Mendoza v Microsoft Inc., 2014 WL 842929 (W.D. Tex. March 5, 2014).
In this action, a Texas district court found that CAFA cannot interfere with contractually valid forum selection clauses, and therefore, cannot preempt the transfer of the action to the venue agreed upon in the contracts.
Microsoft pointed that the plaintiffs had entered into contracts, the plaintiffs had reviewed the terms of conditions, and that according to the terms and conditions, the plaintiffs had agreed to submit their disputes to the exclusive jurisdiction and venue of state and federal courts of King County, Washington. Accordingly, Microsoft argued that the action should be transferred to the Western District of Washington. The Texas district court found that the plaintiffs failed to demonstrate extraordinary circumstances that would cause difficulties if the case was transferred to the Western District of Washington. Accordingly, the District Court concluded that the transfer of venue was warranted pursuant to the contractually valid forum-selection clause.
In short, Atlantic Marine held that if a contractually valid forum-selection clause exists and applies to the lawsuit, a court should grant the motion to transfer in accordance with the forum-selection clause absent extraordinary circumstances. The plaintiffs contended that because their lawsuit alleged a violation of the Video Privacy Protection Act and that Act did not contain a venue provision, the fallback position reverts to the permissive venue provisions of CAFA. The Texas district court, nevertheless, noted that CAFA does not specifically designate a particular venue for a class action. CAFA is only designed to confer diversity jurisdiction over class actions that satisfy certain criteria. Instead, 28 U.S.C. §§ 1391, 1392, the usual venue statutes for civil actions apply to class action lawsuits brought under CAFA.