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Sawyer v Bill Me Later Forum Transfer

Sawyer v Bill Me Later Forum Transfer

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Case 2:10-cv-04461-SJO-JCG Document 1511 Filed COURT Page 11of 10 Page ID Case 2:11-cv-00988-CW STATES DISTRICT

10/21/11 Page Priority Filed 10/24/11 of 10 UNITED Document #:3485 Send CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL
Enter Closed JS-5/JS-6 Scan Only

CASE NO.: CV 10-04461 SJO (JCGx) TITLE:

DATE: October 21, 2011

Kyle Sawyer v. Bill Me Later, Inc., et al.

======================================================================== PRESENT: THE HONORABLE S. JAMES OTERO, UNITED STATES DISTRICT JUDGE Victor Paul Cruz Courtroom Clerk COUNSEL PRESENT FOR PLAINTIFF: Not Present Not Present Court Reporter COUNSEL PRESENT FOR DEFENDANTS: Not Present

======================================================================== PROCEEDINGS (in chambers): ORDER GRANTING WEBBANK'S MOTION TO TRANSFER VENUE [Docket No. 124] This matter is before the Court on Intervenor-Defendant WebBank's ("WebBank") Motion to Transfer Venue or Dismiss for Improper Venue ("Motion to Transfer II"), filed on August 29, 2011. (Docket No. 124.) On June 24, 2010, Defendants Bill Me Later, Inc. ("BML"), eBay, Inc. ("eBay"), and PayPal, Inc. ("PayPal") (collectively, "Defendants") filed a Motion to Dismiss for Improper Venue, or in the Alternative, to Transfer Venue ("Motion to Transfer I") to the United States District Court for the District of Utah based on the forum selection clause in Plaintiff Kyle Sawyer's ("Plaintiff") contract with BML. (Docket No. 10.) On October 4, 2010, the Court denied Defendants' Motion to Transfer I. (Docket No. 40.) On May 23, 2011, WebBank filed a Motion to Intervene as a Matter of Right (Docket No. 84), which the Court granted on August 8, 2011 (Docket No. 115). WebBank filed this Motion to Transfer II on August 29, 2011. On September 12, 2011, Defendants joined in WebBank's Motion to Transfer II. Plaintiff filed an Opposition ("Opposition") on September 19, 2011, to which WebBank filed a Reply ("Reply") on September 26, 2011. The Court found this matter suitable for disposition without oral argument and vacated the hearing set for September 26, 2011. See Fed. R. Civ. P. 78(b). For the following reasons, the Court GRANTS WebBank's Motion to Transfer Venue and Defendants BML, eBay, and PayPal's Joinder. I. FACTUAL AND PROCEDURAL BACKGROUND

In October 2008, Plaintiff used BML's services to obtain a loan funded by CIT Bank ("CIT"), which is located in Salt Lake City, Utah.1 (See Notice of Removal, Ex. A ("Compl.") ¶ 58.) BML provides consumers with an instant transactional credit card plan for purchases made on the internet or

CIT is the original signatory to the BML Program Agreement at issue in this case but has not been named as a party to the action. (Decl. of Jeff D. Friedman in Supp. of Pl.'s Opp'n ("Friedman Decl.") Ex. 2.)
MINUTES FORM 11 CIVIL GEN :
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Initials of Preparer

Case 2:10-cv-04461-SJO-JCG Document 1511 Filed COURT Page 22of 10 Page ID Case 2:11-cv-00988-CW STATES DISTRICT 10/21/11 Page of 10 Filed 10/24/11 UNITED Document #:3486 CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL

CASE NO.: CV 10-04461 SJO (JCGx)

