Tuesday, June 30, 2009

Eleventh Circuit Affirms Remand Based Upon Forum Selection Clause

In Emerald Grande, Inc. v. Clatus Junkin (08-14599), the Eleventh Circuit affirmed a district court's order remanding to state court based upon a forum selection clause.

In a footnote, the court noted: "The order of remand was not based on a lack of federal jurisdiction or defective removalprocedure; appellate review of a remand order enforcing a forum-selection clause is not barredby 28 U.S.C. § 1447(d). See Global Satellite Communication Co. v. Starmill U.K. Ltd., 378 F.3d1269, 1271 (11th Cir. 2004)."


The enforcability of a forum-selection clause in a diversity jurisdiction case is governed by federal law; see P&S Business Machines, Inc. v. Canon USA, Inc., 331 F.3d 804, 807 (11 Cir. 2003); and ordinary principles th of contract interpretation apply. See Global Satellite Communication Co. v. Starmill U.K. Ltd., 378 F.3d 1269, 1271 (11th Cir. 2004). A forum-selection clause may validly and effectively waive the right to remove. See id. at 1272. When a contract contains a valid forum selection clause -- here, neither party argues invalidity -- courts typically classify the clause as permissive or mandatory. See Florida Polk County v. Prison Health Services, Inc., 170 F.3d 1081, 1083 n.8 (11th Cir. 1999). “A permissive clause authorizes jurisdiction in a designated forum but does not prohibit litigation elsewhere. A mandatory clause, in contrast, dictates an exclusive forum for litigation under the contract.” Global Satellite, 378 F.3d at 1272 (internal quotation and citation omitted).


[The contract] mandates that the “Okaloosa Courts” “will be the venue for any dispute, proceeding, suit or legal action concerning the interpretation, construction, validity, enforcement, performance of, or related in any way to this Contract or any other agreement or instrumentexecuted in connection with this Contract.” And Article IX provides further that “each party waives any and all rights ... to object to jurisdiction or venue of the Okaloosa Courts.” In contrast, the language in Article VIII is permissive: it mandates no specific forum. Article VIII is a general consent to personal jurisdiction.


Junkin makes much of the absence of a clause equivalent to Article IX in the Furnishings Contract. Because the Furnishings Contract does have a forum selection clause that tracks Article VIII, and because Emerald was also seeking specific performance of that agreement, Junkin argues that removal must be proper for claims arising under the Furnishing Contract. But the Purchase Contracts and Furnishing Contract were executed together and should be read together. See Hopfenspirger v. West, 949 So.2d 1050, 1053 (Fla.Dist.Ct.App. 2006). And Article IX of the Condominium Contracts selects the Okaloosa Courts as the venue for disputes related to the Condominium Contracts or “any other agreement or instrument executed in connection” with the Condominium Contracts. Remand of all claims relating to the Condominium Contracts and the Furnishings Contract is due to be affirmed.


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