Cats and Dogs Animal Hospital, Inc. v. Yelp! Inc.

Filing 25

NOTICE OF MOTION AND MOTION to Transfer Case to Northern District of California, San Francisco Division filed by Defendant Yelp! Inc.. Motion set for hearing on 5/10/2010 at 01:30 PM before Judge Valerie Baker Fairbank. (Attachments: # 1 Memorandum Memorandum of Points & Authorities, # 2 Declaration Declaration of Bryan Byrne, # 3 Exhibit Exh A to Byrne Declaration, # 4 Exhibit Exh B to Byrne Declaration, # 5 Exhibit Exh C to Byrne Declaration, # 6 Exhibit Exh D to Byrne Declaration, # 7 Exhibit Exh E to Byrne Declaration, # 8 Exhibit Exh F to Byrne Declaration, # 9 Declaration Declaration of Matthew D. Brown, # 10 Exhibit Exh A to Brown Declaration, # 11 Proposed Order Proposed Order)(Brown, Matthew)

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COOLEY GODWARD KRONISH LLP MICHAEL G. RHODES (116127) ([e-mail]) MATTHEW D. BROWN (196972) ([e-mail]) BENJAMIN H. KLEINE (257225) ([e-mail]) 101 California Street 5th Floor San Francisco, CA 94111-5800 Telephone: [phone] Facsimile: [phone] COOLEY GODWARD KRONISH LLP SARAH R. BOOT (253658) ([e-mail]) 4401 Eastgate Mall San Diego, CA 92121-1909 Telephone: [phone] Facsimile: [phone] Attorneys for Defendant YELP! INC. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION CATS AND DOGS ANIMAL HOSPITAL, INC., et al., on behalf of itself and all others similarly situated, Plaintiffs, v. YELP! INC., Defendant. CHRISTINE LaPAUSKY d/b/a D'AMES DAY SPA, on behalf of herself and all others similarly situated, v. YELP! INC., Defendant.
DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)

Case No. CV 10-01340 VBF(SSx) MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT YELP INC.'S MOTION TO TRANSFER VENUE (28 U.S.C. § 1404(a)) Hearing Date: May 10, 2010 Hearing Time: 1:30 p.m. Judge: Hon. Valerie Baker Fairbank Case No. CV 10-01578 VBF (SSx)

Plaintiffs,

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TABLE OF CONTENTS I. II. Introduction ...................................................................................................... 1 Factual And Procedural Background ............................................................... 2

A. The Parties ........................................................................................................ 2 B. The Lawsuits Against Yelp .............................................................................. 3 C. Forum Selection Clauses in Yelp's Terms of Service and Advertising Agreements ....................................................................................................... 4 III. Argument .......................................................................................................... 5 A. Legal Standard .................................................................................................. 5 B. Cats and Dogs and LaPausky Could Have Been Brought in the Northern District of California. ........................................................................ 6 C. The Convenience of the Parties and Witnesses and Interest of Justice Strongly Favor Transfer to the Northern District............................................. 7 1. Plaintiffs' Agreement to the Forum Selection Clause Strongly Supports Transfer to the Northern District. ................................................ 7 a. The Forum Selection Clause Is a "Significant Factor" Entitled to "Substantial Consideration" in the § 1404(a) Analysis. ............................. 7 b. All Plaintiffs Have Agreed to the Forum Selection Clause. ....................... 9 2. The Presence of Related Litigation in the Northern District and the Potential for Consolidation Weighs Strongly in Favor of Transfer. ......... 11 3. Most of the Relevant Conduct Took Place in the Northern District, While Minimal, If Any, Took Place in the Central District. .................... 13 4. The Parties Have Greater Contact with the Northern District than the Central District. ......................................................................................... 14 5. There is Easier Access to Proof in the Northern District than in the Central District. ......................................................................................... 15 6. Transfer of the Action to the Northern District Will Save the Parties and the Court Considerable Time and Expense. .............................................. 16 7. Plaintiffs' Choice of Forum is Entitled to No or "Minimal Consideration.".......................................................................................... 16 IV. Conclusion ...................................................................................................... 18

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DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)

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TABLE OF AUTHORITIES
CASES

Page(s)

