Smart Communications Collier, Inc. v. Lowndes County, Mississippi
N.D. Miss.3/31/2022
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IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF MISSISSIPPI ABERDEEN DIVISION SMART COMMUNICATIONS COLLIER, INC. PLAINTIFF V. NO. 1:21-CV-78-DMB-DAS LOWNDES COUNTY, MISSISSIPPI; LOWNDES COUNTY SHERIFFâS OFFICE; and LOWNDES COUNTY SHERIFF EDDIE HAWKINS, in his Official and Individual Capacities DEFENDANTS ORDER Before the Court is the defendantsâ âMotion to Dismiss, to Transfer and/or Remand for Want of Jurisdiction, or in the Alternative for Forum Non-Conviens[sic].â For the reasons explained below, this case will be dismissed without prejudice. I Procedural History On May 3, 2021, Smart Communications Collier, Inc. filed a complaint in the United States District Court for the Northern District of Mississippi against Lowndes County, Mississippi, Lowndes County Sheriffâs Office, and Lowndes County Sheriff Eddie Hawkins, in his official and individual capacities. Doc. #1. Smart seeks a declaratory judgment determining whether the defendants may properly terminate an agreement under which Smart exclusively provides inmate communication services to the Lowndes County Adult Detention Center. Id. On May 25, 2021, the defendants filed a âMotion to Dismiss, to Transfer and/or Remand for Want of Jurisdiction, or in the Alternative for Forum Non-Conviens[sic]â on grounds that the agreement âattached to the Plaintiffâs Complaint, has a forum selection clause wherein the parties agreed to have this matter in the State Courts of Mississippi.â Doc. #7 at PageID 39. Smart responded in opposition to the motion. Doc. #11.1 The defendants did not reply. II Standard of Review It is important to initially address the criteria under which a forum selection clause should be evaluated when a case is filed in federal court but asserted to be subject to a forum selection clause mandating a state court venue. The defendants ask the Court to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12, or to âtransfer and/or remandâ the case pursuant to 28 U.S.C. § 1404 or, alternatively, for forum non conveniens. Doc. #7 at 1. A. Rule 12 Though the defendants move for dismissal pursuant to Rule 12, they fail to specify the subsection on which they rely. To the extent they seek dismissal for lack of subject matter jurisdiction, the Court presumes they invoke Rule 12(b)(1). Motions under Rule 12(b)(1) challenge a courtâs subject matter jurisdiction. However, âa federal court may dismiss a case on the ground of forum non conveniens without first resolving a threshold issue of jurisdiction.â Wellogix, Inc. v. SAP Am., Inc., 648 F. Appâx 398, 400 (5th Cir. 2016) (citing Sinochem Intâl Co., Ltd. v. Malay. Intâl Shipping Corp., 549 U.S. 442, 425 (2007)). Because the defendantsâ arguments only relate to the forum selection clause and the United States Supreme Court has explained that âthe appropriate way to enforce a forum-selection clause pointing to a state or foreign forum is through the doctrine of forum non conveniens,â2 the Court declines to further address subject matter jurisdiction. 1 Smart initially filed a response and supporting memorandum on June 8, 2021, but attached exhibits to the memorandum (instead of to the response) contrary to Local Rule 7(b)(2). Docs. #9, #10. It refiled its response and memorandum in compliance with the Local Rules on June 16, 2021. Docs. #11, #12. 2 Atl. Marine Constr. Co., Inc. v. U.S. Dist. Ct. for the W. Dist. of Tex., 571 U.S. 49, 60 (2013). B. 28 U.S.C. § 1404 The defendants also seek relief pursuant to 28 U.S.C. § 1404 but neither their motion nor their memorandum specifies the subsection on which they rely. Section 1404(a) provides that â[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.â The Court is puzzled as to why the defendants rely on § 1404. They argue that âthe parties intended to have this matter heard in Mississippi State Courtsâ but as the defendants acknowledge, this Court âcannot force a state Court to take this matterâ where there has been no prior state court filing. Doc. #8 at 1â2. Accordingly, the Court turns to the defendantsâ alternative forum non conveniens argument. C. Forum Non Conveniens The doctrine of forum non conveniens âentail[s] the same balancing-of-interests standardâ as a motion to transfer venue under 28 U.S.C. § 1404(a). Atl. Marine Constr. Co., Inc. v. U.S. Dist. Ct. for the W. Dist. of Tex., 571 U.S. 49, 61 (2013). âIn the typical case not involving a forum-selection clause, a district court considering a § 1404(a) motion (or a forum non conveniens motion) must evaluate both the convenience of the parties and various public-interest considerations.