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Performance Chevrolet, Inc. v. Adp Dealer Services, Inc.

United States District Court, E.D. California

June 22, 2015



TROY L. NUNLEY, District Judge.

The matter is before the Court on Defendant ADP Dealer Services, Inc.'s ("Defendant") motion to transfer this action to the United States District Court for the District of New Jersey, Newark Division. (ECF No. 17.) Plaintiff Performance Chevrolet, Inc. ("Plaintiff") has opposed the motion. (ECF No. 23.) For the reasons discussed below, the motion to transfer venue is GRANTED.

I. Background

On November 21, 2014, Plaintiff filed a complaint in this Court. (ECF No. 1.) The complaint brought two claims, breach of contract and declaratory relief, both arising out of a Master Services Agreement (the "Agreement") executed by the parties. In summary, the Agreement concerned specialized computer software designed for car dealerships, equipment, and related support and maintenance services to be provided to Plaintiff by Defendant.

On January 7, 2015, Defendant filed an answer raising the defense of improper venue based on a forum-selection clause in the parties' agreement requiring this action to be brought in New Jersey. (ECF No. 8.) Defendants also counterclaimed for breach of contract and, in the alternative, common counts arising out of the Agreement. (ECF No. 9.) Specifically, the forum selection clause stated:

This Agreement shall be governed in all respects by the laws of the State of New Jersey, without giving effect to principles of conflicts of laws. Client hereby consents to the jurisdiction of any federal or state court located in the State of New Jersey for all actions arising out of this Agreement and designates the County of Morris or the U.S. District Court, District of New Jersey, Newark, New Jersey, as a proper venue for any action against the Client and the exclusive forum for any action against ADP.

(ECF No. 18 at 3.)

On January 26, 2015, Plaintiff filed a first amended complaint for breach of contract, declaratory relief, and rescission. (ECF No. 10.)

On February 12, 2015, Defendant filed the instant motion to transfer venue in this Court, arguing that the forum-selection clause requires transfer to the New Jersey District Court, Newark Division is the exclusive forum for any action against Defendant. (ECF No. 17.)

On March 4, 2015, Plaintiff filed an opposition to Defendant's motion to transfer venue. (ECF No. 23.) On March 10, 2015, Defendant filed a reply to the opposition. (ECF No. 24.)

II. Applicable Law: Transfer of Venue

A motion to transfer is governed by 28 U.S.C. § 1404(a), which provides: "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented." Ordinarily, a number of factors may be considered when analyzing § 1404(a).[1] However, "[t]he presence of a forum-selection clause... will be a significant factor that figures centrally in the district court's calculus." Stewart Org. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)). "When the parties have agreed to a valid forum-selection clause, a district court should ordinarily transfer the case to the forum specified in that clause. Only under extraordinary circumstances unrelated to the convenience of the parties should a § 1404(a) motion be denied." Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 134 S.Ct. 568, 581 (2013) (footnote omitted).

A forum-selection clause is prima facie valid and should not be set aside unless the party challenging enforcement of the provision can show it is unreasonable under the circumstances. A forum selection clause is unreasonable if: (1) its incorporation into the contract was the "result of fraud, undue influence, or overweening bargaining power;" (2) the selected forum is so inconvenient that "the complaining party will for all practical purposes be deprived of its day in court;" or (3) "enforcement of the clause would contravene a strong public policy of the forum in which the suit is brought." Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 325 (9th Cir. 1996) (citing M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12-13, 15, 18 (1972)) (internal quotation marks omitted).

Where the forum selection clause is found to be valid, the Court must adjust its usual § ...

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