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BURGER KING CORP. v. STROEHMANN BAKERIES

June 18, 1996

BURGER KING CORPORATION, BURGER KING RESTAURANT #7391, HOST MARRIOTT CORPORATION, and MARRIOTT INTERNATIONAL, INC.
v.
STROEHMANN BAKERIES, INC.



The opinion of the court was delivered by: JOYNER

 JOYNER, J.

 JUNE 18, 1996

 This action comes before this Court on Defendant's motion to dismiss Plaintiffs' complaint for lack of subject matter jurisdiction and for failure to state a claim, and alternatively, to transfer this action to the United States District Court for the Southern District of Florida pursuant to 28 U.S.C. § 1404(a).

 Plaintiff Burger King Corporation ("Burger King") is a Florida corporation with a principal place of business in Miami, Florida. Plaintiff Burger King Restaurant #7391 ("the Restaurant"), is a franchise owned by Plaintiffs Host Marriott Corporation and Marriott International, Inc. (collectively "Marriott"). It is located within the Garden State Travel Plaza in New Jersey. Marriott is a Delaware corporation with a principal place of business in Washington, D.C. Defendant Stroehmann Bakeries, Inc. is a Pennsylvania corporation with a principal place of business in Horsham, Pennsylvania.

 Plaintiffs bring the present action seeking a declaratory judgment against Defendant. Specifically, Plaintiffs request a judgment that Defendant is under a duty to indemnify them for any damages awarded against them in a separate personal injury action filed in this court. *fn1" The underlying action alleges that in 1993, one of Defendant's employees was injured when he slipped and fell due to an allegedly defective condition on the loading dock of the Restaurant while making a delivery on Defendant's behalf.

 Plaintiffs' indemnification claim is based on a Supply Contract between Plaintiffs and Defendant. The Supply Contract contains both indemnification and insurance clauses, which provide that Defendant will indemnify Plaintiffs against certain claims as well as maintain liability insurance. Defendant moves to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), or in the alternative, to transfer this action to the Southern District of Florida pursuant to 28 U.S.C. § 1404(a). Because we agree that this action should be transferred, we do not reach the other issues.

 Defendant's argument for transfer rests on Paragraph 36 of the Supply Contract. This paragraph contains a forum selection clause providing that the Supply Contract shall be deemed to have been made and entered into in Florida, shall be governed by Florida law, and that all disputes arising from the Contract shall be litigated in Florida.

 In order to enforce the above forum selection clause, this Court must find that it is valid. Since a forum selection clause is prima facie valid in the absence of fraud or overreaching, and since Plaintiffs do not allege either (Burger King drafted the clause in question), this point is uncontested. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 32 L. Ed. 2d 513, 92 S. Ct. 1907 (1972).

 In adjudicating a motion to transfer, a federal court sitting in diversity should apply federal law - specifically 28 U.S.C. § 1404(a). See Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 101 L. Ed. 2d 22, 108 S. Ct. 2239 (1988). Once a defendant has challenged venue, the burden is on the plaintiff to show that venue is proper. Taylor v. White, 132 F.R.D. 636, 640 (E.D. Pa. 1990). In addition, under Pennsylvania law, the burden is on the plaintiff to show that enforcement of a forum selection clause would be unreasonable. While Pennsylvania law is not binding in a diversity case, the Third Circuit has followed this as the appropriate rule. See Central Contracting Co. v. Maryland Cas. Co., 367 F.2d 341 (3d Cir. 1966).

 Section 1404(a) provides that "for the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." In addition to these three factors, courts have considered several other factors, none of them conclusive, to determine whether a transfer is proper under § 1404(a). Romann v. Geissenberger Mfg. Corp., 865 F. Supp. 255 (E.D. Pa. 1994). For example, while a forum selection clause is not dispositive, its presence is a "significant factor that figures centrally in the district court's calculus." Stewart, 487 U.S. at 29.

 Here, the parties disagree as to the weight to be accorded the forum selection clause. Plaintiffs maintain that their choice of forum "should [not] be disturbed," Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507, 91 L. Ed. 1055, 67 S. Ct. 839 (1947) because it is "a paramount consideration." Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970), cert. denied, 401 U.S. 910, 27 L. Ed. 2d 808, 91 S. Ct. 871 (1971). Defendant, however, points out that all courts agree that "a forum selection clause is treated as a manifestation of the parties' preferences as to a convenient forum" and "while courts normally defer to a plaintiff's choice of forum, such deference is inappropriate where the plaintiff has already freely contractually chosen an appropriate venue." Jumara v. State Farm Ins. Co., 55 F.3d 873, 880 (3d Cir. 1995); see also Stewart, 487 U.S. at 29.

 Plaintiffs cite two cases to support their position that this Court should disregard the forum selection clause drafted by Burger King. Neither case is apposite, however. In Berman v. Cunard Line Ltd., 771 F. Supp. 1175 (S.D. Fla. 1991), the court declined to enforce a forum selection clause when the drafter had far greater bargaining power than the draftee, and when no operative facts of the action occurred in the forum selected by the clause. Here, one of the parties seeking to escape the clause, Burger King, is presumed to have greater bargaining power than Defendant in that it drafted and imposed what appears to be a standard form contract. Further, none of the operative facts of this action occurred in Plaintiffs' chosen forum. The second case, Cottman Transmission Systems, Inc. v. Martino, 36 F.3d 291 (3d Cir. 1994), is completely inapposite because there, the court expressly disregarded the forum selection clause in making its decision. Id. at 293.

 Plaintiffs further argue that "as the drafter of the Supply Contract, Burger King can and has waived this clause in this case." However, Plaintiffs cite no legal support for the proposition that a party who has drafted a clause of a mutually agreed upon contract ...


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