Companies that rely on contractual forum-selection clauses to keep their disputes out of US courts should take note of a recent opinion from the US Court of Appeals for the Second Circuit, in New York. In Phillips v Audio Active, [2007], the court took a more restrictive approach to the interpretation of contractual forum-selection clauses than had previously been adopted by the Court of Appeals for the Seventh Circuit, in Chicago. As a result, the plaintiff Phillips was allowed to proceed in New York with certain statutory and common law claims related to the subject matter of an agreement into which he had entered with the defendant, even though the contract specified that “any legal proceedings that may arise out of [the contract] are to be brought in England”.
In the earlier Seventh Circuit case, Omron Healthcare v MacLaren Exports, [1994], the court held that a forum-selection clause applicable to all claims that “arise out of” a contract applies to “all disputes the resolution of which arguably depend on the construction of an agreement”. As a result, the Seventh Circuit held that plaintiff Omron was required to litigate its trademark infringement claim in the High Court of Justice in England, even though the plaintiff’s statement of its claim did not require any reference to the parties’ contract or any contractual rights or obligations.
