Cottingham & Butler Claim Services, Inc v. Conduent Care Solutions, LLC
ORDER granting in part and denying in part 4 Motion to Remand to State Court. Case is remanded to Iowa District Court for Dubuque County, Iowa. Signed by Judge Linda R Reade on 4/11/2018. (All filings and order mailed to Dubuque County Court) (pac)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
COTTINGHAM & BUTLER CLAIM
CONDUENT CAR SOLUTIONS, LLC,
The matter before the court is Plaintiff Cottingham & Butler Claim Services, Inc.’s
(“Cottingham”) “Motion for Remand”1 (“Motion”) (docket no. 4).
II. RELEVANT PROCEDURAL HISTORY
On October 31, 2017, Cottingham filed a “Petition at Law” (“Petition”) (docket no.
2) in the Iowa District Court for Dubuque County, Iowa (“Iowa District Court”). In the
Petition, Cottingham asserts a claim for breach of contract against Defendant Conduent
Car Solutions, LLC (“Conduent”). See Petition at 1-3. On December 19, 2017, Conduent
filed a Notice of Removal (docket no. 1), bringing the case before the court. On
December 21, 2017, Cottingham filed the Motion. On December 29, 2017, Conduent
filed an Answer (docket no. 5). On January 2, 2018, Conduent filed a Resistance (docket
no. 6). On January 3, 2018, Cottingham filed a Reply (docket no. 7). Neither party has
The court notes that Cottingham failed to file a separate brief in support of the
motion as required by the Local Rules. See LR 7(d) (“For every motion, the moving party
must prepare a brief containing a statement of the grounds for the motion and citations to
the authorities upon which the moving party relies.”). Nonetheless, the court shall
consider the Motion.
requested oral argument and the court finds that oral argument is unnecessary. The matter
is fully submitted and ready for decision.
In the Motion, Cottingham requests that the court remand the instant action to the
Iowa District Court based on an Agreement signed by the parties, which contains a forum
selection clause. The forum selection clause provides that venue is only proper “in the
courts of the State of Iowa.” Motion at 2. Cottingham contends that, based on the
Agreement, venue is only proper in the state courts of Iowa. Id. Conduent argues that the
forum selection clause does not “restrict litigation between the parties to state courts in
the State of Iowa.” Resistance at 2 (emphasis omitted). Rather, Conduent contends that
“[t]he broad language in the Agreement allows [the] parties to file suit in either the Iowa
District Court or the federal courts of the State of Iowa.” Id. at 4.
A. Applicable Law
“A defendant . . . desiring to remove any civil action from a State court shall file
in the district court of the United States for the district and division within which such
action is pending a notice of removal . . . .” 28 U.S.C. § 1446(a). Parties may
contractually waive the right to remove a case by incorporating a forum selection clause.
See iNet Directories, LLC v. Developershed, Inc., 394 F.3d 1081, 1082 (8th Cir. 2005);
see also RK Dixon Co. v. Dealer Mktg. Servs., Inc., 284 F. Supp. 2d 1204, 1208 (S.D.
Iowa 2003). “A forum selection clause is a manifestation of the parties’ expectations of
where any resultant litigation will take place.” RK Dixon, 284 F. Supp. 2d at 1209.
The court “has the inherent power to remand [a case] to state court in order to give
effect to [a] forum-selection clause, even if subject-matter jurisdiction exists and there
has been no ‘defect’ in removal under 28 U.S.C. § 1447(c).”
Medtronic, Inc. v.
Endologix, Inc., 530 F. Supp. 2d 1054, 1056 n.1 (D. Minn. 2008); see also Foster v.
Chesapeake Ins. Co., 933 F.2d 1207, 1214-16 (3d Cir. 1991) (finding that remand based
on a forum selection clause was lawful even though not specifically authorized by
§ 1447(c)); McDermott Int’l, Inc. v. Lloyds Underwriters of London, 944 F.2d 1199, 1203
(5th Cir. 1991) (noting that remand was appropriate in a case involving a forum selection
clause). “Forum selection clauses are prima facie valid and are enforced unless they are
unjust or unreasonable or invalid for reasons such as fraud or overreaching. They are
enforceable unless they would actually deprive the opposing party of his fair day in court.”
M.B. Rests., Inc. v. CKE Rests., Inc., 183 F.3d 750, 752 (8th Cir. 1999) (citation
Conduent does not allege that the forum selection clause is unjust, unreasonable or
invalid for any reason and, upon review, the court finds no basis upon which to so find.
As such, the court need only consider whether the clause waives Conduent’s right to
remove the case to federal court. The Agreement’s forum selection clause states:
This agreement and the performance hereunder, shall be
governed by and construed in accordance with the laws of the
State of Iowa and of the United States (without giving effect to
its conflicts of law principles, which might otherwise be
applicable). Further, in the unlikely event that court
proceedings should arise from this agreement, any such actions
or proceedings shall be maintained only in the courts of the
State of Iowa. Such courts shall have exclusive jurisdiction
over any such proceedings brought by either party.
See Petition at 7. Cottingham argues that the phrase “in the courts of the State of Iowa”
precludes removal of the action to federal court. Conduent contends that the phrase “in
the courts of the State of Iowa” also permits litigation in federal courts located in the State
The court disagrees with Conduent. The term “in” is “used as a function word to
indicate inclusion, location, or position within limits.”
https://www.merriam-webster.com/dictionary/in (last visited April 6, 2018). Therefore,
“a forum selection clause referring to ‘courts in’ a state imposes a geographic limitation,
not one of sovereignty.” Simonoff v. Expedia, Inc., 643 F.3d 1202, 1205-06 (9th Cir.
