liberty interests. The right to choose a
forum is perhaps the most fundamental and essential litigation right, since
it carries with it choice-of-law determinants. The notion of forum access,
regulated by subject matter jurisdiction, is a fundamental governmental
attribute intricately tied to the power and authority of the state.34
Moreover, forum selection with regard to personal jurisdiction entails
wellestablished due process concerns involving traditional notions of
substantial justice and fair play.35
Notwithstanding these serious theoretical underpinnings to the
concepts of jurisdiction and venue, prevailing doctrine in civil litigation is
that waiver of these fundamental rights can be accomplished through
qualitatively different contract standards. Criminal procedure, in
contrast, has devoted substantial attention to the idea that fundamental
litigation rights cannot be forfeited in the absence of a knowing and
voluntary waiver.36 Yet civil procedure contemplates no similar
standard, and contract law in many instances effectively supersedes the
state's authority as well as individual due process concerns. Perhaps this
would be palatable if the doctrine were theoretically well-developed, but
unfortunately it represents little more than a pastiche of black letter
contract rules leavened by a large measure of judicial expediency.3 7
The doctrine of consensual adjudicatory procedure needs, at
minimum, a far better justification than the federal courts typically offer in
their rote recitations of The Bremen principles. 38 Courts ousted of
jurisdiction and litigants forced to sue or to be sued elsewhere deserve
something more than a set of boilerplate contract presumptions. Arguably, a
potential litigant should not waive his due process rights merely by
signing a contract containing a forum-selection clause. The due process
requirements that inform choice-of-law analysis therefore should not be
similarly yielded. Thus, the construction and enforceability of contracts
should not be elevated over the requirements of state long-arm statutes
and the due process clause of the fourteenth amendment.
Beyond a better theoretical justification, the doctrine of consensual
adjudicatory procedure also requires a conceptual clarity informed by due
process requirements that permits parties to select any forum or law with
which the transaction has a normal connection.3 9 Conversely, parties
should not be free to select a forum or law by contriving contacts with an
otherwise non-interested jurisdiction so as to validate the choice-of-law
or forum.' Finally, a comprehensive standard for waiver in civil
litigation is worth delineating to ensure an informed waiver of litigation rights.
Defining and Critiquingthe Doctrine
The doctrine of consensual adjudicatory procedure, a relatively new
doctrine in civil litigation, is so widely accepted that it has largely
escaped critical scrutiny. This Article outlines briefly the origins of the
theory and its rapid development and acceptance in jurisdictional
canons. It then critiques the weaknesses engendered by this rush to
uncritical judgment and legitimacy.
Part I canvasses The Bremen doctrine and the subsequent federal cases
that elaborate a theory of consensual adjudicatory procedure. The thesis
is that the doctrine, as articulated by the Supreme Court, is largely
pieced together by dicta and good intentions. The basic premise of The
Bremen-the efficacy of contractual jurisdiction in the international
trade context 4l-has never been seriously questioned in relation to its
domestic application. The Bremen and its progeny, so to speak, have
lived the unexamined life.
39. See, e.g., U.C.C. § 1-105(1) (1987) ("when a transaction bears a reasonable
relation to this state and also to another state or nation the parties may agree that the law
either of this state or of such other state or nation shall govern their rights and duties");
see also Woods-Tucker Leasing Corp. v. Hutcheson-Ingram Dev. Co., 642 F.2d 744, 754
(5th Cir. 1981) (affirming application of U.C.C. § 1-105 reasonable relation test to
choiceof-law provision); Carefree Vacations, Inc. v. Brunner, 615 F. Supp. 211, 215 (W.D.
Tenn. 1985) (no substantial relationship to Texas; forum/choice-of-law clauses
40. Under U.C.C. interpretation, this is known as the "contrivance principle." See
Woods-Tucker Leasing Corp., 642 F.2d at 750-53 (discussion and application of
contrivance principle); see also Seeman v. Philadelphia Warehouse Co., 274 U.S. 403, 408
(1927) ("parties must act in good faith, and ... the form of the transaction must not
'disguise its real character' "). See generally Nordstrom & Ramerman, The Uniform
Commercial Code and the Choice of Law, 1969 Duke L.J. 623, 628 ("parties' choice
should be upheld unless the transaction lacks a normal connection with the state whose
law was selected") (emphasis in original).
41. The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 13-14 (1972).
Part II explores the serious characterization problems engendered by
the doctrine of consensual adjudicatory procedure. The purpose is to
demonstrate that the federal courts, in their eagerness to embrace this
simple doctrine, have failed to develop a clear and appropriate method
for its implementation. The courts discuss consensual procedure in a
hodgepodge of concepts including jurisdiction, venue and forum non
conveniens. Moreover, the courts are in confusion concerning the
appropriate remedy for legitimate claims: dismissal, transfer, remand or stay
of proceedings. Finally, courts scarcely mention fundamental theoretical
issues implicit in the characterization of provisions, such as whether
particular clauses are prorogation or derogation clauses.
Part III reflects on the various problems of federalism ensnared in the
doctrine. Although the Supreme Court last term in Stewart
Organization, Inc. v. Ricoh Corp.42 definitively resolved the basic Erie dilemma
concerning the substantive or procedural nature of forum-selection
clauses,4" this decision carried on the unthinking tradition of Supreme
Court pronouncements on this subject. Ricoh may prove most significant
for the issues it left unanswered and the problems engendered in its wake.
Part IV continues with federalism issues by examining consensual
adjudicatory procedure with regard to removal and remand. This Part
shows how federal removal and remand principles sorely fray the
theoretical fabric of consensual procedure, highlighting the frailties of that
doctrine. In this context, consensual adjudicatory procedure most
squarely presents derogation and ouster of jurisdiction antithetical to
article III of the Constitution, the Federal Rules of Civil Procedure and
their accompanying statutory provisions.
Part V explores the puzzling issues presented by concomitant
choiceof-law provisions. These issues arise when courts cannot decide whether
choice-of-law precedes jurisdictional analysis. The courts thus fall into
ever darker abysses of conflicts analysis in order to determine
enforceability of the clauses.
Part VI summarizes the consequences of elevating contract rules over
jurisdictional principles. This section demonstrates how courts rotely
apply black letter contract principles with insufficient attention to
countervailing jurisdictional principles. It discusses the serious ramifications of
contract presumptions on litigation rights, as well as the vapid notion of
consent and waiver in the civil litigation arena.
Finally, Part VII surveys possible modifications or doctrinal
improvements for a theory of consensual adjudicatory procedure, calling for a
more principled notion of consensual litigation not purchased at the
expense of litigants' rights. This section appeals for decisions that do not
sacrifice important litigation values on the high altar of judicial
expediency. It pleads for better-reasoned opinions that offer more to a
con42. 108 S. Ct. 2239 (1988). For an extensive discussion of Ricoh, see infra Part III.
43. See infra notes 139-44.
tracting party than the meaningless theory that the law presumes
knowledge of a contractual provision.
THE BREMEN: JURISDICTIONAL PRINCIPLES AFLOAT IN
The doctrine of consensual adjudicatory procedure at the Supreme
Court level has at best been cobbled together with baling wire and tape.
In the major cases in which the Court has considered a problem of
consensual procedure," it has never clearly and affirmatively stated that
such a doctrine of consensual jurisdiction applies in federal courts sitting
on purely domestic federal cases.4 5 Indeed, in its most recent
opportunity to clarify this point, the Court chose to sidestep The Bremen issue
altogether and rely on venue law.4 6 Two Justices, displeased with that
tactic but not with the result, decried that "[c]ourts should announce and
encourage rules that support private parties who negotiate such
clauses."'4 Yet the Supreme Court has declined to do so when given the
Rather, the Supreme Court's doctrine of jurisdiction by consent
consists of little more than conclusory pronouncements and dicta elevated
into received dogma. This is quite remarkable because the theory
embodies a complete reversal of long-standing repugnance to consensual
jurisdiction.4 8 If nothing else, certainly this traditional doctrine deserved a
better, if not more explicit, demise.
44. See Stewart Org., Inc. v. Ricoh Corp., 108 S.Ct. 2239 (1988);
Shearson/American Express, Inc. v. McMahon, 107 S.Ct. 2332 (1987) (arbitration case); Mitsubishi
Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (arbitration case);
Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (franchise agreement); Insurance
Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (1982) (waiver of
objection to personal jurisdiction as discovery sanction); The Bremen v. Zapata Off-Shore
Co., 407 U.S. 1 (1972) (international towage contract); National Equip. Rental, Ltd. v.
Szukhent, 375 U.S. 311 (1964) (farm equipment lease); Bisso v. Inland Waterways Corp.,
349 U.S. 85 (1955) (contractual limitation against all liability for negligent towage by
owner); Boyd v. Grand Trunk W. R.R., 338 U.S. 263 (1949) (venue-limiting provision).
45. But see Gruson, Forum-Selection Clauses, supra note 3, at 149:
Federal courts have universally agreed that the teaching of Bremen is not
limited to admiralty cases nor to cases involving the selection of a foreign forum
but applies to all forum-selection clauses even if they select a domestic forum
and even if they arise in a suit between parties of different states.
The Bremen and National Equipment Rental, Ltd. v. Szukhent
be 'unreasonable' under the circumstances."'
The rationales supporting
The current doctrine of consensual adjudicatory procedure enforced
throughout the federal court system is based on Supreme Court
pronouncements in The Bremen.4 9 In its most often cited proposition, the
Court opined that forum-selection clauses "are prima facie valid and
should be enforced unless enforcement is shown by the resisting party to
this sweeping conclusion, however, leave nagging doubts about the
applicability of this new rule to purely domestic federal cases.
major doctrinal support was somewhat dubious. In
reaching its conclusion, the Bremen Court suggested that forum-selection
clauses were "merely the other side of the proposition,"5 " recognized in
NationalEquipment Rental, Ltd. v. Szukhent, 2 that "in federal courts a
party may validly consent to be sued in a jurisdiction where he cannot be
found for service of process through contractual designation of an 'agent'
for receipt of process in that jurisdiction."5 3 The Bremen Court cited
with approval the black letter rule posited in Szukhent that "it is settled
.. . that parties to a contract may agree in advance to submit to the
jurisdiction of a given court, to permit notice to be served by the
opposing party, or even to waive notice altogether."5 4
Szukhent is an inappropriate case on which to construct an entire
doe49. The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972); see Collins, Choice of
Forum and the Exercise of JudicialDiscretion-The Resolution of an Anglo-American
Conflict, 22 Int'l &Comp. L.Q. 332 (1973); Collins, ForumSelection and an Anglo-Amer
ican Conflict-The Sad Case of The Chaparral, 20 Int'l & Comp. L.Q. 550, 556-57
(1971); Delaume, Choice of Forum Clauses and the American Forum Patriae;Something
Happenedon the Way to the Forum: Zapataand Silver, 4 J. Mar. L. &Com. 295 (1973);
Farquharson, supra note 4, at 97-98; Gilbert, supra note 4, at 24-28; Gruson,
ForumSelection Clauses, supra note 3, at 147-49; Juenger, supra note 20, at 49-50; Maier, The
Three Faces of Zapata: MaritimeLaw, Federal Common Law, Federal Courts Law, 6
Vand. J. Transnat'l L. 387, 396-98 (1973); Nadelmann, Choice-of-Court Clauses in the
United States: The Road to Zapata, 21 Am. J. Comp. L. 124, 134 (1973); Reese, supra note 5, at 532-33; Note, The Enforcement of Forum Selection Provisionsin International
CommercialAgreements: M/S Bremen v. Zapata Off-Shore Co., (U.S. Sup. Ct. 1972), 11
Colum. J. Transnat'l L. 449, 450 (1972); Note, Choice of Forum, 14 Harv. Int'l L.J. 145,
149-53 (1973); Comment, Admiralty-InternationalCommercialTransactions-Choiceof
Forum Clauses Presumed Valid, 6 N.Y.U. J. Int'l L. & Pol. 369, 381-83 (1973).
