Supreme Court Upholds Onerous Forum Selection Clause

In Atl. Marine Constr. Co., Inc. v. U.S. Dist. Ct. for W.Dist. of Texas, __ U.S. __, 134 S. Ct. 568 (2013), the U.S. Supreme Court upheld a forum selection clause that required litigation to take place in a jurisdiction far from the site of the project.

In challenging the clause, the subcontractor argued that the forum selection clause imposed by the general contractor was unfair, inconvenience to the parties, and would result in several key witnesses being inaccessible for deposition and trial.  The Supreme Court disagreed.  “When private parties agree to a forum-selection clause, they waive the right to challenge the pre-selected forum as inconvenient or less convenient for themselves or their witnesses, or for their pursuit of litigation.”  Instead, the forum selection clause “represents the parties’ agreement as to the most proper forum.”

This case had received significant attention from the subcontractor community, which has lobbied to require that all litigation should take place in the jurisdiction in which the project at issue is located.