When Forum-Selection Clauses Collide: The Sixth Circuit Limits Rule 12(b)(6) Dismissals Where Venue Agreements Are Factually Disputed

Introduction

VCST International B.V. (“VCST”), a Belgian automotive-gear manufacturer operating a plant in Mexico, sued BorgWarner, Inc. and its subsidiary BorgWarner Noblesville, LLC (collectively “BorgWarner”) in the Eastern District of Michigan for more than USD 28 million arising out of cancelled purchase orders for electric-vehicle pinions. Although the business dispute is straightforward, the litigation quickly turned on which of two contradictory forum-selection clauses governed the relationship—one designating Mexican federal courts, the other Michigan state or federal courts. The district court, treating the Mexican clause as definitive, dismissed the action under Federal Rule of Civil Procedure 12(b)(6) for improper venue. The Sixth Circuit reversed.

The appellate opinion is notable for its procedural teaching: a Rule 12(b)(6) dismissal based on a forum-selection clause is appropriate only when the clause’s applicability is unambiguous on the face of the complaint and incorporated documents. Where factual disputes cloud which clause controls, the issue cannot be resolved at the pleadings stage; nor can the court leap-frog fact-finding by simply invoking the common-law doctrine of forum non conveniens without first deciding the contract question.

Summary of the Judgment

• The Sixth Circuit (Judges Moore, Gibbons, and Murphy, with Judge Murphy authoring) reversed the district court’s Rule 12(b)(6) dismissal and remanded for further proceedings.
• It held that VCST’s complaint plausibly alleges the parties later adopted the Michigan forum-selection clause appearing in BorgWarner’s U.S. Purchase Order Terms, creating a factual dispute that cannot be resolved on the pleadings.
• The panel distinguished between (1) motions under Rule 12(b)(6) (which are confined to the complaint and incorporated documents) and (2) motions under forum non conveniens (which may permit broader evidentiary submissions and discretionary balancing).
• Because the district court relied solely on Rule 12(b)(6) and never performed a forum non conveniens analysis, the Sixth Circuit limited its review to the Rule 12(b)(6) context, applied de novo review, and found dismissal erroneous.

Analysis

1. Precedents Cited and Their Influence

• Atlantic Marine Construction Co. v. U.S. District Court, 571 U.S. 49 (2013) – Clarified that forum-selection clauses are most commonly enforced through transfer (§1404(a)) or dismissal under forum non conveniens. The Sixth Circuit used Atlantic Marine to emphasize that when a clause is valid and undisputed, courts typically respect the chosen venue, but the threshold question remains whether the clause in fact applies.
• Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) – Supplied the “plausibility” standard for Rule 12(b)(6). The panel applied Twombly to find VCST’s allegations sufficient to survive dismissal.
• Jones v. Bock, 549 U.S. 199 (2007) – Held that a complaint need not anticipate and negate affirmative defenses. The court used this principle to underscore BorgWarner’s burden in asserting the forum-selection clause at the pleading stage.
• Firexo, Inc. v. Firexo Group Ltd., 99 F.4th 304 (6th Cir. 2024) – Provided the circuit’s two-step framework (applicability and enforceability) for evaluating forum-selection clauses, which the panel followed.
• Other procedural authorities: Sinochem Int’l, Piper Aircraft, Hefferan, Rudd, Blackwell, each invoked to delineate standards of review and scope of permissible materials on a Rule 12(b)(6) motion.