50. The Bremen, 407 U.S. at 10; see Conklin & Garrett, Ltd. v. M/V Finnrose, 826
F.2d 1441, 1442 (5th Cir. 1987) (forum-selection clauses prima facie valid); Diaz
Contracting, Inc. v. Nanco Contracting Corp., 817 F.2d 1047, 1050-52 (3d Cir. 1987) (same);
Colonial Leasing Co. v. Pugh Bros. Garage, 735 F.2d 380, 382 (9th Cir. 1984) (same);
Coastal Steel Corp. v. Tilghman Wheelabrator Ltd., 709 F.2d 190, 202 (3d Cir.)
(forumselection clauses presumptively valid), cert.denied, 464 U.S. 938 (1983). Butsee Kolendo
v. Jerell, Inc., 489 F. Supp. 983, 985 (S.D. W. Va. 1980) (mem.) ("Nevertheless, it must
not be assumed thatprimafacie validity means, in all but the most unconscionable cases,
51. The Bremen, 407 U.S. at 10.
52. 375 U.S. 311 (1964).
53. The Bremen, 407 U.S. at 10-11 (Justice Burger's construction of Szukhent
54. Id. at 11 (quoting Szukhent, 375 U.S. at 315-16).
trine of consensual adjudicatory procedure. The cases cited in support of
its black letter pronouncement dealt largely with anomalous
international waiver situations.5 5 At the time, prevailing Supreme Court
precedent 6 and lower federal court opinions5 7 still embodied traditional
55. The Court cited Cerro de Pasco Copper Corp. v. Knut Knutsen, O.A.S., 187 F.2d
990 (2d Cir. 1951) (bill of lading specifying Norwegian law) and Mittenthal v. Mascagni,
183 Mass. 19, 66 N.E. 425 (1903) (contract between Italian citizens partly to be
performed in United States and partly to be performed in Italy, specifying Italian law). See
The Bremen, 407 U.S. at 10 n.10. Yet the Court also referred to Daley v. People's
Building, Loan & Savings Association, 178 Mass. 13, 15, 59 N.E. 452, 452 (1901) (forum
designation condition of contract). See The Bremen, 407 U.S. at 10 n.10.
Bergman persuasively argues that Judge Learned Hand's statement in Krenger v.
Pennsylvania R.R., 174 F.2d 556 (2d Cir. 1949), cert. denied, 338 U.S. 866 (1949),
concering no absolute taboo against forum clauses, was based on a misapprehension of the
Restatement of Contracts § 558 (1932). See Bergman, ContractualRestrictions on the
Forum, 48 Calif. L. Rev. 438, 440-47 (1960). Bergman found it ironic that the source of
confusion supporting forum clauses was based in Judge Hand's concurring opinion,
noting that "[i]t is somewhat difficult to understand how that which was so well settled in
1930 could become unsettled in the space of nineteen years." Bergman, supra, at 440.
56. See, e.g., Dixilyn Drilling Corp. v. Crescent Towing & Salvage Co., 372 U.S. 697,
698 (1963) (tugboat owner may not validly contract against negligence liability); Bisso v.
Inland Waterways Corp., 349 U.S. 85, 90-91 (1955) (towboat owner may not contract
against negligence liability); Boyd v. Grand Trunk W. R.R., 338 U.S. 263, 266 (1949)
(venue limiting agreement void as conflicting with Federal Employers' Liability Act);
Insurance Co. v. Morse, 87 U.S. (20 Wall.) 445, 451 (1874) ("agreements in advance to
oust courts of the jurisdiction conferred by law [were] illegal and void").
57. See Indussa Corp. v. S.S. Ranborg, 377 F.2d 200, 203 (2d Cir. 1967)
(forumselection clause in bill of lading invalid under Carriage of Goods by Sea Act (COGSA));
Carbon Black Export v. S.S. Monrosa, 254 F.2d 297, 300-01 (5th Cir. 1958)
(forumselection clause in bill of lading not enforced under COGSA), cert. dismissed, 359 U.S.
180 (1959); Matthiessen v. National Trailer Convoy, Inc., 294 F. Supp. 1132, 1134-35 (D.
Minn. 1968) (forum-selection clause not enforced; third-party complaint); Hawaii Credit
Card Corp. v. Continental Credit Card Corp., 290 F. Supp. 848, 851 (D. Haw. 1968)
(forum-selection clause not enforced); United States v. Aetna Casualty & Sur. Co., 38
F.R.D. 418, 419-20 (N.D. Cal. 1965) (forum-selection clause not enforceable; in conflict
with Miller Act).
A number of federal courts, however, adopted the "modern trend" towards
enforceability signalled by the Second Circuit in Win. H. Muller & Co. v. Swedish American
Line Ltd., 224 F.2d 806 (2d Cir.), cert. denied, 350 U.S. 903 (1955). See, e.g., Furbee v.
Vantage Press, Inc., 464 F.2d 835, 837 (D.C. Cir. 1972) (provision enforced); Central
Contracting Co. v. Maryland Casualty Co., 367 F.2d 341, 344 (3d Cir. 1966)
(forumselection clause enforced as not unreasonable); Jack Winter, Inc. v. Koratron Co., 326 F.
Supp. 121, 124-26 (N.D. Cal. 1971) (forum-selection clause upheld; exhaustive survey of
existing law and movement towards modern trend); A.C. Miller Concrete Prods. Corp. v.
Quickset Vault Sales Corp., 309 F. Supp. 1094, 1095 (E.D. Pa. 1970) (forum clause
upheld); National Equip. Rental, Ltd. v. Sanders, 271 F. Supp. 756, 761-62 (E.D.N.Y.
1967) (forum clauses enforceable if not unreasonable or offensive to public policy); Geiger
v. Keilani, 270 F. Supp. 761, 766 (E.D. Mich. 1967) (forum-selection clause enforceable
under Muller reasonableness test); Takemura & Co. v. S.S. Tsuneshima Maru, 197 F.
Supp. 909, 911-13 (S.D.N.Y. 1961) (forum-selection clause enforceable, using forum non
conveniens analysis). See generally Bergman, supra note 55, at 438-47 (historical
analysis of validity of choice of forum clauses); Farquharson, supranote 4, at 93-97 (discussing
development of American conflicts rules); Gilbert, supra note 4, at 11-20 (historical
sketch of pre-1972 problem of choice of forum provisions); Gruson, Forum-Selection
Clauses,supra note 3, at 138-47 (extensive citation to pre-Bremen case law); Reese, supra
note 5, at 536-37 (same).
abhorrence of consensual jurisdiction. That a conclusive rule of
jurisdiction by contractual agreement should appear by fiat in Szukhent was
Moreover, the Szukhent Court's statement with regard to consensual
jurisdiction was little more than dictum because, after all, Szukhent
concerned statutory construction of agency requirements under Rule 4 of the
Federal Rules of Civil Procedure." It is certainly debatable whether
service of process requirements and Rule 4 are jurisdictional in nature.5 9 At
a minimum, the ability of a party to waive notice requirements should
not bootstrap a theory of consensual jurisdiction. Unless the bases for
jurisdiction are congruent with the bases of service requirements-and
they are not-then waiver and consent theories should not sweep so
broadly as to encompass both concepts.
The Bremen Court's second rationale noted that enforcement of
forum-selection clauses was an "approach... substantially that followed in
other common-law countries including England."6 Additionally,
adoption of this approach "accord[ed] with ancient concepts of freedom of
contract."6 1 The Court, however, neglected to mention some other
telling aspects of comparative law. While many common law countries
generally approve of forum-selection clauses, 62 many countries still reject
them.63 Moreover, most nations have well-articulated theoretical
justifications for embracing or repudiating consensual procedure, in contrast to
62. For a discussion of the validity of forum-selection clauses, see the papers
presented at the Proceedings of the 1964 Annual Meeting of the American Foreign Law
Association: Cowen & Mendes Da Costa, The ContractualForum: Situation in England
and the British Commonwealth, 13 Am. J. Comp. L. 179 (1964); Eek, The Contractual
Forum: Scandinavia, 13 Am. J. Comp. L. 173 (1964); Perillo, supra note 17; Reese, The
ContractualForum: Situation in the United States, 13 Am. J. Comp. L. 187 (1964);
Schwind, DerogationClausesin Latin-AmericanLaw, 13 Am. J. Comp. L. 167 (1964); see
also Farquharson, supra note 4, at 86; Gilbert, supra note 4, at 20-21.
63. Although Farquharson's list suggests broad acceptance of such provisions,
Professor Perillo notes that Austria, France, Germany and Switzerland's acceptance of such
clauses are laden with qualifications and depend on whether the clauses are prorogation
or derogation provisions. Further, Italy, the Netherlands, Spain and Portugal have
severe limitations or outright prohibitions on certain clauses; certainly the validity and
enforceability issues are not free from doubt. See Perillo, supra note 17, at 163-65. Schwind
describes a generally unfavorable trend in Latin America based on resurgent nationalism.
See Schwind, supra note 62, at 167-73.
choice of forum provision to do what it would not let a choice of law
clause do. Thus, if the court would not give effect to choice of a
certoafinfosrtuamte'swlhaiwchonwpouubldlicacpcoolmicpyligsrhouthnedss,aimtsehtohuinldg.n3o30t enforce a choice
A Tennessee district court appreciated these critiques in its
construction of a combined forum-selection and choice-of-law provision. 33a The
court held that in a multi-state commercial transaction involving
Tennessee, Illinois and Texas, contractual clauses specifying a Texas forum and
Texas law were unreasonable and unenforceable.3 32 After conducting an
obstensible Bremen analysis (sounding much like InternationalShoe
minimum contacts jurisprudence 333), the court concluded that Texas did not
have a reasonable relationship to the transaction,3 34 thus invalidating the
choice-of-law provision. Since the choice-of-law provision was
unenforceable, the court looked to Tennessee state law, the law of the
noncontractual forum, to determine choice-of-law.33 5
Ironically, Tennessee conflicts rules required that the substantive
rights of contracting parties be governed by the law intended by the
parties. That was the stipulated Texas law, but the court reasoned that since
the choice-of-law provision was unenforceable and inapplicable, it would
instead look to the place of the contract's making.3 36
Although it arrived at its conclusion by circuitous means, the
Tennessee opinion illustrates an instance where consensual forum and
choice-oflaw provisions did not trump traditional due process or public policy
analysis associated with jurisdiction or governing law. However ineptly,
the court viewed these concerns as paramount in its evaluation.
FullFaith and Credit to ConsensualAdjudicatory Decisions
a second forum. 34
The construction of forum-selection clauses by a non-selected forum
implicates full faith and credit issues,3 3 7 including subsequent collateral
attack. In particular, if forum-selection clauses are viewed as
jurisdictional, then various conflicts principles govern interstate recognition of a
sister state's determination.
A determination of good subject matter jurisdiction generally is not
open to collateral attack if that issue was fully and fairly litigated in the
first forum.3 3 s Further, collateral attack based on a lack of personal
jurisdiction in the first forum is always unavailing. If a defendant appears
but does not raise a defense of lack of personal jurisdiction, this
constitutes a waiver of that jurisdictional defect.3 3 9 If the defendant appears
and contests personal jurisdiction but loses, this precludes relitigation in
Against this backdrop, the Fourth Circuit ruled that a South Carolina
district court was not collaterally estopped from relitigating the validity
of a forum-selection clause where a New York federal court had found
proper venue. 34'
Reconsideration of the clause was not precluded
because the New York court finding was based on a venue interpretation:
"Once that was determined, the issue of whether the... choice-of-forum
clause was valid was of no consequence. '342
Thus, because the New
York court arrived only at a venue conclusion, the validity of the clause
could be determined in a subsequent suit between the parties.
