Forum Selection Clauses are Not Per Se Violative of Louisiana Law

hurricane.jpgThe Louisiana Supreme Court held that forum selection clauses are not per se violative of public policy in Louisiana. Shelter Mutual Insurance Company v. Rimkus Consulting Group, Inc. of Louisiana, 2013-1977 (La. 7/1/14). Specifically, a plurality of the Louisiana Supreme Court (three Justices agreeing with the opinion and one Justice concurring in the result), enforced a forum selection clause found in the written “Terms and Conditions” of a tacit agreement between Shelter Mutual Insurance Company and Rimkus Consulting Group that required litigation arising out of Rimkus’s engineering evaluation and expert witness services in connection with Shelter’s defense of litigation resulting from a claim for hurricane damages brought by a corporation insured by Shelter be brought in Texas.

The Louisiana Supreme Court held that only specific forum selection clauses declared unenforceable and against public policy by the Louisiana Legislature are invalid and unenforceable. The Louisiana Supreme Court distinguished the specific legislative limitations on forum selection clauses found in La. R.S. 9:2779(A), La. R.S. 51:1407(A) and La. R.S. 23:921(A)(2). The Louisiana Supreme Court rejected a blanket application of the public policy stated in these statutes to every contractual forum selection clause.

La. R.S. 9:2779(A) expressly declares out-of-state forum selection clauses against public policy in a small subset of construction contracts for “public and private works projects, when one of the parties is domiciled in Louisiana, and the work to be done and the equipment and materials to be supplied involve construction projects in this state” and states that “provisions in such agreements requiring disputes arising thereunder to be resolved in a forum outside of this state…are inequitable and against the public policy of this state.”

La. R.S. 51:1407(A) of The Louisiana Unfair Trade Practices Act invalidates contractual selections of venue or jurisdictions involving transactions or interactions between out-of-state, professional telephone solicitors and Louisiana residents.

La. R.S. 23:921(A)(2) prohibits forum selection clauses in employment contracts unless the choice of forum clause “is expressly, knowingly, and voluntarily agreed to and ratified by the employee after the occurrence of the incident which is subject to the civil or administrative action.”

The three dissenters opined that all forum selection clauses are unenforceable because such clauses (1) are prohibited by La.Code Civ. P. art. 44(A), which states: “[a]n objection to the venue may not be waived prior to the institution of the action,” (2) contravene a strong public policy of Louisiana, and (3) are contrary to Louisiana’s comprehensive venue scheme and Louisiana law on forum non conveniens.

This legal news update is provided by experienced Baton Rouge, Louisiana injury lawyer, Scott Andrews, and Dué, Guidry, Piedrahita & Andrews. Contact Scott Andrews to schedule a free legal consultation on any personal injury matter.