Opinion
Civil No. 04-3065-CO.
November 4, 2004
FINDINGS AND RECOMMENDATION
This action was removed to federal court by defendant on the ground of diversity of citizenship, 42 U.S.C. § 1441. This court may have jurisdiction pursuant to 28 U.S.C. § 1332. Before the court is plaintiff's motion to remand to Jackson County Circuit Court (#4), which defendant opposes.
DISCUSSION
Plaintiff moves to remand this matter to Jackson County Circuit Court on the ground that this court lacks subject matter jurisdiction. Plaintiff contends that the parties agreed in an enforceable forum clause in their license agreement to have this dispute heard in Jackson County Circuit Court. Defendant responds that the language at issue does not deny it the right to remove to federal court. Defendant contends that the language is not mandatory nor does it contain an unambiguous and express waiver of federal court jurisdiction. It asserts that the real issue here is whether the clause constitutes a waiver of removal rights. Plaintiff replies that defendant fails to discuss the Ninth Circuit cases cited in his motion that support enforcing the forum selection clause, but relies on two out-of-district district court cases.
The court agrees with the summary of the law applicable to determination of whether a forum selection clause is mandatory and, thus, enforceable, or permissive and unenforceable, as stated by the district court in Koresko v. Real Networks, Inc., 291 F. Supp.2d 1157, 1161 (E.D. Cal. 2003):
A forum selection clause will be enforced where venue is specified with mandatory language. Docksider, Ltd. v. Sea Technology, Ltd., 875 F.2d 762, 764 (9th Cir. 1989). However, if the language of the forum selection clause is non-mandatory, the forum selection clause will not preclude suit elsewhere. Hunt Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 75, 77 (9th Cir. 1987). When a mandatory forum selection clause clearly designates the forum chosen as the exclusive forum, it is enforceable. Northern California Dist. Council of Laborers v. Pittsburg-Des Moines Steel Co., 69 F.3d 1034, 1037 (9th Cir. 1995). "When only jurisdiction is specified the clause will generally not be enforced without some further language indicating the parties' intent to make jurisdiction exclusive." Docksider, 875 F.2d at 764.
In seeking a remand of this matter, plaintiff relies on the following language contained in the parties' license agreement, which provides: "This Agreement shall be construed under the laws of the State of Oregon," (Compl. Ex. A Par. 13.1 at 15; Vanderhoof Aff. Ex. 1 Par. 13.1 at 15), and "It is mutually agreed that the courts of Jackson County, Oregon are of competent jurisdiction and the parties mutually submit to the jurisdiction of said courts concerning any disputes arising directly or indirectly from this Agreement," (Compl. Ex. A Par 13.2 at 15; Vanderhoof Aff. Ex. 1 Par. 13.2 at 15). Plaintiff contends that the forum selection clause at issue is similar to the forum selection clauses found mandatory and enforceable in Docksider, Ltd. v. Sea Technology, Ltd., 875 F.2d 762, 763-64 (9th Cir. 1989), and Sterling Forest Associates v. Barnett-Range Corp., 840 F.2d 249, 250, 252 (4th Cir. 1988), abrogated on another ground by Lauro Lines S.R.L. v. Chasser, 490 U.S. 495 (1989). However, in so contending, plaintiff misstates the forum selection clause at issue in Docksider, quoting instead the forum selection clause at issue in Hunt Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 75, 76 (9th Cir. 1987). (Pl. Mem. at 3.) The clause at issue in Docksider, 875 F.2d at 763, which the Ninth Circuit found required enforcement, provided:
This agreement shall be deemed to be a contract made under the laws of the State of Virginia, United States of America, and for all purposes shall be interpreted in its entirety in accordance with the laws of said State. Licensee hereby agrees and consents to the jurisdiction of the courts of the State of Virginia. Venue of any action brought hereunder shall be deemed to be in Gloucester County, Virginia.
The clause at issue in Hunt Wesson, 817 F.2d at 76, which the Ninth Circuit determined was permissive, provided:
Buyer and Seller expressly agree that the laws of the State of California shall govern the validity, construction, interpretation and effect of this contract. The courts of California, County of Orange, shall have jurisdiction over the parties in any action at law relating to the subject matter or the interpretation of this contract.
The Docksider court distinguished the clause at issue in that case from the clause found to be permissive and not mandatory inHunt Wesson by the addition of a sentence stating that, "[v]enue of any action brought hereunder shall be deemed to be in Gloucester County, Virginia." 875 F.2d at 764. The court found that,
This language requires enforcement of the clause because Docksider not only consented to the jurisdiction of the state courts of Virginia, but further agreed by mandatory language that the venue for all actions arising out of the license agreement would be Gloucester County, Virginia. This mandatory language makes clear that venue, the place of suit, lies exclusively in the designated county.Id.; see Sterling Forest Assocs., 840 F.2d at 250, 252 (clause providing that "parties agree that in any dispute jurisdiction and venue shall be in California," held to be mandatory and not permissive) (and cases cited).
The court finds that the forum selection clause at issue here is like the clause in Hunt Wesson, which the Ninth Circuit found was permissive rather than mandatory. The Hunt-Wesson court's analysis applies equally here:
[T]he plain meaning of the language is that the [Jackson] County courts shall have jurisdiction over this action. The language says nothing about the [Jackson] County courts having exclusive jurisdiction. The effect of the language is merely that the parties consent to the jurisdiction of the [Jackson] County courts. . . . Such consent to jurisdiction, however, does not mean that the same subject matter cannot be litigated in any other court. In other words, the forum selection clause in this case is permissive rather than mandatory.Hunt Wesson, 817 F.2d at 77. The Hunt Wesson court pointed out that, in cases in which forum selection clauses were found to be mandatory, the language mandated more than that a particular court had jurisdiction — the language mandated that the specified courts were the only ones which had jurisdiction. Id. (and cases cited); see Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 275 (9th Cir. 1984) (clause including language that, "this Agreement shall be litigated only in the Superior Court for Los Angeles, California (and in no other)" found to be enforceable).
The court finds that the forum selection clause in the parties' license agreement is permissive and not mandatory. Because of the court's conclusion, the court finds it unnecessary to address the issue raised by defendant in its opposition.
RECOMMENDATION
Based on the foregoing, the court recommends that plaintiff's motion to remand to Jackson County Circuit Court (#4) be denied.This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals . Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of the district court's judgment or appealable order. The parties shall have ten days from the date of service of a copy of this recommendation within which to file specific written objections with the court. Thereafter, the parties have ten days within which to file a response to the objections . Failure to timely file objections to any factual determinations of the Magistrate Judge will be considered a waiver of a party's right to de novo consideration of the factual issues and will constitute a waiver of a party's right to appellate review of the findings of fact in an order or judgment entered pursuant to the Magistrate Judge's recommendation.