Oregon-Idaho Utilities Inc et al v. Skitter Cable TV Inc. et al
MEMORANDUM DECISION AND ORDER granting 24 Motion to Change Venue and 27 Motion to Transfer Case. Signed by Judge Edward J. Lodge. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st) [Transferred from Idaho on 8/10/2017.]
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
OREGON-IDAHO UTILITIES, INC.,
an Oregon corporation, and
MEDIASNAP SOLUTIONS, LLC, a
Delaware limited liability company,
Case No. 1:16-cv-00228-EJL
MEMORANDUM DECISION AND
SKITTER CABLE TV, INC., a Georgia
corporation; SKITTER, INC., a Georgia
corporation; GALVA CABLE
COMPANY LLC, a Georgia limited
liability company; SOUTHEAST
CONTENT GROUP, LLC, a Georgia
limited liability company; TBM
CONTENT PARTNERS, LLC, a
Georgia limited liability company;
VIDEO 6 LLC, a Missouri limited
liability company; KINGDOM
TELEPHONE COMPANY, a Missouri
telephone corporation, and ROBERT
SAUNDERS, an individual;
Before the Court in the above entitled matter are: (1) the Skitter Defendants’ Motion
for Change of Venue (Dkt. 24); (2) Defendant Robert Saunders’ Motion to Transfer Venue
(Dkt. 27); (3) Defendant Video 6 LLC’s Motion to Dismiss (Dkt. 29); and (4) Plaintiffs’
Motion to Amend the Complaint (Dkt. 44). All four motions have been fully briefed and
are ripe for the Court’s consideration. However, in the interest of judicial efficiency, the
MEMORANDUM DECISION AND ORDER- 1
Court will address only the Skitter Defendants Motion for Change of Venue (Dkt. 24) and
Defendant Saunders’ Motion to Transfer Venue (Dkt. 27) (collectively “Venue Motions”).
Having fully reviewed the record, the Court finds that the facts and legal arguments
are adequately presented in the briefs and record. Accordingly, in the interest of avoiding
further delay, and because the Court conclusively finds that the decisional process would
not be significantly aided by oral argument, the Venue Motions are hereby decided on the
record before this Court without oral argument.
As explained more fully below, the Court hereby grants the Venue Motions. All of
the claims in this case arise from a Franchise Agreement between Defendant Skitter Cable
TV, Inc. (“Skitter Cable TV”) and Plaintiffs Oregon-Idaho Utilities, Inc. (“OIU”) and
MediaSnap Solutions, LLC. 1 This Franchise Agreement included a forum-selection clause
in which the parties agreed that any litigation brought by either party against the other in
connection with any rights or obligations arising out of the Franchise Agreement would be
instituted in either Georgia state court in Gwinnett County or the United States District
Court for the Northern District of Georgia. In addition, all of the Defendants have now
consented to the change in venue. (Dkts. 24, 27, 30, 32). Thus, for the convenience of the
parties and in the interest of justice, the Court will transfer the case to the Northern District
of Georgia pursuant to 28 U.S.C. § 1404(a) for all future proceedings.
Plaintiff OIU assigned all of its rights and obligations under the Franchise Agreement to
Plaintiff MediaSnap Solutions, LLC. (Dkt. 101, ¶ 62).
MEMORANDUM DECISION AND ORDER- 2
The following allegations are derived from the original Complaint filed in this
action on June 6, 2016 (Dkt. 1), unless otherwise specifically noted.
Plaintiffs are OIU and Mediasnap Solutions, LLC (“Mediasnap”). Defendants are:
(1) Skitter Cable TV; (2) Skitter, Inc.; (3) Galva Cable Company, Inc. (“Galva Cable”); (4)
Southeast Content Group, LLC (“Southeast Content Group”); (5) TBM Content Partners,
LLC (“TBM Content Partners”); (6) Video 6 LLC (“Video 6”); (7) Kingdom Telephone
Company; and (8) Robert Saunders.
