Court Opinion

ID: 4122381
Source: CourtListenerOpinion
Date Created: 2017-02-01 19:01:00.072148+00
Date Added: 2024-06-11T07:46:22.056457
License: Public Domain

Case: 16-20384   Document: 00513858100   Page: 1     Date Filed: 02/01/2017

         IN THE UNITED STATES COURT OF APPEALS
                  FOR THE FIFTH CIRCUIT
                                                              United States Court of Appeals
                                                                       Fifth Circuit
                            No. 16-20384                             FILED
                          Summary Calendar                    February 1, 2017
                                                                Lyle W. Cayce
                                                                     Clerk

GRAND VIEW PV SOLAR TWO, LLC;
CENTAURUS RENEWABLE ENERGY, L.L.C.,

                                 Plaintiffs–Appellees
                                 Cross–Appellants,

versus

HELIX ELECTRIC, INCORPORATED/HELIX ELECTRIC OF NEVADA,
 L.L.C., J.V., a California Partnership;
HELIX RENEWABLES, A CALIFORNIA JOINT VENTURE;
HELIX ELECTRIC,
 A NEVADA LIMITED LIABILITY COMPANY OF NEVADA, L.L.C.,
 Agent of Heliz Electric, a Nevada Limited Liability Company,

                                 Defendants–Appellants
                                 Cross–Appellees.

              Appeals from the United States District Court
                   for the Southern District of Texas
     Case: 16-20384       Document: 00513858100          Page: 2     Date Filed: 02/01/2017

                                       No. 16-20384
Before JOLLY, SMITH, and GRAVES, Circuit Judges.
JERRY E. SMITH, Circuit Judge:

       Defendants appeal a remand to state court. 1 The district court decided
that it had no jurisdiction because defendants had granted “sole and exclusive”
jurisdiction to the state courts. Finding no error, we affirm.

                                               I.
       Plaintiff Grand View PV Solar Two, L.L.C. (“Grand View”), owns a solar
power project in Idaho. A second plaintiff, Centaurus Renewable Energy,
L.L.C. (“Centaurus”), is a producer of renewable energy. In the first half of
2015, Grand View entered into two contracts with the Helix Entities, which
have expertise in designing, equipping, and constructing solar power plants.
In August 2015, Centaurus and Helix Electric, L.L.C., entered into a third
agreement, the Mutual Confidentiality Agreement (“MCA”). At the time, Cen-
taurus was in the process of acquiring Grand View, which occurred in Septem-
ber 2015. Centaurus signed the MCA in anticipation of acquiring Grand View
and entering into a final agreement with the Helix Entities to construct the
solar power plant.

       The MCA requires the parties to maintain the confidentiality of certain
project-related materials. The parties and their “subsidiaries and affiliated
companies” consented to the following forum-selection clause (“FSC”):
    The Parties hereto hereby irrevocably and unconditionally consent to
    the sole and exclusive jurisdiction of the courts of Harris County in the
    State of Texas for any action, suit or proceeding arising out of or re-
    lating to this Agreement or the Proposed Transaction, and agree not to

       1 There are four defendants: Helix Electric, Incorporated/Helix Electric of Nevada,
L.L.C., J.V., a California Partnership (“Helix Partnership”); Helix Electric, Inc. (“Helix Elec-
tric”); Helix Renewables, a California Joint Venture (“Helix J.V.”); and Helix Electric of
Nevada, L.L.C., a Nevada Limited Liability Company (“Helix Electric, L.L.C.”). We refer to
defendants collectively as “the Helix Entities.”
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                                   No. 16-20384
   commence any action, suit or proceeding related thereto except in such
   courts. The Parties hereto further hereby irrevocably and uncondi-
   tionally waive any objection to the laying of venue of any action, suit or
   proceeding arising out of or relating to this Agreement in the courts of
   Harris County in the State of Texas, and hereby further irrevocably and
   unconditionally waive and agree not to plead or claim in any such court
   that any such action, suit or proceeding brought in any such court has
   been brought in an inconvenient forum.
        Negotiations between Centaurus and the Helix Entities soon broke
down.       In October 2015, Helix Electric’s president accused Centaurus of
breaching the MCA. Centaurus denied that charge. In November 2015, Cen-
taurus and Grand View sued the Helix Entities in Harris County state court,
alleging that the Helix Entities had breached their earlier contracts with
Grand View and, among other things, requesting a declaratory judgment to
determine rights under the MCA.

        In December 2015, the Helix Entities sued Grand View and Centaurus
in California federal court and removed the Texas state suit to the federal court
a quo. In January 2016, Centaurus and Grand View moved to remand, and
the district court agreed. The Helix Entities appeal. 2

                                         II.
        A contractual clause prevents removal where the clause amounts to a
“clear and unequivocal” waiver of removal rights. City of New Orleans v. Mun.
Admin. Servs., Inc., 376 F.3d 501, 504 (5th Cir. 2004). “A party may waive its
rights by explicitly stating that it is doing so, by allowing the other party the
right to choose venue, or by establishing an exclusive venue within the con-
tract.” Id. Ambiguous language cannot constitute a “clear and unequivocal”
waiver. Id. at 505–06. Under Texas law, a contract “is ambiguous when its

       We have jurisdiction to review remand orders that are based on FSCs. Waters v.
        2

Browning-Ferris Indus., Inc., 252 F.3d 796, 797 (5th Cir. 2001).
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                                       No. 16-20384
meaning is uncertain and doubtful or it is reasonably susceptible to more than
one meaning.” Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983) (citation omit-
ted). Because removal must be unanimous, a single defendant’s waiver of its
removal rights is enough to defeat removal. Brown v. Demco, Inc., 792 F.2d
478, 481 (5th Cir. 1986). “[A]ny doubt about the propriety of removal must be
resolved in favor of remand.” Gasch v. Hartford Accident & Indem. Co., 491
F.3d 278, 281–82 (5th Cir. 2007).

