Cream et al v. Northern Leasing Systems, Inc. et al

Filing 37

ORDER Vacating Hearing and Deferring Ruling on Motion to Dismiss 16 ; ORDER Requesting Authentication of Documents; Moving Defendants' Response due 7/10/2015; Plaintiffs' Objections due 7/17/2015. Signed by Judge Maria-Elena James on 6/26/2015. (mejlc2S, COURT STAFF) (Filed on 6/26/2015)

1
2

UNITED STATES DISTRICT COURT

3

NORTHERN DISTRICT OF CALIFORNIA

4
JOSEPH CREAM, et al.,

5

Case No. 15-cv-01208-MEJ

Plaintiffs,
6
v.
7
NORTHERN LEASING SYSTEMS, INC.,
et al.,

8

ORDER DEFERRING RULING ON
MOTION TO DISMISS AND
REQUESTING AUTHENTICATION OF
DOCUMENTS
Re: Dkt. No. 16

Defendants.

9
10

INTRODUCTION

United States District Court
Northern District of California

11

Plaintiffs Joseph Cream, Jr., Amanda Cream, Cathy Cream, and Fernando Carillo

12
13

(“Plaintiffs”) bring this action against Defendant Northern Leasing Systems, Inc. and related

14

Defendants,1 alleging that they fraudulently induce small business owners like Plaintiffs to lease

15

credit card machines under undisclosed and onerous terms. First Am. Compl. (“FAC”) at 1, Dkt.

16

No. 13. Defendants Northern Leasing Systems, Inc., Lease Finance Group, LLC, CIT Financial

17

USA, Inc., Lease Source, Inc. and Jay Cohen (collectively, “Defendants”) move to dismiss the

18

FAC pursuant to Federal Rule of Procedure 12(b)(3) on the ground that the action is improperly

19

venued in this Court, as the leases referenced in the FAC contain forum selection clauses requiring

20

that actions be filed in New York (and one lease requires filing in Illinois). Dkt. No. 16 (“Mot.”).

21

Plaintiffs filed an Opposition (Dkt. No. 23), and Defendants filed a Reply (Dkt. No. 28). The

22

Court finds this matter suitable for disposition without oral argument and VACATES the hearing.

23

See Fed. R. Civ. P. 78(b); Civil L.R. 7-1(b). Having considered the parties’ positions, relevant

24

legal authority, and the record in this case, the Court DEFERS ruling on Defendants’ Motion at

25

this time for the reasons discussed below.

26
1

27
28

Plaintiffs named as Defendants Northern Leasing Systems, Inc; Lease Finance Group LLC; EVO
Merchant Services, LLC; EVO Payments International, LLC; Allen & Associates; Lease Source
Inc.; Lease Source-LSI, LLC; CIT Financial USA, Inc; Jay Cohen; Peter S Cohen; Ron G
Arrington; and Does 1-100.

1
2

DISCUSSION
Defendants argue that this action must be dismissed or transferred because each of the

3

leases referenced in Plaintiffs’ FAC require that actions relating to those agreements be filed in

4

jurisdictions other than California. Mot. at 1. Defendants thus request that the Court take judicial

5

notice of 14 lease agreements, which they assert are the same agreements specifically referenced

6

by number in Plaintiffs’ FAC. Reply at 1; Req. for Judicial Notice, Dkt. No. 16-4; see also id.,

7

Exs. A-N. Plaintiffs object, arguing that judicial notice is not appropriate for these documents

8

under Federal Rule of Evidence 201, which permits judicial notice only of documents capable of

9

immediate and accurate determination by resort to easily accessible sources of indisputable
accuracy. See Dkt. No. 23-1. Plaintiffs also challenge the validity of these agreements, alleging

11
United States District Court
Northern District of California

10

that they did not receive a copy of their agreements and that they were unaware of the existence of

12

the additional pages or of the onerous terms contained in the agreements. FAC at 6-9.

13

While the Court agrees that the documents are not judicially noticeable, the Court may

14

nevertheless consider them under certain circumstances. First, while generally a court may not

15

look beyond the four corners of a complaint in ruling on a Rule 12(b) motion, there is an exception

16

for documents incorporated into the complaint by reference. See Swartz v. KPMG LLP, 476 F.3d

17

756, 763 (9th Cir. 2007) (per curiam); Lee v. City of L.A., 250 F.3d 668, 688-89 (9th Cir. 2001).

18

Under the doctrine of incorporation by reference, the Court may consider documents whose

19

contents are alleged in the complaint, provided the complaint “necessarily relies” on the

20

documents or contents thereof, the document’s authenticity is uncontested, and the documents’

21

relevance is uncontested. Coto Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010);

22

United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) (“Even if a document is not attached to

23

a complaint, it may be incorporated by reference into a complaint if the plaintiff refers extensively

24

to the document or the document forms the basis of the plaintiff’s claim.”). “The defendant may

25

offer such a document, and the district court may treat such a document as part of the complaint,

26

and thus may assume that its contents are true for purposes of a motion to dismiss under Rule

27

12(b)(6).” Id. Although the pending Motion is not made under Rule 12(b)(6), the same principles

28

apply, as Plaintiffs’ FAC refers to the lease agreements but does not include the actual documents.
2

1
2

As such, Defendants should be permitted to offer these documents for the Court’s consideration.
Second, Courts regularly accept such evidence in determining motions to transfer based on

3

forum selection clauses. See, e.g., T & M Solar & Air Conditioning, Inc. v. Lennox Int’l Inc., __

4

F. Supp. 3d __, 2015 WL 1289497, at *3-5 (N.D. Cal. Mar. 20, 2015); Monastiero v. appMobi,

5

Inc., 2014 WL 1991564, at *1 (N.D. Cal. May 15, 2014); Bayol v. Zipcar, Inc., 2014 WL

6

4793935, at *1 (N.D. Cal. Sept. 25, 2014) (all reviewing and considering the agreements that

7

contained the allegedly applicable forum-selection clause).

8
9

That said, Defendants submitted the lease agreements only through a request for judicial
notice, with no affidavit or declaration authenticating these documents. Defendants state that such
declarations “appear[] to be an unnecessary waste of judicial resources and time.” Reply at 1.

11
United States District Court
Northern District of California

10

Nonetheless, in this District, Civil Local Rule 7-5 requires that factual contentions made in

12

support of any motion “must be supported by affidavit or declaration” and “evidentiary matters

13

must be appropriately authenticated by an affidavit or declaration.” Accordingly, Defendants must

14

properly authenticate these lease agreements to support their Motion.
CONCLUSION

15
16

In light of the foregoing, the Court currently DEFERS ruling on Defendants’ Motion to

17

Dismiss. To support their Motion, Defendants must file the lease agreements as properly

18

authenticated documents in accordance with Local Rule 7-5 by July 10, 2015. Failure to timely

19

file the authenticated documents will result in denial of Defendants’ Motion without prejudice.

20

Following Defendants’ filing of such authenticated documents, Plaintiffs will have one week (i.e.,

21

by July 17, 2015) to assert any objections to the Defendants’ evidence before the Court makes its

22

ruling on Defendants’ Motion.

23

IT IS SO ORDERED.

24
25
26
27

Dated: June 26, 2015
______________________________________
MARIA-ELENA JAMES
United States Magistrate Judge

28
3