Karl Senner, LLC v. Steerprop, Ltd.

Filing 15

ORDER AND REASONS granting in part and denying in part 5 Motion to Remand to State Court. ORDERED that Plaintiffs' motion to remand is granted and this case is remanded to the 24th Judicial District for the Parish of Jefferson, Louisiana. FURTHER ORDERED that Plaintiffs motion for costs and fees is denied. Signed by Judge Carl Barbier on 11/18/2021. (ko) (Additional attachment(s) added on 11/18/2021: # 1 Remand Letter) (ko).

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
KARL SENNER, LLC

CIVIL ACTION N.: 2:21-cv-01625
SECTION: “J”

VERSUS

JUDGE CARL J. BARBIER

STEERPROP, LTD.

MAGISTRATE
DANA M. DOUGLAS
ORDER & REASONS

Before the Court is a Motion to Remand (Rec. Doc. 5) filed by Plaintiff, Karl
Senner, LLC (“Plaintiff”), which is opposed by Defendant, Steerprop, Ltd.
(“Defendant”) (Rec. Doc. 8). Having considered the motion and legal memoranda,
the record, and applicable law, the Court finds that the motion should be GRANTED
in part and DENIED in part.
FACTS AND PROCEDURAL BACKGROUND
This litigation arises out of a contractual dispute regarding the parties’ forum
selection clause. Defendant is a manufacturer of Azimuth Propulsors and other
related components, equipment, and spare parts. (Rec. Doc. 1-2), at 2. Plaintiff is a
marine equipment seller, who also is a distributor of Defendant’s products. Id.
Defendant drafted a Distributor Agreement in December 2014, which
contained a forum selection clause that read:
In the event of a legal claim against the Distributor [i.e., Karl Senner] by the
Manufacturer [i.e, Steerprop], the legal proceedings are to be held at the
District Court of Rauma, Finland as the first instance.
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In the event of a legal claim against the Manufacturer by the Distributor, the
legal proceedings are to be held at a court located in the Distributor's
country.
(Rec. Doc. 12-1), at 2. Plaintiff subsequently modified the words “are to be held at a
court located in the Distributor’s country” and replaced them with “are to be held in
the 24th Judicial District Court for the Parish of Jefferson, State of Louisiana”
(hereinafter “24th Judicial District Court”). Id. Neither party commented nor further
modified the phrase before the contract was finalized. Id.
Plaintiff filed suit in the 24th Judicial District Court. Subsequently,
Defendant removed on the basis of diversity jurisdiction. Now, Plaintiff claims that
Defendant violated their forum selection clause and moves for remand.
LEGAL STANDARD
A defendant may remove to federal court “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). “A federal district court has subject matter jurisdiction over a state
claim when the amount in controversy is met and there is complete diversity of
citizenship between the parties.” Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392, 397
(5th Cir. 2013) (citing 28 U.S.C. § 1332(a)). The amount in controversy required by §
1332(a) is currently $75,000. Id. The court considers the jurisdictional facts that
support removal as of the time of removal. Gebbia v. Wal-Mart Stores, Inc., 233 F.3d
880, 883 (5th Cir. 2000). Because removal raises significant federalism concerns, any
doubt about the propriety of removal must be resolved in favor of remand. Gasch v.
Hartford Acc. & Indem. Co., 491 F.3d 278, 281-82 (5th Cir. 2007).
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DISCUSSION
The issue before the Court is whether the forum selection clause is mandatory
or permissive. Plaintiff contends that the clause clearly states that these legal
proceedings should be held in the 24th Judicial District Court, which waives
Defendant’s right to removal. However, Defendant argues that consent to jurisdiction
in the 24th Judicial District Court does not waive jurisdiction in other courts.
Particularly, because the clause does not contain the word “shall,” Defendants believe
that this clause is permissive and not mandatory.
To waive removal, the parties’ forum selection clause must be mandatory and
not permissive. City of New Orleans v. Mun. Admin. Servs., 376 F.3d 501, 504 (5th
Cir. 2004); Collin Cnty. v. Siemens Bus. Servs., 250 Fed. Appx. 45, 50-51 (5th Cir.
2007). A mandatory forum selection clause must have a clear and unequivocal waiver
in one of three ways: “[a] party may waive its rights by explicitly stating that it is
doing so, by allowing the other party the right to choose venue, or by establishing an
exclusive venue within the contract.” City of New Orleans, 376 F.3d at 504. A party
can waive removal even without explicit language like “shall” or “waive.” See Collin
Cnty., 250 Fed. App’x at 50 (citing Waters v. Browning Ferris Indus., 252 F.3d 796,
797 (5th Cir. 2001)); see also Caldas & Sons v. Willingham, 17 F.3d 123, 127-28 (5th
Cir. 1994) (stating that although “shall” often indicates mandatory action, “shall” is
not dispositive when interpreting the permissiveness of forum selection clauses). At
the same time, “[f]or a forum selection clause to be exclusive, it must go beyond

