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City of Springfield v. T-Mobile Central, LLC

United States District Court, E.D. Missouri, Eastern Division

June 19, 2019

CITY OF SPRINGFIELD, MISSOURI, et al., Plaintiffs,
v.
T-MOBILE CENTRAL LLC, et al., Defendants.

          OPINION, MEMORANDUM AND ORDER

          HENRY EDWARD AUTREY UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         This matter is before the Court on Plaintiffs' Motion to Remand [Doc. No. 11], brought pursuant to 28 U.S.C. § 1447(c). For the reasons stated below, the Court grants the motion and remands this case to the Circuit Court of St. Louis County, Missouri.

         FACTS AND BACKGROUND

         The facts relevant to the Court's disposition of this motion are as follow. Plaintiff brought this action in Circuit Court of St. Louis County, Missouri against Defendants for delinquent taxes and other relief. Plaintiffs are Cities which impose municipal business license taxes on telephone companies doing business in the Plaintiff Cities. Defendants are telephone companies which do business in the Cities and are allegedly required to pay the Cities' license taxes. Defendants previously entered into a class action settlement agreement with the Cities of Grandview, Lee's Summit, and Webster Groves. This settlement agreement was approved by the Circuit Court of the County of St. Louis, Missouri. The Settlement Agreement requires Defendants to pay the Cities' license taxes. Plaintiffs allege Defendants have not done so.

         The Petition contains the following 19 counts: Counts I-IV seek delinquent local taxes, interest, and penalties. Counts V-VIII seek rulings that Defendants have violated Missouri State statutes and subjected the Cities to undue and unreasonable prejudice and disadvantage. Counts IX-XII seek declaratory judgments regarding Defendants' obligations to pay local license taxes and the enforcement of those taxes. Counts XIII-XVI seek an accounting of Defendants' gross receipts to determine the extent of Defendants' alleged underpayment of taxes. Counts XVII-XIX allege breach of contract claims for Defendants' alleged violations of the class action settlement agreement.

         The Settlement Agreement contains a forum selection clause wherein the parties agreed that the Circuit Court of the County of St. Louis Missouri will

[R]etain jurisdiction, after entry of the Order and Judgment of Dismissal with respect to enforcement of the terms of this Settlement, and all Parties and Class Members submit to the exclusive jurisdiction of the Court with respect to the enforcement of the Settlement and any dispute with respect thereto.
Further, the settlement agreement defined “Court” as the Circuit Court of the Count of St. Louis, Missouri.

         Plaintiffs filed this action on November 2, 2018 in the Circuit Court of the County of St. Louis. Defendants removed based on the Court's diversity of citizenship jurisdiction, 28 U.S.C. §§ 1332, 1441, and 1446. Plaintiffs move to remand based on the forum selection clause contained in the settlement agreement. Defendants oppose remand arguing that the forum selection clause is insufficient to waive their removal rights.

         DISCUSSION

         Section 1441 of Title 28 generally provides a defendant in a state civil case the right to remove that case to federal district court, assuming the case could have been brought there originally. See Martin v. Franklin Capital Corp., 546 U.S. 132, 134, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005). In turn, the plaintiff may move to have the case remanded if subject matter jurisdiction is lacking, or if some other defect makes removal improper. See 28 U.S.C. § 1447(c). Courts who have considered the issue, including the Eighth Circuit, have concluded that removal in the face of a valid forum selection clause fixing venue in the state courts is the sort of defect that qualifies a case for remand. See, e.g., iNet Directories, LLC v. Developershed, Inc., 394 F.3d 1081, 1082 (8th Cir. 2005). There is a strong presumption in favor of finding forum selection clauses valid and enforceable. See Atl. Marine Constr. Co. v. U.S. Dist. Court, ____ U.S. ____, 134 S.Ct. 568, 583, 187 L.Ed.2d 487 (2013) (“When parties have contracted in advance to litigate disputes in a particular forum, courts should not unnecessarily disrupt the parties' settled expectations.”); Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 589, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991); M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). Where, as here, there is no allegation of fraud or overreaching in procurement of the forum selection clause, the only issue the Court need consider is whether the language of the clause acts as a waiver of the right to remove the case to federal court. See Babe Winkelman Prods., Inc. v. Sports Design and Dev., Inc., No. Civ. 05-2971 DWF/RLE, 2006 WL 980821, at *2 (D. Minn. Apr. 7, 2006).

         Courts differ regarding the level of specificity that the forum selection clause must show before removal is foreclosed. See James Wm. Moore et al., Moore's Federal Practice ¶ 107.130[2] (3d ed. 2016). The Eighth Circuit has adopted the stricter of the two prevailing standards, requiring that any contractual waiver of the right to remove must be “clear and unequivocal.” See Weltman v. Silna, 879 F.2d 425, 427 (8th Cir. 1989).

         In Weltman, the court declared that an agreement that venue would be proper in state court did not constitute a waiver of the right to remove because it did not “address removal.” 879 F.2d at 427. As several district courts have noted, however, because the Eighth Circuit did not provide the language of the clause it was interpreting, the Weltman opinion is of limited value. See, e.g., Push Pedal Pull,Inc. v. Casperson, 971 F.Supp.2d 918, 927 (D.S.D. 2013); Babe WinkelmanProds., 2006 WL 980821, at *2. The other relevant Eighth Circuit case is iNetDirectories, LLC v. Developershed, Inc., 394 F.3d 1081 (8th Cir. 2005). There, the court determined that a forum selection clause providing that the parties “irrevocably waive[d] any and all objections ... to the laying of venue ... in any such federal or state court in the State of Missouri” constituted a waiver of the right to remove a case first filed in Missouri state court. 394 F.3d at 1081-82. In so holding, the court emphasized that the parties ...


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