UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

RT Consulting LLC

v. Civil No. 15-cv-132-PB Opinion No.

Kentucky Bankers Association

MEMORANDUM AND ORDER

RT Consulting LLC (“RTC”), a New Hampshire consulting firm,

sued the Kentucky Bankers Association (“KBA”), a trade group

based in Louisville, Kentucky, on a variety of legal theories

that all stem from a claim that KBA breached a Management

Services Agreement (“Agreement”) between the two entities. KBA

has responded with a motion to dismiss (Doc. No. 10) contending

that the court lacks personal jurisdiction and that the

complaint fails to state a viable claim for relief. In the

event that its motion to dismiss is denied, KBA alternatively

claims that the court should transfer the case to the Western

District of Kentucky (Doc. No. 11).

The Agreement includes a forum selection clause that

seemingly precludes both motions, but KBA argues that it is not

subject to the forum selection clause because it was never made

a party to the Agreement. Instead, it contends that RTC contracted with a separate entity that KBA identifies as the

“Kentucky Bankers Association Health and Wealth Benefit Trust.”

For the reasons described below, RTC has alleged sufficient

facts to support its contention that KBA was made a party to the

Agreement. Accordingly, I deny KBA’s motions.

I. BACKGROUND

KBA is a Kentucky corporation that provides employee

benefit plans to banks. See Doc. No. 1 at 1-2. In October

2013, KBA’s president, Ballard W. Cassady, and a representative

of RTC signed the Agreement. In its preamble, the Agreement

states that it is a contract between RTC and an entity named the

“Kentucky Bankers Association (‘KBA’) Health and Welfare Benefit

Program.” Doc. No. 1-1 at 1. Throughout the document, the

Agreement repeatedly refers to this entity as “the Company,”

although an addendum titled “Schedule A” also references “KBA”

and “KBA’s Plan,” specifically noting that “KBA is responsible

for all legal requirements and administrative obligations.” Id.

at 1-7. The Agreement requires that all notices to “the

Company” be sent to Debra Stamper of the “Kentucky Bankers

Association.” Id. at 4. Stamper is KBA’s General Counsel and

Executive Vice President. Doc. No. 1-2.

The Agreement includes a forum selection clause providing 2 that “[a]ny litigation, court action, arbitration, or similar

proceeding shall be brought and litigated in the State of New

Hampshire.” Doc. No. 1-1 at 4. It also includes a termination

provision allowing either party to terminate the Agreement upon

written notice to the other party. Id. at 2. The termination

provision gives the “breaching party” ten business days after

receipt of notice of termination to “cure such default.” Id.

Pursuant to its understanding of the Agreement, RTC

developed an online enrollment and communication service for KBA

in the spring of 2014. Doc. No. 1 at 3. RTC incurred

substantial costs to develop the enrollment and communication

service, but KBA refused to implement it. Id. In response, RTC

notified KBA that its refusal to implement the service was a

breach of the Agreement. Id.

Over the course of 2014, RTC continued to provide services

to KBA pursuant to the Agreement. Id. at 4. In the fall of

2014, RTC expended significant resources to develop a “Wellness

Program” to provide health benefits to KBA’s plan participants.

Id. The parties discussed a proposal to amend the Agreement to

address the Wellness Program, but KBA ignored RTC’s requests to

amend the Agreement and the proposed amendment was never

adopted. Id. at 4-5. Novertheless, RTC implemented the

Wellness Program, getting it “up and running” by January 2015. 3 Id. at 5.

In March 2015, Stamper sent RTC a letter stating that “the

Participating Employer Committee of the KBA Health and Welfare

Benefit Program (‘KBA Program’) has determined that it is

necessary to terminate the relationship pursuant to paragraph

9.b of the Management Services Agreement. . . .” Doc. No. 1-2.

Stamper stated in her letter that she “consider[ed] the 10-day

cure period to have been satisfied” because of “the continued

and repeated requests by the Program for compliance with the

Agreement.” Id. The letter did not specify how RTC had

allegedly breached the Agreement. See id.

Soon after, RTC filed this action, bringing five claims

against KBA: breach of contract; breach of the covenant of good

faith and fair dealing; unjust enrichment; promissory estoppel;

and unfair and deceptive trade practices under Section 358:2 of

the New Hampshire Revised Statutes. Doc. No. 1 at 6-10. KBA

countered with the present motions to dismiss and to change

venue.

II. ANALYSIS

KBA argues that RTC’s complaint must be dismissed because

the court lacks personal jurisdiction over it, and because the

complaint fails to state a viable claim for relief. In the 4 alternative, it argues that the action should be transferred to

the Western District of Kentucky if it is not dismissed.

Because the standards of review that govern these arguments

differ, I deal with each argument separately.

