City of Albany v. Ch2m Hill, Inc. , 924 F.3d 1306 ( 2019 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CITY OF ALBANY, an Oregon No. 18-35283
municipal corporation,
Plaintiff-Appellee, D.C. No.
6:18-cv-00073-
v. AA
CH2M HILL, INC., a Florida
corporation, OPINION
Defendant-Appellant.
Appeal from the United States District Court
for the District of Oregon
Ann L. Aiken, District Judge, Presiding
Argued and Submitted May 13, 2019
Portland, Oregon
Filed May 29, 2019
Before: N. Randy Smith, Paul J. Watford,
and Ryan D. Nelson, Circuit Judges.
Opinion by Judge Watford
2 CITY OF ALBANY V. CH2M HILL
SUMMARY *
Contracts/Remand Orders
The panel affirmed the district court’s order granting the
City of Albany’s motion to remand this case to state court
based on a venue-selection clause in its contract with CH2M
Hill, Inc., an engineering firm incorporated in Florida.
The City of Albany brought an action for breach of
contract against CH2M Hill Inc., in the Circuit Court for
Linn County, Oregon. CH2M removed the case to federal
court based on diversity of citizenship. The City moved to
remand the case to state court, based on the venue-selection
clause in the contract, which provided that the venue for
litigation would be in Linn County, Oregon.
The panel first noted that, while an order remanding a
case to state court ordinarily is not reviewable, it was
permitting review based on the parties’ venue-selection
agreement. The panel held that an agreement limiting venue
for litigation to a particular county unambiguously prohibits
litigation in federal court when there is no federal courthouse
located in the designated county. The panel therefore
concluded that the venue-selection clause at issue here
precluded litigation in federal court because no federal
courthouse was located in Linn County. Accordingly, the
only way to effectuate the parties’ agreement was to limit
venue for litigation to the state court in Linn County.
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
CITY OF ALBANY V. CH2M HILL 3
COUNSEL
Thomas W. Sondag (argued), Peter D. Hawkes, and Charles
F. Hudson, Lane Powell PC, Portland, Oregon, for
Defendant-Appellant.
Paul S. Bierly (argued), Anit K. Jindal, and Kerry J.
Shepherd, Markowitz Herbold PC, Portland, Oregon, for
Plaintiff-Appellee.
OPINION
WATFORD, Circuit Judge:
The City of Albany brought this action in the Circuit
Court for Linn County, Oregon, alleging that CH2M Hill,
Inc., an engineering firm incorporated in Florida, breached
its contract to provide engineering services to the City.
CH2M removed the case to federal court based on diversity
of citizenship. The City moved to remand the case back to
state court based on the venue-selection clause in the parties’
contracts. The district court granted the City’s motion, and
CH2M has appealed. While an order remanding a case to
state court ordinarily is not reviewable, see 28 U.S.C.
§ 1447(d), we permit review when remand was based on a
venue-selection agreement. See Kamm v. ITEX Corp.,
568 F.3d 752, 754–55 (9th Cir. 2009). Because we conclude
that the parties’ venue-selection agreement unambiguously
precludes litigation of this case in federal court, we affirm
the district court’s remand order.
The contracts at issue contain identical venue-selection
clauses that provide: “Venue for litigation shall be in Linn
County, Oregon.” Notwithstanding this provision, CH2M
4 CITY OF ALBANY V. CH2M HILL
removed the case under 28 U.S.C. § 1441 to the United
States District Court for the District of Oregon. Linn County
lies within the district court’s Eugene Division, but there is
no federal courthouse located in Linn County. The federal
courthouse is located in the City of Eugene, which is in Lane
County. Despite the absence of a federal courthouse in Linn
County, CH2M contends that the venue-selection clause is
ambiguous as to whether removal to federal court is
permitted. CH2M argues that a federal court may reasonably
be deemed to be “in” a county merely by virtue of its judicial
authority over cases that arise in that county.
We have not previously decided whether removal to
federal court is permitted when a venue-selection clause
provides that litigation shall occur “in” a county in which no
federal courthouse is located. Contrary to the City’s
contention, we did not resolve that issue in Docksider, Ltd.
v. Sea Technology, Ltd., 875 F.2d 762 (9th Cir. 1989). In
that case, we considered a venue-selection clause selecting
Gloucester County, Virginia, as the sole venue for any action
under the contract, and it happened to be the case that no
federal courthouse was located in Gloucester County. We
ultimately held that the clause “clearly designates the state
court in Gloucester County, Virginia, as the exclusive
forum.” Id. at 764. But the question in Docksider was
whether the venue-selection clause at issue was mandatory
or permissive. Our decision did not mention the fact that
there was no federal courthouse in Gloucester County, much
less consider whether a federal court located outside of
Gloucester County, but encompassing that county within its
jurisdiction, might be an appropriate forum.
More instructive is our decision in Simonoff v. Expedia,
Inc., 643 F.3d 1202 (9th Cir. 2011). There, we considered a
forum-selection clause limiting venue to the “courts in King
CITY OF ALBANY V. CH2M HILL 5
County, Washington.” Id. at 1205. The parties disputed
whether that clause limited venue to the state court in King
County, or whether it also permitted venue in the federal
district court located in King County. We noted that the
word “in” imposes a geographic limitation, and that “when
a federal court sits in a particular county, the district court is
undoubtedly ‘in’ that county.” Id. at 1206. We therefore
held that “a forum selection clause that vests ‘exclusive
jurisdiction and venue’ in the courts ‘in’ a county provides
venue in the state and federal courts located in that county.”
Id. at 1207; accord Alliance Health Group, LLC v. Bridging
Health Options, LLC, 553 F.3d 397, 400 (5th Cir. 2008);
Global Satellite Communication Co. v. Starmill U.K. Ltd.,
378 F.3d 1269, 1272 (11th Cir. 2004).
We had no occasion in Simonoff to decide the question
presented here, since a federal courthouse was in fact located
in the county designated by the parties. Given our emphasis
in Simonoff on the location where a federal court sits,
however, we think the answer to the question before us is
straightforward: An agreement limiting venue for litigation
to a particular county unambiguously prohibits litigation in
federal court when there is no federal courthouse located in
the designated county. The clear import of the venue-
selection clause at issue in this case was to ensure that any
litigation arising out of the contracts would take place within
the geographic boundaries of Linn County. If the case
proceeded in federal court, litigation would instead occur in
Lane County. Thus, permitting CH2M to remove the case
to federal court would violate the plain terms of the parties’
agreement.
Our holding is in accord with decisions of the Second
and Fourth Circuits. Faced with similar venue-selection
clauses and the absence of a federal courthouse in the county
6 CITY OF ALBANY V. CH2M HILL
designated by the parties, those circuits also held that
litigation in federal court was unambiguously barred.
Bartels v. Saber Healthcare Group, LLC, 880 F.3d 668, 674
(4th Cir. 2018); Yakin v. Tyler Hill Corp., 566 F.3d 72, 76
(2d Cir. 2009). In Yakin, the Second Circuit so held even
though there was a federal courthouse in the designated
county at the time of the parties’ agreement; by the time the
plaintiff brought suit, though, the courthouse had closed. See
Yakin, 566 F.3d at 74. The Second Circuit’s holding
illustrates that the effect of a venue-selection clause
providing for litigation “in” a particular county is to ensure
that litigation occurs within the geographic boundaries of
that county—nothing more, nothing less.
In short, the venue-selection clause at issue here
precludes litigation in federal court because no federal
courthouse is located in Linn County. Accordingly, the only
way to effectuate the parties’ agreement is to limit venue for
litigation to the state court in Linn County.
AFFIRMED.