## Facts

- Robin P. Petersen, a former U.S. Navy pilot, was recruited in the United States to work in Saudi Arabia as a flight instructor for Boeing International Support Systems Company, Saudi Arabia Limited (BISS), a Boeing subsidiary.
- Before leaving the United States, Petersen signed a preliminary employment agreement that did not include a forum-selection clause.
- After arriving in Saudi Arabia, Petersen alleged he was required to sign a second employment agreement immediately, without time to read it, under a “sign now or go home at your own expense” ultimatum.
- The second agreement contained a forum-selection clause requiring contractual disputes to be resolved in the Saudi labor courts.
- Petersen alleged that after signing, his passport was confiscated, he was confined to a housing compound, and his workplace had serious safety and ethics violations.
- He asserted that when he tried to resign and return to the United States, his employer withheld his passport for nearly three months, and he returned only after U.S. consular intervention.
- After returning to the United States, Petersen sued Boeing and BISS in the District of Arizona for breach of contract and related statutory and common-law claims.
- Petersen submitted sworn assertions that he lacked the financial ability to litigate in Saudi Arabia, would face harsh restrictions if he returned, and that the forum-selection clause was obtained through fraud and undue pressure; record materials also suggested he could not lawfully reenter Saudi Arabia and faced risks of detention and unfair proceedings.

## Issues

1. Whether the district court abused its discretion by dismissing for improper venue under Fed. R. Civ. P. 12(b)(3) based on a foreign forum-selection clause without an evidentiary hearing, despite sworn allegations of fraud, coercion, and severe obstacles to litigating in the chosen forum.
2. Whether the district court abused its discretion by denying leave to amend before dismissal.
3. Whether the court of appeals should strike reply-brief material presenting new evidence or factual allegations outside the district-court record.

## Decision

- The Ninth Circuit reversed the Rule 12(b)(3) dismissal and remanded.
- The court held Petersen’s allegations and supporting materials were sufficient to create a triable factual dispute regarding enforceability of the forum-selection clause under the M/S Bremen framework.
- The court held the district court abused its discretion by dismissing based on the clause without conducting an evidentiary hearing on fraud and overreaching.
- The court held the district court abused its discretion by denying Petersen leave to amend under the liberal Rule 15(a) standard.
- The court granted defendants’ motion to strike portions of Petersen’s reply brief containing new evidence or alleged new facts not presented below.

## Legal Principles

- Forum-selection clauses are presumptively enforceable, but may be set aside upon a strong showing that enforcement would be unreasonable or unjust, or that the clause resulted from fraud or overreaching.
- A challenge must be directed to procurement of the forum-selection clause itself; sworn allegations that the clause was imposed under coercive circumstances can create a material factual dispute about validity.
- Enforcement may be unreasonable where the chosen forum is so gravely difficult or unfair that the plaintiff is effectively denied a meaningful opportunity to be heard.
- When material facts relevant to enforceability are genuinely disputed and supported by specific sworn statements, a district court may not resolve those disputes solely on the papers; an evidentiary hearing may be required before dismissal for improper venue.
- Leave to amend should be freely given under Rule 15(a); absent a clear showing of futility or other recognized grounds, denying amendment—particularly to a pro se litigant—can be an abuse of discretion.
- Appellate review is confined to the record before the district court; new evidence or factual allegations first raised on appeal may be stricken.

## Conclusion

The Ninth Circuit held that Petersen’s sworn allegations and supporting materials raised material factual disputes about whether a Saudi labor-court forum-selection clause was procured through fraud or overreaching and whether enforcement would effectively deny him a meaningful forum, requiring an evidentiary hearing and permitting amendment rather than dismissal for improper venue.


Petersen v. Boeing Co., 715 F.3d 276 (9th Cir. 2013)