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Integrated Health Resources, LLC v. Rossi Psychological Group, P.A.

2008 WL 320532 (U.S. Dist. Ct. D. N.J. 2008) (Unpublished)

FORUM SELECTION — Even though a contract provision may refer to jurisdiction, its plain meaning may also encompass venue, and where such a provision says that only a state court can be used, a party may not seek relief in a federal court.

A company provided administrative support services to business clients. It entered into a license and service agreement with a psychology practice group to provide certain services including procuring nurse practitioners. The company ultimately filed a breach of contract claim against the group. The group filed a motion to dismiss based upon the contract’s forum selection clause. Testimony on behalf of the group was to the effect that during contract negotiations it had objected to the choice of forum, and subsequently the language of the contract was altered to provide that only the courts of the State of New Jersey sitting in Somerset County could be used. The group argued that the Federal District Court could not exercise its jurisdiction over the disputes because the exclusive venue had to be in New Jersey state court.

The District Court held that the pertinent provision was an unambiguous forum selection clause that provided that the proper venue for all disputes should be in state court, noting that forum selection clauses are generally treated as ordinary contract provisions and are subject to ordinary rules of contract interpretation. It found that although the contract provision in question referred to jurisdiction, the plain meaning of the language indicated that venue was to be laid in New Jersey state court, and such venue clauses that are titled jurisdiction are routinely recognized as unambiguously creating a forum selection clause. It also recognized that the group’s objection to the former language which had named New York as a venue was not an oversight or accidental, and was suggestive that as the result of negotiation, it was the intent of the parties to make New Jersey’s state courts the exclusive forum for litigation. Thus, the Court granted the group’s motion to remand the action to the New Jersey Superior Court in Somerset County for further proceedings consistent with the parties’ contractual agreement.

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