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Medina v. Oanda Corporation

United States District Court, N.D. California, San Jose Division

March 29, 2017

OANDA CORPORATION, et al., Defendants.


          EDWARD J. DAVILA United States District Judge

         Plaintiff Antonia Medina (“Plaintiff”) filed this action against OANDA Corporation in California Superior Court alleging breach of contract and other related claims arising under state law. OANDA removed this action to federal court on diversity grounds, pursuant to 28 U.S.C. §§ 1332(a) and 1441(b). See Dkt. No. 1.

         Presently before the court is Plaintiff's Motion to Remand, as well as OANDA's Motion to Transfer this action to the United States District Court for the Southern District of New York pursuant to 28 U.S.C. § 1404(a) and the terms of a mandatory forum selection clause contained in OANDA's customer agreement.[1] Dkt. Nos. 18, 21. Having carefully considered the relevant pleadings and papers submitted by both parties in this matter, the court DENIES Plaintiff's Motion to Remand and GRANTS OANDA's Motion to Transfer for the reasons explained briefly below.

         I. BACKGROUND

         For the purposes of the motions presently pending before the court, the relevant factual and procedural background in this case is as follows:

         OANDA is a foreign currency exchange company offering online currency exchange trading, foreign currency transfers, and currency services information. See Am. Compl. (“AC”) ¶ 1, 4, Dkt. No. 15. OANDA is a corporation organized and existing under the laws of Delaware, with its principal place of business located in New York, New York. Decl. of Srivatsa Narasimha (“Narasimha Decl.”) ¶¶ 5, 7-10, Dkt. No. 23-1, Exs. A and B. OANDA also has an office located in San Francisco, California. Id. ¶ 16; AC ¶ 1. However, OANDA's Executive Vice President and Chief Financial and Strategy Officer represents that OANDA considers New York, New York - not San Francisco, California - to be the company's headquarters. Narasimha Decl. ¶ 16.

         Plaintiff is, and at all times relevant to this action was, a resident of Santa Clara County, California. AC ¶ 2. In August 2005, Plaintiff opened an account with OANDA's online platform and began using OANDA's currency conversion and trading services. Id. ¶ 4.

         Plaintiff filed this action in California Superior Court on February 29, 2016, alleging breach of contract, false advertising, and other related state law claims arising from his use of OANDA's currency trading platform and services. See Dkt. No. 1-1. On April 22, 2016, OANDA removed the case to federal court on diversity grounds. Dkt. No. 1. On May 16, 2016, Plaintiff filed an Amended Complaint in which he added Edmond I. Eger, III (“Eger”) - OANDA's Chief Executive Officer and a resident of San Francisco, California - as a defendant in this case. AC ¶ 1. Plaintiff then immediately sought to remand the case to superior court for lack of diversity jurisdiction, and requests costs and sanctions. See Dkt. No. 18 (“Remand Mot.”).


         A. Removal Jurisdiction Pursuant to 28 U.S.C. § 1441

         Removal jurisdiction is a creation of statute. See Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979) (“The removal jurisdiction of the federal courts is derived entirely from the statutory authorization of Congress.”). In general, only those state court actions that could have been originally filed in federal court may be removed. 28 U.S.C. § 1441(a) (“Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant.”); see also Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987) (“Only state-court actions that originally could have been filed in federal court may be removed to federal court.”). Accordingly, the removal statute provides two ways in which a state court action may be removed to federal court: (1) the case presents a federal question, or (2) the case is between citizens of different states and the amount in controversy exceeds $75, 000. 28 U.S.C. §§ 1441(a), (b).

         On a motion to remand, it is the removing defendant's burden to establish federal jurisdiction, and the court must strictly construe removal statutes against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (“The ‘strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper.”); Geographic Expeditions, Inc. v. Estate of Lhotka, 599 F.3d 1102, 1107 (9th Cir. 2010). “Where doubt regarding the right to removal exists, a case should be remanded to state court.” Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003); 28 U.S.C. § 1447(c) (“If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.”).

         B. Transfer of Venue Pursuant to 28 U.S.C. § 1404(a)

         Pursuant to 28 U.S.C. § 1404(a), “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” if such a transfer is convenient to the parties and witnesses and is otherwise “in the interest of justice.” The purpose of § 1404(a) is to “prevent the waste of time, energy, and money and to protect litigants, witnesses, and the public against unnecessary inconvenience and expense.” Van Dusen v. Barrack, 376 U.S. 612, 616 (1964). To determine if transfer is appropriate, the court first examines whether the case could have been brought in the proposed transferee district. See Hatch v. Reliance Ins. Co., 758 F.2d 409, 414 (9th Cir. 1985). An action may be commenced in any district where the court has subject matter jurisdiction over the claims; personal jurisdiction over the defendant; and venue is proper. Hoffman v. Blaski, 363 U.S. 335, 343-44 (1960). If the proposed district is a viable one, the court then goes through “individualized, case-by-case consideration of convenience and fairness” to determine whether such interests and the interest of justice favor transfer. Van Dusen, 376 U.S. at 622.

