United States District Court, N.D. Indiana, South Bend Division
OPINION AND ORDER
Michael G. Gotsch, Sr. United States Magistrate Judge
February 13, 2019, Defendant, Mercedes-Benz USA, LLC
(“MBUSA”), filed its Motion to Transfer Pursuant
to 28 U.S.C. § 1404(a). On February 26, 2019, both
Plaintiffs and Defendant, Thor Motor Coach
(“TMC”), filed their response briefs in
opposition to MBUSA's motion. MBUSA filed a reply brief
on March 13, 2019, eight days after the reply was due.
See N.D. Ind. L.R. 7-1(d)(2)(B). The Court would
typically be inclined to ignore an untimely reply brief.
However, in this case, neither Plaintiffs nor TMC challenge
the untimely brief. More importantly, MBUSA's reply brief
does not change the Court's final decision on the motion
to transfer. Therefore, the Court considered MBUSA's
reply brief in its decision to deny the motion to transfer,
as discussed below.
case involves a defective RV manufactured as a complete
vehicle in Indiana by TMC, a corporation with its principal
place of business in Indiana, using a chassis and related
parts manufactured by MBUSA, a corporation with its principal
place of business in Georgia. The RV was warranted in whole or
party by TMC while the underlying chassis and related parts
were warranted in whole or party by MBUSA. Plaintiffs,
citizens of Colorado, purchased the defective RV in Utah.
Repairs to Plaintiffs' RV were performed before the sale
in Utah and after the sale in Colorado under both TMC's
and MBUSA's warranties. The RV's defects, however,
were never completely repaired or were not repaired within a
reasonable amount of time or repair attempts. Thus,
Plaintiffs filed their complaint alleging TMC's and
MBUSA's breaches of warranty or contract and violations
of the Magnuson Moss Warranty Act.
however, Plaintiffs did not attach a copy of either TMC's
or MBUSA's warranty to their complaint or otherwise
allege the full terms of the separate warranties. Not being a
party to the TMC warranty and without any knowledge of its
terms, MBUSA filed the instant motion to transfer under 28
U.S.C. § 1404(a). Through its motion, MBUSA applied the
typical Section 1404(a) transfer analysis arguing that the
convenience of the witnesses and the interests of justice
favor transfer of this action to the District of Utah.
and TMC then reported in their response briefs that the TMC
warranty contains a forum-selection clause requiring that any
dispute between TMC and Plaintiffs be brought in courts
within the State of Indiana. [SeeDE 10-2 at 6].
Thus, Plaintiffs and TMC contend that the transfer analysis
must be adjusted to account for the policy outlined in
Atl. Marine Const. Co., Inc. v. U.S. Dist. Court for W.
Dist. of Tex., 571 U.S. 49 (2013) favoring enforcement
of valid forum-selection clauses. Furthermore, Plaintiffs and
TMC argue that an additional analysis is required in
considering transfer of this case because MBUSA is not a
party to the TMC Warranty's forum-selection agreement
citing In re: Howmedica Osteonics Corp, 867 F.3d
390, 404-05 (3d Cir. 2017), cert. denied sub nom.
Nordyke v. Howmedica Osteonics Corp., 138 S.Ct. 1288
(2018) and In re Rolls Royce Corp., 775 F.3d 671,
679 (5th Cir. 2014).
to this revelation of a forum-selection clause, MBUSA noted
that it would have filed a motion to sever and transfer
instead of a Rule 1404(a) transfer motion had it been aware
of the clause. In so doing, MBUSA implied its acceptance of
the validity of the newly reported clause as between
Plaintiffs and TMC. MBUSA then cited Moore v. AT&T
Latin Am. Corp., 177 F.Supp.2d 785 (N.D. Ill. 2001) in
support of its position that Plaintiffs' failure to
allege the existence of a valid forum-selection clause in
their complaint dictates application of the typical Section
1404(a) analysis here, rather than the Atlantic
Marine/Howmedica forum-selection clause
analysis. MBUSA concluded by reiterating its position that
the Section 1404(a) convenience and interest of justice
factors justify transfer to either the District of Colorado
or the District of Utah.
turning to the merits of MBUSA's transfer motion, the
Court must first determine whether the typical Section
1404(a) transfer analysis can be applied as MBUSA requests
considering the forum-selection clause in the TMC Warranty.
Proper Transfer Analysis
to 28 U.S.C. § 1404(a), a federal district court may
transfer any civil action to any other district for the
convenience of the parties and witnesses and in the name of
justice, if venue is proper in both courts. Therefore, the
typical Section 1404(a) transfer analysis involves a
balancing of private and public interests through separate
inquiries into (1) the proper venue in the transferor and
transferee courts; (2) the convenience of parties and
witnesses; and (3) the interest of justice. Research
Automation Inc. v. Schrader-Bridgeport Int'l, Inc.,
626 F.3d 973, 978 (7th Cir. 2010). The burden is on the
movant to show that transfer is warranted. Coffey v. Van
Dorn Iron Works, 796 F.2d 217, 219-20 (7th Cir. 1986).