DATE: October 21, 2011

over the phone. (Compl. ¶ 1.) Plaintiff failed to repay the loan and, as a result, he was charged multiple allegedly unfair late fees. (Compl. ¶¶ 58, 59.) Plaintiff filed a class action complaint against Defendants in state court on May 21, 2010. (See generally Compl.) Plaintiff's Complaint alleges that the actions of Defendants BML and PayPal, aided and abetted by Defendant eBay, constitute: (1) breach of contract in violation of California Civil Code section 1671; (2) violations of the California Consumers Legal Remedies Act ("CLRA"); (3) violations of article XV, section 1 of the California Constitution; and (4) violations of the California Business and Professions Code section 17200 (commonly known as the Unfair Competition Law ("UCL")). (See generally Compl.) On June 17, 2010, Defendants removed this action to federal court based on diversity of citizenship under the Class Action Fairness Act ("CAFA"). (See generally Notice of Removal ("Notice"), ECF No. 1.) On June 24, 2010, prior to WebBank intervening in this matter, Defendants filed a Motion to Dismiss for Improper Venue, or in the Alternative, Motion to Transfer Venue ("Motion to Transfer I") based on a forum selection clause in Plaintiff's contract with BML. (Mot. to Transfer I, ECF No. 10.) The contract as originally written did not contain a forum selection provision, but did contain a choice-of-law provision designating Utah law for construction of contract terms, and federal law and Utah law for resolution of disputes relating to interest, charges, and fees. (Mot. to Transfer I 7:4-7.) The contract was subsequently amended ("Amended Agreement") to include a Forum Selection Clause ("FSC") that mandates "any claim or dispute . . . be resolved by a court located in Utah." (Mot. to Transfer I 2:9-14.) In an Order issued October 4, 2010 ("October 4th Order"), the Court denied Defendants' Motion to Transfer I. (Oct. 4th Order, ECF No. 40.) In the October 4th Order, the Court analyzed the enforceability of the FSC by looking at the FSC in conjunction with the choice-of-law provision. (Oct. 4th Order 11:11-12.) The Court found that the FSC was unenforceable because application of Utah state law would deprive Plaintiff of the right to obtain punitive damages, which "contravenes the strong California public policy to preserve remedies under the CLRA for California residents." (Oct. 4th Order 12:9-10.) As a result, the Court denied Defendants' Motion to Transfer I. (Oct. 4th Order 12:16-17.) On August 8, 2011, the Court permitted WebBank to intervene as a defendant in this matter. (Order Granting Req. to Intervene, ECF No. 115.) WebBank is a Utah-chartered industrial bank, headquartered in Salt Lake City, Utah. (See generally Mot. to Intervene.) WebBank issues several consumer and commercial private-label and bank-card credit programs, one of which is the BML program. (See generally Order Granting Req. to Intervene.) On August 4, 2011, while WebBank's Motion to Intervene was pending, Plaintiff retained counsel in Utah and filed two discovery requests in the District of Utah, seeking to compel further discovery responses from CIT and WebBank. (Decl. of Sean A. Commons in Supp. of Mot. to Transfer II ("Commons Decl.") Exs. A, B.) On August 8, 2011, WebBank asked Plaintiff to withdraw his motions against WebBank because it was now a party to this action. (Commons Decl. ¶ 4.) Plaintiff refused to withdraw his motions to compel. (Commons Decl. ¶ 4; Pl.'s Opp'n 4:14-15.)

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Case 2:10-cv-04461-SJO-JCG Document 1511 Filed COURT Page 33of 10 Page ID Case 2:11-cv-00988-CW STATES DISTRICT 10/21/11 Page of 10 Filed 10/24/11 UNITED Document #:3487 CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL

CASE NO.: CV 10-04461 SJO (JCGx)

DATE: October 21, 2011

On August 29, 2011, WebBank filed its Motion to Transfer II, requesting the Court to enforce the FSC and transfer this action to the District of Utah. (See generally Mot. to Transfer II). Defendants BML, eBay, and PayPal have joined in WebBank's request. (Defs.' Joinder to Mot. to Transfer, ECF No. 128.) On September 26, 2011, WebBank filed a Motion to Dismiss Case for Failure to State a Claim ("Motion to Dismiss"). (Mot. to Dismiss, ECF No. 141.) II. DISCUSSION

