Transfer of Venue • Forum Nonconveniens • Forum Selection Clause
Jon Feingersh Photography v. Houghton Mifflin Harcourt Publ’g Co., PICS Case No. 14-0233 (E.D. Pa. Feb. 24, 2014) Slomsky, J. (8 pages).
Venue was improper in Pennsylvania where forum selection clause in licensing agreement specified that copyright disputes would be heard by New York court, and “private” and “public” factors weighed in favor of transfer. Case transferred.
Plaintiff entered into certain stock photo licensing agreements, granting defendant limited licenses to use certain photographs in its educational publications. The licensing agreement provided that disputes under, inter alia, Title 17 (Copyright) of the United States Code were to be governed by New York law in a New York court.
Plaintiff sued defendant in the United States District Court for the Eastern District of Pennsylvania, alleging copyright infringement and breach of contract. Defendants moved to dismiss, asserting that venue was improper under the forum selection clause in the licensing agreement. In the alternative, defendant sought transfer to a New York court. Plaintiff argued that the copyright infringement claims are not subject to the forum selection clause and that even if the court strictly enforced the forum selection provisions, only the breach of contract claims should be transferred.
The United States District Court for the Eastern District of Pennsylvania transferred the entire case to the United States District Court for the Southern District of New York and withheld ruling on defendant’s motion to dismiss.
A district court may transfer a case pursuant to 28 U.S.C. §1404(a) for the convenience of parties and witnesses to any district where it might have been brought or to which all parties have consented.
A forum selection clause can be a term of a contract and agreed to by the parties. The clause is valid absent “fraud, influence or overwhelming bargaining power.” Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995). Moreover, the party seeking transfer must establish that: (1) venue is proper in the transferee forum; (2) transfer is more convenient for the parties and witnesses; and (3) transfer would be in the interest of justice.
In Jumara, the United States Court of Appeals for the Third Circuit set forth “private interest” and “public interest” factors that a district court should consider when deciding whether to transfer a case. “Private interests” include the parties’ forum preference, whether claim arose elsewhere, the convenience of the parties (relative physical and financial condition), convenience of witnesses (only to extent may actually be unavailable in one of the fora), and the location of books and records (limited to extent files could not be produced in alternative forum). “Public interests” include enforceability of the judgment, practical considerations of trial, relative administrative difficulty, local interests in deciding local controversies at home, public policies of the fora, and the familiarity of the trial judge with applicable state law in diversity cases.
Here, private interest factors weigh in favor of transferring the case. With respect to parties’ forum preferences, the parties agreed to litigate any dispute in state or federal court in New York in accordance with the contract. Plaintiff agreed to New York as the forum, and is bound by this agreement. In addition, plaintiff has its principle place of business in Maryland, while defendant has its primary offices in Boston, and the event did not arise primarily in the Eastern District of Pennsylvania. Plaintiff has not shown that the Eastern District of Pennsylvania would be any more convenient for the parties than the Southern District of New York.
Public interest factors also weigh in favor of transfer. While plaintiff argues that the copyright claims should remain in the Eastern District of Pennsylvania even if the breach of contract claims are transferred, this would be an inefficient use of judicial resources. With respect to the other “public interest” factors, plaintiff has not established that the Eastern District would be any more familiar with the controversy than a New York court. It also does not appear to be any more expensive or cumbersome for the parties to litigate in New York than in Pennsylvania.
Furthermore, the licensing contracts specifically provide that any dispute under Title 17 of the United States Code shall be governed by the laws of the State of New York. Title 17 codified the Copyright Act, and copyright disputes clearly fall under the purview of this Title. Therefore, the forum selection clause specifically mandates that copyright disputes are subject to New York jurisdiction. Most importantly, plaintiff conceded that the forum selection clause applies to 82 of the 121 licenses at issue. Since New York is the proper forum for the majority of the licenses at issue, judicial efficiency requires that the entire matter be transferred.