A West Virginia district court denied full faith and credit to a New
York default judgment predicated on a forum-selection clause.34 3
Construing the contractual provision as jurisdiction-conferring, the court
stated that the validity of the clause was open to collateral attack. Since
the defendant had not appeared and contested jurisdiction in New York,
West Virginia could construe the clause.
Moreover, in construing the
validity of the clause the court ignored the New York choice-of-law
provision, arguing that "[tio do otherwise would be to permit the clause to
'pull itself up by its own bootstraps.' "344
Under West Virginia law 345 the
court held the clauses unjust, unreasonable, and unenforceable and
therefore refused to give full faith and credit to the judgment based on
jurisdiction conferred by the clauses.3 46
A number of potential full faith and credit issues remain to be explored
by the courts. In instances where the clauses are not viewed as
jurisdictional, will this effectively preclude re-examination of the validity
determination in the second forum? 347 A more interesting question is whether
a second forum could refuse to give full faith and credit to the valid
judgment of a first forum because the judgment was based on a combined
forum-selection and choice-of-law provision that violates the public
policy of the second forum. 348
The Bremen speaks generally
about non-enforcement where clauses contravene public policy, 34 9 that
stricture rarely prevails and has not yet been tested in a full faith and
344. Id. at 1014. The court relied on Baldwin v. Iowa State Traveling Men's
Association, 283 U.S. 522, 525 (1931), for the proposition that ajurisdictional issue may be raised
on collateral attack if a foreign corporation did not appear to challenge jurisdiction and
therefore "never ...had its day in court with respect to jurisdiction." See Leasewell,
Ltd., 423 F. Supp. at 1014 (quoting Baldwin, 283 U.S. at 525).
345. Leasewell,Ltd., 423 F. Supp. at 1014. The court first applied the conflicts rules of
West Virginia under the mandate of Klaxon Co. v. Stentor Electric Manufacturing Co.,
313 U.S. 487 (1941). See supra notes 305-07 and accompanying text.
346. See LeasewellLtd., 423 F. Supp. at 1015-17. The court stated that it "refuse[d] to
extend full faith and credit to the judgment of the Supreme Court of the State of New
York.... ." Id. at 1017.
347. See E. Scoles & P. Hay, supra note 305, § 24.15, at 93
) (noting disparate
treatment of default judgments based on warrant of attorney or cognovit notes). The
authors believe that various state refusals of recognition ofjudgments in these instances
are based on reasons that are "inappropriate." Moreover, the authors believe that
fullfaith-and-credit is due since the Supreme Court's holding in D.H. Overmyer Co., Inc. v.
Frick Co., 405 U.S. 174, 187 (1972) (cognovit clause consenting to judgment without
notice or hearing not unconstitutional per se and not in violation of fourteenth
348. See Restatement (Second) of Conflict of Laws § 103 (1971) (a state need not
accord interstate recognition to a judgment if it "is not required by the national policy of
full faith and credit because it would involve an improper interference with important
interests of the sister State"). Professors Scoles and Hay argue that § 103 "does not
identify areas where local public policy may serve as a basis for the refusal to accord
recognition to a sister-state judgment when such recognition is otherwise mandated under
the Full Faith and Credit Clause of the Constitution." E. Scoles & P. Hay, supra note
305, § 24.21, at 946.
349. See The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972). The "public
policy" exception to The Bremen is generally a difficult argument on which to prevail in
urging non-enforcement of a clause. See supra note 282 and accompanying text.
CONTRACTUAL SUPREMACY OVER FORUM-SELECTION AND
When The Bremen asserted that a forum-selection clause was prima
facie valid and should control absent a strong showing that it should be
set aside,35 ° the Supreme Court set the stage for the wholesale
importation of contract principles into traditional jurisdiction and venue
analysis. Although the Court attempted to temper the concept of a
contractual forum with a countervailing consideration of
"reasonableness,"3 51 the Court instead allowed the lower federal courts to create a
new hodgepodge test for forum access.
The federal courts now apply a test that is a pastiche of principles
imported from jurisdiction, venue, forum non conveniens and
choice-oflaw rules. The major ingredients, however, are contract principles.
Contract principles dominate interpretation of the validity and scope of
forum-selection provisions. Because of this, the due process concerns that
typically predominate forum access either recede in importance or
disappear altogether. In addition, the courts have failed to supply any
meaningful content to the concept of waiver in the civil litigation context.
The Bremen Test for Forum-Selection Clauses
As is true for many landmark Supreme Court cases, The Bremen
offered only broad limitations on forum-selection clause applicability.
Thus, such clauses were generally enforceable and the resisting party
carried the burden to "clearly show that enforcement would be
unreasonable and unjust, or that the clause was invalid for such reasons as fraud or
overreaching. 3 52 Moreover, an allegation that the contractual forum
was inconvenient was insufficient, unless the opposing party could
demonstrate that "trial in the contractual forum will be so gravely
difficouflhtisanddayinicnoncvoeunrite.n3t53that he will for all practical purposes be deprived
These very generalized strictures have generated a proliferation of tests
and factors. One district court noted that the Supreme Court cited,
out indicating their sufficiency or exclusivity, only four mitigating
factors: inconvenience to the parties; fraud; undue influence; or
overweening bargaining power.3 54 Another district court read The
Bremen as promulgating a two-pronged test. The first prong rested on
contract principles to show the forum-clause void or voidable and
therefore unenforceable. 355 The contract approach derived from the "fraud or
overreaching" factors, and implicated the standard contract doctrines of
mistake, coercion, lack of consideration, unconscionability and
adhesion. 35 6 The court termed this approach the "invalidity test. ' 35 7 The
second prong involved demonstrating that the contractual forum was
unreasonable or unjust, an inquiry related to The Bremen's inconvenience
dicta.358 This second prong, in turn, involved an evaluation of seven
factors "flowing from the Bremen decision": (1) inequality of bargaining
power; (2) public policy; (3) injustice; (4) availability of remedies in the
chosen forum; (5) the governing law; (6) inconvenience; and (7) conduct
of the parties.35 9
This two-pronged test has been largely ignored in favor of freelance
judicial buccaneering. The two-pronged approach suggested conceptual
difficulties; some reasonableness factors were elements of contract
validity. Moreover, most courts have been unwilling--consciously or
unconsciously-to draw firm analytical distinctions among concepts of
contract validity, forum convenience, justice and reasonableness. 360
Rather, courts typically resort to an ever-growing hybrid list to guide the
determination of enforceability.
This trend toward further expansion of The Bremen elements reached
its apotheosis in D'Antuono v. CCH Computax Systems, 36 1 where a
Rhode Island district court undertook to definitively articulate The
Bremen test. The court dismissed the "inconvenience" prong of The
Bremen by asserting that "by consenting to the inclusion of a forum
designation in the contracts, the plaintiff, to the extent that such a
covenant is valid in a particular case, has waived any consideration of his
convenience." ' 62 The court then observed that numerous federal courts
had synthesized and refined The Bremen factors to provide a "yardstick
of reasonableness." These include the following:
(1) The identity of the law which goveins construction of the
(2) The place of execution of the contract(s). 3 4
(3) The place where the transactions have been or are to be
(4) The availability of remedies in the designated forum.366
(5) The public policy of the initial forum state ....367
(6) The location of the parties, the convenience of prospective
witnesses, and the accessibility of evidence.368
(7) The relative bargainingpower of the parties and the circumstances
surrounding their dealings. 69
a(t8i)ngTh(eorpreexsaecnecrebaotirnagb)secnircceumofstfaranucdes,.u37n0due influence or other
extenu(9) The conduct of the parties.37 1
The court also assayed the related issues of relevance and weight of these
elements: "While each of these factors has some degree of relevance and
some claim to weight, there are no hard-and-fast rules, no precise
formulae. The totality of the circumstances, measured in the interests of
justice, will-and should-ultimately control. '372
Although D'Antuono articulated the most comprehensive Bremen test,
courts have nonetheless been inventive in adding additional elements to
the list, such as residence of the parties and witnesses3. 73 The problem,
however, is that the "totality of the circumstances" mentality has
bled courts to pick and choose among possible determinants. Some
courts focus on contractual factors; 374 others on convenience
concerns; 375 and others on vague reasonableness theories.3 76 Given the
374. See Conklin & Garrett, Ltd. v. M/V Finnrose, 826 F.2d 1441, 1443-44 (5th Cir.
1987) (discussion of inequality of bargaining power); Hunt Wesson Foods, Inc. v.
Supreme Oil Co., 817 F.2d 75, 77 (9th Cir. 1987) (straight contract interpretation);
Farmland Indus. Inc. v. Frazier-Parrott Commodities, Inc., 806 F.2d 848, 852 (
) (contract tainted by fraud allegation); Sun World Lines, Ltd. v. March Shipping
Corp., 801 F.2d 1066, 1068 (
8th Cir. 1986
) (no unequal bargaining power found);
General Eng'g Corp. v. Martin Marietta Alumina, Inc., 783 F.2d 352, 360 (3d Cir. 1986) (no
evidence of coercion in contract); Bryant Elec. Co. v. City of Fredericksburg, 762 F.2d
1192, 1196-97 (4th Cir. 1985) (rejects unequal bargaining power argument in context of
municipal contract bidding process); AVC Nederland B.V. v. Atrium Inv. Partnership,
740 F.2d 148, 155-59 (2d Cir. 1984) (discussion of fraud basis of claim and connection to
contract clause); Lien Ho Hsing Steel Enter. Co. v. Weihtag, 738 F.2d 1455, 1458-60 (9th
Cir. 1984) (no overweening bargaining power in non-negotiated insurance policy due to
party's representation by broker); Colonial Leasing Co. v. Pugh Bros. Garage, 735 F.2d
380, 382-83 (9th Cir. 1984) (no negotiation in fine print contract for take-it-or-leave-it
clause; clause not enforced); Coastal Steel Corp. v. Tilghman Wheelabrator Ltd., 709
F.2d 190, 202 (3d Cir.) (no overreaching on contract negotiations), cert. denied,464 U.S.
938 (1983); Crown Beverage Co. v. Cerveceria Moctezuma, S.A., 663 F.2d 886, 888 (9th
Cir. 1981) (no fraud or overreaching); Aaacon Auto Transport, Inc. v. State Farm
Mutual Auto Ins. Co., 537 F.2d 648, 661 (2d Cir. 1976) (court does not reach contract of
adhesion arguments), cert. denied, 429 U.S. 1042 (1977); see also Janko v. Outboard
Marine Corp., 605 F. Supp. 51, 52 (W.D. Okla. 1985) (claim of boilerplate contract does
not preclude enforcement of clause); LFC Lessors, Inc. v. Pearson, 585 F. Supp. 1362,
1364-65 (D. Mass. 1984) (focus on contract negotiations, lack of sophistication and legal
advice, contract of adhesion); Richardson Greenshields Secs., Inc. v. Metz, 566 F. Supp.
(no overreaching even though party alleges no contract
negotiations); Hoffman v. Burroughs Corp., 571 F. Supp. 545, 549 (N.D. Tex. 1982) (no
overreaching, but parties did not discuss boilerplate contract); Richardson Eng'g Co. v. IBM,
554 F. Supp. 467, 470 (D. Vt. 1981) (rejects contract of adhesion argument), aff'd, 697
F.2d 296 (2d Cir. 1982); First Nat'l Monetary Corp. v. Chesney, 514 F. Supp. 649, 656
(E.D. Mich. 1980) (brokerage agreement clause held to be contract of adhesion); Kolendo
v. Jerell, Inc., 489 F. Supp. 983, 986 (S.D. W. Va. 1980) (mem.) (clause not enforced in
part on ground of overweening bargaining power); Taylor v. Titan Midwest Constr.
