A recent 3rd Circuit decision demonstrates how seemingly innocuous word choices can have far-reaching results. Based on a recent opinion of the 3rd U.S. Circuit Court of Appeals, you may need to review your copy of Merriam-Webster’s Dictionary before permitting your client to agree to a forum selection clause. The difference between “of” and “in” may cost you access to federal court.
In May 2011, in reviewing a petition to remand, the 3rd Circuit considered the meaning of a contractual forum selection clause providing that “exclusive jurisdiction … shall lie in the appropriate courts of the State [of] New Jersey.” (See State of New Jersey v. Merrill Lynch & Co. Inc. ) To Merrill Lynch’s chagrin, the court held that the clause constituted a waiver of the right to remove. It held that, by adopting that contract language, the parties limited jurisdiction of actions brought under the agreement exclusively to the state courts in New Jersey. In so holding, the court devoted significant attention to the meaning of the words “of” and “courts.”
