Peters v. C21 Investments, Inc. ( 2022 )

462
Argued and submitted September 28, general and supplemental judgments
reversed and remanded October 26, 2022
Jesse PETERS,
an individual, and
Kate Guptill, an individual,
Plaintiffs-Appellants,
v.
C21 INVESTMENTS, INC.,
a corporation incorporated under
the laws of British Columbia;
320204 US Holdings Corp., a Delaware corporation;
Phantom Brands LLC, an Oregon limited
liability company, dba Phantom Farms;
Swell Companies Limited, an Oregon corporation;
Robert Cheney, an individual;
Skyler Pinnick, an individual;
Eric Shoemaker, an individual;
Leonard Werden, an individual; and
Eco Firma Farms, LLC,
an Oregon limited liability company,
Defendants-Respondents,
and
Clinton HARRIS,
Defendant.
Clackamas County Circuit Court
19CV19273; A174918
520 P3d 920
In this civil action, plaintiffs Jesse Peters and Kate Guptill appeal from gen-
eral and supplemental judgments for defendants after the trial court dismissed for
lack of subject matter jurisdiction their amended complaint alleging tort claims
for intentional interference with business relations and intentional interference
with employment relations. Plaintiffs assign error to the trial court’s ruling that
a forum-selection clause in an agreement that plaintiffs had with a Canadian
corporation for the sale of their business was enforceable by these defendants,
who were not parties to the agreement containing the forum-selection clause.
Held: The trial court erred. The Court of Appeals engaged in a construction of the
text of the forum-selection provision and concluded that it applied only to claims
relating to the subject matter of plaintiffs’ agreement with the Canadian corpo-
ration and not to plaintiffs’ tort claims against defendants. The court therefore
reversed and remanded the general and supplemental judgments.
General and supplemental judgments reversed and remanded.
Cite as 322 Or App 462 (2022) 463
Douglas V. Van Dyk, Judge. (General Judgment)
Susie L. Norby, Judge. (Supplemental Judgment)
Matthew A. Goldberg argued the cause for appellants.
Also on the opening brief were Allison C. Bizzano and Lotus
Law Group, LLC. Also on the reply brief were Nicole C.
Gossett-Roxbury and Lotus Law Group, LLC.
Julie A. Smith argued the cause for respondents. Also on
the brief was Cosgrave Vergeer Kester LLP.
Before Tookey, Presiding Judge, and Egan, Judge, and
Kamins, Judge.
TOOKEY, P. J.
General and supplemental judgments reversed and
remanded.
464 Peters v. C21 Investments, Inc.
TOOKEY, P. J.
In this civil action, plaintiffs Jesse Peters and Kate
Guptill appeal from general and supplemental judgments for
defendants after the trial court dismissed for lack of subject-
matter jurisdiction their amended complaint alleging tort
claims for intentional interference with business relations
and intentional interference with employment relations.
As explained in more detail below, plaintiffs’ claims
arise out of a transaction in which plaintiffs agreed to sell
their interests in Eco Firma Farms LLC (EFF), an Oregon-
licensed recreational marijuana growing operation, to C21
Investments, Inc. (C21), a publicly traded Canadian corpora-
tion incorporated under the laws of the Province of British
Columbia, through its United States subsidiary, 320204
US Holdings, Corp (USH), a Delaware corporation. The
agreements memorializing the sale were subject to a share-
purchase agreement (SPA) that included a forum-selection
clause stating that the parties agreed that the courts of the
Province of British Columbia were the “exclusive forum”
for any litigation “in respect of the subject matter” of the
agreement.
Plaintiffs’ original complaint, filed in the Clackamas
County Circuit Court, named as defendants the above enti-
ties as well as the current defendants—Phantom Brands
LLC, d/b/a Phantom Farms, an Oregon limited liability com-
pany (Phantom), Phantom CEO Skyler Pinnick (Pinnick),
Swell Companies Limited, an Oregon corporation (Swell),
Swell CEO Eric Shoemaker (Shoemaker), Clinton Harris,
an employee of EFF, and other individuals not pertinent to
this appeal.
