Copperweld Steel Co. v. Demag-Mannesmann-Boehler

Demag-Mannesmann-Boehler (Demag) (defendant), a German company, sold a casting machine to Copperweld Steel Company (Copperweld) (plaintiff), an American company. The standard-form sale agreement contained a forum-selection clause that required any disputes arising from the contract to be litigated in Germany unless Demag chose to bring the action in the United States. This clause was expressly applicable to any export contract negotiated by Demag. The machine was originally supposed to be built and exported from Germany, but before the sale agreement was finalized, Demag and Copperweld concluded that the machine would be manufactured in the United States. After the sale, the machine failed to meet Copperweld’s requirements. Copperweld sued Demag in a federal district court for breach of contract, negligent design and manufacture, and negligent and fraudulent misrepresentation. Demag, relying on the forum-selection clause, moved to dismiss the action for lack of jurisdiction. The district court denied Demag’s motion and declined to enforce the forum-selection clause because the manufacturing facility, relevant records, witnesses, and customers were all located in the United States and because Demag did business and maintained offices in the United States. Demag appealed, arguing that the forum-selection clause was enforceable.