IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ILLINOIS
February 24, 2010
LAURIE PIECHUR, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
REDBOX AUTOMATED RETAIL, LLC, DEFENDANT.
The opinion of the court was delivered by: J. Phil Gilbert District Judge
MEMORANDUM AND ORDER
THIS MATTER comes before the Court on plaintiff Laurie Piechur's Motion to Remand (Doc. 13). Defendant Redbox Automated Retail, LLC ("Redbox") has responded to the motion (Doc. 22), and Piechur has replied to that response (Doc. 24). Redbox has also filed a notice of supplemental authority (Doc. 28), and Piechur has responded to that notice (Doc. 29). The Court does not consider the supplemental briefing materials as they constitute sur-replies, which are not permitted by Local Rule 7.1(c). To the extent the supplemental authority cited is relevant to this case, the Court is well able to consider it without further comment from the parties.
Piechur filed this lawsuit in October 2009 in the Circuit Court for the Twentieth Judicial Circuit, St. Clair County, Illinois. On behalf of herself and others similarly situated, she alleges various state law causes of action arising out of fees charged by Redbox, a purveyor of rental DVDs from kiosks located throughout the United States. Piechur alleges Redbox improperly charges customers a fee of $1 if the customer returns a rental DVD even one minute late. She also complains that Redbox improperly charges a fee of $25 if the customer never returns the DVD regardless of the actual value of the DVD. She claims Redbox has collected more than $100 million in such improper fees.
Relying on federal jurisdiction under the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d), Redbox filed a timely notice of removal to this Court. In the notice, Redbox references an Exhibit C as containing copies of all process, pleadings and orders served on it in this action, but it failed to attach Exhibit C to the notice. However, within 30 days of being served with the complaint, Redbox filed the omitted Exhibit C, which contained the summons and the complaint with which it was served.
Piechur asks the Court to remand this case on three grounds: (1) Redbox waived federal jurisdiction by agreeing with its customers to submit to the "exclusive jurisdiction" of Illinois state courts; (2) Redbox failed to present evidence of the amount in controversy to support CAFA jurisdiction; and (3) Redbox's notice of removal was procedurally deficient in that it did not attach the summons served with the complaint.
In response, Redbox argues Piechur has waived her right to remand by filing a motion before this Court for appointment of interim lead class counsel. It also argues that the allegations in Piechur's complaint are sufficient to establish the jurisdictional minimum amount in controversy required for CAFA jurisdiction and that it remedied any defect in the notice of removal by filing the summons within 30 days of service of the complaint.
Compl. Ex. 1, Doc. 2 at 33.
A. Applicability of Forum Selection Clause to Right of Removal
A defendant may remove to federal court a case filed in state court if the federal court would have had original jurisdiction to hear the case when the plaintiff originally filed it. 28 U.S.C. § 1441(a); Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 758 (7th Cir. 2009). Here, Redbox asserts this Court has subject matter jurisdiction under CAFA, and the Court assumes it does. However, regardless of whether a federal court would have subject matter jurisdiction, a defendant may waive its right to remove by contracting to bring a lawsuit only in a state court. See, e.g., Roberts & Schaefer Co. v. Merit Contracting, Inc., 99 F.3d 248, 252 (7th Cir. 1996). Redbox has provided no authority suggesting this general rule does not apply where federal subject matter jurisdiction is based on CAFA.
Forum selection clauses are prima facie valid and enforceable unless the party seeking to avoid enforcement establishes that enforcing the clause would be unjust or unreasonable or that the clause is invalid for reasons such as fraud, undue influence or overweening bargaining power. See M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 9-17 (1972). This is true even if the contract is a form contract that the parties did not truly "negotiate" and that one party dictated as a take-it-or-leave-it proposition to the other party. See Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 593-95 (1991).
B. Meaning of Forum Selection Clause
On the other hand, in Dixon, the Fifth Circuit Court of Appeals examined the following language: "The Courts of Texas, U.S.A., shall have jurisdiction over all controversies with respect to the execution, interpretation or performance of this Agreement, and the parties waive any other venue to which they may be entitled by virtue of domicile or otherwise." Dixon, 330 F.3d at 397. The court found that the clause waived the defendant's right to removal because it mandated venue in the courts of Texas, that is, Texas state courts, which did not include federal courts sitting in Texas. Id.
Redbox's forum selection clause mandates that this lawsuit be pursued only in an Illinois state court. Where a forum selection clause specifies jurisdiction in a way that indicates the parties' intent to make the specified venue exclusive, the Court will generally enforce the clause. See Paper Express, Ltd. v. Pfankuch Maschinen GmbH, 972 F.2d 753, 757 (7th Cir. 1992) ("[W]here only jurisdiction is specified, the clause will generally not be enforced unless there is some further language indicating the parties' intent to make venue exclusive."); accord Muzumdar v. Wellness Int'l Network, Ltd., 438 F.3d 759, 762 (7th Cir. 2006). By agreeing to submit to the "exclusive jurisdiction" in a particular forum, the parties in this case have manifested their intent to make that venue exclusive and to exclude venue in all other jurisdictions. Indeed, the words "shall" or "exclusive" have been hallmarks of mandatory forum selection clauses, and their absence indicative of a permissive clause. See Roberts & Schaefer Co. v. Merit Contracting, Inc., 99 F.3d 248, 254 (7th Cir. 1996) (remand required where agreement provided Illinois courts "shall have exclusive jurisdiction" to resolve disputes); Paper Express, 972 F.2d at 756-57 (collecting cases).
C. Waiver of Right to Invoke Forum Selection Clause
It is true that it is possible to waive a non-jurisdictional arguments in support of remand. In re Continental Cas. Co., 29 F.3d 292, 294 (7th Cir. 1994) (citing Ayers v. Watson, 113 U.S. 594 (1885)). For example, participation in litigation after removal but before filing a motion to remand can waive a right to remand. See Koehnen v. Herald Fire Ins. Co., 89 F.3d 525, 528 (8th Cir. 1996) (right to remand waived by filing motion to supplement complaint prior to motion to remand). However, generally a party does not waive the right to assert objections to removal if she promptly moves to remand the case and simply continues litigating until the remand decision is made. See, e.g., Kitson v. Bank of Edwardsville, No. 06-cv-528-GPM, 2006 WL 3392752, *4-5 (S.D. Ill. Nov. 11, 2006).
For the foregoing reasons, the Court GRANTS Piechur's motion to remand (Doc. 13) and REMANDS this case to the Circuit Court for the Twentieth Judicial Circuit, St. Clair County, Illinois.
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