â3 Id. at 62. âThe calculus changes, however, when the partiesâ contract contains a valid forum-selection clause, which represents the partiesâ agreement as to the most proper forum.â Id. at 63. When there is a mandatory, enforceable forum selection clause, âthe plaintiffâs choice of forum merits no weightâ and the plaintiff bears the âburden of establishing that § 1404(a) transfer 3 âThe public-interest factors include the administrative difficulties flowing from court congestion; the local interest in having localized controversies decided at home; and the interest in having the trial of a diversity case in a forum that is at home with the law.â Weber v. PACT XPP Techs., AG, 811 F.3d 758, 767 (5th Cir. 2016) (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n.6 (1981)). or [forum non conveniens] dismissal is unwarranted.â Weber v. PACT XPP Techs., AG, 811 F.3d 758, 767 (5th Cir. 2016) (citing Atl. Marine, 571 U.S. at 63). This is because âdismissal ⊠work[s] no injustice on the plaintiffâ because the plaintiff âhas violated a contractual obligation by filing suit in a forum other than the one specified in a valid forum-selection clause.â Atl. Marine, 571 U.S. at 66 n.8. Additionally, a court âshould not consider arguments about the partiesâ private interestsâ4 but instead consider only the âpublic interestâ factors. Id. at 64. Because âa valid forum-selection clause should be given controlling weight in all but the most exceptional cases,â public-interest factors will rarely defeat a transfer motion. Id. at 63â64 (alterations omitted). Therefore, the plaintiffâs burden to establish that âpublic-interest factors overwhelmingly disfavor a transferâ is very heavy. Id. at 67. Where the parties dispute whether the forum selection clause language precludes filing in a federal forum, the forum non conveniens analysis in the Fifth Circuit is: First, the courtâs threshold consideration ⊠is whether the civil action might have been brought in the transferee court. Second, assuming the court decides that threshold question in the affirmative, the court then evaluates whether the clause in question is mandatory, permissive, or ambiguous, applying principles of contract law as necessary. ⊠Third, if the court concludes that the forum-selection clause is mandatory, then the clause is presumptively enforceable and, to prevent transfer, the party opposed to the motion must meet its âheavy burdenâ to demonstrate that enforcement of the clause would be unreasonable under the circumstances. If the court concludes that the clause is permissive, however, the court embarks on a typical § 1404(a) analysis and, to succeed on its motion, the party moving for a change of venue must satisfy its burden to demonstrate why the forum should be changed. Alternatively, if the court concludes that the clause is genuinely ambiguous, principles of contract law indicate that the court must construe the clause against the drafting party. Fleetwood Servs., LLC v. Complete Bus. Sols. Grp., Inc., No. 3:17-CV-2272, 2018 WL 501184, at *4 (N.D. Tex. Jan. 22, 2018) (internal citations omitted) (collecting authorities). 4 Weber, 811 F.3d at 767 (parties who âhave contracted for a specific forum ⊠waive the right to challenge their preselected forum as inconvenientâ). III Factual Background In 2015, Smart and Lowndes County negotiated the terms of an agreement (âAgreementâ) under which Smart was to provide Lowndes County with a secure electronic messaging system used by Lowndes County Adult Detention Center inmates. Doc. #1 at 5; Doc. #1-1. On June 18, 2015, after a meeting between the parties, Smartâs Director of Information Technology, Justin Scott, forwarded a draft agreement prepared by Smart to Rick Jones of Lowndes County for review.5 Doc. #11-1 at PageID 69â70. Several days later, Jones e-mailed Scott indicating the draft agreement had been reviewed and suggested the following changes: 1.1-Hillborough County, Florida-Lowndes County, Mississippi 7.7-Florida Statutes-change to Mississippi? 