June 12, 2013
Tanner Trosper, Plaintiff,
Synthes USA Sales, LLC., Depuy Synthes Sales, Inc., and Does 2 through 10 Defendants.
ORDER Re: Defendants' Motion to Dismiss Plaintiff Tanner Trosper's First Amended Complaint ; Plaintiff's Motion for Summary Judgment or, in the Alternative, Partial Summary Judgment 
RONALD S.W. LEW, Senior District Judge.
Currently before the Court are Defendants Synthes USA Sales, LLC. and Depuy Synthes Sales, Inc.'s Motion to Dismiss Plaintiff Tanner Trosper's First Amended Complaint , and Plaintiff Tanner Trosper's Motion for Summary Judgment or, in the Alternative, Partial Summary Judgment . The Court having reviewed all papers submitted pertaining to this Motion and having considered all arguments presented to the Court, NOW FINDS AND RULES AS FOLLOWS:
The Court hereby GRANTS Defendants Synthes USA Sales, LLC and Depuy Synthes Sales, Inc.'s Motion to Dismiss. Accordingly, Plaintiff's Motion for Summary Judgment is DENIED AS MOOT.
Plaintiff Tanner Trosper ("Plaintiff" or "Trosper") filed this Action against Defendants Synthes USA Sales, LLC, Depuy Synthes Sales, Inc. (collectively, "Synthes" or "Defendant"), and Does 2 through 10 seeking declaratory and injunctive relief. Plaintiff alleges that certain provisions of a Sales Consultant Confidentiality and Non-Solicitation Agreement ("Agreement") that he signed as a condition of employment with Synthes is void.
The Agreement contains a "Choice of Law and Forum" clause, which provides as follows:
Choice of Law and Forum:
This agreement will be governed by Pennsylvania law applicable to contracts entered into and performed in Pennsylvania. I agree that this agreement shall exclusively be enforced by any federal or state court of competent jurisdiction in the Commonwealth of Pennsylvania and hereby consent to the personal jurisdiction of these courts.
Compl., Ex. A at 8 . Synthes' instant Motion to Dismiss Plaintiff Tanner Trosper's First Amended Complaint seeks enforcement of the foregoing forum selection clause. Plaintiff's Motion for Summary Judgment seeks summary judgment as to the entirety of Plaintiff's Complaint.
Plaintiff filed this Action on March 25, 2013 . He filed his First Amended Complaint ("FAC") on April 24, 2013 . Synthes filed a Complaint against Trosper three days later in the United States District Court for the Eastern District of Pennsylvania (the "Pennsylvania Litigation") seeking to enforce the Agreement. See Def.'s Request for Judicial Notice Ex. A .
II. LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(3) allows a party to file a motion to dismiss on the basis of improper venue. Fed. R. Civ. Proc. 12(b)(3). A motion to dismiss premised on the failure of a plaintiff to initiate an action in the venue mandated by a forum selection clause is treated as a motion to dismiss under Rule 12(b)(3). Argueta v. Banco Mexicano , 87 F.3d 320, 324 (9th Cir. 1996).
When a party seeks enforcement of a forum selection clause under Rule 12(b)(3), a district court is not required to accept the pleadings as true and may consider facts outside of the pleadings. Id .; see also Richards v. Lloyd's of London , 135 F.3d 1289, 1292 (9th Cir. 1998). Further, a court may draw all reasonable inferences in favor of the party that is opposing enforcement of the forum selection clause. Murphy v. Schneider Nat'l , 362 F.3d 1133, 1138 (9th Cir. 2004).
Enforcement of forum selection clauses in diversity cases in federal court is governed by federal law. Manetti-Farrow, Inc. v. Gucci Am., Inc. , 858 F.2d 509, 513 (9th Cir. 1988). Before a court can assess the enforceability of a forum selection clause, it must first determine whether the clause is mandatory or permissive. See 14D Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 3803.1 (3d ed. 1998). A permissive forum selection clause will permit a certain forum to assert jurisdiction over the claim, but it does not designate that forum as the only proper forum for litigation. See Mostny v. Winnie Papir, A/S, 158 Fed.App'x 825 (9th Cir. 2005) (finding a forum selection clause permissive where it contained no language indicating the parties' intent to make Denmark courts the exclusive forum).
