United States District Court, D. Oregon, Eugene Division
OPINION AND ORDER
Aiken United States District Judge.
City of Albany brought suit against defendant CH2M Hill, Inc.
("CH2M") in Linn County Circuit Court alleging
claims for breach of contract, professional negligence,
attorney fees, and reckless misrepresentation. Defendant
removed this case to federal court on the basis of diversity
jurisdiction, (doc. 1) Plaintiff now seeks remand of the case
back to state court based on the exclusive language of the
venue selection clause in the agreements between the parties.
For the reasons set forth below, plaintiff's Motion to
Remand (doc. 5) is GRANTED.
initially filed this lawsuit in the Circuit Court of the
State of Oregon, Linn County. The complaint alleges claims
for breach of contract and professional negligence, attorney
fees, and reckless misrepresentation against defendant.
contracted defendant's professional engineering services
to design and oversee the construction of two infrastructure
projects for a new wastewater treatment plant and a 30-acre
wetland. The first agreement between the parties was signed
on May 15, 2005, whereby plaintiff engaged defendant's
services related to modifications to Albany's wastewater
treatment system. The second agreement was signed on October
12, 2006, whereby plaintiff engaged defendant's
engineering services related to the design of a constructed
wetland that would reduce the temperature of effluent from
the treatment facility before its discharge into the
Willamette River. Both agreements contained identical venue
selection clauses providing that: "The laws of Oregon
shall govern the validity of this agreement, its
interpretation and performance, and other claims related to
it. Venue for litigation shall be in Linn County,
removed the action to federal court in the District of
Oregon, Eugene Division, asserting diversity jurisdiction.
Plaintiff is an Oregon municipal corporation located within
Linn County, Oregon. Defendant is a Florida corporation, with
its principal place of business in Colorado. Plaintiff filed
the present motion to remand arguing the venue selection
clause in the two agreements mandates Oregon Circuit Court in
Linn County as proper venue for their dispute. Defendant
argues that the venue selection clause in their agreements
can be considered either permissive or mandatory, but under
either interpretation, the clause allows for this suit to
remain before this Court.
law is applied in interpreting a venue selection clause in
federal court. Doe 1 v. AOL LLC, 552 F.3d 1077, 1081
(9th Cir. 2009). Forum selection clauses in commercial
contexts are prima facie valid. The Bremen v. Zapata
Off-Shore Co., 407 U.S. 1, 10 (1972); Pelleport
Inv'rs. Inc. v. Budco Quality Theaters, Inc., 741
F.2d 273, 279 (9th Cir. 1984). Forum selection clauses are
not set aside "unless the enforcement is shown by the
resisting party to be unreasonable under the
circumstances." Docksider, Ltd. v. Sea Tech.,
Ltd., 875 F.2d 762, 763 (9th Cir, 1989). "To
establish unreasonableness of a forum selection clause the
party resisting enforcement of the clause has a heavy burden
of showing that tiial in the chosen forum would be so
difficult and inconvenient that the party effectively would
be denied a meaningful day in court."
Pelleport, 741 F.2d at 281 (citing Bremen,
407 U.S. at 18).
"plain language of the contract should be considered
first." Doe 1, 552 F.3d at 1081 (quoting
Klamath Water Users Protective Ass'n v.
Patterson, 204 F.3d 1206, 1210 (9th Cir. 1999)). In
considering the plain language of the contract, "common
or normal meaning of language will be given to the words of a
contract unless circumstances show that in a particular case
a special meaning should be attached to it." Hunt
Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 75, 77
(9th Cir. 1987)).
asserts that because the language of the venue selection
clause lists Linn County, Oregon as venue for litigation and
no federal district court sits in in Linn County, the Circuit
Court in Linn County is the exclusive venue for litigation.
Thus, plaintiff argues that the language of the clause is
mandatory and must be enforced. Defendant avers that the
language of the clause is ambiguous and thus it must be
construed against plaintiff, the drafter of the contract.
Defendant also argues that the ambiguous language of the
clause means that it can be construed as both permissive and
mandatory, but in either case, it cannot preclude venue in
first determine whether the clause is mandatory or merely
permissive. The Ninth Circuit directs that a venue selection
clause must contain mandatory and exclusive language in order
to require litigation of disputes in a particular court,
See Hunt Wesson Foods, 817 F.2d at 78. "To be
mandatory, a clause must contain language that clearly
designates a forum as the exclusive one." N. Cat
Dist, Counsel of Laborers v. Pittsbitrgh-Des Moines Steel
Co., 69 F.3d 1034, 1037 (9th Cir. 1995). However, where
venue is not specified with exclusivity, the clause is
permissive. Hunt Wesson Foods, 817 F.2d at 77.
venue is defined with specific language, the clause is
mandatory. Docksider, 875 F.2d at 764.
Docksider involved a license to distribute equipment
manufactured by the defendant which included a forum
selection clause stating that "venue . . . shall be
deemed to be in Gloucester County, Virginia."
875 F.2d at 763 (emphasis added). The court there found the
clause mandatory based on this additional language as
"indicating the parties' intent to make jurisdiction
exclusive." Id. at 764. Thus, the court noted
that the defendant had not only consented to the jurisdiction
of state courts of Virginia but also further agreed to the
Gloucester County, Virginia as the venue for litigation.
can be contrasted with the Ninth Circuit's decision in
Pittsburgh-Des Moines Steel Co. There, the Circuit
panel vacated a district court's remand order in an
action to confirm an arbitration award filed in California
state court, finding that the forum selection clause at issue
was permissive. Pittsburgh-Des Moines Steel Co. 69
F, 3d at 1036, 1038. The language in the forum selection
clause in that case read that the arbitration decision
"... shall be enforceable .. . in the Superior Court of
the City and County of San Francisco, State of
California." Id. at 1036. The Ninth Circuit
panel opined that "shall be enforceable" was not
enough to make the clause mandatory absent additional
language, such as, "venue . . . shall be deemed to be
in" or "cases may only be litigated only in" a
particular venue. Id. at 1037. Since there was no
language "clearly requiring exclusive jurisdiction,
" the clause was permissive, not mandatory, Id. See
also Hunt Wesson Foods, 817 F.2d at 77 ...