The trial court granted defendants’ motion to make
the original complaint more definite and certain and allowed
plaintiffs to replead. Plaintiffs then filed an amended com-
plaint, on which this appeal is based, naming only the cur-
rent defendants—Oregon entities Phantom and Swell, and
Oregon residents Shoemaker, Pinnick, and Harris—none
of whom were parties to the SPA that includes the forum-
selection clause.
Nonetheless, on the current defendants’ motion, the
trial court dismissed the complaint for lack of subject-matter
Cite as 322 Or App 462 (2022) 465
jurisdiction, based on the forum-selection clause. Plaintiffs
appeal from the general judgment dismissing their claims
and a supplemental judgment awarding attorney fees. We
conclude that the trial court erred in dismissing plaintiffs’
claims based on a lack of subject-matter jurisdiction and
therefore reverse both judgments.
Whether a court has subject-matter jurisdiction
over a particular proceeding is a question of law that we
review for legal error. State v. Hill, 277 Or App 751, 763, 373
P3d 162, rev den, 360 Or 568 (2016). In reviewing the trial
court’s ruling granting defendants’ motion to dismiss for
lack of subject-matter jurisdiction under ORCP 21 A(1),1 we
draw our summary of the relevant facts from the pleadings
and affidavits and assume the truth of all well-pleaded facts
alleged in plaintiffs’ amended complaint as supplemented
by the record, construing the pleadings and affidavits liber-
ally in favor of jurisdiction. See O’Neil v. Martin, 258 Or App
819, 828, 312 P3d 538 (2013) (in reviewing a trial court’s
grant of a motion to dismiss for lack of personal jurisdic-
tion, we assume the truth of all well-pleaded allegations in
the record and construe the pleadings liberally in support of
jurisdiction).
In 2018, plaintiffs sold their shares in EFF to C21
through C21’s United States subsidiary USH. The terms and
conditions of the sale were first set forth in a “term sheet”
and then memorialized in the SPA between plaintiffs, C21,
and USH.
Under a separate agreement incorporated into the
SPA, plaintiffs were to continue working for EFF after the
sale, with Peters serving as “Director of Oregon Operations”
and Guptill serving as EFF’s chief executive officer.
The SPA further included a forum-selection clause
that provided:
“Each of the Parties hereto irrevocably attorns [(con-
sents)] and submits to the exclusive jurisdiction of the
courts of the Province of British Columbia in respect of the
subject matter of this Agreement.”
1
ORCP 21 A has been renumbered, effective January 1, 2022. We cite to the
version of the rule in existence at the time the trial court issued its decision in
this case.
466 Peters v. C21 Investments, Inc.
Plaintiffs alleged in their amended complaint
that Peters’s role with EFF was to include recruiting other
Oregon cannabis businesses to join C21, and that a portion of
his compensation would be based on that success. Plaintiffs
alleged that Peters introduced C21 to other Oregon-licensed
recreational marijuana growing operations, including defen-
dants Phantom and Swell. Plaintiffs alleged that, shortly
before and after C21’s acquisition of EFF, defendants began
to exclude plaintiffs from the Oregon operations as well as
negotiations concerning C21’s acquisition of Oregon entities,
and to interfere with Peters’s efforts to attract entities to
C21. C21 removed Peters as manager of EFF, and replaced
him with Shoemaker, who plaintiffs had initially introduced
to C21.
Peters resigned from his position with EFF over
disputes concerning compensation and plaintiffs’ belief that
they were being excluded from the business, and Guptill was
fired from her position as CEO of EFF, allegedly as a result
of defendants’ interference. Plaintiffs then made a demand
on C21 to pay plaintiffs wages they believed were owed
under the various agreements. C21 rejected the demand,
and plaintiffs brought this action.