WebBank's Motion to Transfer II states three grounds for transferring this action to the District of Utah. (Mot. to Transfer II 4:16.) First, WebBank argues that the validity of the FSC must be determined on its own and not in conjunction with the choice-of-law provision. (Mot. to Transfer II 4:17-20.) Second, WebBank contends that even if the FSC and choice-of-law provision are considered together, the FSC cannot offend California public policy. (Mot. to Transfer II 4:20-23.) Lastly, WebBank asserts that the differences between CLRA and the Utah Consumer Sales Practice Act ("UCSPA") cannot offend fundamental public policy and that Plaintiff's remedies under the UCSPA will not be limited. (Mot. to Transfer II 4:23-26.) For the following reasons, the Court agrees that enforceability of the FSC should be analyzed separately from enforceability of the choice-of-law provision, and GRANTS WebBank's Motion to Transfer II. A. Legal Standard for Transfer Under 28 U.S.C. § 1404(a)

A district court may transfer a civil case to any other district where it could originally been filed "[f]or the convenience of parties and witnesses[] [and] in the interest of justice." 28 U.S.C. § 1404 (a) (2006). In determining whether transfer is appropriate, the district court must "balance the preference accorded to the plaintiff's choice of forum with the burden of litigating in an inconvenient forum." Gherebi v. Bush, 352 F.3d 1278, 1302 (9th Cir. 2003), vacated on other grounds, 542 U.S. 952 (2004). A motion for transfer lies within the broad discretion of the district court, and may be determined on an "individualized, case-by-case consideration of convenience and fairness." Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000). Factors a court may consider 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. Id. at 498-99. "Additionally, the presence of a forum selection clause is a significant factor in the court's § 1404(a) analysis." Id. at 499. B. Reconsideration of the Court's October 4th Order

Before addressing whether the FSC is enforceable, the Court must determine whether WebBank's Motion to Transfer II is a motion to reconsider the Court's October 4th Order or a new motion. In his Opposition, Plaintiff asserts that WebBank is attempting to relitigate the exact issue already decided by this Court, i.e., the enforceability of the FSC, without showing proper grounds
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CASE NO.: CV 10-04461 SJO (JCGx)

DATE: October 21, 2011

for reconsideration. (Pl.'s Opp'n 4:22-23.) Plaintiff argues that a motion for reconsideration should not be granted unless there is newly discovered evidence, clear error, or if there is an intervening change in the law. (Pl.'s Opp'n 5:13-14 (quoting Orange St. Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999).) Although Plaintiff correctly states the standard for reconsideration, the Court disagrees that it applies here. WebBank is not seeking reconsideration because it was not a party at the time the Court issued the October 4th Order. See LR 7-18 . Rather, WebBank seeks to relitigate the enforceability of the FSC. WebBank, as an intervenor, can raise improper venue as a defense. See SEC v. Ross, 504 F.3d 1130, 1150-51 (9th Cir. 2007) (holding that an intervenor does not automatically consent to the jurisdiction, but does "consent[] to have the district court determine all issues in the case, including issues of jurisdiction, venue and service of process"). In the Order Granting Movant's Request to Intervene, the Court understood that WebBank sought to address the applicability of Utah and federal law and the enforceability of the contract with Plaintiff. (Order Granting Req. to Intervene 6.) The Court allowed WebBank to intervene because its arguments were within the scope of litigation and would not prejudice Plaintiff. (Order Granting Req. to Intervene 6.) This very issue was brought to the Court's attention when it granted WebBank's request to intervene. The Court finds that WebBank may fully relitigate the enforceability of the FSC, and need not meet the requirements for reconsideration.2 B. Standing to Enforce the Forum Selection Clause

