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Meier v. Midwest Recreational Clearinghouse

July 9, 2010

HANS MEIER AND SUSAN MEIER, PLAINTIFFS,
v.
MIDWEST RECREATIONAL CLEARINGHOUSE, LLC, AND DOES 1 THROUGH 20, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Through the present action, Hans and Susan Meier ("Plaintiffs") seek damages for violations of California law arising out of their online purchase of a recreational vehicle ("RV") from Midwest Recreational Clearinghouse ("Defendant"). Presently before the Court is Defendant's Motion to Dismiss for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3).*fn1 For the reasons set forth below, Defendant's Motion to Dismiss for improper venue will be granted.

BACKGROUND*fn2

Defendant, a Minnesota company, runs an online auction site called www.crankyape.com. In February, 2009, Plaintiffs accessed said website and submitted the winning bid for a 2005 National Tropical T399 recreational vehicle ("RV").

In order to bid on a vehicle through crankyape.com, a user must agree to specified terms and conditions. (Decl. Susan Meier No. 4.) Contained within those terms and conditions is a forum selection clause, pursuant to which the user consents to "the exclusive jurisdiction and venue of courts in Washington County, Minnesota, U.S.A., in all disputes arising out of or related to the use of CrankyApe.com." (Def.'s Mot. Dismiss 2.) By checking the required box and using the site, Plaintiffs agreed to this forum selection clause, although Plaintiff contends that she did not notice or understand the import of the clause. (Decl. Susan Meier No. 4.)

According to Plaintiffs, the RV they purchased was advertised as having a "few small scratches on the exterior" in addition to a broken passenger headlight. After picking up the RV, Plaintiffs claim they discovered more significant problems. The RV shook persistently, and when Plaintiffs took the RV to a service center, they were told that the engine needed to be replaced. Plaintiffs and Defendant have settled as to the replacement of the engine.

Plaintiffs nonetheless seek compensation through the present lawsuit for other defects to the RV as well as damages for, inter alia, fraud and breach of contract.*fn3

Defendant does not confirm or deny these facts. Rather, Defendant seeks to dismiss the present action pursuant to Rule 12(b)(3) because Plaintiffs have filed suit in California, not Minnesota, contrary to the forum selection clause. Plaintiffs argue that the agreement containing the forum selection clause is a contract of adhesion and as such is unenforceable.

STANDARD

Rule 12(b)(3) and 28 U.S.C. § 1406(a) authorize the Court to dismiss an action on grounds that venue is improper. Plaintiffs have the burden of proof to show that venue is proper in this district. Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979); Hope v. Otis Elevator Co., 389 F. Supp. 2d 1235, 1243 (E.D. Cal. 2005). A motion to dismiss under Rule 12(b)(3) is the proper means to enforce a contractual forum-selection clause. Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996).

Unlike a motion to dismiss for failure to state a viable claim under Rule 12(b)(6), on a motion for improper venue under Rule 12(b)(3) "the pleadings need not be accepted as true and the court may consider supplemental written materials and consider facts outside the pleadings" in its adjudication. Kelly v. Qualitest Pharm, Inc., 2006 WL 2536627 at *7 (E.D. Cal. 2006) (citing Murphy v. Scheider Nat'l, Inc., 362 F.3d 1133, 1137 (9th Cir. 2004).

The decision to dismiss for improper venue, or alternatively to transfer venue to a proper court, is a matter within the sound discretion of the district court. Cook v. Fox, 537 F.2d 370, 371 (9th Cir. 1976).

ANALYSIS

Forum-selection clauses are "prima facie valid" and will be enforced unless shown to be "unreasonable under the circumstances. Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972) (internal quotation omitted). This "unreasonable" exception should be narrowly construed. Argueta, 87 F.3d at 325. A forum-selection clause is unreasonable if "its incorporation into the contract was the result of fraud, undue influence, or overwhelming bargaining power." Id. at 325 (internal citations omitted). The fact that a forum-selection clause is contained within a so-called "clickwrap agreement," whereby a user accepts a ...


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