Morgan Tire of Sacramento, Inc. v. The Goodyear Tire & Rubber Company, et al
Filing
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ORDER signed by Judge Kimberly J. Mueller on 11/12/2014 GRANTING defendants' 20 Motion to Transfer in the interests of justice. This matter is TRANSFERRED to USDC - Northern District of Ohio and CLOSED to further action. (Marciel, M)[Transferred from caed on 11/14/2014.]
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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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MORGAN TIRE OF SACRAMENTO,
INC.,
Plaintiff,
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ORDER
v.
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No. 2:13-cv-2135 KJM AC
THE GOODYEAR TIRE & RUBBER
COMPANY, et al.,
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Defendants.
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On March 14, 2014, the court heard argument on defendants’ motion to transfer or,
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in the alternative, to dismiss. Lawrence Skidmore and Kathleen Lyon appeared for plaintiff; Eric
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Enson appeared for defendants. Following the hearing, the court ordered supplemental briefing,
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which has now been filed. After considering the parties’ papers and arguments, the court
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GRANTS defendants’ motion to transfer.
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I. BACKGROUND
On October 15, 2013, plaintiff Morgan Tire of Sacramento (Morgan Tire) filed a
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complaint alleging conversion, breach of county contracts and piggy-back contracts, intentional
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interference with prospective business advantage, breach of the covenant of good faith and fair
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dealing, and unfair business competition against Goodyear Tire and Rubber Company (Goodyear)
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and Wingfoot Commercial Tire Systems (Wingfoot) (collectively defendants). ECF No. 1.
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Defendants filed a motion to change venue or dismiss on December 10, 2013.
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ECF No. 13. On December 31, 2013, plaintiff filed its first amended complaint (FAC). ECF No.
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16. The court then denied the motion to dismiss as moot. ECF No. 17.
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On January 21, 2014, defendants filed a new motion to transfer or to dismiss. ECF
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No. 20. Plaintiff opposed the motion, defendants filed a reply and plaintiffs filed an objection to
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new evidence defendants filed with the reply. ECF Nos. 23–25.
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On February 25, 2014, the court asked the parties for supplemental briefing and
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rescheduled the hearing on the motion. ECF No. 26. The parties filed their supplemental briefs.
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ECF Nos. 27–28. Following the March 14, 2014, hearing, the court asked for additional
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supplemental briefing. ECF No. 31. As noted, the parties have now submitted their supplemental
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briefs in response to the court’s order. ECF Nos. 34–35.
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II. ALLEGATIONS OF THE FIRST AMENDED COMPLAINT
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Morgan Tire is a distributor of new tires and for twenty years, until December
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2011, operated under a distributorship subject to a New Tire Agreement with Goodyear. FAC,
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ECF No. 16 ¶ 9 & Ex. A. In January 2012, Goodyear sent another agreement to Morgan Tire, but
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the latter did not sign it. ECF No. 16 ¶ 11. However, Morgan Tire and Goodyear agreed to
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continue to do business “under a partly written and partly oral agreement under those terms of the
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New Tire Agreement acknowledged by the well-established course of business dealings by and
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between [them] . . .,” including supplying Goodyear tires to national accounts, ordering tires,
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prices and payment and credit terms for tires. Id. The parties have not previously been in any
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legal disputes. Id.
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In 2001, Morgan Tire opened a Goodyear retread tire plant under a distributorship
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agreement for retread sales, the Retread Agreement. Id. ¶ 12. The parties have not executed a
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written Retread Agreement since 2003, but have continued to do business under a partly written,
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partly oral agreement reflecting their course of business dealings and reflecting the terms of the
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Retread Agreement regarding supplying retreads to national accounts and ordering, pricing and
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payment. Id. ¶ 13.
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The New Tire and Retread Agreements, collectively the Distributorship
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Agreements, gave Morgan the exclusive right to service Goodyear’s national accounts, such as
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UPS and Federal Express; Goodyear tires were preapproved for these accounts. Id. ¶ 15.
