Community Voice Line, LLC v. Great Lakes Communication Corp
Filing
297
MEMORANDUM OPINION and ORDER: Denying 271 Motion to Dismiss For Forum Non Conveniens, Signed by Judge Mark W Bennett on 07/07/14. (kfs)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
WESTERN DIVISION
COMMUNITY VOICE LINE, L.L.C., a
Maryland limited liability company,
No. C 12-4048-MWB
Plaintiff,
vs.
GREAT LAKES COMMUNICATION
CORP., an Iowa corporation; COMITY
COMMUNICATIONS, L.L.C., a
Nevada limited liability company;
ALPINE AUDIO NOW, L.L.C., a
Delaware limited liability company;
JOSH NELSON; FRANCE MEDIAS
MONDE t/a RADIO FRANCE
INTERNATIONALE; SIGNAL
FM HAITI; and JOHN DOES 1
THROUGH 10,
MEMORANDUM OPINION AND
ORDER REGARDING DEFENDANT
ALPINE AUDIO NOW’S MOTION
TO DISMISS FOR FORUM NON
CONVENIENS
Defendants.
___________________________
This case is now before me on the renewed challenge by defendant Alpine Audio
Now, L.L.C.—a Delaware limited liability company, which refers to itself simply as
“AudioNow”—to litigating the plaintiff’s claims against it in this forum. This case
originated on May 15, 2012, as a diversity action by plaintiff Community Voice Line,
L.L.C. (CVL), a Maryland limited liability company, which provides conference call
services, recorded content, audio streams, and other business services, alleging claims of
breach of contract and unjust enrichment. The original defendant was Great Lakes
Communication Corporation (GLCC), an Iowa competitive local exchange carrier
(CLEC), which provides local telephone services, other related telecommunications
services, and, more specifically, “hosting” of the telephone numbers that CVL’s
customers would call to obtain CVL’s services. CVL’s original claims against GLCC
arose from GLCC’s alleged failure to pay CVL a marketing fee or commission from
revenues that GLCC collected from originating carriers for calls from CVL’s customers
to CVL’s telephone numbers “hosted” by GLCC. On December 4, 2013, United States
Magistrate Judge Leonard T. Strand granted CVL leave to file its Second Amended
Complaint (docket no. 187), adding five named defendants, including AudioNow, ten
“John Doe” defendants, and seventeen new counts, including several new counts against
existing defendant GLCC, and I affirmed on January 23, 2014. Memorandum Opinion
And Order (docket no. 213).
On March 10, 2014, AudioNow filed a Motion To Dismiss (docket no. 228)
seeking dismissal of the claims against it in CVL’s Second Amended Complaint for
improper venue and lack of personal jurisdiction pursuant to Rule 12(b)(2) and (b)(3) of
the Federal Rules of Civil Procedure. CVL alleges that AudioNow “is engaged in the
business of rebroadcasting foreign language radio station content accessible by calling
telephone numbers,” and that AudioNow engaged in various kinds of misconduct—
sometimes in cahoots with GLCC and others—to usurp CVL’s position as a “middleman”
between content providers and GLCC. Second Amended Complaint (docket no. 187),
¶ 8 and Counts X-XVII and XIX [misnumbered XIV]. In a Memorandum Opinion And
Order (docket no. 270), filed May 6, 2014, I denied AudioNow’s Motion To Dismiss in
its entirety. See Community Voice Line, L.L.C., v. Great Lakes Commc’n Corp., ___ F.
