GH AMERICA ENERGY LLC, Plaintiff, -against- GREENALIA WIND POWER BLUE HILLS, LLC, Defendants.
1:24-cv-05645-ALC
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
March 26, 2025
ANDREW L. CARTER JR., United States District Judge
OPINION & ORDER
Plaintiff GH America Energy LLC (“GHAE“) brings this action against Defendant Greenalia Wind Power Blue Hills, LLC (“Blue Hills“) alleging breach of contract. In the instant motion, Defendant moves to dismiss the Plaintiff‘s complaint pursuant to
STATEMENT OF FACTS
The Court assumes the parties’ familiarity with the facts, which are set forth more fully in the Complaint. ECF No. 3. Plaintiff GHAE is a limited liability company formed under the laws of Texas with its principal place of business located at 2800 Post Oak Boulevard, Suite 5115, Houston, Texas 77056. Id. at ¶ 1. GHAE‘s sole member is Luxemburg Irtysh Petroleum Sari, LLC, a Luxemburg limited liability company, whose sole member is Xingjiang Guanghui Petroleum Co., Ltd., a corporation formed under the laws of the People‘s Republic of China. Id.
Beginning in 2021, GHAE, a Texas-based renewable energy company, was developing wind energy projects in Val Verde County, Texas. Id. at ¶ 6. On June 7, 2021, the Texas state legislature enacted The Lone Star Infrastructure Protection Act (“LSIPA“), which prohibits businesses owned by citizens of China, Iran, North Korea, or Russia from entering into agreements granting them direct or remote access to critical infrastructure, including the Texas electric grid. Id. at ¶ 6-7. At the time of LSIPA‘s enactment, GHAE had several interconnection requests pending with the Electric Reliability Council of Texas (“ERCOT“), including one request for a 276-megawatt wind energy project known as the Blue Hills Wind Project (the “Wind Project“) in Val Verde County, Texas. Id. at ¶ 8. In December 2021, GHAE became aware that ERCOT intended on applying LSIPA to prohibit all of GHAE‘s requests. Id. To mitigate its losses, GHAE sought a buyer for the Wind Project, and ultimately entered into an Asset Purchase Agreement (“APA“) on January 31, 2022, with Babcock & Wilcox Blue Hills, LLC, which was later acquired by Greenalia and renamed Greenalia Wind Power Blue Hills, LLC (“Blue Hills“). Id. at ¶ 9-10.
Under the APA, Blue Hills acquired all rights to the Wind Project and certain related assets, along with options to lease or purchase land from GHAE‘s affiliate, Brazos Highland Properties LP (“Brazos“). Id. at ¶ 11. Blue Hills agreed to pay GHAE an $11 million purchase price, consisting of a $200,000 deposit, a $1 million upfront payment, and two payments of $5 million each after Milestone 1 and Milestone 2, events defined by the APA. Id. Milestone 1 required Blue Hills to execute a Standard Generation Interconnection Agreement (“SGIA“) with
On April 22, 2024, Greenalia‘s CEO, Alberto Expósito, allegedly informed GHAE‘s Vice President, Jerry Price, that Blue Hills could execute the SGIA within one to two weeks, but that Greenalia‘s board of directors would not authorize the execution unless GHAE agreed to spread the Milestone 1 payment over the course of 32 months. ECF No. 3 at ¶ 18. GHAE allegedly rejected to modify the terms of the APA, after which Expósito allegedly suggested that Greenalia may convert the Wind Project into a solar project. Id.
GHAE alleges that Blue Hills has intentionally failed to provide information that AEP and ERCOT requested for completion of an interconnection study, rather than using its best efforts to execute the SGIA, thereby preventing completion of the SGIA. Id. at ¶ 20. GHAE further contends that had Blue Hills acted diligently, it could have executed the SGIA by April
In response, Blue Hills argued that it had no contractual obligations to complete the SGIA or achieve Milestone 1, as the APA‘s language imposed no obligatory duty on Blue Hills to do so. Id. at ¶ 25. On May 31, 2024, GHAE informed Greenalia that it was in material breach of the APA. Id. at ¶ 26. On June 7, 2024, Greenalia reaffirmed its position that it was not required to execute the SGIA by the APA. Id. at ¶ 27. GHAE subsequently initiated this instant action seeking specific performance of Blue Hills’ alleged contractual obligations, reasonable and necessary attorney‘s fees and cost of suit, and any other relief that the Court deems proper. Id. at ¶ 34, 37.
PROCEDURAL HISTORY
On July 26, 2024, Plaintiff filed the complaint for breach of contract and declaratory judgment. ECF No. 3. On August 8, 2024, GHAE filed a motion for a preliminary injunction enjoining Greenalia from failing to pursue discussions and actions with AEP. ECF No. 9. That same day, this Court issued an Order to Show Cause (“OSHOW“) to the Defendant as to why a preliminary injunction should not be issued against them to enjoin Defendant Blue Hills, pending final resolution of this case, from failing to pursue discussions and actions with the AEP to enable AEP to complete a full interconnection study. ECF No. 11.
