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TAMPA -- A forum selection clause in an agreement is too ambiguous, the U.S. District Court for the Middle District of Florida Tampa Division ruled April 17 as it denied a protein company’s motion to remand the case back to state court.
Ideal Protein of America, Inc. had asked a state court to file a declaratory judgment that would allow it to terminate its agreement with Allife Consulting, Inc. After Ideal Protein sued, Allife removed the case from the original state court to the current federal court.
Ideal Protein wanted the case remanded back to the state court, saying a selection clause in their agreement requires a state court to govern the case. However, the court agreed with Allife and denied Ideal Protein’s motion.
Although Ideal Protein argued that the clause was exclusive to Florida state courts, the court and Allife said that the clause was actually too broad and could include a federal or state court in Florida.
“The 11th Circuit has previously found the clause ‘the courts of the state of Florida’ to be ambiguous, because the clause does not clearly indicate whether it is referring to only Florida state courts, or also includes federal courts located in Florida,” said the district court. It agreed that the phrase is too ambiguous and said that wasn’t enough to remand the case back to state court.
Ideal Protein also argued that Allife hasn’t proved the amount in question is more than $75,000, which wouldn’t make the federal court a valid venue. Still, the court pointed out that Allife has proved the amount in question. It issued a memo that said Ideal Protein paid Allife more than $550,000 in fees last year and the consideration traded via the agreement is more than $250,000.
“The fact that Allife has not established that it definitely would have received specific payments exceeding $75,000 but for the agreement’s termination does not negate the court’s confidence in the amount-in-controversy calculation,” the court said.
Ultimately, it denied Ideal Protein’s motion to remand the case.
The two entered into a regional development consultant agreement in December 2014 and agreed that the contract would automatically renew in one-year terms. But the portion in question was a forum selection clause that reads:
“This agreement shall be governed by and interpreted, construed and performed exclusively in accordance with the internal laws in force in the state of Florida and the United States of America, without reference to or application of local rules of conflict of laws, and [Allife] hereby submits to and acknowledge that the exclusive jurisdiction of the courts of the state of Florida presiding in the county where [Ideal Protein’s] offices are located in the event of any disagreement with respect to the application or interpretation of this agreement.”