Defendant Skitter Cable TV is a wholly-owned subsidiary of Defendant, Skitter,
Inc. Defendants Galva Cable; Southeast Content Group, LLC; and TBM Content Partners
are also subsidiaries of Skitter, Inc. (Dkt. 25.) Collectively, these Defendants are referred
to herein as the “Skitter Defendants.” All of the Skitter Defendants are either Georgia
corporations or Georgia limited liability companies. The Skitter Defendants are
represented jointly by counsel and together filed one of the Venue Motions. (Dkt. 24.)
Defendant Kingdom Telephone Company is a Missouri telephone company and,
like OIU, was a franchisee of Skitter Cable TV. Kingdom Telephone solicited funds from
other franchisees ostensibly to help the Skitter Defendants meet operating expenses. In
addition, Kingdom Telephone was instrumental in the formation of Defendant Video 6,
which was created and used to infuse cash into the Skitter Defendants and exert control
over the Skitter Defendants’ business decisions.
MEMORANDUM DECISION AND ORDER- 3
Defendant Robert Saunders is an individual resident of Georgia and the Chief
Executive Officer of Skitter Cable TV and Skitter, Inc. Plaintiffs believe Mr. Saunders is
an officer or member of and serves in various leadership capacities in the Skitter
Defendants as well as Defendant Video 6.
OIU is a provider of telephone public utility services in parts of Oregon and Idaho.
In 2007, OIU began offering broadband DSL services in Idaho, Oregon, and Nevada.
Sometime thereafter, OIU began considering its options for offering its rural customer base
internet TV services.
Ultimately, on or about June 5, 2012, OIU and Skitter Cable TV entered a Franchise
Agreement. OIU entered the Franchise Agreement based on Skitter Cable TV’s
representations that it had a working platform that would enable OIU to provide its
customers with a full television channel line-up, including local and satellite channels.
The Franchise Agreement states that it is between OIU and Skitter Technologies,
Inc. However, it is undisputed that in September 2014, Skitter Technologies, Inc. changed
its name to Skitter Cable TV. In addition, on June 6, 2012, Plaintiff OIU assigned its rights
and obligations under the Franchise Agreement to Plaintiff MediaSnap, which was formed
specifically for the purpose of operating OIU’s Skitter Cable TV franchise.
In the Franchise Agreement, the parties agreed to a forum selection clause requiring
them to institute any litigation “in connection with any rights or obligations arising out of
this Agreement” in either Qwinnett County, Georgia or the United States District Court for
the North District of Georgia, Atlanta Division. (Dkt. 1-1.) The parties further agreed that
MEMORANDUM DECISION AND ORDER- 4
“[t]he validity and effect of this [Franchise] Agreement are to be governed by and construed
and enforced in accordance with the laws of the State of Georgia.” Id.
Plaintiffs allege that the Skitter Defendants and Defendant Saunders made various
ongoing misrepresentations of fact and other false statements in the course of their dealings
with Plaintiffs between June 2012 and May 2016. (Dkt. 44-2.) These misrepresentations
induced Plaintiffs to: (1) enter the Franchise Agreement; (2) wire $295,000 to the Skitter
Defendants for the equipment, services, and content promised in the Franchise Agreement;
(3) purchase various equipment; and (4) not cancel the Franchise Agreement and request a
full refund. In addition, the Skitter Defendants misrepresented their financial standing and
requested repeated infusions of cash to help them continue operations and meet their
obligations under the Franchise Agreement.
Plaintiffs allege conspiracy and enterprise theories of liability connecting the
conduct of all of the Defendants together. This includes making false statements, soliciting
funds, and managing the Skitter Defendants in such a way that Plaintiffs were deprived of
the benefit of the bargain they had agreed to as outlined in the Franchise Agreement.
Ultimately, on April 6, 2016, Defendant Saunders sent Plaintiffs a letter terminating
the Franchise Agreement “[e]ven though [the Skitter Defendants] and Video 6 failed to
perform their obligations under the Franchise Agreement.” (Dkt. 1, ¶ 115.) On or about
May 1, 2016, Defendants shut off all Skitter Cable TV services provided through Plaintiffs’
franchise and pursuant to the Franchise Agreement.
