Bower et al v. Zounds Hearing Franchising, LLC et al

Filing 33

Opinion and Order. Defendants' Motion to Dismiss Amended Complaint and to Deny Joinder of Non-Diverse Defendant, or, in the Alternative, to Sever Plaintiffs, Dismiss Count I of the Amended Complaint and Transfer Case (Related doc # 16 ) is granted in part. Case is transferred, pursuant to Atlantic Marine, to the United States District Court for the District of Arizona for further adjudication of all pending matters. Judge Christopher A. Boyko on 3/7/2017. (H,CM)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

EDWARD T. BOWER, et al.,
Plaintiffs,
vs.
ZOUNDS HEARING
FRANCHISING, LLC, et al.,
Defendants.

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CASE NO. 1:16CV1429
JUDGE CHRISTOPHER A. BOYKO
OPINION AND ORDER

CHRISTOPHER A. BOYKO, J.:
This matter comes before the Court upon the Motion (ECF DKT #16) of Defendants,
Zounds Hearing Franchising, LLC and Zounds Hearing, Inc. (“Zounds”), to Deny Joinder of
Non-Diverse Defendant and Dismiss Plaintiffs’ Amended Complaint, or, in the alternative, to
Sever Plaintiffs, Dismiss Count I of the Amended Complaint and Transfer Case to Arizona.
For the following reasons, the Court transfers the above-captioned case to the United States
District Court for the District of Arizona for further adjudication of all pending matters.
I. BACKGROUND
In their First Amended Complaint (ECF DKT #14), Plaintiffs allege that they entered
into Franchise Agreements in 2013 with Zounds to operate hearing centers in the state of

Ohio. They paid up to $40,000 each for their franchises. Plaintiffs claim that Zounds
violated the disclosure and other requirements of the Ohio Business Opportunity Purchasers
Protection Act (“OBOPPA”), R.C. § 1334.01, et seq. They also claim that Zounds failed to
provide any Plaintiff with the required five-day right to cancel. Plaintiffs seek an Order
confirming their right to rescind the Franchise Agreements and further seek to recover
statutory damages, treble damages and attorney fees.
Each Franchise Agreement contains a forum selection clause, which applies to claims
other than for injunctive relief and which provides as follows:
[T]he parties agree any actions arising out of or related to this Agreement must
be initiated and litigated in the state court of general jurisdiction closest to
Phoenix, Arizona or, if appropriate, the United States District Court for the
District of Arizona. Franchisee acknowledges that this Agreement has been
entered into in the State of Arizona, and that Franchisee is to receive valuable
and continuing services emanating from Franchisor’s headquarters in Arizona,
including but not limited to training, assistance, support and the development
of the System. In recognition of such services and their origin, Franchisee
hereby irrevocably consents to the personal jurisdiction of the state and federal
courts of Arizona as set forth in this Section. (Emphasis added.)
(§ 22E, ECF DKT #13.)
The Franchise Agreements also provide for the governing law:
This Agreement shall be governed by and construed in accordance with
the laws of the State of Arizona, without reference to Arizona’s conflict of
laws principles. (§ 22A, ECF DKT #13)
Plaintiffs do not allege, nor argue, that the forum selection clause is invalid or
unenforceable or that the clause was obtained by fraud, duress or other unconscionable
means.
II. LAW AND ANALYSIS
Under 28 U.S.C. § 1404(a), “[f]or the convenience of parties and witnesses, in the

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interest of justice, a district court may transfer any civil action to any other district or division
where it might have been brought.” The court is typically required to consider the private
interests of the parties, their convenience and the convenience of potential witnesses, as well
as public-interest concerns, such as systemic integrity and fairness. Then, the court must
decide whether, on balance, a transfer would promote the interests of justice. Stewart
Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 29-30 (1988).
However, when a valid and enforceable forum selection clause evidences the parties’
intent to bring an action in a particular federal district, the forum selection clause must be
given “controlling weight in all but the most exceptional circumstances.” Atlantic Marine
Construction Co. Inc. v. United States District Court for the Western District of Texas, et al.,
134 S.Ct. 568, 581 (2013). In addition,
when parties agree to a forum selection clause, they waive the right to
challenge the preselected forum as inconvenient or less convenient for
themselves or their witnesses, or for their pursuit of the litigation. A court
accordingly must deem the private-interest factors to weigh entirely in favor of
the preselected forum ... As a consequence, a district court may consider
arguments about public-interest factors only. Atlantic Marine, 134 S.Ct. at
568.
The Supreme Court focused on valid and enforceable forum selection clauses that
protect the parties’ “settled expectations” whether mandatory or permissive. Id. at 583.
“[T]he interest of justice is served by holding parties to their bargain.” Id.
The Court need not discuss private-interest factors because they are presumed to favor
the preselected forum. Id. at 582. Pursuant to the choice of law provision in the Agreement,
the public-interest factor of “having the trial in a forum that is at home with the state law that
must govern the case” does not militate against transfer because the Arizona federal jurists

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are more than capable of handling this matter under Arizona contract law, and applying the
OBOPPA, should they deem that statute is applicable. Moreover, the Court finds that judicial
economy and docket congestion do not weigh significantly in favor of either jurisdiction.
III. CONCLUSION
For these reasons, the Motion (ECF DKT #16) of Defendants, Zounds Hearing
Franchising, LLC and Zounds Hearing, Inc., is granted in part and the above-captioned case
is transferred, pursuant to Atlantic Marine, to the United States District Court for the District
of Arizona for further adjudication of all pending matters.
IT IS SO ORDERED.
s/ Christopher A. Boyko
CHRISTOPHER A. BOYKO
United States District Judge
Dated: March 7, 2017

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