A mandatory forum selection clause, on the other hand, contains language explicitly designating a forum as the only proper venue and the only appropriate forum to assert jurisdiction. See Carnival Cruise Lines, Inc. v. Shute , 499 U.S. 585 (1991) (finding a forum selection clause as mandatory where it provided that all disputes "shall be litigated" in Florida). Mandatory forum selection clauses are presumptively valid and are to be strictly enforced. See id.; see also Hsu v. OZ Optics Ltd. , 211 F.R.D. 615 (N.D. Cal. 2002).
Under federal law, mandatory forum selection clauses are presumptively valid and the party challenging the clause faces a "heavy burden" and must "clearly show that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or over-reaching." Murphy , 362 F.3d at 1140 (quoting M/S Bremen v. Zapata Off-Shore Co. , 407 U.S. 1, 12, 15 (1972)). There are three basic reasons why a forum selection clause might not be enforced: "(1) if the inclusion of the clause in the agreement was the product of fraud or overreaching; (2) if the party wishing to repudiate the clause would effectively be deprived of his day in court were the clause enforced; and (3) if enforcement would contravene a strong public policy of the forum in which suit is brought." Id . (internal quotation marks omitted).
A. Request for Judicial Notice
The Parties both request that the Court take judicial notice of various documents they have submitted in support of their filings pertaining to Synthes' Motion to Dismiss. Synthes requests that the Court take judicial notice of the Complaint that it filed against Plaintiff in the U.S. District Court for the Eastern District of Pennsylvania (the Pennsylvania Litigation). Plaintiff requests that the Court take judicial notice of various court filings and opinions.
Under Federal Rule of Evidence 201, a trial court must take judicial notice of facts "if requested by a party and supplied with the necessary information." Fed.R.Evid. 201(d). A fact is appropriate for judicial notice only if it is not subject to reasonable dispute in that it is (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. Fed.R.Evid. 201(b). A court may take judicial notice of the existence of another court's opinion or of the filing of pleadings in related proceedings; the Court may not, however, accept as true the facts found or alleged in such documents. Wyatt v. Terhune , 315 F.3d 1108, 1114 (9th Cir. 2003) (citing M/V Am. Queen v. San Diego Marine Constr. Corp. , 708 F.2d 1483, 1491 (9th Cir. 1983)).
Accordingly, the Court GRANTS Synthes and Plaintiff's Requests for Judicial Notice with regard to taking judicial notice of the court documents, "not for the truth of the facts recited therein, but for the existence of the documents], which is not subject to reasonable dispute over its authenticity." Id.
B. Evidentiary Objections
Plaintiff filed a number of evidentiary objections with its Opposition to Synthes' Motion to Dismiss. The Court OVERRULES the evidentiary objections as MOOT.
C. Synthes' Motion to Dismiss - GRANT
Synthes argues that the Court should enforce the Pennsylvania choice of forum clause in the Agreement and dismiss Plaintiff's Action. Plaintiff seeks to avoid enforcement of the forum selection clause. Based on the following, the Court GRANTS Synthes' Motion to Dismiss. Accordingly, the Court also DENIES AS MOOT Plaintiff's Motion for Summary Judgment.
1. Plaintiff's Declaratory Relief Action Is Within The Scope of the Forum Selection Clause and the Clause Is Mandatory
As a threshold matter, the Court finds that the choice of forum clause applies to Plaintiff's dispute. The Agreement provides that it "shall exclusively be enforced by any federal or state court of competent jurisdiction in the Commonwealth of Pennsylvania." Plaintiff argues that the forum selection clause does not apply to his lawsuit by distinguishing between his action, which seeks to avoid enforcement of the Agreement, and an action to "enforce" to Agreement. Plaintiff's argument is not persuasive. The clear intent of the contractual language is to provide certainty about where an action pertaining to the Agreement will be filed. Plaintiff's interpretation creates unnecessary uncertainty and ambiguity. Indeed, Plaintiff's interpretation would effectively mean that the forum selection clause applies only in those circumstances where Synthes initiates a lawsuit, because presumably Synthes will be the party seeking to enforce the Agreement. But, following Plaintiff's reasoning, any employee (such as Plaintiff) who seeks to avoid enforcement of the Agreement can sue anywhere she desires, notwithstanding this explicit choice of forum clause. This upsets the expectations of the parties, as the provision contemplates litigation in Pennsylvania, and is not a reasonable interpretation of the provision.