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Since 1993, Morgan Tire has had written agreements to supply new Goodyear tires
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to the County of Sacramento. Since 2009, it has had an agreement to supply the County with
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Goodyear retreads. Id. ¶ 17. In 2012 Morgan Tire again secured a contract with Sacramento
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County to supply both new and retread tires, using the pricing figures Goodyear employees input
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directly into Morgan Tire’s bid package. Id. ¶¶ 18, 20. In order to fulfill its obligations to the
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County, Morgan Tire entered into a written subcontract with Goodyear for the latter to supply
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Morgan Tires with the requirements of the County contract. Id. ¶ 19. The City of Roseville and
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City of Sacramento piggy-backed onto Sacramento County’s agreement with Morgan Tire. Id. ¶
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22.
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As part of its agreement to supply Morgan Tire with the retread material necessary
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to satisfy the County contract, Goodyear required Morgan Tire to use its “cushion and precure”
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process and to purchase and install new equipment at Morgan Tire’s retread plant. Id. ¶ 21 &
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Ex. D.
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When Morgan Tire began talking about a retread agreement with Continental Tire
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some of Goodyear’s employees said Goodyear would not be pleased and would cancel Morgan
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Tire’s contract. Id. ¶ 24. On January 17, 2013, Morgan Tire received a letter from Goodyear
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terminating the Distributorship Agreements. Even before the termination went into effect,
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Goodyear cut off Morgan Tire’s access to Goodyear’s online ordering and accounting system
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and to the credit balances Morgan Tire had amassed. Id. ¶ 29. As a result, Morgan Tire did not
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have enough tire material on hand to honor its contracts with Sacramento County and the City of
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Roseville. Id. ¶ 31. Goodyear later told Sacramento County and the piggy-back contract parties
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its subsidiary Wingfoot could fulfill the contract at the same price as Morgan Tire. Id. ¶ 32.
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The First Amended Complaint makes five claims: (1) conversion against
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Goodyear; (2) breach of the Sacramento County and piggy-back contracts, against Goodyear; (3)
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intentional interference with prospective business advantage against Goodyear and Wingfoot: (4)
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breach of
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the covenant of good faith and fair dealing against Goodyear; (5) unfair competition against
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Goodyear and Wingfoot.
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III. MOTION TO TRANSFER
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A. Standard
Under 28 U.S.C. § 1404(a) a district court may “transfer any civil action to any
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other district or division where it might have been brought or to any district or division to which
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all parties have consented . . . . for the convenience of parties and witnesses.” 28 U.S.C.
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§ 1404(a). Typically, in considering such a transfer, the court “must evaluate both the
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convenience of the parties and various public-interest considerations,” “weigh[ing] the relevant
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factors and decid[ing] whether, on balance, a transfer would serve ‘the convenience of the parties
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and witnesses’ and otherwise promote ‘the interests of justice.’” Atl. Marine Constr. Co. v. U.S.
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Dist. Court, __ U.S. __, 134 S. Ct. 568, 581 (2013) (quoting 28 U.S.C. § 1404(a)).
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“The calculus changes, however, when the parties’ contract contains a valid
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forum-selection clause, which represents the parties’ agreement as to the most proper forum.” Id.
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(citation and internal quotation marks omitted). Under such circumstances, “a proper application
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of § 1404(a) requires that a forum-selection clause be given controlling weight in all but the most
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exceptional cases.” Id. at 579 (citation and internal quotation marks omitted). By “[e]nforc[ing]
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. . . valid forum-selection clauses, bargained for by the parties, [the court] protects their legitimate
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expectations and furthers vital interests of the justice system.” Id. at 581 (citation and internal
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quotation marks omitted).
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Accordingly, where presented with such an agreement, the court must disregard
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plaintiff’s choice of forum and the parties’ private interests. Id. at 581–82. It instead “consider[s]
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arguments about public-interest factors only,” and “those factors will rarely defeat a transfer
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motion.” Id. at 582. Further, “the party acting in violation of the forum-selection clause . . . must
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bear the burden of showing that public-interest factors overwhelmingly disfavor a transfer.” Id. at
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583. Finally, “when a party bound by a forum-selection clause flouts its contractual obligation
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and files suit in a different forum, a § 1404(a) transfer of venue will not carry with it the original
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venue’s choice-of-law rules.” Id. at 582.