Plaintiffs bring seven claims in the Complaint. These include:
MEMORANDUM DECISION AND ORDER- 5
• Breach of contract (against the Skitter Defendants),
• Breach of the covenant of good faith and fair dealing (against the Skitter
• Fraud (against the Skitter Defendants and Robert Saunders),
• Tortious Interference with Contract (against Video 6),
• Unjust Enrichment (against all Defendants),
• Racketeering Activity in violation of Idaho Code § 18-7804 (against all
• Racketeering in violation of the federal Racketeer Influenced and Corrupt
Organizations Act (“RICO”), 18 U.S.C. §§ 1961-1985 (against all
Proposed Amended Complaint
On November 4, 2016, Plaintiffs filed a Motion to File First Amended Complaint
(Dkt. 44) with a Proposed First Amended Complaint attached. (Dkt. 44-2.) The Court has
reviewed that proposed pleading solely for the purpose of determining the Motions to
Plaintiffs moved to file an amended complaint in response to Defendant Video 6’s
Motion to Dismiss. (Dkt. 44-1.) The proposed changes were intended to: (1) add greater
specificity to the fraud, RICO, and racketeering claims; (2) create more continuity as to the
various claims; and (3) clarify allegations against Video 6 and the other Defendants. Id.
As they relate to the Venue Motions, the proposed First Amended Complaint adds
more specific allegations concerning the Skitter Defendants’ misrepresentations and
omissions allegedly inducing Plaintiffs to: (1) enter the Franchise Agreement, (2) amend
MEMORANDUM DECISION AND ORDER- 6
the Franchise Agreement, and (3) continue to perform their obligations under the Franchise
Agreement. (Dkt. 44-2.) The additional allegations further clarify that Defendant Kingdom
Telephone was a Skitter franchisee and took an active role in raising money for the Skitter
Defendants to continue to operate the Skitter franchise in a “bailout” that included the
creation of Defendant Video 6. Id.
Plaintiffs allege that Video 6 “has been exerting improper control over the business
decisions and business trajectory of Skitter since its formation.” Id. Plaintiffs further allege
that Video 6, along with all of the other Defendants, was ultimately responsible for the
failure of Skitter Cable TV to provide Plaintiffs what was promised in the Franchise
Agreement: a working platform that would have enabled Plaintiffs to provide its customers
with a full television channel line-up through an inexpensive set-up box. The legal claims
in the proposed first Amended Complaint are substantively the same as those alleged in the
The Skitter Defendants and Defendant Saunders seek a transfer of venue to the
Northern District of Georgia pursuant to the parties’ forum-selection clause in the
Franchise Agreement, which states:
The parties . . . agree that any litigation brought by either party
against the other party in connection with any rights or
obligations arising out of this Agreement shall be instituted in
a federal or state court of competent jurisdiction with venue
only in the county of Qwinnett, State of Georgia, or in the
United States District Court for the North District of Georgia,
MEMORANDUM DECISION AND ORDER- 7
(Dkt. 1-1.) Defendants argue that the allegations and claims in the Complaint arise under
the Franchise Agreement or relate to alleged acts all of which concern the Franchise
Agreement. (Dkts. 25, 27-1.)
In the Complaint, Plaintiffs allege venue is proper in this Court pursuant to Idaho
Code § 29-110, because Plaintiffs are franchisees and part of the area of the franchise is in
Idaho. (Dkt. 1.) In opposition to the Venue Motions, Plaintiffs argue the forum-selection
clause in the Franchise Agreement does not apply to all of the claims involved in this case.
(Dkts. 37, 39.) Rather, the forum-selection clause is limited to the breach of contract claims
and is only binding on the Franchise Agreement signatories and their assigns; i.e., Plaintiffs
and Skitter Cable TV. Id.