On September 5, 2024, Defendant filed a Memorandum of Law in opposition to the motion for the preliminary injunction. ECF No. 30. On September 13, 2024, Plaintiff filed their reply memorandum of law to the Defendant‘s opposition to the Plaintiff‘s motion for the preliminary injunction. ECF No. 34.
On October 14, 2024, Defendant filed a motion to dismiss for lack of subject matter
LEGAL STANDARD
I. Rule 12(b)(1)
II. Rule 12(b)(2)
On a motion to dismiss for lack of personal jurisdiction under
III. Rule 12(b)(3)
The doctrine of forum non conveniens permits a court to dismiss an action “even if the court is a permissible venue with proper jurisdiction over the claim.” Carey v. Bayerische Hypo- und Vereinsbank AG, 370 F.3d 234, 237 (2d Cir. 2004). “The rationale for dismissing a case on forum non conveniens grounds is that “a court abroad is the more appropriate and convenient forum for adjudicating the controversy.” Sinochem Int‘l Co. v. Malay. Int‘l Shipping Corp., 549 U.S. 422, 425 (2007). In deciding a motion to dismiss based on a forum-selection clause, “a
IV. Rule 12(b)(6)
To survive a motion to dismiss pursuant to
I. Rule 12(b)(1)
This Court finds that it is appropriate to dismiss this action for lack of federal subject matter jurisdiction pursuant to
Here, there is a dispute between the parties over the citizenship of Defendant Blue Hills. Plaintiff argues that this Court has federal subject matter jurisdiction under
This Court finds that for purposes of diversity jurisdiction, Defendant Blue Hills is a citizen of Spain. When determining a party‘s citizenship for diversity purposes, a limited liability company “takes the citizenship of each of its members.” Bayerische Landesbank v. Aladdin Capital Mgmt. LLC, 692 F.3d 42, 49 (2d Cir. 2012). The question is whether its principal place of business is Spain or New York. In Hertz Corp. v. Friend, the Supreme Court instructed lower courts to apply the “nerve center” test to determine where a corporation‘s principal place of business is located. 559 U.S. 77, 80–81 (2010). Under the nerve center test, the principal place of business is “where a corporation‘s officers direct, control, and coordinate the corporation‘s activities.” Id. at 92–93. The nerve center “is a single place,” usually a corporation‘s headquarters and always the “actual center” of “direction, control, and coordination.” Id. at 93. Although the nerve center test is neither as clear-cut nor as simple to determine as the Supreme Court evidently intended, subsequent courts have recognized that the test focuses on where a corporation‘s “high-level” decisions are made, not where day-to-day activities are managed. See,
Applying this standard, Defendant Blue Hills is a citizen of Spain because its sole LLC member Greenalia Wind Power, Inc.‘s principal place of business is in Spain, and an LLC takes the citizenship of its members. Bayerische Landesbank v. Aladdin Capital Mgmt. LLC, 692 F.3d 42, 49 (2d Cir. 2012). At its core, a corporation‘s “nerve center,” and thus its principal place of business for the purposes of diversity of citizenship, is where the lion‘s share of corporate decisionmaking and direction occurs at the time a lawsuit is initiated, not where corporate decisionmaking may have happened in the past or where it may happen in the future. See Protostorm, Inc. v. Foley & Lardner LLP, 18-CV-2107 (PKC) (JO), 2019 WL 4094882, at *6 (E.D.N.Y. Aug. 29, 2019) (plaintiff‘s testimony established that principal place of business was an executive‘s “house in Connecticut ... because [they were] not operating out of Delaware yet“); Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567, 570 (2004) (“[T]he jurisdiction of the court depends upon the state of things at the time of the action brought.” (citation omitted)). Here, Spain is the “nerve center” of Greenalia Wind Power, Inc. because the company‘s sole director works in Spain where he controls and makes executive decisions regarding Greenalia Wind Power, Inc. and Greenalia Wind Power Blue Hills, LLC.
