                                                                                                                           Opinions of the United
2007 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


11-6-2007

Cowatch v. Sym-Tech Inc
Precedential or Non-Precedential: Non-Precedential

Docket No. 07-2582




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Recommended Citation
"Cowatch v. Sym-Tech Inc" (2007). 2007 Decisions. Paper 257.
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                                                            NOT PRECEDENTIAL

                   UNITED STATES COURT OF APPEALS
                        FOR THE THIRD CIRCUIT
                             ____________

                                  No. 07-2582
                                 ____________

                 GEORGE COWATCH, an Adult Individual;
             IMPACT MARKETING, INC., a Delaware Corporation



                                       v.


                   SYM-TECH INC, a Canadian Corporation,

                                                    Appellant
                                 ____________

               On Appeal from United States District Court for the
                        Western District of Pennsylvania
                         District Court No.: 06-cv-1500
                  District Judge: Honorable Joy Flowers Conti

                                 ____________

                  Submitted Under Third Circuit LAR 34.1(a)
                              October 26, 2007

        Before: SLOVITER, CHAGARES and HARDIMAN, Circuit Judges.

                           (Filed: November 6, 2007)

                                 ____________

                           OPINION OF THE COURT
                                ____________

HARDIMAN, Circuit Judge.
       Appellant Sym-Tech, Inc. (Sym-Tech) appeals the District Court's order partially

remanding to state court a complaint filed by Appellees George Cowatch (Cowatch) and

Impact Marketing, Inc. (Impact). Sym-Tech argues that the District Court erred by: (1)

finding that Sym-Tech unambiguously waived its right to federal jurisdiction in a forum

selection clause; and (2) refusing to consider extrinsic evidence proffered by Sym-Tech

to show that it did not intend to waive its right to federal jurisdiction.

                                               I.

       Our review of the District Court’s construction of the forum selection clause is

plenary. Foster v. Chesapeake Ins. Co., 933 F.2d 1207, 1216 (3d Cir. 1991). We

determine contractual waiver of federal jurisdiction using the same benchmarks of

construction as we employ in resolving all preliminary contractual questions. Id. at 1217

n.15. We ascertain the intent of the parties to a written agreement from the writing itself,

and where the words contained in the agreement are clear and unambiguous, we enforce

them. Martin v. Monumental Ins. Co., 240 F.3d 223, 232-33 (3d Cir. 2001). We will

consider extrinsic evidence only where the language of the agreement itself is ambiguous.

Mellon Bank, N.A. v. Aetna Bus. Credit, Inc., 619 F.2d 1010 n.9 (3d Cir. 1980).

                                               II.

       Because we write for the parties, we repeat only the facts essential to our decision.

Sym-Tech, a Canadian corporation, alleges that it entered into an exclusive

distributorship agreement with Cowatch and Impact, both citizens of Pennsylvania, under

which Sym-Tech would be the sole Canadian distributor of a corrosion control device

                                               2
patented by Cowatch. Cowatch and Impact deny that any exclusive distributorship

agreement was ever signed, but it is undisputed that the parties entered into non-

disclosure/non-compete agreement, which stated:

              THE TERMS AND CONDITIONS OF THIS AGREEMENT
              WILL BE INTERPRETED ACCORDING TO THE LAWS
              OF THE COMMONWEALTH OF PENNSYLVANIA AND
              ANY DISPUTES FROM THIS AGREEMENT WILL BE
              SETTLED IN AN APPROPRIATE COURT OF
              COMPETENT JURISDICTION IN THE
              COMMONWEALTH OF PENNSYLVANIA.

              SYM-TECH HEREBY ACKNOWLEDGES AND CONSENTS TO
              THE JURISDICTION OF SAID COURT OR COURTS AND
              HEREBY WAIVES ANY RIGHTS REGARDING DIVERSITY OF
              JURISDICTION PERTAINING TO THIS MATTER.

       After Cowatch and Impact entered into distribution agreements with other

companies in Canada, Sym-Tech brought suit in Canada for breach of the alleged

exclusive distributorship agreement. Cowatch and Sym-Tech responded with a patent

infringement action in Canada, and also filed a complaint against Sym-Tech in the Court

of Common Pleas of Clarion County, Pennsylvania, asserting claims for tortious

interference with contract and requesting injunctive relief and a declaratory judgment.