Pursuant to 28 U.S.C. § 1404(a), the Court “may transfer any civil action to any
other district or division where it might have been brought or to any district or division to
which the parties have consented” provided such transfer is “[f]or the convenience of
parties and witnesses” and “in the interest of justice.” 28 U.S.C. § 1404(a); Atlanta Marine
Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 134 S. Ct. 568, 581 (2013) (“Atlanta
Marine”). “Section 1404(a) is . . . a codification of the doctrine of forum non conveniens
for the subset of cases in which the transferee forum is within the federal court system; in
such cases, Congress has replaced the traditional remedy of outright dismissal with
transfer.” Id. at 580. The analysis of a Section 1404(a) change of venue motion depends on
whether there is a valid and enforceable forum-selection clause.
MEMORANDUM DECISION AND ORDER- 8
“Section 1404(a) is intended to place discretion in the district court to adjudicate
motions for transfer according to an ‘individualized, case-by-case consideration of
convenience and fairness.” Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 33
(1988) (quoting Van Dusen v. Barrack, 276 U.S. 612, 622 (1964)). The purpose of the rule
is “to prevent the waste of time, energy and money and to protect litigants, witnesses, and
the public against unnecessary inconvenience and expense.” Van Dusen, 276 U.S. at 616
(internal quotations omitted).
Section 1404(a) without a Forum Selection Clause
Courts must consider a variety of case-specific factors in determining whether to
transfer an action. See Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000).
Such factors may include:
(1) the location where the relevant agreements were negotiated
and executed, (2) the state that is most familiar with the
governing law, (3) the plaintiff's choice of forum, (4) the
respective parties' contacts with the forum, (5) the contacts
relating to the plaintiff's cause of action in the chosen forum,
(6) the differences in the costs of litigation in the two forums,
(7) the availability of compulsory process to compel
attendance of unwilling non-party witnesses, and (8) the ease
of access to sources of proof.
Id. at 498–99.
Courts divide these considerations into “public factors” and “private factors.” See
Altantic Marine, 143 S.Ct. at 581, n. 6; Decker Coal Co. v. Commonwealth Edison Co.,
805 F.2d 834, 843 (9th Cir. 1986). Private factors include “the relative ease of access to
sources of proof; availability of compulsory process for attendance of unwilling, and the
cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view
MEMORANDUM DECISION AND ORDER- 9
would be appropriate to the action; and all other practical problems that make trial of a case
easy, expeditious and inexpensive.” Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947).
Public factors include “the administrative difficulties flowing from court congestion; the
‘local interest in having 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 conflict of laws, or in the application of foreign
law; and the unfairness of burdening citizens in an unrelated forum with jury duty.” Piper
Aircraft, 454 U.S. at 241 n. 6 (quoting Gulf Oil Corp., 330 U.S. at 509). Generally, in the
absence of a forum-selection clause, a plaintiff’s choice of forum is afforded substantial
weight. Decker, 805 F.2d at 843.
Section 1404(a) with a Forum Selection Clause
In the Atlanta Marine decision, the United States Supreme Court made clear that
“proper application of § 1404(a) requires that a forum-selection clause be ‘given
controlling weight in all but the most exceptional cases.’” Id. (quoting Stewart
Organization, Inc., 487 U.S. at 33). “When the parties have agreed to a valid forumselection clause, a district court should ordinarily transfer the case specified in that clause”
unless the non-moving party shows “extraordinary circumstances unrelated to the
convenience of the parties.” Id.
The existence of a valid forum-selection clause changes the typical 1404(a) analysis
in three ways. Id. “First, the plaintiff’s choice of forum merits no weight.” Id. Second, the
Court “should not consider arguments about the parties’ private interests.” Id. at 582.
“Third, when a party bound by a forum-selection clause flouts its contractual obligation
MEMORANDUM DECISION AND ORDER- 10
and files suit in a different forum, a § 1404(a) transfer of venue will not carry with it the
original venue’s choice-of-law rules- a factor that in some circumstances may affect publicinterest considerations.” Id.
Transfer is Appropriate under 28 U.S.C. § 1404(a) and Atlantic Marine.