While the Plaintiff may argue that Greenalia Wind Power, Inc. maintains its headquarters and principal address at 230 Park Avenue, Suite 2840, New York, NY 10169, the Plaintiff has failed to plead sufficient facts that suggest that this New York address is where high-level decisions are made. Where Greenalia Wind Power, Inc. is a subsidiary of Greenalia S.A. of Spain, this Court is not persuaded by the Plaintiff‘s reference to a financial website that states
Finally, the Plaintiff argues that it is persuasive for this Court to find that New York is a principal place of business for Greenalia Wind Power Blue Hills, LLC because Alberto Expósito Seoane, the CEO of “Greenalia Power US,” acknowledges that his e-mail signature line lists his address as “230 Park Avenue, Helmsley Building, 28th Floor, Suite 2840, New York, NY” “because Greenalia Power US Inc. leases office space there.” Declaration of Alberto Expósito Seoane (“Seoane Decl.“), ECF No. 43 at ¶ 4; see also ECF No. 45 at 4. In determining the situs of a corporation‘s nerve center, courts may consider proffered evidence and “sworn declaration[s]” so long as said evidence does not merely provide “self-serving.... legal conclusions.” See, e.g., Signature Fin. LLC v. Chicago Elite Cab Corp., 2:16-cv-6063 (DRH)(SIL), 2018 WL 1385896, at *5 (E.D.N.Y. Mar. 19, 2018); Cofimco USA, Inc. v. Mosiewicz, 15-cv-9118 (SAS), 2016 WL 1070854, at *4 (S.D.N.Y. Mar. 16, 2016) (declaration not credible where it “parrot[ed] the language of the Hertz decision ... without providing any
II. Rule 12(b)(2)
In light of the lack of subject matter jurisdiction, this Court declines to decide whether the Defendant has met their burden to dismiss this action for lack of personal jurisdiction pursuant to
III. Forum Non Conveniens
This Court finds that the Defendant has met their burden to show that the doctrine of forum non-conveniens warrants dismissal of this action. When the parties have agreed to a valid forum-selection clause, a district court should ordinarily transfer the case to the forum specified in that clause. Atl. Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., 571 U.S. 49, 62 (2013). Although a forum-selection clause does not render venue in a court “wrong” or “improper” under
Determining the scope of a forum selection clause is a matter of contractual interpretation, see Yakin v. Tyler Hill Corp., 566 F.3d 72, 76 (2d Cir.2009); Phillips v. Audio Active Ltd, 494 F.3d 378, 387 (2d Cir. 2007) (stating that the forum selection clause is “a creature of contract“), and “[t]he Second Circuit has endorsed an expansive reading of the scope of forum selection clauses, in keeping with the policy favoring their use.” Bluefire Wireless, Inc. v. Cloud9 Mobile Commc‘ns, Ltd., No. 09–CV–7268 (WB), 2009 WL 4907060, at *3 (S.D.N.Y.2009) (citation omitted). “In general, ... when a defendant moves to dismiss on the ground of forum non conveniens, courts assess: (1) the deference to be accorded the plaintiff‘s choice of forum; (2) the adequacy of the alternative forum proposed by the defendants; and (3) the balance between the private and public interests implicated in the choice of forum.” Fasano v. Yu Yu, 921 F.3d 333, 335 (2d Cir. 2019) (per curiam). “The decision to dismiss a case on forum non conveniens grounds lies wholly within the broad discretion of the district court.”
The Second Circuit sets forth a “four-part framework when determining whether to dismiss a claim based on a forum selection clause under the modified doctrine of forum non conveniens.” Rabinowitz v. Kelman, 75 F.4th 73, 81 (2d Cir. 2023). First, the court examines “whether the clause was reasonably communicated to the party resisting enforcement.” Id. (quoting Martinez v. Bloomberg LP, 740 F.3d 211, 217 (2d Cir. 2014)). Second, the court evaluates “‘whether the clause is mandatory,’ that is, whether the parties are required to bring any dispute to the designated forum or simply permitted to do so.” Id. (quoting Martinez, 740 F.3d at 217). Third, the court determines “whether the claims and parties involved in the suit are subject to the forum selection clause.” Id. (quoting Martinez, 740 F.3d at 217). “If the answer to all three questions is yes, the clause is ‘presumptively enforceable.‘” Id. (quoting Martinez, 740 F.3d at 217). Finally, the court determines “whether the resisting party has rebutted that presumption by ‘making a sufficiently strong showing that enforcement would be unreasonable or unjust, or that the clause was invalid for such reasons as fraud or overreaching.‘” Id. (quoting Martinez, 740 F.3d at 217). The Court addresses each step of the analysis in turn.
[W]here a contract contains both a valid choice-of-law clause and a forum selection clause, the substantive law identified in the choice-of-law clause governs the interpretation of the forum selection clause, while federal law governs the enforceability of the forum selection clause.” Id. at 214. Thus, “[t]he analysis of those four factors is governed by a mixture of federal law and the law selected in the parties’ contractual choice-of-law clause.” ICICI Bank Ltd. v. Essar Glob. Fund Ltd., 565 B.R. 241, 251 (S.D.N.Y. 2017). “The Second Circuit has held that federal law governs the first and fourth steps of forum selection clause analysis regardless of the
i. The Forum Selection Clause Was Reasonably Communicated
This Court finds that the forum selection clause was reasonably communicated to the Plaintiff. The forum selection clause in section 10.10(b) of the APA states:
Any legal suit, action or proceeding arising out of or based upon this agreement, the ancillary documents or the transactions contemplated hereby or thereby may be instituted in the federal courts of the United States of America or the courts of the State of Texas in each case located in the City of San Antonio and County of Bexar, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.
