Where a case is litigated is crucial to its outcome. Litigating in a foreign state can burden parties with additional costs, travel, and time. This is especially true for transportation and logistics companies pursuing collection of freight charges for services rendered for interstate loads. Parties often risk being forced to litigate in a foreign jurisdiction when collecting against parties from a different state. Including a forum selection clause within your agreements can help avoid these headaches by mandating a specific court in which disputes must be brought.
The recent case of Lavoie v. Artists Rights Enf't Corp. illustrates that some litigants learn this lesson the hard way. Robert Kent LaVoie — a singer-songwriter better known by his stage name “Lobo” — is one such litigant. LaVoie sprung into popularity in the early 1970’s, during which time he entered into an agreement with Artists Rights Enforcement Corporation (AREC). Unfortunately for LaVoie, that agreement lacked a forum selection clause, a mistake he would not recognize until it was too late.
LaVoie became dissatisfied with his agreement with AREC and he informed them that he intended to terminate their contractual relationship. AREC, maintaining that the contract was not terminable at will, threatened to take legal action against him. LaVoie decided not to wait and brought an action against AREC in Florida state court. Without a forum selection clause, LaVoie was dragged from state to federal court by AREC. The federal court judge then issued an opinion not on the merits of the case, but on which court could hear the case next. In doing so, the Court analyzed the issue of personal jurisdiction, determining whether AREC had enough activity in a state to have the case fairly heard in Florida. LaVoie contended that AREC’s payments to him in Florida were sufficient for personal jurisdiction. However, the Court was not persuaded and ultimately determined that personal jurisdiction was not proper, dismissing the case without prejudice and stating that LaVoie would have to bring his case against AREC in a court that had proper jurisdiction. LaVoie is now appealing this decision, which could have been avoided by including a forum selection clause mandating that any disputes be brought within the Florida state courts.
LaVoie’s story is especially concerning for shippers, brokers, and carriers that are involved in interstate commerce, or business across state lines. The case illustrates that even payment from a debtor to a creditor is not enough to establish personal jurisdiction for the creditor. Parties can easily be dragged out of their home court and into a foreign jurisdiction, where they will be forced to suffer the associated burdens and costs. Thankfully, this misfortune can be avoided with a properly drafted, enforceable forum selection clause within your agreements.
At Mitchell-Handschuh Law Group, our attorneys assist transportation and logistics clients with all aspects of their transportation agreements, in addition to providing a comprehensive range of legal services. We welcome inquiries about our transportation claims and litigation practice, as well as assistance drafting contracts for transportation and logistics companies.
Please feel free to contact us by calling (404) 262-9488 or using our online contact form. We will be happy to assist you to ensure that your contracts are drafted in your best interest.
Our attorneys assist clients with legal matters in the Atlanta Metro area, throughout the State of Georgia, and across the country.