As previously noted, plaintiffs’ original complaint
had named as defendants C21, USH, and EFF, defen-
dants Phantom and Swell, defendants Harris, Pinnick,
and Shoemaker, and other individuals not involved in this
appeal. Those defendants moved to dismiss the complaint
for lack of subject-matter jurisdiction, based on the forum-
selection clause, or to make the complaint more definite and
certain. The trial court granted the motion to make the
complaint more definite and certain and allowed plaintiffs
to replead.
Also as noted, plaintiffs’ amended complaint names
as defendants only Phantom, Swell, Pinnick, Shoemaker,
and Clinton Harris. Those entities and individuals were
not parties to the SPA and associated agreements between
plaintiffs, C21, and EFF. For their first claim, plaintiffs
allege that Phantom, Swell, Pinnick, and Shoemaker inten-
tionally interfered with plaintiffs’ economic relations with
C21 and EFF:
Cite as 322 Or App 462 (2022) 467
“Phantom, Swell, Mr. Pinnick, and Mr. Shoemaker
intentionally interfered with Plaintiffs’ contracts, profes-
sional relationships, and business expectancies for the
improper purposes of, among others (i) ousting Plaintiffs
from their senior management roles within C21 and (ii) con-
spiring to ensure that the acquisition of EFF by C21 would
turn into a colossal tragedy and failure for Plaintiffs.
“Phantom, Swell, Mr. Pinnick, and Mr. Shoemaker
intentionally interfered with Plaintiffs’ contracts, profes-
sional relationships, and business expectancies through
improper means by: (i) repeatedly disparaging Peters
behind his back within his professional network and within
C21; (ii) working actively to exclude Peters from company
and industry happenings to the greatest possible extent;
(iii) misrepresenting to third-parties the true nature of
C21’s interest in Phantom and Swell; and (iv) knowingly
violating OLCC regulations.”
Based on the same underlying facts, for their sec-
ond claim, plaintiffs allege that defendants Phantom, Swell,
Pinnick, and Shoemaker interfered with plaintiffs’ employ-
ment relationships with C21.
Defendants Phantom, Swell, Pinnick, and Shoemaker
filed a new motion to dismiss under ORCP 21 A(1), for a
lack of subject-matter jurisdiction, asserting that all of the
claims depend on the existence of and arise “in respect of
the subject matter” of plaintiffs’ agreements with C21 and
EFF and, thus, that the forum-selection clause of the SPA
requires that the claims be brought in a court of the Province
of British Columbia.
The trial court granted the motion to dismiss and
entered a general judgment dismissing all defendants except
Harris,2 and subsequently awarded defendants their attor-
ney fees in a supplemental judgment. Plaintiffs appeal from
2
Harris was a former employee of EFF. In their amended complaint, plain-
tiffs alleged that Harris “coerced Plaintiffs through economic duress to give him
a 10% interest in [EFF] or risk seeing their economic prospects disintegrate
before their eyes,” and sought the recission of that agreement, the imposition
of a constructive trust, and restitution. Harris made a motion to dismiss plain-
tiffs’ claims against him based on the forum-selection provision, which the trial
court denied. Harris and plaintiffs then entered into a stipulated judgment of
dismissal without prejudice, and that judgment is not on appeal.
468 Peters v. C21 Investments, Inc.
the general judgment and from the supplemental judgment
awarding attorney fees.