       Plaintiffs correctly allege that Helix Electric waived its removal rights
by agreeing in the MCA to “the sole and exclusive jurisdiction of the courts of
Harris County in the State of Texas for any action, suit or proceeding arising
out of or relating to this Agreement or the Proposed Transaction.” 3 The MCA’s
FSC is “clear and unequivocal”: It gives Harris County state courts exclusive
jurisdiction over disputes such as the one plaintiffs brought in that county.
Because Helix Electric, L.L.C., agreed to the MCA’s terms, it cannot remove,
and neither can its co-defendants.

       The Helix Entities claim that the MCA’s FSC does not bar them from
removing. They advance two theories. The first is that the words of the FSC
are ambiguous. The Helix Entities cite three grounds: (1) It is not clear what
“Proposed Transaction” means; (2) it is not evident whether Grand View quali-
fies as a subsidiary or affiliated company under the MCA; and (3) the FSC
omits the term “Proposed Transaction” from its waiver-of-objection sentence.
In fact, none of this renders the FSC ambiguous.

       Texas courts determine whether a clause is ambiguous “by looking at the

       3 Where an FSC grants exclusive jurisdiction to the “the Courts of Texas,” it is refer-
ring to Texas state courts, not just courts located in Texas. Dixon v. TSE Int’l, Inc., 330 F.3d
396, 398 (5th Cir. 2003) (per curiam). This FSC therefore refers to state courts in Harris
County.
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                                         No. 16-20384
contract as a whole in light of the circumstances present when the contract was
entered.” Coker, 650 S.W.2d at 394 (citation omitted). It is obvious from the
context that “Proposed Transaction” refers to the solar-power-plant project—
the proposed transaction that the parties were contemplating when the MCA
was drafted. Likewise, it is clear from the context that Grand View is a subsidi-
ary or affiliated company of Centaurus under the MCA. Though Centaurus
had not yet acquired Grand View when the parties entered into the MCA, the
contract was drafted in anticipation of Centaurus’s acquisition of Grand View. 4

       The Helix Entities draw the negative inference that the omission of “Pro-
posed Transaction” from one sentence of the FSC was meant to contradict the
previous sentence’s explicit statement vesting “sole and exclusive jurisdiction
. . . for any action, suit or proceeding arising out of . . . the Proposed Transac-
tion.” But this is not a reasonable interpretation. The Helix Entities read clear
language out of the contract on the basis of a negative inference.

       The Helix Entities’ second argument is that the FSC does not cover
Plaintiffs’ claims. They reason that those claims derive from the two contracts
Grand View entered into before the MCA took effect and therefore should be
governed by those contracts’ California FSCs. 5

       Again, we disagree. Plaintiffs’ claims relate to the “Proposed Trans-
action”—the plan to build a solar power plant in the Idaho desert. Moreover,
the lawsuit also relates to the MCA because plaintiffs are seeking a declaratory
judgment to establish an affirmative defense that Centaurus did not breach

       4 The Helix Entities cite VKK Corp. v. Nat’l Football League, 244 F.3d 114, 130 (2d
Cir. 2001), for the proposition that “affiliate” when used in a contract does not include com-
panies that became affiliated after the contract took effect. But the contract in that case
explicitly tied its operation to “the date of this Release.” Id. The instant FSC does not include
similar time-limited language.
       5   The California FSCs in the earlier contracts bind only the Helix Entities.
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                                 No. 16-20384
the agreement. Accordingly, those claims are governed by the MCA’s broadly
worded FSC.

                                      III.
      Plaintiffs petition for attorneys’ fees under 28 U.S.C. § 1447(c). The
usual rule is that courts can award fees under that subsection only where “the
removing defendant lacked objectively reasonable grounds to believe the re-
moval was legally proper.” Hornbuckle v. State Farm Lloyds, 385 F.3d 538,
541 (5th Cir. 2004) (internal quotation marks and citation omitted).

      We review the district court’s denial of fees for abuse of discretion. Gar-
cia v. Amfels, Inc., 254 F.3d 585, 587 (5th Cir. 2001). The court did not abuse
its discretion. In fact, the Helix Entities had an objectively reasonable basis
for seeking removal even if, in our view, that effort was ultimately misguided.

                                      IV.
      This FSC is similar to the one we examined in Ensco Int’l, Inc. v. Certain
Underwriters at Lloyd’s, 579 F.3d 442, 448–49 (5th Cir. 2009), in which we held
that where a FSC is unambiguous, language vesting “exclusive jurisdiction” in
a state court constitutes a waiver of removal rights. We reach the same con-
clusion here. The judgment of remand is AFFIRMED.

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