9.4-Florida law-change to Mississippi laws? Id. at PageID 69.6 On June 24, 2015, Scott e-mailed Jones a revised draft agreement, indicating the âvenue and applicable laws have been updated to Mississippi as requestedâ and asking Jones to advise if he had âany other questions or concerns.â Id. Jones responded on July 9, 2015, that he was in receipt of the revised draft agreement and would get back to Scott if he had any questions. Id. No additional revisions were requested by Lowndes County, and the Agreement executed by Lowndes County was sent by e-mail on July 21, 2015, to Smartâs President, Jim Logan.7 Id. at PageID 71. Logan executed the Agreement on August 7, 2015. Doc. #1-1 at 8. The Agreement allows early termination in several situations and contains a forum 5 The e-mails Smart provided contain some duplication and do not include copies of the attached draft agreements. See Doc. #11-1. 6 Section 1.1 of the Agreement contains the language: âThe parties agree that this Agreement shall be governed by all federal, state and county laws applicable to Lowndes County, Mississippi.â Doc. #1-1 at 1. Section 7.7 of the Agreement does not contain any language relating to Mississippi law as discussed in Jonesâ e-mail, and instead addresses sovereign immunity. See id. at 6. Section 9.4 of the Agreement is the forum selection clause. Id. 7 See Doc. #1-1 at 8 (naming James Logan, as âPresidentâ of Smart). selection clause.8 Doc. #1-1 at 4, 6. In a letter dated March 5, 2021, Lowndes County notified Smart of its intent to cancel the Agreement in thirty days. Doc. #1-3 at PageID 25. A disagreement ensued between the parties as to whether the time to terminate the Agreement had passed, resulting in Smart filing the complaint in this case. See Doc. #1 at 7; Docs. #1-4, #1-5. IV Analysis The defendants seek dismissal of this entire case, contending that âthe State Courts of Mississippi are the mandatory, sole jurisdiction for dispute under [the Agreement].â Doc. #8 at 2 (emphasis omitted). Smart agrees the Agreementâs forum selection clause is mandatory but disagrees about the scope of the limitations of the phrase âother pertinent Mississippi Courts,â arguing the forum selection clause allows filing in both state and federal courts sitting in the geographical bounds of Mississippi. Doc. #12 at 3â5, 7. Utilizing Mississippi contract interpretation principles and federal enforceability standards, the Court finds that the forum selection clause is mandatory and enforceable against Smart and that this case must be dismissed under the doctrine of forum non conveniens as proscribed by Atlantic Marine and the Fifth Circuit. A. Forum Selection Clause Interpretation In the Fifth Circuit, âwhen determining whether a forum selection clause ⊠require[s] the parties to litigate in the named forum, i.e., is mandatory and enforceable, a two-step inquiry is undertaken.â Kirkland Props., LLC v. Pillar Income Asset Mgmt., Inc., 481 F. Supp. 3d 626, 629 (N.D. Miss. 2020). First, the court determines whether the forum selection clause is mandatory or permissive, and then, if mandatory, the court determines if the clause is enforceable. See Weber, 8 The parties executed an addendum to the Agreement on June 25, 2018. Doc. #1-2. 811 F.3d at 770 (â[T]he question of enforceability is analytically distinct from the issue of interpretation: Only after the court has interpreted the contract to determine whether it is mandatory or permissive does its enforceability come into play.â). Generally, â[o]nly mandatory [forum selection] clauses justify transfer or dismissal.â Id. at 769. And only mandatory forum selection clauses are presumptively valid. See Pratt Paper (LA), L.L.C. v. JLM Advanced Tech. Servs., No. 11-1556, 2013 WL 395815, at *5 (W.D. La. Jan. 31, 2013) (citing Caldas & Sons, Inc. v. Willingham, 17 F.3d 123, 127 (5th Cir. 1994)). âA mandatory forum selection clause requires that all litigation be conducted in a specified forum. To be considered mandatory, the clause must go beyond establishing that a particular forum will have jurisdiction and must clearly demonstrate the partiesâ intent to make that jurisdiction exclusive.