William R. Allensworth, senior partner with the Austin-based construction firm Allensworth & Porter, is scheduled to argue before the United States Supreme Court in the case of In re Atl. Marine Const. Co., Inc., 701 F.3d 736 (5th Cir. 2012) cert. granted, 12-929, 2013 WL 1285318 (U.S. Apr. 1, 2013). The hearing takes place on Oct. 9.
The case, which Allensworth believes could have a profound impact on the use and effect of forum-selection clauses throughout the construction industry, stems from a dispute between J-Crew Management Inc. and a subcontractor working on a project at Fort Hood in Killeen.
After the contractor refused to pay J-Crew for completed work, Allensworth & Porter filed suit against the contractor on behalf of J-Crew. The case was initially filed with a federal district court in Austin, but the contractor demanded that it be transferred to Virginia, claiming that a forum-selection clause in the subcontract required all disputes to be heard there. U.S. District Judge Lee Yeakel refused the transfer, noting that with the project and most of the project documentation being located in Texas, many witnesses would be unavailable to testify.
The contractor filed a petition for a writ of mandamus in the United States 5th Circuit Court of Appeals. In a precedent-setting opinion, the 5th Circuit denied the petition. The contractor then filed a petition for a writ of certiorari with the U.S. Supreme Court.
According to Allensworth & Porter, during the trial, the Court will either affirm the 5th Circuit Court of Appeals and subject forum-selection clauses to review by a district court judge to ensure the parties’ choice of venue does not undermine the interests of justice, or alternatively, reverse the court of appeals and require judges to reflexively enforce forum selection clauses.
“The Supreme Court’s decision will resolve a split in authority among the country’s circuit courts over the proper procedural mechanism to enforce forum-selection clauses,” said Allensworth. “This is an important issue and we are honored to participate in it.”