In his Opposition, Plaintiff argues that WebBank is not a successor in interest to the contract and cannot enforce the FSC. On December 1, 2006, CIT and Defendant BML entered into a Receivables Sales Agreement.3 (Friedman Decl. Ex. 3, at ¶ 3.) In February 2010, BML amended the original agreement to include the FSC. (Mot. to Transfer I 2:9-14.) WebBank was not a party to the Amended Agreement. (Pl.'s Opp'n 2-3; Mot. to Transfer I 2:22-3:8.) On September 1, 2010, CIT assigned all its rights as the prior owner of the BML accounts to WebBank. (Decl. of Jason Lloyd in Supp. of Mot. to Intervene ("Lloyd Decl.") ¶¶ 5-6.) In order to compel enforcement of the forum selection clause, a nonsignatory to the contract must be: (1) a third-party beneficiary to the contract; (2) a successor in interest to the contract; or (3) an agent intended to benefit from the clause. See Britton v. Co-op Banking Grp., 4 F.3d 742, 745-48 (9th Cir. 1993) (discussing when a nonsignator can compel an arbitration clause); see also

2

Irrespective of the requirements of LR 7-18, a court has the inherent authority to reconsider its own orders. See Amarel v. Cornell, 102 F.3d 1494, 1515 (9th Cir.1996) ("[T]he interlocutory orders and rulings made pre-trial by a district judge are subject to modification by the district judge at any time prior to final judgment."). The Receivable Sales Agreement is between CIT and I4 Commerce, Inc., and BML was formerly I4 Commerce, Inc. (Friedman Decl. Exs. 1-3.)

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Case 2:10-cv-04461-SJO-JCG Document 1511 Filed COURT Page 55of 10 Page ID Case 2:11-cv-00988-CW STATES DISTRICT 10/21/11 Page of 10 Filed 10/24/11 UNITED Document #:3489 CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL

CASE NO.: CV 10-04461 SJO (JCGx)

DATE: October 21, 2011

Dayhoff, Inc. v. H.J. Heinz Co., 86 F.3d 1287, 1298 n.9 (3d Cir. 1996) (stating that the distinction between arbitration and forum selection clauses "is irrelevant for our purpose of reviewing the district court's contract analysis"). Plaintiff argues that when BML purchased the receivables from CIT, CIT relinquished all rights flowing from Plaintiff's receivables. (Pl.'s Opp'n 8:10-15.) Plaintiff further asserts that following the transfer to BML, CIT did not have any rights against Plaintiff, and thus could not assign any rights to WebBank that would make WebBank a successor in interest with standing to enforce the FSC.4 (Pl.'s Opp'n 8:16-19.) The Court need not decide whether WebBank became successor in interest with rights under the Amended Agreement when CIT transferred its interest to WebBank. "[A] range of transaction participant, parties and non-parties, should benefit from and be subject to forum selection clauses." Manetti-Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509, 514 n.5 (9th Cir. 1988) (internal quotation marks omitted). Whether a non-signatory to the contract may be bound by the forum selection clause depends on whether "the alleged conduct of the non-parties is so closely related to the contractual relationship that the forum selection clause applies to all defendants." Id. The Court allowed WebBank to intervene because WebBank's contractual relationship with BML is closely related to Plaintiff's contractual relationship with BML. (See generally Order Granting Req. to Intervene). Further, all Defendants have joined WebBank's Motion to Transfer II, including BML, who is undoubtedly a party to the Amended Agreement. The Court concludes that WebBank has standing to enforce the FSC. C. Enforceability of the Forum Selection Clause

In diversity cases, federal law determines the validity of a forum selection clause. Manetti-Farrow, 858 F.2d at 513 (9th Cir. 1988). The U.S. Supreme Court has held that forum selection clauses are presumptively valid and should only be set aside if the party challenging enforcement can "clearly show that enforcement would be unreasonable and unjust." M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972). A forum selection clause may be deemed unreasonable under the following circumstances: (1) if the inclusion of the clause in the agreement was the product of fraud or overreaching; (2) if the party wishing to repudiate the clause would effectively be deprived of his day in court were the clause
4

