Removal, a Forum-Selection Clause, and a Later Non-Diverse Defendant
Marla, a Pittsburgh citizen, signs a consulting agreement with Vector Analytics, an Ohio corporation headquartered in Columbus with no Pennsylvania office or employees. The agreement contains a clause: 'The parties irrevocably consent to the exclusive jurisdiction of the Court of Common Pleas of Allegheny County, Pennsylvania.' Vector allegedly fails to deliver two data modules, and Marla sues in Allegheny County for $140,000. Vector removes to the U.S. District Court for the Western District of Pennsylvania based on diversity. Marla moves to remand, arguing that the forum-selection clause waived Vector's right to remove. While that motion is pending, Marla seeks leave to amend her complaint to add Dan, a Pennsylvania citizen and former Vector employee, as a co-defendant on a state-law tortious interference claim. Vector opposes the amendment, asserting that Dan was fraudulently joined because the complaint contains only conclusory allegations about his conduct. The court must decide the remand motion and the amendment.
1. Marla argues that the forum-selection clause makes removal improper and requires remand. Is she correct? Explain the proper procedural treatment of the clause.
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No. Removal is governed by 28 U.S.C. § 1441(a), which asks whether the federal court would have had original jurisdiction. Marla is a Pennsylvania citizen; Vector is an Ohio corporation with its principal place of business in Ohio, so complete diversity exists, and $140,000 exceeds the $75,000 amount-in-controversy requirement. A forum-selection clause does not defeat removal jurisdiction. In Atlantic Marine Construction Co. v. U.S. District Court, the Supreme Court held that such a clause is enforced through 28 U.S.C. § 1404(a) transfer or forum non conveniens, not through remand. Because the clause selects a Pennsylvania state court, § 1404(a) cannot transfer the case to that court; the district court may instead consider dismissal under forum non conveniens or retain the case and treat the clause as a contractual waiver. The remedy is not remand. Marla's motion should be denied on that ground, without prejudice to Vector's motion to enforce the clause.
2. How should the court decide whether to permit the amendment adding Dan, and what happens to federal jurisdiction if joinder is allowed?
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Under 28 U.S.C. § 1447(e), when a plaintiff seeks to join a nondiverse defendant after removal, the court has discretion either to deny joinder or to permit joinder and remand. The court considers whether the purpose is to defeat diversity, whether the plaintiff has stated a colorable claim against the nondiverse defendant, and other equitable factors. The fraudulent-joinder inquiry asks whether there is no reasonable basis in law or fact for the claim; conclusory allegations are weak, but specific factual allegations that Dan, a Pennsylvania citizen, sent the interfering emails from Pennsylvania would give a reasonable basis. If Marla pleads only labels, the court may deny joinder. If joinder is permitted, Dan and Marla are both Pennsylvania citizens, complete diversity is destroyed, and the court must remand the entire case. The forum-selection clause reinforces the state-court forum.
3. Assume the case stays in federal court. Does the clause or Vector's conduct support personal jurisdiction in Pennsylvania?
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A forum-selection clause can be a consent to personal jurisdiction in the selected forum, but this clause names the Allegheny County Court of Common Pleas, not the federal court. Whether it consents to federal jurisdiction is a contract question; the safer analysis is the Pennsylvania long-arm statute, 42 Pa.C.S. § 5322, and due process. Vector contracted with a Pennsylvania resident, communicated about performance, and allegedly failed to deliver modules into Pennsylvania. A single contract with a resident is not automatically purposeful availment under Burger King; the court looks for prior negotiations, contemplated future consequences, the terms of the contract, and the actual course of dealing. The exclusive Pennsylvania forum clause shows Vector contemplated Pennsylvania and is strong evidence of purposeful availment. Even if the clause does not itself consent to federal court, it supports minimum contacts, and the exercise of jurisdiction is reasonable. The federal court may exercise jurisdiction if the Pennsylvania state court could.