â LeBlanc v. C.R. England, Inc., 961 F. Supp. 2d 819, 828 (N.D. Tex. 2013) (emphasis in original) (citing UNC Lear Servs., Inc. v. Kingdom of Saudi Arabia, 581 F.3d 210, 219 (5th Cir. 2009)). â[W]ords of limitationâ act to exclude other venues and establish the mandatory nature of a forum selection clause. Bentley v. Mut. Benefits Corp., 237 F. Supp. 2d 699, 702 (S.D. Miss. 2002). In contrast, a permissive forum selection clause âauthorize[s] jurisdiction in a designated forum, but do[es] not prohibit litigation elsewhere.â First Nat. of N. Am., LLC v. Peavy, No. 3-02- cv-33, 2002 WL 449582, at *2 (N.D. Tex. Mar. 21, 2002). However, some forum selection clauses are neither facially mandatory nor permissive and instead are ambiguous, requiring additional evaluation to determine the partiesâ intent and the clauseâs enforceability.9 Fleetwood, 2018 WL 501184, at *4. A forum selection clause is ambiguous âwhere the clauseâs language cannot be given a definite legal meaning and is 9 When a forum selection clause is clearly mandatory and the parties do not otherwise contest its mandatory nature, contract interpretation principles need not be utilized. ASAP Auto Grp., LLC v. Marina Dodge, Inc., 3 F. Supp. 3d 573, 576 (S.D. Miss. 2014). reasonably susceptible to more than one interpretation.â Id. (cleaned up); see Dalton v. Cellular S., Inc., 20 So. 3d 1227, 1232 (Miss. 2009) (defining ambiguity as âa susceptibility to two reasonable interpretationsâ when âviewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or businessâ). When forum selection clause language is ambiguous, principles of contract law are applied âto discern the partiesâ intent, if possible.â Fleetwood, 2018 WL 501184, at *4. Under Mississippi law,10 courts âappl[y] a three-tiered approach to contract interpretation.â Gainnie v. McMillin, 138 So. 3d 131, 135 (Miss. 2014). First, the Court applies the four corners test, looking to the language that the parties used in expressing their agreement and reading the contract as a whole, so as to give effect to all of its clauses. If the provision at issue is unclear or ambiguous, the Court applies the discretionary canons of contract construction. Finally, if the contract continues to evade clarity as to the partiesâ intent, the court should consider extrinsic or parol evidence. Accident Ins. Co. v. Deep S. Roofing, Inc., No. 3:19-cv-10, 2021 WL 3641457, at *2 (S.D. Miss. Aug. 17, 2021) (cleaned up) (citing Gainnie, 138 So. 3d at 135). 1. Mandatory, permissive, or ambiguous The parties agree the forum selection clause was designed to be mandatory but disagree as to the scope of its limitation of forum. Doc. #8 at 2; Doc. #12 at 5. âThe Fifth Circuit has held forum selection clauses mandatory when express language such as âonlyâ or âmustâ is incorporated into the clause to bestow exclusive jurisdiction or venue on a court of a specific locale.â Jimmie Lyles Carpets, Inc. v. Munlake Contractors, Inc., No. 5:11-CV-85, 2012 WL 2222857, at *2 (S.D. Miss. June 14, 2012) (collecting cases). 10 In this diversity action, the Court applies the law of the forum state, 84 Lumber Co. v. Contâl Cas. Co., 914 F.3d 329, 333 (5th Cir. 2019), which the parties do not dispute. See Doc. #12 at 6 (stating Mississippi law governs interpretation); Doc. #8 (declining to state which law governs interpretation). The entire forum selection clause at issue states: 9.4 Governing Law. The parties mutually agree that any litigation arising hereunder shall be brought and completed in Lowndes County, Mississippi and other pertinent Mississippi courts and further that neither party shall seek to remove such litigation from Circuit Courts and Appellate Courts of the State of Mississippi by application of conflict of laws or any other removal process to any Federal Court or court not in Mississippi. Doc. #1-1 at 6. By comparing this language to the forum selection clause language used by the Fifth Circuit as an example of a mandatory language, it is clear the language of limitation for a mandatory clause has been utilized here. See Caldas & Sons, Inc. v. Willingham, 17 F.3d 123, 128 (5th Cir. 1994) (using âany dispute arising must be treated before the London Court of Justiceâ as an example of mandatory forum selection clause language) (citing M/S Bremen v. Zapata Off- Shore Co., 407 U.S. 1, 2 (1972)). Here, the parties used express language limiting their ability to bring âany litigationâ arising under the Agreement to certain courts. See Doc. #1-1 at 6. Despite the use of mandatory language, the use of the phrase âother pertinent Mississippi courtsâ may still render the clause ambiguous as to what forum is proper. Therefore, utilization of Mississippi contract interpretation principles considering the entirety of the forum selection clause is required. 