The opinion of the court was delivered by: MARIA-ELENA JAMES, Magistrate Judge
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS FOR IMPROPER VENUE
PURSUANT TO FED. R. CIV. P. 12(b)(3).
ORDER FOR CLERK OF COURT TO CLOSE FILE.
Before the Court are Defendants' COLT Telecommunications'
("COLT") and COLT Telecom Group Plc's ("COLT Telecom")
Motion to Dismiss for
Improper Venue and Motion to Dismiss for Failure to State Facts
Upon Which Relief Can be Granted, filed April 8, 2004. After
careful consideration of the parties' papers, relevant statutory
and case law authority, and Good Cause appearing, the Court
hereby GRANTS Defendants' Motion for Improper Venue, pursuant to
Federal Rule of Civil Procedure 12(b)(3). II. BACKGROUND
COLT Telecom is the parent of Defendant COLT. COLT is a company
that provides telecommunications network services for call
origination and termination. After protracted negotiations,
SeeComm Network Services ("Plaintiff") and COLT signed the
European Master Services Agreement (hereinafter "EMSA"), a
one-year contract, on May 21, 2002. The EMSA has a Forum
Selection Clause at Section 30, which states:
This Agreement shall be governed by the laws of
England and the parties submit to the exclusive
jurisdiction of the Courts of England always provided
that COLT and/or its Affiliates may commence
proceedings in any jurisdiction in which Customer
and/or its Affiliate is incorporated, domiciled or
On or about August 16, 2002, after services under the EMSA had
commenced, COLT notified Plaintiff that it wished to revise the
payment schedule to remedy a typographical error in setting
prices for calls to and from France. The EMSA listed a rate of ?
0.0214. COLT claims that the rate should have read ? 0.214.
Plaintiff asserts that phone rates needed to remain unchanged for
the one year term of the EMSA, because Plaintiff negotiated
contracts with their customers based on EMSA pricing. As a result
of Plaintiff's refusal to revise the price for calls made to and
from France, COLT terminated all services under the EMSA on
August 21, 2002.
Plaintiff previously sued COLT for specific performance of the
EMSA and damages in England Plaintiff lost its application for a
preliminary injunction ordering COLT to perform under the EMSA.
Simultaneously, COLT counter-claimed for the value of services it
had rendered under the EMSA. Plaintiff was ordered to pay COLT's
costs associated with the preliminary injunction application and
to post security of costs for the future litigation. Plaintiff
failed to pay those costs, essentially abandoning its claims,
thus Plaintiff's case was dismissed. Unsuccessful in England,
Plaintiff filed a complaint in Superior Court of California, for
the County of Marin for damages stemming from breach of contract,
fraud, and interference with prospective business advantage.
Defendants subsequently filed the current motion. B. Procedural Background
On January 27, 2004, Plaintiff filed a Complaint in Superior
Court of the State of California in and for the County of Marin.
On April 1, 2004, Defendants filed a Notice of Removal,
pursuant to 28 U.S.C. § 1441(b), in the United States District
Court for the Northern District of California.
On April 8, 2004, Defendants filed Motions to Dismiss for
Improper Venue and for Failure to State Facts Upon Which Relief
Can be Granted (hereinafter "the Motion"), as well as a
Memorandum of Points and Authorities, the Declaration of Richard
Stewart Norman, the Declaration of Dov. M. Grunschlag, and a Rule
44.1 Notice (notice to court of foreign law applicable) in
On April 29, 2004, Plaintiff filed an Opposition to the Motion,
as well as a Memorandum of Points and Authorities and the
Declaration of Martin Foster in support thereof.
On May 6, 2004, Defendants filed a Reply in Support of the
Motion, as well as the Supplemental Declaration of Dov. M.
Grunschlag in support thereof.
On July 1, 2004, the Court held a hearing on the matter. After
the hearing, the Court issued an Order for Further Briefing
addressing how much Plaintiff was required to post in security to
proceed with its claim in the English Court, and whether this
financial inconvenience was foreseeable at the time the contract
On July 7, 2004, Defendants filed Further Briefing with the
On July 8, 2004, Plaintiff filed Further Briefing with the
Defendants argue in the Motion that Plaintiff filed its
complaint in an improper venue. According to Defendants, the
Forum-Selection Clause in the EMSA requires Plaintiff to file
lawsuits against COLT in England
Plaintiff claims that venue is proper in the Northern District
of California because the Forum-Selection Clause is invalid for
several reasons. First, Plaintiff argues that COLT committed a
unilateral mistake, so the entire EMSA, including the Forum
Selection Clause, is invalid. Second, Plaintiff argues that COLT fraudulently-induced Plaintiff into the contract,
making Plaintiff rely on COLT's promised price levels,
invalidating the EMSA and the Forum-Selection Clause. Next,
Plaintiff argues that it could not afford to have its day in
court in England, and therefore has the right to bring its claim
in this Court.
For these reasons, Plaintiff argues that the Forum-Selection
Clause is invalid and this court is the proper venue for the
Federal Rule of Civil Procedure 12(b)(3)
Federal Rule of Civil Procedure 12(b)(3) provides that if a
party brings an action in the wrong court, a defendant can move
to dismiss for improper venue. Fed.R. Civ. P. 12(b)(3). "Where
the proper venue is located in a foreign country, federal courts
lack authority to transfer the action and therefore must dismiss
it for improper venue." Chateau Des Charmes Wines Ltd. v. Sabate
USA, Inc., 2002 U.S. Dist. LEXIS 4406,*3 (N.D. ...