FindWhere Holdings, Inc. v. Systems Environment Optimization, LLC
2010 U.S. App. LEXIS 24363
| 4th Cir. | 2010Background
- FindWhere and Homeland Security entered a May 2008 contract appointing Homeland Security as FindWhere's exclusive reseller in several Middle Eastern countries.
- FindWhere sued in Virginia state court in June 2009 for breach of contract; SEO, LLC, Frank Williams, and Matthew Williams removed to federal court on diversity grounds.
- The contract contains a forum-selection clause stating jurisdiction and venue lie exclusively in the courts of Virginia, with a transfer phrase added: 'or be transferred to' Virginia courts.
- FindWhere moved to remand, arguing the clause confines disputes to Virginia state courts; defendants argued the clause allows federal or concurrent jurisdiction via transfer language.
- The district court remanded to state court, applying the 'in [a state]' versus 'of [a state]' distinction to interpret sovereignty; the court found exclusive Virginia state-court jurisdiction.
- On appeal, the Fourth Circuit affirmed remand, holding the clause is sovereign, not geographic, and excludes federal-court jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the forum clause is sovereign or geographic | Clause contemplates exclusive Virginia courts under sovereignty. | Clause contemplates potential federal transfer to Virginia courts via 'or be transferred to'. | Clause is sovereign; exclusive to Virginia state courts. |
| Effect of 'or be transferred to' in the clause | Transfer language broadens to include federal transfers. | Transfer language is narrow; cannot defeat exclusivity. | Transfer phrase does not create federal jurisdiction; exclusivity remains with Virginia state courts. |
| Appellate reviewability of remand based on forum clause | Remand based on forum clause should be reviewable on appeal. | Not contested here; standard practice allows review. | Remand based on forum clause is reviewable on appeal. |
Key Cases Cited
- Doe 1 v. AOL, LLC, 552 F.3d 1077 (9th Cir.2009) (courts 'of' Virginia refers to state courts; sovereignty framing)
- Am. Soda, LLP v. U.S. Filter Wastewater Group, Inc., 428 F.3d 921 (10th Cir.2005) (term 'Courts of' restricts to state courts)
- Dixon v. TSE Int'l Inc., 330 F.3d 396 (5th Cir.2003) (sovereignty vs geography interpretation of forum clause)
- LFC Lessors, Inc. v. Pac. Sewer Maint. Corp., 739 F.2d 4 (1st Cir.1984) (language restricting to state courts interprets sovereignty)
- Autoridad de Energia Electrica de Puerto Rico v. Ericsson, 201 F.3d 15 (1st Cir.2000) (forum clause review across circuits)
- Yakin v. Tyler Hill Corp., 566 F.3d 72 (2d Cir.2009) (forum-selection clause interpretation in remand context)