Robles v. Comtrak Logistics, Inc.

Filing 66

ORDER signed by Judge John A. Mendez on 4/2/2015 GRANTING 59 Motion to Change Venue. CASE CLOSED. (Michel, G.)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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SALVADOR ROBLES, individually
and on behalf of others
similarly situated,

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Plaintiffs,

No.

2:13-cv-00161-JAM-AC

ORDER GRANTING DEFENDANT’S
MOTION TO TRANSFER VENUE

v.
COMTRAK LOGISTICS, INC., a
Delaware Corporation; DOES 1
through 10, inclusive,

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Defendants.

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Defendant Comtrak Logistics, Inc. (“Defendant”) moves the

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Court to transfer venue (“MTV”) (Doc. #59) based on a forum

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selection clause included in a written agreement between the

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parties.

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GRANTED.

For the reasons that follow, Defendant’s motion is

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I.

FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

A full discussion of the facts can be found in the Court's

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earlier order (Doc. #54) of December 19, 2014.

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this motion, a few additional items need be mentioned.

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For purposes of

Defendant is a major provider of full dray truckload
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transportation services across the country.

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Salvador Robles (“Plaintiff”) alleges that he is a former driver

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for Defendant who was initially classified as an independent

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contractor and later hired as an employee driver by Defendant.

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Id. ¶ 3.

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FAC ¶ 5.

Plaintiff

Plaintiff claims Defendant has misclassified these drivers

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as independent contractors in order “to avoid various duties and

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obligations owed to employees” under California law.

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Plaintiff alleges that he and the other drivers were made to sign

FAC ¶ 1.

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an “Independent Contractor and Equipment Lease Contract” (the

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“Contract”), which labeled them as independent contractors and

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primarily discussed the details of Defendant’s “leasing” of the

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drivers’ equipment.

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MTV, Exhibit A.

The FAC pleads the first twelve causes of action (“IC

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Claims”) as a class action on behalf of Plaintiff and a class of

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drivers who (a) signed the Contract with Defendant; (b) were

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assigned to an operating terminal in California; and (c) were

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residents of California (“the Class”).

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obligations owed by an employer to an employee; therefore, each

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of these causes of action relies on the premise that Defendant

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improperly classified the drivers as independent contractors when

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legally they should have been treated as employees under

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California law.

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law, primarily arising under the California Labor Code.

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These claims involve

The claims are brought pursuant to California

In addition, the FAC restates the same claims found in the

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second through twelfth causes of action on behalf of Plaintiff

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individually for labor and wage violations during his time

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working for Defendant in which he was classified as an employee.
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These eleven claims (“EE Claims”) allege that although Plaintiff

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was properly classified as an employee by Defendant during the

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relevant time period, Defendant still failed to abide by the

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applicable provisions of California law, including the California

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Labor Code.

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Defendant filed a motion to dismiss, which was stayed for a

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period pending resolution of relevant issues by the Ninth

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Circuit.

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the Court received supplemental briefing, the motion to dismiss

After the Ninth Circuit’s decision was handed down and

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was denied.

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U.S.C. § 1404(a) (“§1404(a)”).

Defendant now moves to transfer venue pursuant to 28

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II.

OPINION

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A.

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Plaintiff requests the Court take notice of three documents

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Request for Judicial Notice

(Doc. #63).

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The Court may consider material attached to, or relied on

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by, the complaint so long as authenticity is not disputed, or

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matters of public record, provided that they are not subject to

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reasonable dispute.

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2241664 at *2 (C.D. Cal. Mar. 30, 2009) (citing Lee v. City of

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Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001) and Fed. R. Evid.

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201).

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E.g., Sherman v. Stryker Corp., 2009 WL

The three documents offered by Plaintiff are (1) a record of

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Defendant’s name change from the California Secretary of State

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(Doc. #63-1); (2) a 10-k SEC Filing form for the year ending

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December 31, 2013 (Doc. #63-2); and (3) a “Business Entity

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Detail” record from the California Secretary of State (Doc. #633

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3).

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that are not subject to reasonable dispute.

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Court will take judicial notice of them.

The Court finds these documents are matters of public record
Accordingly, the

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B.

Discussion

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Defendant has moved the Court to transfer venue pursuant to

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§1404(a) based on the forum selection clause included in the

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“Independent Contractor and Equipment Lease Contract” (“the

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Contract”) entered into by the parties.

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Section 1404(a) provides:

“For the convenience of parties

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and witnesses, in the interest of justice, a district court may

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transfer any civil action to any other district or division where

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it might have been brought or to any district or division to

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which all parties have consented.”

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Court has held that “a forum-selection clause may be enforced by

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a motion to transfer under § 1404(a).”

