2004 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit

10-27-2004 

# S p ec tr a com I nc v

. T yco I n tl I nc P r e c e de n t i al or N on-P r e c e de n t i al : N on-P r e c e de n t i al D ocke t N o . 03-3845

F o l lo w thi s a nd a dd it ion al work s at : h tt p://d i g it alc ommon s .l a w . v i l l a no va . e du/thir dc ir c uit_2004

Thi s de c i sion i s br ou gh t t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sit y S choo l of L a

w Di g it al Re posit or y

. It h as be e n a c c e pt e d for inclusion in 2004 D e c i sion s b y a n author i z e d a dmini s tr at or of V i l l a no va U nive r sit y S choo l of L a

w Di g it al Re posit or y

. F or mor e infor m at ion, p le as e c on t a ct Be n j a min . C a rl s on@l a

w . v i l l a no va . e du . Re c omme nde d C it at ion

" S pe ctr a c om I nc v

. T yc o I n tl I nc " (2004). 2004 D e cisio n s . P ape r 194. h tt p://d i g it alc ommon s .l a

w . v i l l a no va . e du/thir dc ir c uit_2004/194NOT PRECEDE NTIAL UNITED STATES COURT OF APPEALS FO R T HE TH IRD CIR CU IT

No. 03-3845

SPECTR ACO M, INC., on behalf of its elf and all ot hers si milarl y si tuate d, Appellant

v. TYCO INTERNATI ONAL, I NC.; ADT SECURI TY SERVI CES, INC.

APPEAL FROM THE UNI TED STATES DIST RICT COURT

FOR THE DISTRICT OF NEW JERSEY D.C. CivilNo. 03-cv-00686 Distric t Judg e: Th e H ono rable J erom e B. S iman dle

Submitte d Under Third Circ uit LAR 34.1(a)

September 30, 2004

Bef or e: ROTH, BARRY, and CH ER TO FF , Circuit Judges (Opinion Fi led: Oct ober 27, 2004)

OPI NION

BA RR Y, Circuit

Judge This appealinvolves the is sue of the pr oper venue for an acti on by pl ainti ff Spectrac om, Inc. (“Spectr acom”) agains t defendant s ADT Security Services , Inc.2

(“ADT”) and Tyco Internati onal, Inc. ( “Tyco”) . The District Court dis missed the acti on

so t ha t pl ai nti ff

ma y r ef i l e i t s c l ai ms i n ast ate c ou r t i n C ol or ad o. Pl ai nti ff ap pe al s. We wil l aff irm. I. Bec ause we write o nly for the parties in this m atter, w e w ill dispen se w ith a fu ll recit ation of

the fact s and li mit our di scussi on only to thos e facts necessary t o reach our decisi on. Spectracom and ADT entered int o a written contra ct, an “Authoriz ed Dealer Agreement,” under

which Spectra com sold ADT security sys tems to cus tomers and assigne d the homeowner contr acts exc lusi velyto ADT for a fee. The Authori zed Dealer Ag reem ent co ntaine d the f ollow ing fo rum selectio n clau se: Applicabl e Law, Juris dicti on and Venue . This Agreement shallbe construed and enforced i n accordance wit h the la ws of the st ate of Color ado app licab le to a gre em ents wh olly ex ecu ted a nd w hol ly perf orm ed th erein

. Any acti on or proceedi ng brought byeithe r party agai nst the other arisi ng out of or r elating to t

his agr eement shal l only be brought i n a court of com pete nt ju risdi ction loca ted in Ar apa ho C oun ty, Co lora do. Spectrac om initiall y br ought thi s acti on against defendants in the Superior Court of Ne w J erse y alleg ing , inter alia , that: (1) T yco, the p arent c om pany of AD T, inten tionally interfe red w ith the c ontrac t betw een S pectra com and A DT by indu cing A DT to brea ch its contrac t with aut

horized de alers ; and (2) ADT breached the contra ct. On February 12, 2003, defendant s removed the c ase to t he United States Dist

