A calligrapher sues an illustrator in a federal court in State A for breach of contract. The contract provides that any lawsuits concerning the contract must be brought in State C. State A law provides that forum selection clauses are unenforceable. The defendant moves to transfer to State C. How should the court rule?

A calligrapher sues an illustrator in a federal court in State A for breach of contract. The contract provides that any lawsuits concerning the contract must be brought in State C. State A law provides that forum selection clauses are unenforceable. The defendant moves to transfer to State C. How should the court rule?

• A. Deny the motion because forum selection clauses are unenforceable under State A law
• B. Grant the motion because forum selection clauses are enforceable under federal law
• C. Grant the motion because State A law is inapplicable given a choice-of-law provision
• D. Consider the motion and weigh all factors, including forum clause

Answer: (B)

The main idea tested is that forum-selection clauses are enforced in federal courts under federal law, not by a state’s unenforceability rule. Under federal practice, a district court should honor a valid forum-selection clause and transfer the case to the designated forum, applying the clause as controlling weight in the decision to transfer. Here, the contract says the litigation must be in State C. Even though State A law says forum-selection clauses are unenforceable, a federal court applies federal law on this issue. The controlling federal rule—articulated in decisions like Bremen and, more recently, Atlantic Marine—presumes the clause is valid and should be enforced in transfer decisions unless a strong exception applies (fraud, illegality, or the clause being unreasonable or unjust). There’s no indication of fraud or other objection here, so the court should grant the transfer to State C under 28 U.S.C. § 1404(a). Denying based on State A’s unenforceability would ignore the federal standard that governs enforceability of forum clauses in federal courts. There’s no separate choice-of-law provision to justify invoking State A law to override the clause. Weighing all factors and treating the clause as just one factor would also miss the presumption that the forum clause controls, unless a valid exception applies. So the court should grant the transfer to the forum chosen by the contract, recognizing the forum-selection clause as enforceable under federal law.

The main idea tested is that forum-selection clauses are enforced in federal courts under federal law, not by a state’s unenforceability rule. Under federal practice, a district court should honor a valid forum-selection clause and transfer the case to the designated forum, applying the clause as controlling weight in the decision to transfer.

Here, the contract says the litigation must be in State C. Even though State A law says forum-selection clauses are unenforceable, a federal court applies federal law on this issue. The controlling federal rule—articulated in decisions like Bremen and, more recently, Atlantic Marine—presumes the clause is valid and should be enforced in transfer decisions unless a strong exception applies (fraud, illegality, or the clause being unreasonable or unjust). There’s no indication of fraud or other objection here, so the court should grant the transfer to State C under 28 U.S.C. § 1404(a).

Denying based on State A’s unenforceability would ignore the federal standard that governs enforceability of forum clauses in federal courts. There’s no separate choice-of-law provision to justify invoking State A law to override the clause. Weighing all factors and treating the clause as just one factor would also miss the presumption that the forum clause controls, unless a valid exception applies.

So the court should grant the transfer to the forum chosen by the contract, recognizing the forum-selection clause as enforceable under federal law.