Hiram Lodge Enterprises, Inc. v. TSN, LLC

Filing 26

ORDER denying 5 MOTION to Remand and Request for Hearing. So Ordered by Chief Judge Joseph N. Laplante.(jb)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Hiram Lodge Enterprises Corp.
v.

Civil No. 17-cv-462-JL
Opinion No. 2018 DNH 022

TSN, LLC, d/b/a Asirvia and/or
Asirvia Proximity Marketing
Solutions, et al.
MEMORANDUM ORDER
Whether this breach of contract action remains in federal
court turns on the specificity of the parties’ agreed-to forumselection clause.

Plaintiff Hiram Lodge Enterprises Corp.

brought this suit in Grafton County Superior Court, claiming
that defendants Donald W. LaPlume, Jr., Kevin Marion, Donald
Smith, and TSN, LLC, doing business as Asirvia and/or Asirvia
Proximity Marketing Solutions (collectively “TSN”), breached an
exclusive distribution agreement between Hiram Lodge and TSN.
Hiram Lodge also brings several common-law and statutory claims
arising from that relationship.

TSN timely removed the action,

citing this court’s diversity jurisdiction under 28 U.S.C.
§ 1332(a).

See 28 U.S.C. § 1441.

Conceding the parties’ diversity and satisfaction of the
amount-in-controversy requirement, Hiram Lodge moves to remand
this action to the Superior Court in light of the forumselection clause in the parties’ agreement.

Concluding that TSN

did not clearly waive its right to remove actions to this court
through the forum-selection clause, the court denies Hiram
Lodge’s motion.
Applicable legal standard
“[A]ny civil action brought in a State court of which the
district courts of the United States have original jurisdiction,
may be removed by the defendant or the defendants, to the
district court of the United States for the district and
division embracing the place where such action is pending.”
28 U.S.C. § 1441(a).

As the defendants observe in their notice

of removal,1 this court has subject-matter jurisdiction over this
action under 28 U.S.C. § 1332 (diversity).

The amount in

controversy exceeds $75,000 and complete diversity exists
between the parties.

Specifically, the plaintiff is a Canadian

At oral argument, Hiram Lodge suggested for the first time that
the parties may not be diverse because defendant TSN maintains a
principal place of business in New Hampshire. See Plaintiff’s
Mem. (doc. no 6) (premising remand motion solely on parties’
agreement without challenging this court’s subject-matter
jurisdiction). As a limited liability company, however, TSN’s
citizenship is not governed by its place of incorporation and
principal place of business, as a corporation’s would be. See
28 U.S.C.§ 1332(c)(1). Rather, TSN is deemed to be a resident
of the same state as each of its members. Pramco, LLC ex rel.
CFSC Consortium, LLC v. San Juan Bay Marina, Inc., 435 F.3d 51,
54 (1st Cir. 2006). TSN’s members are citizens of Vermont,
Connecticut, and Maine, rendering TSN a resident of each of
those states. See Notice of Removal (doc. no. 1) ¶ 8.
1

2

corporation with its principal place of business in Canada,2
while the corporate defendant, TSN, is a Wyoming limited
liability company, the individual members of which, who are also
named as defendants in this action, are citizens of Vermont,
Connecticut, and Maine.3
A forum-selection clause does not “divest a court of
jurisdiction that it otherwise retains,” but rather “merely
constitutes a stipulation in which the parties join in asking
the court to give effect to their agreement by declining to
exercise its jurisdiction.”

Silva v. Encyclopedia Britannica

Inc., 239 F.3d 385, 388 n.6 (1st Cir. 2001) (quoting LFC
Lessors, Inc. v. Pac. Sewer Maint. Corp., 739 F.2d 4, 6 (1st
Cir. 1984)).

As such, “a forum selection clause mandating that

disputes be resolved in state court operates as a waiver of the
parties’ removal rights under § 1441.”

Skydive Factory, Inc. v.

