Atlantic Marine v. U.S. District Court is scheduled for oral argument in the U.S. Supreme Court on Oct. 9. Professor Stephen Sachs, who has filed a brief in the case as amicus curiae, explains the issue before the Court this way: If a contract requires suit in a particular forum, and the plaintiff sues somewhere else, how may the defendant raise the issue?
Sachs, a scholar of civil procedure and conflict of laws, argues in his brief that both the petitioner, Atlantic Marine Construction Company, and the respondent, J-Crew Management, Inc., are both presenting flawed arguments to the Court. “The parties in this case defend two sides of a many-sided circuit split,” he writes in his brief filed in support of neither party. “This brief argues that a third view is correct.”
In fact, Sachs said in a recent interview, his review of the parties’ “cert” briefs showed them arguing two sides of an issue “on which the circuit courts had gone in multiple directions — three at least, and maybe four or five. And the sides they had picked were just the wrong ones.”
Given the technicality of the issue, Sachs decided to weigh in. “The Court obviously can get things right on its own, but it’s very hard to do that when no one else is making arguments for you,” he said. “That is one of the roles that amici typically play — making sure that the Court knows someone has fleshed out the issue and highlighted potential areas of concern.”
Sachs is gratified that the parties involved in Atlantic Marine and the justices all have taken note of his brief. Both the petitioner and respondent cited to his brief in their own briefs filed with the Court. While Sachs’ motion to argue before the justices was not granted — such motions rarely are — the Court issued an order on Sept. 30 instructing the parties to “be prepared to address at oral argument the arguments raised in the brief of Professor Stephen E. Sachs as amicus curiae in support of neither party.” (Read more about this "rare homework assignment" in the National Law Journal.)
“It shows, I hope, that disposing of the case on these grounds is a live possibility, in a way that makes it important to signal to the parties to prepare in advance,” said Sachs.
Atlantic Marine originated as a dispute between a Virginia-based contractor and a subcontractor on a building project in Fort Hood, Texas, explained Sachs, who clerked for Chief Justice John Roberts during the 2009-2010 term and practiced appellate litigation at Mayer Brown before joining the Duke Law faculty. While their contract specified that any disputes between them would be litigated in Norfolk, Va., the subcontractor sued the contractor in Texas, claiming that a Texas statute allowed it to do so.
“The question is, what mechanism should the contractor, Atlantic Marine, use to bring this issue up? The contractor claims it is a problem of venue — that the forum selection clause in the contract destroyed ‘proper venue’ which ordinarily would let you bring the case in Texas,” said Sachs. “The subcontractor, J-Crew, says, ‘No, venue is not lacking, because venue is defined by statute.’ According to the subcontractor, the only thing Atlantic Marine could do is request a transfer from one court to another, which gives the court a considerable amount of discretion.”
A majority of appellate courts say that a forum selection clause destroys proper venue, while a minority say that a discretionary transfer to another court is the only option, said Sachs. “And finally the First Circuit and maybe a few others say, ‘you’re both wrong. Really, this is just a defense to liability in that court, and there are standard procedures for raising that.’” Sachs argues in his brief that the First Circuit’s approach “is closest to the truth,” and is workable in many circumstances.
Sachs would like the justices to vacate the judgment under appeal in Atlantic Marine and send it back down to the Fifth Circuit Court of Appeals “to let them figure out where to go from here,” he said. “It might get sent down further; there might be some preservation issues about whether they made the argument the right way in the District Court. But it’s not something the Supreme Court has to fully determine.”
Atlantic Marine is a significant case because of the prevalence of forum selection clauses in contracts, said Sachs. “Forum selection clauses are common for good reason. When people from different states enter a contract, they want to know where any lawsuit will end up. When you have sophisticated parties signing a contract, they want to have that determined. It’s negotiated over, it’s bargained for, it’s something they want to nail down. And if the court doesn’t identify the right procedure for dealing with it, you either have a lot of statutory confusion, straining other parts of the venue statutes that are supposed to apply, or you prevent parties from getting the benefit of their bargains.”
Sachs, who decided to write and file his brief after coming across the Atlantic Marine grant of certiorari and related briefs on Scotusblog, has clearly enjoyed digging into the issues in the case.
“Civil procedure is fun particularly because of the little quirks and the ins and outs of the rules,” he said. “You very quickly get into the strategy of litigation. This is something the parties are going to be thinking about. Where you file your suit matters a lot — it determines which judge you’re going to be in front of, which jury is going to hear your case, and what procedural rules are going to apply. Those things matter — that’s why parties fight over these clauses. And if the Court doesn’t handle them in such a way that allows them to be easily enforced, you can imagine the various problems that would arise.
“I find it really interesting when something I study as part of teaching Civil Procedure suddenly becomes relevant to a real-world case in the Supreme Court. And this is, in some ways, the kind of case the Court should be taking more frequently. In my brief I identify three more circuit splits that are still unresolved about other aspects of this issue that the Court hasn’t yet addressed.
“I also think it’s the job of academics to stay connected with what’s going on in the courts and to be able to say, ‘Hey, this will actually have some effect beyond this case that might not have been immediately apparent just based on the parties’ briefs,’” he said.