The parties in Automobile Mechanics Local 701 Welfare & Pension Funds v. Vanguard Car Rental USA, Inc., 2007 U.S. App. LEXIS 22217 (7th Cir. Sept. 18, 2007), filed cross-motions for summary judgment. Rather than addressing those motions, the district court dismissed the suit sua sponte, because it concluded that the dispute had to be arbitrated. Both parties appealed, and the Seventh Circuit reversed. ‛Enforcement of a forum selection clause (including an arbitration clause) is not jurisdictional; it is a waivable defense that [defendant], in fact, waived.“ The Court declared that: ‛District courts should not, as a matter of general practice, dismiss sua sponte either for improper venue or for failure to follow a forum selection clause.“
The Seventh Circuit proceeded to decide the summary judgment motions that the district court had declined to address. It noted that it was empowered to do so by 28 U.S.C. § 2106, which authorizes courts of appeals to provide relief when so doing would "be just under the circumstances" — which includes the prerogative to decide motions for summary judgment as a matter of first impression. Held, while this prerogative should be exercised rarely, ‛’Rarely’ does not mean ‘never....’"
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