However, the statute allows for a “flexible and
individualized” analysis of the unique issues raised in
a particular civil action, which therefore places
considerable discretion in the transferor court when deciding
whether transfer is appropriate. Research
Automation, 626 F.3d at 977-78 (citing Stewart Org.,
Inc. v. Ricoh Corp., et al., 487 U.S. 22, 29 (1988)).
Notably, “when the inconvenience of the alternative
venues is comparable there is no basis for a change of
venue[.]” Scottsdale Ins. Co. v. PMG Indus.,
LLC, No. 2:16-CV-373-RLM-PRC, 2016 WL 7228796, at *2
(N.D. Ind. Dec. 14, 2016) (citing In re Nat'l Presto
Indus., 347 F.3d 662, 665 (7th Cir. 2003)).
transfer calculus changes, however, when the parties enter a
contract that includes a forum-selection clause reflecting
their pre-suit agreement as to the most proper forum for
resolution of their disputes. Atlantic Marine, 571
U.S. at 63. “The enforcement of valid forum-selection
clauses, bargained for by the parties, protects their
legitimate expectations and furthers vital interests of the
justice system.” Id. (internal quotations and
citations omitted). Therefore, “a valid forum-selection
clause should be given controlling weight in all but the most
exceptional cases.” Id. The Court then
outlined a modified Section 1404(a) analysis for cases where
all parties to the case were also parties to a valid
Atlantic Marine analysis, however, did not address
directly cases where some but not all the parties had
contracted to a particular forum through a forum-selection
clause. In 2014, the Fifth Circuit first applied the
principles of Atlantic Marine to this problem in
In re Rolls Royce Corp. In Rolls Royce, the
court noted that (1) a valid-selection clause favored, as a
matter of law, severance of claims or parties subject to the
clause and transfer to enable litigation in the
contracted-for forum; (2) the private factors of
non-contracting parties had to be considered separately just
as they would be in any Rule 21 severance or Section 1404(a)
transfer analysis; and (3) the interests of judicial economy
in having all claims determined in a single lawsuit could
outweigh any interest of the non-contracting party in a
different forum. 775 F.3d at 679.
with somewhat different facts in a similar case involving a
forum-selection clause between only some parties, the Third
Circuit modified the Rolls Royce framework into a
four-step analysis. In re Howmedica, 867 F.3d at
403-05. Under Howmedica, a court must first
assume that Atlantic Marine applies to parties who
agreed to forum-selection clauses and that, in all but the
most unusual cases, claims concerning those parties should be
litigated in the fora designated by the clauses. . . .
Second, the court performs an independent analysis of private
and public interests relevant to non-contracting parties,
just as when adjudicating a § 1404(a) transfer motion
involving those parties in the absence of any forum-selection
clauses. . . .
Third, if the Step One and Step Two analyses point different
ways, then the court considers severance. SeeFed. R.
Civ. P. 21. . . . [If] severance is neither clearly warranted
nor clearly disallowed, . . . the court goes on to select the
appropriate fora based on a combination of interests
addressed at the next step. . . .
Fourth, . . .a district court exercises its discretion . . .
in choosing the most appropriate course of action [by
considering] efficiency interests in avoiding duplicative
litigation, . . . taking into account case management
techniques that can reduce inefficiencies accompanying
severance . . . as well as any other public interests that
may weigh against enforcing a forum-selection clause . . . .
[and weighting them against] the non-contracting parties'
private interests and any prejudice that a particular
transfer decision would cause with respect to those
[Depending upon the outcome of the Howmedica
analysis, a district court could decide to] retain the case
in its entirety, transfer the case in its entirety, or sever
certain parties or claims in favor of another forum.
[Important factors for the court to consider include] the
nature of any interests weighing against enforcement of any
forum-selection clause; the relative number of
non-contracting parties to contracting parties; and the
non-contacting parties' relative resources, keeping in
mind any jurisdiction, venue, or joinder defects that the
court must resolve. [To decline to enforce a valid
forum-selection clause, a court must find that the
countervailing interests overwhelmingly outweigh] the strong
public interest in upholding the contracting parties'
however, MBUSA asks the Court to ignore the policy favoring
enforcement of valid forum-section clauses espoused in
Atlantic Marine and to apply the typical Section
1404(a) transfer analysis rather than the Howmedica
framework in determining whether transfer of this case in its
entirety is warranted. MBUSA's argument appears grounded
in what can amount only to an implication that Plaintiffs
waived the effects of the forum-selection ...