Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-00439/USCOURTS-caed-2_05-cv-00439-1/pdf.json

Parties Involved:
Quick Sort Sacramento, Inc.
Plaintiff
Standard Register
Defendant

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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

QUICK SORT SACRAMENTO, INC.,

NO. CIV. S-05-439 LKK/PAN

Plaintiff,

v. O R D E R

STANDARD REGISTER,

Defendant.

 /

Plaintiff, Quick Sort Sacramento (“plaintiff” or “Quick Sort”)

brought suit in Yolo Superior Court on January 19, 2005 alleging

three causes of action: breach of contract, fraud, and breach of

the covenant of good faith and fair dealing. On March 4, 2005,

defendant, Standard Register, removed the case to this court. 

Pending before this court is plaintiff’s motion to remand. 

Plaintiff contends that a written agreement between the parties

containing a forum selection clause precludes removal to federal

court. I decide the motion based on the parties’ papers and after

oral argument. 

Case 2:05-cv-00439-LKK -PAN Document 27 Filed 05/26/05 Page 1 of 9
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2

 I.

 BACKGROUND

Quick Sort is in the business of providing pre-sorting, barcoding and mailing services for the United States Postal Service

(“USPS”). Standard Register is in the business of providing

support for printing and mass mailings for its customers. On or

about August 1, 2003, the parties entered into a written agreement

whereby plaintiff would process defendant’s mass mailings which

would in turn be distributed by USPS. The agreement contained a

one-year term that provided for automatic renewal of additional

one-year terms if neither party gave notice of termination within

90 days prior to the August 1 contract anniversary date. In a

letter dated November 30, 2004, Standard Register notified Quick

Sort that it was terminating the agreement. Quick Sort objected

to the termination, stating that it was neither timely nor

effective. On January 19, 2005, Quick Sort filed suit in Yolo

Superior Court. Shortly thereafter, Standard Register removed the

matter to this court. 

II.

STANDARDS

Under 28 U.S.C. § 1441, "any civil action brought in a State

court of which the district courts of the United States have

original jurisdiction, may be removed by the defendant or

defendants, to the district court of the United States for any

district . . . where such action is pending." 28 U.S.C. § 1441(a).

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3

One instance in which the district courts of the United States have

"original jurisdiction" is where there is complete diversity

between the parties and the amount in controversy exceeds $75,000.

The proper procedure for challenging removal is a motion to remand,

and a federal court must order remand if there is any defect which

causes federal jurisdiction to fail, or if there is any defect in

the removal procedure. 28 U.S.C. § 1447(c). The Ninth Circuit

strictly construes the removal statute against removal

jurisdiction. Gaus Miles, Inc., 980 F.2d 564 (9th Cir. 1992)

(citing Boggs v. Lewis, 863 F.2d 662, 663 (9th Cir. 1988)); Takeda

v. Northwestern Nat'l Life Ins. Co., 765 F.2d 815, 818 (9th Cir.

1985). Any doubts about removability are resolved in favor of

remanding the case to state court. Shamrock Oil & Gas Corp. v.

Sheets, 313 U.S. 100, 108-09 (1941); Gaus v. Miles, Inc., 980 F.2d

564, 566 (9th Cir.1992). On a motion to remand, the removing

defendant faces a strong presumption against removal, and bears the

burden of establishing that removal was proper by a preponderance

of evidence. Sanchez v. Monumental Life Ins. Co., 102 F.3d 398,

403-404 (9th Cir.1996); Gaus, 980 F.2d at 567. 

In cases based on diversity jurisdiction, "federal law . . .

applies to [the] interpretation of forum selection clauses." 

Manetti-Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509, 513 (9th

Cir. 1988). Forum selection clauses are presumptively valid and

will not be set aside absent a showing that the "enforcement would

be unreasonable and unjust, or that the clause was invalid for such

reason as fraud or overreaching." M/S Bremen v. Zapata Off-Shore

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1 The forum selection clause at issue in Snapper allowed “the

undersigned to bring a suit in the courts of the State of Georgia

or the United States District Court, Northern District of Georgia.”

The Eleventh Circuit held that the clause allowed plaintiff the

right to choose the forum for litigation and that the clause

constituted a waiver of the right to remove. The facts and holding

of Snapper do not assist the plaintiffs where, as here, they allege

that the forum selection clause in paragraph 5.6 prohibits removal

and designates California state courts as the appropriate forum for

this suit. 

