United States District Court, C.D. California
ORDER GRANTING DEFENDANTS’ MOTION TO TRANSFER
[12]
OTIS
D. WRIGHT, II UNITED STATES DISTRICT JUDGE.
I.
INTRODUCTION
Plaintiffs
Lawrence Britvan and his current employer HWE California,
Inc. (HWE) filed this action for declaratory relief against
Britvan’s former employer, Defendant Cantor Commercial
Real Estate Sponsor, L.P. (“CCRES”)[1] and other related
entities, Defendants Cantor Fitzgerald, L.P.
(“CFLP”) and Cantor Commercial Real Estate
Company (“CCREC”) (collectively, Defendants).
(Complaint (“Compl.”), ECF No. 1-1.) CCRES now
moves to transfer the matter to the Southern District of New
York pursuant to 28 U.S.C. § 1404. (Mot. to Transfer
(“Mot.”), ECF No. 12.) Based on a valid
arbitration forum selection clause and in the interest of
justice, the Court GRANTS CCRES’s Motion to
Transfer.[2]
II.
BACKGROUND
This
declaratory judgment action arises from a New York employment
contract between Britvan, a highly paid executive and lawyer,
and his former New York-based employer, CCRES. For five
years, Britvan was a resident of New York, working for CCRES
in New York City under a September 8, 2010 Employment
Agreement that: 1) was negotiated in New York by New York
lawyers, 2) was signed in New York, 3) is governed by New
York law, and 4) contains an arbitration provision that
requires “any disputes, differences or controversies
under [the] Agreement” to be adjudicated by a panel of
arbitrators sitting in New York City. (Declaration of Lori
Pennay (“Pennay Decl.”) ¶¶ 6-13; Pennay
Decl. Ex. A (“Employment Agreement” §§
8, 10).)
Britvan
resigned from his employment with CCRES on September 30,
2015. (Pennay Decl. ¶ 30.) Immediately thereafter, CCRES
sent to Britvan’s New York apartment non-compete
payments, as provided for in the contract, which now total
$375, 000. (Id.)
Britvan
moved to California to take a job with HWE (an alleged
competitor of CCRES) beginning on May 6, 2016. (Declaration
of Lawrence Britvan (“Britvan Decl.”) ¶ 5.)
On May 9, 2016, Britvan and HWE filed the subject declaratory
judgment action in Los Angeles County Superior Court to strip
from the employment agreement its covenant not to compete,
its covenant not to solicit, and its mandatory arbitration
provision. (Compl. ¶¶ 44-58.)
The
Complaint names as defendants CCRES, as well as two
non-parties to the Employment Agreement, CFLP and CCRE.
(Id. ¶¶ 10-15.) Plaintiff HWE is also not
a party to the Employment Agreement.
On May
11, 2016, Plaintiffs filed in Los Angeles County Superior
Court an Ex Parte Application for Temporary
Restraining Order and Order to Show Cause Re: Preliminary
Injunction, which sought to temporarily enjoin the Defendants
from enforcing the provisions that Plaintiffs sought to
invalidate. (Declaration of David A. Paul “Paul
Decl.” ¶ 8.) The court denied
Plaintiffs’ request for a TRO and scheduled a hearing
on their Motion for Preliminary Injunction. (Id.
¶ 9.)
On May
20, 2016, CCRES filed a special proceeding in New York
Supreme Court, seeking an order, inter alia, a)
declaring that New York law applies to the Employment
Agreement and that the arbitration clause of the Employment
Agreement is valid and binding on Britvan; b) compelling
arbitration of any disputes arising under the Employment
Agreement; and c) enjoining prosecution of the Declaratory
Judgment Action. (Id.¶ 10, Ex. 2)
That
same day, after receiving argument from CCRES and Britvan
(who appeared through counsel and did not contest the
court’s jurisdiction), the court granted CCRES a
temporary restraining order which enjoined prosecution of the
Declaratory Judgment Action pending a further hearing on
CCRES’s application. (Id. ¶ 11, Ex. 3.)
In a court-supervised mediation on June 6, 2016, Plaintiffs
state that Judge Joan Kenney verbally indicated to the
parties her intent to issue an order requiring that Britvan
arbitrate all claims raised in the Declaratory Judgment
Action before a panel in New York. (Id.) The parties
have fully briefed the New York Action, and await the
court’s decision and order. (Id.)
On June
8, 2016, prior to the preliminary injunction hearing in the
Declaratory Judgment Action, CCRES (with the consent of CFLP
and CCRE) timely removed the case to this Court on the
grounds that there is complete diversity between Britvan and
CCRES. (Notice of removal (“NOR”), ECF No. 1.)
On June
20, 2016, CCRES filed a demand for arbitration with the
American Arbitration Association.
CCRES
now moves to transfer the Declaratory Judgment Action to the
Southern District of New York. The Motion is before the Court
for consideration.
III.
LEGAL STANDARD
Pursuant
to 28 U.S.C. § 1404(a), a district court may transfer an
action to any district or division “where the action
might have originally been brought” in order to promote
the convenience of the parties and witnesses and the
interests of justice. A district court must make two
findings: 1) the transferee court is one where the action
“might have been brought, ” and 2) the
parties’ and witnesses’ conveniences, as well as
the interests of justice, favor transfer. Metz v. U.S.
Life Ins. Co., 674 F.Supp.2d 1141, 1145 (C.D. Cal.
2009); see also Hatch v. Reliance Ins. Co., 758 F.2d
409, 414 (9th Cir. 1985). This provision under 28 U.S.C.
§ 1404(a) “gives a district court broad discretion
to transfer a case to another district where venue is also
proper.” Amini Innovation Corp. v. JS Imports,
Inc., 497 F.Supp.2d 1093, 1108 (C.D. Cal. 2007)
(footnote omitted); s ...