United States District Court, N.D. California
ORDER ON DEFENDANTS' MOTIONS TO TRANSFER VENUE
RE: DKT. NOS. 41, 42
M. RYU JUDGE.
Blend, LLC (“Blend”) filed this lawsuit against
Defendants Glenwood Smoked Products, Inc. (“Glenwood
Smoked Products”); Glenwood Snacks, LLC
(“Glenwood Snacks”); Mitch Scott; Clark Scott;
Scott Zabriskie; and Daniel Haller alleging breach of
contract and related claims. Glenwood Snacks, Zabriskie, and
Haller (the “Glenwood Snacks Defendants) filed a motion
to transfer venue pursuant to 28 U.S.C. § 1406(a).
[Docket No. 41.] Glenwood Smoked Products, Mitch Scott, and
Clark Scott (the “Glenwood Smoked Products
Defendants”) separately move to transfer venue pursuant
to 28 U.S.C. § 1406(a). [Docket No. 42.] Blend filed a
consolidated opposition to both motions (Docket No. 44). This
matter is appropriate for determination without oral
argument. Civil L.R. 7-1(b). For the following reasons, the
motions are denied.
following facts are taken from Blend's complaint. Blend
is a California company that “owns and manages food
product brands.” Its principal place of business is in
Vacaville, California. Compl. ¶ 6. Both Glenwood Smoked
Products and Glenwood Snacks are Idaho corporations with
their principal places of business in Idaho. Id. at
¶¶ 7, 8. Mitch Scott and Clark Scott are officers,
directors, shareholders, and/or managing agents of Glenwood
Smoked Products and citizens of Idaho. Id. at
¶¶ 9, 10. Zabriskie is an officer, director,
shareholder, and/or managing agent of Glenwood Smoked
Products and/or Glenwood Snacks and is an Idaho citizen.
Heller is an officer, director, shareholder, and/or managing
agent of Glenwood Snacks and is an Idaho citizen.
Id. at ¶¶ 12, 13.
April 1, 2016, Blend entered into a “Recipe/Formulation
Agreement” with Glenwood Smoked Products. Compl. Ex. A
(the “Recipe Agreement”). Pursuant to that
agreement, Glenwood Smoked Products agreed to “create
jerky recipes for Blend according to Blend's
specifications, ” and the parties agreed that Blend
would “have full ownership rights to these
recipes.” Id. In exchange, Blend granted
Glenwood Smoked Products “the right of first refusal
for any and all orders received by Blend which use the
recipes developed by Glenwood [Smoked Products].”
Id. The Recipe Agreement contains the following
forum selection provision:
Blend LLC and Glenwood [Smoked Products] agrees [sic] that
the covenants of this Agreement may be enforced by the other
party in the local jurisdiction of the enforcing party; and,
to that end, each party consents to jurisdiction (and waves
[sic] any objection based on inconvenient forum) in the
jurisdiction of the other party.
Id. Clark Scott signed the Recipe Agreement on
behalf of Glenwood Smoked Products as its President/CEO. An
individual named David Ngo signed on behalf of Blend.
July 2016 to December 2017, Glenwood Smoked Products
developed recipes for Blend's jerky products and
manufactured the products for Blend under Blend's
direction. Compl. ¶ 2. In January 2018, Blend learned
that Glenwood Smoked Products had been sold to new owners and
would operate under a new name, Glenwood Snacks, LLC. Blend
alleges that “Glenwood Snacks did not dispute that it
succeeded to the rights and liabilities of Glenwood Smoked
Products after the acquisition, which included the rights and
obligations pertaining to the Recipe Agreement.”
Id. at ¶ 21. Shortly thereafter, Glenwood
Snacks purported to give notice of its cancellation of a
separate manufacturing agreement between Glenwood Smoked
Products and Blend. Id. Blend alleges on information
and belief that Glenwood Snacks had its own preexisting line
of jerky products that competed with Blend's jerky
products. Id. at ¶¶ 2, 22.
February 2018, after attempting to negotiate the terms of a
manufacturing agreement with the new owners of Glenwood
Smoked Products, Blend repeatedly demanded that Defendants
“turn over complete Recipe information as was its right
under the Recipe Agreement” so that it could
“line up a new manufacturer” and fill existing
orders. Id. at ¶¶ 3, 24-28. Defendants
failed to do so, preventing Blend from continued production,
distribution, and sales of its jerky products, which damaged
damaging Blend. Id. at ¶ 4.
filed a complaint in July 2019 alleging the following claims:
1) breach of contract, against Glenwood Smoked Products and
Glenwood Snacks; 2) breach of the implied covenant of good
faith and fair dealing against Glenwood Smoked Products and
Glenwood Snacks; 3) breach of fiduciary duties against all
Defendants; 4) intentional interference with contractual
relations against the Glenwood Snacks Defendants; 5)
intentional interference with prospective economic relations
against the Glenwood Snacks Defendants; 6) negligent
interference with prospective economic advantage against the
Glenwood Snacks Defendants; 7) unfair competition against all
Defendants; and 8) punitive damages against all Defendants.
complaint, Blend alleges that venue is proper pursuant to 28
U.S.C. § 1391(b)(2) because a substantial part of the
events or omissions giving rise to its claims occurred in
this district. It also alleges that venue is proper
“because Glenwood specifically agreed to the local
jurisdiction of the enforcing party, Blend, as per the Recipe
Agreement[.]” Compl. ¶ 16.
now separately move pursuant to 28 U.S.C. § 1406(a) to
transfer the case to the District of Idaho. The Glenwood
Snacks Defendants argue that only Glenwood Smoked Products is
a party to the Recipe Agreement, and thus they are not
subject to its forum selection clause. According to the
Glenwood Snacks Defendants, 28 U.S.C. § 1391 governs and
the District of Idaho is the proper venue under 28 U.S.C.
§ 1391(b)(1) and (2).
alternative, if the court concludes that the forum selection
clause in the Recipe Agreement is enforceable as to all
Defendants, the Glenwood Snacks Defendants move to transfer
the case to the Eastern District of California, arguing that
Blend's “local jurisdiction” is located where
Blend has its principal place of business in Vacaville,
California, which is in that district.
Glenwood Smoked Products Defendants also move pursuant to 28
U.S.C. § 1406(a) to transfer the case to the District of
Idaho. They also argue that under 28 U.S.C. § 1391, the
District of Idaho is the proper venue for this action, and
that if the forum selection clause in the Recipe Agreement
applies, then venue is proper in the Eastern District of
California. Blend opposes the motions.