Milani Construction, LLC v. City of Frederick, Maryland, 1:20-cv-02944

Milani Construction sued the City of Frederick for breach of contract, seeking nearly $6 million for road and bridge work under the Monocacy Boulevard Phase 2 contract.
Milani is an LLC; its two members (the Milaninias) claimed they domiciled in Arlington, Virginia as of August 2020 and submitted voter registration, change-of-address, and Virginia driver’s licenses to show Virginia citizenship.
Frederick submitted earlier filings, tax and property records showing the Milaninias previously lived in Reisterstown, Maryland, arguing Milani was a Maryland citizen and thus no diversity jurisdiction existed.
The contract contains a mandatory, exclusive forum-selection clause (Article 10(b)) requiring contractor-filed litigation in a court within the county where the Owner is located (Frederick County).
The Court (1) found, by a narrow preponderance, that Milani is a Virginia citizen and thus diversity jurisdiction exists; (2) converted Frederick’s Rule 12(b)(3) venue challenge into a forum non conveniens motion; (3) allowed Milani to file a surreply; and (4) enforced the contract’s forum-selection clause and dismissed the case for improper forum.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Subject-matter jurisdiction (diversity) — citizenship of LLC	Milani: LLC members domiciled in Virginia (change-of-address, VA voter regs, VA licenses).	Frederick: Milaninias domiciled in Maryland (prior filings, homeownership, tax payments).	Court: Milani narrowly met burden; LLC treated as VA citizen; diversity jurisdiction exists.
Proper procedural vehicle to enforce forum clause	Milani: defendant should not use Rule 12(b)(3); forum non conveniens is proper.	Frederick: asked court to treat its motion as forum non conveniens in reply.	Court: converted Rule 12(b)(3) motion to forum non conveniens and permitted surreply.
Enforceability of forum-selection clause	Milani: clause is conflicting, procedurally/substantively unconscionable, and deprives right to federal court; raises public-policy concerns.	Frederick: clause is mandatory, unambiguous, included in Contract and Special Provisions, and governs under federal law.	Court: clause is presumptively valid, not shown invalid or unreasonable; enforce clause.
Contract ambiguity due to other forum provisions	Milani: other contract documents contain differing forum language (appeals to state board; broad venue language).	Frederick: Article 6 preference clause gives Contract and Special Provisions priority, resolving any apparent conflict.	Court: preference clause controls; no conflict that invalidates Article 10(b).

Atl. Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., 571 U.S. 49 (2013) (forum-selection clauses are presumptively valid and control except in unusual circumstances)
Albemarle Corp. v. AstraZeneca UK Ltd., 628 F.3d 643 (4th Cir. 2010) (federal common law governs interpretation/enforcement of forum-selection clauses in federal court)
Bryant Elec. Co. v. City of Fredericksburg, 762 F.2d 1192 (4th Cir. 1985) (upholding a city’s forum-selection clause in a competitively bid construction contract)
M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (landmark recognition of enforceability of forum-selection clauses absent unreasonableness or fraud)
Bartels by & through Bartels v. Saber Healthcare Grp., LLC, 880 F.3d 668 (4th Cir. 2018) (a clause limiting suits to a particular county does not permit removal to federal court covering that county)
Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567 (2004) (citizenship for diversity jurisdiction is assessed as of the time of filing)
Gen. Tech. Applications, Inc. v. Exro Ltda, 388 F.3d 114 (4th Cir. 2004) (an LLC’s citizenship is the citizenship of its members)
Demetres v. E. W. Constr., Inc., 776 F.3d 271 (4th Cir. 2015) (plaintiff bears the burden to prove subject-matter jurisdiction by a preponderance of the evidence)
Rihani v. Team Exp. Distrib., LLC, 711 F. Supp. 2d 557 (D. Md. 2010) (district precedent interpreting county-based forum clauses as not authorizing federal forums that merely encompass the county)