Will a Nebraska court enforce this forum-selection clause?
Yes, by statute, but only if the clause is mandatory (“only”, “exclusively”, “and not elsewhere”), and never for construction work performed in Nebraska. Nebraska is a statutory forum-selection state, not a common-law one: the governing law is the Model Uniform Choice of Forum Act, Neb. Rev. Stat. §§ 25-413 to 25-417. The operative outbound section is § 25-415, not § 25-414: “If the parties have agreed in writing that an action on a controversy shall be brought only in another state and it is brought in a court of this state, the court will dismiss or stay the action, as appropriate”, unless one of five listed exceptions applies, the last being that “it would for some other reason be unfair or unreasonable to enforce the agreement.” Haakinson & Beaty Co. v. Inland Insurance settled its validity in a case of first impression: “We believe that the provisions of § 25-415 are valid, and, likewise, the provisions of the bond are enforceable”, and “whether the exceptions contained in § 25-415 are specifically spelled out in the bond or not, they are a part of the bond and must be considered by any court”. Polk County Recreational Ass'n v. Susquehanna Patriot Commercial Leasing Co. supplies the rule the later cases apply: “In the absence of one of the five listed exceptions, § 25-415 requires dismissal of an action only when the forum selection clause is mandatory”, and “A party seeking to avoid a contractual forum selection clause bears a heavy burden of showing that the clause should not be enforced”. The inbound section is § 25-414, which applies where “the agreement provides the only basis for the exercise of jurisdiction” and requires that Nebraska be a reasonably convenient place for trial, and which “does not apply to cognovit clauses, to arbitration clauses, or to the appointment of an agent for the service of process”. The construction kill-switch is Neb. Rev. Stat. § 45-1209(3): void is “[a] provision that purports to require that the venue for a court or arbitration hearing be held at any location outside of the state.”
The trap
“Consents and submits to the jurisdiction of the courts of X” is worthless in Nebraska. § 25-415 operates only where the action “shall be brought only in another state”, and in Polk County seven of eight identical-looking equipment leases used consent-and-submit language and were held PERMISSIVE, so § 25-415 did not compel dismissal as to them: “If the forum selection clause is permissive rather than mandatory, § 25-415 does not require dismissal of the Nebraska action.” Only the eighth, which said the action “shall be brought” in a named Pennsylvania county, was mandatory. The dismissal as to the seven permissive leases was nonetheless affirmed on a separate ground, because an action on the same dispute was already pending in Pennsylvania. Four sub-traps follow. For construction work performed in Nebraska, § 45-1209(3) voids the clause outright, and unlike § 25-414(2) it reaches the ARBITRATION SEAT as well as the courtroom, subject to § 45-1207's four-residential-unit limit and § 45-1208's October 1, 2010 date. A clause naming NEBRASKA can fail on the same Act: in Applied Underwriters Captive Risk Assurance Co. v. E.M. Pizza, Inc. a mandatory, exclusive Nebraska clause did not confer jurisdiction because Nebraska was not a reasonably convenient place for trial, the court reading § 25-414 “to require courts to consider both private and public interest factors when determining whether this state is a reasonably convenient place for the trial of the action”. The race to the courthouse can beat the clause: Mueller v. Peetz records that “there is widespread consensus that parties may not deprive a court of subject matter jurisdiction by their own agreement”, and Neb. Rev. Stat. § 25-538 gives a Nebraska court an independent power to “stay or dismiss the action” when the interest of substantial justice points elsewhere. And several other Nebraska statutes void or dictate the clause for particular contract types (their text is not quoted here).
23 authorities
- statuteNeb. Rev. Stat. § 25-415enactment date not established
The words that state the rule
If the parties have agreed in writing that an action on a controversy shall be brought only in another state and it is brought in a court of this state, the court will dismiss or stay the action, as appropriate, unless (1) the court is required by statute to entertain the action; (2) the plaintiff cannot secure effective relief in the other state, for reasons other than delay in bringing the action; (3) the other state would be a substantially less convenient place for the trial of the action than this state; (4) the agreement as to the place of the action was obtained by misrepresentation, duress, the abuse of economic power, or other unconscionable means; or (5) it would for some other reason be unfair or unreasonable to enforce the agreement.
- statuteNeb. Rev. Stat. § 25-414enactment date not established
The words that state the rule
This section does not apply to cognovit clauses, to arbitration clauses, or to the appointment of an agent for the service of process
- statuteNeb. Rev. Stat. § 25-417enactment date not established
The words that state the rule
Sections 25-413 to 25-417 may be cited as the Model Uniform Choice of Forum Act.
- statuteNeb. Rev. Stat. § 45-1209enactment date not established
The words that state the rule
A provision that purports to require that the venue for a court or arbitration hearing be held at any location outside of the state.
