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Although it might seem like a clear-cut argument—“my client cannot be bound to a contractual provision when it was not a party to the contract”—courts have routinely rejected it. In doing so, these courts have often ordered that a defendant is then bound to a forum selection clause found in a co-defendant’s agreement with the plaintiff. In order to reach this result, however, the court must conclude that the nonsignatory defendant is sufficiently “closely related” to the dispute in the underlying action, such that it was foreseeable that the nonsignatory defendant would be bound to the other defendant’s forum-selection clause. What follows are three common situations in the trucking industry where your client might be found to be sufficiently “closely related”.

The Tortious Interference Claim

In a typical example, one trucking company enters into various lease equipment agreements for trailers to run with their own trucks. Then, another trucking company (your client) engages in some activity—whether that be an all-out purchase, an informal borrowing of the leased trailers, or something similar—and the leasing company subsequently sues both you and the other company. In its petition, the leasing company claims the other company breached its lease agreements and also that your client tortiously interfered with those agreements. Unfortunately, the lease equipment agreements contain a forum-selection clause that require any claim arising from or related to the agreements to be litigated in state court.[1] Often, the plaintiff will argue that simply by raising a tortious interference claim against your client’s company, that the company is per se “closely related” to the dispute. In many instances, however, even when a tortious interference claim is raised and the court concludes that a defendant is sufficiently closely related to the dispute, there are additional facts establishing a “common interest” between the defendants, such as both defendants being represented by the same counsel, which go beyond simple allegations of tortious interference, See, e.g., Medtronic, Inc. v. Endologix, Inc., 530 F.Supp.2d 1054, 1057 (D. Minn. 2008); C.H. Robinson Worldwide, Inc. v. Rodriguez, No. CIV. 12-264 DSD/SER, 2012 WL 4856245, at *6 (D. Minn. Oct. 12, 2012). Thus, in these instances, carefully review the cases cited by opposing counsel to see if the court, in fact, relied on additional facts to reach its conclusion, which you can then use as distinguishing factors in your case.

The Theory of Broker Liability

In cases where broker liability might be imposed, even if the broker has not entered into a contract with a plaintiff—a trailer-leasing company, for example—the broker may be bound to a forum-selection clause found in the carrier’s lease agreement with the leasing company if the broker and the carrier are sufficiently “closely related.” This could become a common situation because in cases of broker liability, the court typically concludes that the broker exerted too much control over the carrier and its driver, which is quite similar to the closely-related doctrine’s central question—i.e., whether the broker was sufficiently closely related to the dispute between the carrier and the leasing company. In short, exerting too much control also likely means your client is closely related to the dispute.

In a scenario such as this, where the plaintiff asserts that the broker exerted too much control over the carrier and its driver, the broker may be treated as a “transaction participant”, and find itself bound to the venue provision in the contract between the carrier and the leasing company under this particular theory of the closely-related doctrine. See LaRoss Partners, LLC v. Contact 911 Inc., 874 F. Supp. 2d 147, 154 (E.D.N.Y. 2012) (citing cases within the Second Circuit recognizing that it is well established within the Circuit that a range of transaction participants are subject to forum selection clauses).

Overlap in Corporate Structure, Personnel, or Control

The cases where a nonsignatory defendant is most often found to be sufficiently closely related involve multiple defendants with overlap in corporate structure, personnel, or control. In the trucking industry, this could apply in a situation where your client takes over another trucking company’s operations, either through a formal sale or merger or through a change in corporate control, which allows your client to manage and control the other company’s leased equipment. If the agreements for the leased agreements contain a forum selection clause, then your client might find itself bound to that venue provision, even if your client denies assuming any rights or obligations under those same agreements.

[1] Federal courts in Missouri have upheld such agreements when they have previously been challenged, so trying to avoid being bound by arguing that the forum-selection clause is invalid may be foreclosed. See XTRA Lease LLC c. Century Carriers, Inc., No. 09-2041, 2010 WL 431787, at *1 (E.D. Mo. Feb. 2, 2010).