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<pre>                  United States Court of Appeals <br>                      For the First Circuit <br>                       ____________________ <br> <br>No. 99-2140 <br> <br>         AUTORIDAD DE ENERG A EL
CTRICA DE PUERTO RICO, <br> <br>                       Plaintiff, Appellee, <br> <br>                                v. <br> <br>   ERICSSON INC., F/K/A ERICSSON GE MOBILE COMMUNICATIONS INC.; <br>                    FEDERAL INSURANCE COMPANY <br> <br>                     Defendants, Appellants. <br> <br>                       ____________________ <br> <br>                            JOHN DOE, <br> <br>                            Defendant. <br>                       ____________________ <br> <br>           APPEAL FROM THE UNITED STATES DISTRICT COURT <br> <br>                 FOR THE DISTRICT OF PUERTO RICO <br> <br>        [Hon. Carmen Consuelo Cerezo, U.S. District Judge] <br> <br>                       ____________________ <br>                      <br>                              Before <br> <br>           Selya, Boudin, and Lynch, Circuit Judges. <br>                                 <br>                       ____________________ <br> <br> <br>  Roberto C. Quiones-Rivera, with whom Samuel T. Cspedes, <br>Carmen Hilda Bus, and McConnell Valds were on brief, for <br>appellants. <br>  Cornelius J. Moynihan, Jr., with whom Alberto Cuevas <br>Trisn and Juan A. Perez Lopez were on brief, for appellee. <br> <br>                       ____________________ <br>                      <br>                         January 6, 2000 <br>                       ____________________

  LYNCH, Circuit Judge. In 1992, Autoridad de Energa <br>Elctrica de Puerto Rico (the Puerto Rico Electric Power Authority) <br>entered into a $7.5 million contract with Ericsson GE Mobile <br>Communications, Inc., to purchase a trunk radio system guaranteed <br>to function for fifteen years. The Authority, or PREPA, generates, <br>transmits, and distributes almost all of the electricity used in <br>the Commonwealth. PREPA came to think that the equipment it had <br>purchased was not Y2K-compliant. In July 1999, PREPA sued Ericsson <br>in the courts of the Commonwealth for a declaration that Ericsson <br>was required to upgrade the equipment (without further charge) <br>under the contract and for injunctive relief to the same effect. <br>  Ericsson removed the case to federal court based on <br>diversity and moved to stay all proceedings under the Y2K Act, Pub. <br>L. No. 106-37, 113 Stat. 185 (1999) (codified at 15 U.S.C.  6601- <br>6617). In the meantime, PREPA moved to remand to the Commonwealth <br>court based on Article 28 of the contract, which PREPA <br>characterized as a forum-selection clause. Without acting on <br>Ericsson's Y2K Act stay motion, the federal district court remanded <br>the matter to the Commonwealth court.  <br>  Ericsson appealed and this court issued a stay of the <br>remand order. Our stay order permitted the district court to <br>address ordinary matters that were not inconsistent with the <br>prosecution of the appeal. PREPA had taken no action in the <br>district court in the interim as of the time of oral argument. <br>  The appeal raises several issues, most of which are of <br>first impression for this court. First, does 28 U.S.C.  1447 <br>preclude jurisdiction in this court in a removed case to review a <br>remand order based on a contract's forum-selection clause? The <br>question is complicated by the need to consider the effect of the <br>1996 amendment to 28 U.S.C.  1447(c). Second, does the final <br>judgment rule nonetheless bar review of this case, or does the case <br>fall within one of that rule's exceptions? Third, does the language <br>of the contractual clause mean that the parties agreed only that <br>they would consent to jurisdiction in the Commonwealth courts or, <br>alternatively, that those courts would have exclusive jurisdiction? <br>Fourth, should this court address Ericsson's contention that the <br>Y2K Act mandates that a stay of the district court proceedings be <br>issued?  <br>  We conclude that we have jurisdiction. Remand orders <br>based on contractual forum clauses are not within the bar on <br>appellate review in 28 U.S.C.  1447(d). We also join every other <br>circuit court that has addressed the issue in holding that forum <br>clause-based remand orders fall within the collateral order <br>doctrine, are final for the purpose of the final judgment rule, <br>and, consequently, are subject to review by direct appeal. Further, <br>we conclude that the district court erred in its reading of the <br>clause and that its remand of the case to the Commonwealth courts <br>was improper. A clause that simply consents to jurisdiction in one <br>court does not by its terms exclude jurisdiction in another court. <br>This case is properly in the federal courts and we conclude that <br>the district court should address the matter of the Y2K Act stay in <br>the first instance. <br> <br>I. Jurisdiction in this Court <br>A. The Effect of 28 U.S.C.  1447 <br>  This court has not previously addressed the issue of <br>whether review is available when the remand was based on a forum- <br>selection clause; other circuits have concluded that there is <br>appellate jurisdiction because a forum-selection clause is not a <br>ground stated in  1447(c) as to which review is precluded. See <br>Snapper, Inc. v. Redan, 171 F.3d 1249, 1255-56 nn.8 & 15 (11th Cir. <br>1999) (citing cases). At oral argument, PREPA's able counsel <br>conceded that we would have jurisdiction to review the remand order <br>unless the 1996 amendment to 28 U.S.C.  1447(c) altered the prior <br>analysis in the case law. He also admitted that there would be <br>jurisdiction if this court accepted the Eleventh Circuit's analysis <br>in Snapper. <br>  We briefly explain what is at issue. The question is <br>whether to apply here the bar to review of certain remand orders <br>contained in  1447(d): <br>        [a]n order remanding a case to the State court <br>    from which it was removed is not reviewable on <br>    appeal or otherwise.  <br> <br>In 1976, the Supreme Court held that the prohibition in  1447(d) <br>applies only to remand orders based on the grounds specified in <br> 1447(c). See Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. <br>336, 346 (1976). In 1988, the text of  1447(c) was revised. It no <br>longer spoke of remands for cases "improvidently removed" or <br>"without jurisdiction," the language interpreted by Thermtron. <br>Instead, the new language spoke of remands "on the basis of any <br>defect in removal procedure" or for lack of "subject matter <br>jurisdiction." In 1996, the statute was amended again. It now <br>provides: <br>    A motion to remand the case on the basis of any defect <br>  other than lack of subject matter jurisdiction must be <br>  made within 30 days after the filing of the notice of <br>  removal under section 1446(a).  <br> <br>Commentators have suggested a possible reading of the amendments to <br>the effect that  1447(c) now covers all remand orders. See David <br>D. Siegel, Commentary on 1996 Revision of Section 1447(c), 28 <br>U.S.C.A.  1447 (West Supp. 1999) (the new language is "like a <br>residuary clause"); see also Thomas R. Hrdlick, Appellate Review of <br>Remand Orders in Removed Cases: Are They Losing a Certain Appeal?, <br>82 Marq. L. Rev. 535, 561-69 (1999). <br>  The basic issue, since there is no question of lack of <br>federal subject matter jurisdiction, is whether the term "defect," <br>as used in the statute, encompasses a remand order that is based on <br>an interpretation of a forum clause in a contract. We think not, <br>for two reasons. First, the text of the statute provides a <br>reasonable meaning for the term "defect," a meaning that refers to <br>the failure to comply with the various requirements for a <br>successful removal, as set forth in  1446(a) and (b). Much less <br>plausible would be a reading of the term "defect" that encompassed <br>a remand based on a forum-selection clause. <br>  There is a second consideration. If Congress had truly <br>desired to overrule Thermtron and its progeny, we think it would <br>have chosen less oblique means. The Eleventh Circuit's well- <br>documented analysis of the context and history of the legislative <br>revisions to the statute convince us that Congress had no such <br>intent. See Snapper, 171 F.3d at 1254-59; see also Hrdlick, supra, <br>at 576 (arguing that the legislative "history suggests Congress did <br>not intend a radical alteration of . . . the appellate bar"). We <br>join the Eleventh Circuit's conclusion in Snapper that  1447(d) is <br>not a bar to review of a remand order based on a forum-selection <br>clause. <br> <br>B. Final Judgment Rule <br>  This circuit has never addressed the question of whether <br>forum clause-based remand orders are reviewable by appeal, as an <br>exception to the normal rule that only final judgments are <br>reviewable. In Thermtron, the Supreme Court had stated that "an <br>order remanding a removed action does not represent a final <br>judgment reviewable by appeal." Thermtron, 423 U.S. at 352-53. But <br>this language was limited by Quackenbush v. Allstate Insurance Co., <br>517 U.S. 706, 711-15 (1996), which held that an abstention-based <br>remand order was reviewable by an interlocutory appeal. The Court <br>found that this type of remand order was reviewable since it <br>satisfied the collateral order doctrine and was final in the sense <br>that it put the plaintiff out of federal court. See id. at 714-15. <br>PREPA says that Quackenbush cannot be transferred to remand orders <br>based on forum clauses. <br>  The circuit courts of appeals that have addressed this <br>issue have all concluded that remand orders based on forum- <br>selection clauses are reviewable by interlocutory appeal. See <br>Florida Polk County v. Prison Health Servs., Inc., 170 F.3d 1081, <br>1083 (11th Cir. 1999); Milk 'N' More, Inc. v. Beavert, 963 F.2d <br>1342, 1344-45 (10th Cir. 1992); McDermott Int'l, Inc. v. Lloyds <br>Underwriters, 944 F.2d 1199, 1204 & n.7 (5th Cir. 1991); Foster v. <br>Chesapeake Ins. Co., 933 F.2d 1207, 1211 & n.6 (3d Cir. 1991); <br>Regis Assocs. v. Rank Hotels (Mgmt.) Ltd., 894 F.2d 193, 194-95 <br>(6th Cir. 1990); Karl Koch Erecting Co. v. New York Convention Ctr. <br>Dev. Corp., 838 F.2d 656, 658-59 & n.1 (2d Cir. 1988); Pelleport <br>Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 277- <br>78 (9th Cir. 1984); see also Benson v. SI Handling Sys., Inc., 188 <br>F.3d 780, 782 (7th Cir. 1999) (holding that remand order in <br>successive removal is reviewable); Pennsylvania Nurses Ass'n v. <br>Pennsylvania State Educ. Ass'n, 90 F.3d 797, 801 (3d Cir. 1996) <br>(same for supplemental jurisdiction-based remand order); Gaming <br>Corp. of Am. v. Dorsey & Whitney, 88 F.3d, 536, 542 (8th Cir. 1996) <br>(same). For the same reasons the abstention-based remand order was <br>reviewable in Quackenbush, we find that the forum-based remand <br>order is reviewable and we join the other circuits that have so <br>found. <br>  The two circuit cases on which PREPA relies predate <br>Quackenbush and have been abrogated. See Doughty v. Underwriters at <br>Lloyd's, London, 6 F.3d 856, 864 (1st Cir. 1993) (finding no <br>appellate jurisdiction over abstention-based remand order); Garcia <br>v. Island Program Designer, Inc., 4 F.3d 57, 59-60 (1st Cir. 1993) <br>(same). <br> <br>II. The Forum Clause <br>  Having confirmed our jurisdiction to hear this appeal, we <br>turn to the forum clause, the basis for the district court's remand <br>order. The forum clause, Article 28 of the contract between the <br>parties, provides: <br>        This contract will be governed and interpreted <br>    pursuant to the Laws of the Commonwealth of <br>    Puerto Rico and the parties agree to submit to <br>    the jurisdiction of the courts of the <br>    Commonwealth of Puerto Rico. <br> <br>The district court summarily allowed the remand motion, saying only <br>that "Article 28 demonstrates the parties' clear intention to <br>litigate matters related to the contract in the Commonwealth <br>courts."  <br>  Ericsson urges error on two bases: first, the language is <br>plain that the clause is nothing more than a consent to personal <br>jurisdiction in the courts of the Commonwealth; and, second, if <br>there were any obscurity in the language, the clause must, under <br>Puerto Rico law, see P.R. Laws Ann. tit. 31,  3478, be construed <br>against the originator of the language. Ericsson is incorporated <br>and has its principal place of business outside of Puerto Rico, <br>facts that support Ericsson's reading.  <br>  PREPA counters with two arguments: the clause is not <br>ambiguous and Puerto Rico law requires, even if the language were <br>unclear, that the evident intention of the parties shall prevail. <br>See P.R. Laws Ann. tit. 31,  3471. If the language were ambiguous, <br>PREPA says, the usual rule under Puerto Rico law -- that any <br>obscurity should be read against the drafter -- should not apply. <br>The clause should not be construed against PREPA because, while <br>PREPA drafted the clause, it says it considers itself the underdog  <br>fighting against a big international corporation. The parties agree <br>that Puerto Rico law governs the contract interpretation question. <br>  Our review of the contract interpretation question is de <br>novo. See Lambert v. Kysar, 983 F.2d 1110, 1112 (1st Cir. 1993). <br>The outcome of this question is determined by our 1993 decision in <br>Redondo Construction Corp. v. Banco Exterior de Espaa S.A., 11 <br>F.3d 3 (1st Cir. 1993). There, plaintiff sued in federal court in <br>Puerto Rico and defendant defended on the basis that a forum clause <br>required the action to be brought in Florida. See id. at 5. This <br>court disagreed. The contract clause in Redondo stated: <br>        Borrower and the Guarantors each hereby expressly <br>    submits to the jurisdiction of all Federal and <br>    State Courts located in the State of Florida.  <br> <br>Id. We read the clause to be an affirmative conferral of personal <br>jurisdiction by consent, and not a negative exclusion of <br>jurisdiction in other courts. See id. at 6. We do so here as well. <br>Several circuits have interpreted such forum clause language <br>similarly. See John Boutari & Son, Wines & Spirits, S.A. v. Attiki <br>Importers & Distribs., Inc., 22 F.3d 51, 53 (2d Cir. 1994); Caldas <br>& Sons, Inc. v. Willingham, 17 F.3d 123, 127-28 (5th Cir. 1994); <br>Hunt Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 75, 77 (9th <br>Cir. 1987). <br>  Of some weight is PREPA's argument that this clause would <br>be rendered mere surplusage by such a reading given that Ericsson <br>had qualified to do business in Puerto Rico at the time of the <br>contract and so there was no need for a consent to personal <br>jurisdiction in the courts of Puerto Rico. See, e.g., Florida Polk, <br>170 F.3d at 1083-84. But the argument is not persuasive. PREPA, a <br>frequent litigant in the federal courts, could easily have drafted <br>the contract to provide for exclusive jurisdiction in the <br>Commonwealth courts if that were its intent. And that Ericsson had <br>qualified to do business at the time of the contract did not mean <br>that it would continue to do so at all times within the statute of <br>limitations on the contract. Finally, PREPA had an obvious interest <br>in cutting off any possible litigation on personal jurisdiction <br>grounds, even if the issue was unlikely to be raised. See McDermott <br>Int'l, 944 F.2d at 1206 n.10 (explaining the value of consent to <br>personal jurisdiction by foreign corporations). Because we decide <br>this as a matter of the language of the contract, we do not <br>discuss Ericsson's alternative argument that a waiver of a <br>statutory right of removal must be "clear and unequivocal." See, <br>e.g., In re Delta Am. Re Ins. Co., 900 F.2d 890, 892 (6th Cir. <br>1990). <br>  Accordingly, the order remanding the case to the <br>Commonwealth courts was error. <br> <br>III. The Y2K Act and the Motion for Stay <br>  The Y2K Act, which generally governs civil actions <br>related to Y2K failure, establishes an initial cooling-off period <br>designed to facilitate resolution of Y2K problems through voluntary <br>efforts or alternative dispute resolution. In particular, the Act <br>requires potential plaintiffs to file a pre-litigation notice. See <br>15 U.S.C.  6606(a). The potential defendant has thirty days to <br>respond with a plan to remediate or to enter into alternative <br>dispute resolution. See id.  6606(c). If the defendant fails to <br>respond within thirty days, the plaintiff may file suit on the <br>thirty-first day. See id.  6606(d). If the defendant does respond, <br>an additional sixty days is allowed to resolve the problem. See id. <br> 6606(e). Where, as here, the plaintiff fails to provide pre- <br>litigation notice, the defendant may treat the complaint as such <br>notice by so informing the court. See id.  6606(f). If any <br>defendant elects to treat the complaint as notice, the Act <br>provides that "the court shall stay all discovery and all other <br>proceedings in the action for the appropriate period after filing <br>of the complaint." Id. (emphasis added). PREPA concedes that the <br>Y2K Act applies, but disputes Ericsson's contention that it was <br>entitled to a stay. <br>  Ericsson continues to press for a stay, pointing out that <br>it has been in litigation since this action started. PREPA, in <br>turn, points out that a stay, under the statute, should be "for an <br>appropriate period," id.  6606(f), and that five months have <br>passed since the complaint was filed. In response to questions from <br>this court at oral argument, both parties conceded that the matter <br>of a stay is better decided by the district court in the first <br>instance. We agree. <br>  Accordingly, we vacate the district court's order of <br>remand to the Commonwealth court and remand the case to the <br>district court for further proceedings consistent with this <br>opinion. Costs are awarded to appellants.</pre>

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