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Before the court may consider the impact of any forum selection clause on
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plaintiff’s choice of forum and the motion to transfer, it must first determine whether a contract
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exists and, if so, whether it contains the forum selection clause at issue. Kedkad v Microsoft
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Corp., No. 13-0141, 2013 WL 4734022, at *3 (N.D. Cal. Sept. 3, 2013) (“Before the court can
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apply federal law to the interpretation and enforcement of a forum selection clause, however, it
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must, as a threshold issue, determine whether a forum selection clause exists.”); see also
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Comerica Bank v. Whitehall Specialties, Inc., 352 F. Supp. 2d 1077, 1081 (C.D. Cal. 2004).
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Defendants here bear the burden of demonstrating the existence of a contract and the inclusion of
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the forum selection clause in that contract. See Kedkad, 2013 WL 4734022, at *3 n.3; Alcatel
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Lucent USA, Inc. v. Dugdale Commc’ns, Inc., No. 09-2140, 2010 WL 883831, at *13 (C.D. Cal.
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Mar. 5, 2010).
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When ruling on motions to transfer based on § 1404(a), the court may consider
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undisputed facts outside of the pleadings. See Martensen v. Koch, No. 12-05257, 2013 WL
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4734000, at *8 (N.D. Cal. Sept. 3, 2013). See also Midwest Precision Servs., Inc. v. PTM Indus.
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Corp., 574 F. Supp. 657, 659 (N.D. Ill. 1983) (“Although the party seeking transfer bears the
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burden of persuasion that transfer is proper, the burden under § 1404(a) is substantially less than a
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transfer under the doctrine of forum non conveniens.”) (citing Norwood v. Kirkpatrick, 349 U.S.
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B. Analysis
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Defendants argue Goodyear’s contracts with Morgan Tire contain a forum
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selection clause that requires Morgan Tire to bring suit in state or federal court in Summit
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County, Ohio. Mot. to Transfer, ECF No. 20-1 at 11; see FAC, Ex. A, ECF No. 16 at 32 ¶ 30
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(“Dealer agrees that Dealer shall commence, and that Goodyear may commence, any action
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arising out of or relating to this Agreement in state or federal court in Summit County, Ohio.”)
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(New Tire Agreement). They also claim Morgan Tire is bound by admissions in the original
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complaint that even when the various agreements had lapsed, “Morgan Tire and Goodyear
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continued their business relationship under the terms of the New Tire Agreement.” They contend
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that even under Morgan Tire’s theory about a hybrid oral/written contract, the forum selection
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clause controls. Compl., ECF No. 1 ¶ 9; ECF No. 20-1 at 13.
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Morgan Tire contends it was not bound by this clause because it was not a
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bargained-for, agreed upon term and did not carry over from past agreements; it may plead
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inconsistently in successive pleadings; the forum selection clause does not govern because it
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covers only those claims arising out of the New Tire Agreement, but not those arising out of the
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Retread Agreement, and cannot be relied on by Wingfoot, who did not sign any of the
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Agreements. Opp’n, ECF No. 23 at 12–20.
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In reply, defendants argue a forum selection clause survives the termination of a
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contract; additionally, the order acknowledgement faxed after Morgan Tire submitted a purchase
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order following the lapse of the contract clearly stated that any disputes arising out of the orders
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would be subject to the forum selection clause. Reply, ECF No. 24 at 6-8 & No. 24-1 at 6
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(“Customer agrees that Customer shall commence, and Seller may commence, any action arising
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out of or relating to this Acknowledgement, the goods supplied hereunder or the order relating
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thereto in a state or federal court in Summit County, Ohio.”).1 Defendants claim this order
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acknowledgement form was faxed or emailed to Morgan Tire ninety-four times in 2012. Defs.’