Plaintiff cites Dimmitt & Owens Fin., Inc. v. United States, No. 73-1808, 1975 U.S. Dist. LEXIS 13499 (E.D. Pa. Mar. 6, 1975), for the proposition that WebBank failed to carry its burden to establish its property rights. (Pl.'s Opp'n 9:13-21.) The Court finds Dimmitt to be factually distinguishable. The court in Dimmitt found a nonparty to the case was unable to transfer any property rights to the plaintiff because it was a sham corporation. Dimmitt, 1975 U.S. Dist. LEXIS 13499, at *9-10. Thus, Dimmitt is inapposite here because there is no contention that CIT is a sham corporation unable to transfer its property rights to WebBank. Further, the Court need not rely on Dimmitt because it is not binding authority.

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CASE NO.: CV 10-04461 SJO (JCGx)

DATE: October 21, 2011

enforced; and (3) if enforcement would contravene a strong public policy of the forum in which suit is brought. Holland Am. Line, Inc. v. Wartsila N. Am., Inc., 485 F.3d 450, 457 (9th Cir. 2007). The party opposing enforcement bears a "heavy burden" to prove the unreasonableness of a forum selection clause. See Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 325 (9th Cir. 1996). In reviewing the enforceability of a forum selection clause, the Court is not required to accept the pleadings as true and may consider facts outside of the pleadings. Id. at 324. However, the Court must draw all reasonable inferences and resolve all factual conflicts in favor of the non-moving party. Murphy v. Schneider Nat'l, Inc., 362 F.3d 1133, 1138 (9th Cir. 2004). For the following reasons, the Court finds that the FSC is reasonable and enforceable. Plaintiff does not contend that the FSC was a product of fraud or would deprive him of his day in court.5 (Mot. to Transfer II 6:2-3.) The only issue before the Court is whether the FSC is unreasonable because it contravenes California public policy. (See generally Mot. to Transfer II; Pl.'s Opp'n.) WebBank argues that the enforceability of the forum selection clause should be determined separately from the enforceability of the choice-of-law provision. (Mot. to Transfer II 12-13.) Plaintiff argues that the choice-of-law provision and the enforceability of the FSC are "inextricably bound up," and when the two are considered together, the FSC violates California public policy. (Pl.'s Opp'n 12:21-24.) Plaintiff relies primarily on America Online, Inc. v. Superior Court of Alameda County, 90 Cal. App. 4th. 1 (2001), and Doe 1 v. AOL, LLC, 552 F.3d 1077 (9th Cir. 2009), for his assertion that the FSC would violate a fundamental public policy because his California claims under CLRA are unwaivable.6 In the October 4th Order, the Court held that the FSC is unenforceable because the clause in conjunction with the choice-of-law provision denied Plaintiff his rights to remedies under CLRA. (Oct. 4th Order 11:11-13.) The October 4th Order conflated the enforceability of the FSC

5

Plaintiff argues that the FSC does not apply to him because he did not voluntarily use BML's service after BML provided notice of the Amended Agreement. (Pl.'s Opp'n 9:2411:13.) The Court already determined that the FSC applied to Plaintiff in the October 4th Order. (Oct. 4th Order 4:11-8:3.) For the reasons stated in the October 4th Order, the Court rejects Plaintiff's argument.

In addition, Plaintiff argues that his Financial Lending Law ("FLL") claim rests on statutory rights that represent public policy interests that are also unwaivable. (Pl.'s Opp'n 11-17.) Plaintiff moved for leave to amend his Complaint to include his FLL claim, but the Court terminated Plaintiff's Motion for Leave to Amend (Mot. for Leave to Am., ECF No. 42) on March 18, 2011 with leave to re-file after resolution of two case-dispositive issues. (See Order Terminating Pl.'s Mot. for Leave to Am., ECF No. 64.) The Court will not consider Plaintiff's potential FLL claim in its analysis of WebBank's Motion to Transfer II.