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U.S. Dist. Court for W. Dist. of Texas, 134 S. Ct. 568, 575

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(2013) (“Atlantic Marine”).

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The United States Supreme

Atl. Marine Const. Co. v.

The Contract is referenced and relied on in the FAC (¶¶ 3,

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67) and attached to Defendant’s motion as Exhibit A.

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does not dispute its authenticity so the Court looks to it in its

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analysis.

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relating to this Agreement shall be brought in the state or

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federal courts sitting in Memphis, Tennessee, and in no other

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court.”

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independent contractor and primarily discusses the detail of

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Defendant’s lease of Plaintiff’s equipment in boilerplate

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language.

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Plaintiff

The relevant clause provides that “any action or suit

MTV, Exh. A § 5.G.

The Contract labels Plaintiff as an

Defendant contends the forum selection clause is valid,
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enforceable, and Plaintiff’s claims lie within its scope.

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p. 11.

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the District Court for the Western District of Tennessee.

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Plaintiff opposes the motion on a number of grounds.

MTV at

It therefore requests the Court transfer this matter to

First,

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he argues the claims are not “related to” the Contract and

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therefore fall outside the scope of the forum selection clause.

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Second, Plaintiff contends that even if the clause does apply, it

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is unenforceable because: (1) the clause’s inclusion in the

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Contract was the product of Defendant’s coercion and

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overreaching; (2) the clause is unreasonable; and (3) enforcement

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of the clause will undermine public policy.

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1.

Scope of the Forum Selection Clause

“In diversity cases, federal law governs the analysis of the

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effect and scope of forum selection clauses.”

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Franchising, Inc., 211 F.3d 495, 497 (9th Cir. 2000) (citing

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Manetti–Farrow, 858 F.2d at 513.

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Circuit that the scope of a forum selection clause can cover both

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contractual and tort causes of action.

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at 514; Morgan Tire of Sacramento, Inc. v. Goodyear Tire & Rubber

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Co., No. 2:13-CV-2135 KJM AC, 2014 WL 6390282, at *9 (E.D. Cal.

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2014).

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Jones v. GNC

It is well-settled in the Ninth

Manetti–Farrow, 858 F.2d

Plaintiff has stated claims pursuant to the California Labor

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Code along with other California laws regulating employment

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practices.

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whether Plaintiff and the proposed class were employees of

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Defendant rather than independent contractors and therefore

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entitled to a host of benefits they did not receive.

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motion, Defendant contends the language in the clause “easily

The issue at the center of this controversy is

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In its

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encompasses Plaintiff’s claims.”

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argues Plaintiff’s theory of misclassification necessarily relies

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on the terms of the Contract.

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MTV at pp. 6-8.

Defendant

In response, Plaintiff discusses the factors involved in

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analyzing whether an employer-employee relationship exists.

Opp.

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at pp. 9-12.

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Relations, 48 Cal. 3d 341, 351 (1989) (listing over one dozen

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factors “logically pertinent to the inherently difficult

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determination whether a provider of service is an employee or an

See S. G. Borello & Sons, Inc. v. Dep't of Indus.

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[] independent contractor”).

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factors arise out of or are related to the Contract.

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out that the Contract does not even contain a clause that

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attempts to define Plaintiff as an independent contractor.

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at p. 2.

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Plaintiff argues that none of these
He points

Opp.

“The scope of the claims governed by a forum selection

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clause depends [upon] the language used in the clause.”

Ronlake

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v. US-Reports, Inc., No. 1:11-CV-02009 LJO, 2012 WL 393614, at

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*3-4 (E.D. Cal. 2012) (“Ronlake”).

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Ninth Circuit has found that provisions using the phrases

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“arising under,” “arising out of,” and “arising hereunder”

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(collectively referred to as “arising under” language) should be

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narrowly construed to cover only those disputes “relating to the

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interpretation and performance of the contract itself.”

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Flattery Ltd. v. Titan Mar., LLC, 647 F.3d 914, 922 (9th Cir.

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2011); see also Ronlake, 2012 WL 393614, at *4; Perry v. AT & T

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Mobility LLC, No. C 11-01488 SI, 2011 WL 4080625, at *4 (N.D.

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Cal. 2011) (“Perry”).

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add phrases such as “relating to” and “in connection with”

In analogous contexts, the

Cape

In contrast, provisions that include or

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(collectively referred to as “relating to” language) have a

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broader reach.

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Inc., No. CV 09-3627 PSG AJWX, 2009 WL 7322253, at *5 (C.D. Cal.

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Dec. 30, 2009); Cape Flattery, 647 F.3d at 922; Joseph v.

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Amazon.Com, Inc., No. C12-06256 HRL, 2013 WL 4806462, at *4 (N.D.

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Cal. 2013).

