The U.S. Court of Appeals recently addressed important issues relating to jurisdiction in Republic Building Co v. Charter Township of Clinton, Michigan, WL 5762965 (2023). In its ruling, the Court further affirmed the strength and importance of jurisdiction-based clauses in judgments and contracts.
The parties signed a consent judgment that included a provision stating that if there was any conflict over the terms of the judgment, the Macomb County Circuit Court would retain jurisdiction and the power to interpret or enforce the judgment. Many years later, the Plaintiffs filed suit in U.S. District Court. Jurisdiction clauses, such as the one in this case, determine in advance where parties can file actions relating to the consent judgment. The Court determined that the Macomb County Circuit Court retained exclusive jurisdiction over the consent judgment because the U.S. District Court would have to interpret or enforce the judgment to resolve the lawsuit, which would violate the exclusive jurisdiction clause of the consent judgment.
When a Court “retains jurisdiction” it means that this Court is the only court that has the authority to hear and rule on any legal issues relating to the matter. The Court’s findings in Republic highlight that it is important for parties to a consent judgment or contract to be aware of any clauses related to jurisdiction contained in the document that is being agreed to. Courts continue to enforce such clauses, which can significantly impact where a party may file an action relating to a contract and the success of an action before the court.