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CASE NO.: CV 10-04461 SJO (JCGx)

DATE: October 21, 2011

with the enforceability of the choice-of-law provision. After reviewing the additional briefing and further considering America Online and AOL, the Court finds that the enforceability of the FSC should be analyzed separately from the choice-of-law provision.7 In America Online, the defendant moved to dismiss the action for improper venue based on a forum selection clause that "designated Virginia as the jurisdiction in which all disputes arising out of the relationship would be litigated." Am. Online, 90 Cal. App. 4th at 4. The agreement in America Online also contained a choice-of-law provision requiring Virginia law to be applied. Id. The court assumed that upon transfer, the Virginia state court would apply its own consumer protection laws. Id. at 14 n.6. The California Court of Appeals held that the forum selection clause at issue, with the choice-of-law provision, was unenforceable because it violated public policy for two reasons. First, enforcement of the forum selection clause would lead to application of nonCalifornia substantive law and "necessitate a waiver of the statutory remedies under the CLRA" in violation of the CLRA's anti-waiver provision. Id. at 15. Second, the forum selection clause would transfer the matter to a forum whose procedural rules did not permit class actions. Id. at 18. Similarly, the Ninth Circuit, in AOL, refused to enforce the same forum selection clause addressed in America Online. AOL, 552 F.3d at 1082-83. The Ninth Circuit first interpreted the forum selection clause as designating only Virginia state courts as an appropriate venue. Id. at 1082. The Ninth Circuit then determined whether the enforcement of the forum selection clause would contravene California public policy, "whether declared by statute or by judicial decision." Id. at 1083 (citing Bremen, 407 U.S. at 15). Relying on America Online, the Ninth Circuit held that California has declared "by judicial decision" that the forum selection clause was invalid because CLRA's anti-waiver provision would be violated and because class actions are not available in Virginia state court. Id. at 1084. WebBank argues that the contract provision at issue in America Online and AOL fundamentally differs from the FSC at issue in this case. (Mot. to Transfer II 10:13-14.) The Court agrees. Unlike the clause in America Online and AOL, the FSC at issue here does not limit Plaintiff exclusively to state court. The FSC mandates that a dispute be resolved in "a court located in Utah," thus either federal or state court located in Utah is an appropriate forum. The availability of a federal forum in this case makes all the difference. In America Online, the plaintiff's right to bring a class action and CLRA claims were waived by enforcement of the forum selection clause because the Virginia state forum would, presumably, apply its own consumer protection laws, particularly in light of the choice of law provision. Further, regardless of the substantive law applied to the America Online plaintiff's claims, transfer to Virginia state court would have violated California public policy because the Virginia court system
7

"An error doesn't become a mistake until you refuse to correct it." U.S. Rubber Recycling, Inc. v. Encore Intern., Inc., No. CV 09-09516 SJO (OPx), 2011 WL 311014, at *4 n.2 (C.D. Cal. Jan. 7, 2011) (quoting Orlando A. Battista).

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CASE NO.: CV 10-04461 SJO (JCGx)

