As a matter of first impression, in Weber v. PACT XPP Technologies, AG, the US Court of Appeals for the Fifth Circuit held that a mixed standard of review must be used for forum non conveniens rulings involving forum selection clauses in the wake of the US Supreme Court's decision in Atlantic Marine Construction Co. v. U.S. District Court for the Western District of Texas (134 S. Ct. 568 (2013)). The Fifth Circuit will review de novo the district court's interpretation of the enforceability of the forum selection clause. If the forum selection clause is valid, the Fifth Circuit will then review for abuse of discretion the district court's balancing of private and public interest factors regarding the convenience of the forum.
In 2004, Peter Weber became CEO of PACT, a company incorporated in Germany. In 2008, Weber and PACT signed a written compensation agreement containing a forum selection clause requiring litigation in Germany. Weber sued PACT for breach of the agreement in 2013 in the US District Court for the Eastern District of Texas. Invoking the forum selection clause, PACT moved to dismiss.
The magistrate judge ruled that the forum selection clause was mandatory and enforceable, and recommended dismissal of the case without prejudice on forum non conveniens grounds. Weber objected. The district court adopted the magistrate's findings and recommendations, dismissing the case. Weber appealed.
Weber argued that the standard of review for appeal of a forum non conveniens dismissal based on a forum selection clause should be de novo. PACT responded that the abuse of discretion standard should instead apply.
As a matter of first impression, the Fifth Circuit held that after the Atlantic Marine decision, a mixed standard of review must be used for forum non conveniens rulings involving forum selection clauses. It explained that in Atlantic Marine, the Supreme Court held that an enforceable forum selection clause alters the factors a court must weigh to decide transfer of venue by removing from consideration all private interest factors and removing all weight given to the plaintiff's choice of forum. However, Atlantic Marine did not address the standard of review on an appeal of a forum non conveniens motion involving a forum selection clause.
The Fifth Circuit reasoned that the district court's interpretation of a forum selection clause must be reviewed de novo, just as an appellate court would review any other contract interpretation. If the reviewing court finds the forum selection clause to be valid, it must then review for abuse of discretion the district court's balancing of private and public interest factors.
After deciding the standard of review, the court held:
The forum selection clause was valid.
The district court did not abuse its discretion in its analysis of the balance of interest factors.
Therefore, the Fifth Circuit affirmed the district court's judgment.