Kittitas Reclamation District v. Tetra Tech Inc, No. 1:2019cv03252 - Document 29 (E.D. Wash. 2020)
Court Description: ORDER GRANTING 17 MOTION TO DISMISS OR REMAND FOR FORUM NON CONVENIENS AND REMANDING CASE. Case is closed. cc: certified copy of Order mailed to Kittitas County Superior Court this date. Signed by Judge Salvador Mendoza, Jr. (AY, Case Administrator)
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Kittitas Reclamation District v. Tetra Tech Inc Doc. 29 FI LED I N THE U.S. DI STRI CT COURT EASTERN DI STRI CT OF WASHI NGTON 1 Jun 19, 2020 2 SEAN F. MCAVOY, CLERK UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 3 4 5 KITTITAS RECLAMATION DISTRICT, a municipal corporation, Plaintiff, 6 7 8 9 10 v. TETRA TECH, INC., a foreign corporation, No. 1:19-cv-03252-SMJ ORDER GRANTING MOTION TO DISMISS OR REMAND FOR FORUM NON CONVENIENS AND REMANDING CASE Defendant. 11 Before the Court, without oral argument, is Plaintiff Kittitas Reclamation 12 District’s Motion to Dismiss or Remand for Forum Non Conveniens, ECF No. 17. 13 Plaintiff asserts this case must be remanded because the contract giving rise to the 14 dispute includes a forum selection clause establishing that Kittitas County, 15 Washington Superior Court is the only appropriate venue for a dispute as to the 16 contract. Id. Defendant Tetra Tech, Inc. opposes the motion, arguing that a separate, 17 superseding contract governs this dispute and does not establish a forum for 18 litigation. ECF No. 19. Having reviewed the stipulated pleading and the file in this 19 matter, the Court is fully informed, grants the motion, and remands this case to the 20 Kittitas County Superior Court. ORDER GRANTING MOTION TO DISMISS OR REMAND FOR FORUM NON CONVENIENS – 1 Dockets.Justia.com BACKGROUND 1 2 Plaintiff filed this action in Kittitas County Superior Court asserting claims 3 against Defendant for breach of contract and negligence. ECF No. 1-1. In the 4 Complaint, Plaintiff asserts the parties entered into a Professional Services 5 Consulting Agreement (“2016 Agreement”), under which Defendant would design, 6 manage, administer, and coordinate a project to line portions of an existing dirt 7 canal. Id. at 4–5. The 2016 Agreement was attached to the Complaint and 8 incorporated by reference. Id. at 5, 12 52. Defendant removed the action to this 9 Court. ECF No. 1. 10 Plaintiff now asserts the claims in the Complaint “arise from two 11 processional consulting agreements,” and that the 2016 Agreement contains a forum 12 selection clause identifying the appropriate forum as the Superior Court of the State 13 of Washington situated in Kittitas County, where Plaintiff is located. ECF No. 17 14 at 2 3. Plaintiff asserts the second consulting agreement (the “2017 Agreement”) 15 incorporated the 2016 Agreement. Id. at 3. Defendant asserts the 2017 Agreement 16 did not incorporate the 2016 Agreement. ECF No. 19 at 3. 17 LEGAL STANDARD 18 A district court may dismiss an action under the doctrine of forum non 19 conveniens when a valid forum selection clause identifies a state court as the proper 20 venue for a lawsuit. Atl. Marine Constr. Co. v. United States Dist. Court, 571 ORDER GRANTING MOTION TO DISMISS OR REMAND FOR FORUM NON CONVENIENS – 2 1 U.S. 49, 60 (2013). A valid forum selection clause also modifies the typical forum 2 non conveniens analysis by removing the private interest factors, so that the Court 3 evaluates only whether public interest factors weigh against dismissal. Id. at 64 4 (holding that where a valid forum selection clause controls, private interest factors 5 “weigh entirely in favor of the preselected forum”). However, “[w]hen the parties 6 have agreed to a valid forum-selection clause, a district court should ordinarily 7 transfer the case to the forum specified in that clause.” Id. at 62. The party 8 attempting to defy the forum selection clause bears the burden of showing that the 9 forum selection clause does not apply. Id. at 63. 