Here, an action to enforce the Agreement has been filed in Pennsylvania, with Trosper as the defendant. That lawsuit will invariably raise the issue of whether the Agreement is enforceable. Regardless of whether the lawsuit is styled as one for declaratory relief to avoid enforcement of the Agreement and one to enforce the Agreement, the substance is virtually identical. See Am. S.S. Owners Mut. Prot. & Indem. Ass'n v. Am. Boat Co., LLC, 11 CIV 6804 (PAE), 2012 U.S. Dist. LEXIS 21739 (S.D.N.Y. Feb. 17, 2012)(holding that forum selection clause stating that "[a]ny suit against The Club and/or its agents shall be brought in the United States District Court of the Southern District of New York" applies to declaratory judgment action brought by the Club because substance of any suit involving contract would be substantively the same).
The forum selection clause is also mandatory. The word "exclusively" limits venue to any state or federal court sitting in Pennsylvania. See Sixty-Two First St., LLC v. CapitalSource Fin. LLC, No. C 11-01920 WHA, 2011 U.S. Dist. LEXIS 60231, at *6 (N.D. Cal. June 6, 2011).
Thus, the forum selection clause is presumptively valid and Pennsylvania is the presumptively proper venue for this suit. Trosper has the heavy burden of showing that enforcement of the clause is unreasonable. See Murphy v. Schneider Nat'l, Inc. , 362 F.3d 1130, 1141 (9th Cir. 2003).
2. The Forum Selection Clause Is Enforceable
Here, the Court finds that Plaintiff has not met his burden to establish that the forum selection clause is unenforceable because (1) the inclusion of the clause was the result of fraud or overreaching; (2) litigation in Pennsylvania would be prohibitively inconvenient; or (3) that its enforcement would violate any California public policy.
a. The Inclusion of the Clause Was Not the Result of Fraud or Overreaching
The Court finds that the inclusion of the choice of forum clause was not the result of fraud or overreaching. Plaintiff has not alleged that the Agreement was procured by fraud. Although Plaintiff alleges that Synthes is a powerful company, and he was unable to negotiate the specific terms of the Agreement, "overreaching" is a ground "short of fraud, " and a mere showing of "non-negotiability and power difference" does not render a forum selection clause unenforceable. Murphy , 362 F.3d at 1141; E.J. Gallo Winery v. Andina Licores S.A. , 440 F.Supp.2d 1115, 1126 (E.D. Cal. 2006).
b. Enforcement Of The Forum Selection Clause Would Not Deprive Plaintiff Of His Day In Court
A party seeking to escape the forum selection clause must show that "trial in the contractual forum will be so gravely difficult and inconvenient that he will for all practical purposes be deprived of his day in court." Bremen , 407 U.S. at 18. However, this is an extremely heavy burden to meet, and is not satisfied simply by a showing of additional expense. Id . In fact, courts have routinely rejected the notion that the expense or inconvenience of prosecuting an action in the designated forum rises to the level of depriving one of one's day in court, and have found that extreme hardship has been shown in cases where difficulties in addition to financial hardship exist. See, e.g., Three Bros. Trucking, Inc. v. Excel Global Logistics, Inc., Nos. C 06-1816 WDB, C 06-2583 WDB, 2006 WL 1329883, at *4 (N.D. Cal. May 16, 2006).
Plaintiff mainly argues that litigating in Pennsylvania would result in additional expense and inconvenience to him, but does not establish the practical impossibility of such litigation. As such, this is the typical argument about expense and inconvenience that courts generally reject, as courts have recognized that accepting these arguments would effectively nullify the advantages of forum selection clauses. See, e.g., Hodes v. S. N.C. Achille Lauro ed Altri-Gestione , 858 F.2d 905, 916 (3rd Cir. 1988) (upholding forum clause requiring that suit be brought in Italy; travel and expense are "obvious concomitant" of litigation abroad); Cross v. Kloster Cruise Lines, Ltd. , 897 F.Supp. 1304, 1309 (D. Or. 1995) (rejecting argument that passenger's age and limited income warranted setting aside forum clause); Miller v. Regency Maritime Corp. , 824 F.Supp. 200, 202 (N.D. Fla. 1992) (finding that a passenger's alleged physical and financial inability to travel to forum designated in cruise ticket did not render ticket's forum clause fundamentally unfair); Smith, Valentino & Smith, Inc. v. Superior Ct. , 17 Cal.3d 491, 496 (1976)(rejecting claim that inconvenience and expense of trying case in another state made enforcement of a forum clause unreasonable).
c. Enforcement of the Forum Selection Clause Does Not Contravene Any Strong California Public Policy
A forum selection is unenforceable if enforcement of that clause would contravene public policy in the forum in which the suit is brought. Bremen , 407 U.S. at 15. California law, like federal law, generally favors the enforcement of forum selection clauses. See Smith , 17 Cal.3d at 495.
