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Championship Tournaments, LLC v. United States Youth Soccer Association, Inc.

United States District Court, D. Maryland

February 8, 2019

CHAMPIONSHIP TOURNAMENTS, LLC Plaintiff
v.
UNITED STATES YOUTH SOCCER ASSOCIATION, INC., et al. Defendants

          MEMORANDUM OPINION

          Ellen L. Hollander United States District Judge.

         Championship Tournaments, LLC, d/b/a Elite Tournaments (“Elite”), filed suit in the Circuit Court for Howard County against United States Youth Soccer Association, Inc. (“USYSA”); United States Youth Soccer Association, Inc. d/b/a U.S. Youth Soccer; United States Youth Soccer Association, Inc. d/b/a/ U.S. Youth Soccer Region I; United States Youth Soccer Association, Inc. d/b/a Eastern Regional League; and United States Youth Soccer Association, Inc. d/b/a U.S. Youth Soccer Region I - Eastern Regional League. ECF 1-3 (the “Complaint”). Plaintiff alleges “Breach of Contract” (Count I); “Anticipatory Breach of Contract” (Count II); and “Declaratory Judgment” (Count III). Id. at 11-16.

         On the basis of diversity jurisdiction, USYSA removed the case to this Court, pursuant to 28 U.S.C. §§ 1332. ECF 1, ¶ 5. Now pending is plaintiff's Motion for Remand. ECF 12. The motion is supported by a memorandum of law (ECF 12-1) (collectively, the “Motion”), along with exhibits. See ECF 12-2 to ECF 12-4.[1]

         Plaintiff alleges that the removal violates a forum selection clause contained in the “Memorandum of Understanding” at issue in this case. See ECF 12-2 (the “Contract”). Further, Elite claims the Notice of Removal was not timely filed within the 30-day period established under 28 U.S.C. § 1446. USYSA opposes the Motion (ECF 15, the “Opposition”) and submitted an exhibit. ECF 15-1. Plaintiff has replied. ECF 21 (“Reply”).

         No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I shall deny the Motion.

         I. Factual Background

         On October 7, 2016, Elite, a sports management firm specializing in youth sporting events, entered into a contract with “Eastern Regional League U.S. Youth Soccer Region I” (“ERL”). ECF 1-3, ¶¶ 22-27; see also ECF 12-2. The parties agreed that ERL would incorporate some of Elite's soccer events and tournaments into its youth soccer regional league. ECF 1-3 at ¶¶ 1, 30. The contract has a three-year term and terminates after the end of the 2019 Eastern Regional League season. Id. at ¶¶ 2, 31.

         The Complaint alleges that USYSA unilaterally announced that it would be eliminating its regional league system in favor of national conferences. Further, it allegedly announced that it had selected a different company, instead of Elite, to manage its tournaments. Id. at ¶¶ 3, 47-55. According to Elite, the defendant told Elite in no uncertain terms that USYSA and its member clubs would not participate in Elite's events in 2019. Id. ¶ 5. As a consequence, Elite claims the defendant is in breach of contract.

         The parties currently dispute the meaning of their Contract's forum selection clause. The clause states, ECF 12-2 at 6 (emphasis added):

15. Disputes
If a dispute arises, the parties will try in good faith to settle it through mediation conducted by an independent mediator to be mutually selected. The parties will share the costs of the mediator equally. Each party will cooperate fully and fairly with the mediator and will attempt to reach a mutually satisfactory compromise to the dispute. If the dispute is not resolved within 30 days after it is referred to the mediator, either party may file a lawsuit in Howard County in the State of Maryland.

         II. Legal Standard

         Federal courts are courts of limited jurisdiction and “may not exercise jurisdiction absent a statutory basis.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005). Further, a federal court must presume that a case lies outside its limited jurisdiction unless and until jurisdiction has been shown to be proper. United States v. Poole, 531 F.3d 263, 274 (4th Cir. 2008) (citing Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994)).

         A civil action filed in state court may be removed to federal court if it is one over which the district court has original jurisdiction. 28 U.S.C. § 1441(a). The burden of demonstrating jurisdiction and the propriety of removal rests with the removing party. See McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010); Robb Evans & Assocs., LLC v. Holibaugh, 609 F.3d 359, 362 (4th Cir. 2010); Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 816 (4th Cir. 2004). Therefore, “[i]f a plaintiff files suit in state court and the defendant seeks to adjudicate the matter in federal court through removal, it is the defendant who carries the burden of alleging in his notice of removal and, if challenged, demonstrating the court's jurisdiction over the matter.” Strawn v. AT & T Mobility LLC, 530 F.3d 293, 296 (4th Cir. 2008).

         Courts are required to construe removal statutes narrowly. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941). This is because “the removal of cases from state to federal court raises significant federalism concerns.” Barbour v. Int'l Union, 640 F.3d 599, 605 (4th Cir. 2011), abrogated in part on other grounds by the Federal Courts Jurisdiction and Venue Clarification Act of 2011, Pub. L. No. 112-63, 125 Stat. 758 (2011); see also Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994) (“Because removal jurisdiction raises significant federalism concerns, [courts] must strictly construe removal jurisdiction.”) (citing Shamrock, 313 U.S. at 108-09). Indeed, a federal court “should construe removal statutes narrowly, [with] any doubts . . . resolved in favor of state court jurisdiction.” Barbour, 640 F.3d at 617; see also Cohn v. Charles, 857 F.Supp.2d 544, 547 (D. Md. 2012) (“Doubts about the propriety of removal are to be resolved in favor of remanding the case to state court.”).

         Courts in this circuit have held that a motion to remand from federal to state court on the basis of a forum selection clause is, in effect, a challenge to subject matter jurisdiction under Rule 12(b)(1). See Nahigian v. Juno-Loudoun, LLC, 661 F.Supp.2d 563, 565-66 (E.D. Va. 2009) (reviewing the plaintiff's motion to remand from federal to state court under Rule 12(b)(1)); Garner v. Supervalu, Inc., DKC 2008-0895, 2008 WL 11416969, at *1 (D. Md. June 4, 2008) (explaining that “[t]he motion to remand challenges Defendant's ...


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