Choice of venue clause required remand to state court

By irrevocably consenting to the jurisdiction of the court in which the proceeding is brought, a sports agent with Paramount Sports & Entertainment Management effectively consented to state court jurisdiction, where the dispute over commissions was first brought.

Background

Defendant is a player agent in professional sports, and specifically the National Football League. Paramount, whose CEO is Alvin Keels, acquired defendant’s agency business by bringing him in-house at Paramount.

On Nov. 24, 2014, defendant Shah and Paramount entered into an Assignment and Assumption Agreement which provided for Shah to assign to Paramount Shah’s fees under his representation agreements with his then-existing player-clients in exchange for Paramount’s payment to Shah of $1,550,000 over the course of a five-year payment schedule. The AAA contains a forum-selection clause.

On the same day as the execution of the AAA, Shah and Paramount also became parties to an Employment Agreement, pursuant to which defendant became an employee of Paramount. The EA also contains a forum selection clause.

As a result of a change in the default rate of player commission negotiated by the NFL Players Association on November 2016, some of defendant Shah’s and Paramount’s clients began agitating for lower commissions. For economic necessity, defendant and Paramount reduced some of their respective clients’ commissions with Paramount’s approval. Subsequently, Paramount suspended Shah’s earn-out payments in order to compensate for the loss of commission revenue to Paramount.

On June 11, 2018, Paramount sued Shah in the Circuit Court for the City of Norfolk. Shah removed the case to this court, answered, and filed a counterclaim. In response to the counterclaim, Paramount has filed a motion to remand, a motion to dismiss count 3 and an answer

Analysis

Shah removed this case by alleging diversity jurisdiction. Neither party disputes that the amount in controversy exceeds $75,000 and is between citizens of different states. Therefore, because the EA clause solely provides for state jurisdiction, the relevant question before the court is whether the forum selection clause of the AAA prohibits removal to federal court.

Paramount argues that, under the language of the clause, Shah “irrevocably consents” to the “exclusive exercise” of jurisdiction by a state court, thus waiving his right to remove to federal court. Defendant asserts, however, that the AAA clause does not waive removal rights or the right to object to personal jurisdiction or venue; rather, defendant argues, the AAA forum selection clause establishes where such removal must take place and confirms that plaintiffs have consented to the laying of venue in this court.

The forum selection clause amounts to a waiver of removal given that both parties irrevocably consent to the jurisdiction of the court in which the proceeding is brought. Applying ordinary contract principles, the court concludes that plaintiffs brought the proceeding in state court and, as such, defendant contractually waived his right to remove the case to federal court.

Motion to remand granted.

Paramount Sports & Entertainment Management LLC v. Shah, Case No. 18-cv-412, Dec. 7, 2018. EDVA at Norfolk (Jackson). VLW 018-3-541. 7 pp.