Compass Bank v. Palmer, et al., No. A-13-CA-831-SS (W.D. Tex. January 30, 2014)(Sparks, S.)

Defendant Palmer and various affiliated businesses under his control executed a series of loan agreements with Texas State Bank, which was later acquired by plaintiff Compass Bank. Order at pp. 1-3. After defendants defaulted on all loan agreements, plaintiff brought suit for breach of contract in the Austin Division of the Western District of Texas. Id. at 3. Defendants then filed a Motion to Transfer Venue to the Southern District of Texas, McAllen Division, arguing that it was the more convenient venue, and at least two of the loan agreements contained forum selection clauses requiring any lawsuit to be filed in that venue. Id. at 4.

After setting forth the standard for venue transfers under 28 U.S.C. § 1404(a), the Court discussed in detail the U.S. Supreme Court’s decision in Atlantic Marine Construction Company, Inc. v. United States, 134 5. Ct. 568 (2013), which addressed the enforcement of forum selection clauses. Id. at 7-8. Noting that Atlantic Marine directs district courts to enforce forum selection clauses except for in unusual cases, the Court found that the plaintiff provided no persuasive reason why the forum selection clauses should not be enforced as valid against it. Id. at 10. Moreover, the public interest factors weighed in favor of transferring the venue, because the operative facts occurred in McAllen, not Austin. Id. at 11. Finally, because the loans with forum selection provisions demanded transfer to McAllen, the Court held that it made “little sense” to sever the case and keep the matter in Austin with respect to the loan agreements without such venue restrictions. Id. at 12-13. Thus, the Court transferred the entire lawsuit to the Southern District of Texas, McAllen Division.