RC Recreation Development, LLC v. The Town of Yorktown

Background

RC Recreation Development, LLC sued the Town of Yorktown, N.Y., Matthew J. Slater, Sergio Esposito, and John H. Landi in New York state court. The complaint alleged that the defendants took steps intended to prevent RC Recreation Development from completing and operating a golf-course renovation project on Town property. The claims included breach of a licensing agreement, state-law tort claims, and claims under 42 U.S.C. § 1983 alleging First Amendment retaliation, denial of procedural and substantive due process, and unreasonable search and seizure.

The defendants timely removed the case to federal court under 28 U.S.C. § 1441(a). RC Recreation Development conceded that removal was proper because the federal claims gave the federal court original jurisdiction and the related state-law claims fell within supplemental jurisdiction. Supplemental jurisdiction allows a federal court to hear related state-law claims that form part of the same case or controversy as federal claims.

Motion to Remand

RC Recreation Development moved to remand the entire case to state court based on a forum-selection clause in the licensing agreement. The clause stated: “Westchester County, New York, shall be the venue for any disputes arising under this License.” RC Recreation Development argued that this language required the dispute to proceed in state court.

In the alternative, RC Recreation Development asked the court to decline supplemental jurisdiction over the state-law claims under 28 U.S.C. § 1367(c)(1) and (2), sever those claims from the federal claims, and remand them to state court. It also requested a stay of proceedings on the federal claims after remand of the state claims.

Court’s Analysis

The court held that the forum-selection clause did not require a state-court forum. The clause did not say that an action could be brought only in state court, did not identify a particular state court, and did not prohibit removal of a case filed in state court. The court also noted that it sits in White Plains, New York, which is in Westchester County.

The court also declined to remand the state-law claims under the supplemental-jurisdiction statute. It found that the state-law claims did not present novel or complex issues and did not substantially predominate over the federal claims. The state and federal claims relied on the same operative facts, and the court described the contract and related tort issues as routine rather than unusual or especially complicated.

The court further concluded that severing and remanding the state-law claims would undermine judicial economy and convenience by requiring related claims to be litigated in two venues. It was also unwilling to keep the federal claims on its docket for months or years while waiting for a state-court action to conclude.

Disposition

The court denied the motion to remand and instructed the Clerk to terminate the motion. The opinion does not state a separate disposition of the request to stay proceedings.