A.J. Indus., Inc. v. U.S. Dist. Court, 503 F.2d 384 (9th Cir. 1974)................................................................................................... 15 Amazon.com v. Cendant Corp., 404 F. Supp. 2d 1256 (W.D. Wa. 2005) ....................................................................... 5, 11, 12 Burcham v. Expedia, Inc., No. 4:07CV1963 CDP, 2009 WL 586513 (E.D. Mo. Mar. 6, 2009) .................................. 9, 10 Cairo, Inc. v. Crossmedia Servs., Inc., No. C 04-4825 JW, 2005 WL 756610 (N.D. Cal. Apr. 1, 2005) .............................................. 9 Calloway Golf Co. v. Corporate Trade, Inc., No. 09cv384 L(POR), 2010 WL 743829 (S.D. Cal. Mar. 1, 2010) ........................................ 13 Data Retrieval Tech., LLC v. Sybase, Inc., No. C08-1702 RSM, 2009 WL 960681 (W.D. Wa. Apr. 8, 2009) ......................................... 12 Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834 (9th Cir. 1986)................................................................................................... 17 FTC v. Watson Pharms., Inc., 611 F. Supp. 2d 1081 (C.D. Cal. 2009) .................................................................................... 6 General Electric Credit Corp. v. Toups, 644 F. Supp. 11 (S.D.N.Y. 1985) ........................................................................................ 8, 17 Gomez v. Wells Fargo Bank, NA, No. CV-09-00181-PHX-GMS, 2009 WL 1936790 (D. Ariz. July 2, 2009) ........................... 17 Guadagno v. E*Trade Bank, 592 F. Supp. 2d 1263 (C.D. Cal. 2008) .................................................................................. 10 IBM Credit Corp. v. Definitive Computer Servs., Inc., No. C-95-3927 SI, 1996 WL 101172 (N.D. Cal. Feb. 28, 1996) ............................................ 17 Jones v. GNC Franchising, Inc., 211 F.3d 495 (9th Cir. 2000)............................................................................................ passim Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995) ........................................................................................................ 8 Koresko v. Realnetworks, Inc., 291 F. Supp. 2d 1157 (E.D. Cal. 2003) ................................................................................... 10

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Lou v. Belzburg, 834 F.2d 730 (9th Cir. 1987)................................................................................................... 17 Molnar v. 1-800-Flowers.com, Inc., No. CV 08-0542 CAS (JCx), 2008 WL 4772125 (C.D. Cal. Sept. 29, 2008) .......................... 9 Morrow v. Vertical Doors, Inc., No. CV 09-0256-PHX-DGC, 2009 WL 1698560 (D. Ariz. June 17, 2009)............................. 6 Orix Credit Alliance, Inc. v. Mid-South Materials Corp., 816 F. Supp. 230 (S.D.N.Y. 1993) ...................................................................................... 8, 17 Pfeiffer v. Himax Technologies, Inc. 530 F. Supp. 2d 1121 (C.D. Cal. 2008) .............................................................................. 8, 17 Register.com, Inc. v. Verio, Inc., 356 F. 3d 393 (2d Cir. 2004) ............................................................................................... 9, 10 Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22 (1988) .................................................................................................................... 5 Unisys Corp. v. Access Co., Ltd., No. C05-3378 TEH, 2005 WL 3157457 (N.D. Cal. Nov. 23, 2005) .................................... 7, 8 Ward v. Follett Corp., 158 F.R.D. 645 (N.D. Cal. 1994) ............................................................................................ 12 STATUTES 28 U.S.C. § 1332(d)(2).................................................................................................................... 6 28 U.S.C. § 1391(a)(1) .................................................................................................................... 6 28 U.S.C. § 1391(c) ........................................................................................................................ 6 28 U.S.C. § 1404(a) .......................................................................................................... 1, 5, 7, 12 28 U.S.C. § 1453(b) ........................................................................................................................ 3 Cal Bus. &Prof. Code § 17500 ....................................................................................................... 3 Cal. Bus. & Prof. Code § 17200 et seq. .......................................................................................... 3 Cal. Penal Code §§ 518-19.............................................................................................................. 3 Cal. Penal Code § 524 ..................................................................................................................... 3 OTHER AUTHORITIES Fed. R. Civ. P. 45(c)(3)(A)(ii), (B)(iii) ......................................................................................... 16 iii.
DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)

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I.

INTRODUCTION The two actions pending before this Court have little relevant connection

with the Central District of California; instead, they have many close connections-- including a related pending action--with the Northern District of California. Under 28 U.S.C. § 1404(a), the convenience of the parties and the witnesses and the interest of justice strongly favor transfer to the Northern District. First, all named Plaintiffs have agreed to forum selection clauses in agreements with Defendant Yelp! Inc. ("Yelp"), in which Plaintiffs have consented to jurisdiction and venue in the Northern District of California. Such forum selection clauses, even if permissive rather than mandatory, are a substantial consideration in assessing a § 1404(a) transfer. Second, transfer to the Northern District strongly supports the interest of justice, since it would allow potential consolidation of these actions with a closely related action currently pending in the Northern District, thus achieving an efficient, economical, and expeditious determination of all three actions, while avoiding inconsistent judgments. Third, the majority of the relevant conduct--Yelp's business and sales practices related to the solicitation of advertising--took place in the Northern District where Yelp maintains its corporate headquarters. The majority of Yelp witnesses are located in the Northern District, including almost all of those witnesses most likely to be involved in the subject of Plaintiffs' lawsuits, while Yelp has only four employees and no offices in the Central District. Plaintiffs themselves have only modest contact with the Central District; in fact, seven out of eleven Plaintiffs are located outside of the Central District, with three of eleven being residents of the Northern District to which Yelp seeks transfer. Finally, although a plaintiff's choice of forum is generally given considerable deference, where (as here) a plaintiff seeks to represent a nationwide class of plaintiffs, plaintiff's choice is given "little" or "minimal" consideration. Furthermore, where (as here) the operative facts occurred in another district, plaintiff's choice is given "substantially less deference."
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DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)

