Commercial Litigation and Arbitration

Forum Selection Clause Providing that Parties “Submit” to Courts of One Jurisdiction, without More, Is Permissive, Not Mandatory — Failure to Attach a Copy of Served Process with Notice of Removal Does Not Warrant Remand Even If Not Timely Corrected

Plaintiffs do not contest that this court has original jurisdiction over the instant action on the bases of both complete diversity between the parties and the federal questions presented by the Lanham Act and ACCPA [Anticybersquatting Consumer Protection Act] claims. Nevertheless, plaintiffs argue that the instant case should be remanded because, first, the forum-selection clause in the Agreement ("the parties hereto submit to the jurisdiction of the courts of Puerto Rico") mandates jurisdiction only in the Commonwealth courts.... Second, plaintiffs argue that even if the clause is not mandatory, it should be enforced since the defendants drafted the Agreement, including the clause, and have not demonstrated why the clause should not be enforced.... Finally, plaintiffs argue that because the defendants' Notice of Removal failed to include a copy of the process served on them, and defendants did not cure the omission within thirty days, the removal was fatally defective....

Plaintiffs argue first that the Agreement's forum-selection clause is mandatory and should be enforced absent any showing by the defendants why it should not be. Generally, "such clauses are prima facie valid and should be enforced unless enforcement is shown by the resisting party to be 'unreasonable' under the circumstances." Silva v. Encyclopedia Britannica Inc., 239 F.3d 385, 386 (1st Cir. 2001); M/S Bremen v. Zapata Off-Shore Co. , 407 U.S. 1, 10 (1972). When found to be mandatory rather than permissive, a forum selection clause ordinarily will be enforced. Intercall Telecommc'ns, Inc. v. Instant Impact, Inc., 376 F. Supp. 2d 155, 158 (D.P.R. 2005); see also Autoridad de Energia Electrica v. Ericsson Inc., 201 F.3d 15, 19 (1st Cir. 2000); Redondo Constr. Corp. v. Banco Exterior de Espana, 11 F.3d 3, 6 (1st Cir. 1993). However, a mandatory clause does not divest a court of jurisdiction, as the clause constitutes only a stipulation by the parties asking the court to honor their agreement by declining to exercise its jurisdiction. Intercall, 376 F. Supp. 2d at 158, n.2. Furthermore, courts are hesitant to enforce forum selection clauses unless they clearly state the parties' unambiguous intent that the controversy be litigated exclusively in a particular forum. Cummings v. Caribe Mktg. & Sales Co., Inc., 959 F. Supp. 560, 565 n.7 (D.P.R. 1997).

In Redondo Construction, the forum-selection clause provided that the parties "each hereby expressly submit to the jurisdiction of all Federal and State courts located in the State of Florida." The First Circuit ruled that the clause did not prohibit the plaintiff from suing in the District of Puerto Rico, because "[a]ffirmatively conferring Florida jurisdiction by consent does not negatively exclude any other proper jurisdiction." ... In Ericsson, the forum-selection clause provided that "the parties agree to submit to the jurisdiction of the courts of the Commonwealth of Puerto Rico." Relying on this clause, this court remanded the case to the Commonwealth courts. On appeal, the First Circuit vacated the remand order because it found the forum selection clause was permissive, not mandatory, and should have been read like the one in Redondo Construction. Ericsson, 201 F.3d at 18-19.

Here, the forum-selection clause provides that "the parties hereto submit to the jurisdiction of the courts of Puerto Rico." ... This clause is identical in all significant respects to the clause in Ericsson. Reading the clause in light of Redondo Construction and Ericsson, I conclude that the clause is permissive, not mandatory, and therefore does not compel remand to the Commonwealth courts....

[Failure to Attach a Copy of Process with Notice of Removal]

The plaintiffs' last argument is that remand is required due to a technicality. Plaintiffs allege that the defendants did not include a copy of the process served on them when they filed their Notice of Removal to this court, and did not cure this omission within the statutory thirty-day period for removal.... The defendants admit the oversight and have attached the missing copy of service of process to their motion opposing the motion to remand, filed on July 29, 2009, after the statutory thirty-day period had elapsed...

Plaintiffs argue that because removal statutes are strictly construed, this omission is fatal to the removal and warrants remand. Plaintiffs acknowledge that the issue has not been discussed in this district or by the First Circuit and cite cases from other jurisdictions that hold failure to file a copy of process with the notice of removal requires remand.... Defendants agree that this is an issue of first impression in this district, but argue that the rule cited by plaintiffs is a minority position, and that the majority rule is that failure to include a copy of process is a minor, curable defect that does not affect the court's jurisdiction....

Importantly, the thirty-day statutory time limit for removal petitions is merely a formal and modal requirement and is not jurisdictional. Renaissance Marketing, Inc. v. Monitronics Int'l, Inc., 606 F. Supp. 2d 201, 204 (D.P.R. 2009) (citing Fristoe v. Reynolds Metals Co., 615 F.2d 1209, 1212 (9th Cir. 1980)); see also Ayers v. Watson, 113 U.S. 594, 598 (1885) (modern removal statute's predecessor prescribing "the mode of obtaining [removal], and the time within which it should be applied for . . . is but modal and formal" and its conditions, "though obligatory, may, to a certain extent, be waived"). Thus, this court is not deprived of jurisdiction by the defendants' failure to cure their omission within the thirty days prescribed by statute. The question, then, is whether defendants' non-jurisdictional breach of the requirement to file all documents within 30 days warrants remand.

The statutory period for removal "has not been subject of extended discussion by the First Circuit." ... Other jurisdictions, however, provide persuasive authority dating back over half a century (covering prior versions of the current section 1446) holding that such minor defects in the removal paperwork are curable. See, e.g., Tucker v. Kerner, 186 F.2d 79 (7th Cir. 1951) (failure to post bond simultaneously with removal petition was cured within thirty-day window); Covington v. Indemnity Ins. Co. of N. Am. , 251 F.2d 930 (5th Cir. 1958) (failure to file certain portions of state court record has no effect on removal); Riehl v. Nat'l Mut. Ins. Co., 374 F.2d 739 (7th Cir. 1967) (minor irregularity that copy of complaint was not filed with removal papers); In re Methyl Tertiary Butyl Ether ("MTBE") Prods. Liab. Litig., 399 F. Supp. 2d 340, 348 (S.D.N.Y. 2005) ("the failure to file all the state court papers is curable in the federal court if there is a motion to remand") (internal quotation and alteration omitted); O'Neal v. Moore, 2007 WL 541695, at *16 n.17 (D. Minn. 2007) ("failure to file some of the necessary papers upon removal to federal court is not irremediable, and has no effect on removal if the case is in its nature removable"). See generally 14C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 3733, at 351 (3d ed. 1998) (collecting cases). In contrast with the rule propounded by the plaintiffs, I think the better rule is that a minor procedural defect in filing "a copy of all process, pleadings, and orders" with the removal notice can be cured, and the case may remain in federal court, so long as the removal notice itself was timely filed and otherwise complies with the statutory requirements, the plaintiff is not injured by the defect, and the federal court properly has jurisdiction.

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