1:24-cv-05645
S.D.N.Y.Mar 26, 2025Background
- GH America Energy LLC (GHAE), a Texas-based renewables company with Chinese ownership, sold a Texas wind project to Greenalia Wind Power Blue Hills, LLC (Blue Hills), ultimately controlled by a Spanish entity.
- The sale was prompted by the Texas Lone Star Infrastructure Protection Act, which restricted GHAE from owning critical energy infrastructure due to its Chinese ownership.
- The parties' Asset Purchase Agreement (APA) included payments conditioned on project milestones and featured a forum selection clause designating courts in Bexar County, Texas.
- GHAE alleged Blue Hills failed to use best efforts to achieve a fast interconnection agreement, effectively impeding project progress and breaching the APA.
- Blue Hills argued they had no strict obligation to meet specific milestones and challenged federal jurisdiction, asserting both parties were foreign for diversity purposes.
- Blue Hills moved to dismiss for lack of subject matter jurisdiction, improper venue, and in the alternative, on forum non conveniens and failure to state a claim grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject Matter Jurisdiction | Parties are diverse; Blue Hills is a New York citizen | No diversity; both are foreign (Spain and China) | No diversity; both are foreign. Dismissed. |
| Forum Selection & Venue | New York venue is appropriate | Mandatory Texas forum-selection clause controls | Clause mandatory for Bexar County, TX courts |
| Interpretation of Forum Selection Clause | Clause is permissive due to “may” language | Language is mandatory given “exclusive jurisdiction” | Interpreted as mandatory under Texas law |
| Enforceability of Forum Clause | Enforcement burdensome and unfair | Clause is fair, negotiated, and not oppressive | Plaintiff failed to rebut enforceability |
Key Cases Cited
- Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365 (complete diversity required for subject matter jurisdiction)
- Hertz Corp. v. Friend, 559 U.S. 77 ("nerve center" test for corporate citizenship)
- Bayerische Landesbank v. Aladdin Capital Mgmt. LLC, 692 F.3d 42 (LLC citizenship based on members)
- Atl. Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., 571 U.S. 49 (forum-selection clauses enforced via forum non conveniens)
- Phillips v. Audio Active Ltd., 494 F.3d 378 (framework for forum selection clause enforceability)