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Together, the fact that Plaintiffs seek to represent a nationwide class and the fact that their claims concern conduct that took place largely in the Northern District of California, Plaintiffs' choice of forum is merely fortuitous and entitled to little, if any, deference. Accordingly, Yelp asks that these two actions be transferred to the Northern District of California. II. FACTUAL AND PROCEDURAL BACKGROUND A. The Parties Yelp is the registered owner and provider of a popular website, www.yelp.com (the "Yelp Website"), which allows Internet users to find local businesses, read and write reviews about them, and rate them on a scale of one to five stars. (First Amended Complaint ("FAC") in Cats and Dogs Animal Hospital, Inc., et al. v. Yelp! Inc. ("Cats and Dogs") ¶¶ 13, 16-17, 29.) The Yelp Website features information on and reviews of businesses throughout the United States and is visited by approximately 30 million people per month. (Cats and Dogs FAC ¶ 38; Declaration of Bryan Byrne ("Byrne Decl.") ¶ 13.) Yelp makes money by, inter alia, selling ads to local businesses, which appear as "Sponsored Results" on Yelp's website. (Cats and Dogs FAC ¶¶ 43-44.) Yelp's headquarters are in San Francisco, within the Northern District, where 70 percent of its 362 employees work. In the Central District, Yelp has no offices and has only 4 employees. (Byrne Decl. ¶ 14.) Plaintiff in LaPausky d/b/a D'ames Day Spa v. Yelp! Inc. ( "LaPausky") is Christine LaPausky, who does business as D'ames Day Spa in San Diego, which is in the Southern District of California. (LaPausky Compl. ¶ 3.) She has not purchased advertising from Yelp. (LaPausky Compl. ¶ 19.) Plaintiffs in Cats and Dogs divide themselves into two putative classes: NonSponsor Plaintiffs and Sponsor Plaintiffs. The Non-Sponsor Plaintiffs are "those [Plaintiff] businesses to which Yelp offered paid advertising subscriptions, but
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DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)

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which declined to purchase any advertising. In other words, `Non-Sponsors' could have become Sponsors, but elected not to." (Cats and Dogs FAC ¶ 52.) The Sponsor Plaintiffs are "[Plaintiff] businesses that purchase[d] advertising subscriptions." (Cats and Dogs FAC ¶ 44.) Four of the ten Cats and Dogs Plaintiffs are located in the Central District of California, while three of them are located in the Northern District of California. (Cats and Dogs FAC ¶¶ 3, 6, 8, 12 (Central District); 4, 7, 11 (Northern District).) B. The Lawsuits Against Yelp In addition to Cats and Dogs and LaPausky, Yelp is also facing one other, related action entitled Boris Levitt v. Yelp! Inc., Case No. C 10-01321 MHP ("Levitt"), which is pending in the United States District Court for the Northern District of California, San Francisco Division, where it has been assigned to the Honorable Marilyn Hall Patel. The Levitt action was filed on March 12, 2010 in the Superior Court of the State of California, County of San Francisco. A true and correct copy of the March 12th complaint is attached as Exhibit A to the Declaration of Matthew D. Brown, dated April 9, 2010 ("Brown Decl."). On March 29, 2010, Yelp removed the action to the United States District Court for the Northern District of California pursuant to 28 U.S.C. § 1453(b). (Brown Decl. ¶ 4.) Plaintiffs in Cats and Dogs, LaPausky, and Levitt allege that Yelp manipulates the reviews for plaintiff businesses depending on whether or not they advertise with Yelp. Plaintiffs in all three actions assert claims for violation of California's Unfair Competition Law, Business and Professions Code ("B&P") Section 17200 et seq. In addition to a B&P § 17200 claim, plaintiff in the Levitt action includes claims for (a) violation of B&P § 17500 (false advertising), (b) negligent misrepresentation, and (c) intentional misrepresentation. Likewise, in addition to a B&P § 17200 claim, plaintiffs in Cats and Dogs include claims for (a) violation of Cal. Penal Code §§ 518-19 (extortion), (b) violation of Cal. Penal Code
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§ 524 (attempted extortion), and (c) intentional interference with prospective economic advantage. All three actions are styled as class actions against Yelp, and plaintiffs in all three actions seek to represent nearly identically defined putative classes. C. Forum Selection Clauses in Yelp's Terms of Service and Advertising Agreements

