On May 9, 2023, the First Department issued a decision in Alvarez & Marshal Valuation Servs., LLC v. Solar Eclipse Inv. Fund III, LLC, 2023 NY Slip Op. 02449, holding that a forum selection clause choosing New York’s federal courts does not create jurisdiction in the New York state courts, explaining:
Plaintiff has failed to satisfy its burden of demonstrating personal jurisdiction over the dismissed defendants. Plaintiff’s sole alleged basis for personal jurisdiction over the dismissed defendants is found in the jurisdiction and forum selection provisions of the parties’ pre-November 2016 engagement letters, in which the parties agree that any Federal Court sitting within the Southern District of New York shall have exclusive jurisdiction over any litigation arising out of this Agreement; to submit to the personal jurisdiction of the Courts of the United States District Court for the Southern District of New York; and to waive any and all personal rights under the law of any jurisdiction to object on any basis (including, without limitation, inconvenience of forum) to jurisdiction or venue within the State of New York for any litigation arising in connection with this Agreement.
It is uncontested that New York federal courts do not have subject matter jurisdiction over this dispute, as there is no diversity of citizenship or federal question presented. Under these circumstances, Supreme Court properly determined that it could not maintain jurisdiction over defendants who signed the pre-November 2016 engagement letters based on the third clause of the exclusive jurisdiction provision, namely, that they had waived any and all personal rights under the law of any jurisdiction to object on any basis (including, without limitation, inconvenience of forum) to jurisdiction or venue within the State of New York. The third and final clause of the exclusive jurisdiction provision merely clarifies what the clauses preceding it set forth: that the parties cannot avoid jurisdiction in the federal court (which is located within New York state) by raising personal jurisdiction or venue objections there; the waiver clause does not apply to a state action.
(Internal quotations and citations omitted).