Defendant would ordinarily be deemed to have waived its right to
remove the case. However, resolution of this issue is complicated
by the unorthodox language used in the clause here, which states
that "jurisdiction of all legal disputes shall be decided in the
Supreme Court." The precise intent of this provision is unclear:
it makes little sense on its face, and the awkward phrasing
suggests that it reflects an incomplete revision of language that
existed in a prior version of the agreement. Omitting the clause
"jurisdiction of" yields a provision establishing state court as
the proper venue to the exclusion of federal court, while
omitting "decided" yields a provision that appears to grant
non-exclusive jurisdiction to the Supreme Court.
The difference is significant since the Second Circuit has held
that "`[w]hen only jurisdiction is specified, the clause will
generally not be enforced without some further language
indicating the parties' intent to make jurisdiction exclusive,'
while `if mandatory venue language is employed, the clause will
be enforced.'" John Boutari & Son, Wines and Spirits, S.A. v.
Attiki, 22 F.3d 51, 52-53 (2d Cir. 1994). In other words, if the
parties' agreement stipulates that a state court shall be the
venue for a dispute, the defendant's right to remove the case
to federal court would be deemed waived; removal would
necessarily move the case to a venue other than the one in the
agreement. However, if the agreement only establishes that a
state court shall have jurisdiction over a dispute, the right
to remove the case would not be affected; personal jurisdiction
over a defendant is an issue distinct from the question of where
a trial will be held.
Because there is an ambiguity in the clause, the Court must
interpret it against the drafter. Albany Savings Bank v.
Halpin, 117 F.3d 669, 674 (2d Cir. 1997); Pullman, 477 F. Supp.
at 443. In this case, it is undisputed that the agreement was
drafted by the Plaintiff. Accordingly, the Court interprets the
ambiguous forum selection clause to only establishes that New
York State Supreme Court shall have jurisdiction over this
dispute, not to require that it be the venue of the action. Such
a conclusion is justified by the facts of this case: the
Defendants are residents of the state of Pennsylvania, and there
is no evidence to suggest that they would otherwise be subject to
the personal jurisdiction of courts in New York. Nevertheless,
nothing in the clause suggests that this jurisdiction is intended
to be exclusive. Accord Boutari, 22 F.3d at 52 (clause
declaring that Greek courts will have jurisdiction over "any
dispute" did not provide for exclusive jurisdiction in Greece).
In any event, even if the forum selection clause could be read
as the Plaintiff suggests, the Court would nevertheless deny the
Plaintiff's motion to remand on the grounds that the Plaintiff
has waived its right to insist on the designated forum. In New
York, when a party disregards a forum selection clause and sues
on a contract in an unauthorized forum, it waives the forum
selection clause on the claims it pursues. Pirolo Brothers, Inc.
v. Angelo Maffei and Figli, SAS, 1989 WL 20945 (S.D.N.Y. 1989);
see also In Re Rationis Enterprises, Inc., 1999 WL 6364
(S.D.N.Y. 1999) ("a forum selection clause will be deemed waived
if the party invoking it has taken actions inconsistent with
While the Plaintiff attempts to distinguish Pirolo by
pointing out that its decision to commence this action in Nassau
County resulted from its corporate offices moving there during
the life of the contract, the Court fails to see any difference
between the two cases. In Pirolo, the plaintiff and defendant
had an agreement requiring disputes to be litigated in Italy,
although the defendant had litigated several suits under the
contract against the plaintiff in New York to collect on certain
unpaid transactions occurring under the contract. Id. When the
plaintiff then commenced a new suit against the defendant for
unpaid commissions under the contract, the defendant invoked the
forum selection clause. The court held that by ignoring the forum
selection clause in the earlier actions, the defendant waived the
clause, but only for those particular causes of action previously
sued upon. Here, the Plaintiff seeks a remand of the exact action
that it previously filed in violation of the terms of the forum
selection clause. Under these circumstances, it is appropriate to
deem the Plaintiff to have waived the benefits of the clause for
the purpose of this action.
A court will enforce a forum selection clause unless doing so
would be unreasonable or unjust. Jones v. Weibrecht,
901 F.2d 17, 18 (2d Cir. 1990), citing Bremen v. Zapata OffShore Co.,
407 U.S. 1, 15, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). Here,
enforcing the term of the contract by remanding the case to
Nassau County would be unjust to the Defendants who bargained for
the right to be sued only in Supreme Court, Suffolk County.
Because the remedy of remand sought by the Plaintiff would not
have the effect of bringing about the situation the parties
apparently bargained for, the Plaintiff's motion to remand is
DENIED. The parties are directed to immediately contact the
chambers of United States Magistrate Judge Michael L. Orenstein
to set a date for an initial conference and to establish a
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