Businesses and individuals who use the Yelp Website may agree to Yelp's Terms of Service ("TOS") in at least two ways. First, anyone who uses the Yelp Website agrees to Yelp's TOS, which are posted on the Yelp Website. Second, any business that registers for Yelp's business services at biz.yelp.com explicitly agrees to Yelp's TOS. Apart from the TOS, any business that purchases advertising from Yelp agrees to the terms of an advertising agreement with Yelp ("Advertising Agreement"). The TOS and the Advertising Agreement include nearly identical forum selection clauses, in which the business or individual consents to jurisdiction and venue in the state and federal courts in San Francisco County, California, which includes the Northern District of California. (Byrne Decl. ¶¶ 3-5, 10-11.) For example, the TOS for users of the Yelp Website and the TOS for businesses that register for Yelp's business services both state: If there is any dispute about or involving the Site or Yelp, you agree that any such dispute will be governed by the laws of the State of California without regard to its conflict of law provisions. You agree to personal jurisdiction by and venue in the state and federal courts in San Francisco County, California. (Byrne Decl. ¶¶ 10-11 & Exs. E, F.) Similarly, businesses that sign up to advertise on Yelp agree to the Advertising Agreement, which includes a similar forum selection clause: This Agreement shall be governed by and construed in accordance with the law of California without regard to the conflict of law provisions thereof. The parties consent to jurisdiction and venue for actions related to the subject matter hereof in the state and federal courts located in San Francisco County, California.
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(Byrne Decl. ¶¶ 3-5 and Exs. A, B, C.) All of the Plaintiffs in both LaPausky and Cats and Dogs have agreed to these forum selection clauses, in some instances more than once. (Byrne Decl. ¶¶ 2-12 & Exs. A-F.) III. ARGUMENT A. Legal Standard 28 U.S.C. § 1404(a) provides that "[f]or 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." The statutory provision thus provides two requirements: (1) that the action could have been brought in the transferee district; and (2) that transfer be for the convenience of the parties and witnesses and the interest of justice. See Amazon.com v. Cendant Corp., 404 F. Supp. 2d 1256, 1259 (W.D. Wa. 2005). Concerning what constitutes "the convenience of parties and witnesses" and "the interests of justice," the Ninth Circuit has instructed that: Under § 1404(a), the district court has discretion to adjudicate motions for transfer according to an `individualized, case-by-case consideration of convenience and fairness.' A motion to transfer venue under § 1404(a) requires the court to weigh multiple factors in its determination whether transfer is appropriate in a particular case. For example, the court may consider: (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. Additionally the presence of a forum selection clause is a `significant factor' in the court's § 1404(a) analysis. Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir. 2000) (internal quotation marks and footnotes omitted). See also Stewart Org., Inc. v. Ricoh Corp.,
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487 U.S. 22, 29 (1988) ("presence of a forum-selection clause . . . will be a significant factor that figures centrally in the district court's calculus" in determining whether to transfer venue under § 1404(a)). B. Cats and Dogs and LaPausky Could Have Been Brought in the Northern District of California.

The Northern District of California ("Northern District") can properly exercise both personal jurisdiction over the parties and subject matter jurisdiction over this dispute. Yelp has its principal place of business in San Francisco, California and therefore would be subject to the Northern District's jurisdiction. (Cats and Dogs FAC ¶ 13.) Plaintiffs have already consented to jurisdiction in the state of California by virtue of their lawsuits filed in this district.1 Like this Court, the Northern District would also have subject matter jurisdiction over these actions under the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2). (LaPausky Compl. ¶ 1; Cats and Dogs FAC ¶ 1.) For venue selection purposes, an action based on diversity of citizenship may be brought only in "a judicial district where any defendant resides, if all defendants reside in the same State." 28 U.S.C. § 1391(a)(1). A corporate defendant is "deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced . . . ." 28 U.S.C. § 1391(c). Here, Yelp, the sole defendant, is subject to the personal jurisdiction in the Northern District because it has its principal place of business in San Francisco, California. (Cats and Dogs FAC ¶ 13.)

1

Moreover, "as matter of law, a transferee forum need not have personal jurisdiction over a plaintiff in order for transfer to be appropriate under § 1404(a)." Morrow v. Vertical Doors, Inc., No. CV 09-0256-PHX-DGC, 2009 WL 1698560, at *2 (D. Ariz. June 17, 2009). See also FTC v. Watson Pharms., Inc., 611 F. Supp. 2d 1081, 1090 (C.D. Cal. 2009) ("[I]t is not necessary for the transferee forum to have personal jurisdiction over the plaintiff.").
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DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)

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Thus, both Cats and Dogs and LaPausky could both have been brought in the Northern District. C. The Convenience of the Parties and Witnesses and Interest of Justice Strongly Favor Transfer to the Northern District.

Many of the factors that courts consider in assessing a § 1404(a) transfer strongly weigh in favor of transferring these actions to the Northern District of California. The only factor Plaintiffs might cite as weighing against transfer-- Plaintiffs' choice of forum--is of no or minimal consideration in this case, because Plaintiffs have (a) already agreed that the Northern District is a convenient forum, (b) purport to represent a nationwide class of plaintiffs, and (c) bring this action in a forum where few of the operative facts of the actions took place. 1. Plaintiffs' Agreement to the Forum Selection Clause Strongly Supports Transfer to the Northern District.

Plaintiffs' agreement to the forum selection clause in Yelp's TOS and Advertising Agreement, in which Plaintiffs agreed to jurisdiction and venue in the Northern District, strongly favors transfer. a. The Forum Selection Clause Is a "Significant Factor" Entitled to "Substantial Consideration" in the § 1404(a) Analysis.