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Cedars-Sinai Med. Ctr. v. Global Excel Mgmt.,

Defendant argues in its reply that the forum selection

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clause in the Contract should be construed broadly to include

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Plaintiff’s labor code claims because the clause uses “related

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to” language.

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The Court agrees.

In Perry, the court stated the issue before it as “‘whether

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in classifying plaintiff, and others like h[er], as an

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independent contractor defendant[s] ha[ve] violated the law.’”

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Perry, 2011 WL 4080625, at *3-4 (quoting Quinonez v. Empire

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Today, LLC, No. C 10-02049 WHA, 2010 WL 4569873, at *3 (N.D. Cal.

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2010)). The court determined whether the California Labor Code

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claims brought by the plaintiff were covered under a forum

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selection clause found in a contract between the parties.

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*1.

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“any action . . . relating to” made it “significantly broader”

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than clauses using “arising under” language.

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the “question [fell] within the scope of the forum selection

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clause, because it ‘relates to’ the contracts entered into by

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[the parties].”

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Id. at

The court found the forum selection clause’s use of the term

Id.

It then found

Id.

The circumstances present in Perry are nearly identical to

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those before this Court.

The Court similarly finds Plaintiff’s

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claims relate to the Contract.

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relationship between the parties.

The Contract governs the working

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It is the precise nature of

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that relationship that is at issue in this matter.

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Plaintiffs claims fall within the scope of the forum selection

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clause.

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2.

Therefore,

Enforceability of Forum Selection Clause

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Federal courts have recognized three grounds for declining

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to enforce a forum selection clause: (1) where the inclusion of

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the clause in the contract was the result of “fraud or

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overreaching”; (2) if the party seeking to avoid the clause would

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be effectively deprived of its day in court in the forum

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specified in the clause; or (3) if enforcement would contravene a

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strong public policy of the forum in which the suit is brought.

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Murphy v. Schneider Nat'l, Inc., 362 F.3d 1133, 1140 (9th Cir.

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2004); see also Manetti–Farrow, Inc. v. Gucci Am., Inc., 858 F.2d

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509, 514 (9th Cir. 1988); The Bremen v. Zapata Off–Shore Co., 407

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U.S. 1, 15 (1972)).

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a valid forum-selection clause, a district court should

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ordinarily transfer the case to the forum specified in that

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clause.”

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However, “[w]hen the parties have agreed to

Atlantic Marine, at 581.
a. Fraud and Overreaching

“For a party to escape a forum selection clause on the

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grounds of fraud, it must show that ‘the inclusion of that clause

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in the contract was the product of fraud or coercion.’”

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v. Lloyd's of London, 135 F.3d 1289, 1297 (9th Cir. 1998)

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(quoting Scherk v. Alberto-Culver Co., 417 U.S. 506, 518, 94 S.

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Ct. 2449, 2457, 41 L. Ed. 2d 270 (1974)) (emphasis in original).

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“‘Overreaching’ is a ground ‘short of fraud,’ and a mere showing

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of ‘non-negotiability and power difference’ does not render a

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forum selection clause unenforceable.”
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Mahoney v. Depuy

Richards

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Orthopaedics, Inc., No. CIVF 07-1321 AWI SMS, 2007 WL 3341389, at

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*7 (E.D. Cal. 2007) (citing Murphy, 362 F.3d at 1141; E.J. Gallo

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Winery v. Andina Licores S.A., 440 F.Supp.2d 1115, 1126 (E.D.

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Cal. 2006)).

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selection clause on the grounds of fraud or overreaching “must

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show that the inclusion of the clause itself into the agreement

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was improper; it is insufficient to allege that the agreement as

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a whole was improperly procured.”

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The party opposing enforcement of the forum

Id.

Plaintiff argues the forum selection clause was the product

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of economic coercion and overreaching.

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Plaintiff cites the power differentials between the parties and

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Plaintiff’s lack of negotiating power in regards to the formation

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of the Contract and, specifically, the inclusion of the forum

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selection clause.

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argument that unequal bargaining power is a ground to reject

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enforcement of a forum selection clause in an employment

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contract.”

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2014 WL 4477349, at *7 (N.D. Cal. 2014) (citing Murphy, 362 F.3d

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at 1141).

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because of the parties' unequal bargaining power: it is

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enforceable if there is reasonable communication of the clause.”

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Id.

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595 (1991)).

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Opp. at pp. 12-13.

However, “the Ninth Circuit has rejected the

Marcotte v. Micros Sys., Inc., No. C 14-01372 LB,

A forum selection clause is “not unreasonable merely

(citing Carnival Cruise Lines, Inc. v. Shute, 499 U.S 585,

Plaintiff has failed to provide any evidence that the

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Contract’s terms regarding forum selection were not clearly

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communicated in the Contract or that the inclusion of the forum

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selection clause was the product of fraud or overreaching.