Corp., 474 F. Supp. 145, 149 (N.D. Tex. 1979) (enforcement of boilerplate clauses limited
to facts of case); Cruise v. Castleton, Inc., 449 F. Supp. 564, 570 (S.D.N.Y. 1978)
(straight contract analysis; no finding of contract of adhesion); Gaskin v. Stumm Handel
GmbH, 390 F. Supp. 361, 365-66 (S.D.N.Y. 1975) (no unfairness or injustice where
German contract not translated into English); cf Plum Tree, Inc. v. Stockment, 488 F.2d 754
(3d Cir. 1973) (district court held clause invalid on face of contract and without any
375. It is virtually impossible to successfully challenge validity and enforceability of a
forum-selection clause on the ground of "inconvenience." See, e.g., Sun World Lines,
Ltd. v. March Shipping Corp., 801 F.2d 1066, 1068 (
8th Cir. 1986
) (no inconvenience
found; witnesses can be deposed); General Eng'g Corp. v. Martin Marietta Alumina, Inc.,
783 F.2d 352, 359 (3d Cir. 1986) (same); Mercury Coal & Coke, Inc. v. Mannesmann
Pipe & Steel Corp., 696 F.2d 315, 318 (4th Cir. 1982) (same); Furry v. First Nat'l
Monetary Corp., 602 F. Supp. 6, 10 (W.D. Okla. 1984) (same); LFC Lessors, Inc. v. Pearson,
585 F. Supp. 1362, 1365 (D. Mass. 1984) (same); Intermountain Sys. v. Edsall Constr.
Co., 575 F. Supp. 1195, 1198
(D. Colo. 1983)
(mem.) (same); Richardson Greenshields
Secs., Inc. v. Metz, 566 F. Supp. 131, 134
(same); Richardson Eng'g Co.
v. IBM, 554 F. Supp. 467, 469 (D. Vt. 1981) (same), aff'd, 697 F.2d 296 (2d Cir. 1982);
Gordonsville Indus., Inc. v. American Artos Corp., 549 F. Supp. 200, 205-06 (W.D. Va.
1982) (rejects inconvenience argument despite having to litigate in Germany); Anastasi
broad spectrum of elements that bear on enforceability, litigants have
little clue as to which tack any particular court may take in construing a
forum-selection clause. This reality surely does not serve the values of
certainty and predictability that supposedly underlie contractual forum
Moreover, this expanding laundry list of post-Bremen factors is
nothing more than a patchwork of concepts drawn from jurisdiction, venue,
forum non conveniens and contract law.37 7 It is as if the courts, vaguely
mindful that consensual procedure involves a waiver of
carefullywrought litigation protections, 378 have reintroduced due process
concerns through additional relevant elements. Due process ignored is in
effect due process denied, so courts have serviced due process through
the back door. Even though post-Bremen analysis may be viewed as
moving more toward fairness concerns, contract analysis still
predominates. And in this manner forum-selection decisions threaten litigation
Applied ContractLaw in the Realms of Jurisdiction, Venue and
Forum Non Conveniens
Many federal courts have clung to a narrow contractual interpretation
of forum-selection clauses.3 79 In these instances contract law has proven
Bros. Corp. v. St. Paul Fire & Marine Ins. Co., 519 F. Supp. 862, 864
(E.D. Pa. 1981)
unreasonable inconvenience shown); Full-Sight Contact Lens Corp. v. Soft Lenses, Inc.,
466 F. Supp. 71, 74 (S.D.N.Y. 1978) (same); Brown v. Gingiss Int'l, Inc., 360 F. Supp.
1042, 1044 (E.D. Wis. 1973) ("net inconvenience" not significant). But see McDonnell
Douglas Corp. v. Islamic Republic of Iran, 758 F.2d 341, 346 (8th Cir.) (judicial notice of
impracticality and impossibility of litigating in Iran), cert. denied, 474 U.S. 94
Union Ins. Soc'y of Canton, Ltd. v. S.S. Elikon, 642 F.2d 721, 724-25 (4th Cir. 1981)
(alternative forum non conveniens argument); Leasing Serv. Corp. v. Broetje, 545 F.
Supp. 362, 369 (S.D.N.Y. 1982) (same); Randolph Eng'g Co. v. Fredenhagen
Kommandit-Gesellschaft, 476 F. Supp. 1355, 1359-60 (W.D. Pa. 1979) (mem.) (clause not
enforced; extensive inconvenience discussion).
376. See Diaz Contracting, Inc. v. Nanco Contracting Corp., 817 F.2d 1047, 1052 (3d
Cir. 1987) (discussion of evidence required by Bremen unreasonableness test); National
Iranian Oil Co. v. Ashland Oil, Inc., 817 F.2d 326, 332-33 (5th Cir.) (discussing
impossibility and impracticability), cert. denied, 108 S. Ct. 329 (1987); Luce v. Edelstein, 802
F.2d 49, 57 (2d Cir. 1986) (clauses not disfavored and would be unreasonable not to
enforce); Furbee v. Vantage Press, Inc., 464 F.2d 835, 837 (D.C. Cir. 1972) (list of factors
of reasonableness); Colonial Leasing Co. v. Best, 552 F. Supp. 605, 607-0
8 (D. Or. 1982
(standard of unreasonableness for forum-selection clause easier to satisfy than defense of
duress for contract of adhesion); Kline v. Kawai Am. Corp., 498 F. Supp. 868, 871-72
(D. Minn. 1980) (lengthy discussion of reasonableness factors); Hoes of Am., Inc. v.
Hoes, 493 F. Supp. 1205, 1208-09 (C.D. Ill. 1979) (not unreasonable or unjust to apply
German law; stay to determine if German court procedures adequate); Dick Proctor
Imports, Inc. v. Sumitomo Corp. of Am., 486 F. Supp. 815, 818-19 (E.D. Mo. 1980) (clause
not unreasonable, unjust, or unconscionable); cf. Takemura & Co. v. S.S. Tsuneshima
Maru, 197 F. Supp. 909, 912-13 (S.D.N.Y. 1961) (pre-Bremen case testing reasonableness
by forum non conveniens factors).
377. See cases cited supra notes 374-76.
378. See supra notes 10-12 and accompanying text.
379. See supra note 374 and accompanying text.
to be a difficult taskmaster, with harsh results. Contract principles have
been applied to basic issues of language construction, as well as to
broader issues of adhesion and unconscionability. In almost all instances
the courts have unsympathetically posited the reasonable businessman
predicate, noting in one instance that "[i]t is not unlawful for a business
person to drive a hard bargain so as to attain for himself the best possible
deal." 38 And in almost all instances, this unremitting, stringent
application of contract rules has not been tempered by broader justice concerns.
Contract principles have played a large role in determining
forumclause enforceability where the language of the provision is ambiguous,
or where the agreement incorporates more than one such clause. In
these situations courts have invoked various contract rules, including the
"plain meaning" rule wherein "[t]he common or normal meaning of
language will be given to the words of a contract unless circumstances show
that in a particular case a special meaning should be attached to it." 381
Although many courts have taken an expansive view of forum
provisions, 3 82 parties challenging ambiguous clauses have successfully invoked
the rule of contract interpretation construing the language against the
drafter. 3 Also, courts will attempt to reconcile and give effect to
conflicting provisions when it can reasonably be done.38 4
On the contrary, challenges based on ignorance of the clauses have
proven consistently unavailing. Courts repeatedly lecture that a party's
knowledge of contract provisions is presumed by the party's signature,38 5
and that ignorance due to a failure to read is no defense in contract
law.38 6 Despite this harsh rule, a few courts have liberally construed the
parol evidence rule to permit a challenging party to establish allegations
of fraud, mistake or other equitable reasons for relief,3 8 7 but no one ever
wins on these grounds.
In The Bremen, enforceability was predicated on a freely negotiated
private international agreement unaffected by fraud, undue influence or
overweening bargaining power."' This has impelled courts to assess
whether contractual forum provisions are adhesive or unconscionable.
In general, courts recite by rote the talismanic phrases "fraud," "undue
influence" and "overweening bargaining power" and conclude that these
factors did not taint the clause.38 9 The courts rarely distinguish between
the concepts of adhesion and unconscionability, roaming rather freely
over this aspect of contract law.39 °
In almost every instance, without regard to the comparative size,
skills, sophistication or assets of the parties, .the courts find fair
bargaining.39 1 In reaching this conclusion the courts rely on another contract
presumption, that the party opposing the forum-clause received
consideration or a contractual concession in return for the provision.3 92 In other
part of the contract because Fortney was unable to read the clause when he signed.
Nonetheless, ignorance due to failure to read is no excuse in West Virginia or New
387. See Jackam v. Hospital Corp. of Am. Mideast, 800 F.2d 1577, 1582 (11th Cir.
1986) (parol evidence allowed to determine whether Saudi or U.S. law should apply to
employee claim where contract was ambiguous); Yam Indus., Inc. v. Krupp Int'l, Inc.,
736 F.2d 125, 129 (4th Cir. 1984) (parol evidence allowed for mutual mistake).
388. See The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12 n.14, 13-14, 17 (1972).
389. See cases cited supra note 374.
390. See, eg., Intermountain Sys. v. Edsall Constr. Co., 575 F. Supp. 1195, 1198
(mem.) (commingling concepts of adhesion, fraud, and overreaching);
Richardson Greenshields Secs., Inc. v. Metz, 566 F. Supp. 131, 133
concepts of fraud, overreaching, and unconscionability); Richardson Eng'g Co. v. IBM,
554 F. Supp. 467, 469 (D. Vt. 1981) (commingling contract of adhesion and overweening
bargaining power arguments), aff'd, 697 F.2d 296 (2d Cir. 1982); Colonial Leasing Co. v.
Best, 552 F. Supp. 605, 607-0
8 (D. Or. 1982
) (maintaining that the "unfair or
unreasonable" test for forum-clause validity easier to satisfy than defenses of duress or
unconscionability as to substantiveterms of a contract of adhesion) (emphasis in original); Kolendo
v. Jerell, Inc., 489 F. Supp. 983, 985 (S.D. W. Va. 1980) (mem.) (factors against honoring
forum-selection clause include: fraud, overreaching and unreasonableness in application
to facts at hand); Cruise v. Castleton, Inc., 449 F. Supp. 564, 570 (S.D.N.Y. 1978) (same);
cf.Gaskin v. Stumm Handel GmbH, 390 F. Supp. 361, 365 nn.5-6 (S.D.N.Y. 1975)
(distinguishing concepts of adhesion contracts, unconscionability, inequality and
overweening bargaining power). See generally J. Calamari & J. Perillo, The Law of Contracts §
940, at 406-09 (3d ed. 1987) (unconscionability); Leff, Unconscionabilityand The
CodeThe Emperor'sNew Clause, 115 U. Pa. L. Rev. 485 (1967) (extensive discussion of U.C.C.
§ 2-302 unconscionability); U.C.C. § 2-302 (1987) (unconscionable contract or clause).