- statuteNeb. Rev. Stat. § 25-538enactment date not established
The words that state the rule
When the court finds that in the interest of substantial justice the action should be heard in another forum, the court may stay or dismiss the action
The words that state the rule
If, then, § 25-415 is a valid exercise by the Legislature, we are compelled to determine that the provision contained in Inland's bond is not void as being contrary to public policy
The words that state the rule
Section 25-415 is part of the Model Uniform Choice of Forum Act adopted by the Legislature of the State of Nebraska in 1969.
The words that state the rule
whether the exceptions contained in § 25-415 are specifically spelled out in the bond or not, they are a part of the bond and must be considered by any court
The words that state the rule
We believe that the provisions of § 25-415 are valid, and, likewise, the provisions of the bond are enforceable.
- case734 N.W.2d 750Polk County Recreational Ass'n v. Susquehanna Patriot Commercial Leasing Co.Neb.decided 2007read it at the source ↗
The words that state the rule
In the absence of one of the five listed exceptions, § 25-415 requires dismissal of an action only when the forum selection clause is mandatory.
- case734 N.W.2d 750Polk County Recreational Ass'n v. Susquehanna Patriot Commercial Leasing Co.Neb.decided 2007read it at the source ↗
The words that state the rule
Under the Act, Nebraska courts are generally directed to enforce forum selection clauses unless certain statutory exceptions apply.
- case734 N.W.2d 750Polk County Recreational Ass'n v. Susquehanna Patriot Commercial Leasing Co.Neb.decided 2007read it at the source ↗
The words that state the rule
A party seeking to avoid a contractual forum selection clause bears a heavy burden of showing that the clause should not be enforced
- case734 N.W.2d 750Polk County Recreational Ass'n v. Susquehanna Patriot Commercial Leasing Co.Neb.decided 2007read it at the source ↗
The words that state the rule
If the forum selection clause is permissive rather than mandatory, § 25-415 does not require dismissal of the Nebraska action.
- case734 N.W.2d 750Polk County Recreational Ass'n v. Susquehanna Patriot Commercial Leasing Co.Neb.decided 2007read it at the source ↗
The words that state the rule
We further conclude that although the forum selection clauses in the remaining seven leases were permissive rather than mandatory, the court did not err in dismissing the complaint as to Patriot with regard to these leases because the Pennsylvania action was pending at the time the golf courses filed this action for declaratory judgment in Nebraska.
The words that state the rule
Under Nebraska law, the enforceability of a forum selection clause is evaluated by the terms of the Choice of Forum Act.
The words that state the rule
Based on Burger King Corp. v. Rudzewicz , the weight of authority holds that a valid and enforceable choice of forum clause in a contract is sufficient in itself to waive the requirement of minimum contacts and to submit the nonresident to the jurisdiction of the forum state
- case923 N.W.2d 789Applied Underwriters Captive Risk Assurance Co. v. E.M. Pizza, Inc.Neb. Ct. App.decided 2019read it at the source ↗
The words that state the rule
We read Ameritas Invest. Corp. v. McKinney, supra, and Atlantic Marine Constr. Co. v. United States Dist. Court for Western Dist. of Tex., supra, to require courts to consider both private and public interest factors when determining whether this state is a reasonably convenient place for the trial of the action under § 25-414(1)(b).
The words that state the rule
This is plainly incorrect as there is widespread consensus that parties may not deprive a court of subject matter jurisdiction by their own agreement
- statuteNeb. Rev. Stat. § 45-1207enactment date not established
The words that state the rule
The Nebraska Construction Prompt Pay Act does not apply to improvements to real property intended for residential purposes when the residence consists of no more than four residential units.
- statuteNeb. Rev. Stat. § 45-1208enactment date not established
The words that state the rule
The Nebraska Construction Prompt Pay Act applies to contracts or subcontracts entered into on or after October 1, 2010.
- statuteNeb. Rev. Stat. § 25-414enactment date not established
The words that state the rule
If the parties have agreed in writing that an action on a controversy may be brought in this state and the agreement provides the only basis for the exercise of jurisdiction, a court of this state will entertain the action if (a) the court has power under the law of this state to entertain the action; (b) this state is a reasonably convenient place for the trial of the action; (c) the agreement as to the place of the action was not obtained by misrepresentation, duress, the abuse of economic power, or other unconscionable means; and (d) the defendant, if within the state, was served as required by law of this state in the case of persons within the state or, if without the state, was served either personally or by certified mail directed to his last-known address.
- statuteNeb. Rev. Stat. § 45-1209enactment date not established
The words that state the rule
The following provisions in any contract or subcontract for construction work performed within the State of Nebraska shall be against public policy and shall be void and unenforceable:
- statuteNeb. Rev. Stat. § 45-1201enactment date not established
The words that state the rule
Sections 45-1201 to 45-1211 shall be known and may be cited as the Nebraska Construction Prompt Pay Act.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.