Capital Restaurant Group, LLC v. Burger King Corporation
ORDER granting 9 Motion to Dismiss for Failure to State a Claim. Closing Case.. Signed by Judge Robert N. Scola, Jr on 10/10/2019. See attached document for full details. (ail)
United States District Court
Southern District of Florida
Capital Restaurant Group, LLC,
Burger King Corporation,
) Civil Action No. 19-22131-Civ-Scola
Order on Defendant’s Motion to Dismiss
This matter is before the Court on Defendant Burger King Corporation’s
motion to dismiss. (ECF No. 9.) The Plaintiff filed a response (ECF No. 12) and
the Defendant timely replied. (ECF No. 13.) Upon review of the record, the parties’
briefs, and the relevant legal authority, the Court grants the Defendant’s motion.
(ECF No. 9.)
Plaintiff Capital Restaurant Group is a franchisee of Defendant Burger
King. (ECF No. 1 at ¶ 1.) The Plaintiff wishes to sue Burger King for a number of
state claims in Florida state court. (Id.) The parties’ franchise agreement,
however, contains a forum selection clause in which the parties agreed to litigate
their claims in the Southern District of Florida. The relevant language is as
Franchisee and [Burger King Corporation] acknowledge
and agree that the U.S. District Court of the Southern
of Florida, or if such court lacks jurisdiction, the 11th
Judicial Circuit (or its successor) in and for Miami-Dade
County, Florida, shall be the venue and exclusive
proper forum in which to adjudicate any case or
controversy arising either, directly or indirectly, under
or in connection with this Franchise Agreement[.]
(Id. at ¶ 16.) The Plaintiff asserts that the forum selection clause expands the
federal court’s jurisdiction by circumventing the resident defendant rule found
in 28 U.S.C. § 1441(b)(2). (Id. at ¶ 27.) The Plaintiff seeks declaratory judgment
regarding the validity of the forum selection clause.
This Plaintiff is not the first franchisee to make this argument. On
November 17, 2016, franchisees of the Defendant’s affiliated brand, Tim Hortons,
filed a complaint against Tim Hortons in state court. (ECF No. 1 at ¶ 29 (citing
Picktown Foods, LLC, et al. v. Tim Hortons, USA, Inc, Circuit Court for MiamiDade County Case No. 16-29754 CA 40)). Tim Hortons moved to dismiss the
Picktown action based on the forum selection clause. The Picktown plaintiffs
opposed dismissal arguing that the forum selection clause was against public
policy and expanded federal court jurisdiction. (Id. at ¶ 31.) The state court
granted the motion to dismiss but left open the question of the scope of federal
court jurisdiction. The Picktown plaintiffs then filed a declaratory judgment
action in the Southern District of Florida asking the court to decide the issue.
Judge Altonaga did not reach the question of enforceability of the forum selection
clause, holding that such review was barred by the Rooker-Feldman doctrine.
Picktown Foods, LLC, et al. v. Tim Hortons, USA, Inc., Case No. 17-21072, ECF
No. 28 (S.D. Fla. June 22, 2017) (Altonaga, J.).
The Plaintiffs argue that neither the state court or the federal court in
Picktown decided the issue and it is now ripe for review.
Federal Rule of Civil Procedure 8(a) requires “a short and plain statement
of the claims” that “will give the defendant fair notice of what the plaintiff’s claim
is and the ground upon which it rests.” Fed. R. Civ. P. 8(a). The Supreme Court
has held that “[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss
does not need detailed factual allegations, a plaintiff's obligation to provide the
‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions,
and a formulaic recitation of the elements of a cause of action will not do. Factual
allegations must be enough to raise a right to relief above the speculative level.”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations
“To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662 (2009) (quotations and citations omitted).
“A claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for
the misconduct alleged.” Id. Thus, “only a complaint that states a plausible claim
for relief survives a motion to dismiss.” Id. at 1950. When considering a motion
to dismiss, the Court must accept all of the plaintiff's allegations as true in
determining whether a plaintiff has stated a claim for which relief could be
granted. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984). For purposes of Rule
12(b)(6), a court generally may not look beyond the pleadings, which includes
any information attached to a complaint. U.S. ex. Rel. Osheroff v. Humana, Inc.,
776 F.3d 805, 811 (11th Cir. 2015) (internal citations omitted).
The Plaintiff’s complaint seeks a declaration from this Court that the forum
selection clause in the parties’ agreement is invalid because it circumvents the
forum defendant rule. (ECF No. 1 at ¶ 25.) The Defendant’s motion to dismiss
argues that just because the resident defendant rule would prevent the
Defendant from removing this case to federal court if it were brought in state
court, that does not mean that the forum selection clause is invalid. (ECF No. 9
at 8-9.) However, neither party addresses whether this Court, or any other court,
has analyzed a forum selection clause that circumvents the resident defendant
The forum defendant rule limits the right of defendants in state court to
remove diversity cases if the defendant is from the forum state. 28 U.S.C. §
1441(b)(2). In other words, if the plaintiff chooses to bring his claims in state
court against a resident defendant, the defendant cannot remove the case to
federal court, even if the case could have been originally brought in federal court
under diversity jurisdiction. See Bentley v. Miami Air Int’l, Inc., 377 F. Supp. 3d
1337, 1345 (S.D. Fla. 2019) (Altonaga, J.). Here, the Plaintiff would like to bring
its state claims in state court but, pursuant to the forum selection clause, must
bring its claims in the Southern District of Florida if the court has subject matter
jurisdiction. The Plaintiff argues that this is an expansion of federal subject
matter jurisdiction because if these parties were in state court, the resident
Defendant could not remove under 28 U.S.C. § 1441(b)(2).
