Removal, Unanimity, and a State-Court Forum Clause
Ridgeview LLC, an Idaho company, signed a two-year distribution agreement with Cascade Trading LLC, a Washington company, to sell $120,000 of outdoor equipment. The agreement selected Idaho law and 'the state courts of Idaho' as the exclusive forum. Cascade's president, Dana Whitcomb, a Washington resident, personally guaranteed $30,000 of Cascade's debt. After Cascade missed two shipments, Ridgeview sued Cascade and Whitcomb in Idaho state court for breach of contract and fraud. Cascade filed a notice of removal 45 days after service, asserting diversity jurisdiction. Whitcomb did not consent to removal. Cascade has no Idaho office or employees, but its website generated 214 orders and $86,000 in Idaho revenue last year. Ridgeview moves to remand. Cascade argues that the forum-selection clause does not affect removal and that Whitcomb's consent is unnecessary because the fraud claim is separate.
1. Should the Idaho federal court remand the case? Analyze the unanimity rule and the forum-selection clause.
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Conclusion: remand is required. Removal requires every defendant served with process to join in or consent to the notice of removal. Under 28 U.S.C. § 1446(b)(2)(A), Whitcomb's failure to consent is a procedural defect, and it does not matter that the fraud claim is analytically separate from the contract claim against Cascade. The unanimity rule applies defendant by defendant, not claim by claim. Ridgeview must move to remand within 30 days under § 1447(c); the prompt says it moves, so the defect is timely raised. The forum-selection clause supplies an independent reason. A mandatory clause choosing 'the state courts of Idaho' is strong evidence that Cascade waived removal; many courts enforce such a clause by remanding or transferring. Cascade's contrary argument confuses personal jurisdiction with removal procedure. Even if the clause were only a contractual promise, Ridgeview can enforce it, and the clause reinforces the remand result. The federal court should remand rather than decide the merits.
2. Assume removal was proper. Does the federal court have personal jurisdiction over Cascade?
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Conclusion: yes, specific jurisdiction exists. The constitutional question is whether Cascade purposefully availed itself of the Idaho market and whether the claim arises out of or relates to those contacts. Cascade contracted with an Idaho company for a two-year distribution relationship worth $120,000, and its website generated 214 orders and $86,000 in Idaho revenue in one year. Those are deliberate, sustained contacts with Idaho, not accidental ones. The breach-of-contract claim arises directly from the Idaho distribution agreement, so relatedness is satisfied. The reasonableness factors also favor jurisdiction: Idaho has an interest in protecting its resident company, the contract selected Idaho law and an Idaho forum, and Cascade can hardly claim surprise at defending where it deliberately sold goods. The fact that Cascade has no Idaho office or employees is not dispositive; physical presence is not required for specific jurisdiction. A court would likely uphold jurisdiction over Cascade.
3. If the court remands, may Ridgeview's fraud claim against Whitcomb proceed in Idaho state court? Identify any jurisdictional obstacle.
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Conclusion: the record is insufficient to establish personal jurisdiction over Whitcomb. A state court still needs minimum contacts between Whitcomb and Idaho. Whitcomb's guarantee of Cascade's $30,000 debt to an Idaho creditor is a relevant contact, but a single guaranty does not automatically show purposeful availment. Ridgeview would need facts showing that Whitcomb reached into Idaho-negotiating the guarantee there, directing payments or communications to Idaho, or otherwise invoking Idaho law and benefits. The fraud claim must also arise from or relate to those Idaho contacts; if the alleged fraud concerned statements made entirely in Washington, the relatedness showing is weaker. The state court should permit jurisdictional discovery rather than assume jurisdiction from the guarantee alone. If no purposeful availment is shown, the fraud claim must be dismissed or severed, even though the contract claim against Cascade remains in Idaho.