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Fifth Circuit reminder: Selecting the courts of a state as the exclusive forum will preclude removal to federal court.

A Fifth Circuit opinion, issued yesterday, reminds contract drafters that if a forum-selection clause specifies the courts of a state or county as the exclusive forum, that might well preclude removal to federal court.  See Grand View PV Solar Two, LLC v. Helix Electric, Inc., No. 16-20384 (5th Cir. Feb. 1, 2017) (affirming remand to state court because forum-selection provision had granted “sole and exclusive” jurisdiction to state courts). The forum-selection clause read as follows:

The Parties hereto hereby irrevocably and unconditionally consent to the sole and exclusive jurisdiction of the courts of Harris County in the State of Texas for any action, suit or proceeding arising out of or relating to this Agreement or the Proposed Transaction, and agree not to commence any action, suit or proceeding related thereto except in such courts.

The Parties hereto further hereby irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of or relating to this Agreement in the courts of Harris County in the State of Texas, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

Id., slip op. at 2-3 (emphasis and extra paragraphing added). The court held:

Plaintiffs correctly allege that Helix Electric waived its removal rights by agreeing in the [Agreement] to “the sole and exclusive jurisdiction of the courts of Harris County in the State of Texas for any action, suit or proceeding arising out of or relating to this Agreement or the Proposed Transaction.”

The [forum-selection clause] is “clear and unequivocal”: It gives Harris County state courts exclusive jurisdiction over disputes such as the one plaintiffs brought in that county. Because Helix Electric, L.L.C., agreed to the [Agreement]’s terms, it cannot remove, and neither can its co-defendants.

Id., slip op. at 4 (footnote omitted, extra paragraphing added).

This wasn’t an unusual result; see, e.g., Doe 1 v. AOL, LLC, 552 F.3d 1077, 1081-82 (9th Cir. 2009) (per curiam) (also holding that forum-selection provision was unenforceable for unrelated reasons).

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