10 To interpret and enforce a forum selection clause, the Court applies federal 11 law. See Simonoff v. Expedia, Inc., 643 F.3d 1202, 1205 (9th Cir. 2011); Manetti- 12 Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509, 513 (9th Cir. 1988). The Court 13 may look to declarations outside of the pleadings to decide a motion for forum non 14 conveniens. U.S. Vestor, L.L.C. v. Biodata Info. Tech. AG, 290 F. Supp. 2d 1057, 15 1062 n.1 (N.D. Cal. 2003) (citing Van Cauwenberghe v. Biard, 486 U.S. 517, 529 16 (1988); AT&T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 589 91 (9th 17 Cir. 1996). 18 19 20 DISCUSSION A. Plaintiff’s claims arise only under the 2016 Agreement First, the Court must determine whether a forum selection clause governs this ORDER GRANTING MOTION TO DISMISS OR REMAND FOR FORUM NON CONVENIENS – 3 1 dispute. Defendant does not dispute that the 2016 Agreement contains a forum 2 selection clause. See ECF No. 19 at 2. Neither party disputes that the 2017 3 Agreement does not itself contain the forum selection clause Plaintiff seeks to 4 enforce, though Plaintiff asserts the clause from the 2016 Agreement was 5 incorporated by reference. Compare ECF No. 17 at 2 3 (asserting the 2017 6 Agreement incorporated the terms of the 2016 Agreement by reference and that 7 “[b]oth Consulting Agreements accordingly contain the same forum selection 8 clause.”) with ECF No. 19 at 11 12 (asserting the 2017 Agreement does not contain 9 a forum selection clause and does not incorporate the 2016 Agreement terms by 10 reference). 11 The Court, therefore, first looks to whether Plaintiff’s claims arise under the 12 2016 Agreement, the 2017 Agreement, or both. Plaintiff is itself inconsistent on this 13 issue. See ECF No. 17 at 6 (Plaintiff asserting “Plaintiff’s contract breach and 14 negligence claims arise out of Defendant’s failure to perform the scope of work 15 identified in both Consulting Agreements.”); ECF No. 23 at 4 (Plaintiff asserting 16 “2016 Contract work is the foundational cause for the canal not performing 17 properly”). Defendant asserts the claims arise out of the 2017 Agreement. ECF 18 No. 19 at 10. 19 However, a review of the Complaint itself reflects that the claims asserted 20 therein arise only out of the 2016 Agreement. The Complaint discusses the Scope ORDER GRANTING MOTION TO DISMISS OR REMAND FOR FORUM NON CONVENIENS – 4 1 of Work set forth in the 2016 Agreement, attaches and incorporates by reference 2 only the 2016 Agreement, and asserts a breach only of the terms of the 2016 3 Agreement. ECF No. 1-1 at 5 8. The Complaint challenges only Defendant’s 4 allegedly deficient design under the terms of the 2016 Agreement and Defendant’s 5 allegedly negligent work under the 2016 Agreement. Id. at 7 8 (referencing the 6 terms of the 2016 Agreement only). 7 The Complaint does reference conduct that appears to have occurred under 8 the 2017 Agreement, such as Defendant’s failure to discover the design defect and 9 Plaintiff’s authorization of Defendant’s temporary repair work. Id. at 6. However, 10 while these issues may be relevant to damages, they do not form the basis of 11 Plaintiff’s claims. Thus, as drafted, the Complaint is limited to a breach of the 2016 12 Agreement and negligence arising out of the performance of Defendant’s duties 13 under the 2016 Agreement. Defendant’s assertion that the claims arise under the 14 2017 Agreement and not the 2016 Agreement would be highly relevant to the merits 15 of Plaintiff’s claims for breach of the 2016 Agreement and negligence related to the 16 2016 Agreement. However, it is irrelevant to whether the forum selection clause 17 applies to those claims. Because the Court finds the Complaint is limited to the 2016 18 Agreement, the Court does not reach the issue whether the 2017 Agreement 19 incorporated the terms of the 2016 Agreement. 