Plaintiffs contend in their first and second assign-
ments of error that the trial court erred in dismissing their
claims against Phantom, Swell, Pinnick, and Shoemaker
based on the forum-selection clause of the SPA and asso-
ciated agreements between plaintiffs and C21, USH, and
EFF. Plaintiffs contend that their claims do not fall within
the forum-selection clause, because they are not contract
claims based on the agreements and because Phantom,
Swell, Pinnick, and Shoemaker were not parties to those
agreements nor are they intended beneficiaries. Phantom,
Swell, Pinnick, and Shoemaker respond that plaintiffs’
claims fall within the forum-selection provision, because the
alleged interference depends on the existence of plaintiffs’
agreements with C21, USH, and EFF.3
The court’s ruling relates to subject-matter juris-
diction. In Oregon, unless divested by statute or rule of
law, “circuit courts have subject matter jurisdiction over all
actions.” State v. Terry, 333 Or 163, 186, 37 P3d 157 (2001)
(citing Or Const, Art VII (Original), § 9 (stating that all juris-
diction not vested by law in another court shall be vested in
circuit courts); Or Const, Art VII (Amended), § 2 (not chang-
ing jurisdictional scheme set out in original Article VII)).
To divest the circuit courts of subject-matter jurisdiction,
the legislature must do so expressly. Specialty Risk Services
v. Royal Indemnity Co., 213 Or App 620, 625, 164 P3d 300
(2007).
There is no question that the Clackamas County
Circuit Court had subject-matter jurisdiction of the parties’
litigation. The question is whether the court was nonetheless
3
Defendants assert, as a preliminary matter, that the appeal should be dis-
missed because plaintiffs have failed to name C21, USH, and EFF as respondents
on appeal, noting that, despite not naming them as defendants in the amended
complaint, plaintiffs never sought to dismiss them from the case as permitted by
ORCP 54 A(1) (providing that “a plaintiff may dismiss an action in its entirety or
as to one or more defendants without order of court by filing a notice of dismissal
with the court and serving the notice on all other parties not in default not less
than 5 days prior to the day of trial if no counterclaim has been pleaded, or by fil-
ing a stipulation of dismissal signed by all adverse parties who have appeared in
the action”). We reject the assertion, as it appears that the general judgment did
in fact dismiss all defendants without prejudice, including C21, USH, and EFF.
Cite as 322 Or App 462 (2022) 469
required to relinquish its subject-matter jurisdiction because
of the forum-selection clause of the SPA. The parties devote
considerable briefing to the issue whether, as a matter of
contract construction, the forum-selection clause of the SPA
expresses the intention of the parties to the agreement that
it can be enforced by a nonsignatory to the agreement. But
we diverge from that issue preliminarily to consider a pro-
cedural issue not raised by the parties: whether an individ-
ual who is not a signatory to the agreement containing the
forum-selection clause may bring an ORCP 21 motion to dis-
miss based on the forum-selection clause.
In Reeves v. Chem Industrial Co., 262 Or 95, 101,
495 P2d 729 (1972), the Supreme Court had before it the
question whether a forum-selection clause requiring that
the parties’ disputes be litigated in Ohio was valid and could
provide a basis for dismissal of a claim brought in Oregon.
The court reviewed the development of the case law around
forum-selection clauses and concluded that, unless the court
determined that a forum-selection clause establishing an
exclusive forum for resolution of the parties’ disputes was
unfair or its enforcement was unreasonable, the provision
would be enforced by dismissing an action filed in a forum
not agreed to by the parties. The court quoted with approval
from the Restatement that enforcement of a forum-selection
provision would be unreasonable if “the forum chosen by the
parties would be a seriously inconvenient one for the trial
of the particular action.” Reeves, 262 Or at 98 (quoting com-
ment to 1 Restatement, Conflict of Laws (Second), § 80). The
court did not explicitly state in Reeves whether its ruling
was based on subject-matter jurisdiction. Indeed, the court’s
concluding paragraph suggested that its ruling was not
“jurisdictional.”4 Rather, the court explained, its decision
4
The opinion’s concluding paragraph states:
“It should be understood that we are not holding that such clause ‘ousted’
the Oregon court from jurisdiction. We are not deciding whether Oregon had
jurisdiction under the long-arm statute. We are holding that if Oregon has
jurisdiction the Oregon court nevertheless will dismiss the action because the
contract clause agreeing upon the courts of Cleveland, Ohio, as the place for
litigation over the contract is valid and should be enforced. This conclusion is
reached because there is no evidence that the clause is unfair or enforcement
would be unreasonable.”
