Matthew Kenney v. Fifth Third Bancorp

Background

Matthew Kenney, appearing without a lawyer, originally filed the complaint in Los Angeles County Superior Court. He asserted federal and state claims against Fifth Third Bancorp and Prepaid Expense Card Solutions, Inc. (PEX) arising from an alleged unauthorized transfer of funds from MK Cuisine Global, LLC, a restaurant group of which Kenney is identified as chief executive officer. The complaint alleged professional negligence, fraud and misrepresentation, breach of contract, aiding and abetting fraud, unjust enrichment, misrepresentation and obstruction, violations of federal anti-money-laundering law, violations of Know Your Customer regulations, and a violation of the Bank Secrecy Act.

The defendants removed the case to federal court, asserting federal-question and diversity jurisdiction. Kenney moved to remand, meaning he asked the court to return the case to state court. The defendants moved to dismiss or transfer the case to the Southern District of New York. Their arguments included lack of personal jurisdiction over Fifth Third, lack of standing to pursue damages allegedly suffered by MK Cuisine, failure to state viable claims, and a forum-selection clause in the PEX agreement.

Motion to Remand

The court denied the motion to remand. It held that filing the removal notice on the last day of the applicable 30-day period was timely. It also held that serving Kenney and filing the notice with the state court within days satisfied the requirement that those actions occur promptly. Because Kenney did not dispute that the federal court had federal-question and diversity jurisdiction, his arguments based on comity did not support remand. The court also found that Kenney’s earlier service difficulties, state-court filings, and efforts to obtain defaults after removal did not require remand.

Transfer

The court considered transfer before deciding the defendants’ other arguments. It explained that federal law allows a court to transfer a case for the convenience of the parties and witnesses and in the interest of justice. It also explained that a valid forum-selection clause generally receives controlling weight.

The PEX master services agreement stated that New York law and federal law would govern and that the customer consented to the exclusive jurisdiction of state and federal courts located in Manhattan, New York City. The agreement’s general terms identified the partner bank issuing the account and card as a third-party beneficiary entitled to enforce PEX’s rights. Based on the allegations, the court concluded that the partner bank appeared to be Fifth Third.

The court found that the forum-selection clause applied to Kenney’s claims against both PEX and Fifth Third and was valid and enforceable. Kenney’s opposition did not address the clause or provide a reason not to enforce it. The court found no evidence that the clause resulted from fraud, and it found that Kenney had not shown that enforcement would deprive him of his day in court or violate public policy.

Disposition

The court denied Kenney’s Motion to Remand, declined to address the arguments in the defendants’ Motion to Dismiss, and granted the defendants’ Motion to Transfer. It ordered the Clerk to transfer the action to the United States District Court for the Southern District of New York. The opinion therefore did not resolve the defendants’ personal-jurisdiction, standing, pleading-sufficiency, or merits arguments.