A. Personal Jurisdiction

KBA first moves to dismiss for lack of personal

jurisdiction. When a defendant contests personal jurisdiction,

the plaintiff bears the burden of demonstrating a basis for

jurisdiction. Astro-Med, Inc. v. Nihon Kohden Am., Inc.,

(1st Cir. 2009). Because I have not held a hearing on

the motion, RTC must only make a prima facie showing that this

court has personal jurisdiction. See Cossaboon v. Me. Med.

Ctr.,

(1st Cir. 2010). A prima facie showing

requires the plaintiff to “proffer[] evidence which, if

credited, is sufficient to support findings of all facts

essential to personal jurisdiction.” Lechoslaw v. Bank of Am.,

N.A.,

(1st Cir. 2010) (internal quotation marks

omitted). I consider RTC’s allegations to the extent they are

supported by specific facts set forth in the record and consider

evidence offered by KBA “to the extent that [it is]

uncontradicted.” Cossaboon,

(internal quotation

marks omitted). I construe the evidence “in the light most

congenial to the plaintiff’s jurisdictional claim,” Hannon v. 5 Beard,

(1st Cir. 2008), but will not “credit

conclusory allegations or draw farfetched inferences.” Negron-

Torres v. Verizon Commc’ns, Inc.,

, 23 (1st Cir.

2007).

A court’s personal jurisdiction over a defendant residing

outside the forum state ordinarily depends upon whether both the

requirements of the forum state’s long-arm statute and the

Fourteenth Amendment’s due process clause have been satisfied.

Cossaboon,

n.1. Where, however, the parties have

consented to a forum selection clause, they generally waive the

right to contest personal jurisdiction, and there is no need to

determine whether the defendant has sufficient contacts within

the forum state to satisfy the requirements of the due process

clause. See M/S Bremen v. Zapata Off-Shore Co.,

(1972) (“[Forum selection] clauses are prima facie valid and

should be enforced unless enforcement is shown by the resisting

party to be ‘unreasonable’ under the circumstances.”); Nat'l

Equip. Rental, Ltd. v. Szukhent,

(1964)

(“[I]t is settled . . . that parties to a contract may agree in

advance to submit to the jurisdiction of a given court . . .

.”); E. Bridge, LLC v. Bette & Cring, LLC.,

(“[B]y agreeing that litigation arising out of the contract

would be conducted exclusively in a court of competent 6 jurisdiction under New Hampshire law, [the defendant]

voluntarily relinquished any objection that it might have had to

such a court's exercise of personal jurisdiction over it.”).

Here, RTC argues that KBA waived any challenge to personal

jurisdiction by consenting to the Agreement’s forum selection

clause, which mandates that “[a]ny litigation . . . shall be

brought . . . in the State of New Hampshire.” Doc. No. 1-1 at

4. KBA counters that it was not a party to the Agreement, and

thus the forum selection clause does not bind KBA. Instead, it

argues that RTC contracted with the “Kentucky Bankers

Association Health and Welfare Benefit Program,” which KBA

claims is a shorthand reference to the “Kentucky Bankers

Association Health and Wealth Benefit Trust” (the “trust”), a

“stand-alone, non-profit organization separate and distinct from

KBA.” See Doc. No. 10-1 at 1-2. Thus, according to KBA, RTC

contracted with this separate trust, not KBA itself. And,

because the trust functions independently from KBA, the forum

selection clause does not apply.

This argument is unpersuasive. To begin, at this juncture,

I must credit the plaintiff’s factual assertions as true so long

as they assert more than “conclusory allegations” or “farfetched

inferences.” Mass. Sch. of Law at Andover, Inc. v. Am. Bar

Ass’n,

(1st Cir. 1998) (“In conducting the 7 requisite analysis under the prima facie standard, we take

specific facts affirmatively alleged by the plaintiff as true

(whether or not disputed) and construe them in the light most

congenial to the plaintiff’s jurisdictional claim”).

Here, RTC states in its complaint that it entered into the

Agreement with “KBA,” defined as the “Kentucky Bankers

Association.” Doc. No. 1 at 1-2. To support this assertion,

RTC points to the language of the Agreement and certain

extrinsic evidence. First, RTC argues, the Agreement was signed

by Ballard W. Cassady, who is the President and CEO of KBA.

