849 F. Supp. 2d 240
D.P.R.2012Background
- Pipeliners and Prestige have a P&S Agreement from 2005 with Prestige’s security interest in Pipeliners’ receivables.
- Pipeliners later entered a $2,000,000 revolving loan with EDB on July 22, 2010, with a continuing security interest encumbering the same collateral.
- Prestige, asserting a senior lien, notified EDB’s counsel in August 2010 and demanded turnover of proceeds.
- EDB purportedly terminated the loan in October 2010 after learning of Prestige’s senior lien and alleged nondisclosure by Pipeliners.
- Pipeliners filed a Crossclaim in this action for breach of contract and tortious interference, seeking specific performance and damages.
- EDB moved to dismiss on forum-selection and supplemental jurisdiction grounds; the court denied both challenges.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Forum selection clause permissive or mandatory | Pipeliners argues clause is permissive | EDB argues clause is mandatory | Clause is permissive; Crossclaim may proceed in this forum |
| Existence of supplemental jurisdiction under § 1367(a) | Crossclaim related to Prestige’s claims; should be allowed | No supplemental jurisdiction | Crossclaim sufficiently related; § 1367(a) applies; proceed |
Key Cases Cited
- Redondo Constr. Corp. v. Banco Exterior de España, S.A., 11 F.3d 3 (1st Cir. 1993) (permissive forum clause language)
- Autoridad de Energía Eléctrica de Puerto Rico v. Ericsson, Inc., 201 F.3d 15 (1st Cir. 2000) (permissive forum clause when not clearly exclusive)
- Rivera v. Centro Médico de Turabo, Inc., 575 F.3d 10 (1st Cir. 2009) (mandatory-like effect when qualifying introductory phrase present)
- Global Seafood Inc. v. Bantry Bay Mussels Ltd., 659 F.3d 221 (2d Cir. 2011) (clarifies lack of clear exclusionary language yields permissive clause)
- Nazario-Lugo v. Caribevisión Holdings, Inc., 670 F.3d 109 (1st Cir. 2012) (parallel actions; exceptional basis required to surrender jurisdiction)