United States District Court, N.D. California
ORDER GRANTING MOTION TO DISMISS FOR FORUM NON
CONVENIENS RE: DKT. NO. 9
WILLIAM H. ORRICK, UNITED STATES DISTRICT JUDGE
Nicolette Lewis was engulfed by flames and suffered severe
burns when a fuel container for her family's outdoor fire
bowl exploded during refueling. She and her family members,
Alexis Lewis, Margrett Lewis, and Jeffrey Lewis, brought suit
against the manufacturer, EcoSmart, Inc.
(“EcoSmart”), and its parent company The Fire
Company, Pty, Ltd (“TFC”), and were awarded
damages in excess of $45 million. EcoSmart has since declared
bankruptcy and plaintiffs now bring this action against
EcoSmart and TFC's insurers, Liberty Mutual Insurance
Company and Liberty International Underwriters (together,
“Liberty Mutual”), seeking payment on their
damages award. The insurance policy contains a mandatory
forum selection clause granting exclusive jurisdiction to the
Australian Courts, and so Liberty Mutual moves to dismiss on
forum non conveniens grounds so that the case is
litigated in Australia. Because the clause is valid and its
enforcement is not unreasonable or unjust, I am constrained
to GRANT Liberty Mutual's motion.
8, 2014, twin sisters Nicolette and Alexis Lewis were using
the fire bowl at their home in Sonoma, California. Complaint
(“Compl.”) [Dkt. No. 1-1] ¶ 6. Alexis was
refueling the bowl with a one-gallon fuel container of e-NRG
when the vapors from the container ignited and caused an
explosive discharge of ethanol fuel and fire, engulfing
Nicolette in flames and causing severe third degree burns to
her face, neck, chest, arms, legs, and feet. Id. As
their parents Jeffrey and Margrett Lewis rushed to her to
attempt to put out the flames, they too suffered burn
injuries. Id. ¶¶ 6, 8. Nicolette spent 30
days in the hospital with life threatening injuries and
required multiple surgical procedures, laser treatments, and
other medical care. Id. ¶ 7.
fuel container was manufactured by EcoSmart, a California
corporation headquartered in California. Compl. ¶ 2.
EcoSmart is a subsidiary of TFC, an Australian corporation.
Defs.' RJN Ex. 3 at 2. EcoSmart and TFC were insured by
Liberty Mutual when the underlying incident occurred.
See Compl. ¶ 11; Milliken Decl. Ex. 1 [Dkt. No.
11-1]; Nicholls Decl. Ex. 1 [Dkt. No. 12-1]. Liberty Mutual
issued an insurance policy to EcoSmart and TFC covering
negligence and product defects resulting in bodily injury
with a coverage period of April 20, 2013 to April 30, 2014.
Compl. ¶ 11. EcoSmart and TFC renewed that policy from
April 30, 2014 to April 30, 2015, but coverage under the
second policy period substantially reduced coverage limits.
Id. Both policies contained a mandatory forum
selection clause granting exclusive jurisdiction to the
Australian Courts over all matters arising from or relating
to the construction, operation, or interpretation of the
policies. See Milliken Decl. Ex. 1, at § 8.6;
Nicholls Decl. Ex. 1, at § 8.6.
brought suit against EcoSmart and TFC in the Sonoma County
Superior Court alleging product defect, negligence, and
negligent infliction of emotional distress. Compl. ¶ 10.
Liberty Mutual declined to provide a defense and
indemnification in that case, and EcoSmart filed for
bankruptcy on November 8, 2015, as a result. Id.
¶¶ 12, 14. TFC ignored the litigation. Opp. at 4.
On January 9, 2018, a judgment in excess of $45 million was
entered against EcoSmart and in favor of plaintiffs. Compl.
¶ 15. Plaintiffs now bring suit against Liberty Mutual
pursuant to California Insurance Code Section 11580(b)(2),
seeking payment on their judgment against EcoSmart.
selection clauses are “presumptively valid, ” and
“honored “absent some compelling and
countervailing reason.” Murphy v. Schneider
Nat'l Inc., 362 F.3d 1133, 1140 (9th Cir. 2003).
“The party challenging the clause bears a heavy burden
of proof 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.” Id.
at 1140 (internal quotation marks and citation omitted). A
forum selection clause may be unreasonable if: (1) “the
inclusion of the clause in the agreement was the product of
fraud or overreaching”; (2) “the party wishing to
repudiate the clause would effectively be deprived of his day
in court were the clause enforced”; or (3)
“enforcement would contravene a strong public policy of
the forum in which suit is brought.” Id.
appropriate way to enforce a forum-selection clause pointing
to a state or foreign forum is through the doctrine of
forum non conveniens.” Atl. Marine Constr.
Co. v. U.S. Dist. Ct., 571 U.S. 49, 60 (2013). When a
motion to dismiss is based on a forum selection clause,
rather than solely on the doctrine of forum non
conveniens, the Supreme Court has held that a district
court cannot consider the “private interest”
factors, such as the plaintiff's choice of forum and the
convenience of parties and witnesses. See Id. at
62-64. Instead, the court may only weigh the “public
interest” factors, which “may include the
administrative difficulties flowing from court congestion;
the local interest in having localized controversies decided
at home; [and] the interest in having the trial of a
diversity case in a forum that is at home with the
law.” Id. at 62 n.6. “Once a district
court determines that the appropriate forum is located in a
foreign country, the court may dismiss the case.”
Nibirutech Ltd v. Jang, 75 F.Supp.3d 1076, 1079
(N.D. Cal. Dec. 2, 2014).
Plaintiffs Are Within the Scope of the Forum Selection
contend that whether or not the forum selection clause is
generally valid and enforceable, it may not be applied to
them because they are not parties to the insurance policy and
did not have the benefit of negotiating its terms, and thus
should be entitled to their choice of forum. Liberty Mutual
responds that because plaintiffs stand in the shoes of
EcoSmart as third-party beneficiaries to the contract, they
are subject to and bound by its terms.
law applies to the analysis of a forum selection clause's
effect and scope. See Manetti-Farrow, Inc. v. Gucci Am.,
Inc., 858 F.2d 509, 513 (9th Cir. 1988) (“[T]he
federal procedural issues raised by forum selection clauses
significantly outweigh the state interests, and the federal
rule announced in The Bremen controls enforcement of
forum clauses in diversity cases.”). The parties
initially provided precedent concerning the general rule in
the Ninth Circuit, which is that “the scope of a
third-party beneficiary's rights is defined by the