2. The four corners The defendants argue that â[i]t is clear from the plain language of the contract, the parties intended to have this matter heard in Mississippi State Courtsâ and âmultiple pieces of language were inserted into [the forum selection] clause to keep this out of Federal Court.â Doc. #8 at 2. Smart contends the forum selection clause creates a geographical limitationânot a jurisdictional oneâbecause (1) the words âother pertinent Mississippi courtsâ are âplainly inclusive [of a Mississippi federal court], not exclusive;â and (2) had the parties intended to limit the available fora to only Mississippi state courts, they would have used more precise language to do so.11 Doc. #12 at 6â7. Smart also claims the portion of the forum selection clause forbidding removal âdoes not applyâ âbecause there has been no removal by a defendant.â Id. at 2â3. When interpreting a contract in Mississippi, a court must âread the contract as a whole, so as to give effect to all of its clausesâ and the concern is ânot nearly so much with what the parties may have intended, but with what they said, since the words employed are by far the best resource for ascertaining the intent and assigning meaning with fairness and accuracy.â Facilities, Inc. v. Rogers-Usry Chevrolet, Inc., 908 So. 2d 107, 111 (Miss. 2005). At this stage of review, âthe courts are not at liberty to infer intent contrary to that emanating from the text at issue.â Id. Despite Smartâs position that the parties could have used more precise language in the forum selection clause, at this stage, the Court may not consider what the parties could have done and instead must review the actual language used.12 Similarly, the Court cannot simply decline to review a portion of the forum selection clause because Smart argues it does not apply.13 The forum selection clause is a single sentence with two provisions separated by the language âand further âŠ.â Doc. #1-1 at 6. The term âfurtherâ is defined as âto a greater degree or extentâ or âin additionâ14 and indicates that the second removal provision modifies or otherwise places additional restraints on the first initial filing provision and is not meant to stand alone. 11 Smart also contends the parties were not concerned with jurisdictional limitations and were only concerned with geographical ones during the forum selection clauseâs formation, citing e-mails including the defendantsâ request to change the contract language from Florida to Mississippi. Doc. #12 at 10 (referencing Doc. #11-1). However, the Court will not consider this argument at this point of review as extrinsic evidence is only relevant if this Court proceeds beyond the first tier of review. Facilities, Inc. v. Rogers-Usry Chevrolet, Inc., 908 So. 2d 107, 111 (Miss. 2005). 12 Smartâs insistence that the placement of the word âotherâ is evidence that âother pertinent Mississippi courtsâ means âmore than state appellate courtsâ also relies on potential alternate constructions of the forum selection clause. Doc. #12 at 7 n.6. 13 See Doc. #12 at 3. 14 See further, MERRIAM-WEBSTER, https://www.merriam-webster.com/dictionary/further (last accessed Mar. 30, 2022). Smart asserts it was âunable to find a case that involves the interpretation of a forum selection clause identical or even substantially similar to the clause at issue hereâ and relies on general contract principles to support its position that âother pertinent Mississippi courtsâ are generally understood to mean both state and federal courts sitting in Mississippi. Doc. #12 at 6. However, the Eighth Circuit addressed an identically worded forum selection clause15 in a case involving Smart. Smart Commc'ns Collier Inc. v. Pope Cnty. Sheriff's Off., 5 F.4th 895 (8th Cir. 2021). While the Pope County case is not binding authority, it is certainly instructive here. In Pope County, the defendant moved to dismiss under an identical forum selection clause after Smart filed suit in an Arkansas federal court and the Eighth Circuit affirmed the lower courtâs dismissal based on the forum selection clause, finding the âother pertinent [state] courtâ language limited filings to the Arkansas state courts. Id. at 898. The court explained that the state name in the clause was âused as an adjective, not a nounâ and â[u]sually, an adjective before a court connotates what government it belongs to âe.g., federal court, state court, United States Supreme Court, Arkansas Supreme Court.â Id. The Eighth Circuit then pointed to specific examples of the usage of the phrase âArkansas courtsâ in both Eighth Circuit and Arkansas state case law which established that the âordinary understanding of âArkansas courtsâ refers to courts that are constituted under the Arkansas state government, not any court that happens to be within Arkansas's borders.â Id. The court also found that âthe word âpertinentâ d[id] not alter the meaning 15 The forum selection clause at issue in that case read: The parties mutually agree that any litigation arising hereunder shall be brought and completed in Pope County, Arkansas and other pertinent Arkansas courts and further that neither party shall seek to remove such litigation from Circuit Courts or Appellate Courts of the State of Arkansas by application of conflict of laws or any other removal process to any Federal Court or court not in Arkansas. Smart Commc'ns Collier Inc. v. Pope Cnty. Sheriff's Off., 5 F.4th 895, 897 (8th Cir. 2021). The only differences between the two forum selection clauses are the use of âArkansasâ instead of Mississippi, and âPope Countyâ instead of Lowndes County. Compare id. with Doc. #1-1 at 6. of âArkansas courts,ââ and instead functioned to connect âother ⊠Arkansas courtsâ to the âlitigationâ referenced in the clause or the courts in the county designated in the clause. Id. at 899. Similar to courts in the Eighth Circuit and Arkansas, as discussed in Pope County, the Fifth Circuit, as well as both state and federal courts in Mississippi, have consistently referred to Mississippi state courts as âMississippi courts.â See, e.g., Moore v. Roberts, 83 F.3d 699, 703 (5th Cir. 1996) (referring to Mississippi state courts as âMississippi courtsâ when discussing application of federal law by multiple Mississippi state courts); Boisseau v. Town of Walls, 138 F. Supp. 3d 792, 812 (N.D. Miss. 2015) (discussing Mississippi state courts as âMississippi courtsâ); Reese v. Skelly Oil Co., 53 F.R.D. 548, 564 (S.D. Miss. 1971) (same); Miss. Bar v. Rexrode, 939 So. 2d 755, 757 (Miss. 2005) (referring to the state courts of Mississippi as âMississippi courtsâ when differentiating between the âUnited States Courts of Appeals for the Fifth Circuit, the United States District Courts for the Northern and Southern Districts of Mississippi, and Mississippi courtsâ). This Court agrees with the Eighth Circuitâs analysis that the term âpertinentâ does not expand upon or otherwise explain what constitutes âMississippi courts.â16 Although the Pope County court did not âresort to the rules of constructionâ because the forum selection cause at issue âpermits only one reasonable interpretation,â17 the application of Mississippi contract interpretation principles renders the same result here. By finding that the âother pertinent Mississippi courtsâ language limits filing only to Mississippi state courts, the remainder of the forum selection clause may be given full force and effect based on its plain 16 âPertinentâ is defined as âhaving a clear decisive relevance to the matter in hand.â See pertinent, MERRIAM- WEBSTER, https://www.merriam-webster.com/dictionary/pertinent (last accessed Mar. 31, 2022). Thus, even if âpertinentâ was designed to relate to in what court litigation could take place as Smart contends, it does not provide any assistance as to whether a Mississippi federal court should be included in the scope of the word âcourts.