and Submitted May 13, 2019 Seattle, Washington
from the United States District Court 1:18-cv-00035-CWD for
the District of Idaho Candy W. Dale, Magistrate Judge,
Trout (argued), Trout Law PLLC, Boise, Idaho, for
E. Prince (argued) and Brett C. Ruff, Holland & Hart LLP,
Boise, Idaho, for Defendants-Appellees.
Before: Michael Daly Hawkins, William A. Fletcher, and Mark
J. Bennett, Circuit Judges.
panel reversed the district court's dismissal of an
action on the basis of a forum selection clause in the
parties' Asset Purchase Agreement.
panel applied the decision in Yei A. Sun v. Advanced
China Healthcare, Inc., 901 F.3d 1081 (9th Cir. 2018),
which was decided after the district court decision in this
case, and M/S Bremen v. Zapata Off-Shore Co., 407
U.S. 1, 15 (1972). The panel held that the district court
abused its discretion in enforcing the forum-selection clause
that contravened the strong public policy announced by Idaho
Code § 29-110(1), and was therefore unenforceable; and
remanded so that the district court could apply a traditional
forum non conveniens balancing analysis. The panel
clarified that satisfaction of Bremen's public
policy factor continues to suffice to render a
forum-selection clause unenforceable.
FLETCHER, CIRCUIT JUDGE
Technologies, Inc. ("Gemtech") is an Idaho-based
manufacturer of gun silencers. In 2017, Smith & Wesson
Corp. and parent company American Outdoor Brands Corp.
(collectively "Smith & Wesson") offered to
purchase Gemtech's assets. Gemtech accepted and entered
into an Asset Purchase Agreement with Smith & Wesson. The
Agreement contained a forum-selection clause requiring
"any action or proceeding arising out of or relating to
this Agreement" to be brought in Delaware. Gemtech
subsequently sued Smith & Wesson for breach of the
Agreement in Idaho federal district court. The district court
enforced the forum-selection clause and dismissed the action.
On appeal, Gemtech argues that the forum-selection clause is
unenforceable because it contravenes the strong public policy
declared by Idaho Code § 29-110(1). Applying our
decision in Yei A. Sun v. Advanced China Healthcare,
Inc., 901 F.3d 1081 (9th Cir. 2018) ("Advanced
China Healthcare"), decided after the district
court ruled in this case, we agree. We reverse and remand.
January 2018, Gemtech filed a diversity action against Smith
& Wesson in the United States District Court for the
District of Idaho alleging breach of contract. In the Asset
Purchase Agreement, Smith & Wesson promised to make two
payments to Gemtech, a cash payment and an earn-out payment.
According to Gemtech's complaint, Smith & Wesson
breached the Agreement in several material respects that
"violated, nullified, and significantly impaired the
cash payments and the earn-out payments to Gemtech."
February 21, 2018, Smith & Wesson moved to dismiss the
action because of the forum-selection clause in the