United States District Court, E.D. North Carolina, Eastern Division
C. Dever III United States District Judge.
March 4, 2019, Halifax Linen Service, Inc. ("Halifax
Linen" or "plaintiff") filed a complaint in
Halifax County Superior Court against Tidelife, LLC d/b/a
Tidelife Vacation Rentals ("Tidelife" or
"defendant") alleging breach of contract [D.E.
1-1]. On April 10, 2019, Tidelife removed the action to this
court [D.E. 1]. On April 17, 2019, Tidelife moved to dismiss
Halifax Linen's complaint [D.E. 7] and filed a memorandum
in support [D.E. 8]. On April 24, 2019, Halifax Linen moved
to remand the action to the Halifax County Superior Court
[D.E. 12] and filed a memorandum in support [D.E. 13]. On May
15, 2019, Tidelife responded in opposition [D.E. 16]. On May
29, 2019, Halifax Linen replied [D.E. 17]. On April 25, 2019,
the court extended the time by which Halifax Linen may
respond to Tidelife's motion to dismiss until ten days
after the court rules on Halifax Linen's motion to remand
[D.E. 15]. As explained below, the court denies Halifax
Linen's motion to remand.
Linen operates a garment and linen rental and cleaning
business in Halifax County, North Carolina. See [D.E. 8] 1.
Tidelife "is a small, family-owned business that owns
and operates vacation rental properties" in Pawleys
Island, South Carolina. Id. On August 28, 2018,
Halifax Linen entered into a 36-month contract with Tidelife.
See Compl. [D.E. 1-1] ¶¶ 6, 10; Ex. A [D.E.1-1]
6-9. Halifax Linen agreed to provide goods and services for
Tidelife, including "rental and cleaning of various
linen products and other goods and rental items." Compl.
[D.E. 1-1] ¶ 6. The contract specified that Tidelife
would pay weekly base charges that "serve[d] as minimum
billing requirements and function[ed] independent of actual
usage." Id. ¶ 7; see Ex. A [D.E. 1-1]
¶ 6. The contract also specified the consequences of
failing to timely pay and provided for liquidated damages if
Tidelife breached. See Compl. [D.E. 1-1] ¶¶ 8, 13;
Ex. A [D.E. 1-1] ¶¶ 6, 9. Finally, the contract
contained choice-of-law and forum-selection clauses:
This Agreement shall be in effect when signed by [Tidelife]
and shall be governed by and interpreted and performed in
accordance with the laws of the State of North Carolina,
without consideration of choice of law rules. Venue for any
action arising out of the Agreement shall be in the General
Court of Justice in Halifax County, North Carolina.
Ex. A [D.E. 1-1] ¶ 15.
Linen alleges that it provided goods and services under the
terms of the contract to Tidelife. See Compl. [D.E. 1-1]
¶ 9. Halifax Linen alleges that Tidelife, however,
"failed to pay outstanding invoices" due under the
terms of the contract. Id. ¶ 11. On October 29,
2018, Halifax Linen alleges that Tidelife "gave verbal
notice of its intent to terminate" the contract.
Id. ¶ 12. At the time, 154 weeks remained on
the contract. See Id. ¶ 15. Halifax Linen
claims that Tidelife owes it $283, 772.72 under the contract.
See id, ¶¶ 13, 15.
April 10, 2019, Tidelife removed the action to this court
under 28 U.S.C. §§ 1332, 1441, 1446 [D.E. 1]. On
April 24, 2019, Halifax Linen moved to remand the case to
Halifax County Superior Court based on the forum-selection
clause and pursuant to 28 U.S.C. § 1447(c) [D.E. 12].
Linen argues that, because the contract between Halifax Linen
and Tidelife contains a forum-selection clause, Tidelife
waived the right to remove this case to federal court under
28 U.S.C. § 1441. See[D.E. 13] 2-6. Tidelife responds
mat me forum-selection clause is permissive, not mandatory,
under North Carolina law. Thus, Tidelife argues that it did
not waive its right to remove this action. See [D.E. 16] 5-7.
courts, unlike most state courts, are courts of limited
jurisdiction, created by Congress with specified
jurisdictional requirements and limitations." Strawn
v. AT & T Mobility LLC., 530 F.3d 293, 296 (4th Cir.
2008); see, e.g., Kokkonen v. Guardian Life Ins.
Co. of Am., 511 U.S. 375, 377 (1994); Vick v. Nash
Hosps., Inc., 756 F.Supp.2d 690, 692 (E.D. N.C. 2010).
"Except as otherwise expressly provided by Act of
Congress, any 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" to the
district court "for the district and division embracing
the place where such action is pending." 28 U.S.C.