391. See cases cited supra note 374. But see Colonial Leasing Co. v. Pugh Bros.
Garage, 735 F.2d 380, 382 (9th Cir. 1984) (no bargaining on "take-it-or-leave-it"; clause
held unreasonable and unenforceable); Colonial Leasing Co. v. Best, 552 F. Supp. 605,
607 (D. Or. 1982) ("The defendant had no knowledge of the meaning of the
392. See, e.g., General Eng'g Corp. v. Martin Marietta Alumina, Inc., 783 F.2d 352,
360 (3d Cir. 1986) ("Both parties here are sophisticated business entities capable of
understanding and adjusting for the risks associated with a forum selection clause.");
Intermountain Sys. v. Edsall Constr. Co., 575 F. Supp. 1195, 1198
(D. Colo. 1983)
words, the courts presume a fair bargain. And despite the many
instances of boilerplate contract clauses, the courts rarely invalidate a
forum-selection clause on the grounds of adhesion or unconscionability3. 93
Since outright fraud never forms the basis for a forum-selection clause, it
is virtually impossible to challenge a clearly drafted provision.
Finally, in construing contract validity the federal courts have in effect
created a federal common law of contract interpretation. Although a few
courts look to underlying state principles in diversity cases,3 94 many
courts derive contract rules from general sources of law.395 This is
certainly true in federal question cases.39 6 Yet nothing authorizes the
fed("[The defendant] is presumed to have received appropriate consideration, in the form of
a lower price, for the venue selection clause."); D'Antuono v. CCH Computax Sys., 570
F. Supp. 708, 713
("The better-reasoned view is that the plaintiff, by
consenting to inclusion of the forum designation in the agreements, has in effect subordinated
his convenience to the bargain.").
393. See Lien Ho Hsing Steel Enter. Co. v. Weihtag, 738 F.2d 1455, 1458 (9th Cir.
1984) (forum clause in non-negotiated insurance policy upheld); Janko v. Outboard
Marine Corp., 605 F. Supp. 51, 52 (W.D. Okla. 1985) (claim of boilerplate contract does
not preclude enforcement of clause); LFC Lessors, Inc. v. Pearson, 585 F. Supp. 1362,
1364-65 (D. Mass. 1984) (clause enforced despite allegations of contract of adhesion, lack
of business sophistication and legal advice); Hoffman v. Burroughs Corp., 571 F. Supp.
545 (N.D. Tex. 1982) (no discussion of boilerplate challenge to clause due to
sophistication of parties); Richardson Eng'g Co. v. IBM, 554 F. Supp. 467, 469 (D. Vt. 1981)
(rejection of unfamiliarity with contract provisions argument), aff'd, 697 F.2d 296 (2d
Cir. 1982); Cruise v. Castleton, Inc., 449 F. Supp. 564, 570 (S.D.N.Y. 1978) (rejection of
contract of adhesion argument). But see First Nat'l Monetary Corp. v. Chesney, 514 F.
Supp. 649, 656 (E.D. Mich. 1980) (brokerage agreement clause found to be unenforceable
contract of adhesion); Cutter v. Scott & Fetzer Co., 510 F. Supp. 905, 908
(clause not enforced where, among other things, no evidence of negotiation or
bargaining on provision); cf.Taylor v. Titan Midwest Constr. Corp., 474 F. Supp. 145, 149
(N.D. Tex. 1979) (reservation in regard to boilerplate contracts; agreeing with Szukhent
394. See, e.g., Jackam v. Hospital Corp. of Am. Mideast, 800 F.2d 1577, 1582 (1lth
Cir. 1986) (Georgia contract law); Yam Indus. v. Krupp Int'l, Inc., 736 F.2d 125, 129
(4th Cir. 1984) (South Carolina contract principles); Mercury Coal & Coke, Inc. v.
Mannesmann Pipe & Steel Corp., 696 F.2d 315, 318 (4th Cir. 1982) (West Virginia and New
York contract principles); Central Contracting Co. v. Maryland Casualty Co., 367 F.2d
341, 345-46 (3d Cir. 1966) (Pennsylvania contract principles); Carefree Vacations, Inc. v.
Brunner, 615 F. Supp. 211, 215 (W.D. Tenn. 1985) (Tennessee contract principles);
Richardson Eng'g Co. v. IBM, 554 F. Supp. 467, 470 (D. Vt. 1981) (Vermont contract law),
aff'd, 697 F.2d 296 (2d Cir. 1982); Colonial Leasing Co. v. Best, 552 F. Supp. 605, 607
(D. Or. 1982) (Oregon contract principles); City of New York v. Pullman, Inc., 477 F.
Supp. 438, 442 (S.D.N.Y. 1979) (New York contract principles).
395. See, e.g., Hunt Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 75, 77 (9th Cir.
1987) (reliance on S. Williston, A Treatise on the Law of Contracts (3d ed. 1961));
Richardson Greenshields Sees., Inc. v. Metz, 566 F. Supp. 131, 133
on J. Calamari & J. Perillo, The Law of Contracts (2d ed. 1977)); Gaskin v. Stumm
Handel GmbH, 390 F. Supp. 361, 366 (S.D.N.Y. 1975) (reliance on New York law, as
well as S. Williston, Law of Contracts (3d ed. 1970)); A. Corbin, Corbin on Contracts
(1961 & Supp. 1971); Calamari, Duty to Read-A Changing Concept, 43 Fordham L.
Rev. 341 (1974)).
396. See cases cited supra note 374; see, e.g., Intermountain Sys. v. Edsall Constr. Co.,
575 F. Supp. 1195, 1197-98
(D. Colo. 1983)
(mem.) (relying on general principles from
The Bremen and post-Bremen federal cases); D'Antuono v. CCH Computax Sys., 570 F.
eral courts to create federal common law contract principles to govern
the essentially private contractual relationship between private
citizens. 397 This is a return to pre-Erie federal court rulemaking.
The Civil Litigation Concept of Waiver
In Szukhent, the Supreme Court case that undergirded the entire
subsequent doctrine of consensual adjudicatory procedure, Justice Black
based his dissent on the boilerplate contract provisions that the
Szukhents unwittingly subscribed to in order to obtain their rental farm
equipment. 39 From Justice Black's perspective, the majority treated the
contractual provision as a waiver of the Szukhents' objection to personal
jurisdiction-a waiver Justice Black characterized as a "constitutional
right not to be compelled to go to a New York court to defend
themselves against the company's claims."3 99 Justice Black protested that it
strained and exhausted credulity to suggest that a Michigan farmer or
layman "reading these legalistic words" would know or even suspect that
the service of process clause subjected them to suit in New York.400
Most offensive, however, was the majority's cavalier treatment of the
concept of waiver. Justice Black explained, "[w]aivers of constitutional
Supp. 708, 711-12
(same); Cruise v. Castleton, 449 F. Supp. 564, 568-70
(S.D.N.Y. 1978) (same); see also General Eng'g Corp. v. Martin Marietta Alumina, Inc.,
783 F.2d 352, 356 n.2 (3d Cir. 1986) (list of federal Bremen cases).
397. One court recognized the need for special circumstances to exist in order to create
federal common law:
We must correct the assumption that federal courts are bound as a matter of
federal common law to apply The Bremen standard to forum selection clauses.
The construction of contracts is usually a matter of state, not federal, common
law. Federal courts are able to create federal common law only in those areas
where Congress or the Constitution has given the courts the authority to
develop substantive law, as in labor and admiralty, or where strong federal
interests are involved, as in cases concerning the rights and obligations of the United
States. Only rarely will federal common law displace state law in a suit between
The interpretation of forum selection clauses in commercial contracts is not
an area of law that ordinarily requires federal courts to create substantive
law.... Thus, the Court has used a federal standard only where the
Constitution or Congress has recognized, either expressly or implicitly, the authority of
federal courts to create substantive law. This is not such a suit.
General Eng'g Corp. v. Martin Marietta Alumina, Inc., 783 F.2d 352, 356-57 (3d Cir.
1986) (citations omitted); see also Texas Indus. v. Radcliff Materials, Inc., 451 U.S. 630,
640-43 (1981) (court has limited power to create federal common law when "necessary to
protect uniquely federal interests" and where Congress has given the power to create
substantive law) (quoting Banco Nacional de Cuba v. Sabatino, 376 U.S. 398, 426
(1964)); Miree v. DeKalb County, Georgia, 433 U.S. 25, 31-32 (1977) (federal common
law should be fashioned when there is significant conflict between federal interests and
the use of state law) (citing Wallis v. Pan Am. Petroleum Corp., 384 U.S. 63, 68 (1966)).
398. See National Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311, 324-29 (1964)
(Black, J., dissenting).
399. Id. at 332.
400. Id. at 332-33.
rights to be effective, this Court has said, must be deliberately and
understandingly made and can be established only by clear, unequivocal, and
Justice Black's point has gone unheeded in forum-selection cases.
Throughout dozens of opinions, courts have failed to give much
conceptual clarity to waiver in civil litigation. Only two circuit courts have
given passing recognition to the propositions that "a waiver is a
voluntary relinquishment of a known right," 2 and "[a] party signing a waiver
must know what rights it is waiving. ,1 3 Nonetheless, without further
evidentiary basis, those courts found effective waiver.' One lone federal
district court has raised the spectre of a possible Johnson v. Zerbst waiver
standard," 5 but that court retreated from the suggestion by noting that it
did not have to pass on the waiver standard to decide the enforceability
of the forum-selection clause. °6
The large number of boilerplate contractual provisions that form the
basis of these cases call for a more finely-developed concept of civil
waiver, and certainly one that is not grounded in contract law. The
application of contract principles has simply failed to balance competing
constitutional concerns. This is especially ominous, since contractual
challenges to forum-selection rarely succeed. In enforcing the
contractual basis of forum-selection clauses, courts have ignored the implications
for surrender of constitutional rights. It is essential, therefore, that
courts develop a concept of civil waiver that counters the rigid, formulaic
application of contract law.
RECOMMENDATIONS FOR A MEANINGFUL DOCTRINE OF
CONSENSUAL ADJUDICATORY PROCEDURE
To describe the judicial mediation of consensual adjudicatory
procedure is also to explicate its many doctrinal weaknesses. Among these are
the serious defects of inadequate theoretical justification and confused
characterization. The inconsistent treatment of federalism problems is
disturbing, as is the vexation of a choice-of-law overlay onto the
choiceof-forum issue. Finally, the rote application of black letter contract
principles, in the absence of a balanced theory of civil waiver, serves to vitiate
important procedural rights.
At a minimum, courts should do a better job of characterizing the
issues and justifying their decisions. Beyond this, a principled doctrine of
consensual procedure should incorporate appropriate regard for the due
process considerations implicated in forum access and governing law.
Additionally, courts ought to develop a constructive standard of waiver
for civil litigation rights.
Restoring Due Process and Reasonable Relationship Concepts
Characterization problems lie at the heart of a principled theory of
consensual adjudicatory procedure. The generally accepted view of
forum-selection clauses as venue-conferring contributes directly to the
devaluation of competing fundamental litigation rights. The venue
characterization covers a wealth of procedural sins and allows courts
easy justifications for bad rulings. Moreover, the venue characterization
has permitted the Supreme Court to evade the central Erie issue of
federal common law rulemaking in the area of contract law.
The first step toward a principled theory of consensual adjudicatory
procedure is recognizing that forum-selection clauses are jurisdictional
and not merely matters of venue. It is judicial sleight-of-hand to
pronounce that forum-selection clauses do not oust a court of jurisdiction
when, as a matter of theoretical and practical effect, such provisions do
rob a particular court of its ability to adjudicate the substantive merits of
a lawsuit. When a court is asked to abdicate its jurisdiction, whether the
abdication is merely geographical or substantive, its starting proposition
should be the principle that "[w]hen a federal court is properly appealed
to in a case over which it has by law jurisdiction, it is its duty to take
such jurisdiction." 7 Further, as the abstention cases teach," 8 the
federal courts should have exceptional or extraordinary reasons for yielding
their properly conferred jurisdiction." 9
The most immediate effect of construing forum-selection clauses as
jurisdictional is to obviate the need for the post-Bremen litany of
reasonableness factors. The subsequent history of The Bremen demonstrates
how doctrinal laxity spawns a mishmash of legal tests and standards.
