When the Supreme Court heard oral arguments on Oct. 9 in Atlantic Marine Construction Inc. v. U.S. District Court for the Western District of Texas, the session didn’t draw the crowds that pack the chamber for marquee cases. I was among only a handful of reporters there taking notes... with pen and paper (no cameras, no digital recorders, no smart phones allowed).
Within the construction industry, the case is being watched closely. It deals with a forum-selection clause in a contract between prime Atlantic Marine Construction, of Virginia Beach, and subcontractor J-Crew Management Inc. of Killeen, Texas.
Atlantic Marine Construction (AMC) won an Army Corps of Engineers contract to build a child-development center at Fort Hood in Texas. J-Crew contends AMC owed it $159,000 for the job. J-Crew sued AMC in federal court in Texas though the contract specified that suits would have to be brought in state or federal court in Virginia.
For an excellent look at forum selection from construction industry viewpoints, see coverage by my ENR colleague, ENR Managing Senior Editor Richard Korman.
But during the hour-long oral argument session on Oct. 9—a half-hour for each side—there was little mention of the construction industry. Instead, the justices' prime focus was the complex interplay among a few sections of federal law that cover procedures for determining where a case may be brought. (See court's official transcript.)
The court also was faced with a split among federal appeals courts on the issue.
The attorneys who appeared before the court for each side in Atlantic Marine are both Texans: W. Scott Hastings, a partner with Locke Lord LLP in Dallas, who represented AM; and William R. Allensworth, founder of Allensworth & Porter LLP in Austin, representing J-Crew’s interests.
They were peppered with questions and comments from all of the justices except Clarence Thomas, who rarely speaks in the court's public sessions.
The word "construction" did pop up a few times. Allensworth opened his remarks by setting the scene, saying J-Crew "brought this construction case in the Western District of Texas, which is where we performed our work, where the project's located, where all the witnesses reside and where virtually all the evidence is located."
Justice Elena Kagan cut him off, saying, "But Mr. Allensworth, where you agreed not to bring it."
Chief Justice John Roberts seemed to place weight on the forum-section clauses in the contract. He also said their impact is wide-ranging, commenting that “the enforceability of the clauses is critically important to a lot of modern commerce.” Roberts said that's particularly true for companies that do business in multiple states.
The Roberts court's nine members are viewed as being split along liberal and conservative lines, with Justice Anthony Kennedy generally conservative, but at times a swing vote.
The discussion in Atlantic Marine didn't seem to break down strictly along conservative-liberal lines.
At least a couple of the conservatives,Roberts and Justice Samuel Alito, did appear to side more with AMC's views. One of the liberals, Justice Elena Kagan, was probing in her interchange with Hastings, but she was tough on Allensworth, too.
There were some lighter moments. I thought the best exchange was this one: Allensworth said, "What brings us here to the federal [judicial] system is not for a declaratory relief or to make new law on venue; it’s to collect $160,000....”
Then Kagan interjected, “So...the only people collecting that $160,000 are going to be the lawyers.” Allensworth said, “I wish.”
After oral arguments in high-profile cases, attorneys and spokespersons from various interest groups appear before the cameras and microphones that media outlets set up on the court's front steps, give their takes on how they fared before the justices.
For the Atlantic Marine case, no cameras, no crowds. I was the media. Hastings and Allensworth took a few minutes to talk about the case.
Hastings said, "I thought it went very well. Tough questions." He added, "I'm not in the business of trying to predict how something comes out, but we're hopeful [the justices] would enforce the contract."
Likewise, Allensworth wouldn't forecast how the court might rule. But he was expansive in discussing the case. He said, “I think that most of the judges generally favor forum-selection clauses and are on record as having done so. The question is whether those clauses were going to be applied reflexively, enforced reflexively, or whether there was going to be any room for judicial discretion before enforcing them.”
A decision is expected during the court's current term. It's impossible to say just when. But because the oral argument came so early—Day Three of the term—I'd guess the court will hand down its opinion well before the term ends next summer.