Virginia Lawyers Weekly VA Lawyers Weekly
Where the parties’ contract required “exclusive venue in Giles County, Virginia” for disputes arising under the contract, and there is no federal court in Giles County, enforcement of the forum selection clause required remand to the circuit court.
Background
This case involves a state law breach of contract claim by U.S. Crane & Rigging Inc. against EC Source Services LLC. US Crane originally filed this case in the circuit court. EC subsequently removed it to this court. US Crane now seeks to remand this case back to state court.
Analysis
The court has diversity jurisdiction over this case, as it is completely diverse and the amount in controversy exceeds $75,000. While US Crane’s original complaint sought only $74,999.99 in compensatory damages, US Crane also seeks attorney’s fees. Attorney’s fees may be included in the amount-in-controversy calculation “if the fees are provided for by contract,” which is the case here.
US Crane nevertheless argues that EC waived its right to remove disputes to federal court by agreeing to the contract and the forum selection clause contained therein. US Crane’s straightforward argument is correct. As paragraph nine of the contract requires “exclusive venue in Giles County, Virginia” for disputes arising under the contract, it is a mandatory forum selection clause. Because there is no federal courthouse in Giles County, Virginia, enforcement of this forum selection clause requires remand.
In response, EC argues that it lacked reasonable notice because the contract did not sufficiently emphasize the clause by setting it apart in its own, specifically titled paragraph. This argument fails. “That the notice could have been clearer does not mean that the [contract] was insufficiently communicative.” EC cannot argue that it lacked the opportunity to be informed of the terms of a seven-page contract that it negotiated, signed and presumably read.
EC nevertheless argues that remanding this case back to the Giles County Circuit Court would deprive EC of its day in court due to prejudice it would suffer as a large, foreign corporation defending itself against a local company with a significant presence in the region. If such bias exists, it is mitigated by the contract’s requirement that any disputes be resolved “before the court sitting without a jury.” Further, EC’s motion does not sufficiently show bias.
Next, EC argues that it would be “gravely inconvenient” to proceed in Giles County instead of Roanoke City, as its witnesses and corporate representatives would need to travel longer distances. In Allen v. Lloyd’s of London, 94 F.3d 923 (4th Cir. 1996), the parties were held to their contract provision specifying the United Kingdom as the forum. If litigating across the Atlantic was not sufficiently inconvenient, it is difficult to see how litigating in Giles County — approximately 60 miles from the defendant’s preferred venue in Roanoke City — could be.
Finally, EC contends that remand would be inconsistent with this court’s “public policy of allowing corporate parties access to federal courts for an efficient disposition of legal disputes. This concern does not justify overriding instruction that “a freely negotiated private … agreement, unaffected by fraud, undue influence, or overweening bargaining power … should be given full effect.”
Plaintiff’s motion to remand granted.
U.S. Crane & Rigging Inc. v. EC Source Services LLC, Case No. 7:22-cv-481, Feb. 7, 2023. WDVA at Roanoke (Urbanski). VLW 023-3-044. 11 pp.
