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NCR Credit Corporation v. Ye Seekers Horizon, Inc.

17 F. Supp.2d 317 (D. N.J. 1998)

CONTRACTS; DRAFTING; VENUE—A party can waive opposition to improper venue by agreeing to a forum selection clause in its contract.

An equipment lessee, a Delaware corporation, with its principal place of business in New Jersey moved to transfer venue to the state of Texas. The lessor was a Texas corporation, with its principal place of business in Houston, Texas. The equipment was leased pursuant to 14 separate subleases; negotiation of the subleases took place in Texas; they were executed in Texas; and, all the equipment was placed in the lessee’s stores in Texas. The master lease governed eleven of the subleases and did not have a forum selection clause. A master Equipment Lease Agreement governed the other three subleases and contained the following forum selection clause: “Lessor and Lessee consent to the jurisdiction of any local, state or Federal court located within [New Jersey], and waive any objection relating to improper venue or forum non conviens to the conduct of any proceeding in any such court.” The forum selection clause also provided that the Master Equipment Lease “SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NEW JERSEY.” (emphasis in original).

The Court refused to transfer the matter to Texas. It found that the lessee had waived any opposition to improper venue when it agreed to the forum selection clause in the Master Equipment Lease, which governed a substantial part of four of the plaintiff’s claims and thereby consented to jurisdiction in New Jersey. Moreover, under federal law a corporation is deemed to reside “in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced.” The Court also found that the lessee’s interest in having the litigation removed to Texas did not overcome the great weight which is accorded to the party’s contractual choice of forum.


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