Wada Farms, Inc. et al v. Jules and Associates, Inc.

Filing 15

MEMORANDUM DECISION AND ORDER granting 5 Defendant's Motion to Transfer Venue. This action is hereby TRANSFERRED to the United States District Court for the Central District of California. The Clerk is directed to take the action necessary to effect that transfer. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjs)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
WADA FARMS, INC., an Idaho
corporation; WADA FAMILY, LLC, an
Idaho limited liability company; WADA
FARMS TRUCKING, LLC, an Idaho
limited liability company; and WADA
VAN ORDEN, LLC, an Idaho limited
liability company,

Case No. 4:14-cv-00324-BLW
MEMORANDUM DECISION AND
ORDER

Plaintiff,
v.
JULES AND ASSOCIATES, INC., a
California corporation,
Defendant.

INTRODUCTION
Before the Court is defendant’s motion to transfer venue.1 The motion is fully
briefed and at issue. For the reasons stated below, the Court will grant the motion and

1

The defendant originally sought either dismissal or a change of venue, but later withdrew its
request for dismissal. See Notice of Withdrawal (Dkt. No. 11). The motion now seeks only a transfer of
venue.

MEMORANDUM DECISION AND ORDER - 1

transfer the action to the United States District Court for the Central District of
California.
BACKGROUND
Wada Farms leased vehicles and farming equipment from Jules. The lease
included an option to purchase, and to exercise that option, Wada Farms tendered a sum
equal to 3% of the original cost of the equipment. Jules rejected the tender, prompting
Wada Farms to file suit in state court to enforce the tender. Jules transferred the action
here on the basis of diversity, and filed the motion to transfer venue that is now before the
Court.
More specifically, Jules seeks to transfer this action to California pursuant to a
forum selection clause contained in the lease agreement. That clause states that,
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS LEASE AND THE
SCHEDULES SHALL BE TRIED AND LITIGATED ONLY IN THE
STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF
LOS ANGELES, STATE OF CALIFORNIA . . . .
2007 Master Equipment Lease Agreement (Dkt. No. 5-3) at ¶ 28; 2008 Master Equipment
Lease Agreement (Dkt. No. 5-4) at ¶ 28. Each lease agreement also contains a choice of
law provision:
THE VALIDITY OF THIS LEASE AND THE SCHEDULES, THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES
HERETO AND THERETO WITH RESPECT TO ALL MATTERS . . .
SHALL BE DETERMINED UNDER . . . THE LAWS OF THE STATE
OF CALIFORNIA.
Id. at ¶ 28(1).

MEMORANDUM DECISION AND ORDER - 2

LEGAL STANDARD
A forum selection clause must be “given controlling weight in all but the most
exceptional cases.” Atlantic Marine Cons.Co., Inc. v. U.S. Dist. Court for the Western
Dist. of Texas, 134 S.Ct. 568, 579 (2013). “When the parties have agreed to a valid
forum-selection clause, a district court should ordinarily transfer the case to the forum
specified in that clause. Only under extraordinary circumstances unrelated to the
convenience of the parties should a § 1404(a) motion be denied.” Id. at 581. A valid
forum-selection clause bargained for by the parties, protects their legitimate expectations
and further vital interests of the justice system.” Id.
A forum-selection clause alters the § 1404 analysis in three ways. Id. at 581-82.
“First, the plaintiff's choice of forum merits no weight.” Id. at 582. Second, a court
evaluating a defendant's § 1404(a) motion to transfer based on a forum-selection clause
should not consider arguments about the parties’ private interests, such as convenience.
Id. “Third, when a party bound by a forum-selection clause flouts its contractual
obligation 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 public-interest considerations .” Id.
ANALYSIS
The forum selection clause clearly sets venue in Los Angeles County, California.
Wada Farms does not allege that it was forced or tricked into agreeing to the forum
selection clause; indeed, both parties to the contract are sophisticated business entities.

MEMORANDUM DECISION AND ORDER - 3

Instead, Wada Farms argues that it is protected by a provision in Idaho law stating that
forum selection clauses mandating venues outside of Idaho are “void as . . . against the
public policy of Idaho.” See Idaho Code § 29-110(1). The Ninth Circuit has noted –
prior to Atlantic Marine – that such a statute would be given some weight in the analysis,
although it would not be considered dispositive. Jones v GNC Franchising, Inc., 211
F.3d 495, 499 n. 21 (9th Cir. 2000). But since Atlantic Marine was decided in 2013, that
weight has diminished considerably or disappeared entirely. Atlantic Marine places
controlling weight on the forum selection clause and requires that Wada Farms produce
an “extraordinary” reason to ignore such a clause. If Idaho Code § 29-110(1) was
determinative, striking down the forum selection clause would be routine rather than
extraordinary, standing Atlantic Marine on its head. Hence, Wada Farms must point to
something more than just the statute itself to warrant ignoring the forum selection clause.
In that attempt, Wada Farms cites other Idaho statutes governing disputes over
certificates of title and real property, stressing that they are disputes to be handled within
the State. But this is a simple contract dispute, lacking the circumstances that Atlantic
Marine would label “extraordinary.”

MEMORANDUM DECISION AND ORDER - 4

In sum, Wada Farms has failed to overcome the presumption in favor of enforcing
the forum selection clause. Therefore, the court will grant the motion to transfer.2
ORDER
In accordance with the Memorandum Decision set forth above,
NOW THEREFORE IT IS HEREBY ORDERED, that the defendant’s motion to
transfer venue (docket no. 5) is GRANTED. This action is hereby TRANSFERRED to
the United States District Court for the Central District of California. The Clerk is
directed to take the action necessary to effect that transfer.

DATED: January 7, 2015

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

2

The parties did not discuss Atlantic Marine in their briefing until Jules mentioned the case in its
reply brief. In that same brief, Jules offered to stipulate that Wada Farms could file a sur-reply brief.
Wada Farms did not take Jules up on the offer.

MEMORANDUM DECISION AND ORDER - 5