Doc. No. 1-1 at 5. Second, the Agreement requires all notices

to be sent to Debra Stamper of the “Kentucky Bankers

Association.” Id. at 4. Third, Schedule A of the Agreement

notes that “KBA” – not a “Program” or “Trust” – is responsible

for “all legal requirements and administrative obligations with

regard to the Plan.” Id. at 6. Fourth, the word “trust” is

absent from the Agreement. See id. Finally, and perhaps most

fundamentally, RTC maintains that it simply does not make sense

that RTC would contract with a “Benefit Program,” which does not

appear to be a legal entity, rather than KBA itself, which is an

association that administers benefit programs. These arguments

are persuasive at least for purposes of the present motion, and

therefore I credit RTC’s assertion that KBA was a party to the 8 Agreement.1

With this understanding, I turn now to the Agreement’s

forum selection clause. “Under federal law, the threshold

question in interpreting a forum selection clause is whether the

clause at issue is permissive or mandatory.” Rivera v. Centro

Medico de Turabo, Inc.,

(1st Cir. 2009).

Permissive forum selection clauses merely “authorize

jurisdiction in a designated forum;” mandatory clauses authorize

jurisdiction only in that forum, to the exclusion of others.

To be mandatory, “a forum selection clause must contain

language that clearly designates a forum as the exclusive one.”

Arguss Commc'ns Grp., Inc. v. Teletron, Inc.,

, at

*6 (D.N.H. Nov. 19, 1999) (internal quotations omitted).

The forum selection clause at issue in this case provides

that “[a]ny litigation, court action, arbitration, or similar

proceeding shall be brought and litigated in the State of New

Hampshire.” Doc. No. 1-1 at 4. This is mandatory language.

The clause states that “any” litigation “shall” be brought in

1 Even if, as KBA contends, the contract was between RTC and the Trust, the proffered facts would support a claim that KBA, through the actions of its CEO, was acting as an undisclosed agent for the Trust when he signed the Agreement. If so, both KBA and the Trust would be deemed to be parties to the Agreement, who are bound by the Agreement’s forum selection clause under basic principles of agency law. See Restatement (Third) of Agency § 6.03. 9 New Hampshire. Id. According to First Circuit precedents, the

word “shall” carries a “mandatory sense.” Rivera,

(describing “shall” as a “typical mandatory term”);

Summit Packaging Sys., Inc. v. Kenyon & Kenyon,

(1st Cir. 2001) (describing the word “will” as “commonly having

the mandatory sense of ‘shall’ or ‘must’”); Barletta Heavy Div.,

Inc. v. Erie Interstate Contractors, Inc.,

(D. Mass. 2009) (“[T]he First Circuit has found words such

as ‘shall,’ which carry a ‘mandatory sense,’ to demonstrate

parties' exclusive commitment to the named fora.”). Moreover,

the Agreement does not say that only certain types of litigation

belong in New Hampshire; it states that “any litigation, court

action, arbitration, or similar proceeding” shall be brought in

New Hampshire. Doc. No. 1-1 at 4 (emphasis added). This broad

language reflects the parties’ intentions to make New Hampshire

the exclusive venue for any legal dispute. Cf. Paper Exp., Ltd.

v. Pfankuch Maschinen GmbH,

(7th Cir. 1992)

(“The phrase ‘shall be filed,’ coupled with the phrase ‘all

disputes,’ clearly manifests an intent to make venue compulsory

and exclusive.”). As such, the forum selection clause is

mandatory.

Mandatory forum selection clauses, like this one, carry a

“strong presumption of enforceability.” Rivera,

. 10 This presumption may be overcome only by establishing one or

more of four factors: “(1) the clause was the product of fraud

or overreaching; (2) enforcement would be unreasonable and

unjust; (3) proceedings in the contractual forum will be so

gravely difficult and inconvenient that the party challenging

the clause will for all practical purposes be deprived of his

day in court; or (4) enforcement would contravene a strong

public policy of the forum in which suit is brought . . . .”

Rafael Rodriguez Barril, Inc. v. Conbraco Indus., Inc.,

(1st Cir. 2010) (internal alterations, citations, and

quotations omitted). Thus, “the forum clause should control

absent a strong showing that it should be set aside.” M/S

Bremen,

.

KBA makes no such showing here. It does not address the

four factors described above. Instead, it puts forward two

unrelated arguments: first, that several of RTC’s claims “do not

involve the Agreement;” and second, that the clause is “so vague

and ambiguous as to be incapable of enforcement.” Doc. No. 11-1

at 7-8. These arguments are unconvincing.

First, RTC’s claims do involve the Agreement. The

Agreement provides the entire basis for the two parties’

relationship; RTC furnished services to KBA’s plan participants

pursuant to the Agreement. RTC’s unjust enrichment, promissory 11 estoppel, and consumer protection claims all arise from its

understanding of its contractual relationship with KBA, which is

grounded in the Agreement.

Second, rather than being too vague, the forum selection

clause is actually quite clear: it states simply that any

litigation shall be brought in New Hampshire. KBA criticizes

the clause for not containing language limiting it to litigation

arising under the Agreement, but cites no cases requiring

inclusion of this type of language for a clause to be

enforceable. The clause therefore controls.