2011). Contrarily, “of” “indicate[s] origin or derivation” or “a possessive relationship.”
Of, Merriam-Webster.com, https://www.merriam-webster.com/dictionary/of (last visited
April 6, 2018). Thus, “the phrase ‘the courts of’ a state refers to courts that derive their
power from the state—i.e., only state courts.” Simonoff, 643 F.3d at 1205.
Numerous circuit courts have recognized this distinction and adopted “the widelyaccepted rule that ‘in a state’ expresses the parties’ intent as a matter of geography,
permitting jurisdiction in both the state and federal courts of the named state.” New Jersey
v. Merrill Lynch & Co., 640 F.3d 545, 549 (3d Cir. 2011) (alterations and emphasis
omitted) (quoting FindWhere Holdings, Inc. v. Sys. Env’t Optimization, LLC, 626 F.3d
752, 755 (4th Cir. 2010)); see also Simonoff, 643 F.3d at 1206 (concluding that “[b]ecause
the clause uses the preposition ‘in,’ the contract contemplates federal as well as state courts
as proper courts for adjudication”); Alliance Health Grp., LLC v. Bridging Health Options,
LLC, 553 F.3d 397, 400 (5th Cir. 2008) (“[T]he clause at hand, providing for venue in a
specific county, permits venue in either federal or state court, because a federal courthouse
is located in that county.”). “On the other hand, ‘of a state’ connotes sovereignty, limiting
jurisdiction to the state courts of the named state.” Merrill Lynch, 640 F.3d at 549
(alterations and emphasis omitted) (quoting FindWhere, 626 F.3d at 755); see also Am.
Soda, LLP v. U.S. Filter Wastewater Grp., Inc., 428 F.3d 921, 924, 926 (10th Cir. 2005)
(concluding that where the agreement stated that the parties “hereby submit to the
jurisdiction of the [c]ourts of the State of Colorado” the “agreement designate[d] the
Colorado state court system as the forum for resolution of disputes arising out of the
contract, and does not include the federal district court”); Dixon v. TSE Int’l Inc., 330
F.3d 396, 398 (5th Cir. 2003) (per curiam) (“Federal district courts may be in Texas, but
they are not of Texas.”).
Indeed, Conduent’s argument, and each case it cites in support thereof, fails to
account for the distinction between the use of the term “in” and the use of the term “of.”
See Glob. Satellite Comm’n Co. v. Starmill U.K. Ltd., 378 F.3d 1269, 1272 (11th Cir.
2004) (concluding that where the forum selection clause provided that “[v]enue shall be
in Broward County, [Florida]” a “suit either in the [state court], or in the [federal court],
both of which are located in Broward County, would satisfy the venue requirement”
(emphasis added)); Basicomputer Corp. v. Scott, 973 F.2d 507, 510 (6th Cir. 1992)
(“Since the federal district court of the Northern District of Ohio is unquestionably a court
‘in the State of Ohio,’ the forum selection clause is not limited to Ohio state courts.”);
Carrano v. Harborside Healthcare Corp., 199 F.R.D. 459, 460 (D. Conn. 2001)
(concluding that where the forum selection clause stated that any litigation “shall be
brought in Pinellas county, [Florida]” it “permit[ed] the plaintiff to file suit in state or
federal court in Florida” (emphasis added)).
Simply put, incorporation of the term “of” in the forum selection provision denotes
the parties’ intention to restrict litigation to the state courts of the State of Iowa—the courts
that derive their jurisdiction from the State of Iowa. See also Portfolio Mgmt. Grp., LLC
v. Bitach Fund I, LLC, No. 09-CV-3193 (PJS/AJB), 2010 WL 727993, at *1 (D. Minn.
Mar. 2, 2010) (“[T]he [c]ourt agrees with the majority of federal courts that the phrase
‘courts of’ a particular state unambiguously refers only to that state’s courts, not to federal
courts sitting within the boundaries of that state.”). Therefore, the court shall grant the
In the Motion, Cottingham contends that it should be entitled to “costs, expenses
and attorneys’ fees incurred as a result of the removal” because Conduent “had no
objectively reasonable basis for removal.” Motion at 3. Conduent contends that it “had
an objectively reasonable basis to remove this action.” Resistance at 5.
“An order remanding the case may require payment of just costs and any actual
expenses, including attorney fees, incurred as a result of the removal.” 28 U.S.C.
§ 1447(c). “[C]ourts may award attorney fees under § 1447(c) only where the removing
party lacked an objectively reasonable basis for seeking removal.” Convent Corp. v. City
of N. Little Rock, Ark., 784 F.3d 479, 483 (8th Cir. 2015) (quoting Martin v. Franklin
Capital Corp., 546 U.S. 132, 141 (2005)). “Conversely, when an objectively reasonable
basis exists, fees should be denied.” Id. (quoting Martin, 546 U.S. at 141). “In
determining whether the removing party lacked an objectively reasonable basis for seeking
removal . . . ‘the court must consider the objective merits of removal at the time of
removal, irrespective of the ultimate remand.’” Id. (quoting Diaz v. Cameron Cnty. Tex.,
300 F. App’x 280, 281 (5th Cir. 2008) (per curiam).
The court finds that because the Eighth Circuit Court of Appeals has not yet
addressed this issue, there were reasonable grounds for a difference of opinion as to the
propriety of removal in this case. Accordingly, Cottingham’s request for attorney fees and
costs is denied.
In light of the foregoing, the Motion to Remand (docket no. 4) is GRANTED IN
PART AND DENIED IN PART and the case is REMANDED to Iowa District Court for
Dubuque County, Iowa.
IT IS SO ORDERED.
DATED this 11th day of April, 2018.
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