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establishing that a particular forum will have jurisdiction and must clearly
demonstrate the parties’ intent to make that jurisdiction exclusive. It is important to
distinguish between jurisdiction and venue when interpreting such clauses.” See City
of New Orleans, 376 F.3d at 504.
Defendants rely on City of New Orleans to argue that the clause does not
establish the 24th Judicial District Court as the exclusive venue. However, in City of
New Orleans, the contract contained a jurisdiction selection clause not a forum
selection clause. 376 F.3d at 504. 1 Thus, the court in that case held that consenting
to personal jurisdiction in one place did not preempt personal jurisdiction in other
places. Id. This is clearly distinguishable from the present case in which the clause
establishes an exclusive forum, not jurisdiction.
In Holthausen v. DMartino, Plaintiffs moved to remand by arguing that the
lease agreement provision specified the 24th Judicial District Court as having
exclusive jurisdiction and venue. Holthausen, 2009 U.S. Dist. LEXIS 106509, *4 (E.D.
La. June 10, 2009). 2 The court agreed and found that the provision was mandatory.
Id. Both parties were “sophisticated business people who negotiated and contracted

The contractual provision in City of New Orleans read:
Jurisdiction
The undersigned Contractor does further hereby consent and yield to the jurisdiction of the
State Civil Courts of the Parish of Orleans and does hereby formally waive any pleas of
jurisdiction on account of the residence elsewhere of the undersigned Contractor.
2 The contractual provision in Holthausen provided:
Controlling Law: . . . If any claim or complaint is made by any party to enforce the rights,
obligations and terms and conditions of this Lease, the parties agree that such claim or
complaint shall be filed and adjudicated in the 24th Judicial District Court for the Parish of
Jefferson, State of Louisiana.
Holthausen, 2009 U.S. Dist. LEXIS 106509, *13.
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for the language contained in the agreements.” Id. at *26. The plain language
established the 24th Judicial District Court as the exclusive venue for the parties’
lease disputes, which waived removal. Id. at *4; infra City of New Orleans, 376 F.3d
at 504. The court reasoned that the clause clearly and unambiguously selected the
venue and waived removal, because the parties demonstrated their intent to make
the forum exclusive. Holthausen, 2009 U.S. Dist. LEXIS 106509, at *15-18.
Specifically, although no particular language was required, the court believed that it
was relevant that the parties stated a specific place for the venue. Id. at *16.
The facts in Holthausen are analogous to the present matter. Here, Plaintiff
and Defendant are both sophisticated business entities, who negotiated for the
language contained in the agreement. Resultingly, the plain language indicates that
“[i]n the event of a legal claim against the Manufacturer by the Distributor, the legal
proceedings are to be held in the 24th Judicial District Court.” (Rec. Doc. 12-1), at 2.
The forum selection clause is exclusive by virtue of the parties clearly and
unambiguously establishing the 24th Judicial District Court as the chosen venue
within the contract. It is immaterial that the clause does not contain explicit language
like “waiver” or “shall.”
For these reasons, the forum selection clause in the contract is mandatory and
establishes the 24th Judicial District Court as the exclusive venue.

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CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Plaintiffs’ motion for remand (Rec. Doc.
5) is GRANTED and this case is REMANDED to the 24th Judicial District for
the Parish of Jefferson, Louisiana.
IT IS FURTHER ORDERED that Plaintiffs motion for costs and fees is
DENIED.
New Orleans, Louisiana, this 18th day of November, 2021.

CARL J. BARBIER
UNITED STATES DISTRICT JUDGE

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