Forum-selection clause enables general contractor to litigate in agreed venue.
The firm’s client was a general contractor who hired a demolition subcontractor in connection with an Army Corps of Engineers project located in Nevada. The subcontract contained a forum-selection clause, which placed venue for all disputes in the federal and state courts located in Maricopa County, Arizona. When the subcontractor sued the general contractor and its surety for breach of contract and enforcement of its Miller Act payment bond in the United States District Court for the District of Nevada, the firm successfully enforced the subcontract’s valid forum-selection clause and had the case transferred to the federal district court located in the client’s home forum of Maricopa County, Arizona.
General contractors working on projects in foreign jurisdictions to benefit from precedent setting decision.
In a decision of first impression by a district court in the Ninth Circuit, the Court ruled that a valid forum-selection clause superceded the venue provisions of the Miller Act (40 U.S.C. § 3133(b)(3)(B)), which require Miller Act claims to be filed where the project is located. The decision in this case is of paramount importance to general contractors who work on projects in foreign jurisdictions. It also underscores how a properly drafted forum-selection clause can be effectively used to ensure that disputes are efficiently litigated in the contractor’s home jurisdiction.
Counsel: David W. Smiley