Forum-selection clauses are now measured by reasonableness criteria
derived from venue, forum non conveniens and contract principles. Clause
enforceability in large measure depends on the particular spin a judge
chooses to impose on the facts. Moreover, the reasonableness concerns
that inform venue, forum non conveniens, and contract law are
qualitatively different from the reasonableness considerations of jurisdictional
In addition to characterizing forum-selection clauses as jurisdictional,
courts should engage in thoughtful distinction between derogation and
prorogation concepts.4 1 On the derogation side, it should be
emphatically recognized that subject matter jurisdiction cannot be consensually
yielded by prospective litigants. It should also be recognized that
personal jurisdiction cannot simply be waived without some consideration of
the due process protections implicated in that concept. On the
prorogation side, analogous scrutiny should be afforded to the nature of the
consent of the parties. Consent should not be refracted through contractual
principles, but rather through a standard of informed civil waiver.
The federal courts have labored for more than forty years elaborating
highly technical requirements for due process fairness in relation to
personal jurisdiction, 4 12 only to collapse in the face of forum-selection
clauses. It is ironic that the law steadfastly protects a defendant from
litigation in an unreasonable forum when that defendant knows nothing
at all about subject matter or personal jurisdiction, yet the law does not
supply the same due process protection if the defendant signs a
boilerplate agreement. In the latter instance the law simply imputes
Moreover, it is troubling that a Supreme Court that has so carefully
crafted jurisdictional prerequisites blindly accedes to the notion that
parde novo review should be respected and federal courts should stay their hands to prevent
confusing interpretation of state law); Pullman, 312 U.S. at 496 (federal judicial resources
should not be wasted to make determinations of state regulatory law when effective state
tribunal exists to protect constitutional claims).
410. This critique is developed generally by Professor Gilbert. See supra note 4, at
4367. Also, the due process concerns and reasonableness tests underlying personal
jurisdiction and choice-of-law analysis are similar, but not co-extensive. See authorities cited
supra note 313.
411. For a discussion of derogation and prorogation clauses, see supra note 17.
412. For the development of the due process constitutional protections in regard to
personal jurisdiction, see Asahi Metal Indus. v. Superior Court, 480 U.S. 102 (1987);
International Shoe Co. v. Washington, 326 U.S. 310 (1945). See generally J. Friedenthal,
M. Kane, & A. Miller, supra note 10, §§ 3.10-3.17, at 123-61 (discussing development of
fairness requirement in personal jurisdiction); E. Scoles & P. Hay, supra note 305,
§§ 8.25-8.30, at 292-307 (jurisdiction based on defendant's economic activities within the
ties, in advance of litigation, can designate an appropriate forum. This
proposition is antithetical to the well-articulated principle that legal
claims should have some reasonable relationship to the forum in which
the claims are adjudicated.4 13 How can parties consent, in advance of
their litigation, to such an appropriate forum?4 14 Moreover, it is
wellestablished that if a contractual dispute triggers application of a
forumselection clause, all the non-contractual claims travel to the selected
forum.4 11 Can it reasonably be maintained that when the forum-selection
clause was negotiated, the parties also contemplated adjudication of
noncontract claims in the selected forum?4" 6 These same issues are
implicated in choice-of-law provisions that prospectively designate governing
law without regard to the nature or situs of the underlying claims.
Viewing forum-selection clauses as jurisdictional also serves to counter
potential inequities raised by offensive and defensive assertion of a
forumselection clause. Courts have devoted virtually no analytical scrutiny to
which party invokes the clause or challenges its enforceability.4 17 When
a plaintiff seeks to enforce a forum-selection clause against a defendant,
413. See Allstate Ins. Co. v. Hague, 449 U.S. 302, 308 (1981); Home Ins. Co. v. Dick,
281 U.S. 397, 408 (1930); cf. Carefree Vacations, Inc. v. Brunner, 615 F. Supp. 211, 215
(W.D. Tenn. 1985) ("In a multi-state transaction, the contracting parties' choice-of-law
provision is valid absent contravention of public policy of the forum state or a showing
that the selected forum does not bear a reasonable relationship to the transaction.").
Both the U.C.C. and the Restatement (Second) of Conflict of Laws require some kind of
"reasonable relation" or "substantial relationship" to the forum in order to validate a
choice-of-forum or choice-of-law clause. See U.C.C. § 1-105 (1987); Restatement
(Second) of Conflict of Laws § 187(2)(a) (1971).
414. See Gilbert, supranote 4, at 56-57 (discussing due process implications of
foreseeability and requirement of predicting appropriate forum and applicable law).
415. See Stewart Org., Inc. v. Ricoh Corp., 779 F.2d 643, 650-51, vacated, 785 F.2d
896 (1986), rev'd, 810 F.2d 1066 (11th Cir. 1987) (en banc) (per curiam), aff'd, 108 S. Ct.
2239 (1988); cf Stewart Org. Inc. v. Ricoh Corp., 108 S. Ct. 2239, 2245 (1988)
(noncontractual claims travel to selected forum by implication, since court did not discuss
issue of severability raised in the lower court opinions).
416. The Eleventh Circuit in Ricoh thought this possibility had in fact been considered.
In determining the scope of the forum-selection clause to include non-contractual claims,
the court stated:
It is clear from the language of the agreement that it anticipated that any
dispute arising out of or in connection with the dealer-manufacturer
relationship was to be governed by the clause. Of necessity this includes causes of
action arising directly from the contract and those causes concomitant. There is
no logical reason not to give these parties the benefit of their bargain.
Ricoh, 779 F.2d at 650 (emphasis in original) (relying on Bense v. Interstate Battery Sys.
of Am., 683 F.2d 718, 720 (2d Cir. 1982)). See also Ricoh, 810 F.2d at 1069-70 (same).
The concurring opinion also noted that the fact that the parties entered into a valid
contract creates a conclusive presumption "that Ricoh has already compensated Stewart,
through lowered costs or some other method, for any inconvenience that Stewart or its
witnesses might suffer by trying this case in New York." Ricoh, 810 F.2d at 1075
(Tjoflat, J., concurring).
417. See Gruson, Forum-Selection Clauses, supra note 3, at 200. Both plaintiffs and
defendants have challenged forum-selection clauses, or asserted their enforcement, in the
variety of procedural postures in which these cases arise: state court, federal court and
proper regard should be given to the defendant's due process rights to be
sued in a particular forum. Conversely, when a defendant challenges or
invokes a forum-selection clause to the detriment of the plaintiff, the
courts should accord at least some traditional deference to the plaintiff's
In summary, traditional jurisdictional principles relating to forum
access should govern forum-selection clause enforceability. Litigants may
choose their forum and governing law so long as the choices comport
with articulated notions of justice and fair play. The concept of
reasonableness should derive from jurisdiction and choice-of-law canons, not
venue or contract law.
While there is no law against making a bad bargain,4" 8 there is a
longstanding American tradition that "[w]aivers of constitutional rights...
must be deliberately and understandingly made."4 19 Even the Supreme
Court has acknowledged that personal jurisdiction represents an
individual liberty interest grounded in fourteenth amendment due process
concerns, 42 0 and that this substantial right should not so freely and
uncritically be bartered away.
Contractual Waiver of Civil Litigation Rights
The waiver of rights in criminal and civil law has developed in
analogous but not identical fashion.42 1 The central requirements for a waiver
in criminal law, knowledge and voluntariness, are derived from the 1938
Supreme Court case Johnson v. Zerbst4, 2 which defined waiver as "an
intentional relinquishment.., of a known right or privilege."4'2 3 In civil
law cases, on the other hand, contract principles and terminology
generally govern the validity of waivers.4 24 Nevertheless, criminal and civil
waivers are united in the common but elusive notion of consent.42 5
Both criminal and civil waivers have developed different standards in
relation to different rights. For example, in criminal law, the strictest
Johnson standard of knowing and voluntary waiver has been applied to
the right to counsel, formal indictment before trial, the right to trial
itself, and trial by jury.4 26 A lesser standard of waiver has been applied to
the right to be tried in the district where the offense was committed, to be
418. See J. Calamari & J. Perillo, supra note 390, § 10-1, at 429-30 (consumer
419. National Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311, 332 (1964) (Black, J.,
420. See Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S.
694, 702-03 (1982); see also supra note 412 and accompanying text.
421. See generally Rubin, supra note 6 (discussing lack of clear definition of waiver in
both civil and criminal contexts).
422. 304 U.S. 458 (1938).
423. Id. at 464.
424. See Rubin, supra note 6, at 491, 512-28.
425. See id. at 529.
426. See id. at 494-95 nn.76-79 (denoted as the "strict standard" of waiver).
present at one's trial, to raise defenses and objections and to avoid
selfincrimination.4 27 The waiver of these rights must be voluntary but need
not be made knowingly.428 On the civil side, consent judgments and
settlements that are tantamount to a waiver of the right to trial are judged
by principles of contract law,42 9 while waiver of defenses and objections
generally are not evaluated by contract principles or Johnson standards,
but by the principle of "stage" preclusion.4 30
As one commentator suggests, "the law of waiver, when viewed as a
totality, is presently in disarray,"4 3 1 and conceptual problems are
patently manifest in the case law. Although many different standards for
waiver exist in both criminal and civil cases, "no court has articulated a
general rule for determining the category in which a particular waiver
belongs."4'3 2 This same commentator notes that different types of rights
exist that require different waiver standards, yet the cases do not
distinguish these rights in any meaningful fashion.43 3 Therefore, even rights
viewed as "fundamental rights" can nonetheless be subjected to a lesser
standard of waiver.434
Waiver theory is also plagued by linguistic and analytical difficulties.
Concepts such as knowledge, intention, voluntariness and consent
necessarily entail ventures into philosophy and psychology, generating at
times "a unique level of obscurity."4'35 On the civil side, waiver
Judicial definitions of voluntariness include such mysterious terms as "free will"
or "free choice," terms that have been sources of debate for several milennia.
Efforts to avoid such philosophical issues necessarily lead to the equally
uncertain field of psychology. As Justice Frankfurter wrote, the question of volition
"invites psychological judgment-a psychological judgment that reflects deep,
tions based in public policy also provide elusive, mysterious
determinants.4 3 6
Moreover, the concept of waiver strikes an uneasy balance between
values enhanced and dangers inherent in recognition of the waiver. In
criminal law, the application of a strict waiver standard counters the
dangers, but inadequately accounts for countervailing values.4 37 In
contrast, the application of contractual principles in civil law favors the
value-enhancing aspect of waivers at the expense of potential and actual
By permitting parties to waive their legal rights through private
agreements, this framework allows the value of waivers to be realized, but
offers little protection against their dangers. Since the general civil law
policy is to enforce private agreements, it is rare that a waiver will be
invalidate4d38 on the contract law grounds of fraud, duress or
Finally, application of contract principles in civil law to determine the
validity of waiver strains notions of consent and voluntariness. It is
ironic that courts in forum-selection cases enforce such provisions over
the strenuous objection of one of the "consenting" parties.4 39 That
courts do so is more a tribute to the sanctity of contract than a
recognition of competing rights.
Thus the ultimate inquiry must be whether the application of contract
principles to civil law waivers adequately balances the dangers of waiver
with the value-enhancing dimension of consent. The cases suggest that it
does not. If a waiver represents an "alternative, informal interaction that
the state encourages by its enforcement of the waiver,"' then it is
incumbent that "courts should strive to translate the fairness of the plenary
interaction into the informal setting of the abbreviated one."" 1
Therefore, a party waiving a right should be assured the functional equivalent
of that right in the setting in which the right is foregone. As a practical
matter, it is the court's task to "determine the nature of the right that has
been waived, identify the kind of protection that the right provides, and
then require that an informal version of those same protections be
even if inarticulate, feelings of our society." It seems unlikely that any court
could respond to this invitation with a set of clear legal rules.