Reeves, 262 Or at 101.
470 Peters v. C21 Investments, Inc.
was a matter of not exercising its jurisdiction to give effect to
the parties’ enforceable agreement that their disputes would
be litigated in Ohio. Id. at 101. Thus, the court’s emphasis
was on the enforceability of the parties’ agreement to liti-
gate in Ohio.
In Black v. Arizala, 337 Or 250, 266, 95 P3d 1109
(2004), the court addressed the cognizability of a motion
to dismiss under ORCP 21 A(1) for lack of subject-matter
jurisdiction based on a venue agreement. The court found
instructive to its interpretation of ORCP 21 A(1) the court’s
reasoning in Reeves that “the specific, private law estab-
lished by the parties’ valid agreement superseded the gen-
eral jurisdiction of the Oregon courts over claims for breach
of contract.” Black, 337 Or at 264 (emphasis added). The
court reasoned, based on Reeves, that “a conclusion of an
Oregon court that the parties’ venue agreement is valid and
enforceable is a legal determination that requires the court
to dismiss the action in response to a timely motion to dis-
miss for lack of jurisdiction over the subject matter.” Id.(emphasis added). The court studied the legislative history
of ORCP 21 A(1) and concluded that, although no statutory
provision expressly provides for the dismissal of a complaint
based on an agreement to litigate claims in a different
venue,
“ORCP 21 A(1) authorizes Oregon courts to dismiss an
action for lack of jurisdiction over the subject matter when
the motion is timely filed and the record demonstrates that
the parties have an enforceable agreement to litigate the
action in a different venue.”
Id. at 266 (emphasis added).
Thus, both Reeves and Black seem to emphasize
as a prerequisite to the enforceability of a forum-selection
clause an agreement by the parties to the specific litigation
that their disputes would be litigated in a selected forum.
The forum-selection clause of the SPA provides:
“Each of the Parties hereto irrevocably attorns [(consents)]
and submits to the exclusive jurisdiction of the courts of
the Province of British Columbia in respect of the subject
matter of this Agreement.”
Cite as 322 Or App 462 (2022) 471
(Emphasis added.) Textually, it is the parties to the SPA
who consented and agreed to the exclusive jurisdiction of
the Province of British Columbia. Defendants were not par-
ties to the SPA or the associated agreements; nor do they
have a separate forum-selection agreement with plaintiffs.
We note that courts of other jurisdictions have held
that, in limited circumstances, forum-selection provisions
may be enforced by or against nonsignatories. See, e.g., Tate
& Lyle Ingredients Ams., Inc. v. Whitefox Tech. USA, Inc., 98
AD 3d 401, 949 NYS 2d 375 (2012) (citing cases holding that
a nonsignatory can enforce a forum-selection clause when
its enforcement is “foreseeable by virtue of the relationship
between them,” and the nonsignatory has a “sufficiently close
relationship with the signatory and the dispute to which
the forum selection clause applied”); Hugel v. Corporation
of Lloyd’s, 999 F2d 206, 209 (7th Cir 1993); Manetti-Farrow,
Inc. v. Gucci Am. Inc., 858 F2d 509, 514 n 5 (9th Cir 1988)
(“We agree with the district court that the alleged conduct
of the non-parties is so closely related to the contractual
relationship that the forum selection clause applies to all
defendants.”); but see Cape Flattery Ltd. v. Titan Maritime,
LLC, 647 F3d 914, 924 (9th Cir 2011) (“The mere fact that
the tortious interference claims would not have arisen ‘but
for’ the existence of the Employment Agreements is insuffi-
cient to sweep those non-signatory claims into the ambit of
the forum selection clause in a contract they did not sign.”).