Because the scope of the forum-selection clause applies to all of Plaintiffs’ claims
and all of the Defendants have consented to the transfer, the Court finds the Venue Motions
should be granted for the convenience of the parties and witnesses and in the interest of
justice. Moreover, the Court finds all of the parties have consented to transfer within the
meaning of Section 1404(a) and the Atlantic Marine analysis applies to the Venue Motions.
A. The Substance of Plaintiffs’ Claims against All of the Defendants Fall within
the Scope of the Forum-Selection Clause.
In the forum-selection clause, Plaintiffs and Defendant Skitter Cable TV agreed
“that any litigation brought by either party against the other party in connection with any
rights or obligations arising out of this Agreement” would be venued in Georgia. (Dkt.
1-1 (emphasis added).) All of Plaintiffs’ claims arise from, and are inextricably connected
to, the Franchise Agreement.
In general, Plaintiffs claim that the Defendants together conspired to deprive
Plaintiffs of the benefits of the Franchise Agreement. Plaintiffs’ claims include: (1) breach
of contract and breach of the covenant of good faith and fair dealing against the Skitter
Defendants; (2) fraud against the Skitter Defendants and Defendant Saunders; (3) tortious
interference with contract against Video 6; (4) unjust enrichment against all the
Defendants, and (5) state and federal racketeering claims against all the Defendants.
MEMORANDUM DECISION AND ORDER- 11
First, it cannot be disputed that the breach of contract and breach of good faith and
fair dealings claims are premised upon the Franchise Agreement and thus subject to the
forum-selection clause. Second, the fraud claim relates to the Skitter Defendants’ and
Defendant Saunders’ alleged misrepresentations specifically concerning the Skitter
Defendants’ ability to fulfill their obligations under the Franchise Agreement. (Dkt. 1, ¶
133). Third, the tortious interference with contract claim is based on Video 6’s alleged
intentional interference with the Franchise Agreement by exerting its control over the
management and operations of the Skitter Defendants. Fourth, the unjust enrichment claim
applies to all of the Defendants who obtained funds from the Plaintiffs by representing that
the funds were necessary in order for the Skitter Defendants to meet their operational
expenses and their contractual obligations under the Franchise Agreement. Fifth, the
racketeering claims allege that all of the Defendants together operated an enterprise in order
perpetrate the fraud upon the Plaintiffs and ultimately cause the Skitter Defendants to
breach the Franchise Agreement.
In short, none of the claims would exist without the Franchise Agreement. It is the
common denominator that brought the parties together and but for the Franchise
Agreement, none of these claims would exist. Accordingly, the scope of the forumselection clause covers the substantive claims at issue and Skitter Cable TV, at a minimum,
has the right to enforce that agreement against both Plaintiffs.
Moreover, because the remaining Defendants consent to transfer, the Court finds
that, for the convenience of the parties and witnesses and in the interests of justice the case
MEMORANDUM DECISION AND ORDER- 12
should be transferred. This will allow the claims, which are inextricably connected, to be
All Parties Have Consented to Transfer.
Section 1404(a) grants courts discretion to transfer a civil action to “any district or
division to which all parties have consented.” 28 U.S.C. § 1404(a). There is no requirement
in the statute that the consent be written or executed contemporaneously. Nor is there a
requirement that all parties be bound by the forum-selection clause in order to consent to a
In this case, all of the parties have consented to venue this dispute in the Northern
District of Georgia. Plaintiffs and Skitter Cable TV specifically consented to venue there
in the Franchise Agreement. Further, all of the Defendants have consented to the change
in venue as reflected by their filings in this case. (Dkts. 24, 27, 30, 32).
Because all of the parties have consented to venue this dispute in the Northern
District of Georgia, the Court finds that Atlantic Marine controls this case. Thus, the Court
should transfer the case unless Plaintiffs demonstrate “extraordinary circumstances
unrelated to the convenience of the parties.” Atlantic Marine, 143 S.Ct. at 581.
C. There are No Extraordinary Circumstances Present that Would Justify
Denying the Venue Motions.
