The Fifth Circuit denied a petition for writ of mandamus to direct transfer of a case from the U.S. District Court for the Northern District of Texas to the U.S. District Court for the Northern District of California, notwithstanding a forum selection clause between the parties that designated California. In re Yahoo! Inc.; Overture Services, Inc., Case No. 09-10098 (5th Cir., Mar. 11, 2009) (per curiam).
American Airlines filed a complaint against Yahoo!, Inc. and Overture Services, Inc. (collectively, Yahoo) in the U.S. District Court for the Northern District of Texas, for trademark, misappropriation and tort violations, alleging that when Yahoo users type various American Airlines’ trademarks into Yahoo’s search engine, a list of paid advertisements from American’s competitors appear as sponsored results on the screen. Yahoo moved to transfer venue pointing to the forum selection clause that American Airlines and Yahoo had included as part of a contract, termed the Sponsored Search Agreement. The forum selection clause stated, in part, “[t]he terms of the Agreement and any dispute relating thereto or between you and us shall be governed by the laws of the State of California. You agree to submit to the exclusive jurisdiction of the state and federal courts located in Los Angeles County or Santa Clara County, California, or another location designated by us.”
The district court, in denying the motion, stated that it was contended that “a jurisdictional statement appearing in a paragraph entitled ‘Choice of Law’ within a boilerplate ‘terms and conditions’ website, incorporated by reference into an advertising contract, mandates an exclusive forum for claims that arise out of a relationship completely separate from, and unrelated to, the relationship created by the advertising contract.” In a somewhat brusque manner, the district court stated the following: “The court finds this argument to be completely nonsensical. The court need not devote further time to explain the various reasons why such argument fails, however, because the plain language of the asserted clause does not apply to claims made by American against Yahoo.”
Calling on its decision In re Volkswagen, the Fifth Circuit reinforced that the court grants mandamus only upon a determination that there has been clear abuse of discretion that produces a patently erroneous result. The Fifth Circuit, in denying the petition for a writ of mandamus, stated, “We cannot fault the finding by the district court that the forum selection clause does not apply to the type of claims asserted by American,” and that “[t]he claims [of this case] do not depend on the contractual relationship between American and Yahoo, do not require interpretation of the sponsored Search Agreement contract, and involve different operative facts than would exist if American brought a breach of contract claim against Yahoo under the Sponsored Search Agreement.”