Assuming that we were to adopt the view that certain cir-
cumstances might justify enforcement of a forum-selection
clause by a nonsignatory to the agreement containing
the clause, the record here is not sufficiently developed to
determine whether the limited circumstances described in
those cases exist here. Thus, were we to resolve the case on
that basis, we would conclude that, under both Black and
Reeves, defendants are not entitled to enforce the forum-
selection provision, because they did not have an agreement
with plaintiffs to pursue claims in the Province of British
Columbia.
But we need not resolve that issue here, because
we conclude that, even if the SPA forum-selection provision
is enforceable by defendants as nonsignatories through a
472 Peters v. C21 Investments, Inc.
motion to dismiss for lack of subject-matter jurisdiction,
it would not apply to these particular claims by plaintiffs
under the terms of the provision itself. Thus, we turn to the
contract construction arguments discussed by the parties.
The forum-selection provision of the SPA states that the
parties to the agreement “submit[ ] to the exclusive juris-
diction of the courts of the Province of British Columbia in
respect of the subject matter of this Agreement.” (Emphasis
added.) On appeal, in defense of the trial court’s ruling,
defendants contend that a claim is “in respect of the subject
matter” of the agreements if agreements provide the under-
lying facts for the claims. Plaintiffs assert that the forum-
selection clause only applies when the claims originate from
the agreements, not when they arise from separate tortious
conduct.
In Black, the court said that, when parties have
agreed to litigate their dispute in a different forum,
whether, as a textual matter, the forum-selection provi-
sion requires dismissal of the particular litigation is to be
determined through a construction of the agreement. 337
Or at 267 (“The remaining question is whether the trial
court correctly determined that parties’ venue agreement
required dismissal.”). The forum-selection provision in
Black stated that “venue for any legal action arising from
this Agreement, including enforcement of any arbitra-
tion award, shall be in San Juan, Puerto Rico.” The court
explained in Black that the parties’ intentions, as expressed
in the provision, would determine whether particular liti-
gation was subject to the forum-selection provision. The
court turned to dictionary definitions to help in its deter-
mination whether the instant action was “arising from this
Agreement”:
“The dictionary defines the verb ‘arise’ to include ‘to orig-
inate from a specific source[,]’ ‘to come into being[,]’ and
‘to become operative[.]’ Webster’s Third New Int’l Dictionary
117 (unabridged ed 1993). The dictionary also explains that
‘from’ is ‘used as a function word to indicate the source or
original or moving force of something: as * * * (4) the place
of origin, source, or derivation of a material or immaterial
thing[.]’ Id. at 913. Applying those definitions, we conclude
Cite as 322 Or App 462 (2022) 473
that the parties’ agreement must be the specific place of ori-
gin or the source of the legal action to trigger application of
the venue agreement.”
Black, 337 Or at 267 (emphasis added; ellipsis and brackets
in Black).5
As in Black, our analysis requires that we determine
whether the parties to the SPA intended that the forum-
selection clause would apply to plaintiffs’ tort claims. The
ordinary rules of contract construction apply in determining
the applicability of the forum-selection clause. Black, 337 Or
at 267. We first determine whether the parties intended the
forum-selection clause to include the present controversy by
examining the text and context of the provision. Yogman
v. Parrott, 325 Or 358, 361, 937 P2d 1019 (1997); see also
Batzer Construction, Inc. v. Boyer, 204 Or App 309, 313, 129
P3d 773, rev den, 341 Or 366 (2006) (noting that, to deter-
mine whether a provision is ambiguous, the trial court may
consider the text in light of the circumstances underlying
the formation of the contract). If the provision is unambig-
uous, we construe the words of the contract as a matter of
law. Eagle Industries, Inc. v. Thompson, 321 Or 398, 405,
900 P2d 475 (1995). If we concluded that the forum-selection
clause applies, under Reeves, 262 Or at 98, we must then
determine whether application of the provision would be
unfair or unreasonable.