rict Court for t

he District of New Jersey under

28 U.S.C. § 1446 base d on divers ity juri sdiction. Accordi ng to the Joint D iscov ery Plan, o n M arch 4 , 2003 , a sche duling mee ting w as he ld du ring w hich:1 Defendants al so indi cated the foll owing in their repl y memorandum in s upport of t he mo tion to tra nsfe r: “W HE RE FO RE , for the reaso ns set f orth ab ove, D efen dants respectfully

request that t he Court tr ansfer t

his cas e to the United States District Court for the D istrict of C olo rad o pu rsua nt to 28 U .S.C . § 14 04( a) o r, alterna tively, dism iss it in favor of a Colorado forum .” (S A 1 24) (em pha sis ad ded ). 3 cou nse l for De fen dan ts ad vise d co uns el fo r Pla intif f of their inten t to fi le . . . at the tim e their re spon se to su ch am ende d com plaint is d ue, a m otion to trans fer venue t o the Unite d States Distri ct Court f or the Dis tri ct Court of Colorado pursuant to 28 U.S.C. § 1404 or alternativelyto dismiss the case pur sua nt to , inter alia , 28 U .S .C . § 1 40 6 f or im pr op er ve nu e. A cc or di ng ly, and as counselfor Defendants a dvised couns el for Pl ainti ff at the March 4, 200 3 sch edulin g m eeting , nothin g her ein, inclu ding but n ot limited to Defendants’ par

ticipation i n the March 4, 2003 sc heduling meeting, particip ation in this joint s ubm ission to the C ourt, pa rticipation in the A pril 1, 200 3 sch edulin g con feren ce be fore th e Co urt, agre eme nt to res pon d to discovery pr opounded by Pl ainti ff, or any other action, i s int ended to, or should be cons trued as , a waiver of Defendants’ pos iti on that t his action should ei ther be t

ransfer red to t he United States Dist

rict Court for t

he Distric t of C olorad o or d ismisse d in fa vor o f bein g refile d, if at all, in Co lora do. ( SA 130 -13 1). On Mar ch 2 5, 200 3, Spe ctra com f il ed a n ame nde d co mpl ai ntin whi ch i t a dde d RI CO claim s ag ains t Tyco

. De fend ants the n filed a notic e of in tent to su bm it a mo tion to tra nsfe r the ca se to the Dist rict Court of Colora do. In a foot note in t heir brief i n support of

the moti on, defe ndan ts alterna tively requ ested a dism issal of the ca se in fa vor o f a C olorad o state forum should t

he District Court

find that the f

orum select

ion clause mandates a

Colorado st at e fo ru m. 1 The Distric t Cou rt heard oral arg um ent, du ring w hich d efen dants ’ cou nsel ag ain indicated that “if

a trans fer is inappropriate , the n a motion t o dismis s under 12(b) (6)2 That claus e provided t hat an action “shal l only be brought i n a court of competent juri sdiction located in Arapaho County, Colorado. ” The Distri ct Court c oncluded that beca use th ere w as no fede ral cou rt sitting in A rapah o C oun ty, the clause referre d on ly to the s tate c our t in A rap aho Co unt y. 4 would be the appr opriate vehicl e.” (A10). The Distri ct Court di smissed t he acti on, fi ndi ng that

(1 ) the f or um s el ect

io n cl aus e pr eclude d l itig at io n i n an y fed er al forum; 2 and (2) d efe nda nts d id n ot w aive their righ t to en for ce th e fo rum sele ction clau se. Sp ectra com filed a tim ely ap pea l. W e ha ve ju risdi ction pur sua nt to 28 U .S.C . § 12 91. II. On appeal, Spect

racom does not chall enge the Dist rict Court’s f

inding t hat under the forum sel ecti on clause, this case may only be lit igate d in a st ate court in Arapaho County, Colorado. Inste ad, Spect racom contends that t

he District Court

erred i n finding that de fendants’ acti ons did not consti tute a

waiver of their right to enforce the forum select ion clause. Accordi ng to Spectr acom, defendant s waived their ri ght by (1) removing thecase from the Superior Court of New Jersey(an improper forum), to the Distri ct Court f

