Oribe Hair Care, LLC v. Canales et al

Filing 68

ORDER granting 49 Defendants' Motion to Transfer Pursuant to 28 U.S.C. § 1404(a). The Clerk of the Court shall transfer this action in its entirety to the U.S. District Court for the Southern District of New York. This action is CLOSED in this District. Signed by Judge Darrin P. Gayles (ssd) Modified to "opinion" on 5/15/2017 (wc).

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 17-cv-20148-GAYLES
ORIBE HAIR CARE, LLC,
Plaintiff,
v.
ORIBE CANALES, et al.,
Defendants.
/
ORDER
THIS CAUSE comes before the Court on Defendants Oribe Canales and Orizak, LLC’s
Motion to Transfer Pursuant to 28 U.S.C. § 1404(a) [ECF No. 49]. The Court has reviewed the
Motion and the record and is otherwise fully advised. For the reasons set forth below, the
Court grants the Motion.
I.

BACKGROUND
Plaintiff Oribe Hair Care, LLC (“OHC”), is a New York limited liability company that

designs and distributes haircare and beauty products throughout the United States under the
federally registered ORIBE trademark. [ECF No. 1 at 1]. Defendant Oribe Canales is a celebrity
hairstylist who cofounded OHC in 2007 [Id. at 3], and Defendant Orizak, LLC, is a limited
liability company that operates the Oribe Salon in Miami Beach, Florida under the direction and
supervision of Canales. [Id. at 1]. From 2007 to 2012, Canales and OHC entered into four
agreements governing, inter alia, the parties’ ownership interests and the extent to which the
parties are permitted to utilize Canales’s name, image, and likeness. 1

1

The four agreements include: the Contribution Agreement [ECF No. 30-1]; the Master Assignment and License
Agreement [ECF No. 30-2]; the Canales License Agreement [ECF No. 30-4]; and the Settlement Agreement and
Release [ECF No. 21]. Orizak was a party to only one of the four agreements: the Canales License Agreement.
[ECF No. 57 at 6].

On or about January 6, 2017, Canales posted an image on Instagram. [Id. at 7]. The
image depicted a caricature of Canales crucified on a cross, holding shears and a blow dryer, and
surrounded by women. [Id. at 7–9]. His first name, “ORIBE,” and the words “KINDA GENIUS”
appeared at the bottom of the image. [Id.]. On January 12, 2017, OHC filed an Emergency
Motion for Temporary Restraining Order and Preliminary Injunction, arguing, inter alia, that
Canales’s Instagram image harmed OHC’s trademarks and reputation. [ECF No. 6]. The Court
granted OHC’s Emergency Motion [ECF No. 11]. At a hearing on January 23, 2017, Defendants
argued that this Court is not the appropriate forum for this action and agreed to refrain from
using the image at issue while they filed their motion to transfer venue. [ECF No. 33].
Accordingly, the Court found good cause to extend the Temporary Restraining Order so that the
Court could rule on the motion. [Id.].
On February 24, 2017, Defendants filed the instant Motion to Transfer, asserting that this
action should be transferred to the U.S. District Court for the Southern District of New York
pursuant to 28 U.S.C. § 1404(a) because four separate agreements contain valid and mandatory
forum-selection clauses requiring that any controversy, claim, or matter “arising out of” or
relating to the agreements be filed in the courts of New York. [ECF No. 49 at 6].
Specifically, the Contribution Agreement (and the Master Assignment and License
Agreement, which incorporates the Contribution Agreement [ECF No. 30-2 ¶ 5]) contains the
following forum-selection clause:
In the event of any controversy or claim arising out of or relating to this
Agreement or the breach or alleged breach hereof, each of the parties hereto
irrevocably (a) submits to the exclusive jurisdiction of the U.S. District Court for
the Southern District of New York located in New York County or, if such court
does not have jurisdiction, the New York Supreme Court sitting in New York
County, (b) waives any objection which it may have at any time to the laying of
venue of any action or proceeding brought in any such court, (c) waives any claim
that such action or proceeding has been brought in an inconvenient forum or that
there is a more convenient forum for such action or proceeding . . .
2

