Ex parte Sunset Digital Communications, Inc.
Annotate this CaseDefendant-petitioner Sunset Digital Communications, Inc. ("Sunset") sought a writ of mandamus to direct an Alabama circuit court vacate its order denying a motion to dismiss the complaint filed by plaintiffs Point Broadband, LLC ("Point Broadband"), and Point Broadband Fiber Holding, LLC ("PBFH") (collectively, "plaintiffs"). In 2018, Sunset and Sunset Fiber, LLC, entered into a "First Amended and Restated Asset Purchase Agreement" ("the APA") with PBFH, which was then known as Sunset Digital Holding, LLC. In 2021, plaintiffs filed a complaint against Sunset seeking a judgment declaring that PBFH was not liable for certain unpaid taxes and penalties; that PBFH did not owe defense or indemnity obligations to Sunset relating to those unpaid taxes; that PBFH did not owe legal fees in connection with any audits or other investigations relating to Sunset's tax liability; and that Sunset owed PBFH defense and indemnity obligations in the event a third party sought to bring a claim or attempted to collect any unpaid taxes from PBFH. Sunset moved to dismiss the complaint pursuant to Rule 12(b), Ala. R. Civ. P., in which it alleged, among other things, that the APA included a mandatory outbound-forum selection clause that "requires the parties to submit exclusively to the jurisdiction of the United States federal courts or the Virginia state courts located in Bristol, Virginia." In its order denying the motion to dismiss, the trial court stated, in pertinent part: "At issue is if the language ('may') creates a mandatory forum selection clause or clause that consents to jurisdiction. Language such as 'shall' or 'must' would be used in cases where the clause was to be considered mandatory. As this is a consent to jurisdiction clause and not a mandatory one, Alabama Courts have held that imperative language such as 'shall' or 'must' are required to find that the clause is a mandatory one. However, the word 'may' results in language that is much more permissive or rather a 'consent to jurisdiction' clause." Sunset argued the trial court erroneously found that the forum-selection clause in the APA was permissive rather than mandatory. Specifically, it asserted that the trial court "wholly ignored the 'exclusive jurisdiction' language of the forum selection clause." To this the Alabama Supreme Court concurred, granted the writ and directed the trial court to vacate its February 2022 order denying Sunset's motion to dismiss.
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