Although plaintiff fails to make note of it, and as I explain

infra, the Snapper court’s explanation of the ‘clear and

unequivocal test’ is helpful and provides this court with some

guidance. 

4

Co., 407 U.S. 1, 15 (1972). 

III.

ANALYSIS

Before the court is plaintiff’s motion to remand, which 

is premised upon on a provision contained in the contract 

between the parties. Citing an Eleventh Circuit case, Snapper,

Inc. v. Redan, 171 F.3d 1249 (11th Cir. 1999), plaintiff contends

that this provision provides for exclusive jurisdiction over any

suit in “California State Courts.”1 Mot. at 3. Defendant, on the

other hand, asserts that remand is inappropriate because the

language is not a clear and unequivocal waiver of the right to

remove. Opp'n at 3. Having carefully this matter, I conclude

that this case must be remanded.

A. “CLEAR AND UNEQUIVOCAL WAIVER”

 Defendant maintains that remand is improper because paragraph

5.6 is not a clear and unequivocal waiver of the right to remove.

I cannot agree that plaintiff must meet the stringent “clear and

unequivocal standard” where a forum selection clause is at issue.

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2 Because the Ninth Circuit adopted the clear and unequivocal

test in the context of litigation-based waivers in RTC, but failed

to mention the Clorox case, this court presumes that the Ninth

Circuit viewed it as arising in a completely different context.

Importantly, other circuits have assumed that ordinary principles

of contract interpretation govern in the context of contractual

waivers of removal or have applied less stringent versions of the

clear and unequivocal test. See, e.g., Karl Koch Erecting Co. v.

New York Convention Ctr. Dev. Corp., 838 F.2d 656, 659 (2d Cir.

1988)(forum selection clause did not expressly waive removal

5

As the Sixth Circuit has explained, there has been some confusion

in the circuit courts about whether a waiver of the right to remove

must be “clear and unequivocal.” The cases that have applied such

a standard, however, have been in a context when the removing party

participated in actions in the state court prior to removal which

might be interpreted as waiver of the right to remove. Snapper,

171 F.3d at 1249. As the Sixth Circuit explained, such

“litigation-based waivers must be distinguished from the

contractual waiver” at issue in the case at bar. Id. The Ninth

Circuit has explicitly adopted the clear and unequivocal test in

the context of “litigation-based waivers,” explaining that only a

clear and unequivocal waiver, and not just a responsive pleading,

would defeat a party's right to removal. See RTC v. Bayside

Developers, 43 F.3d 1230, 1240 (9th Cir. 1985). In an earlier case

involving a forum selection clause, or a contractual waiver of the

right to remove, the Ninth Circuit made no mention of the clear and

unequivocal standard in holding that the language in an employee

handbook, included because federal regulations required it, did not

amount to a waiver of removal. See Clorox Co. v. United States

District Court, 779 F.2d 517, 521 (9th Cir. 1985).2 In fact, the

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because “the parties’ inclusion of the . . . clause makes little

sense unless it precludes removal).

6

court could locate no other cases in which the Ninth Circuit has

considered whether the “clear and equivocal” standard would apply

to contractual waivers of the right to remove. This court agrees

with the Sixth Circuit’s explanation that requiring such a high

standard in the context of removal where a forum selection clause

is involved would go against the “general trend of interpreting the

removal statutes against removal and probably springs from the

outdated notion that forum selection clauses are disfavored.” 

Snapper, 171 F.3d at 1261. Indeed, such a high barrier would

contravene the Ninth Circuit’s standard of construing the removal

statute against removal jurisdiction. Gaus Miles, 980 F.2d 566.

Thus, I hold that in the context of removal based on a contract,

ordinary contractual principles govern the interpretation of the

contractual waiver. 

B. APPLICATION OF ORDINARY CONTRACTUAL PRINCIPLES

This motion turns on the interpretation of an agreement

between the parties, which reads:

5.6 Governing Law

(a) This agreement shall be governed and interpreted in

accordance with the laws of the state of California

without regard to principles of conflict of laws. The

Parties agree to submit to the exclusive jurisdiction

over all disputes hereunder or related hereto in the

State of California located in Yolo County. 

Pl.’s Exh. A (emphasis supplied).