2. The Court’s Legal Reasoning

1. Different Procedural Paths Require Different Evidentiary Rules
   Rule 12(b)(6). Because such motions test only the legal sufficiency of the complaint, courts must:
   • accept well-pleaded facts as true,
   • draw reasonable inferences in the plaintiff’s favor, and
   • confine review to the complaint and documents it “necessarily embraces.”
   Forum Non Conveniens. Dismissal on this ground is discretionary and may rely on evidence outside the pleadings (affidavits, exhibits, live testimony). Standard of appellate review is abuse of discretion. The district court skipped this analysis.
2. The Contract Documents Were Ambiguous
   The relationship evolved through multiple instruments over four years:
   • Letter of Intent (2018) + BW Mexico Terms → Mexican forum clause.
   • Addendum No. 1 (2018) → reaffirmed Mexican clause but involved entities not parties to the lawsuit (VCST de Mexico & BorgWarner PDS (USA) Inc.).
   • Five Award Letters & multiple Quotes (2019-22) → first two referenced Addendum No. 1; last three dropped that reference and directed parties to generic “BW Purchase Order Terms.”
   • Purchase Orders issued by BW Noblesville (U.S.-based) expressly stated they are governed by the Terms & Conditions of the country where the “ordering BorgWarner entity” is seated, arguably the United States.
   These cross-currents created a plausible inference that the parties replaced or at least introduced doubt about the earlier Mexican clause.
3. Because Applicability Is Fact-Sensitive, Rule 12(b)(6) Dismissal Is Improper
   Under Michigan contract law, ambiguities permit consideration of extrinsic evidence. The very need to consult emails, evolving business practices, and the identities of affiliates confirmed that factual development was necessary. Therefore, the Sixth Circuit reinstated the action for further proceedings, leaving the district court free to employ:
   • an evidentiary hearing on contract formation,
   • limited discovery followed by summary judgment, or
   • a renewed motion under forum non conveniens after factual issues are resolved.

3. Potential Impact of the Decision

• Litigation Strategy in the Sixth Circuit. Defendants invoking a forum-selection clause must now carefully assess whether the contract record is airtight; otherwise, an early Rule 12(b)(6) motion risks denial or reversal.
• Evidentiary Hearings Anticipated. District courts may increasingly convene prompt evidentiary hearings (or authorize limited discovery) to decide contested applicability issues before reaching substantive merits.
• Drafting & Supply-Chain Contracts. Corporate counsel are reminded that partial amendments, affiliate name changes, and hyperlinks to web-hosted T&Cs can unintentionally create ambiguity, undermining the predictability that forum-selection clauses are meant to provide.
• Clarification of Standards. The opinion sharpens the distinction between the Rule 12(b)(6) framework and forum non conveniens doctrine, providing valuable guidance to lower courts and litigants inside and outside the Sixth Circuit.
• Plausibility Threshold for Affirmative Defenses. By treating the forum clause as an affirmative defense not established “on the face” of the complaint, the decision reaffirms plaintiffs’ latitude to survive dismissal even when they do not plead around such defenses.

Complex Concepts Simplified

• Forum-Selection Clause – A contractual provision where parties agree in advance on the court or jurisdiction where disputes will be litigated.
• Rule 12(b)(6) Motion – A request to dismiss a lawsuit because the complaint, on its face, fails to state a legally cognizable claim. Evidence outside the complaint is generally off-limits.
• Forum Non Conveniens – A discretionary, judge-made doctrine permitting dismissal when another adequate forum is substantially more convenient for the parties and witnesses; allows consideration of external evidence.
• Plausibility Standard – Under Twombly, a complaint must offer enough factual detail to raise a reasonable expectation that discovery will reveal evidence supporting the claim.
• Affirmative Defense – A legal argument that, even if the allegations are true, provides an independent reason to defeat the claim (e.g., statute of limitations, contractual venue clause). Generally must be proven by the defendant.
• Ambiguity in Contract Law – Where contract language reasonably supports more than one interpretation. Courts then may admit extrinsic evidence (emails, course of dealing) to ascertain intent.
• Choice-of-Law Clause – Specifies which jurisdiction’s substantive law governs the contract; distinct from where a lawsuit must be filed.

Conclusion

VCST Int’l B.V. v. BorgWarner Noblesville, LLC underscores that a forum-selection clause—powerful though it is—cannot shortcut fundamental pleading rules when its own applicability is clouded by factual uncertainty. The Sixth Circuit’s decision delivers three key takeaways:

1. The propriety of enforcing a forum clause at the pleading stage hinges on an unambiguous contractual record; ambiguity demands factual development.
2. Rule 12(b)(6) and forum non conveniens operate under different procedural lenses, and courts must respect those distinctions.
3. Transactional clarity is imperative. Parties should consolidate terms, avoid overlapping or contradictory documents, and expressly identify the governing version of any online or country-specific terms.

Going forward, litigants in the Sixth Circuit can expect closer scrutiny of motions that seek early dismissal based on contractual venue provisions, and contract drafters now have a cautionary exemplar of how “hidden” ambiguities can unravel the very predictability they strive to secure.