Skydive Orange, Inc., 2013 DNH 33, 1 (McAuliffe, J.) (citing
Karl Koch Erecting Co., Inc. v. New York Convention Ctr. Dev.
Corp., 838 F.2d 656, 659 (2d Cir. 1988)).
Accordingly, “[w]hen the basis for removal jurisdiction is
established and the issue of remand turns on the language of a
forum selection clause,” as it does here, “remand is only

2

Compl. (doc. no. 1-1) ¶ 1.

3

Notice of Removal (doc. no. 1) ¶ 8.

3

required where there is ‘clear language indicating that
jurisdiction and venue are appropriate exclusively in the
designated forum.’”

Wells Fargo Fin. Leasing, Inc. v. Tulley

Auto. Grp., Inc., 2016 DNH 177, 5 (McCafferty, J.) (quoting
Inhabitants of Fairfield v. Time Warner Cable Ne., LLC, No.
1:14–CV–495, 2015 WL 1565237, at *1 (D. Me. Apr. 8, 2015)
(Levy, J.)).

“The correct approach” is to “enforce the forum

clause specifically unless” the party opposing its enforcement
clearly demonstrates “that enforcement would be unreasonable and
unjust, or that the clause was invalid for such reasons as fraud
or overreaching.”

M/S Bremen v. Zapata Off-Shore Co., 407 U.S.

1, 15 (1972).
In determining whether to enforce the forum-selection
clause and remand this action to the Superior Court, this court
may consider not only the complaint, but also “documents the
authenticity of which are not disputed by the parties, documents
central to plaintiffs’ claim, and documents sufficiently
referred to in the complaint.”

Claudio-De León v. Sistema

Universitario Ana G. Méndez, 775 F.3d 41, 46 (1st Cir. 2014)
(internal quotations and citation omitted).

The contract

containing the forum-selection clause falls into all three of
these categories.

4

Background
Hiram Lodge, a Canadian corporation based out of Toronto,
makes and sells Bluetooth-enabled wireless marketing devices
called “Royaltie Gems.”4

On May 9, 2017, Hiram Lodge entered

into an agreement with TSN, a limited liability company based in
New Hampshire, under which TSN would be the sole distributor of
its Royaltie Gems in the network marketing industry.5

Hiram

Lodge agreed to provide Royaltie Gems, as well as the associated
software and services, to TSN under a private label brand called
“Asirvia GO.”6
The parties included a forum-selection clause in the
agreement, which provides as follows:
Each Party irrevocably and unconditionally agrees that
it will not commence any action, litigation or
proceeding of any kind whatsoever against the other
Party in any way arising from or relating to this
Agreement, including all exhibits, schedules,
attachments and appendices attached to this Agreement,
and all contemplated transactions, in any forum other
than the courts of the State of New Hampshire, and any
appellate court from any thereof. Each Party
irrevocably and unconditionally submits to the
exclusive Jurisdiction of such courts and agrees to
bring any such action, litigation or proceeding only
in courts sitting in the State of New Hampshire. Each
Party agrees that a final judgment in any such action,
litigation or proceeding is conclusive and may be
Compl. (doc. no. 1-1) ¶ 1. The parties offer little
explanation as to what these devices do or how they work, which
appears immaterial to resolution of the pending motion.
4

5

Compl. (doc. no. 1-1) ¶ 3.

6

Id.

5

enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.7
The parties further agreed that “the laws of the State of New
Hampshire” would govern the agreement.8
A mere four months after entering into the agreement, on
September 14, 2017, TSN’s counsel sent Hiram Lodge a letter
purporting to terminate it “for cause, effective immediately,
and indicating that TSN did not intend to meet its outstanding
obligations pursuant to the Agreement.”9

Hiram Lodge alleges

that this letter failed to comply with the agreement’s terms,
which provided Hiram Lodge a 300-day opportunity to cure any
breach alleged by TSN.10

In the meantime, Hiram Lodge alleges,

TSN used Hiram Lodge’s confidential and proprietary information
-- learned under the terms of the agreement -- to develop a
competing Bluetooth-enabled wireless marketing device, which it
intended to market and sell as an alternative to, and in
competition with, Royaltie Gems.11
Hiram Lodge filed this action after learning that TSN
intended to launch its competing product between September 29

7

Mot. to Remand Ex. 1 (doc. no. 6-1) ¶ 22.