Although the forum selection clause contained in Yelp's TOS and Advertising Agreement is most likely permissive (rather than mandatory) in nature, it is nevertheless a "significant factor" entitled to "substantial consideration" under § 1404(a). As the Ninth Circuit has held, "the presence of a forum selection clause is a `significant factor' in the court's § 1404(a) analysis." Jones, 211 F.3d at 49899 (emphasis added). Even where a forum selection clause is permissive, "the fact that the parties contemplated [a particular state] as a possible forum is entitled to `substantial consideration' in this [§ 1404(a)] analysis." Unisys Corp. v. Access Co., Ltd., No. C05-3378 TEH, 2005 WL 3157457, at *5 (N.D. Cal. Nov. 23, 2005) (emphasis added) (finding permissive forum selection clause weighed in favor of
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§ 1404(a) venue transfer). This is because, "while courts normally defer to a plaintiff's choice of forum, such deference is inappropriate where the plaintiff has already freely contractually chosen an appropriate venue" and thus "the plaintiffs bear the burden of demonstrating why they should not be bound by their contractual choice of forum." Id. (quoting Jumara v. State Farm Ins. Co., 55 F.3d 873, 880 (3d Cir. 1995)) (internal quotations omitted); see also Jumara, 55 F.3d at 880 (giving substantial, though not dispositive, weight to a permissive forum selection clause); Orix Credit Alliance, Inc. v. Mid-South Materials Corp., 816 F. Supp. 230, 234 (S.D.N.Y. 1993) ("although a permissive forum clause is entitled to less weight than a mandatory one, the fact that both parties initially accepted the jurisdiction of the courts of [a particular jurisdiction] must count"); General Electric Credit Corp. v. Toups, 644 F. Supp. 11, 15 (S.D.N.Y. 1985) ("In fact, by enforcing the [permissive forum selection] clause, this court would encourage the policy of requiring parties to freely negotiate contracts to live up to their terms."). Furthermore, even where permissive, "[a] forum selection clause is determinative of the convenience to the parties." Himax Technologies, Inc. Orix, 816 F. Supp. at 234 (emphasis added); General Electric Credit, 644 F. Supp. at 15 (same); Pfeiffer v. 530 F. Supp. 2d 1121, 1125 n.4 (C.D. Cal. 2008) ("Although not dispositive, a forum selection clause is determinative of the convenience to the parties and is entitled to substantial consideration.") (citations and internal quotation marks omitted). While the forum selection clause is thus not dispositive of whether the case should be transferred, it nevertheless forecloses Plaintiffs from arguing that the Central District is more convenient to the parties than the Northern District. Id. Thus, the forum selection clause, which each Plaintiff in these actions agreed to in at least one form, although not dispositive, strongly favors transfer to the Northern District and is determinative of the issue of convenience to the parties.
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DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)

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b.

All Plaintiffs Have Agreed to the Forum Selection Clause.

All of the Plaintiffs in both LaPausky and Cats and Dogs have agreed to Yelp's forum selection clause (in some cases, multiple times) and thus have consented to jurisdiction and venue in the Northern District of California. All of the eleven Plaintiffs in both actions have used the Yelp Website and proceeded past the homepage (i.e., the initial webpage displayed at www.yelp.com), thus agreeing to Yelp's TOS, including the forum selection clause. (Byrne Decl. ¶ 9; LaPausky Compl. ¶¶ 17, 20; Cats and Dogs FAC ¶¶ 94, 97, 101102, 105-106, 109, 112, 117, 119-120, 125-126, 129, 131-132, 136, 142, 144-145, 150, 156-157, 165, 169.) Notice to users of their agreement to Yelp's TOS, and a link to the TOS, is given both on the Yelp Website homepage and on every other Yelp webpage. (Byrne Decl. ¶ 9.) Such browse-wrap agreements have been held to be enforceable by courts nationwide. See, e.g., Burcham v. Expedia, Inc., No. 4:07CV1963 CDP, 2009 WL 586513, at *4 (E.D. Mo. Mar. 6, 2009) (plaintiff bound by user agreement because link to full text of user agreement found at bottom of every web page); Molnar v. 1-800-Flowers.com, Inc., No. CV 08-0542 CAS (JCx), 2008 WL 4772125, at *7 (C.D. Cal. Sept. 29, 2008) ("[C]ourts have held that a party's use of a website may be sufficient to give rise to an inference of assent to the Terms of Use contained therein (so called `browsewrap contracts')."); Cairo, Inc. v. Crossmedia Servs., Inc., No. C 04-4825 JW, 2005 WL 756610, at *2 (N.D. Cal. Apr. 1, 2005) (repeated use of a website with link to terms of service constituted actual or imputed knowledge and acceptance of such terms); Register.com, Inc. v. Verio, Inc., 356 F. 3d 393, 403 (2d Cir. 2004) (finding plaintiff who regularly used website was bound by its terms). Not only have all Plaintiffs alleged that they used the Yelp Website, but the Cats and Dogs First Amended Complaint makes it clear that at least three Plaintiffs had actual knowledge of the TOS, since they allege contacting Yelp to complain
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DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)

