City of Benkelman, NE v. Baseline Engineering Corp., No. 16-1949 (8th Cir. 2017)
Annotate this CaseThe City filed suit against Baseline, alleging contract, negligence and professional malpractice, fraud, and negligent misrepresentation. The City's claims stemmed from a contract with Baseline, in which Baseline would assist with the permitting, design, and construction of a water treatment plant for the City. The Eighth Circuit held that, to the extent an arbitration provision was like a forum-selection clause, the motion seeking to compel arbitration was not properly construed under Federal Rule of Civil Procedure 12(b)(3); just as a forum selection clause has no bearing on the issue of whether venue was wrong or improper, an arbitration agreement has no relevance to the question of whether a given case satisfied constitutional or statutory definitions of jurisdiction; contrary to Baseline's contention, the July 2009 Contract's arbitration clause did not strip the federal courts of jurisdiction; and therefore the district court erred in construing the motion as a Rule 12(b)(1) challenge to subject matter jurisdiction. The court agreed with the City that Baseline's motion was properly analyzed under either Rule 12(b)(6) or Rule 56. Under both rules, the summary judgment standard applied. The court reversed and remanded for summary judgment proceedings in the district court.
Court Description: Shepherd, Author, with Riley and Beam, Circuit Judges] Civil case - Arbitration. In action by the City claiming defendant breached the parties' contract calling for defendant to design and construct a water treatment plant, the district court did not err in rejecting defendant's contention that its motion to dismiss should be treated as a Rule 12(b)(3) venue challenge; the Supreme Court has held that parties may not enforce forum-selection clauses through Rule 12(b)(3) motions to dismiss; an arbitration agreement alone - independent of statutory or other binding jurisdictional limitations - does not divest the federal courts of subject matter jurisdiction; contrary to defendant's contention, the arbitration clause in the parties' July, 2009 contract does not strip the federal courts of jurisdiction and the district court erred in construing the motion the motion to dismiss as a Rule 12(b)(1) challenge to subject matter jurisdiction; the motion should be analyzed as either a Rule 12(b)(6) motion or a Rule 56 motion; regardless of which rule is chosen, the same summary judgment standards apply; the district court did not have an opportunity to apply this analysis and the best course of action is to remand the matter to permit the court to consider the motion under summary judgment standards.
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