[ECF No. 30-1 § 9.06]. The Canales License Agreement 2 contains the following forum-selection
clause:
The Parties agree that any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby shall be brought in the United
States District Court for the Southern District of New York or any New York
State court sitting in New York City, so long as one of such courts shall have
subject matter jurisdiction over such suit, action or proceeding, and that any cause
of action arising out of this Agreement shall be deemed to have arisen from a
transaction of business in the State of New York, and each of the Parties hereby
irrevocably consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and irrevocably
waives, to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding in
any such court or that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. . . .
[ECF No. 30-4 § 9.10]. And the Settlement Agreement and Release contains the following
forum-selection clause:
Each Party hereto irrevocably and unconditionally submits to and accept [sic] the
exclusive jurisdiction of the United States District Court for the Southern District
of New York located in the Borough of Manhattan or the courts of the State of
New York located in the County of New York for any action, suit or proceeding
arising out of or based upon this Agreement or any matter relating to it and waive
[sic] any objection that it may have to the laying of venue in any such court or
that such court is an inconvenient forum or does not have personal jurisdiction
over them. . . .
[ECF No. 21 ¶ 20(d)].
OHC does not dispute that the forum-selection clauses are valid; rather, it argues that the
forum-selection clauses do not apply because the claims in the Complaint do not fall within the
scope of the four agreements. [ECF No. 57 at 3].

2

The Canales License Agreement is the only agreement of the four agreements to which Orizak is also a party.
[ECF No. 57 at 6].

3

II.

LEGAL STANDARD
The statute governing venue transfer, 28 U.S.C. § 1404(a), provides, in relevant part, 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 . . . where it might have been brought.” In the
absence of a valid forum-selection clause, courts must consider various public and private
interest factors to determine whether transfer under § 1404(a) is appropriate. “The calculus
changes, however, when the parties’ contract contains a valid forum-selection clause, which
‘represents the parties’ agreement as to the most proper forum.’” Atl. Marine Const. Co. v. U.S.
Dist. Ct. for W. Dist. of Tex., 134 S. Ct. 568, 581 (2013) (quoting Stewart Org., Inc. v. Ricoh
Corp., 487 U.S. 22, 31 (1988)). When there is a valid forum-selection clause, the court’s analysis
changes in three ways: (1) “the plaintiff’s choice of forum merits no weight”; (2) the court
“should not consider arguments about the parties’ private interests”; and (3) the choice-of-law
rules of the original venue are not transferred to the new venue—“a factor that in some
circumstances may affect public-interest considerations.” Id. at 581–82. “As a consequence, a
district court may consider arguments about public-interest factors only. Because those factors
rarely defeat a transfer motion, the practical result is that forum-selection clauses should control
except in unusual cases.” Id. at 582 (citations omitted).
The resolution of this motion, therefore, involves two steps. First, the Court must
determine whether the forum-selection clauses at issue are valid. See id. at 581 n.5. If the forumselection clauses are valid, the Court must then apply the modified analysis from Atlantic Marine
outlined above.
III.

DISCUSSION
A.

Applicability of the Forum-Selection Clause

4

The parties do not dispute the validity of the forum-selection clauses; rather, they dispute
the applicability of the clauses to the claims in the Complaint. Specifically, OHC argues that
Defendants’ transfer argument is focused on the Complaint’s trademark infringement claims and
that it fails to take thirteen 3 of the Complaint’s sixteen counts into account. 4 [ECF No. 57 at 2].
To determine whether a claim or relationship falls within the scope of a forum-selection
clause, the Court must look to the language of the clause. See Bah. Sales Assoc., LLC v. Byers,
701 F.3d 1335, 1340 (11th Cir. 2012); Slater v. Energy Servs. Grp. Int’l, Inc., 634 F.3d 1326,
1330 (11th Cir. 2011) (holding that “the plain meaning of a contract’s language governs its
interpretation” in the context of interpreting a forum-selection clause). Here, all of the forumselection clauses at issue require the parties to submit to the jurisdiction of New York courts for
any actions “arising out of” the agreements “or relating to” [ECF No. 30-1 § 9.06, ECF No. 30-2
¶ 5], “in connection with” [ECF No. 30-4 § 9.10], “or based upon” [ECF No. 21 ¶ 20(d)] the
agreements. The Eleventh Circuit has held that “arising under or in connection with” language in
a forum-selection clause should be interpreted to “include[ ] all causes of action arising directly
or indirectly from the business relationship evidenced by the contract,” Stewart Org., Inc. v.
Ricoh Corp., 810 F.2d 1066, 1070 (11th Cir. 1987) (en banc), aff’d, 487 U.S. 22 (1988),