â 17 Pope County, 5 F.4th at 899. language, and does not render the forum selection clause ambiguous and unenforceable.18 By reading the first portion as containing an express limitation that all litigation under the Agreement be âbrought and completedâ in Mississippi state courts, the second portion operates to âfurtherâ clarify those limits by forbidding removal to any federal court or a state court outside the state of Mississippi.19 See Doc. #1-1 at 6. In other words, the parties made their choice of a Mississippi state forum clearer still in the no-removal terms, rejecting any federal court and any state court outside of Mississippi from presiding over a case arising under the Agreement. The mandatory language of limitation and plain use of the term âMississippi courtsâ as referring to Mississippi state courts establishes that the forum selection clause is mandatory and limited to being filed in pertinent Mississippi state courts. Due to this finding, this Court may not move onto other tiers of review and instead considers whether the forum selection clause is enforceable against Smart. B. Forum Selection Clause Enforcement Federal law governs the enforceability of forum selection clauses in diversity cases. Weber, 811 F.3d at 770. âUnder federal law, a forum selection clause is presumed valid and a party seeking to set it aside must demonstrate that it is unreasonable under the circumstances âŠ.â TruGreen Landcare, L.L.C. v. Telfair Cmty. Ass'n, Inc., No. 12-514, 2013 WL 2147471, at *2 18 Smart suggests the âthe right to remove portion of the forum selection clause seems ambiguous and thus, perhaps unenforceableâ because it is not possible to ââremoveâ a case from a Mississippi state appellate court[.]â Doc. #12 at 5 n.4. However, in some circumstances, removal of cases before a state court of appeals to a federal district court is possible. See, e.g., Matter of Meyerland Co., 910 F.2d 1257, 1262 (5th Cir. 1990), on reh'g, 960 F.2d 512 (5th Cir. 1992) (allowing removal of a matter to federal district court while on appeal before a state appellate court). Even if a forum selection clause is ambiguous, it is not necessarily unenforceable. See, e.g., Pratt Paper, 2013 WL 395815, at *5. 19 Before the Eighth Circuitâs review in Pope County, the Southern District of Arkansas noted that â[i]t makes little sense to bar removal if the case could have been brought originally in a federal court.â Smart Commc'ns Collier, Inc. v. Pope Cnty. Sheriff's Off., No. 4:20-cv-368, 2020 WL 6155673, at *1 (E.D. Ark. June 22, 2020), aff'd, 5 F.4th 895 (8th Cir. 2021). (S.D. Tex. May 14, 2013) (citing M/S Bremen, 407 U.S. at 12â13). Unreasonableness is shown where: (1) the incorporation of the forum selection clause into the agreement was the product of fraud or overreaching; (2) the party seeking to escape enforcement âwill for all practical purposes be deprived of his day in courtâ because of the grave inconvenience or unfairness of the selected forum; (3) the fundamental unfairness of the chosen law will deprive the plaintiff of a remedy; or (4) enforcement of the forum selection clause would contravene a strong public policy of the forum state. Barnett v. DynCorp Int'l, L.L.C., 831 F.3d 296, 301 (5th Cir. 2016). Here, as the forum selection clause has been found to contain mandatory language limiting resolution of any dispute arising under the Agreement to Mississippi state courts, to prevent dismissal, Smart must demonstrate that enforcement of the clause would be unreasonable under the circumstances. However, Smart failed to present any argument as to why dismissal is unwarranted or otherwise address the public interest factors which might favor the case remaining in this Court despite the forum selection clause. See Doc. #12 at 11â12 (addressing the defendantsâ burden for dismissal but not addressing its own burden). As Smart did not meet its burden, dismissal is warranted. V Conclusion The defendantsâ âMotion to Dismiss, to Transfer and/or Remand for Want of Jurisdiction, or in the Alternative for Forum Non-Conviens[sic]â [7] is GRANTED in Part and DENIED in Part. It is GRANTED to the extent it seeks dismissal. It is DENIED in all other respects. This case is DISMISSED without prejudice. SO ORDERED, this 31st day of March, 2022. /s/Debra M. Brown UNITED STATES DISTRICT JUDGE
Case Information
- Court
- N.D. Miss.
- Decision Date
- March 31, 2022
- Status
- Precedential