5
Because the particular contract at issue in Black was subject to Delaware
law, the court then referred to Delaware case law in determining whether the
parties’ contract was the “specific place of origin or the source” of the plaintiffs’
claims. The court referred for guidance to Parfi Holding AB v. Mirror Image
Internet, Inc., 817 A2d 149 (Del 2002), cert den, 538 US 1032, 155 L Ed 2d 1061,
123 S Ct 2076 (2003), in which the Delaware Supreme Court had considered the
meaning of an agreement requiring arbitration of disputes “arising out of or in
connection with this Agreement.” The Delaware court held that the provision
applied to actions seeking to enforce the rights and duties that the parties’ con-
tract created, not rights and duties created by sources of law external to the par-
ties’ contract. Black, 337 Or at 268. In Black, the court noted the noncontractual
nature of the alleged improper acts that were the sources of the rights and duties
that the plaintiffs’ action sought to enforce. Id. at 270. The court explained its
understanding of Delaware law that, although the plaintiffs’ claims may have
arisen from some or all the same facts that related to the parties’ contractual
transactions, because the sources of the claims were noncontractual, they did not
arise out of the contract. Id. Thus, the court concluded, although the agreement
could provide a source of information to the court in its analysis of the plaintiffs’
claims, the claims were not subject to the forum-selection provision. Id.474 Peters v. C21 Investments, Inc.
Our first task, then, is to determine whether plain-
tiffs’ claims are “in respect of the subject matter of” the
SPA and associated agreements. The phrase “in respect
of” is not defined in the SPA, so we give it its plain, natu-
ral, and ordinary meaning. See Copeland Sand & Gravel
v. Estate of Angeline Dillard, 267 Or App 791, 796, 341 P3d
187 (2014), adh’d to on recons, 269 Or App 904, 346 P3d 526
(2015) (“words in a contract should be given their plain and
ordinary meaning[,] and * * * dictionary definitions are one
source of that meaning”). Thus, as the court did in Black, we
refer to the dictionary for guidance. Webster’s Third New Int’l
Dictionary 1934 (unabridged ed 2002) defines the phrase “in
respect of” to include “as to : as regards : insofar as concerns
: with respect to,” and defines “respect” to include “a rela-
tion or reference to a particular thing or situation.” See also
Phillips Sisson Industries, Inc. v. Hysell, 317 Or App 440,
450, 506 P3d 1139 (2022) (citing definition). Thus, the forum-
selection provision applies to claims “as to” or “as regards”
or “with respect to” the specific subject matter of the SPA
and associated agreements. The “subject matter” of the SPA
and the associated agreements was the contractual agree-
ment between plaintiffs and C21 for the sale of plaintiffs’
shares in EFF and plaintiffs’ continued employment with
EFF. Thus, as we construe the forum-selection provision, it
was unambiguously intended by the parties to those agree-
ments to encompass disputes between them as to their spe-
cific contractual obligations for the sale of plaintiffs’ shares
in EFF to C21 and plaintiffs’ agreement to work for EFF.
Although the SPA and associated agreements are
tangential to and certainly provide background for plain-
tiffs’ current tort claims against defendants, the claims
themselves do not have as their bases the contractual obliga-
tions of the parties to those agreements; nor are the claims
as to the contractual subject matter of the agreements—the
sale of EFF and plaintiffs’ employment. Rather, the claims
concern defendants’ alleged tortious interference with those
agreements. Thus, we conclude that the claims themselves
are not “in respect of the subject matter” of the agreements.
