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Switch, Ltd v. Gei Consultants, Inc.

United States District Court, D. Nevada

October 1, 2019

SWITCH, LTD, Plaintiff,



         I. SUMMARY

         Plaintiff Switch, Ltd. sued Defendant GEI Consultants, Inc. in Nevada state court for allegedly failing to perform under a contract involving a data center in Georgia, where Defendant was to provide environmental consulting services. (ECF No. 1-1.) Defendant removed the case to this Court. (ECF No. 1.) Before the Court is Plaintiff's motion to remand, which is primarily based on a forum selection clause in the contract governing the relationship between the parties (the “Motion”).[1] (ECF No. 16.) Also before the Court is Defendant's motion to dismiss. (ECF No. 10.) Because the Court agrees with Plaintiff that the forum selection clause requires this case be litigated in state court, and as further explained below, the Court will grant Plaintiff's Motion and remand this case.


         Plaintiff essentially alleges that Defendant did not perform its obligations under a contract where Defendant agreed to perform “a subsurface exploration and geotechnical evaluation of property [in Georgia that Plaintiff] was evaluating for purchase, to determine the suitability of the land for building several mission critical data centers and creating a new” campus for Plaintiff in Georgia (the “Contract”). (ECF No. 1-1 at 3; see also Id. at 19-24 (Contract).) Plaintiff brings claims for: (1) breach of contract; (2) intentional interference with prospective economic advantage; (3) deceptive trade practices under NRS § 598.0915; (4) fraud; (5) negligence; (6) negligent misrepresentation; (7) gross negligence; (8) breach of good faith and fair dealing; (9) unjust enrichment; and (10) declaratory relief. (Id. at 8-16.)

         Plaintiff's Motion is primarily based on the forum selection clause in the Contract. (ECF No. 16 at 6-12.) The forum selection clause of the Contract reads:

Jurisdiction and Venue. The interpretation and enforcement of this Agreement shall be governed by the laws of the State of Nevada, without regard to its conflict of laws provisions. Clark County, Nevada, shall be the exclusive venue and jurisdiction for any dispute arising out of or related to this Agreement; except that either party may take interim action in any jurisdiction to prevent disclosure of Confidential Information or to enforce a judgment or other decision.

(ECF No. 1-1 at 22.) Defendant invoked the Court's diversity jurisdiction in removing this case to this Court under 28 U.S.C. § 1332(a). (ECF No. 1 at 3.)


         Federal courts are courts of limited jurisdiction, having subject-matter jurisdiction only over matters authorized by the Constitution and Congress. See U.S. Const. art. III, § 2, cl. 1; see also, e.g., Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A suit filed in state court may be removed to federal court if the federal court would have had original jurisdiction over the suit at the commencement of the action. See 28 U.S.C. § 1441(a). However, courts strictly construe the removal statute against removal jurisdiction, and “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (emphasis added). The party seeking removal such as Defendant here bears the burden of establishing federal jurisdiction. See Kokkonen, 511 U.S. at 377.

         “A forum selection clause operates outside of the various requirements for removal specified in [28 U.S.C.] §§ 1441-1453.” Kamm v. ITEX Corp., 568 F.3d 752, 756 (9th Cir. 2009). “Instead, a forum selection clause is similar to other grounds for not exercising jurisdiction over a case, such as abstention in favor of state court jurisdiction under Younger v. Harris, 401 U.S. 37 (1971), and related abstention cases, or a refusal to exercise supplemental jurisdiction and a resulting remand to state court under 28 U.S.C. § 1367(c).” Id. “[A] forum selection clause does not [normally] deprive a federal court of subject matter jurisdiction.” Id. at 754.

         But “[a]n agreement limiting venue for litigation to a particular county unambiguously prohibits litigation in federal court when there is no federal courthouse located in the designated county.” City of Albany v. CH2M Hill, Inc., 924 F.3d 1306, 1308 (9th Cir. 2019). In contrast, “a forum selection clause that vests ‘exclusive jurisdiction and venue' in the courts ‘in' a county provides venue in the state and federal courts located in that county[, ]” Simonoff v. Expedia, Inc., 643 F.3d 1202, 1207 (9th Cir. 2011), if there is a federal courthouse in that county. See City of Albany, 924 F.3d at 1308 (discussing Simonoff). Thus, if a forum selection clause specifies that disputes must be resolved in a particular county, this Court may retain jurisdiction over the case if there is a federal courthouse located in that county, but not if there is no federal courthouse there-in which case the Court must remand.

         But the Court may remand even where not required by City of Albany, and will do so here-because the Court must remand if there is any doubt as to the right of removal in the first instance, and the plain language of the Contract's forum selection clause compels the conclusion that the parties intended to limit potential litigation to the state courts in Clark County, Nevada.

         Plaintiff argues in pertinent part that the language of the forum selection clause mandates the exclusive venue for any litigation between the parties is the state court located in Clark County, Nevada. (ECF No. 16 at 6-12.) Defendant counters that this case can proceed in this Court because it too is ...

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