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Excentus Corporation v. Giant Eagle, Inc.

United States District Court, W.D. Pennsylvania

March 10, 2014

EXCENTUS CORPORATION, Plaintiff,
v.
GIANT EAGLE, INC., DAVID SHAPIRA, DANIEL SHAPIRA, Defendants.

OPINION

JOY FLOWERS CONTI, Chief District Judge.

I. Introduction

On November 26, 2013, the court denied the Motion for Leave to File Answer to Plaintiff's Amended Complaint and Amended Counterclaims (the "motion for leave to amend") (ECF No. 106) filed by defendant and counterclaim plaintiff Giant Eagle, Inc. ("Giant Eagle"). (ECF Nos. 125, 126.) In the motion for leave to amend, Giant Eagle sought leave of court to add a declaratory judgment action to its counterclaims seeking a declaration that, pursuant to stock purchase agreements entered into between Giant Eagle and plaintiff Excentus Corporation ("Excentus"), Excentus is required to obtain Giant Eagle's consent prior to exercising its option under a stock repurchase agreement between Excentus and Alliance Data Systems, Inc. ("ADS"). At a hearing on November 25, 2013, the court determined that permitting Giant Eagle leave to amend would be futile because this court was not the proper forum for Giant Eagle's declaratory judgment action pursuant to the forum selection clause contained in the stock purchase agreements. On November 26, 2013, the court issued an opinion and order denying Giant Eagle's motion for leave to amend. (ECF Nos. 125, 126.)

On December 2, 2013, Giant Eagle filed a motion for reconsideration of the court's decision denying its motion for leave to amend and a brief in support of the motion. (ECF Nos. 129, 130.) On December 3, 2013, Excentus filed a response in opposition to Giant Eagle's motion for reconsideration, and a brief in support of the response. (ECF Nos. 131, 132.) On December 12, 2013, the court issued a memorandum opinion and order granting Giant Eagle's motion for reconsideration. The court reasoned that its decision denying Giant Eagle's motion for leave to amend required reconsideration to "correct a clear error of law" in light of the Supreme Court's decision in Atlantic Marine Construction Company, Inc. v. United States District Court for the Western District of Texas , 134 S.Ct. 568 (2013); Waye v. First Citizen's Nat'l Bank , 846 F.Supp. 310, 313-14 (M.D. Pa. 1994), aff'd, 31 F.3d 1175 (3d Cir.1994) (motion to reconsider "must rely on at least one of three grounds: 1) an intervening change in controlling law, 2) the availability of new evidence not previously available, or 3) the need to correct a clear error of law or prevent manifest injustice."). In denying Giant Eagle's motion for leave to amend, the court held granting Giant Eagle leave to amend would be futile under Federal Rule of Civil Procedure 12(b)(3) because this court is not the proper forum for Giant Eagle's proposed counterclaim. In the memorandum opinion granting Giant Eagle reconsideration of that decision, the court recognized that under Atlantic Marine, a forum selection clause does not render an otherwise proper venue improper. The Court in Atlantic Marine held:

Section 1404(a) and Rule 12(b)(3) allow dismissal only when venue is "wrong or improper." Whether venue is "wrong" or "improper" depends exclusively on whether the court in which the case was brought satisfies the requirements of federal venue laws, and those provisions say nothing about a forum-selection clause.
...
Whether the parties entered into a contract containing a forum-selection clause has no bearing on whether a case falls into one of the categories of cases listed in §1391(b). As a result, a case filed in a district that falls within §1391 may not be dismissed under §1406(a) or Rule 12(b)(3).

Atlantic Marine , 134 S.Ct. at 577. The court in this case reasoned that because there was no dispute that this court is a proper venue for Giant Eagle's proposed counterclaim under 28 U.S.C. § 1391, the court erred under Atlantic Marine when it denied Giant Eagle's motion for leave to amend based upon this court being the "wrong" or "improper" forum for the counterclaim. The court granted Giant Eagle's motion for reconsideration on that basis.

The court noted, however, that Excentus was not without redress to enforce an otherwise valid forum selection clause entered into by the parties. As the Supreme Court held, "a forum-selection clause may be enforced by a motion to transfer under §1404(a)." Atlantic Marine , 134 S.Ct. at 575. Section 1404(a) provides:

(a) For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.

28 U.S.C. § 1404(a). The Supreme Court instructed that "[w]hen a defendant files [a motion to transfer venue to enforce a forum selection clause]...a district court should transfer the case unless extraordinary circumstances unrelated to the convenience of the parties clearly disfavor a transfer." Atlantic Marine , 134 S.Ct. at 575.

On January 2, 2013, Excentus filed a motion to sever and transfer Giant Eagle's counterclaims and brief in support of the motion. (ECF Nos. 147, 148.) Excentus' motion to sever and transfer is not limited to the proposed counterclaim in issue in the motion for leave to amend; Excentus requests the following counterclaims be severed and transferred to the United States District Court of the Northern District of Texas, Dallas Division:

• Counterclaim VI-Breach of Section 8.07 of the stock purchase agreements
• Counterclaim VII-Recovery of Attorney's Fees Under Texas Code
• Counterclaim VIII-Breach of Section 7.01 of the stock purchase agreements
• Counterclaim IX-Breach of Section 5.07 of the stock purchase agreements
• Counterclaim X-Breach of Section 3.09 of the stock purchase agreements; and

• Counterclaim XII-Declaratory Judgment Regarding Excentus' Breach of Section 5.02 of the stock purchase agreements

(ECF No. 145.) The foregoing counterclaims are counterclaims asserted by Giant Eagle that arise from the stock purchase agreements entered into by the parties. (Id.) On January 21, 2013, Giant Eagle filed a response in opposition to Excentus' motion to sever and transfer and a brief in support of the response. (ECF Nos. 161.) On February 21, 2013, Excentus with leave of court filed an unopposed motion for leave to file a reply brief to its motion to sever and transfer and attached the proposed reply brief to the motion. (ECF No. 164.) On February 18, 2013, Giant Eagle with leave of court filed a surreply brief to Excentus' motion to sever and transfer. (ECF No. 172.)

In its motion to sever and transfer, Excentus argues the six counterclaims listed above should be transferred to the United States District Court of the Northern District of Texas, Dallas Division U.S.C. § 1404(a). In the alternative, Excentus argues the court should dismiss those counterclaims for failing to state a claim upon which relief cam be granted, pursuant to Federal Rule of Civil Procedure 12(b)(6). According to Excentus, the Court in Atlantic Marine did not address or preclude the possibility that a forum selection clause may be enforced by a party filing a motion to dismiss under Rule 12(b)(6).

In its responsive submissions, Giant Eagle argues: Texas law controls the dispute between the parties and requires the counterclaims in this case to be tried in the Western District of Pennsylvania; 28 U.S.C. §1404(a) does not apply to counterclaims; Federal Rule of Civil Procedure 21 with respect to severance weighs heavily against severance in this case; and the counterclaims in ...


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