Dynamic CRM v. UMA Education, No. 21-20351 (5th Cir. 2022)
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Dynamic CRM Recruiting Solutions sued UMA Education in Harris County district court for alleged misappropriation of Dynamic’s software in breach of their licensing agreement (“the Agreement”). UMA removed the action to federal district court, which in turn remanded it to state court based on the parties’ contractual forum selection clause.
The Fifth Circuit found that the forum state is Texas, and the Agreement provides that its interpretation shall be governed by Texas law. The court reasoned that contractual choice-of-law clauses are generally valid under Texas law unless they violate one of the limitations set forth in the Restatement (Second) of Conflict of Laws Sec. 187 (1971), and neither party here has argued that this clause is invalid on this ground.
Further, since the Agreement provides that disputes arising thereunder must be “brought before the district courts of Harris County”, UMA has contractually waived its right to remove the suit. UMA also argued that the district court abused its discretion in allowing Dynamic to drop its claims for conversion, quantum meruit, lien foreclosure, and violations of the TTLA. The court found that it need not reach the jurisdictional point because the district court properly allowed Dynamic to amend its complaint. Thus, the court affirmed the district court’s ruling.
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