Although the SPA and associated agreements could pro-
vide information to the court in its analysis of plaintiffs’
tort claims, we conclude that they do not require that the
Cite as 322 Or App 462 (2022) 475
claims be brought in the courts of the Province of British
Columbia.6
6
Defendants contend that our opinion in Livingston v. Metropolitan Pediatrics,
LLC, 234 Or App 137, 227 P3d 796 (2010), requires that we construe the SPA’s
forum-selection provision to be enforceable by defendants. In Livingston, the
plaintiff brought claims of interference with economic relationships against the
defendants, who were the plaintiff’s coworkers and who then sought to enforce
an arbitration clause contained in an employment contract between the plaintiff
and the employer, to which they were not parties. The arbitration clause pro-
vided: “Any controversy, dispute or disagreement arising out of or relating to this
Agreement, or the breach thereof, shall be resolved by arbitration.” The plaintiff
contended that, as nonsignatories to the employment contract, the defendants
had no right to enforce the arbitration provision. We disagreed. Id. at 149. We
noted the special rule of construction relating to arbitration clauses that requires
that an arbitration clause will apply if it can plausibly be so construed. Id. at 147.
We reasoned that the broad text of the arbitration clause could plausibly be con-
strued to apply to claims against nonsignatories. In light of that requirement and
in view of the presumption in favor of arbitration, we held that the clause applied
to the plaintiff’s claims:
“[T]he plain text of the clause—in particular, the ‘arising out of or relating
to’ language—does not limit its scope to controversies under the agreement
or between plaintiff and [the employer]. Furthermore, the employment agree-
ment provides the basis for and terms of plaintiff’s employment. The text of
the arbitration clause is reasonably susceptible to the interpretation that the
parties intended it to apply to any claim that plaintiff might have arising out
of or relating to his employment pursuant to the agreement.
“We conclude that the wording of the clause is also broad enough to
encompass claims against nonsignatories and to support the interpretation
that the parties intended that [the employer’s] employees and agents could
avail themselves of its terms. Furthermore, the claims against the individ-
ual nonsignatory defendants (intentional interference with economic rela-
tions, intentional infliction of emotional distress, and blacklisting) depend on
the same allegations made against [the employer] and have as their source
the identical circumstances of plaintiff’s claims against [the employer]—
defendants’ concerted response to plaintiff’s conduct relating to the vaccine
storage problem. We conclude, especially in light of the public policy favoring
arbitrability, see [Snow Mountain Pine, Ltd. v. Tecton Laminates Corp., 126
Or App 523, 869 P2d 369, rev den, 319 Or 36, 876 P2d 782 (1994)], that the
arbitration clause plausibly encompasses not only claims between the parties
to the agreement, but claims against the individual defendants that arise out
of or relate to plaintiff’s employment with [the employer].”
Id. at 150-51.
Livingston is thus distinguishable and is not precedent for the issue pre-
sented here. First, Livingston involved an arbitration clause and not a forum-
selection clause. It did not involve a motion to dismiss under ORCP 21 A(1) for
lack of subject-matter jurisdiction; the enforcement of an arbitration provision
does not implicate the court’s general subject-matter jurisdiction. Second, our
conclusion in Livingston was required because of a special rule of construction for
arbitration clauses that is not applicable here—whether the clause can plausibly
be interpreted to require arbitration. Id. at 147. Finally, had Livingston involved
a forum-selection provision rather than an arbitration clause, under Reeves, we
would have been required to also determine whether application of the provision
to the plaintiff’s claims against the defendants would be unfair or unreasonable.
476 Peters v. C21 Investments, Inc.
For that reason, the trial court erred in concluding
that plaintiffs’ claims must be dismissed because defen-
dants are entitled to assert that they can only be sued in the
courts of the Province of British Columbia.7 We therefore
reverse the general judgment. In light of our conclusion, we
also reverse the supplemental judgment awarding attorney
fees.
General and supplemental judgments reversed and
remanded.
7
In view of our conclusion that the forum-selection provision does not apply
to plaintiffs’ claims, we do not need to address whether application of the forum-
selection clause would be unfair or unreasonable. Reeves, 262 Or at 100-01 (hold-
ing that a contractual clause agreeing on an exclusive forum will not be enforced
if it is determined to be unfair or unreasonable).