Id. at 529-30 (citations omitted).
436. See id. at 531 (unclear what "public policy" consists of); supranotes 282, 349 and
437. See Rubin, supra note 6, at 488-91, 533-34.
438. Id. at 534.
439. It is almost painfully obvious that "[ijn such a situation, it does not make sense to
argue that enforcing the waiver fulfills the first party's desires. Perhaps he was willing to
part with his right at one time, but now he is no longer so inclined; otherwise there would
be no dispute." Id.
440. Id. at 537.
This equivalence principle supplies a useful framework for determining
the validity of forum-selection clauses. Under this view the most
important rights, those affecting judicial adjudication, are governed by the due
For all these adjudication-related waivers, therefore, courts should
require that the functional equivalent of due process protection be
provided in the interaction between parties. A due process standard
would protect against the dangers of waivers; under a rigorous
application of such a standard, a waiver would be no more likely to produce
injustice than would a full-scale procedure." 3
Forum-selection and choice-of-law provisions should not be viewed as
mere creatures of contract law. These provisions must be viewed as
involving serious due process rights in relation to forum-access and
governing law. Although contractual principles may supply some guidance
for contract interpretation, contract law should not subvert due process
inquiries into the fundamental rights at stake. The due process concerns
of jurisdiction and choice-of-law must prevail as the central referents for
validity and enforceability of such consensual arrangements. Contract
rules "cannot be used to justify those waivers that involve constitutional
rights since such rights necessarily take precedence over the contract
policy of honoring private agreements."' 4
The doctrine of consensual adjudicatory procedure manifested
through forum-selection and choice-of-law provisions is now a fixed
feature of the adjective law. Traditional rejection of such mechanisms has
yielded to wholesale, largely uncritical enforcement. Because of the
favorable reception that courts accord forum-selection and choice-of-law
provisions, these stipulations are becoming increasingly prevalent in all
aspects of commercial and non-commercial dealings.
The task of the courts is to supply more conceptual clarity to the
doctrine of consensual adjudicatory procedure. This entails acknowledging
forum-selection clauses as jurisdiction-ousting or jurisdiction-conferring.
This entails recognizing that the supremacy of contract principles in civil
law waiver has sacrificed fundamental litigation rights. Due process
concerns must be restored as the centerpiece of judicial scrutiny.
The values enhanced by consensual agreements are not to be
trivialized in the context of contemporary complex litigation. Among these
values are predictability, certainty, security, stability and simplicity.
443. Id. at 538; see also Gilbert, supra note 4, at 40, 43-66 (placing the forum in an
uninterested state implicates due process concerns). But see E. Scoles & P. Hay, supra
note 305, §§ 8.13-8.19, at 275-84 (discussing jurisdiction based on consent); id. §§
18.118.13, at 632-53 (discussing party autonomy in choice of forum law); Gruson, Governing
Law Clauses, supra note 3, at 216-17 (1982) (voiding the forum selection clause nullifies
the parties' freedom of contract).
444. Rubin, supra note 6, at 545.
Other values are cost minimization, time efficiency and flexibility. Yet
the courts have not inquired whether contractual provisions have
actually enhanced these values. Indeed, it is patently ironic that proliferating
litigation over forum-selection and governing-law clauses is
counterproductive to the very values that these devices supposedly enhance.
Finally, courts must acknowledge that "[w]aivers can be dangerous for
precisely the same reason that they can be valuable: they constitute
alteratives to the protections provided by the plenary assertion of one's
rights."" 5 Therefore, a principled theory of consensual adjudicatory
procedure will strike a fair balance between the values of such waivers
and the dangers inherent in yielding fundamental rights. That balance
must be mediated by the due process priciples that traditionally have
guided jurisdictional and choice-of-law determinations.
445. Id. at 489.
1. The Arbitration Trilogy ..........................
2. Further Supreme Court Imprimatur to Consensual Jurisdiction ...................................... II. Characterization Problems : Consensual Procedure in Chaotic Confusion .......................................
8. See, ag., Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth , 473 U.S. 614 , 629 ( 1985 ) (lauding enhanced values of international comity, sensitivity to international commercial system, and predictability); Luce v . Edelstein , 802 F.2d 49 , 57 ( 2d Cir . 1986 ) (forum-selection clauses not disfavored in law); Bense v . Interstate Battery Sys. of Am., 683 F.2d 718 , 721 ( 2d Cir . 1982 ) ("'general hostility' towards forum-selection clauses is today simply a vestigial remainder of an outmoded doctrine"); Merrill Lynch , Pierce, Fenner & Smith Inc . v. Lecopulos, 553 F.2d 842 , 844 ( 2d Cir . 1977 ) ("forum selection clauses have come to be recognized as useful devices" ).
33. See infra notes 202-03 and accompanying text.
34. See J. Friedenthal , M. Kane & A. Miller , supra note 10, § 2 .1, at 10.
35. See International Shoe Co. v. Washington, 326 U.S. 310 , 316 ( 1945 ); 4 C. Wright & A. Miller , Federal Practice & Procedure § 1063, at 225 (2d ed. 1987 ).
36. See Dix , Waiver in Criminal Procedure: A BriefFor More CarefulAnalysis , 55 Tex. L. Rev. 193 ( 1977 ); Rubin, supra note 6, at 480-83, 491 - 512 ; Spritzer, Criminal Waiver, ProceduralDefault and the Burger Court , 126 U. Pa . L. Rev. 473 ( 1978 ) ; Tigar, The Supreme Court 1969 Term Foreword: Waiver of ConstitutionalRights:Disquietin the Citadel, 84 Harv. L. Rev . 1 ( 1970 ) ; Westen, Away From Waiver: A Rationalefor the Forfeitureof ConstitutionalRights in CriminalProcedure,75 Mich. L. Rev . 1214 ( 1977 ) ; Comment, Criminal Waiver: The Requirements of Personal Participation , Competence andLegitimate State Interest , 54 Calif. L. Rev. 1262 ( 1966 ) ; Comment, Guilty Plea Waiversand the Right to CompulsoryProcess, 27 UCLA L . Rev . 1303 ( 1980 ). For a discussion of waiver in relation to civil law forum-selection clauses, see infra Parts VI C, VII B .
37. See supra notes 5-9 and accompanying text; infra Part I A .
38. See infra notes 49-54 and accompanying text (discussing The Bremen) .
46. See Stewart Org., Inc. v. Ricoh Corp., 108 S. Ct . 2239 , 2243 - 45 ( 1988 ).
47. Id . at 2250 ( Kennedy and O'Connor , JJ., concurring).
48. "In 1950 it was said of the few cases that enforced a forum clause, 'they stand alone, separate and apart, branded with the malodorous antipathy of a bastard child at a family reunion of bluebloods.'" Public Water Supply Dist . No. 1 v . American Ins. Co., 471 F. Supp . 1071 , 1072 n.1 (W.D. Mo . 1979 ) (quoting Zapata Off-Shore Co . v. M/S Bremen, 428 F.2d 888 , 900 n. 12 ( 5th Cir . 1970 ) (Wisdom , J., dissenting)) . The Western District of Missouri embraced the new doctrine of The Bremen and enforced a forumselection provision in a performance and payment bond . See id.; see also Gruson , ForumSelection Clauses, supra note 3 , at 138-47 ( discussing pre-Bremen decisions); authorities cited supra note 4 .
58. The Court stated: "The only question now before us is whether the person upon whom the summons and complaint was served was 'an agent authorized by appointment' to receive the same, so as to subject the respondents to the jurisdiction of the federal court in New York." Szukhent , 375 U.S. 311 , 313 . See Fed. R. Civ . P. 4 ( d ). The Court also noted that "[n]o questions of subject matter jurisdiction or of venue are presented . " Szukhent , 375 U.S. at 313 n.2.
59. See 4 C. Wright & A. Miller , supra note 35, § 1063 , at 225 ( citing FrCv. Compagnie de Saint- Gobain- Pont-a- Mousson , 636 F.2d 1300 , 1312 n.61 (D.C. Cir . 1980 ); Libby v . United States , 657 F. Supp . 1251 , 1252 -53 (M.D. Fla . 1987 ); Eastman Kodak Co . v. Studiengesellschaft Kohle , 392 F. Supp . 1152 , 1154 (D. Del . 1975 )).
60. The Bremen v . Zapata Off-Shore Co ., 407 U.S. 1 , 11 ( 1972 ).
330. Id . at 39-40.
331. See Carefree Vacations , Inc. v. Brunner, 615 F. Supp . 211 ( W.D. Tenn . 1985 ).
332. Id . at 214-15.
333. International Shoe Co. v. Washington, 326 U.S. 310 ( 1945 ).
334. See Carefree Vacations, 615 F. Supp . at 214. The court considered the factors that none of the parties lived or did business in Texas, the contract was executed in Illinois and Tennessee, and only one witness was from Texas. The court also rejected the idea that "the fact that payments were wired through Texas enroute to Illinois gives Texas the requisite relationship." Id.
335. See id. at 214- 15 . In determining the validity of the choice-of-law provision, the court observed: "In a multi-state transaction, the contracting parties' choice-of-law provision is valid absent contravention of public policy of the forum state or a showing that the selected forum does not bear a reasonable relationship to the transaction." Id. at 215 (citing Woods-Tucker Leasing Corp . v. Hutcheson-Ingram Dev . Co., 642 F.2d 744 , 749 - 53 (5th Cir. Apr. 1981 ), and relying on the "substantial relation" standard from the U.C.C. provisions of Texas, Tennessee and Illinois).
336. See Carefree Vacations, 615 F. Supp . at 215- 16 . Carefree Vacations serves as another illustration of hopelessly confused conflicts analysis that is neither predictable nor certain for the parties to the agreement. For a lengthy and thoughtful public policy and due process-centered approach to forum-selection and choice-of-law provisions , see Gilbert, supra note 4 , at 43- 72 . Other commentators, however, see such efforts to infuse reasonable relation tests as misguided and highly detrimental to the primary value of party autonomy . See Gruson , GoverningLaw Clauses, supra note 3 , at 216; E. Scoles & P. Hay, supra note 305, § 18 .8, at 647-48.
337. See U.S. Const. art. IV, § 1 (among states of the union, each state must give "Full Faith and Credit ... to the ... Judicial Proceedings of every other State"); see also E. Scoles & P. Hay, supra note 305, §§ 3 . 24 - 3 . 25 , 3 .30, §§ 24 . 1 - 24 . 48 .
338. See Durfee v. Duke , 375 U.S. 106 ( 1963 ) ; Chicot County Drainage Dist . v. Baxter State Bank , 308 U.S. 371 ( 1940 ). But see Kalb v . Feuerstein , 308 U.S. 433 , 438 ( 1940 ) (subject matter jurisdiction may be open to collateral attack if state court makes erroneous conclusion over exclusive federal court jurisdiction).
339. See J. Friedenthal , M. Kane & A. Miller , supra note 10, § 3 .26, at 182.
340. See Baldwin v. Iowa State Traveling Men's Ass'n , 283 U.S. 522 ( 1931 ).
341. See Yarn Indus., Inc. v. Krupp Int'l, Inc., 736 F.2d 125 , 128 - 29 ( 4th Cir . 1984 ).
342. Id . at 129. The Fourth Circuit noted that neither the district court nor the Second Circuit had ever ruled on the efficacy of the forum-selection clause: "Neither court discussed the validity of the clause or its reasonableness, but rather agreed that under any interpretation of the clause venue for any action arising under the contract between Yarn and Krupp could only be in Delaware or South Carolina, not in New York." Id. The court viewed the case as presenting a problem of issue preclusion under Parklane Hosiery Co . v. Shore, 439 U.S. 322 ( 1979 ). See Yarn Indus ., Inc., 736 F.2d at 128.
