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Piechur v. Redbox Automated Retail

February 24, 2010

LAURIE PIECHUR, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
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.

I. Background

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.

II. Analysis

The Court need only address one dispute between the parties, for that issue is dispositive of the pending motion to remand. That issue is the significance of the contract provision between Piechur and Redbox in which Redbox agreed to submit to the "exclusive jurisdiction of the courts of the state of Illinois." This agreement, contained in the Terms of Use to which Piechur agreed when renting DVDs from a Redbox kiosk, states in pertinent part:

These Terms of Use, your [the customer's] access and use of the Kiosks, and the relationship between you and us are governed by the laws of the state of Illinois, without giving effect to its conflict of law provisions. You and Redbox both agree to submit to the personal and exclusive jurisdiction of the courts of the state of Illinois.

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 ...


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