8

Id. ¶ 21.

9

Compl. (doc. no. 1-1) ¶ 11.

10

Id. ¶¶ 4, 11.

11

Id. ¶¶ 10, 12.

6

and October 1, 2017.12

It sought and obtained from the Superior

Court a temporary restraining order barring TSN from, among
other things, launching or providing to customers its new,
competing product.13

The Superior Court scheduled a hearing on

Hiram Lodge’s request for a preliminary injunction to be held
October 5, 2017.

The day before that hearing, the defendants

removed the action to this court.
Analysis
The parties agree that the forum-selection clause is valid
and enforceable as between the parties to the contract.14

They

further agree that the clause is exclusive in nature -- that is,
that the parties agreed to commence any litigation arising from
their agreement in their selected forum.15

12

Id. ¶ 13.

13

They differ only in

Ex Parte Order (doc. no. 1-1) ¶ 1.

See also Obj. (doc. no. 11) at 4-5; Reply (doc. no. 18)
(making no representation or argument to the contrary). The
parties confirmed this agreement at oral argument.
14

Specifically, the parties agreed “irrevocably and
unconditionally to submit to the exclusive [j]urisdiction” of
their selected court, and “irrevocably and unconditionally”
agree that they “will not commence any litigation or proceeding
of any kind whatsoever against the other Party in any way
arising from or relating to this Agreement . . . in any forum
other than” the designated court. Mot. to Remand Ex. 1 (doc.
no. 6-1) ¶ 22 (emphasis added). Such language typically renders
a forum-selection clause mandatory. See Summit Packaging Sys.,
Inc. v. Kenyon & Kenyon, 273 F.3d 9, 13 (1st Cir. 2001) (“[W]hen
parties agree that they ‘will submit’ their dispute to a
15

7

the interpretation of precisely which forum they have selected,
including whether they contemplated or precluded removal to this
court.
In resolving this dispute, the court looks to “the specific
language of the contract at issue.”

Silva, 239 F.3d at 388.

The forum-selection clause raised in this action contains two
sentences addressing the parties’ jurisdictional agreement.
Under the first, the parties agree that they “will not commence
any action, litigation or proceeding . . . in any forum other
than the courts of the State of New Hampshire . . . .”16

Under

the second, the parties “submit[] to the exclusive Jurisdiction
of such courts and agree[] to bring any such action, litigation
or proceeding only in courts sitting in the State of New
Hampshire.”17

The parties’ dispute arises from tension between

these two sentences.

specified forum, they do so to the exclusion of all other
forums.”).
At oral argument, the parties confirmed that this forumselection clause is mandatory. See also Plaintiff’s Mem. (doc.
no. 6) at 8-14 (seeking enforcement resulting in remand); Obj.
(doc. no. 11) at 9 (conceding that agreement contains “a
mandatory clause with relation to the commencement of any
action,” but permits removal).
16

Mot. to Remand Ex. 1 (doc. no. 6-1) ¶ 22 (emphasis added).

17

Id. (emphasis added).

8

Courts often invoke a
widely-accepted rule that forum selection clauses that
use the term ‘in [a state]’ express the parties’
intent as a matter of geography, permitting
jurisdiction in both the state and federal courts of
the named state, whereas forum selection clauses that
use the term ‘of [a state]’ connote sovereignty,
limiting jurisdiction over the parties' dispute to the
state courts of the named state.
FindWhere Holdings, Inc. v. Sys. Env’t Optimization, LLC, 626
F.3d 752, 755 (4th Cir. 2010).

The First Circuit Court of

Appeals has rejected any “general rule for forum-selection
clauses,” Silva, 239 F.3d at 388, but its decisions follow a
similar tack with respect to forum-selection clauses that use
the term “courts of [a state].”