3

4

These counts include false designation of origin and unfair competition, trademark dilution, Florida’s Deceptive
and Unfair Trade Practices Act, defamation, trade libel, tortious interference, and breach of fiduciary duty.
OHC also notes that Orizak is a party to only one of the four agreements. [ECF No. 57 at 6]. However, the
absence of Orizak from the parties’ three other agreements does not preclude the enforcement of the forumselection clauses. “[A] party need not sign a forum selection clause to be bound by the terms of the clause.”
Gonzalez v. Watermark Realty Inc., No. 09-60265, 2010 WL 1299740, at *4 (S.D. Fla. Mar. 30, 2010). “So long
as the nonparties are ‘closely related to the dispute such that it becomes foreseeable that [non-parties] will be
bound’ the forum-selection clause can bind non parties.” Id. (quoting Lipcon v. Underwriters at Lloyd’s, Lon.,
148 F.3d 1285, 1299 (11th Cir. 1998)). As a signatory of the Canales License Agreement—which makes
reference to the Contribution Agreement—and because the parties failed to brief anything about Orizak’s
relationship to the other parties other than identifying Orizak as the limited liability company that operates Oribe
Salon, the Court finds that Orizak’s rights are sufficiently “‘directly related to, if not predicated upon’ the
interests of [Oribe],” Lipcon, 148 F.3d at 1299 (quoting Dayhoff Inc. v. H.J. Heinz Co., 86 F.3d 1287, 1297 (3d
Cir. 1996)), such that Orizak “should benefit from and be subject to [the] forum selection clauses.” ManettiFarrow, Inc. v. Gucci Am., Inc., 858 F.2d 509, 514 n.5 (9th Cir. 1988).

5

including tort claims. See Stiles v. Bankers Healthcare Grp., Inc., 637 F. App’x 556, 560 (11th
Cir. 2016) (per curiam).
OHC offers a narrow interpretation of the agreements as governing equity stakes,
ownership interests, and asset transfers rather than its defamation, deceptive trade practices, and
trademark infringement claims here. OHC argues that “[t]he forum-selection clauses do not
apply to the ‘subject matter of’ those Agreements, but rather are limited to claims arising out of
or related to the Agreement or the breach or alleged breach thereof.” [ECF No. 57 at 9]. In
essence, OHC argues that the forum-selection clauses would apply in a breach of contract claim,
but because it did not bring such a claim here, the forum-selection clauses are inapplicable.
OHC’s arguments are unconvincing.
OHC’s decision to assert a variety of claims in its Complaint—while conveniently
excluding a breach of contract claim—does not preclude the applicability or enforceability of the
agreements’ forum-selection clauses. The Court “cannot accept the invitation to reward attempts
to evade enforcement of forum selection agreements through ‘artful pleading of [tort] claims’ in
the context of a contract dispute.” Food Marketing Consultants, Inc. v. Sesame Workshop, No.
09-61776, 2010 WL 1571206, at *13 (S.D. Fla. Mar. 26, 2010) (quoting Lambert v. Kysar, 983
F.2d 1110, 1121 (1st Cir. 1993)), report and recommendation adopted, 2010 WL 1571210 (S.D.
Fla. Apr. 20, 2010). Indeed, “it is inappropriate . . . to depend solely on the legal labels used by
the plaintiff to decide if his case arises out of the contract” when determining whether a forumselection clause governs its claims. “Instead, when ascertaining the applicability of a contractual
provision to particular claims, [the Court must] examine the substance of those claims, shorn of
their labels.” Phillips v. Audio Active Ltd., 494 F.3d 378, 388 (2d Cir. 2007).
Regardless of how OHC would like to characterize its Complaint, the crux of this action
is the extent to which Canales is permitted to use his own name, image, and likeness in light of
6

the agreements. All four agreements 5 contain provisions precisely detailing this very issue. As
such, a court must interpret the parties’ four agreements in order to resolve OHC’s claims—and
those claims fall squarely within the broad scope of the forum-selection clauses. Because the
parties have “irrevocably submit[ted] to the exclusive jurisdiction” of New York courts and have
“irrevocably waive[d]” any objections to New York courts as the agreed-upon venue, this action
belongs before the courts of New York.
B.

