WILL WE EVER LEARN? “FORUM” ≠ “VENUE”

In re Omnicare Pharmacy of Texas 1, LP
Dallas Court of Appeals, No. 05-17-00246-CV (August 31, 2017)
Justices Lang, Evans, and Stoddart (Opinion available here)

Kelli Hinson

The parties’ Rule 11 agreement to consolidate four Texas cases into a single venue did not override the parties’ prior agreement on Delaware as the chosen forum. Omnicare and Remarkable had entered into four contracts that each contained the same forum selection clause designating Delaware state and federal courts as having exclusive jurisdiction over disputes arising under or relating to the contracts. Remarkable filed four separate lawsuits against Omnicare in four separate Texas counties. The parties agreed to consolidate the four lawsuits into the Dallas County lawsuit and signed a Rule 11 agreement to that effect. The Rule 11 agreement also stated that Omnicare agreed to “waive any objections they may have to venue over the claims against them being in Dallas County.”

Once the cases were consolidated in Dallas County, Omnicare moved to dismiss pursuant to the forum selection clauses. Remarkable argued the Rule 11 agreement superseded the forum selection clauses and that Omnicare had waived its right to object to the Texas forum. The trial court agreed and denied the motion to dismiss.

The Dallas Court of Appeals conditionally granted a writ of mandamus, holding the forum selection clauses are enforceable and are unaffected by the Rule 11 agreement on venue. The Court distinguished the two types of agreements: “A forum-selection agreement is one that chooses another state or sovereign as the location for trial, whereas a venue-selection agreement chooses a particular county or court within that state or sovereign.” The Court held that the Rule 11 agreement merely permitted consolidation of the four cases into one in order to determine the jurisdictional issues. Once the cases were consolidated in Dallas County, the trial court should have concluded that Texas is not the proper forum to determine the merits of the cases and should have dismissed the cases pursuant to the forum selection clauses.