Grand View PV Solar Two, LLC v. Helix Electric, Inc.
2017 U.S. App. LEXIS 1792
5th Cir.2017Background
- Grand View PV Solar Two, LLC owned a solar project; Centaurus Renewable Energy, LLC was acquiring Grand View and signed a Mutual Confidentiality Agreement (MCA) with Helix entities in August 2015.
- The MCA included a forum-selection clause (FSC) giving "sole and exclusive jurisdiction" to the courts of Harris County, Texas, and a waiver of objections to venue and forum non conveniens.
- Negotiations broke down; Grand View and Centaurus sued the Helix entities in Harris County state court alleging breaches and sought a declaratory judgment regarding rights under the MCA.
- Helix entities sued in California federal court and removed the Texas state action; plaintiffs moved to remand and the district court remanded for lack of federal jurisdiction.
- The Fifth Circuit reviewed whether the MCA’s FSC constituted a clear and unequivocal waiver of federal removal rights and whether plaintiffs were entitled to attorneys’ fees under 28 U.S.C. § 1447(c).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the MCA’s FSC waived defendants’ federal removal rights | MCA grants Harris County courts "sole and exclusive jurisdiction," so Helix waived removal | FSC is ambiguous (uncertain term "Proposed Transaction", scope of "affiliate/subsidiary", omission in waiver sentence) | Held: FSC is a clear, unequivocal waiver; removal barred |
| Whether plaintiff’s claims fall within the MCA’s FSC scope | Claims arise from the proposed solar project and seek declaratory relief under the MCA, so they fall within the FSC | Claims arise from earlier contracts with California FSCs and thus are not covered by the MCA | Held: Claims relate to the Proposed Transaction and the MCA; FSC covers them |
| Whether a single defendant’s waiver defeats unanimity for removal | A waiver by one defendant prevents removal because unanimity is required | Removal still improper because one defendant (Helix Electric, L.L.C.) consented to exclusive state-jurisdiction clause | Held: Single defendant’s waiver is sufficient to defeat removal |
| Whether attorneys’ fees should be awarded under 28 U.S.C. § 1447(c) | Plaintiffs sought fees because removal was improper | Defendants argued removal was objectively reasonable | Held: District court did not abuse discretion denying fees; removal was objectively reasonable though unsuccessful |
Key Cases Cited
- City of New Orleans v. Mun. Admin. Servs., Inc., 376 F.3d 501 (5th Cir.) (contractual forum clauses can constitute waiver of removal if clear and unequivocal)
- Brown v. Demco, Inc., 792 F.2d 478 (5th Cir.) (unanimity requirement: a single defendant's waiver can defeat removal)
- Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278 (5th Cir.) (doubts about propriety of removal resolved in favor of remand)
- Coker v. Coker, 650 S.W.2d 391 (Tex.) (contract ambiguity determined by viewing the contract as a whole in its context)
- Hornbuckle v. State Farm Lloyds, 385 F.3d 538 (5th Cir.) (attorney-fee awards under § 1447(c) require lack of objectively reasonable grounds for removal)
- Ensco Int’l, Inc. v. Certain Underwriters at Lloyd’s, 579 F.3d 442 (5th Cir.) (holding that an unambiguous clause vesting exclusive jurisdiction in a state court waives removal rights)