In the context of a valid forum-selection clause, the Court’s analysis of the Venue
Motions is limited to the public interest factors relevant to a forum non conveniens inquiry
and any other extraordinary circumstances the non-moving party identifies in opposition
to the transfer. The Court does not give consideration to the Plaintiffs’ choice of forum, the
MEMORANDUM DECISION AND ORDER- 13
Plaintiffs’ private interests, or Idaho’s choice-of-law rules. Altantic Marine, 143 S.Ct. at
The public interest factors the Court may consider in a forum non conveniens inquiry
are: the administrative difficulties flowing from court congestion; the local interest in
having localized controversies decided at home; and the interest in having the trial of a
diversity case in a forum that is at home with the law. Atlantic Marine, 143 S.Ct. 581, n. 6
(quoting Piper Aircraft Co., 454 U.S. 241, n. 6). In this case, the public factors do not
weigh in favor of keeping the case in Idaho. Rather, given Georgia’s substantial, parallel
interest in the parties’ dispute, the Court does not find any exceptional circumstances that
would warrant overriding the forum-selection clause in the Franchise Agreement.
Most of the public interest factors do not favor one venue over another. For example,
court congestion appears to be a non-issue. Further, this controversy is no more local to
Idaho than it is to Georgia.
The allegations relate to a franchise operated, in part, in Idaho with a franchisor in
Georgia. In addition, six of the eight defendants appear to be Georgia citizens. Other
contacts between this dispute and Georgia include:
The Franchise Agreement originated in Georgia from the
Skitter corporate [sic] Defendants. Robert Saunders . . .
executed it on their behalf in Georgia. The Skitter Defendants’
performance occurred and originated in Georgia, and all
relevant communications by Plaintiffs were to Skitter
Defendants in Georgia, and by the Skitter Defendants to
Plaintiffs from Georgia.
(Dkt. 27-1). Thus, while this dispute undoubtedly has contacts with Idaho, the Court does
not find Idaho’s interest in this controversy overwhelmingly greater than that of Georgia.
MEMORANDUM DECISION AND ORDER- 14
Plaintiffs rely on Idaho Code § 29-110(2) to argue that Idaho has a substantial
interest in this lawsuit given its strong public policy voiding clauses in franchise
agreements that attempt to waive venue or jurisdiction in Idaho. The statute states, “[a]ny
condition, stipulation or provision in a franchise agreement is void to the extent it purports
to waive, or has the effect of waiving, venue or jurisdiction is the state of Idaho’s court
system.” I.C. § 29-110(2).
However, this Court has rejected this argument on at least two previous occasions
with specific regard to I.C. § 29-110(1), the more general Idaho statute that states, “[e]very
stipulation or condition in a contract, by which any party thereto is restricted from
enforcing his rights under the contract in Idaho tribunals . . . is void as it is against the
public policy of Idaho.” This Court has concluded a plaintiff “must point to something
more than just the statute itself to warrant ignoring the forum selection clause” because
“[i]f Idaho Code § 29-110(1) was determinative, striking down forum selection clauses
would be routine rather than extraordinary, standing Atlantic Marine on its head.” Wada
Farms, Inc. v. Jules & Assoc., Inc., 2015 WL 128100, at *2 (D. Idaho Jan. 7, 2015); Idaho
Pacific Corp. v. Binex Line Corp., 2016 WL 843254, at *10 (D. Idaho Mar. 1, 2016).
This reasoning is equally applicable with regard to I.C. § 29-110(1). Further, the
parties agreed that the validity and enforcement of the Franchise Agreement would be
determined by Georgia as opposed to Idaho law. Thus, the Court finds the Idaho public
policy articulated in I.C. § 29-110(2) is not sufficient reason to deny the Venue Motions.