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about violations of the TOS or the "review guidelines" incorporated therein. (See Cats and Dogs FAC ¶¶ 96, 103, 104, 126, 131; see also id. at ¶¶ 57, 58, 93.) Each of these three Plaintiffs was thus not only on notice of the TOS by virtue of the notification at the bottom of every webpage, but each was actually familiar with the Yelp TOS and communicated with Yelp about the TOS. Furthermore, eight of the eleven Plaintiffs have registered at biz.yelp.com, thus agreeing again to Yelp's TOS, including the forum selection clause. (Byrne Decl. ¶¶ 7-8 and Ex. D.) When registering at biz.yelp.com, each of these eight Plaintiffs affirmatively clicked on a button below the statement, "By clicking the button below, you agree to the Yelp Terms of Service." (Byrne Decl. ¶ 6.) Such click-through agreements are also enforceable. See e.g., Burcham, 2009 WL 586513, at *2 ("[click-through] agreements have been routinely upheld by circuit and district courts") (collecting cases); Guadagno v. E*Trade Bank, 592 F. Supp. 2d 1263, 1271 (C.D. Cal. 2008) (assent given by website user clicking on acknowledgement icon); Koresko v. Realnetworks, Inc., 291 F. Supp. 2d 1157, 1162-63 (E.D. Cal. 2003) (assent to forum selection clause given by clicking on clickbox on website). Finally, all three of the Sponsor Plaintiffs have purchased advertising from Yelp and have thus, again, explicitly agreed to the forum selection clause in Yelp's Advertising Agreement. (Byrne Decl. ¶¶ 2-5 & Exs. A, B, C at 4-5; Cats and Dogs FAC ¶¶ 10-12, 44.)

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DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)

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Plaintiffs' agreement to the forum selection clauses contained in Yelp's TOS and Advertising Agreement is summarized in the following chart: Agreed to Communicated Agreed to TOS TOS by Using with Yelp by Registering Website for Yelp's about TOS Business Services LaPausky Yes Yes Cats and Dogs Yes Yes Astro Yes Yes Adult Socials Yes Yes Le Petite Yes Yes Yes Retreat Mermaids Yes Yes Cruises Wag My Tail Yes Yes Scion Yes Yes Yes Bleeding Heart Yes Bakery Sofa Outlet Yes Celibré Yes Yes Plaintiff2 Agreed to Advertising Agreement (i.e., was a "Sponsor")

Yes Yes Yes

Thus, each plaintiff in LaPausky and Cats and Dogs has assented to the forum selection clause, most of them more than once. Their agreement is thus a "substantial consideration" weighing towards transfer to the Northern District. 2. The Presence of Related Litigation in the Northern District and the Potential for Consolidation Weighs Strongly in Favor of Transfer.

Another factor that courts consider is the "pendency of related actions in the transferee forum," which "is a significant factor in considering the interest of justice factor." Amazon.com, 404 F. Supp. 2d at 1261 (emphasis added). The pendency of the Levitt action in the Northern District--in which plaintiffs assert similar causes of action as Plaintiffs in Cats and Dogs and LaPausky, and which is
2

For simplicity, Yelp refers in this chart to the abbreviated names for Plaintiffs used in the LaPausky Complaint and the Cats and Dogs FAC.
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DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)

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based on very similar allegations of Yelp's conduct--thus strongly favors transfer to the Northern District. If LaPausky and Cats and Dogs are transferred to the Northern District, Yelp would seek consolidation of the three actions--conserving the Courts' and the parties' resources and promoting an efficient determination of all three actions. See Amazon.com, 404 F. Supp. 2d at 1262 ("While consolidation of the two cases is a matter for the [transferee] court to decide, the feasability of such consolidation is a factor that this Court may consider in deciding whether to allow a transfer."). Transfer to the Northern District would thus serve the convenience of the parties and the interest of justice by (a) lowering the costs to the courts and to the parties, (b) facilitating expeditious pre-trial proceedings and discovery, and (c) avoiding duplicative litigation and inconsistent results. As the U.S. Supreme Court stated in Ferens v. John Deere Co., "to permit a situation in which two cases involving precisely the same issues are simultaneously pending in different District Courts leads to the wastefulness of time, energy and money that § 1404(a) was designed to prevent." 494 U.S. 516, 531 (1990) (internal quotations and citation omitted). Furthermore, as a recent district court in the Ninth Circuit similarly held, "[l]itigation of related claims in the same tribunal is strongly favored because it facilitates efficient, economical and expeditious pre-trial proceedings and discovery and avoids duplic[ative] litigation and inconsistent results." Amazon, 404 F. Supp. 2d at 1261 (internal citations and quotations omitted); see also Data Retrieval Tech., LLC v. Sybase, Inc., No. C08-1702 RSM, 2009 WL 960681, at *5 (W.D. Wa. Apr. 8, 2009) (finding "efficiency will not be served by retaining the case" due to related action pending in Northern District of California). While Plaintiffs may argue that transfer of Cats and Dogs and LaPausky to the Northern District is not appropriate under the "first-to-file" rule, since these actions were filed before the Levitt action, the first-to-file rule does not apply "if the balance of convenience weighs in favor of the later-filed action." Ward v. Follett
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DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)

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Corp., 158 F.R.D. 645, 648 (N.D. Cal. 1994). Here, the rule should not apply to bar transfer to the Northern District, since the balance of convenience weighs so strongly in favor of litigation in that district. See, e.g., Calloway Golf Co. v. Corporate Trade, Inc., No. 09cv384 L(POR), 2010 WL 743829, *8 (S.D. Cal. Mar. 1, 2010) (transferring first-filed action to district where second-filed action was pending because convenience of the parties and witnesses and the interest of justice weighed in favor of transfer). Thus, the related Levitt action in the Northern District and the potential for consolidation is a "significant factor" weighing in favor of transfer of these actions. 3. Most of the Relevant Conduct Took Place in the Northern District, While Minimal, If Any, Took Place in the Central District.

