The opinion of the court was delivered by: KELLY
JAMES McGIRR KELLY, District Judge.
This matter comes before the court on defendant Murlas Commodities, Inc.'s motion to dismiss and/or transfer this action to a different venue.
Plaintiff has brought suit charging defendant with violations of 18 U.S.C. § 1961 et seq., commonly known as the Racketeer Influenced and Corrupt Organizations Act (RICO), for alleged patterns of racketeering activity involving an investment account he held with Murlas Commodities, Inc. The plaintiff also has stated a cause of action under a theory of common law fraud.
The jurisdiction of this court is invoked under 18 U.S.C. § 1964(c) of the RICO Act with pendent jurisdiction over plaintiff's state common law fraud claim being asserted too.
A brief recitation of the course of conduct between the parties may be instructive in understanding the resolution of these motions.
Mr. Deolalikar, the plaintiff, received a telephone solicitation from Murlas of Miami, Inc.
inquiring of his interest in opening a commodities investment account with the defendant corporation. The plaintiff agreed to open an account and the proper agreement papers were prepared for his signature with $10,000 being initially deposited into the account. Both sides agree up to this point to these facts, but take issues as to what occurred next. Suffice it to say, Mr. Deolalikar's account suffered a $3,000 loss through a series of investments.
Troubled by these losses, the plaintiff contacted the defendant's representatives to complain about their trading strategies. The conversation ended with the plaintiff investing an additional $5,000 to bring his current account to $12,000 and total investment to $15,000.
The plaintiff notified the defendant of his intention to leave the country for a short hiatus and informed them that power of attorney would be conferred on a relative to represent his interest. The plaintiff also wrote letters of instructions on investment strategy. Upon returning to the United States approximately two months later plaintiff's account balance had been reduced to $652.42. These transactions, which resulted in losses, are the basis for plaintiff's claims against Murlas.
In order to open an account, a customer is required to sign an agreement which contains the rights, duties and obligations of both parties. One of the many terms contained within the agreement was a forum selection clause which specifies that any action against Murlas will be brought only in a court sitting in Chicago, Illinois. The agreement also contained a provision that allowed Murlas to settle any disputes with Mr. Deolalikar by use of an arbitration proceeding.
Murlas has asserted the forum selection clause in petitioning this court to transfer the matter to the Federal Court for the Northern District of Illinois.
Mr. Deolalikar raises three arguments why this motion to transfer should be denied. The first point is that the customer agreement, which constitutes a contract between the parties, was never accepted by Murlas. The second argument deals with the validity of enforcing a forum selection and arbitration clause when a federal claim under the RICO act is alleged. The last point centers on the notion that the forum selection and arbitration clauses are not enforceable since they run contrary to existing federal regulations governing commodities disputes.