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7

At the outset, the court agrees with Standard Register that

paragraph 5.6 is "poorly drafted," "awkwardly written," and leaves

much to be desired in terms of clarity. Opp'n at 4. As defendant

notes, the clause is contained under a paragraph titled "governing

law," and does not contain the words "court," "forum," or "waiver."

Id. The line of cases relied on by defendant, however, is

distinguishable from the matter at bar. Defendant cites a number

of cases where forum selection clauses were broadly written so that

the parties could file the case in both state and federal courts.

See Little League Baseball, Inc. v. Welsh Publishing Group, Inc.,

874 F.Supp. 648 (M.D. Pa. 1995)(provision stated that “[a]ll

parties hereto consent to jurisdiction and venue in the State of

Pennsylvania”); Dixon v. TSE International Inc., 330 F.3d 396 (5th

Cir. 2003)(forum selection clause stated that “[t]he Courts of

Texas, U.S.A. shall have jurisdiction over all controversies with

respect to the execution, interpretation or performance of this

agreement . . .”). The distinction between the clauses discussed

in the cases defendant cites and the clause in the case at bar

undermines defendant’s position. 

While it is true that the clause states that “[t]he Parties

agree to submit to the exclusive jurisdiction over all disputes

hereunder or related hereto in the State of California,” that

clause is, importantly, also followed by four words, “located in

Yolo County.” The clause is poorly drafted since it is unclear

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3 If the clause excluded “located in Yolo County,” the case

at bar would be more similar to the cases that defendant cites, and

the court could interpret the clause to mean, as defendant

suggests, that the parties intended not to “exclude from

consideration the federal court that presides over and encompasses

Yolo County.” Opp’n at 6. But that is not the case.

4 Defendant Standard Register urges the court - both in its

papers and at oral argument - to construe the language of the

provision against the drafter of the contract, which they argue is

Quick Sort. See Interpol Bermuda Ltd. v. Kaiser Aluminum Int’l

Corp., 719 F.2d 992, 998 (9th Cir. 1983). Based on the record and

the parties’ representations during the oral argument, it is clear

that both parties were involved in the drafting of the contract at

issue, and thus, Standard Register’s “construction against Quick

Sort” argument fails. 

8

what exactly is “located in Yolo County.”3 In other words, it is

unclear what noun is being modified by the phrase “located in Yolo

County.”4 A primary rule of contractual interpretation, however,

is that “‘[t]he common or normal meaning of language will be given

to the words of a contract unless circumstances show that in a

particular case special meaning should be attached to it.’” Hunt

Wesson Food, Inc. v. Supreme Oil Co., 817 F.2d 75, 77 (9th Cir.

1987). The word “located” is an adjective which typically modifies

a noun and means “situated in a particular spot or position.”

Webster’s Third New International Dictionary. It is reasonable for

this court to conclude that the phrase “located in Yolo County” was

meant to modify the noun “court.” Given the plain meaning of

“located,” it appears to the court that the parties intended to

limit their choice of forum to a court in the “State of California”

which is “located in Yolo County.” Because, as plaintiff notes,

there are no federal courts located in Yolo County, the parties

intended to limit jurisdiction to California State Courts located

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5 Defendant argues that the most that can be read into this

provision is that “it serves a geographic limitation (i.e., venue

selection) clause, through which the parties agreed to adjudicate

their claims only in those courts holding jurisdiction over Yolo

County, which necessarily includes this Court as well as the Yolo

County Superior Court.” Such a reading would require ignoring the

plain meaning of the word “located.”

6 Plaintiff also requests fees and costs for the motion to

remand, for a total of approximately $4000. Because there is lack

of clarity as to the forum selection clause, all parties are to

bear their own costs. 

9

in Yolo County.5 

While the court’s construction is not inevitable, “[a]ny

doubts about removability are resolved in favor of remanding the

case to state court.” Shamrock Oil & Gas Corp. v. Sheets, 313 U.S.

100, 108-09 (1941); Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th

Cir. 1992). 

 Accordingly, plaintiff’s motion to remand is GRANTED.6

IT IS SO ORDERED. 

DATED: May 25, 2005.

/s/Lawrence K. Karlton 

LAWRENCE K. KARLTON

SENIOR JUDGE

UNITED STATES DISTRICT COURT

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