Another factor that courts consider is where the relevant conduct took place. Jones, 211 F.3d at 498-99 (listing "the location where the relevant agreements were negotiated and executed" and "the contacts relating to the plaintiff's cause of action in the chosen forum" as factors). Plaintiffs complain about Yelp's business and sales practices related to the solicitation of advertising from businesses and the subsequent effect of purchasing or declining to purchase such advertising on the display of consumer reviews that appear on the businesses' Yelp webpages. Yelp is headquartered in San Francisco, and the majority of Yelp's employees, including management and the bulk of Yelp's sales force, is located in San Francisco. (Byrne Decl. ¶ 14.) Furthermore, Yelp's user operations department, which handles complaints about reviews of businesses, is located in San Francisco. (Id.) Finally, Yelp's engineering department, which develops and maintains the review filter algorithm3 that will be a significant aspect of Yelp's defense, is located in San Francisco. (Id.) Because anyone can register with Yelp to write reviews of and rate businesses, Yelp has taken steps to guard against improper and disruptive reviews. For example, business owners are known to write the occasional fake review to either
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DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)
3

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Thus, the vast majority of relevant conduct took place in or from the Northern District, which weighs in favor of transfer. By contrast, Plaintiffs chose to bring both actions in the Central District, where little of the relevant conduct took place. (Id.) 4. The Parties Have Greater Contact with the Northern District than the Central District.

Yelp has minimal contact with Plaintiffs' chosen forum, whereas Yelp has very substantial contact with the Northern District. No fewer than 251 of Yelp's 362 employees, including 143 salespeople, work at Yelp's corporate headquarters in San Francisco within the Northern District. (Byrne Decl. ¶ 14.) Comparatively, Yelp has only four employees in the Central District, none of whom are salespeople, and has no offices in the Central District. (Id.) Additionally, most of the Plaintiffs themselves have little relevant contact with their chosen forum. The sole plaintiff in LaPausky maintains her principal place of business in the Southern District of California and likely has little or no relevant contact with the Central District. (LaPausky Compl. ¶ 3.) Only four of the ten plaintiffs in Cats and Dogs maintain their principal place of business in the Central District. (Cats and Dogs FAC ¶¶ 3, 6, 8, 12.) However, nearly that same number of plaintiffs--three--maintain their principal place of business in the

burnish their own image or tarnish that of their competitors, and disgruntled former employees sometimes write negative reviews about their former employers. This problem permeates most online review sites, artificially inflating or deflating a business's rating and misleading consumers. Yelp internally and informally refers to such reviews as "spam," in reference to the common term used to describe unwanted online communications, especially email. Yelp has developed a sophisticated and confidential review filter algorithm that attempts to identify and suppress spam reviews. The review filter runs on a nearly continual basis and, as circumstances change over time (e.g., the review filter gleans new information about a particular review or reviewer), a review may be designated and undesignated as spam.
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DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)

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Northern District. (Cats and Dogs FAC ¶¶ 4, 7, 11.) Thus, since both Yelp and seven of the eleven Plaintiffs have little or no relevant contact with Plaintiffs' chosen forum, the matter should be transferred to a forum that both Yelp and Plaintiffs do have significant contact with--the Northern District. Jones, 211 F.3d at 498-99 (listing "the respective parties' contacts with the forum" as a factor). 5. There is Easier Access to Proof in the Northern District than in the Central District.

The ease of access to proof also supports transfer to the Northern District. Most of the witnesses are likely to be located in the Northern District. See A.J. Indus., Inc. v. U.S. Dist. Court, 503 F.2d 384, 386-87 (9th Cir. 1974) (discussing the importance and history of the convenience of witnesses in evaluating a § 1404 transfer). Since discovery has yet to commence and initial disclosures have not yet been made, the identity of specific witnesses remains to be determined. However, the majority of such witnesses are likely to be located in the Northern District of California. Yelp's witnesses are likely to include employees in the following departments and roles: Category of Witnesses Yelp Salespeople and Sales Trainers Yelp Engineers Yelp Executives Yelp User Operations Subject of Testimony Yelp's sales practices Yelp's review filter algorithm Yelp's overall sales policies Yelp's customer service and communications with business owners and users

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DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)

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The vast majority of these witnesses are located in the Northern District. (Byrne Decl. ¶ 14.)4 Furthermore, since Yelp is headquartered in the Northern District, its primary servers and most documents are also located in the Northern District. (Byrne Decl. ¶ 14.) Thus, the information, and more importantly, the witnesses relevant to Plaintiffs' causes of action are most likely to be in the Northern District. 6. Transfer of the Action to the Northern District Will Save the Parties and the Court Considerable Time and Expense.