Modified Forum Non Conveniens Analysis

Although a valid forum-selection clause almost always governs, the Court must still
engage in the modified forum non conveniens analysis. Post–Atlantic Marine, the Eleventh
Circuit has ruled that “[a] binding forum-selection clause requires the court to find that the forum
non conveniens private factors entirely favor the selected forum.” GDG Acquisitions, LLC v.
Government of Belize, 849 F.3d 1229, 1304 (11th Cir. 2017) (quoting GDG Acquisitions, LLC v.
Government of Belize, 749 F.3d 1024, 1029 (11th Cir. 2014) (emphasis added)). What remains to
be determined under this modified analysis, then, is whether the public interest factors weigh in
favor of this action remaining in the Southern District of Florida or proceeding in the Southern
District of New York. Those factors include the following:
the administrative difficulties flowing from court congestion; the local interest in have
localized controversies decided at home; the interest in having the trial of a diversity case
in a forum that is at home with the law that must govern the action; the avoidance of
unnecessary problems in conflicts of law, or in the application of foreign law; and the
unfairness of burdening citizens in an unrelated forum with jury duty.
Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n.6 (1981).
None of these factors operate to defeat Defendants’ Motion. While the Court makes no
finding as to whether New York law (as provided in all four agreements) or Florida law applies,

5

Section 9.17 of the Canales License Agreement incorporates the Contribution Agreement by reference. [ECF No.
30-4].

7

the judges in the Southern District of New York are eminently qualified to apply either in
presiding over this case. See, e.g., Food Marketing Consultants, Inc., 2010 WL 1571206, at *10
(“While this Court is capable of construing New York law, federal courts in New York engage in
that exercise with far greater frequency and, thus, can fairly be expected to have developed some
expertise in that area.”). The Court cannot predict whether unnecessary problems with conflicts
of law will arise (particularly between Florida law and New York law), but it can see no potential
conflicts that the Southern District of New York would have to resolve that this Court would not
also have to resolve, so this factor similarly does not weigh against transfer.
Regarding the value of having local controversies litigated locally, the Court finds that
there would be value in having a New York court adjudicate a controversy brought by a New
York limited liability company. The administrative difficulties flowing from court congestion
weigh in favor of transfer, given that “the Southern District of Florida has one of the busiest
dockets in the country.” Beaman v. Maco Caribe, Inc., 790 F. Supp. 2d 1371, 1379 (S.D. Fla.
2011). That said, “this factor generally does not warrant significant consideration in the forum
non conveniens analysis, and the Court does not accord it much weight.” Id. at 1379–80. And
finally, the Court does not see any potential unfairness in burdening citizens in New York with
jury duty; quite the contrary, New York citizens likely have a compelling interest in adjudicating
activities that affect companies headquartered within the state’s borders. In sum, there is no
indication that this is one of the “unusual cases” in which the public factors outweigh a valid
forum-selection clause. Atl. Marine, 134 S. Ct. at 582.
Accordingly, because the parties’ contractual forum-selection clauses are valid, broad in
scope, and govern all claims asserted by OHC here, the Court concludes that the Defendants are
entitled to a transfer of this action.

8

IV.

CONCLUSION
Based on the foregoing, it is ORDERED AND ADJUDGED as follows:
1. Defendants’ Motion to Transfer Pursuant to 28 U.S.C. § 1404(a) [ECF No. 49] is
GRANTED; and
2. The Clerk of the Court shall transfer this action in its entirety to the U.S. District
Court for the Southern District of New York.
This action is CLOSED in this District.
DONE AND ORDERED in Chambers at Miami, Florida this 15th day of May, 2017.

________________________________
DARRIN P. GAYLES
UNITED STATES DISTRICT JUDGE

9