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Original Equip. Co., Inc. v. East Coast Res. Group, LLC

United States District Court, D. Nebraska

May 17, 2013

ORIGINAL EQUIPMENT CO., INC., d/b/a AULICK INDUSTRIES, Plaintiff,
v.
EAST COAST RESOURCES GROUP, LLC, and EAST COAST RESOURCE GROUP, LLC, Defendants

For Original Equipment Co., Inc., doing business as Aulick Industries, Plaintiff: Andrew W. Snyder, CHALOUPKA, HOLYOKE LAW FIRM, Scottsbluff, NE.

For East Coast Resources Group, LLC, East Coast Resource Group, LLC, Defendants: Austin L. McKillip, CLINE, WILLIAMS LAW FIRM - LINCOLN, Lincoln, NE; Daniel W. Linna, PRO HAC VICE, HONIGMAN, MILLER LAW FIRM, Detroit, MI.

Page 846

MEMORANDUM AND ORDER

Richard G. Kopf, Senior United States District Judge.

This matter is before the court on the findings and recommendation entered by Magistrate Judge Cheryl R. Zwart on April 8, 2013 (filing 18). Judge Zwart recommends (1) that the plaintiff's motion to remand (filing 11) be granted, and the case remanded to the District Court of Scotts Bluff County, Nebraska, and (2) that the plaintiff's motion to change the location of any federal trial herein to North Platte, Nebraska (filing 10), be denied as moot. The defendant East Coast Resource Group (" ECR" ) [1] has filed a statement of objections to the recommendation that the case be remanded (filing 23).

At issue is a forum selection clause that was drafted by the plaintiff, Original Equipment Co., Inc., doing business as Aulick Industries (" Aulick" ), and included in 17 trailer rental contracts that it entered into with ECR. The clause requires that every lawsuit alleging breach of contract " shall be exclusively instituted and maintained in the District Court of Scotts Bluff County, State of Nebraska," and further specifies that " [e]ach party expressly waives the right to change venue from the District Court of Scotts Bluff County, State of Nebraska" (filing 13, Exhibits A-Q at ¶ 15). ECR objects that Judge Zwart " erroneously interpreted the forum selection clause contained in Aulick's boilerplate terms and conditions and erroneously concluded that ECR 'clearly and unequivocally' waived its right to remove" (filing 23 at CM/ECF p. 1). [2]

Page 847

I find and conclude after de novo review that Judge Zwart has correctly found the facts and applied the law regarding the meaning and effect of the forum selection clause. [3] Subject to my comments below (regarding the legal basis for the remand), her findings and recommendation will be adopted.

In opposing the motion to remand, ECR argued before Judge Zwart that the forum selection clause is unenforceable under Nebraska's Model Uniform Choice of Forum Act," Neb. Rev. Stat. § § 25-413 to 25-417 (filing 17 at CM/ECF pp. 7-8). [4] In particular, ECR disputed that Nebraska is " a reasonably convenient place for the trial of the action," which is a necessary condition for enforcing a forum selection clause under § 25-414. That statute provides, in part:

If the parties have agreed in writing that an action on a controversy may be brought in this state and the agreement provides the only basis for the exercise of jurisdiction, a court of this state will entertain the action if (a) the court has power under the law of this state to entertain the action; (b) this state is a reasonably convenient place for the trial of the action ; (c) the agreement as to the place of the action was not obtained by misrepresentation, duress, the abuse of economic power, or other unconscionable means; and (d) the defendant, if within the state, was served as required by law of this state in the case of persons within the state or, if without the state, was served either personally or by certified mail directed to his last-known address.

Neb. Rev. Stat. § 25-414(1) (emphasis supplied). [5]

Judge Zwart rejected ECR's argument by stating that Nebraska law " cannot be used to determine the threshold issue of federal subject matter jurisdiction pending before this forum" (filing 18 at CM/ECF p. 4 n. 1). This was error in my opinion.

Although ECR has not specifically objected to Judge Zwart's rejection of its argument that the forum selection clause is unenforceable under Nebraska's Model ...


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