DATE: October 21, 2011

was procedurally incapable of hearing class actions. Thus, the forum selection clause and choiceof-law provision at issue in America Online were interconnected and could not be considered separately from one another. This is not true with forum selection clauses that designate district courts as an appropriate venue. A forum selection clause determines where a case will be heard, and is "separate and distinct from choice of law provisions that are not before the court." Besag v. Custom Decorations, Inc., No. CV08-05463 JSW, 2009 WL 330934, at *4 (N.D. Cal. Feb. 10, 2009) (citing Multimin USA, Inc. v. Walco Int'l Inc., No. CV F 06-0226 AWI SMS, 2006 WL 1046964, at *6 (E.D. Cal. April 7, 2006)). When transferring a case to another district court, the state's laws where the district court sits will not automatically apply because district courts use federal conflict of law rules, set forth in the Restatement (Second) of Conflicts of Laws, to determine whether to enforce a choice-of-law provision. See Huynh v. Chase Manhattan Bank, 465 F.3d 992, 997 (9th Cir. 2006). In addition, unlike the Virginia state courts, the District of Utah is able to hear class actions and will do so using the exact same procedures available in this Court. See Fed. R. Civ. P. 1, 23. Thus, America Online and AOL are clearly distinguishable because the transfer to another federal district court is fundamentally different than the transfer to a foreign state court. In the District of Utah, Plaintiff would have the same access to California substantive and federal procedural law as he does in this Court. For these reasons, the FSC should be considered separately from the choiceof-law provision. The Court's position finds support among our sister district courts who have addressed whether a forum selection clause should be considered separately form a choice-of -law provision. See Mazzola v. Roomster Corp., No. CV 10-5954 AHM (JCGx), 2010 WL 4916610, at *3 (C.D. Cal. Nov. 30, 2010) (distinguishing America Online and AOL and enforcing the forum selection clause); Besag v. Custom Decorations, Inc., No. CV08-05463 JSW, 2009 WL 330934, at *4 (N.D. Cal. Feb. 10, 2009) ("[Plaintiff] fails to demonstrate how transfer of this case would contravene an express California public policy underlying the Labor Code as it relates specifically to venue."); Nureau Ink, LLC v. Zomba Recording, LLC, No. 06cv0945 J (JMA), 2006 U.S. Dist. LEXIS 87240, at *25 (S.D. Cal. Nov. 29, 2006) (declining to "address choice of law arguments as they pertain to the enforceability of the forum selection clause"); Swenson v. T-Mobile USA, Inc., 415 F. Supp. 2d 1101, 1105 (S.D. Cal. 2006) (finding that if forum selection clauses were considered with choiceof-law provisions, then they "would be largely meaningless as it would depend on who filed first and whether that forum's law was more favorable to them"). Having concluded that the FSC is to be considered separately from the choice-of-law provision, the Court must now determine whether the FSC, standing alone, violates California public policy. "The question is not whether the application of the forum's law would violate the policy of the other party's state, but rather, whether enforcement of the forum selection agreement would violate the policy of the other party's state as to the forum for litigation of the dispute." Swenson v. T-Mobile USA, Inc., 415 F. Supp. 2d 1101, 1104 (S.D. Cal. 2006). In order to prevail on the argument that the forum selection clause itself would contravene California public policy, a party must show that the underlying state law claim relates to venue. See, e.g., Jones v. GNC Franchising, Inc. 211

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CASE NO.: CV 10-04461 SJO (JCGx)

DATE: October 21, 2011

F.3d 495, 498 (9th Cir. 2000) (holding that a forum selection clause in a franchise agreement was unenforceable because it explicitly contravened the California Business and Professions Code which provides that any provision in a franchise agreement restricting venue is void); see also Whipple Industries, Inc. v. Opcon AB, No. CV-F-05-0902 REC SMS, 2005 WL 2175871, at *9 (E.D. Cal. Sept. 7, 2005). Plaintiff has not shown that his state claims relate to venue, such that enforcing the FSC would prevent him from bringing his class action and CLRA claims. Plaintiff's argument rests on the assumption that if this case is transferred, then the District of Utah will automatically enforce the choice-of-law provision favoring Utah law, thereby denying Plaintiff his rights as a California citizen under the CLRA. This Court will not speculate as to the outcome of this litigation. See Besag, 2009 WL 330934, at *14. In concluding that the District of Utah is the appropriate venue, the Court is not concluding that the Amended Agreement's choice-of-law provision also applies. Whether this action remains in the Central District of California or District of Utah, the same rules of procedure and choice of law analysis apply. A federal court ordinarily applies the choice-of-law rules of the state in which it sits. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 243 n.8 (1981). "However, when a case is transferred pursuant to 28 U.S.C. § 1404(a), we must apply the choice-of-law rules of the state from which the case was transferred." Consul Ltd. v. Solide Enter., Inc., 802 F.2d 1143, 1146 (9th Cir. 1986); Viernow v. Euripides Dev. Corp.,157 F.3d 785, 793 (10th Cir. 1998). Thus, California's rules for choice of law will apply in the District of Utah. Plaintiff's assumption that the District of Utah will automatically apply Utah law is unfounded. After transfer, Plaintiff will be able to argue that California law applies, and the District of Utah can make the appropriate determination. See Mazzola v. Roomster Corp., No. CV 10-5954 AHM (JCGx), 2010 WL 4916610 (C.D. Cal. Nov. 30, 2010) (the court concluded that "once in the proper venue, Plaintiff is free to argue for application of California law").8 The District of Utah is just as capable as this Court of applying the appropriate legal standards to this case, and the Court will not assume otherwise. Accordingly, the Court finds that the FSC by itself does not contravene California public policy because Plaintiff is able to argue, in the appropriate forum, that California state law applies.