§ 1441(a); see, e.g., Lontz v. Tharp, 413 F.3d
435, 439 (4th Cir. 2005). Federal courts "construe
removal statutes narrowly," and any "doubts
concerning removal [are] resolved in favor of state court
jurisdiction." Barbour v. Int'l Union, 640
F.3d 599, 613 (4th Cir. 2011 ¶ abrogated on
other grounds by 28 U.S.C. § 1446(b)(2)(B). The
party who removed the action must establish federal
subject-matter jurisdiction. See Hoschar v. Appalachian
Power Co., 739 F.3d 163, 169 (4th Cir. 2014);
Mulcahey v. Columbia Organic Chems. Co., 29 F.3d
148, 151 (4th Cir. 1994). "Because removal jurisdiction
raises significant federalism concerns, the court must
strictly construe removal jurisdiction, and resolve all
doubts in favor of remand." Korzinski v.
Jackson, 326 F.Supp.2d 704, 706 (E.D. N.C. 2004); see
Mulcahey v. 29 F.3d at 151.
defendant may waive its right to remove an action to federal
court via a valid and enforceable forum-selection clause that
mandates a state court as the forum for a case."
Abbington SPE, LLC v. U.S. Bank Nat'l
Ass'n, 352 F.Supp.3d 508, 514 (E.D. N.C. 2016)
(quotation omitted) (collecting cases), aff'd,
698 Fed.Appx. 750 (4th Cir. 2017) (per curiam) (unpublished);
see Bartels ex rel. Bartels v. Saber Healthcare Grp.,
LLC, 880 F.3d 668, 674-75 (4th Cir. 2018); FindWhere
Holdings. Inc. v. Svs. Env't Optimigation, LLC, 626
F.3d 752, 754-56 (4th Cir. 2010); Basu v. Robson Woese,
Inc., No. 1:03CV98, 2003 WL 1937119, at *3 (M.D. N.C.
Apr. 22, 2003) (unpublished); cf. Alt. Marine Constr. Co.
v. U.S. Dist. Court for W. Dist. of Tex., 571 U.S. 49,
63 (2013). Where a contract contains both a choice-of-law and
a forum-selection clause, courts distinguish between the
interpretation and the enforceability of the forum-selection
clause. See Martinez v. Bloomberg LP, 740 F.3d 211,
217 (2d Cir. 2014). Federal law governs whether the
forum-selection clause is enforceable. See id.
a general matter, courts enforce forum selection clauses
unless it would be unreasonable to do so." BAE Sys.
Tech. Sol. & Servs., Inc. v. Republic of Korea's Def.
Acquisition Program Admin., 884 F.3d 463, 470 (4th Cir.
2018), cert. denied, 139 S.Ct. 209 (2018);
see M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1,
15-16 (1972); Martinez, 740 F.3d at 217. "This
presumption of enforceability, however, only applies if the
forum selection clause is mandatory rather than
permissive." BAE Sys., 884 F.3d at 470; see
Albemarle Corp. v. AstraZeneca UK Ltd., 628 F.3d
643, 650-51 (4th Cir. 2010). "A mandatory clause
requires litigation to occur in a specified forum; a
permissive clause permits litigation to occur in a specified
forum but does not bar litigation elsewhere." BAE
Svs., 884 F.3d at 470; IntraComm, Inc. v.
Bajaj, 492 F.3d 285, 290 (4th Cir. 2007).
body of law selected in an otherwise valid choice-of-law
clause governs the interpretation of a forum-selection
clause." Queen City Pastry. LLC v. Bakery Tech.
Enters., LLC, No. 5:14-CV-143, 2015 WL 3932722, at *3
(W.D. N.C. June 26, 2015) (unpublished) (quotation omitted);
see Cnllins v Mary Kay, Inc.,874 F.3d 176, 181-83
(3d Cir. 2017); Martinez, 740 F.3d at 218-21;
Vault LLC v. Dell Inc., No. 1:18-CV-633, 2019 WL
113726, at *5 n.7 (M.D. N.C. Jan. 4, 2019) (unpublished);
Generation Cos., LLC v. Holiday Hosp. Franchising.
LLC., No. 5:15-CV-220-FL, 2015 WL 7306448, at *4 (E.D.
N.C. Nov. 19, 2015) (unpublished). Thus, if a court has to
decide whether a forum-selection clause is mandatory or
permissive or whether a forum-selection clause encompasses
the claims or parties involved in a certain action, a court
applies "the law contractually selected by the
parties." Martinez, 740 F.3d at 218.
"Distinguishing between the ...