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such, the argument regarding fraud and overreaching fails.
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b. Unreasonable

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Plaintiff next contends the forum selection clause should

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not be enforced because it is unreasonable under the

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circumstances.

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his argument by focusing on § 1404(a) factors including

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convenience of the parties and witnesses and other practical

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considerations.

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Opp. at pp. 14-16.

Plaintiff attempts to support

In a typical case involving a §1404(a) transfer motion, the
court must evaluate a range of factors in determining whether

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transfer would serve “the convenience of the parties and

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witnesses” and otherwise promote “the interests of justice.”

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Atlantic Marine, at 581 (quoting §1404(a)).

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valid forum-selection clause is involved, “the calculus changes.”

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Id.

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arguments about public-interest factors only”; the “plaintiff’s

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choice of forum merits no weight”; and the court “must deem the

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private-interest factors to weigh entirely in favor of the

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preselected forum.”

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circumstances unrelated to the convenience of the parties should

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a § 1404(a) motion be denied.”

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However, when a

In this new analysis, “a district court may consider

Id. at 581-83.

“Only under extraordinary

Id. at 581.

By agreeing to the forum selection clause in the Contract,

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Plaintiff has “waive[d] the right to challenge the preselected

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forum as inconvenient or less convenient.”

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581.

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would be impractical and inconvenient are therefore unpersuasive.

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Atlantic Marine, at

Plaintiff’s arguments that litigating the case in Tennessee

c. Public Policy
Plaintiff’s remaining arguments implicate the public policy
of California and rely on the choice of law provision in the
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Contract.

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selection clause “cannot be considered in isolation from the

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choice-of-law provision where both provisions are complimentary

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aspects of an unlawful subterfuge to evade California employment

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law.”

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Opp. at pp. 16-20.

Plaintiff contends the forum

“Courts in the Ninth Circuit have generally agreed that the

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choice-of-law analysis is irrelevant to determining if the

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enforcement of a forum selection clause contravenes a strong

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public policy.”

Rowen v. Soundview Commc'ns, Inc., No. 14-CV-

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05530-WHO, 2015 WL 899294, at *3-4 (N.D. Cal. 2015).

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challenging enforcement of a forum selection clause may not base

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its challenge on choice of law analysis.’”

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4477349, at *8 (quoting Besag v. Custom Decorators, Inc., No. C

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08–05463 JSW, 2009 WL 330934, at *3–4 (N.D. Cal. 2009) (called

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into question on other grounds by Narayan v. EGL, Inc., 616 F.3d

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895, 899, 904 (9th Cir. 2010))).

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California courts will enforce adequate forum selection clauses

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that apply to non-waivable statutory claims, because such clauses

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do[] not waive the claims, they simply submit their resolution to

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another forum.”

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“‘[A] party

Marcotte, 2014 WL

“As a general matter,

Perry, 2011 WL 4080625, at *5.

However, under certain circumstances, public policy

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considerations may lead to non-enforcement of an otherwise valid

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forum selection clause:

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[I]f the forum is not adequate, a forum selection
clause that applies to a non-waivable statutory claim
may, in fact, improperly compel the claimant to forfeit
his or her statutory rights. In such a case, the forum
selection clause is contrary to the strong public
policy of California and will not be enforced. More
specifically, . . . the California Supreme Court has
held clearly and unequivocally that it is against the
strong public policy of California to enforce a forum
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selection clause where the practical effect of
enforcement will be to deprive a plaintiff or class of
plaintiffs of their unwaivable statutory entitlement to
the minimum wage and overtime payments.

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Perry, at *5 (internal citations omitted).

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Plaintiff argues the choice-of-law provision and the forum

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selection clause operate in tandem to deny him of his statutory

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rights under California law.

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provided, or found, indicating that a transfer of this case to

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the District Court for the Western District of Tennessee would

However, there is no evidence

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deprive him of his rights.

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“fully capable of applying California law.”

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Mut. Ins. Co., No. C 07-04928 SI, 2007 WL 4410408, at *6 (N.D.

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Cal. 2007).

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misclassification of him and others as independent contractors

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are proven true, the court in Tennessee will be “fully capable”

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of awarding him the remedies and withheld benefits provided for

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under California labor laws.

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Federal courts in other states are
Foster v. Nationwide

If Plaintiff’s allegations regarding Defendant’s

Accordingly, Plaintiff’s arguments based on public policy
fall short, and Defendant’s motion is GRANTED.

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III. ORDER

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For the reasons set forth above, the Court GRANTS
Defendant’s motion to transfer venue.
IT IS SO ORDERED.
Dated: April 2, 2015

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