Supp. 2d ___, 2014 WL 1794450 (N.D. Iowa May 6, 2014). In the portion of that ruling
pertinent here, I rejected AudioNow’s improper venue challenge, which was based on
AudioNow’s contention that there is a valid and enforceable “forum selection clause” in
the contract between CVL and AudioNow selecting the Circuit Court of Baltimore City,
State of Maryland, as the exclusive venue for “any dispute arising under or relating to”
the parties’ Referral Agreement. See Second Amended Complaint, Exhibit A, ¶ 12.5. I
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noted that AudioNow had belatedly acknowledged the Supreme Court’s decision in
Atlantic Marine Construction Co. v. U.S. District Court for the Western District of Texas,
___ U.S. ___, 134 S. Ct. 568 (2013), but that it had missed the full import of that
decision. Specifically, I found that Atlantic Marine made clear that “the appropriate way
to enforce a forum-selection clause pointing to a state or foreign forum is through the
doctrine of forum non conveniens.” Atlantic Marine Constr. Co., Inc., ___ U.S. at ___,
134 U.S. at 480. Although I denied AudioNow’s motion to dismiss for improper venue,
because AudioNow had failed to show that this case had been laid in the wrong venue, I
did leave open the door for AudioNow to file a motion properly challenging venue in this
forum, on the basis of a forum-selection clause, pursuant to the forum non conveniens
doctrine.
AudioNow subsequently walked through that door by filing its May 15, 2014,
Motion To Dismiss For Forum Non Conveniens (docket no. 271), which is now before
me. After an extension of time to do so, CVL filed its Resistance To [AudioNow’s]
Motion To Dismiss For Forum Non Conveniens (docket no. 280) on June 12, 2014. On
June 19, 2014, AudioNow filed its Reply (docket no. 288) in further support of its present
Motion. I find that oral arguments on AudioNow’s Motion are unnecessary, and I will
resolve that Motion on the parties’ written submissions.
Of course, in the forum non conveniens analysis involving a forum-selection
clause, the scope of the clause is ordinarily an important question. See Farmland Indus.,
Inc. v. Frazier-Parrott Commodities, Inc., 806 F.2d 848, 852 (8th Cir. 1986), abrogated
on other grounds, Lauro Lines S.R.L. v. Chasser, 490 U.S. 495, 497 (1989) (resolving
a split in the circuits concerning the immediate appealability of a collateral final order);
see also Terra Int’l, Inc. v. Mississippi Chem. Corp., 119 F.3d 688, 694 (8th Cir. 1997)
(noting that “determining the scope of a forum selection clause is a rather case-specific
exercise”). In my decision rejecting AudioNow’s Motion To Dismiss for improper
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venue, I found woefully inadequate the parties’ briefing of the question of whether or not
the forum-selection clause at issue in this case encompasses both contractual and tort (or
other non-contractual) claims.
The parties’ arguments on that issue were, at best,
conclusory, with no real assessment of the factual or legal relationship of the noncontractual claims to CVL’s contract claims or the parties’ contractual relationship. I
also found that the parties had failed to assess, inter alia, whether the determination of
the scope of the forum-selection cause is determined under Iowa law (the law of the forum
state), Maryland law (in light of the choice-of-law and forum-selection clauses of the
parties’ contract), Eighth Circuit law (the law of this forum’s federal appeals court), or
Fourth Circuit law (the law of the federal appeals court for the circuit including
Maryland).
This time, the parties have at least attempted to address the issue of the law
governing the scope of the forum-selection clause.
Unfortunately, their arguments
concerning whether or not the forum-selection clause at issue in this case encompasses
both contractual and tort (or other non-contractual) claims are still largely conclusory.
In essence—and little more is offered, although oft repeated—AudioNow contends that
all of the claims are within the scope of the forum-selection clause, because all involve
the “Program Numbers” and/or “confidential information” identified in the parties’
Referral Agreement. CVL contends, in essence, that it can prove its non-contract claims
without relying on the terms of the parties’ Referral Agreement. Fortunately, I find that
the disposition of AudioNow’s present Motion does not turn on the scope of the forumselection clause in the parties’ Referral Agreement.
This is so, because CVL concedes that the forum-selection clause applies to at
least some of its claims against AudioNow. Specifically, CVL concedes that the forumselection clause applies to the claims in Count XI (breach of contract), Count XII (unjust
enrichment relating to confidential information), and Count XVII (conversion of
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confidential information.1 Assuming—without deciding—that these claims are the only
claims within the scope of the forum-selection clause, it would be inappropriate to require
“piecemeal” resolution of CVL’s claims against AudioNow in two fora by enforcing the
forum-selection clause only as to some of CVL’s claims. See Farmland Indus., Inc., 806
F.2d at 852 (rejecting such “piecemeal resolution” of claims, where the parties’ dispute
is “broader than the [forum-selection] clause”).