Plaintiffs cite two additional factors they argue are exceptional in this case and
warrant a denial of the Venue Motions. These are: (1) potential jurisdictional issues and
MEMORANDUM DECISION AND ORDER- 15
(2) perpetuation of the Skitter Defendants’ fraud. Again, the Court does not find these
First, the jurisdictional concerns do not appear to be a substantial issue given the
allegations in the Complaint and the contacts with Georgia. All of the five Skitter
Defendants are Georgia business organizations and Robert Saunders is a Georgia resident.
In addition, the claims against Kingdom Telephone Company and Video 6 are that these
entities were involved in an enterprise and conspiracy with the Skitter Defendants and also
that they exerted improper control over the management of the Skitter Defendants. It is
difficult to imagine that such allegations do not give rise to personal jurisdiction in Georgia.
Second, Plaintiffs do not allege that the contract at issue was void ab initio due to
Defendants’ fraud. Instead, Plaintiffs include in their Complaint a breach of contract claim
against all of the Skitter Defendants premised upon a valid and enforceable Franchise
Agreement. Plaintiffs offer no evidence as to a fraud claim that is specific to the forumselection clause. Moreover, the fraud claim is just that; it is a claim. Plaintiffs have not set
forth any evidence that would support a finding that extraordinary circumstances connected
to a fraud exist here.
In short, because the parties all consented to venue in Georgia, the Court applies the
Atlantic Marine analysis to Defendants’ Venue Motions. Under this analysis, Plaintiffs
have the burden of proving extraordinary circumstances to warrant denying the motion.
Because Plaintiffs have not met their burden, the Court must grant the Venue Motions.
MEMORANDUM DECISION AND ORDER- 16
D. Application of the Forum Selection Clause to Non-Signatory Defendants
Plaintiffs argue that neither Section 1404(a) nor Atlantic Marine applies to this case,
because not all of the parties were signatories to the Franchise Agreement. The Court is
not persuaded by this argument for three reasons.
First, as a preliminary matter, the plain language of Section 1404(a) only requires
that the parties consent to the alternative venue. 28 U.S.C. § 1404(a) (“a district court may
transfer any civil action to any district or division . . . to which all parties have consented.”)
The statute is otherwise silent regarding how the consent is expressed, allowing parties to
agree to a venue in a contract predating the litigation or during the litigation. See Harland
Clarke Holdings Corp. v. Milken, 997 F. Supp.2d 561, 586 (W.D. Tex. 2014) (holding the
motion requesting transfer sufficient consent to venue in the alternative forum).
Second, while all of the parties in Atlantic Marine were parties to the contract with
the forum-selection clause, that is a distinction without a difference. Atlantic Marine, 143
S.Ct. 581. The Atlantic Marine decision provides instruction for the Court in the context
of a Section 1404(a) motion where, as here, all the parties have consented to an alternative
venue. The decision is based on the existence of a valid forum-selection clause, but it does
not require or otherwise address a potential requirement that all the parties to the lawsuit
consent to the alternate venue in a forum-selection clause.
In this case, Plaintiffs agreed to the alternate venue in a forum-selection clause that
applies to the substantive claims at issue. Because Plaintiffs agreed to try these claims and
any other claims arising from the Franchise Agreement against Skitter Cable TV in the
Northern District of Georgia, Plaintiffs cannot argue now that it would be inconvenient to
MEMORANDUM DECISION AND ORDER- 17
do so. While the claims include additional Defendants, Plaintiffs’ allegations against these
Defendants are inextricably linked with the Franchise Agreement.
Third, there is case law, including Ninth Circuit case law rejecting Plaintiffs’
argument that a forum-selection clause only applies when all parties are signatories to the
contract with the forum-selection clause. Specifically, in Manetti-Farrow, Inc. v. Gucci
America, Inc., 858 F.2d 509 (9th Cir. 1988), the Ninth Circuit upheld a district court
decision dismissing a lawsuit on the basis of a forum-selection clause even though the
plaintiff, who was a party to the contract with the forum-selection clause, brought the case
against six defendants, four of whom were non-parties to the contract. Id. at 514, n.5. The
Ninth Circuit enforced the forum-selection clause to all of Plaintiffs’ claims because “the
alleged conduct of the non-[signatories] [was] so closely related to the contractual
relationship.” The Ninth Circuit reasoned, “a range of transaction participants, parties, and
non-parties, should benefit from and be subject to forum selection clauses.” Id. (quoting
Clinton v. Janger, 583 F. Supp. 284, 290 (N.D. Ill. 1984)).
