Lakeshore Technical College v. Anthology Inc
1:24-cv-01290
| E.D. Wis. | May 30, 2025Background
- Lakeshore Technical College (Lakeshore), a public technical college in Wisconsin, sued Anthology, Inc., a Florida-based software company, over an allegedly failed ERP software implementation.
- Lakeshore filed three state-law claims in Wisconsin state court: fraud in the inducement, violation of the Wisconsin Deceptive Trade Practices Act, and breach of contract.
- Anthology removed the case to the Eastern District of Wisconsin, asserting diversity jurisdiction under 28 U.S.C. § 1332.
- Lakeshore moved to remand, arguing it is an arm of the State of Wisconsin and thus not a "citizen" for diversity jurisdiction; Anthology moved to dismiss or transfer based on a forum selection clause in the parties’ contract designating Florida as the exclusive forum.
- The court addressed both the jurisdictional issue (diversity citizenship) and the enforcement of the forum selection clause.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Lakeshore is an "arm of the State" (diversity jurisdiction) | As a technical college, Lakeshore is an arm of the State and not a citizen | Lakeshore is a political subdivision, not an arm of the State | Not an arm; qualifies as a citizen, diversity exists |
| Enforceability of forum-selection clause | Exception applies for state institutions; also procured by fraud | Clause is mandatory and enforceable; no relevant exception or fraud | Clause is mandatory and enforceable |
| Whether the case should be remanded | Federal court lacks jurisdiction, should return to state court | Federal court has diversity jurisdiction | Motion to remand denied |
| Appropriate venue | Wisconsin is appropriate venue due to state law exception and alleged fraud | Exclusive venue is Southern District of Florida per contract | Transfer to Southern District of Florida ordered |
Key Cases Cited
- Moor v. Alameda Cnty., 411 U.S. 693 (Supreme Court outlines difference between arms of the State and political subdivisions for diversity purposes)
- Mount Healthy City Sch. Dist. Bd. of Ed. v. Doyle, 429 U.S. 274 (Local school districts are not arms of the state for immunity and diversity)
- Atl. Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., 571 U.S. 49 (Forum selection clauses should usually be enforced by transfer under § 1404(a))
- Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30 (State treasury risk is core to arm-of-the-state analysis)
- Parker v. Franklin Cnty. Cmty. Sch. Corp., 667 F.3d 910 (Personhood and arm-of-the-State status under § 1983)