20 ORDER GRANTING MOTION TO DISMISS OR REMAND FOR FORUM NON CONVENIENS – 5 1 B. The forum selection clause applies to this dispute 2 The 2016 Agreement includes the following language: “In the event either 3 party deem it necessary to institute legal action or proceeding to enforce any right 4 or obligation under this AGREEMENT, this action shall be initiated in the Superior 5 Court of the State of Washington, situated in the county in which [Plaintiff] is 6 located.” ECF No. 1-1 at 4. This language plainly applies to the breach of contract 7 claims arising out of the 2016 Agreement and also applies to Plaintiff’s negligence 8 claim related to Defendant’s conduct when executing the terms of the contract. See 9 Manetti-Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509, 514 (9th Cir. 1988) 10 (noting that “forum selection clauses can be equally applicable to contractual and 11 tort causes of action,” and finding plaintiff’s tort claims within scope of forum 12 clause because they related “in some way to rights and duties enumerated in 13 the . . . contract”). 14 C. Remand is appropriate 15 “Only under extraordinary circumstances unrelated to the convenience of the 16 parties” should a forum selection clause not be enforced. Atl. Marine Constr. Co., 17 571 U.S. at 62. These extraordinary circumstances include where “(1) the clause is 18 invalid due to ‘fraud or overreaching,’ (2) ‘enforcement would contravene a strong 19 public policy of the forum in which suit is brought, whether declared by statute or 20 by judicial decision,’ or (3) ‘trial in the contractual forum will be so gravely difficult ORDER GRANTING MOTION TO DISMISS OR REMAND FOR FORUM NON CONVENIENS – 6 1 and inconvenient that [the litigant] will for all practical purposes be deprived of his 2 day in court.’” Yei A. Sun v. Advanced China Healthcare, Inc., 901 F.3d 1081, 1088 3 (9th Cir. 2018) (quoting M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15, 18 4 (1972)). 5 As an initial matter, Defendant incorrectly identifies the party bearing the 6 burden on this issue. Under the modified forum non conveniens analysis for forum 7 selection clauses adopted in Atl. Marine Constr. Co., the burden is on the party 8 resisting application of the forum selection clause to show that the clause does not 9 apply. 571 U.S. at 63. Thus, because the Court has determined that a forum selection 10 clause applies to these claims, Defendant bears the burden of showing that the 11 clause should not apply. 12 Defendant has not alleged that any of the exceptional circumstances 13 described above apply to this case. There are no allegations of fraud or overreach. 14 The Court can find no basis for finding that “enforcement would contravene a strong 15 public policy.” To the contrary, contract and tort claims are the traditional province 16 of state courts, and so public policy weighs toward litigating these claims in state 17 courts. Nor can the Court find that litigating these claims in Kittitas County Superior 18 Court would be gravely difficult or inconvenient for the parties. As such, the Court 19 finds enforcing the forum selection clause is appropriate. Although the typical 20 solution to enforcing a forum selection clause is dismissal, because this case was ORDER GRANTING MOTION TO DISMISS OR REMAND FOR FORUM NON CONVENIENS – 7 1 removed to this Court from the correct forum, the Court finds that remand is 2 appropriate. 3 Accordingly, IT IS HEREBY ORDERED: 4 1. ECF No. 17, is GRANTED. 5 6 2. 9 All pending motions, including the Court’s Order to Show Cause, ECF No. 25, are DENIED AS MOOT. 7 8 Plaintiff’s Motion to Dismiss or Remand for Forum Non Conveniens, 3. This matter is REMANDED to Kittitas County Superior Court, Case No. 19-2-00289-19, for further proceedings. 10 IT IS SO ORDERED. The Clerk’s Office is directed to enter this Order and 11 provide copies to all counsel and a certified copy to the Clerk of the Superior Court 12 of the State of Washington for Kittitas County, Case No. 19-2-00289-19. 13 14 15 DATED this 19th day of June 2020. _________________________ SALVADOR MENDOZA, JR. United States District Judge 16 17 18 19 20 ORDER GRANTING MOTION TO DISMISS OR REMAND FOR FORUM NON CONVENIENS – 8
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