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Hiram Lodge Enterprises, Corp. v. TSN, LLC

United States District Court, D. New Hampshire

February 1, 2018

Hiram Lodge Enterprises Corp.
TSN, LLC, d/b/a Asirvia and/or Asirvia Proximity Marketing Solutions, et al.

          Frank J. Cimler, Jr., Esq. Lisa DeBrosse Johnson, Esq. Michael J. Tierney, Esq.


          Joseph N. Laplante United States District Judge

         Whether this breach of contract action remains in federal court turns on the specificity of the parties' agreed-to forum-selection clause. Plaintiff Hiram Lodge Enterprises Corp. brought this suit in Grafton County Superior Court, claiming that defendants Donald W. LaPlume, Jr., Kevin Marion, Donald Smith, and TSN, LLC, doing business as Asirvia and/or Asirvia Proximity Marketing Solutions (collectively “TSN”), breached an exclusive distribution agreement between Hiram Lodge and TSN. Hiram Lodge also brings several common-law and statutory claims arising from that relationship. TSN timely removed the action, citing this court's diversity jurisdiction under 28 U.S.C. § 1332(a). See 28 U.S.C. § 1441.

         Conceding the parties' diversity and satisfaction of the amount-in-controversy requirement, Hiram Lodge moves to remand this action to the Superior Court in light of the forum-selection clause in the parties' agreement. Concluding that TSN did not clearly waive its right to remove actions to this court through the forum-selection clause, the court denies Hiram Lodge's motion.

         I. Applicable legal standard

         “[A]ny 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). As the defendants observe in their notice of removal, [1] this court has subject-matter jurisdiction over this action under 28 U.S.C. § 1332 (diversity). The amount in controversy exceeds $75, 000 and complete diversity exists between the parties. Specifically, the plaintiff is a Canadian corporation with its principal place of business in Canada, [2]while the corporate defendant, TSN, is a Wyoming limited liability company, the individual members of which, who are also named as defendants in this action, are citizens of Vermont, Connecticut, and Maine.[3]

         A forum-selection clause does not “divest a court of jurisdiction that it otherwise retains, ” but rather “merely constitutes a stipulation in which the parties join in asking the court to give effect to their agreement by declining to exercise its jurisdiction.” Silva v. Encyclopedia Britannica Inc., 239 F.3d 385, 388 n.6 (1st Cir. 2001) (quoting LFC Lessors, Inc. v. Pac. Sewer Maint. Corp., 739 F.2d 4, 6 (1st Cir. 1984)). As such, “a forum selection clause mandating that disputes be resolved in state court operates as a waiver of the parties' removal rights under § 1441.” Skydive Factory, Inc. v. Skydive Orange, Inc., 2013 DNH 33, 1 (McAuliffe, J.) (citing Karl Koch Erecting Co., Inc. v. New York Convention Ctr. Dev. Corp., 838 F.2d 656, 659 (2d Cir. 1988)).

         Accordingly, “[w]hen the basis for removal jurisdiction is established and the issue of remand turns on the language of a forum selection clause, ” as it does here, “remand is only required where there is ‘clear language indicating that jurisdiction and venue are appropriate exclusively in the designated forum.'” Wells Fargo Fin. Leasing, Inc. v. Tulley Auto. Grp., Inc., 2016 DNH 177, 5 (McCafferty, J.) (quoting Inhabitants of Fairfield v. Time Warner Cable Ne., LLC, No. 1:14-CV-495, 2015 WL 1565237, at *1 (D. Me. Apr. 8, 2015) (Levy, J.)). “The correct approach” is to “enforce the forum clause specifically unless” the party opposing its enforcement clearly demonstrates “that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching.” M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972).

         In determining whether to enforce the forum-selection clause and remand this action to the Superior Court, this court may consider not only the complaint, but also “documents the authenticity of which are not disputed by the parties, documents central to plaintiffs' claim, and documents sufficiently referred to in the complaint.” Claudio-De León v. Sistema Universitario Ana G. Méndez, 775 F.3d 41, 46 (1st Cir. 2014) (internal quotations and citation omitted). The contract containing the forum-selection clause falls into all three of these categories.

         II. Background

         Hiram Lodge, a Canadian corporation based out of Toronto, makes and sells Bluetooth-enabled wireless marketing devices called “Royaltie Gems.”[4] On May 9, 2017, Hiram Lodge entered into an agreement with TSN, a limited liability company based in New Hampshire, under which TSN would be the sole distributor of its Royaltie Gems in the network marketing industry.[5] Hiram Lodge agreed to provide Royaltie Gems, as well as the associated software and services, to TSN under a private label brand called “Asirvia GO.”[6]

         The parties included a forum-selection clause in the agreement, which provides as follows:

Each Party irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind whatsoever against the other Party in any way arising from or relating to this Agreement, including all exhibits, schedules, attachments and appendices attached to this Agreement, and all contemplated transactions, in any forum other than the courts of the State of New Hampshire, and any appellate court from any thereof. Each Party irrevocably and unconditionally submits to the exclusive Jurisdiction of such courts and agrees to bring any such action, litigation or proceeding only in courts sitting in the State of New Hampshire. Each Party agrees that a final judgment in any such action, litigation or proceeding is conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.[7]

         The parties further agreed that “the laws of the State of New Hampshire” would govern the agreement.[8]

         A mere four months after entering into the agreement, on September 14, 2017, TSN's counsel sent Hiram Lodge a letter purporting to terminate it “for cause, effective immediately, and indicating that TSN did not intend to meet its outstanding obligations pursuant to the Agreement.”[9] Hiram Lodge alleges that this letter failed to comply with the agreement's terms, which provided Hiram Lodge a 300-day opportunity to cure any breach alleged by TSN.[10] In the meantime, Hiram Lodge alleges, TSN used Hiram Lodge's confidential and proprietary information -- learned under the terms of the agreement -- to ...

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