For example, in LFC Lessors,

the parties agreed that their contract would “be interpreted,
and the rights and liabilities of the parties hereto determined,
in accordance with the law, and in the courts, of the
Commonwealth of Massachusetts.”

739 F.2d at 7.

The Court of

Appeals concluded that, in that context, the parties intended
the word “of” to “restrict the meaning of both ‘law’ and
‘courts’ to those that trace their origin to the state,” with
the result that “all actions on this contract must be brought in
the Massachusetts state courts.”

Id.

It has similarly

interpreted an agreement “to submit to the jurisdiction of the
courts of the Commonwealth of Puerto Rico” as “an affirmative
conferral of personal jurisdiction by consent” to the courts of

9

the Commonwealth, rather than “a negative exclusion of
jurisdiction in other courts,” including the federal court to
which the action was removed.18

Autoridad de Energía Eléctrica

de Puerto Rico v. Ericsson Inc., 201 F.3d 15, 18–19 (1st Cir.
2000).

See also, e.g., Fornaro v. RMC/Res. Mgmt. Co., 201 Fed.

App’x 783, 784 (1st Cir. 2006) (unpublished decision) (phrase
“courts of Carroll County, New Hampshire” meant “the courts that
trace their origin to the state, i.e., the Carroll County, New
Hampshire state courts . . . .”).
Here, the parties’ agreement contains one sentence that
appears to connote sovereignty (“the courts of the State of New
Hampshire”) and one that, by its plain language, clearly
connotes geography (“courts sitting in the State of New
Hampshire”).

If the sovereignty-connoting sentence stood alone,

the court would be compelled by the decisions discussed above to
conclude that the parties intended to limit themselves to New
Hampshire’s state courts.

However, the inclusion of the

geography-connoting sentence renders the phrase “courts of the

In Skydive Factory, a decision relied on heavily by the
plaintiff, Judge McAuliffe concluded that a forum-selection
clause with even more specific language -- that lawsuits would
“be filed in Strafford County, the State Courts of New
Hampshire” -- conferred exclusive jurisdiction in New
Hampshire’s state courts. 2013 DNH 33, 3-5. The parties here
might likewise have specified “the State Courts of New
Hampshire.” They did not.
18

10

State of New Hampshire” ambiguous.

Insofar as the parties

contemplated commencing actions in courts sitting in New
Hampshire, which would include this court, as well as the courts
of the State of New Hampshire, which otherwise would not, this
court cannot conclude that the forum-selection clause includes
“clear language indicating that jurisdiction and venue are
appropriate exclusively” in New Hampshire’s state courts.
Tulley Auto. Grp., 2016 DNH 177, 5.

Under this interpretation

of the forum-selection clause, the court likewise cannot
conclude that TSN has clearly waived its right to removal under
28 U.S.C. § 1441.19
Conclusion
Because the parties’ agreed-to forum-selection clause does
not clearly preclude litigating actions arising from their

The court is unpersuaded by TSN’s attempt to distinguish the
two different sentences on the basis that the former prohibits
“commenc[ing]” an action in any forum other than that selected,
and the latter prohibits “bring[ing]” an action in any other
forums. See Obj. (doc. no. 11) at 6-7, 9. In the context of
this clause, the two words are synonymous, connoting the
inception of a lawsuit.
19

Nor is the court convinced that an agreement to “bring” or
“commence” a lawsuit in a particular court implies that the
parties necessarily contemplated allowing for removal following
the inception of the case. As Judge McAuliffe has observed,
agreements to “file,” “bring,” or “commence” a suit in a given
court “were not meant to require a meaningless ministerial act,
but implicitly (and consistently with the obvious intention of
the parties) require adjudication in” the court selected.
Skydive Factory, 2013 DNH 33, 5.

11

agreement in this court, it DENIES the plaintiff’s motion to
remand this action.20
SO ORDERED.

Joseph N. Laplante
United States District Judge
Dated:
cc:

20

February 1, 2018

Frank J. Cimler, Jr., Esq.
Lisa DeBrosse Johnson, Esq.
Michael J. Tierney, Esq.

Document no. 5.

12