For the reasons stated above with respect to the location of most of the likely witnesses and documents, the difference in costs of litigation in the two forums also weighs in favor of transfer to the Northern District. See Jones, 211 F.3d at 498-99 ("the differences in the costs of litigation in the two forums" is a factor). 7. Plaintiffs' Choice of Forum is Entitled to No or "Minimal Consideration."

Finally, although a plaintiff's choice of forum is generally entitled to considerable deference, here, Plaintiffs' choice of forum here is entitled to no or, at best, minimal weight. For the same reason, the Northern District is more likely to be convenient for any non-party witnesses and is thus less likely to encounter motions to quash subpoenas by such non-party witnesses. See Jones, 211 F.3d at 498-99 (listing "the availability of compulsory process to compel attendance of unwilling non-party witnesses" is a factor for courts to consider in a motion for a Section 1404(a) transfer). While Yelp has not thus far identified any likely non-party witnesses, because Yelp is headquartered in San Francisco, such witnesses (who may include, e.g., former Yelp employees or other parties with whom Yelp has contracted or done business), if any, are more likely to be located in or around the Northern District. The Northern District is therefore less likely than the Central District to face motions to quash brought by reluctant non-party witnesses. See Fed. R. Civ. P. 45(c)(3)(A)(ii), (B)(iii) (detailing mandatory and permissive quashing of subpoenas for third parties located more than 100 miles away). Thus, the availability of compulsory process weighs in favor of transfer to the Northern District.
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DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)
4

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First, a plaintiff's choice of forum is a "convenience of the parties" factor. See Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). However, as discussed above (Section III.C.1, supra), Plaintiffs' agreement to jurisdiction and venue in the Northern District of California "is determinative of the convenience to the parties." Orix, 816 F. Supp. at 234; General Electric Credit, 644 F. Supp. at 15 (same); Pfeiffer, 530 F. Supp. 2d at 1125 n.4 (same). Plaintiffs' agreement to the Northern District of California as a convenient forum thus ends the "convenience of the parties" analysis and negates any weight their choice of forum would otherwise be given. Second, Plaintiffs in both actions seek to represent putative classes that span the entire country, and the Ninth Circuit has held that in such situations, Plaintiffs' chosen forum is largely fortuitous and must be given less weight. See Lou v. Belzburg, 834 F.2d 730, 739 (9th Cir. 1987) ("Although great weight is generally accorded plaintiff's choice of forum, when an individual brings a derivative suit or represents a class, the named plaintiff's choice of forum is given less weight.") (internal citations omitted); see also Gomez v. Wells Fargo Bank, NA, No. CV-0900181-PHX-GMS, 2009 WL 1936790, at *2 (D. Ariz. July 2, 2009) (deference to plaintiff's choice of forum "is relatively minimal in class action suits"). Third, when the chosen forum is neither the plaintiffs' residence nor the place where the operative facts occurred--as here--plaintiffs' choice of forum is entitled only to "minimal consideration." See Lou, 834 F.2d at 739 ("If the operative facts have not occurred within the forum and the forum has no interest in the parties or subject matter, [plaintiff's] choice is entitled to only minimal consideration."). See also IBM Credit Corp. v. Definitive Computer Servs., Inc., No. C-95-3927 SI, 1996 WL 101172 , at *2 (N.D. Cal. Feb. 28, 1996) ("Ordinarily, where the forum lacks any significant contact with the activities alleged in the complaint, plaintiff's choice of forum is given considerably less weight, even if the plaintiff is a resident of the forum.") (emphasis added). As discussed above, the
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DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)

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sole plaintiff in LaPausky resides in the Southern District of California and only four of the ten plaintiffs in Cats and Dogs reside in the Central District of California, whereas nearly that many (three) reside in the Northern District. Furthermore, the majority of the operative facts occurred in the Northern District, while few occurred in the Central District. These reasons, taken together, should fully negate any deference that otherwise may have been afforded to Plaintiffs' choice of forum and, at most, should entitle Plaintiffs' choice to minimal deference. IV. CONCLUSION For the foregoing reasons, Yelp respectfully submits that "the convenience of parties and witnesses" and "the interest of justice" strongly support a transfer of LaPausky and Cats and Dogs to the Northern District of California under 28 U.S.C. § 1404(a). Dated: April 9, 2010 COOLEY GODWARD KRONISH LLP MICHAEL G. RHODES (116127) MATTHEW D. BROWN (196972) BENJAMIN H. KLEINE (257225) SARAH R. BOOT (253658) /s/ Matthew D. Brown Matthew D. Brown (196972) Attorneys for Defendant YELP! INC.

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DEFENDANT YELP'S MEMO. OF P&AS I/S/O MOT. TO TRANSFER VENUE CASE NOS. CV 10-01340 & 10-01578 VBF (SSX)