In a contract, every word on every page has consequential meaning. Whether a case is litigated in California or Louisiana could depend on a court’s interpretation of words in the contract like can, may, shall, must, and will be; ambiguity can sway a finding drastically. This article looks at an example in which a court’s ruling on the word may determined in which state a suit was litigated, which in turn determined what state’s law governed the dispute.
Plaintiff Arkel International, L.L.C. (“Arkel”) and Defendant Parsons Global Services, Inc. (“Parsons”) reached a dispute over sums due under their contracts. Plaintiff filed a suit in the Middle District of Louisiana. In response, citing improper venue, defendant filed a Motion to Dismiss or requested, in the alternative, that the suit be transferred to California. The Middle District of Louisiana, the defendant argued, is excluded as an authorized and proper venue by the parties’ forum selection clause:
“If, …, the parties have not succeeded in negotiating a resolution of the dispute, either party may institute suit in the Superior Court of the State of California for the County of Los Angeles, or, if mutually agreed to by the parties, the dispute shall be settled by arbitration in Pasadena, California ….” Arkel Int’l, L.L.C. v. Parsons Glob. Servs., Inc., No. CV 07-474-FJP-DLD, 2008 WL 11413369, at *3 (M.D. La. Jan. 8, 2008)