The remaining personal jurisdiction analysis is

straightforward. By agreeing that any litigation arising from

the contract would be conducted in New Hampshire, KBA

“voluntarily relinquished any objection that it might have had

to such a court's exercise of personal jurisdiction over it.”

E. Bridge, LLC,

; see also Provanzano v. Parker

View Farm, Inc.,

(D. Mass. 2011) (“By

signing a forum selection clause, however, a party to a contract

waives its right to challenge personal jurisdiction.”); Inso

Corp. v. Dekotec Handelsges, mbH,

(D.

Mass. 1998) (“A party to a contract may waive its right to

challenge personal jurisdiction by consenting to personal

jurisdiction in a forum selection cause.”). As such, this court 12 may properly assert personal jurisdiction over KBA, and KBA’s

personal jurisdiction motion fails.

B. Failure to State a Claim

KBA next brings a motion to dismiss for failure to state a

claim, marshalling essentially the same argument it made to

contest personal jurisdiction: that KBA was never a party to the

Agreement. KBA mounts no specific challenges to any of RTC’s

individual claims. Accordingly, for the reasons discussed

above, RTC has alleged sufficient facts to establish that KBA

was a party to the Agreement. Because KBA presents no other

argument in support of its motion to dismiss for failure to

state a claim, this motion is denied as well.

C. Change of Venue

KBA argues in the alternative that I should transfer venue

to the Western District of Kentucky.

(a)

provides that “[f]or the convenience of parties and witnesses,

in the interest of justice, a district court may transfer any

civil action to any other district or division where it might

have been brought . . . .” “The burden of proof rests with the

party seeking transfer; there is a strong presumption in favor

of the plaintiff’s choice of forum.” Jackson Nat’l Life Ins.

Co. v. Economou,

(D.N.H. 2008)

(quoting Coady v. Ashcraft & Gerel,

(1st Cir. 13 2000)). The court has “wide latitude” in determining whether to

grant a motion to transfer venue.

at 220 (citing Auto

Europe, LLC v. Conn. Indem. Co.,

(1st Cir.

2003)).

When the contract at issue contains a valid mandatory forum

selection clause, “a proper application of § 1404(a) requires

that a forum-selection clause be given controlling weight in all

but the most exceptional cases.” Atl. Marine Const. Co. v. U.S.

Dist. Court for W. Dist. of Tex.,

(2013) (internal quotations omitted) (“The enforcement of valid

forum-selection clauses, bargained for by the parties, protects

their legitimate expectations and furthers vital interests of

the justice system.”). Courts evaluating a § 1404(a) motion to

transfer in cases involving a forum selection clause “should not

consider arguments about the parties’ private interests,” such

as litigation costs or the convenience of witnesses. Id. at

582. Rather, they may consider only “public-interest factors,”

such as court congestion, but these factors will “rarely defeat

a transfer motion.” Id. at 581-82, 581 n.6.

As I have explained, KBA cannot avoid the effect of the

Agreement’s forum selection clause by claiming either that it

was not made a party to the Agreement or that the forum

selection clause was permissive rather than mandatory. 14 Accordingly, the only argument that is left to KBA to support

its change of venue motion is to cite what it refers to as

“1404(a) factors,” including the convenience of witnesses and

the fact that the events at issue largely transpired in

Kentucky. These factors, however, relate to “private

interests,” and are therefore inapplicable here since the

parties agreed to a mandatory forum selection clause. Id. at

581-82, 581 n.6 (“[P]rivate interests include relative ease of

access to sources of proof; availability of compulsory process

for attendance of unwilling, and the cost of obtaining

attendance of willing, witnesses; possibility of view of

premises, if view would be appropriate to the action; and all

other practical problems that make trial of a case easy,

expeditious and inexpensive.”) (punctuation omitted). As such,

KBA has not persuaded me that this is an “exceptional case[]”

where the mandatory forum selection clause should not control,

and I therefore decline to transfer the case. See id. at 582

(“Whatever inconvenience the parties would suffer by being

forced to litigate in the contractual forum as they agreed to do

was clearly foreseeable at the time of contracting.”) (internal

alterations and quotations omitted); E. Bridge, LLC,

(“[T]he contract's mandatory forum selection clause weighs

heavily against transfer.”). 15 III. CONCLUSION

For the reasons stated above, I deny KBA’s motion to

dismiss (Doc. No. 10) and its motion to change venue (Doc. No.

11).

SO ORDERED.

/s/Paul Barbadoro Paul Barbadoro United States District Judge

February 26, 2016

cc: K. Neil Austin, Esq. Stephen Bychowski, Esq. Jeffrey S. Follett, Esq. Eric M. Jensen, Esq. John T. McGarvey, Esq. Michele E. Kenney, Esq.

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