United States District Court, N.D. California
ORDER DENYING DEFENDANTS' MOTION TO TRANSFER
VENUE DOCKET NO. 24
M. CHEN UNITED STATES DISTRICT JUDGE
bring a putative class action against Defendants World
Financial Group Insurance Agency Inc. (a California
corporation), World Financial Group Inc. (a Florida
corporation), and Does 1 to 100 (collectively
“Defendants”), alleging violations of the
California Labor Code, the California Business and
Professional Code, and California Wage Orders (and asserting
a claim of unjust enrichment) based on Defendants'
purported misclassification of Plaintiffs as independent
contractors, as opposed to employees. Defendants move the
Court to transfer the case to the U.S. District Court for the
Northern District of Georgia based on forum selection clauses
in the parties' various contracts.
allege the following. Defendants represent themselves as a
financial- and insurance-products marketing company; they
recruit individuals as “Associates” and purport
to give people the tools “to build and operate their
own financial services business.” Class Action
Complaint (“Complaint”) ¶ 1, Docket No. 1-1.
However, Plaintiffs assert that “Defendants conduct
their business by way of a massive pyramid scheme, ”
wherein recruiting new Associates is one of the “main
factors involved in achieving promotions.” Id.
¶ 2. Once someone is an Associate, Defendants pressure
that person to “purchase Defendants' financial and
insurance products” and to “sell financial and
insurance products to the new Associates.” Id.
also allege that “Defendants have unlawfully
misclassified Associates as ‘independent
contractors' rather than as employees” in order to
further increase profits. Id. ¶ 4.
Specifically, each Associate is “required to sign
identical, non-negotiable Associate Membership Agreements
(‘AMAs'), ” which “set forth uniform
rules and policies promulgated by Defendants, which subject
Associates to strict control . . . . Plaintiffs and Class
Members signed the AMAs.” Id. ¶ 5.
Plaintiffs also contend that “Defendants completely
control the overall operation of the business” and
“retain the exclusive authority to hire and fire every
Associate.” Id. ¶ 6, 7. Furthermore,
because of this classification, Associates earn only
commissions, not minimum wage, and they bear the burden of
business costs, which Defendants might otherwise bear.
Id. ¶ 8, 9. In addition, Associates are
improperly deprived of the protection of workers'
compensation, the benefits of overtime pay, and meal and rest
breaks. Id. ¶ 9, 10. Plaintiffs contend that,
through this conduct, Defendants have violated various
provisions of the California Labor Code, the California
Business and Professional Code, and California Wage Orders;
they also assert a claim of unjust enrichment. Id.
seek to have this case transferred to the U.S. District Court
for the Northern District of Georgia because of forum
selection clauses in the parties' various agreements.
See Defendants' Notice of Motion to Transfer
Venue (“Notice”) at 1, Docket No. 24. In relevant
part, the clause in the Associate Membership Agreement
The parties agree that, without waiver of their rights and
obligations under Section V., unless expressly provided to
the contrary in this Agreement, the state and federal courts
of Georgia shall have exclusive jurisdiction of any
litigation between the parties and the Associate expressly
submits to the jurisdiction and venue of the federal and
state courts sitting in Gwinnett County, Georgia or Cobb
County, Georgia with respect to any such litigation.
Id. (citing Associate Membership Agreement at 12,
Docket No. 24-2). Defendants also allege that many of the
Plaintiffs signed Marketing Director Agreements
(“MDAs”), which “do not displace the AMAs,
but contain a similar forum-selection clause, under which
[those] Plaintiffs reaffirmed their commitment to conduct
‘all litigation' in Georgia.” Id.
(citing Marketing Director Agreement, Section VI., Docket No.
24-3). The forum selection clause in the Marketing Director
The parties agree that the state and federal courts of
Georgia shall have exclusive jurisdiction of any litigation
between the parties and the Marketing Director expressly
submits to the jurisdiction and venue of the federal and
state courts sitting in Fulton County, Georgia, with respect
to such litigation.
Director Agreement, Section VI., Docket No. 24-3.
filed this case in San Francisco Superior Court in December
2018. See Docket No. 1-1. It was removed by
Defendants in February 2019. See Notice of Removal,
Docket No. 1. In June 2019, Plaintiffs filed a First Amended
Class Action Complaint. See Docket No. 23. Shortly
thereafter, Defendants filed a Motion to Transfer Case; they
move the Court for an order transferring the case to the U.S.
District Court for the Northern District of Georgia.
See Docket No. 24.
have moved the Court under 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.”
motion to transfer under § 1404(a) thus calls on the
district court to weigh and balance a number of case-specific
factors. The presence of a forum-selection clause, such as
the parties entered into in this case, will be a significant
factor in the district court's calculus. Normally, a
court assessing whether to grant a motion to transfer venue
may consider factors such as:
(1) plaintiffs' choice of forum, (2) convenience of the
parties, (3) convenience of the witnesses, (4) ease of access
to the evidence, (5) familiarity of each forum with the
applicable law, (6) feasibility of consolidation with other
claims, (7) any local interest in the controversy, and (8)
the relative court congestion and time of trial in each
Vu v. Ortho-Mcneil Pharm., Inc., 602 F.Supp.2d 1151,
1156 (N.D. Cal. 2009) (Illston, J.).
the presence of a forum-selection clause changes that
analysis. The “proper application of § 1404(a)
requires that a forum-selection clause be given controlling
weight in all but the most exceptional cases.” Atl.
Marine Const. Co. v. U.S. Dist. Court for W. Dist. of
Texas, 571 U.S. 49, 59-60 (2013) (internal quotation
marks omitted). In addition, “[t]he presence of a valid
forum-selection clause requires district courts to adjust
their usual § 1404(a) analysis in three ways.”
Id. at 63. First, the plaintiff's choice of
forum “merits no weight”; instead, “as the
party defying the forum-selection clause, the plaintiff bears
the burden of establishing that transfer to the forum for
which the parties bargained is unwarranted.”
Id. Second, “[w]hen parties agree to a
forum-selection clause, they waive the right to challenge the
preselected forum as inconvenient or less convenient for
themselves or their witnesses, or for their pursuit of the
litigation.” Id. Thus, the Court “should
not consider arguments about the parties' private
interests, and instead “may consider arguments about
public-interest factors only.” Id. However,
such factors “will rarely ...