Supreme Court of Alabama, January 18, 2008
In a case brought by an unsuspecting participant in the film Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan, the Supreme Court of Alabama rejected the trial court’s ruling that a forum selection clause in a consent agreement between the parties was void under Alabama’s “door-closing” statute, Ala. Code § 10-2B-15.02(a), which provides that contracts made in Alabama by a foreign corporation without a certificate of authority to transact business are unenforceable. On petition for writ of mandamus, the court held that, notwithstanding the fact that the defendant production company did not obtain such a certificate of authority, the Commerce Clause of the United States Constitution precluded the lower court from applying the door-closing statute to void the parties’ choice of forum.
In this action, the producers of Borat had secured the participation of plaintiff Kathie Martin, the owner of the Etiquette School of Birmingham, to give etiquette lessons to Sacha Baron Cohen’s character, Borat, in what Martin believed would be a documentary film about a foreign journalist’s travels in America. Prior to the shooting of the footage, the parties signed a consent agreement containing, among other things, an assignment of rights, a waiver of claims, and a forum selection clause choosing New York state court as the forum for the resolution of disputes that might arise out of Martin’s participation. Upon learning of the satirical, non-documentary nature of the film, Martin filed suit in Alabama state court against Cohen and the various entities involved in the production, alleging fraud and deceit, quasi-contract and unjust enrichment, commercial appropriation and invasion of privacy, and intentional infliction of emotional distress.
The defendants moved to dismiss the action for improper venue on the basis of the forum selection clause, but the trial court denied the motion on the grounds that the consent agreement was void under Alabama’s door-closing statute. On mandamus review, the Alabama Supreme Court held that where the “primary purpose” of a transaction constitutes an interstate activity, the Commerce Clause of the United States Constitution prohibits Alabama courts from applying the door-closing statute to void such interstate contracts. Rejecting the plaintiff’s argument that the consent agreement was an intrastate contract for the provision of local labor by Martin, the court held that the plain language of the agreement made clear that its purpose was to provide for Martin’s appearance in recorded footage that might be used “without restriction in any media throughout the universe.” Accordingly, the court held that the transaction between the parties constituted an interstate activity and vacated the lower court’s ruling, “notwithstanding the fact that the filming, the execution of the consent agreement …, and [the] payment to Martin all took place in Alabama.”