Plaintiff primarily argues that enforcing the forum selection clause would violate California's strong public policy against non-competition and non-solicitation clauses. However, this conflates the forum selection clause with a choice of law analysis. This kind of attack on a forum selection clause has been rejected by many other courts. See, e.g., Swenson v. T-Mobile United States, Inc. , 415 F.Supp.2d 1101, 1104-05 (S.D. Cal. 2006); Multimin USA, Inc. v. Walco Int'l, Inc., No. CV F 06-0226 AWI SMS, 2006 WL 1046964, at *5-6 (E.D. Cal. April 11, 2006); Manchester v. Arista Records, Inc., No. CV 81-2134 RJK(Kx), 1981 U.S. Dist. LEXIS 18642, at *15-*17 (C.D. Cal. September 16, 1981); see also Ingenieria Alimentaria Del Matatipac, S.A. v. Ocean Garden Prods., Inc., No. 06CV2400 WQH (POR), 2007 U.S. Dist. LEXIS 40015, at *12 (S.D. Cal. May 31, 2007). "The forum selection clause determines where the case will be heard. It is separate and distinct from choice of law provisions that are not before the court." Multimin USA, 2006 U.S. Dist. LEXIS 33624 at *17. More importantly, there is no indication that the Pennsylvania federal court hearing Synthes' Pennsylvania Litigation will not or cannot entertain Plaintiff's choice of law arguments or that it cannot apply California law if it is determined that California law governs. Cf. Swenson , 415 F.Supp.2d at 1104 (noting that plaintiffs could and did make choice of law arguments to Washington state court); Multimin USA, 2006 U.S. Dist. LEXIS 33624 at *17-*18 (noting that plaintiff had not shown that it could not present claims and arguments to Texas courts). Any notion that Pennsylvania courts will not safeguard Plaintiff's rights is purely speculative. Mannetti- Farrow , 858 F.2d at 515.
Plaintiff also argues that the Court should view the forum selection clause as intertwined with the choice of law clause, citing to cases such as Doe 1 v. AOL LLC , 552 F.3d 1077, 1084 (9th Cir. 2009) and Jones v. GNC Franchising Inc. , 211 F.3d 495, 497 (9th Cir. 2000). However, those cases are inapposite for the reasons identified by Synthes. For example, the court in Jones found that the Bremen public policy exception applied where California had an explicit statutory provision voiding the particular type of forum selection clause at issue. 211 F.3d at 497-98. In Doe, the enforcement of the forum selection clause at issue would have dictated the enforcement of the choice of law clause. In Doe, the Ninth Circuit determined that the forum selection clause designated Virginia state courts as the exclusive venue. 552 F.3d at 1083-84. However, Virginia state courts were procedurally incapable of hearing consumer class actions, and application of the forum selection clause would have violated California consumer protection law. Id . None of Plaintiff's arguments address why it would be contrary to California public policy to have the case heard in a Pennsylvania federal court. Here, the enforcement of the venue clause does not dictate that Pennsylvania law will ultimately apply.
Plaintiff has not met his heavy burden of showing that enforcement of the forum selection clause would violate a strong California public policy. See Swenson , 415 F.Supp.2d at 1104-05; Multimin USA, 2006 U.S. Dist. LEXIS 33624 at *17-*18; see also Mahoney v. Depuy Orthopaedics, Inc., CIVF 07-1321 AWI SMS , 2007 WL 3341389 (E.D. Cal. Nov. 8, 2007).
Ordinarily, when a case is brought in the wrong district, the court where it is brought "shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." 28 U.S.C. § 1406. Because Plaintiff has not demonstrated the forum selection clause in this case is unenforceable and there is already an action pending in Pennsylvania, dismissal is appropriate here.
For the reasons set forth above, this Court GRANTS Synthes' Motion to Dismiss. Plaintiff's Motion for Summary Judgment is DENIED AS MOOT. Accordingly, the Clerk shall close this case.
IT IS SO ORDERED.