State payment statutes often bar contract terms requiring disputes on in-state projects to be litigated in other states.

In Popple Construction v. Kiewit Power Construction, the Federal Court for the Middle District of Pennsylvania addressed the issue of whether the Pennsylvania Contractor and Subcontractor Act (CASPA) provision barring the enforcement of contractual, forum selection clauses was enforceable.

In Popple Constr., the plaintiff brought three causes of action—breach of contract, quantum meruit and violation of CASPA in the Pennsylvania court.

The contract between the parties, however, contained a forum selection clause that provided that the courts of the state of Illinois were the sole and exclusive jurisdiction for any disputes between the parties. Despite this provision, the plaintiff filed in Pennsylvania, in reliance on the statutory forum selection clause found in CASPA. CASPA provides that forming a contract subject to the laws of another state or requiring that litigation on the contract occur in another state is unenforceable.

This presented the following legal question to the court: when a contractual forum selection clause is directly at odds with a statutory forum selection clause, which should prevail? The court examined prior decisions by the Third Circuit, other district courts, and its own prior decision in KNL Construction, Inc. v. Killian Construction, Co. and decided that the parties’ contractual agreement to a specific forum outweighed the forum selection provision in CASPA.

The court reasoned that, if it denied the motion to transfer the case to an Illinois court filed by the defendant, it would ultimately allow parties to use CASPA to circumvent their own contractual choice of forum. The existence of a state law forum selection clause, like the one found in CASPA, does not constitute an extraordinary circumstance that would justify the negation of parties’ agreed-upon contractual forum selection clauses.

Under Popple Constr., thus, a statutory forum selection clause does not permit a plaintiff to file an action in a court in contravention of the parties’ contractual forum selection clause. If a party has entered a valid forum selection clause, it is bound by that forum choice regardless of CASPA’s statutory forum selection provisions.