or the Dis tri ct of New Jersey(another improper for

um); and (2) making a

mo tion to tra nsf er th e ca se to a fe der al co urt in Co lora do ( ano ther imp rop er fo rum ). Defendants’ ac tions did not cons tit ute a waiver . Prel iminari ly , we note, as the District Cou rt noted, that the cases cited b y Spectracom do not ad dress w hether a defe ndan t waiv es a fo rum selectio n clau se by rem ovin g a ca se fro m an impro per fo rum to another i mproper forum. Rather, the case s merely indicate that, unde r a forum sel ecti on3 The Joint D iscov ery Plan is fou nd at p p. 128 -31 o f the S upp leme ntal A ppen dix

app ellee s ha ve s oug ht lea ve to file. W e w ill gra nt th at m otio n on ly as to p p. 12 8-3 1. 5 clau se, a def end ant m ay w aive its rig ht to rem ove a ca se f rom a pr ope r fo rum . See, e. g. , Foster v. Chesapeake Ins. Co., Ltd. , 933 F .2d 12 07, 12 16-1 7 (3d Cir. 19 91) (th e right to

remo ve m ay be w aived und er a fo rum selectio n clau se); Karl Koch Erecti ng Co. v. New York Convention Ctr. Dev. Corp. , 838 F.2d 656, 659 (2d Cir. 1988) (byenteri ng into a forum selec tion cl ause that provided t

hat no action shal l commence except i n the New Yo rk S tate S upr em e C our t, def end ant w aive d its r igh t of r em ova l to fe der al co urt). As the Firs t Circui t observed in Lambert v. Ky sar , the fili ng of a removal pet iti on in a diversity action does no t constitute a wa iver. 983 F.2d 1110, 11 13, n.2 (1st C ir. 1993) (“I t is well set

tled t hat the fili ng of a removal pet iti on in a dive rsit

y act ion, wit hout

mo r e, do es no t wa i ve t he r i gh t t o o bj ec t i n f ed er alco urt t o the st ate c ou r t ve nu e. ”)

. We agree. Moreover, therecord s upports t he District Court ’s fi nding that defendants did not waive their right to enforce the forum selection clause. Ind eed, the D istrict Court observed that it

had not been shown that defendant s “have been anything ot her than forthright i n their

intent ions i n seeking di smissalor tr ansfer. ” Op. at 34. The Joint DiscoveryPlan, whic h was signed byboth parties, specifi call y i ndicat ed that “nothing herein . . . i s int ended to, or should be construed as, a wai ver of Defendants ’ posit ion that this acti on should ei ther be t ransfer red to t he United States Dist

rict Court for t

he District of C olo rad o or dism issed in fa vor of b eing refi led, if at all, in Co lora do.” 3 In addition,4 Implicit in this conclusion is the fact that we have co nsidered an d rejected plaintiff’s

motion t o dismis s for mootnes s. Even i f the cas es at i ssue were dupl icative, and we do not reach that issue, the fili ng of a duplicative action in another forum does not moot the first actio n. 6 defendants stated during or al argument , and i n their memorandum of law to the Dist rict Court, t hat if a trans fer was inappr opriate, the case shoul d be dismis sed in favor of a Co lora do s tate c our t. Cf. Salovaara v. Jacks on Nat’l Li fe Ins. Co. , 246 F.3d 289, 298 (3d Cir. 2001) (“Transfer is not avail able, however, when a forum selection cl ause specifies a

non -fede ral foru m. In th at case , it seem s the d istrict cou rt wo uld h ave n o cho ice bu t to dism iss the a ction so it can b e filed in the a ppro priate f orum so lon g as d ismissa l wo uld be in th e intere sts of ju stice.”). A ccord ingly, def enda nts did not w aive th eir right to enf orc e the for um sele ction clau se, a nd t he d ism issal of th e ac tion wa s pro per . III. For th e fore goin g reas ons, w e w ill affirm the jud gm ent of the D istrict Co urt. 4