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James E. Fitzgibbons v. Hill-Rom Company

June 28, 2012

JAMES E. FITZGIBBONS,
PLAINTIFF,
v.
HILL-ROM COMPANY, INC., DEFENDANT.



The opinion of the court was delivered by: Karen E. Schreier Chief Judge

ORDER TRANSFERRING CASE

Plaintiff, James E. Fitzgibbons, brought suit against defendant, Hill-Rom Company, Inc., alleging various claims stemming from Fitzgibbons's employment with Hill-Rom. Hill-Rom moves to dismiss the complaint for improper venue pursuant to Federal Rules of Civil Procedure 12(b)(3) and 12(b)(6). Docket 6. Alternatively, Hill-Rom requests that the case be transferred to Indiana in accordance with 28 U.S.C. § 1406(a) and the forum-selection clause in the employment contract between Fitzgibbons and Hill-Rom. Fitzgibbons resists both dismissal and transfer. Docket 8. For the following reasons, the court transfers this case to the United States District Court for the Southern District of Indiana.

BACKGROUND

The pertinent facts to this order, viewed in the light most favorable to the nonmoving party, Fitzgibbons, are as follows:

Fitzgibbons was hired as a sales manager by Hill-Rom's predecessor, Advanced Respiratory, Inc. (ARI), in February of 1998. In late 2003, Hill-Rom acquired ARI. In January 2004, Fitzgibbons and Hill-Rom entered into an "Executive Employee Agreement" (Agreement), which contained a forum-selection clause. The clause provides:

Choice of Forum. Executive acknowledges that the Companies are primarily based in Indiana, and Executive understands and acknowledges the Company's desire and need to defend any litigation against it in Indiana. Accordingly, the Parties agree that any claim of any type brought by Executive against the Company or any of its employees or agents must be maintained only in a court sitting in Marion County, Indiana, or Ripley County, Indiana, or, if a federal court, the Southern District of Indiana, Indianapolis Division. Executive further understands and acknowledges that in the event the Company initiates litigation against Executive, the Company may need to prosecute such litigation in such state where the Executive is subject to personal jurisdiction. Accordingly, for purposes of enforcement of this Agreement, Executive specifically consents to personal jurisdiction in the State of Indiana as well as any state in which resides a customer assigned to the Executive. Docket 9-1 at 28.

Additionally, the Agreement also contained a choice-of-law provision, which stipulated that Indiana law governs claims arising from Fitzgibbons's employment:

Choice of Law. This Agreement shall be deemed to have been made within the county of Ripley, State of Indiana and shall be interpreted and construed in accordance with the laws of the State of Indiana. Any and all matters of dispute of any nature whatsoever arising out of, or in any way connected with the interpretation of this Agreement, any disputes arising out of the Agreement or the employment relationship between the Parties hereto, shall be governed by, construed by and enforced in accordance with the laws of the State of Indiana without regard to any applicable state's choice of law provision.

Docket 9-1 at 29.

Fitzgibbons was employed by Hill-Rom until September 21, 2011, when Hill-Rom terminated his employment. Fitzgibbons filed this lawsuit in state court in South Dakota, alleging multiple claims related to his employment with Hill-Rom. Docket 7 at 3. After the action was removed to federal court, Hill-Rom moved to dismiss the complaint for improper venue under Federal Rules of Civil Procedure 12(b)(3) and 12(b)(6) or, alternatively, to transfer the case pursuant to 28 U.S.C. S 1406(a). Docket 7 at 9.

DISCUSSION

I. The Forum-Selection Clause: Choice-of-Law, Enforceability, and Applicability

A. Choice-of-Law

The court must first determine whether federal or state law applies to determine the validity and enforceability of the forum-selection clause. A forum-selection clause involves both substantive contract law and procedural venue considerations. Sun World Lines, Ltd. v. March Shipping Corp., 801 F. 2d 1066, 1068-69 (8th Cir. 1986). The Eighth Circuit Court of Appeals has not definitively stated whether the enforceability of a forum-selection clause falls under substantive or procedural law for the purpose of a choice-of-law analysis. See Servewell Plumbing, LLC v. Fed. Ins. Co., 439 F.3d 786, 789 (8th Cir. 2006) (noting there is a circuit split about whether to classify forum-selection clause jurisprudence as substantive or procedural). Because neither party argues that the choice-of-law determination is determinative of the outcome on the venue issue, this court does not need to determine whether forum-selection clauses are directly governed by substantive or procedural law and will apply federal law. Servewell, 439 F. 3d at 789 (holding that it is appropriate to follow federal ...


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