Whether a forum selection clause may effectively circumvent the resident
defendant rule appears to be a matter of first impression for this Court. The
Court, therefore, looks to other district courts for guidance. In Uboh v. United
States Equestrian Foundation, a district court held that a mandatory forum
selection clause to litigate claims in federal court operates as a waiver of the
resident defendant rule on a motion to remand. 384 F. Supp. 3d 780, 781 (E.D.
Ky. 2019). In Uboh, the parties’ employment agreement contained a forum
selection clause in which the parties consented to federal jurisdiction for actions
related to the employment agreement. Id. The plaintiff filed his case in state court
and the defendants removed. The parties filed a joint motion to remand based
on the resident defendant rule. Id. at 782. On reconsideration, the court denied
the motion and held that the forum defendant rule is a procedural rule that may
be waived. Id. at 784. The parties waived their right to assert the forum defendant
rule when they agreed to a mandatory forum selection clause. Id. 784-85.
Therefore, the case was properly in federal court.
In a recent decision from the Northern District of Alabama, the plaintiffs
originally sued the defendants in state court. Sauls v. Sneed, No. 18-cv-1248,
2019 WL 4393033 (N.D. Ala. Sept. 13, 2019). The defendants could not remove
the case to federal court because there were Alabama defendants. Id. at *1. The
plaintiff later added another defendant and asserted a federal claim against this
new defendant. The new defendant removed to federal court based on federal
question jurisdiction. Id. at *2. The plaintiff and the new defendant then settled
their claims. Id. The question before the court was whether the case could remain
in federal court based on diversity jurisdiction even though it could not have
been originally removed from state court. Id. at *3. The court framed the issue
as “whether § 1441(b)(2) substantively eliminates diversity jurisdiction or
whether § 1441(b)(2) identifies a procedural defect in removal that a party may
waive.” Id. at *4. Relying on Eleventh Circuit precedent, the Court held that §
1441(b)(2) is a procedural defect that may be waived. Id. at *5. The plaintiff had
failed to raise the issue in her motion to remand, waiving her right to assert the
resident defendant rule. Id. Therefore, the case could remain in federal court
based on diversity jurisdiction.
Forum selection clauses are “presumptively valid” and enforced absent
evidence of fraud, overreaching or similar inequitable conduct. See Cornett v.
Carrithers, 465 F. App’x 841, 842 (11th Cir. 2012). The parties in this case agreed
to litigate any disputes arising out of the franchising agreement in federal court,
so long as the district court has subject matter jurisdiction. (ECF No. 1 at 5.) The
Plaintiff does not allege that there has been fraud or inequitable conduct, or that
the clause is permissive rather the mandatory. Instead, the Plaintiff asserts that
this clause expands the court’s subject matter jurisdiction because it
circumvents the resident defendant rule. The Eleventh Circuit has held, however,
that the resident defendant rule is not a jurisdictional limitation but rather a
procedural hurdle to remand. Pacheco de Perez v. AT&T Co., 139 F.3d 1368, n.4
(11th Cir. 1998). See also Nanotech Entertainment, Inc v. R&T Sports Marketing
Inc., No. 14-61608, 2014 WL 12611203, at *2 (S.D. Fla. Sept. 23, 2014) (Cohn,
J.) (“[T]he forum defendant rule imposed by section 1441(b)(2) is not a
jurisdictional limitation, and is instead a procedural hurdle to remand.”). This
procedural rule, unlike subject matter jurisdiction, may be waived. Sauls, 2019
WL 4393033 at *4; Nanotech, 2014 WL 12611203 at *2.
The Court finds that the Plaintiff waived any right to bring its case in state
court or rely on the resident defendant rule to remand to state court. The parties
unambiguously agreed to litigate in federal court if there is federal jurisdiction,
see ECF No. 1 at 5, and there is no argument by the parties that this was not
their intent. Moreover, the parties “agree that, in the event of litigation arising
out of or in connection with this Agreement in these courts, they will not contest
or challenge the jurisdiction or venue of these courts.” (Id.) The Plaintiff’s claims
can be brought in federal court because there is diversity in citizenship and the
Plaintiff’s damages exceed $75,000. Because Section 1441(b)(2) is a procedural
rule that may be waived, and the Plaintiff waived it by entering the franchise
agreement, the Court finds that the forum selection clause does not wrongfully
expand federal subject matter jurisdiction and may be enforced.
Based on the foregoing, the Court grants the Defendant’s motion to
dismiss. (ECF No. 9.) The Court dismisses the Plaintiff’s complaint with
prejudice. The Clerk is directed to close this case. All pending motions, if any,
are denied as moot.
Done and ordered in chambers at Miami, Florida on October 10, 2019.
Robert N. Scola, Jr.
United States District Judge
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