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RES Exhibit Services, LLC v. Tecan Group

June 21, 2010

RES EXHIBIT SERVICES, LLC, PLAINTIFF,
v.
TECAN GROUP, LTD., TECAN U.S., INC., TECAN TRADING AG, DEFENDANTS.



The opinion of the court was delivered by: Michael A. Telesca United States District Judge

DECISION and ORDER

INTRODUCTION

This action arises out of an alleged breach of a 2006 agreement between defendants Tecan Trading Group, Ltd., Tecan U.S. and Tecan Trading AG (collectively "Tecan Group") and plaintiff RES Exhibit Services, LLC ("RES"). The 2006 Agreement (hereinafter referred to as the "Agreement") contains a forum selection clause, which RES claims requires any application in law or equity to be venued in New York State Supreme Court, Monroe County, New York.*fn1 Tecan Group however, filed a notice of removal from state court pursuant to 28 U.S.C. §§ 1441 and 1332. RES now moves to remand this action back to state court pursuant to 28 U.S.C. § 1447. For the reasons set forth below, the Court grants RES' motion and remands this action to state court.

BACKGROUND

RES commenced this action in New York State Supreme Court, Monroe County by the filing of the Summons and Complaint on September 29, 2009. Thereafter, an Amended Summons and Complaint were filed in the Monroe County Clerk's office on November 2, 2009. Defendants accordingly removed the action to this Court by filing a Notice of Removal pursuant to 28 U.S.C. §§1441 and 1332.

Paragraph 17 of the Agreement contains the following forum selection clause:

With respect to services rendered in the United States, this Agreement shall be construed in accordance with the laws of the State of New York without regard for its conflict of laws provisions. Any application in law or equity including but not limited to injunctions, restraining orders and/or seizures, shall be exclusively venued in New York State Supreme Court, Monroe County, New York.

See Ex. A of RES' Amended Complaint at ¶17. RES contends that the Agreement is clear and unambiguous that the parties never wavered on the fact that any disputes would be exclusively determined in New York State Supreme Court, Monroe County, New York. See Pl. Br. at 5. Defendants Tecan Group contend that Paragraph 17 is ambiguous. See Defs. Br. at 4.

DISCUSSION

I. Motion to Remand

A. Standard of Review

Federal courts have original jurisdiction over civil actions in which the dispute is between citizens of different states and in which the sum in controversy exceeds $75,000. See 28 U.S.C. §1332(a). In order to obtain diversity jurisdiction, there must be "complete diversity" so that no adverse parties are citizens of the same state. Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). The federal removal statute allows a defendant to remove "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a); see Lincoln Prop. Co. v. Roche, 546 U.S. 81, 84 (2005) ("Defendants may remove an action on the basis of diversity of citizenship if there is complete diversity....") A diversity case may only be removed if none of the properly joined defendants is a citizen of the state in which the action was brought. 28 U.S.C. § 1441(b).

In evaluating the propriety of a removal, the Court starts with the baseline principle that federal courts are courts of limited jurisdiction. See Keene Corp. v. United States, 508 U.S. 200, 207 (1993). Accordingly, "removal jurisdiction exists in a given case only when that jurisdiction is expressly conferred on the courts by Congress." Fed. Ins. Co. v. Tyco Int'l Ltd., 422 F.Supp.2d 357, 367 (S.D.N.Y.2006) (internal quotation marks omitted); see also Irving Trust Co. v. Century Exp. & Imp., S.A., 464 F.Supp. 1232, 1234 (S.D.N.Y.1979) (noting that the right of removal is "a matter of legislative grace" (citing Great N. Ry. Co. v. Alexander, 246 U.S. 276, 280 (1918)).

Judicial scrutiny is especially important "in the context of removal, where considerations of comity play an important role." Johnston v. St. Paul Fire & Marine Ins. Co., 134 F.Supp.2d 879, 880 (E.D.Mich.2001). Indeed, "[o]ut of respect for the independence of state courts, and in order to control the federal docket, federal courts construe the removal statute narrowly, resolving any doubts against removability." Stan Winston Creatures, Inc. v. Toys "R" Us, Inc., 314 F.Supp.2d 177, 179 (S.D.N.Y.2003) (internal quotation marks omitted); see also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941) (noting that federalism concerns call for "the strict construction" of the removal statute); Lupo v. Human Affairs Int'l, Inc., 28 F.3d 269, 274 (2d Cir.1994) ("In light of the congressional intent to restrict federal court jurisdiction, as well as the importance of preserving the independence of state governments, federal courts construe the removal statute narrowly, resolving any doubts against removability." (internal citation ...


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