Furthermore, even assuming—again without deciding—that all of CVL’s claims
against AudioNow fall within the scope of the forum-selection clause, I conclude that
there are, nevertheless, good reasons not to enforce the forum-selection clause in this
case. CVL asserts that, before dismissing for forum non conveniens, the court must first
determine whether there is an adequate alternative forum available to resolve the dispute
and that there is such an adequate alternative forum only if all defendants are amenable
to process in that alternative forum. CVL contends that none of the defendants in this
lawsuit, other than AudioNow, has jurisdictional ties to Maryland sufficient to support
jurisdiction over them. AudioNow counters that CVL could have joined all alleged coconspirator defendants in Maryland under the Maryland conspiracy theory of personal
jurisdiction. CVL is correct that “[t]he doctrine of forum non conveniens presupposes
that an adequate alternative forum is available to hear the case,” and that one part of the
1
CVL’s other five claims against AudioNow are in Count X (intentional
interference with prospective business advantages, also against GLCC and Josh Nelson),
Count XIII (unjust enrichment relating to “Program Numbers”), Count XIV (intentional
interference with existing contracts and relationships, also against Radio France
Internationale, FM Haiti, and the John Does), Count XV (intentional interference with
prospective business advantage, also against Radio France Internationale, FM Haiti, and
the John Does), Count XVI (conversion of “Program Numbers,” also against GLCC and
Comity), and Count XIX [misnumbered XIV] (civil conspiracy).
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test for adequacy of the alternative forum is whether “all parties are amenable to process
and come within the jurisdiction of the forum.” Reid-Walen v. Hansen, 933 F.2d 1390,
1393 n.2 (8th Cir. 1991). I do not believe that it is appropriate for me to determine the
scope of Maryland’s conspiracy theory of personal jurisdiction to determine whether all
defendants, besides AudioNow, are amenable to personal jurisdiction in Maryland. See
Sinochem Int’l Co., Ltd. v. Malay Int’l Shipping Corp., 549 U.S. 422, 432 (2007)
(recognizing that a forum non conveniens dismissal allows a district court to “bypass[ ]
questions of subject-matter and personal jurisdiction”). Suffice to say that there is some
question as to whether or not all parties are amenable to process and come within the
jurisdiction of the Maryland state court. Id.
What I find is determinative here is my consideration of the “public interest”
factors in the forum non conveniens analysis. Atlantic Marine Constr. Co., Inc., ___
U.S. at ___, 134 S. Ct. at 582 (when evaluating a dismissal for forum non conveniens in
a case involving a forum-selection clause, “a district court may consider arguments about
public-interest factors only”). The Supreme Court has explained,
Public-interest factors may include “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.” [Piper Aircraft Co. v. Reyno, 454
U.S. 235, 241, n. 6, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981)].
(internal quotation marks omitted).
Atlantic Marine Constr. Co., Inc., ___ U.S. at ___, 134 S. Ct. at 581 n.6 (emphasis
added).
Additional “public interest” factors include “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 Co., 454 U.S.
at 241 n.6; Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508–09 (1947). This is a nonexclusive list, however. See Reid-Walen, 933 F.2d at 1402 (Timbers, J., dissenting);
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see generally de Melo v. Lederle Labs., Div of Am. Cyanamid Corp., 801 F.2d 1058,
1060-61 (8th Cir. 1986) (distinguishing between “factors relative to the convenience of
the litigants, referred to as the private interests, and factors relative to the convenience
of the forum, referred to as the public interests” (citing Piper Aircraft Corp., 454 U.S.
at 235)). I believe that additional “public interest” factors also include “fairness and
judicial economy.” See Sinochem Int’l Co., Ltd., 549 U.S. at 432 (explaining that a
dismissal on forum non conveniens grounds may be appropriate in light of “considerations
of convenience, fairness, and judicial economy”); accord In re Vistaprint, Ltd., 628 F.3d
1342, 1344-45 (Fed. Cir. 2010) (treating “judicial economy” as a “public interest” factor
in a forum non conveniens analysis under 28 U.S.C. § 1404(a)); Interface Partners Int’l,
Ltd. v. Hananel, 575 F.3d 97, 106 (1st Cir. 2009) (treating “judicial economy” as a
“public interest” factor in a forum non conveniens analysis pursuant to Gilbert).
