292 F. Supp. 3d 595
W.D.N.Y.2017Background
- RCSD (Rochester City School District) sued Aramark in New York State Supreme Court, Monroe County, for breach of a food-service contract seeking $1,020,000 (filed ~June 30, 2017).
- Contract contained a forum-selection clause: "This contract shall be construed under the laws of the State of New York. Any action or proceeding arising out of this contract shall be brought in the appropriate courts of the State of New York."
- Aramark (Delaware corp., principal place of business in Pennsylvania) removed the case to federal court asserting diversity jurisdiction and arguing the clause permits state or federal courts in New York.
- RCSD moved to remand, arguing the clause makes New York state courts the exclusive forum and thus removal was improper.
- The district court applied Second Circuit precedent and forum-selection clause principles (presumption of enforceability; waivers of removal must be clear) and concluded the clause was mandatory and exclusive to New York state courts.
- Court granted the motion to remand and sent the case back to New York State Supreme Court, Monroe County.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the contract's forum-selection clause ("courts of the State of New York") precludes removal to federal court | Clause makes New York state courts the exclusive forum for disputes arising from the contract; removal is barred | Clause is geographic/permissive: "courts of the State of New York" allows either state or federal courts in New York; removal permitted | Clause is mandatory/exclusive to NY state courts; removal was improper and case remanded |
Key Cases Cited
- N.Y. ex rel. Jacobson v. Wells Fargo Nat'l Bank, N.A., 824 F.3d 308 (2d Cir. 2016) (standards for federal jurisdiction and removal)
- McCulloch Orthopaedic Surgical Servs., PLLC v. Aetna Inc., 857 F.3d 141 (2d Cir. 2017) (defendant bears burden to demonstrate proper removal)
- Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941) (uncertainties resolved against removal)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (forum-selection clauses prima facie valid and enforceable)
- Karl Koch Erecting Co. v. New York Convention Ctr. Dev. Corp., 838 F.2d 656 (2d Cir. 1988) (clause requiring commencement in state court precludes removal)
- Yakin v. Tyler Hill Corp., 566 F.3d 72 (2d Cir. 2009) (forum-selection clauses bind parties to a particular jurisdiction or venue)
- Global Seafood Inc. v. Bantry Bay Mussels Ltd., 659 F.3d 221 (2d Cir. 2011) (courts will not lightly infer waiver of removal without clear indication)