United States District Court, N.D. California
ORDER DENYING MOTION FOR LEAVE TO SEEK
RECONSIDERATION OF ORDER DENYING MOTION TO COMPEL
ARBITRATION; DENYING MOTION TO TRANSFER ACTION PURSUANT TO 28
U.S.C. § 1404; DISSOLVING STAY; DIRECTING FILING OF
SECOND AMENDED COMPLAINT DKT. NO.
GONZALEZ ROGERS, UNITED STATES DISTRICT COURT JUDGE
Life Insurance Company of the Southwest, National Life
Insurance Company, NLV Financial Corporation, and National
Life Holding Company filed a Motion for Leave to Seek
Reconsideration of this Court’s January 22, 2019 Order,
which denied defendants’ motions to compel arbitration
as to plaintiffs Rui Chen and Wenjian Gonzalez in this action.
(Dkt. No. 95.) In the alternative, defendants seek an order
transferring this action to the Northern District of Georgia
pursuant to 28 U.S.C. section 1404(a). (Id.)
Reconsideration of Arbitration Order
motion for leave to seek reconsideration, defendants contend
that if the Court grants the motion to compel arbitration in
the related action entitled Wang v. Life Insurance
Company of the Southwest et al, 4:19-cv- 01150-YGR, it
should reconsider its prior ruling denying arbitration in the
instant action for defendants’ failure to submit
sufficient evidence that plaintiffs affirmatively agreed to
the terms of the Premier Financial Alliance Associate
Marketing Agreement (“AMA”) by clicking a box in
an online registration form. Defendants state that the
“proof of affirmative consent that PFA submits with the
instant motion applies equally to all PFA Associates,
including not only the Chen Plaintiffs but all
putative members of the classes pleaded in both cases.”
(Motion, Dkt. No. 95, at 4:4-6.)
separate order issued this date in the Wang action,
the Court denied the motion to compel arbitration as to
plaintiffs therein. As set forth more fully in that order,
based upon the evidence submitted in support of and in
opposition to the motion, there are disputed issues of
material fact as to whether the plaintiffs in the
Wang action themselves entered into the AMA, since
they declare that the recruiting PFA associates completed the
online form for them such that the Wang plaintiffs
never saw any of the terms of the AMA at the time they
the Court declines to reconsider its January 22, 2019 Order
in the instant action denying the motion to compel
arbitration. The motion for leave to seek reconsideration is
Motion to Transfer Pursuant to 28 U.S.C. §
respect to the motion to transfer under section 1404, the
Court Denies the motion.Defendants contend
that this action “might have been brought” in the
Northern District of Georgia, where PFA is incorporated and
headquartered, and plaintiffs, by their acceptance of the
AMA, consented to venue and jurisdiction in Georgia. (Martin
Decl. ¶ 20 and Exh. A at § 14.) Plaintiffs counter
that they cannot be bound by the AMA’s terms as to
venue for the same reason as they cannot be bound by the
arbitration provision. Moreover, they contend the section
1404 factors favor maintaining their choice of venue.
section 1404(a), a district court has discretion to transfer
an action to another forum. Section 1404(a) permits transfer
to “any district where venue is also proper . . . or to
any other district to which the parties have agreed by
contract or stipulation.” Atlantic Marine Const.
Co. v. U.S. Dist. Court, 571 U.S. 49, 59 (2013). Forum
selection clauses may be enforced through a motion to
transfer under section 1404(a). Id.
the typical case not involving a forum-selection clause, a
district court considering a [section] 1404(a) motion . . .
must evaluate both the convenience of the parties and various
public-interest considerations.” Id. at 62.
Private convenience concerns take into account
“relative ease of access to sources of proof[,]
availability of compulsory process for attendance of
unwilling, and the cost of obtaining attendance of willing,
witnesses[,] . . . and all other practical problems that make
trial of a case easy, expeditious and inexpensive.”
Id. at 63 n. 6 (internal citation omitted); see
also Jones v. GNC Franchising, Inc., 211 F.3d 495, 499
(9th Cir. 2000) (factors to be considered include “(1)
the location where the relevant agreements were negotiated
and executed, (2) the state that is most familiar with the
governing law, (3) the plaintiff’s choice of forum, (4)
the respective parties’ contacts with the forum, (5)
the contacts relating to the plaintiff’s cause of
action in the chosen forum, (6) the differences in the costs
of litigation in the two forums, (7) the availability of
compulsory process to compel attendance of unwilling
non-party witnesses, and (8) the ease of access to sources of
proof.”). Public interest factors to be considered
include relative court congestion, local interest in the
controversy, and familiarity with the applicable law.
Atlantic Marine, 571 U.S.
calculus changes . . . when the parties’ contract
contains a valid forum selection clause.” Id.
“[A] valid forum selection clause should be given
controlling weight in all but the most exceptional
cases,” and the “plaintiff bears the burden of
establishing that transfer to the forum for which the parties
bargained is unwarranted,” based upon public interest
factors. Id. (citation and brackets omitted).
defendants’ assertion of a binding forum selection
clause in the AMA carries no weight in the Court’s
analysis, for several reasons. The Court denied
defendants’ motion to compel arbitration in this matter
for “failure to establish the existence of an agreement
to arbitrate” (Order Denying Motions to Compel
Arbitration dated January 22, 2019, Dkt. No. 56.) For the
same reasons, the Court cannot find the forum selection
provision in the AMA to be binding on plaintiffs here.
See Long v. Provide Commerce, Inc., 245 Cal. App.
4th 855, 868 (2016) (party could not simply invoke a forum
selection clause when validity of the larger contract was in
even if defendants could show that plaintiffs agreed to the
forum selection clause in the AMA, that clause is permissive,
not mandatory. The AMA provides in section 13 that “PFA
. . . may elect to file civil litigation in Gwinnett County,
Georgia” in the case of a breach of the agreement, and
in section 14 that “[a]ll parties consent to
jurisdiction and venue in Gwinnett County, Georgia for any
disputes that may arise hereunder.” (Declaration of
Kelly Martin, Dkt. No. 95-1, Exh. A at 8.) Where a forum
selection clause uses only permissive language, it need not
be enforced. Terra Tech Corp. v. Vandevrede, No.
SACV 18-602 JVS (JDEx), 2018 WL 8131761, at *7 (C.D. Cal.
Dec. 4, 2018) (citing Docksider, Ltd. v. Sea Tech.,
Ltd., 875 F.2d 762, 764 (9th Cir. 1989) and Hunt
Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 75, 77
(9th Cir. 1987)). “To be mandatory, a clause must
contain language that clearly designates a forum as the
exclusive one.” N. Cal. Dist. Council of Laborers
v. Pittsburg-Des Moines Steel Co., 69 F.3d 1034, 1037
(9th Cir. 1995). The AMA does not so state.
the forum selection clause in the AMA is limited to matters
arising under the agreement, including “conflict as to
the interpretation, breach or other default events.”
(Martin Decl. Exh. A at 8.) The Court is not persuaded that
the forum selection clause would encompass the tortlike
claims alleged here. See Manetti-Farrow, Inc. v. Gucci
Am., Inc., 858 F.2d 509, 514 (9th Cir. 1988)
(“[w]hether a forum selection ...