United States District Court, E.D. California
S & J RENTALS, INC. d/b/a TWIN CITIES EQUIPMENT RENTALS, a California corporation, individually and on behalf of all others similarly situated, Plaintiff,
HILTI, INC., an Oklahoma corporation, Defendant.
MEMORANDUM AND ORDER
MORRISON C. ENGLAND, UNITED STATES DISTRICT JUDGE.
J Rentals, Inc., (“Plaintiff”) seeks redress on
behalf of itself and a putative class from Hilti, Inc.
(“Defendant”) due to alleged illegal business
practices. Plaintiff's First Amended Complaint
(“FAC”) brings a single cause of action on
grounds that Defendant violated California's Unfair
Competition Law (“UCL”), California Business and
Professions Code §§ 17200-17204. ECF No. 4, at
the Court are two motions, both filed by Defendant. Through
its Motion to Transfer (“Transfer Motion”), (ECF
No. 9), Defendant first asks the Court to transfer this case
to the United States District Court of the Northern District
of Oklahoma, pursuant to a forum selection clause in a
contractual agreement between the parties. Def.'s Mem.,
ECF No. 9-1, at 2:3-8. Secondly, Defendant has submitted a
Motion to Dismiss, (ECF No. 8), addressing the merits of
Plaintiff's Complaint. According to Defendant, it filed
that motion simply “out of an abundance of
caution” in the event the Transfer Motion did not
suffice as a responsive pleading to Plaintiff's FAC.
Def.'s Mem. Supp. Mot. Dismiss, ECF No. 8-1, at 1:18-25.
Plaintiff filed oppositions to each of these motions, (ECF
Nos. 15 & 16), to which Defendant filed timely replies.
ECF Nos. 20 & 21. For the reasons set forth below, the
Court GRANTS Defendant's Motion to Transfer and DENIES
Defendant's Motion to Dismiss without prejudice.
is a California corporation that rents construction equipment
to the public. Defendant is incorporated in Oklahoma and
headquartered in Plano, Texas. Defendant develops,
manufactures, and markets products for construction, building
maintenance, and mining industries.
and 2010, Plaintiff completed credit applications with
Defendant to facilitate its purchase of tools on credit.
Schofield Decl., ECF No. 9-2, at 1-2. Plaintiff subsequently
made several tool purchases utilizing this credit.
Id. at 2. One of those purchases was a TE 3000-AVR
breaker chiseling tool obtained from Defendant in 2012.
claims that it was unaware at the time it purchased
Defendant's products that many of its tools are equipped
with a “deactivation feature” which causes them
to automatically shut down after a specified number of
operational hours. Plaintiff claims that in 2015, its TE
3000-AVR breaker shut down due to this deactivation feature,
and that Defendant charged “reactivation” fees to
make the tool operational again.
alleges that Defendant failed to disclose the deactivation
feature prior to selling these tools, and thus committed
unfair business practices, as defined by the UCL.
considering a motion to transfer look to 28 U.S.C. §
1404(a), which provides that “[f]or 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.”
Typically, “[a] motion to transfer venue under §
1404(a) requires the court to weigh multiple factors in its
determination whether transfer is appropriate in a particular
case.” Jones v. GNC Franchising, Inc., 211
F.3d 495, 498 (9th Cir. 2000). However, this analysis changes
when the dispute is governed by a forum selection clause.
Atl. Marine Constr. Co. v. United States Dist.
Court, 134 S.Ct. 568, 581 (2013). In the Ninth Circuit,
forum selection clauses are presumptively valid, and are only
unenforceable if the “party challenging enforcement . .
. can show it is unreasonable under the circumstances.”
Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 325
(9th Cir. 1996) (citing The Bremen v. Zapata Off-Shore
Co., 407 U.S. 1, 10 (1972)). “The Supreme Court
has construed this exception narrowly, ” with
unreasonableness only being shown if: (1) the clause was the
result of fraud, undue influence, or overweening bargaining
power; (2) the transfer forum “is so gravely difficult
and inconvenient” that plaintiff would essentially be
denied its day in court; or (3) “enforcement of the
clause would contravene a strong public policy” of
California. Argueta, 87 F.3d at 325.
“unreasonableness” exceptions apply, the forum
selection clause is deemed prima facie valid, and the clause
is analyzed under § 1404(a) taking into account the
following considerations: (1) plaintiff's choice of forum
is given no weight; (2) only “public-interest”
factors are considered, not the parties'
private interests; and (3) the original venue's
choice-of-law rules do not “follow the case to the
forum contractually selected by the parties.” Atl.
Marine, 134 S.Ct. at 581-83. When a defendant files a
§ 1404(a) motion, a district court should transfer the
case pursuant to the forum selection clause unless
“extraordinary circumstances unrelated to the
convenience of the parties” clearly disfavors transfer.
Id. at 581.
A Forum Selection Clause Applies To The Current
terms and conditions in the 2008 and 2010 credit applications
include a “Consent to ...