       Sym-Tech removed the case to the District Court on the basis of diversity

jurisdiction, and filed counterclaims for breach of contract, breach of fiduciary duty,

tortious interference, negligent and fraudulent misrepresentation, and unjust enrichment.

Cowatch and Impact filed a motion to remand to the Court of Common Pleas, relying

upon the forum selection clause in the Non-Disclosure/Non-Compete Agreement. The


                                             3
District Court granted the motion to remand in part, finding that the contractual waiver

provision was enforceable but was limited only to those claims arising out of the non-

disclosure/non-compete agreement. Accordingly, it remanded Count I (seeking injunctive

relief) in its entirety and Count III (tortious interference) to the extent it arose out of the

non-disclosure/non-compete agreement, and retained the balance of the case.

                                               III.

       As a preliminary matter, we must address Appellees’ contention that 28 U.S.C.

§ 1447(d), which provides that remand orders of a district court are “not reviewable on

appeal or otherwise,” deprives this Court of jurisdiction. In Foster, we found that a

remand order pursuant to a valid forum selection clause was not immune from review

under § 1447(d). In so doing, we relied upon well-established Supreme Court precedent

holding that § 1447(d) applies only to remand orders issued pursuant to § 1447(c).

Foster, 933 F.2d at 1210 (citing Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336,

346 (1976)). Because § 1447(c) applied only to remand orders “on the basis of any defect

in remand procedure,” and a forum selection clause was not a procedural defect,

§ 1447(d) did not bar review. Id. We also held that a remand order pursuant to a forum

selection clause is “final” for the purposes of 28 U.S.C. § 1291 under the collateral order

doctrine. Id. at 1211.

       Appellees suggest that the 1996 amendment to § 1447(c), which bars review of

“any defect other than a lack of subject matter jurisdiction,” not merely “any defect in

remand procedure,” broadens the scope of the prohibition on review and effectively

                                                4
overturns our holding in Foster. But we rejected this argument in Cook v. Wikler, 320

F.3d 431 (3d Cir. 2003). Although we acknowledged that the 1996 amendment “renders

obsolete a certain amount of discussion in some of our prior decisions,” we also observed

that most of the results in the prior decisions “appear unaffected by this statutory change

because § 1447(d) still only precludes appellate review of remand orders based on a

‘defect.’” Id. at 435 n.5. Thus, the amendment does not limit review of remands “for

which there is no ‘authority in . . . the controlling statute,’” such as sua sponte remands,

remands motivated by an overcrowded docket, remands on the basis of abstention or,

critical to the instant case, remands pursuant to forum selection clauses. Id. (listing

Foster as part of “large body of case law” undisturbed by amendment). Accordingly, we

have jurisdiction to entertain Sym-Tech’s appeal.

       Turning to the merits, we find that the District Court did not err when it found that

Sym-Tech unambiguously waived its right to a federal forum. We agree with Sym-Tech

that the phrase “a court of competent jurisdiction in the Commonwealth of Pennsylvania”

could include federal as well as state courts and the phrase “court or courts” suggests that

a federal forum is not entirely foreclosed. But the last sentence of the provision, in

which Sym-Tech waives “any rights regarding diversity of jurisdiction pertaining to this

matter,” makes it clear that Sym-Tech agreed to waive federal diversity jurisdiction.

       We are unpersuaded by Sym-Tech’s suggestion that the use of the phrase

“diversity of jurisdiction” as opposed to “diversity of citizenship jurisdiction” renders the

provision ambiguous. Both phrases are commonly understood to refer to federal diversity

                                              5
jurisdiction. Indeed, this Court has at times used the phrases interchangeably. See, e.g.,

Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990); Steel Valley Auth. v.

Union Switch and Signal Div., 809 F.2d 1006, 1012 n.6 (3d Cir. 1987). Moreover, Sym-

Tech’s proffered interpretation — that “diversity of jurisdiction” refers to any rights it

might have to a Canadian forum — bolsters our conclusion that the District Court did not

err in finding the operative language susceptible of only one reasonable interpretation.

The first sentence of the provision provides that all disputes would be resolved within the

Commonwealth of Pennsylvania, so we reject summarily Sym-Tech’s suggestion that it

retained a right to a Canadian forum under the agreement.

       For the foregoing reasons, we will affirm the judgment below.




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