Here, both the Plaintiff and Defendant in this action signed the APA, which applies to this instant breach of contract claim. See Pardo Decl., Ex. 1, § 10.10(b); Ex. 1, Signature Page.
ii. The Forum Selection Clause is Mandatory
This Court finds that the language of the forum selection clause is mandatory as opposed to permissive. As noted previously, because the APA contains a Texas choice of law clause, this Court looks to Texas law to determine whether the forum-selection clause is permissive or mandatory. Pardo Decl., Ex. 1, § 10.10(a). (“This Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas“); see also ProFrac Holdings II, LLC v. Kuzov, No. 4:24-CV-00531-P, 2024 WL 3581985, at *2 (N.D. Tex. July 30, 2024).
Here, the intent of the parties was clearly to give courts in the County of Bexar exclusive jurisdiction over any claims arising from the APA. The mandatory language of “exclusive jurisdiction” in the clause “clearly demonstrate[s] the parties’ intent to make that jurisdiction exclusive.” City of New Orleans v. Mun. Admin. Servs., Inc., 376 F.3d 501, 504 (5th Cir. 2004); see ECF No. 42 at 14. While the Plaintiff argues that the word “may” deems the clause permissive, this term must be interpreted in context vis-à-vis the rest of the clause. See ECF No. 45 at 7. The clause says that a relevant lawsuit “may be instituted in federal courts of the United States of America or the courts of the State of Texas in each case located in the City of San
Under Texas law, when a forum-selection clause contains both mandatory and permissive language, the mandatory controls over the permissive. In re Fisher, 433 S.W.3d 523, 533 (Tex. 2014) (finding a forum selection clause containing “agrees not to bring any proceeding ... in any other court” but “non-exclusive jurisdiction” to be mandatory). Other district courts in Texas have found identical language to be mandatory. See, e.g., LaBarge Coating, LLC v. LaBarge C&R LLC, No. H-18-3961, 2018 WL 7290898, at *3 (S.D. Tex. Dec. 17, 2018) (finding that “may” allows a choice between state or federal court, while “in each case” and “exclusive jurisdiction” make the clause mandatory). The mere fact that the clause includes “may” does not render the use of “exclusive jurisdiction,” “in each case,” and “irrevocably submits” also permissive—and no reasonable interpretation could suggest otherwise. Here, the parties clearly intended that state or federal courts in the County of Bexar have exclusive jurisdiction over disputes arising from the contract. Therefore, this Court finds that the forum-selection clause in the APA is mandatory.
iii. The Claims and Parties in the Suit are Subject to the Forum Selection Clause
This Court finds that the claims and parties are subject to the mandatory forum selection clause. The third prong of this analysis requires courts to determine “whether the claims and parties involved in the suit are subject to the forum selection clause.” Phillips v. Audio Active
iv. Plaintiff Does Not Rebut the Presumption of Enforceability
This Court finds that the Plaintiff does not rebut the presumption of enforceability. Because the first three prongs of the Phillips inquiry have been satisfied, the forum selection clause is presumptively enforceable. See Phillips, 494 F.3d at 383-84. Once the court deems a forum selection clause presumptively enforceable, a party seeking to avoid enforcement bears a “heavy burden” of rebutting this presumption. E.g., Bluefire Wireless, Inc., 2009 WL 4907060 at *2. Plaintiff may avoid enforcement by demonstrating that “(1) ... incorporation [of the clause] was the result of fraud or overreaching; (2) the law to be applied in the selected forum is fundamentally unfair; (3) enforcement contravenes a strong public policy of the forum state; or (4) trial in the selected forum will be so difficult and inconvenient that the plaintiff effectively will be deprived of his day in court.” Phillips, 494 F.3d at 392. “The Supreme Court has construed this exception narrowly,” Tropp v. Corp. of Lloyd‘s, 385 F.App‘x. 36, 37 (2d Cir.2010) (citation omitted), and Plaintiff has failed to meet this demanding burden. Here, the Plaintiff has not satisfied their burden of establishing that enforcement of the forum selection clause at issue
IV. Rule 12(b)(6)
In light of the above, this Court declines to decide whether the Defendant has met their burden to dismiss this action for failure to state a claim pursuant to
CONCLUSION
For the reasons set forth above, Defendant‘s motion to dismiss is GRANTED. The Clerk of Court is hereby directed to terminate all motions and close this case.
SO ORDERED.
Dated: March 26, 2025
New York, NY
ANDREW L. CARTER, JR.
United States District Judge