Other courts have addressed this “closely-related” theory in the context of allowing
signatories to a forum-selection clause to enforce it against non-signatories. 2 “It is widely
accepted that non-signatory third parties who are closely related to [a] contractual
relationship are bound by forum selection clauses contained in the contracts underlying the
relevant contractual relationship.” Synthes, Inc. v. Emrege Medical, Inc., 887 F.Supp.2d
Other agency and contract theories used by courts to enforce forum-selection clauses
against non-signatories include inter alia: agency, veil piercing/ alter ego, third-party beneficiary,
and direct benefits estoppel. See Harland Clarke Holdings Corp., 997 F. Supp.2d at 580-584.
MEMORANDUM DECISION AND ORDER- 18
598, 607 (E.D. Pa. 2012) (internal quotations omitted). Courts considering whether a nonsignatory is sufficiently “closely related” to the contract to be bound by a forum-selection
clause must apply a “common sense, totality of the circumstances approach that essentially
inquires into whether, in light of those circumstances, it is fair and reasonable to bind a
non-party to the forum selection clause.” Id. (internal quotations omitted). “This approach
places emphasis on whether it should have been reasonably foreseeable to the nonsignatory that situations might arise in which the non-signatory would become involved in
the relevant contract dispute.” Id.
In this case, the Plaintiffs are signatories to the forum-selection clause with Skitter
Cable TV, one of the Defendants in this lawsuit. Because the conduct of the non-signatory
Defendants is sufficiently closely related to the contractual relationship, the Court finds the
forum-selection clause applies to all of the Defendants consistent with the Ninth Circuit
decision in Manetti-Farrow.
Plaintiffs misplace reliance on an unpublished Ninth Circuit case, Meggitt San Juan
Capistrano, Inc. v. Nie Youngzhong, 575 Fed. App’x 801, 803 (9th Cir. 2014), to support
their argument that all parties must be signatories to the forum-selection clause for it to be
enforceable. However, the Meggitt decision held that a defendant, who was a signatory to
the forum-selection clause, could not rely on it against a non-signatory plaintiff. Id. In
addition, the Ninth Circuit held the claim at issue did not fall within the scope of the forumselection clause. Accordingly, the Court did not allow the non-signatory Defendant to
enforce the forum-selection clause.
MEMORANDUM DECISION AND ORDER- 19
In contrast, in this case, the Plaintiffs are signatories to the forum-selection clause;
all of the parties to the Franchise Agreement are parties to the suit; the forum-selection
clause applies to all of the claims at issue; and all of the non-signatories have agreed to the
alternate venue. Accordingly, the Court finds that the parties have consented to venue this
case in the Northern District of Georgia within the meaning of 28 U.S.C. § 1404(a).
In sum, the Court finds it appropriate to transfer this case to the Northern District of
Georgia consistent with the forum-selection clause in the Franchise Agreement. There is
no requirement that the forum-selection clause be mutually binding on all of the parties in
order to be used as a basis for a motion to change venue pursuant to 28 U.S.C. § 1404(a).
It is mutually binding on the Plaintiffs and, at a minimum, Skitter Cable TV. That is
sufficient where, as here, all of the claims fall within the scope of the forum-selection
clause and the non-signatory Defendants agree to transfer the case allowing it to proceed
in one venue.
NOW THEREFORE IT IS HEREBY ORDERED that the Skitter Defendants’ Motion for
Change of Venue (Dkt 24) and Defendant Robert Saunder’s Motion to Transfer Venue
(Dkt. 27) are GRANTED as stated herein.
MEMORANDUM DECISION AND ORDER- 20
DATED: August 9, 2017
Edward J. Lodge
United States District Judge
MEMORANDUM DECISION AND ORDER- 21
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