Ultimately, “[a]s the party acting in violation of the forum-selection clause, [CVL]
must bear the burden of showing that public-interest factors overwhelmingly disfavor a
[dismissal].” Id. at ___, 134 S. Ct. at 583. As the Supreme Court has also explained,
Because those factors will rarely defeat a transfer motion, the
practical result is that forum-selection clauses should control
except in unusual cases. Although it is “conceivable in a
particular case” that the district court “would refuse to
transfer a case notwithstanding the counterweight of a forumselection clause,” Stewart [Org., Inc. v. Ricoh Corp.], [487
U.S. 22,] 30–31, 108 S.Ct. 2239 [(1988)], such cases will not
be common.
Atlantic Marine Constr. Co., Inc., ___ U.S. at ___, 134 S. Ct. at 582. This is such an
uncommon or “unusual case.”
After a review of applicable law, all of the relevant factors, and the parties’
arguments, I will focus on the “public interest” factors that I find dispositive here. The
first of these is “the local interest in having localized controversies decided at home.”
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Atlantic Marine Constr. Co., Inc., ___ U.S. at ___, 134 S. Ct. at 581 n.6. I recognize
that many of the parties to this litigation—such as CVL and AudioNow—are not Iowa
corporations, entities, or individuals. Nevertheless, this controversy is “localized” to
Iowa, because the focus of the entire litigation is on the use (and the alleged usurpation)
of “program numbers” “hosted” by an Iowa CLEC, GLCC, use of facilities in Iowa to
provide the caller services available on those “program numbers,” and control of and
revenues generated by termination of calls to those “program numbers.” The nexus of
all of the parties’ interactions is also clearly in Iowa.
The second “public interest” factor with significant weight here is the fairness or
unfairness of “burdening citizens in an unrelated forum with jury duty.” Piper Aircraft
Co., 454 U.S. at 241 n.6. Although AudioNow asserts that this factor weighs in favor
of the Maryland forum, because no jury trial would be available on the claims at issue
under Maryland law, the question of whether or not a jury would ultimately be available
on the claims is not the relevant factor. Because I find that the Iowa forum is plainly
related to the claims at issue, no citizens in an unrelated forum would be burdened with
jury duty. Id.
Finally, “judicial economy,” see Sinochem Int’l Co., Ltd., 549 U.S. at 432,
weighs heavily in favor of retaining this action against AudioNow in this forum. All of
CVL’s related claims, and various counterclaims of other parties to this litigation, ranging
well beyond the scope of the dispute between CVL and AudioNow, are already venued
here.
As I have already observed, when rejecting AudioNow’s prior motion for
abstention, this action is not precisely “parallel” with the Maryland state court action,
because this action “involves additional defendants (GLCC, Comity, and Nelson),
additional claims (the claims against defendants other than AudioNow, including GLCC),
and an additional “conspiracy” claim against AudioNow (and other defendants), and the
two lawsuits arise from only some of the same alleged events, and involve only some of
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the same damages, but not all of the same events and damages.” Memorandum Opinion
And Order (docket no. 270) at 12-13; published at Community Voice Line, L.L.C., ___
___ F. Supp. 2d at ___, 2014 WL 1794450 at *6. Piecemeal or duplicative litigation of
the related claims by various parties in this case in various fora plainly offends notions
of judicial economy and, indeed, notions of fairness.
THEREFORE, defendant AudioNow’s May 15, 2014, Motion To Dismiss For
Forum Non Conveniens (docket no. 271) is denied.
IT IS SO ORDERED.
DATED this 7th day of July, 2014.
______________________________________
MARK W. BENNETT
U.S. DISTRICT COURT JUDGE
NORTHERN DISTRICT OF IOWA
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