343. The court noted, "[w]ere it not for that contract provision, New York would lack both jurisdiction and venue. The only issue in this proceeding, therefore, is whether or not the contract provision providing for the acquisition of jurisdiction was valid." Leasewell, Ltd . v. Jake Shelton Ford, Inc., 423 F. Supp . 1011 , 1013 (S.D. W. Va . 1976 ) (mem .).
350. See The Bremen, 407 U.S. at 10.
351. Id . The Court in The Bremen relied on a series of lower federal and state cases that had already made some concept of "reasonableness" the benchmark for forum-selection clause enforceability . See Central Contracting Co. v. Maryland Casualty Co., 367 F.2d 341 , 345 ( 3d Cir . 1966 ); Anastasiadis v . S.S. Little John, 346 F.2d 281 , 284 ( 5th Cir . 1965 ), cert. denied,384 U.S. 920 ( 1966 ) ; Wm.H. Muller & Co. v. Swedish Am. Line Ltd., 224 F.2d 806 , 808 (2d Cir.), cert. denied, 350 U.S. 903 ( 1955 ); Cerro de Pasco Copper Corp. v. Knut Knutsen , O.A.S. , 187 F.2d 990 , 991 ( 2d Cir . 1951 ); Central Contracting Co . v. C.E. Youngdahl & Co., 418 Pa. 122 , 132 - 34 , 209 A.2d 810 , 816 ( 1965 ). The Court also noted that Muller was overruled in Indussa Corp . v. S.S. Ranborg, 377 F.2d 200 , 203 - 04 ( 2d Cir . 1967 ), as in conflict with COGSA, thereby anticipating The Bremen's "public policy" exception . See supra note 282 and accompanying text.
352. The Bremen v . Zapata Off-Shore Co ., 407 U.S. 1 , 15 ( 1972 ).
353. Id . at 18. For a discussion of these factors in the literature , see Gilbert, supra note 4 , at 32-42; Gruson, Forum-Selection Clauses , supra note 3 , at 163-92.
354. See Kolendo v. Jerell, Inc., 489 F. Supp . 983 , 985 (S.D. W. Va . 1980 ) (mem .). The Kolendo court noted that other courts recognized the additional factors of applicable governing law and place of execution or performance of the contract . See id. at 985 (citations omitted); Furbee v . Vantage Press, Inc., 464 F.2d 835 , 837 (D.C. Cir . 1972 ).
355. See Gaskin v. Stumm Handel GmbH , 390 F. Supp . 361 , 364 -65 (S.D.N .Y. 1975 ).
356. See id. at 365.
357. Id .
358. See id.
359. Id .
360. See generally cases cited supra note 3. The Gaskin court anticipated much of this analytical soup when it attempted to clarify some of these elements: "[T]he question is not whether the agreement is, as a matter of law, vitiated by the lack of equality, but rather whether justice requires that a distinction be drawn between freely negotiated contracts and standard form contracts, particularly where there is a lack of equality." Gaskin , 390 F. Supp . at 365 n. 5. Similarly, the court noted: "[C]onduct which does not rise to the level of unconscionability as a matter of contract law may well warrant consideration under the 'inequality' or 'overweening bargaining power' element of the reasonableness test . " Id. at 365 n.6.
361. 570 F. Supp . 708 (D.R.I . 1983 ).
362. Id . at 710 (emphasis in original).
363. Id . at 712 (citing Furbee v . Vantage Press, Inc., 464 F.2d 835 , 837 (D.C. Cir . 1972 )).
364. Id . (citing Leasewell, Ltd . v. Jake Shelton Ford, Inc., 423 F. Supp . 1011 , 1015 - 16 (S.D. W. Va. 1976 ) (mem .)).
365. Id . (citing Kline v . Kawai Am. Corp. , 498 F. Supp . 868 , 872 (D. Minn . 1980 )).
366. Id . (citing Hoffman v . Burroughs Corp., 571 F. Supp . 545 , 549 (N.D. Tex . 1982 ); Full-Sight Contact Lens Corp . v. Soft Lenses, Inc., 466 F. Supp . 71 , 73 (S.D.N .Y. 1978 )).
367. Id . (citing Hoffman, 571 F. Supp . at 549; Cutter v. Scott & Fetzer Co ., 510 F. Supp . 905 , 908 (E.D. Wis . 1981 )).
368. Id . (citing Anastasi Bros . Corp. v. St. Paul Fire & Marine Ins . Co., 519 F. Supp . 862 , 864 (E.D. Pa . 1981 )).
369. Id . (citing Plum Tree, Inc . v. Stockment, 488 F.2d 754 , 757 ( 3d Cir . 1973 )).
370. Id . (citing Cutter v . Scott & Fetzer Co., 510 F. Supp . 905 , 907 (E.D. Wis . 1981 )).
371. Id . (citing Full-Sight Contact Lens Corp . v. Soft-Lens, Inc., 466 F. Supp . at 73; Gaskin v. Stumm Handel GmbH , 390 F. Supp . 361 , 365 (S.D.N .Y. 1975 )).
372. Id .
373. See Carefree Vacations , Inc. v. Brunner, 615 F. Supp . 211 , 214 (W.D. Tenn . 1985 ). The court adhered to its own version of a two-pronged test, id . at 213, and derived its factors from Taylor v. Titan Midwest Construction Corp ., 474 F. Supp . 145 , 149 (N.D. Tex . 1979 ); Furbee v . Vantage Press, Inc., 464 F.2d 835 , 837 (D.C. Cir . 1972 ) ; and Gaskin v . Stumm Handel GmbH , 390 F. Supp . 361 , 368 -69 (S.D.N .Y. 1975 ). See Carefree Vacations , 615 F. Supp . at 214.
380. LFC Lessors, Inc. v. Pearson, 585 F. Supp . 1362 , 1364 (D. Mass . 1984 ).
381. Hunt Wesson Foods , Inc. v. Supreme Oil Co., 817 F.2d 75 , 77 ( 9th Cir . 1987 ) (quoting 4 S.Williston, A Treatise on the Law of Contracts § 618 (3d ed. 1961 )).
382. See supra note 3.
383. See , eg., Hunt Wesson Foods , Inc. v. Supreme Oil Co., 817 F.2d 75 , 78 ( 9th Cir . 1987 ); Zapata Marine Serv . v. O/Y Finnlines, Ltd., 571 F.2d 208 , 209 ( 5th Cir . 1978 ) (per curiam); City of New York v . Pullman Inc., 477 F. Supp . 438 , 443 (S.D.N .Y. 1979 ); First Nat'l City Bank v . Nanz, Inc., 437 F. Supp . 184 , 187 (S.D.N .Y. 1975 ) (mem .).
384. See Proyecfin de Venezuela , S.A. v. Banco Industrial de Venezuela, S.A. , 760 F.2d 390 , 395 - 97 ( 2d Cir . 1985 ).
385. See , e.g., Central Contracting Co. v. Maryland Casualty Co., 367 F.2d 341 , 345 - 46 ( 3d Cir . 1966 ) (discussion of contract principles relating to duty to read); Richardson Greenshields Secs ., Inc. v. Metz, 566 F. Supp . 131 , 133 (S.D.N .Y. 1983 ) (citing J. Calamari & J. Perillo , The Law of Contracts §§ 9 -41 to - 46 (2d ed. 1977 ) on duty to read, among other contract principles); Richardson Eng'g Co. v . IBM , 554 F. Supp . 467 , 469 (D. Vt . 1981 ) (contract signifies agreement not to plead unfamiliarity with contract provisions) , aff'd, 697 F.2d 296 ( 2d Cir . 1982 ); Cruise v . Castleton, Inc., 449 F. Supp . 564 , 570 (S.D.N .Y. 1978 ) (members' knowledge of association constitution and by-laws, containing forum-selection clause , is presumed).
386. See Central Contracting Co. v. Maryland Casualty Co., 367 F.2d 341 , 345 - 46 ( 3d Cir . 1966 ); Richardson Greenshields Sees ., Inc. v. Metz, 566 F. Supp . 131 , 133 (S.D.N .Y. 1983 ); Richardson Eng'g Co. v . IBM , 554 F. Supp . 467 , 469 (D. Vt . 1981 ), aff'd, 697 F.2d 296 ( 2d Cir . 1982 ); Cruise v . Castleton, Inc., 449 F. Supp . 564 , 570 (S.D.N .Y. 1978 ) ; see also Mercury Coal & Coke, Inc . v. Mannesmann Pipe & Steel Corp., 696 F.2d 315 , 318 ( 4th Cir . 1982 ) ("Additionally, Mercury avers that the forum choice never became a 401. Id. at 332 (citing Johnson v . Zerbst , 304 U.S. 458 , 464 ( 1938 ) and a string of other waiver cases in the criminal law area). For a discussion of the parallel but dissimilar development of the concept of waiver in the criminal and civil law, see Rubin, supra note 6 passim; infra Part VII B .
402. National Iranian Oil Co. v. Ashland Oil, Inc., 817 F.2d 326 , 331 - 32 (5th Cir.) (citing Watkins v . Fly , 136 F.2d 578 , 580 (5th Cir.), cert. denied, 320 U.S. 769 ( 1943 ) ; Restatement (Second ) of Contracts § 84 , comment b ( 1981 ) ), cert . denied, 108 S. Ct . 329 ( 1987 ).
403. Patten Sees . Corp. v. Diamond Greyhound & Genetics , Inc., 819 F.2d 400 , 407 ( 3d Cir . 1987 ) (citing Royal Air Properties, Inc . v. Smith , 333 F.2d 568 ( 9th Cir . 1964 )).
404. See Patten Secs. Corp., 819 F.2d at 407; National Iranian Oil Co. v. Ashland Oil, Inc., 817 F.2d 326 , 332 (5th Cir.), cert. denied, 108 S. Ct . 329 ( 1987 ).
405. See Leasewell , Ltd. v. Jake Shelton Ford, Inc., 423 F. Supp . 1011 , 1016 - 17 (S.D. W. Va. 1976 ) (mem .) (extensive citation to Justice Black's dissenting opinion in Szukhent) .
406. See id. at 1017 . The court held the forum-selection clause unjust and unreasonable under Bremen standards, which it expected West Virginia would and should adopt as the modern view . See id. at 1015 . It also avoided addressing the issue of unequal bargaining power . See id. at 1016-17; see also Gilbert, supranote 4, at 72 ( "Even outside the contract of adhesion field, abuse of such clauses is widespread .... In today's economy, equal bargaining power cannot be 'presumed.' Zapata will render a disservice to sound development of the law if it leads to a choice-of-court-clauses epidemic.") (quoting Nadelman , supra note 49 , at 134).
407. England v. Louisiana State Bd. of Medical Examiners , 375 U.S. 411 , 415 ( 1964 ) (quoting Willcox v . Consolidated Gas Co., 212 U.S. 19 , 40 ( 1909 )).
408. See , e.g., Louisiana Power & Light Co . v. City of Thibodaux , 360 U.S. 25 ( 1959 ); Burford v . Sun Oil Co., 319 U.S. 315 ( 1943 ) ; Railroad Comm'n v. Pullman Co ., 312 U.S. 496 ( 1941 ).
409. See LouisianaPower & Light Co., 360 U.S. at 29 ( state court determinations of decisive issue of state law ); Burford, 319 U.S. at 327-34 ( state regulatory agency subject to