         A motion under § 1404(a) is also the proper vehicle to enforce a forum-selection clause. Atl. Marine Constr. Co., Inc. v. U.S. Dist. Ct. for W. Dist. of Texas, 134 S.Ct. 568, 579 (2013). While a court typically must weigh both private and public interest factors in deciding a motion to transfer, “when the parties' contract contains a valid forum-selection clause, that clause ‘represents [their] agreement as to the most proper forum, '” and is generally given deference over other factors. Id. at 581. “Only under extraordinary circumstances unrelated to the convenience of the parties should a § 1404(a) motion [to enforce a forum selection clause] be denied.” Id.

         C. Pro Se Pleadings

         Where, as here, the pleading at issue is filed by a plaintiff proceeding pro se, it must be construed liberally. Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). In doing so, the court “need not give a plaintiff the benefit of every conceivable doubt” but “is required only to draw every reasonable or warranted factual inference in the plaintiff's favor.” McKinney v. De Bord, 507 F.2d 501, 504 (9th Cir. 1974). The court “should use common sense in interpreting the frequently diffuse pleadings of pro se complainants.” Id. A pro se complaint should not be dismissed unless the court finds it “beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Haines v. Kerner, 404 U.S. 519, 521 (1972).


         A. Plaintiff's Motion to Remand for Lack of Subject Matter Jurisdiction

         Though initially filed in state court, OANDA removed this action to federal court under this court's diversity jurisdiction, pursuant to 28 U.S.C. §§ 1332(a) and 1441(b). Plaintiff now seeks to remand this case to superior court, arguing the parties are not diverse. Diversity jurisdiction requires that all parties be in complete diversity and the amount in controversy exceed $75, 000. 28 U.S.C. § 1332(a)(1); Matheson, 319 F.3d at 1090. “Complete diversity” exists where no plaintiff is a citizen of the same state as any defendant to the case. Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68 (1996).

         Here, there is no dispute that the amount in controversy exceeds $75, 000 and that Plaintiff is a citizen of California. Instead, Plaintiff argues that diversity does not exist because (1) newly added defendant Edmond Eger is a resident of San Francisco, California; and (2) OANDA did not meet its burden to show that its principle place of business is New York, New York, as opposed to San Francisco, California as Plaintiff alleges. See Remand Mot. at 1-2. Each argument will be addressed in turn.

         i. Joinder of Defendant Eger

         Federal Rule of Civil Procedure 15 provides that “[a] party may amend its pleading once as a matter of course within ... 21 days after service of a responsive pleading.” Fed.R.Civ.P. 15(a). However, “when a party attempts to amend a complaint in a manner that destroys a federal court's jurisdiction, [28 U.S.C.] § 1447(e) gives the court discretion to consider the propriety and fairness of allowing that amendment.” Clinco v. Roberts, 41 F.Supp.2d 1080, 1087 (C.D. Cal. 1999); see also Mayes v. Rapoport, 198 F.3d 457, 462 n.11 (4th Cir. 1999) (explaining that “a district court has the authority to reject a post-removal joinder that implicates 28 U.S.C. § 1447(e), even if the joinder was without leave of court.”). Under 28 U.S.C. § 1447(e), “if after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to state court.” It is therefore left to the discretion of the district court to determine whether to permit joinder of a diversity destroying defendant. Newcombe v. Adolf Coors Co., 157 F.3d 686, 691 (9th Cir. 1998).

         When making the determination as to whether joinder should be permitted in such cases, courts consider a number of factors, including: “(1) whether the party sought to be joined is needed for just adjudication and would be joined under Federal Rule of Civil Procedure 19(a); (2) whether the statute of limitations would preclude an original action against the new defendants in state court; (3) whether there has been unexplained delay in requesting joinder; (4) whether joinder is intended solely to defeat federal jurisdiction; (5) whether the claims against the new defendant appear valid; and (6) whether denial of joinder will prejudice the plaintiff.” IBC Aviation Servs., Inc. v. Compania Mexicana de Aviacion, S.A. de C.V., 125 F.Supp.2d 1008, 1011 (N.D. Cal. 2000); Neurospine v. Cigna Health & Life Ins. Co., 2016 WL 7242139, at *7 (N.D. Cal. 2016); see also McGrath v. Home Depot USA, Inc., 298 F.R.D. 601, 607 (S.D. Cal. 2014) (“[T]he majority of district courts in the Ninth Circuit addressing the specific situation of a plaintiff attempting to use a Rule 15(a) amendment ‘as a matter of course' to destroy diversity jurisdiction by adding claims against a non-diverse defendant have scrutinized the plaintiff's purposes for amendment under § 1447(e).”).

         Based on a review of the record and the allegations asserted in this case, the court finds that, on balance, the relevant factors do not support permitting joinder of Eger.

         1. Necessity of Defendant for Just Adjudication Under Rule 19

         First, Eger is not a necessary defendant for “just adjudication” of this action. Rule 19 “requires joinder of persons whose absence would preclude the grant of complete relief, or whose absence would impede their ability to protect their interests or would subject any of the parties to the danger of inconsistent obligations.” Fed.R.Civ.P. 19(a). Plaintiff seeks damages for the alleged financial losses he suffered in connection with his use of OANDA's foreign currency exchange services. The only ...

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