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Bidwell Family Corp. v. Shape Corp.

United States District Court, S.D. Ohio, Western Division

December 9, 2019

THE BIDWELL FAMILY CORPORATION, et al., Plaintiffs,
v.
SHAPE CORP. et al., Defendants.

          ORDER DENYING PLAINTIFFS' MOTION TO REMAND (DOC. 15)

          Timothy S. Black United States District Judge

         This civil case is before the Court on Plaintiffs' motion to remand (Doc. 15) and the parties' responsive memoranda (Docs. 19, 21, 24).

         I. BACKGROUND

         Plaintiffs, The Bidwell Family Corporation, an aluminum-extrusion company, and its shareholders[1] (“Bidwell”), filed this action against Defendants, Shape Corp. and Magnode, LLC (“Shape”), in the Butler County Court of Common Pleas in anticipation of an alleged breach of the agreement governing Bidwell's sale of assets to Shape. (Doc. 1-3). The Asset Purchase Agreement (“agreement”) governing this multimillion-dollar sale contains a forum selection clause, which states as follows:

ANY LEGAL SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA O3R THE COURTS OF THE STATE OF OHIO IN EACH CASE LOCATED IN THE COUNTY OF BUTLER, AND EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION, OR PROCEEDING . . . . THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION, OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION, OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(Doc. 1-3 at 104-105, § 11.10(b)). Defendants timely removed the case to this Court on March 14, 2019. (Doc. 1). Plaintiffs seek to enforce the forum selection clause and to remand the case to Butler County. (Doc. 15).

         Plaintiffs argue that pursuant to the language of the clause, Defendants have waived their right to removal, having agreed to “submit[] to the exclusive jurisdiction of” federal courts or the state courts of Ohio “in each case located in the county of Butler.” (Id.). Because there is no federal court physically located in Butler County, Plaintiffs argue that the parties agreed to the exclusive jurisdiction of only state courts located in Butler County. (Id. at 8-9). Plaintiffs also argue Defendants have waived removal based on the language of the clause stating that “the parties hereto irrevocably and unconditionally waive any objection to the laying of venue of any suit . . . in such courts.” (Id. at 10).

         Defendants assert that the clause does not constitute a “clear and unequivocal” waiver of the right to remove, as is required under Sixth Circuit precedent. (Doc. 19). In Defendants' view, the phrase “in each case located in the County of Butler” modifies only “the courts of the state of Ohio, ” such that the line should be read as follows: “each party hereto irrevocably submits to the exclusive jurisdiction of either “the federal courts of the United States of America” or “the courts of the state of Ohio in each case located in the county of Butler.” (Id. at 9-10). In the alternative, Defendants suggest that because “[n]either party would ever voluntarily and willingly agree to include a provision that on its face was a complete nullity, ” the agreement could also be read as including federal courts covering or having jurisdiction over Butler County, not just federal courts physically located in Butler County-of which there are none. (Id. at 11). For the reasons stated below, Plaintiffs' motion to remand is denied.

         II.STANDARD OF REVIEW

         The right to removal provided by 28 U.S.C. § 1441 states in relevant part:

Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.

28 U.S.C. § 1441(a). Pursuant to the removal statute, a “defendant is entitled to have the suit removed to a proper federal court as a matter of right, on complying with the conditions prescribed by the statute.” Regis Assocs. v. Rank Hotels (Mgmt.), Ltd., 894 F.2d 193, 195 (6th Cir. 1990). When the requirements are met, this right “is absolute.” Id.

         A defendant may waive the right to removal by way of a contractual provision. However, such a waiver must be “clear and unequivocal.” Cadle Co. v. Reiner, Reiner, & Bendett, P.C., 307 Fed.Appx. 884, 886 (6th Cir. 2009); see also EBI-Detroit, Inc. v. City of Detroit, 279 Fed.Appx. 340, 347 (6th Cir. 2008). The Sixth Circuit's standard for demonstrating waiver of removal is more stringent than that of many other circuits. See Zehentbauer Family Land LP v. Chesapeake Expl., LLC, No. 4:15-cv-2449, 2016 WL 3903391, at *2 (N.D. Ohio July 19, 2016) (citing LaSalle Grp., Inc. v. Tiger Masonry, Inc., No. 10-11328, 2010 WL 4167257, at *3 (E.D. Mich. Oct. 15, 2010)). In Cadle, the Sixth Circuit found waiver lacking where the relevant forum selection clause stated, “[a]ll disputes . . . shall be resolved in the Newton Falls, Ohio Municipal Court or the Trumbull County, Ohio Common Pleas Court.” 307 Fed.Appx. at 885. The Court reasoned that “the forum selection clause at issue here neither mentions removal nor sets forth an explicit waiver of that right by [the defendant].” Id. at 888.

         “General principles of contract interpretation apply when determining whether a clause explicitly waives the right of removal.” Id. at 886. Thus, the language “should be given its ordinary meaning, the intent of the parties is ...


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