8

This Court already held that California law applies to Plaintiff's claims based on breach of contract, CLRA, UCL, and aiding and abetting. (Order Granting in Part and Den. in Part Defs.' Mot. to Dismiss, ECF No. 41.) Because this Court held that California law applies to several of Plaintiff's claims, one factor of the § 1404(a) analysis favors the Central District of California as the appropriate forum because it is most familiar with the governing law. See Jones, 211 F.3d at 498-99. However, this factor is just one of many that the Court considers in its § 1404(a) analysis. Id. The Court finds this factor is not dispositive in light of the existence of an enforceable FSC. Because the proper venue for this case is the District of Utah, that court will ultimately decide which state's law applies to Plaintiff's claims.

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Case 2:10-cv-04461-SJO-JCG Document 1511 Filed 10/21/11 Page 10 of 10 Page ID Case 2:11-cv-00988-CW STATES DISTRICT COURT Page 10 of 10 Filed 10/24/11 UNITED Document #:3494 CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL

CASE NO.: CV 10-04461 SJO (JCGx)

DATE: October 21, 2011

The Court need not address whether the UCSPA affords the same protections as the CLRA because WebBank's Motion does not seek a choice of law determination.9 See Gamayo v. Match.com LLC, Nos. C 11–00762 SBA, C 11–1076 SBA, C 11–1206 SBA, 2011 WL 3739542, at *6 (N.D. Cal. Aug. 24, 2011). Because the Court considered the FSC and choice-of-law provision together in its October 4th Order, it unnecessarily addressed the public policy issues surrounding enforcement of the choice-of-law provision. Determination of whether California or Utah law applies is a task for the District of Utah. In sum, the Court finds that enforcement of the FSC is unrelated to the choice of law in this case and does not contravene the strong public policy of California. Plaintiff will suffer no prejudice from transfer.10 III. CONCLUSION

For the foregoing reasons, WebBank's Motion to Transfer Venue is GRANTED. The Court hereby TRANSFERS this action to the United States District Court for the District of Utah. IT IS SO ORDERED.

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The parties dispute at great length whether the UCSPA provides the same rights and remedies as CLRA. (Mot. to Transfer II 11:6-14:6; Pl.'s Opp'n 18:4-19:21.) Because venue is properly in the District of Utah, the Court declines to address these arguments.

Plaintiff is not prejudiced by the enforcement of the FSC because Plaintiff consented to the FSC. In the October 4th Order, the Court found that Plaintiff was given notice of the FSC and Plaintiff accepted its terms by continuing to use BML's services. (Oct. 4th Order 5:21-28.) Additionally, it is unlikely that Plaintiff will suffer hardship from transfer because he has already retained counsel in Utah and filed motions to compel in the District of Utah. (Commons Decl. Exs. A, B.) The parties do not address any of the other factors, set forth in Jones, 211 F.3d at 498-99, regarding this Court's consideration of convenience and fairness to transfer the case.

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