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Supplemental Br. (June 24, 2014), ECF No. 35-1 ¶ 4.
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Morgan Tire disputes that order acknowledgement forms containing the forum
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selection clause were faxed with every purchase order it placed and submits a copy of an order
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confirmation it received from Goodyear without a forum selection clause. Pl.’s Supplemental
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Brief (June 25, 2014), ECF No. 34-1, Ex. 1.
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1. Judicial Admission
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Defendants contend plaintiff’s First Amended Complaint is an attempt to plead
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around admissions in the original complaint that the New Tire Agreement governed the parties’
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The document is far from clear, as the print is very small and difficult to read, but the
court reproduces it as well as it is able.
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business relationship over the past two decades. ECF No. 20-1 at 13. They argue the court may
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strike or ignore the changed allegations because plaintiff did not explain them. Id. at 14.
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Plaintiff argues its characterization of the New Tire Agreement in the First
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Amended Complaint is neither false nor misleading, but merely a clarification of the status of the
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New Tire Agreement with its forum selection clause. ECF No. 23 at 9–10. Plaintiff says it did
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not use the word “governed” in the complaint, which in fact made clear that the New Tire
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Agreement was not in effect at the time of the events described in the complaint and the First
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Amended Complaint. Id. at 10.
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“[A] statement in a complaint may serve as a judicial admission,” but when the
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party who made the statement “explains the error in a subsequent pleading or by amendment, the
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trial court must accord the explanation due weight.” Sicor Ltd. v. Cetus Corp., 51 F.3d 848, 859–
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60 (9th Cir. 1995); see also Best Canvas Prods. & Supplies, Inc. v. Ploof Truck Lines, Inc., 713
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F.2d 618, 621 (11th Cir. 1983) (party bound by admission in its pleadings that cause of action
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arose in Georgia).
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Defendants rely on Bauer v. Tacey Goss, P.S., No. 12-00876, 2012 WL 2838834
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(N.D. Cal. July 10, 2012). In Bauer, the plaintiffs claimed defendants could not enforce a forum
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selection clause because they had not been a party to the agreement containing the clause. Id. at
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*3. In the original complaint, however, they had alleged defendants had provided the services
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under the agreement, but omitted this claim in the amended complaint filed after a motion to
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transfer relied on the clause, explaining they had improperly relied on various documents in
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drafting the original complaint. Id. The court said plaintiffs were bound by their original
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admission because they had “not provided any legitimate basis for withdrawing these
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allegations.” Id.
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In the original complaint here, plaintiff said that “[d]uring the last two decades,
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Morgan Tire has been under a distributorship agreement for new tire sales . . . in the basic form
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and content as attached hereto as Exhibit ‘A.’ Often, the New Tire Agreement term would lapse
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between renewals. However, at all times Morgan Tire and Goodyear continued their business
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relationship under the terms of the New Tire Agreement.” ECF No. 1 ¶ 9. It is true plaintiff does
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not use the word “govern,” but it does say the business relationship was governed by the terms of
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the New Tire Agreement. Nevertheless, plaintiff explains in its opposition that the First
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Amended Complaint clarified that the New Tire Agreement in force at the time of the alleged
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wrongdoing “was by course of business and specifically not by Exhibit A, which Morgan Tire did
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not execute.” ECF No. 23 at 10.
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“[T]here is nothing in the Federal Rules of Civil Procedure to prevent a party from
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filing successive pleadings that make inconsistent or even contradictory allegations. Unless there
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is a showing that the party acted in bad faith . . . inconsistent allegations are simply not a basis for
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striking the pleading.” PAE Gov’t Servs., Inc. v. MPRI, Inc., 514 F.3d 856, 860 (9th Cir. 2007).
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The court declines to hold Morgan Tire to its statements in the complaint, given its explanation in
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its opposition, the recognition that an amended complaint can contain contradictory claims, and a
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record that does not support a finding of bad faith.
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2. Is there a contract containing a forum selection clause?
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The parties agree that California law governs the questions of contract formation
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and that defendants bear the burden of demonstrating the existence of a contract and the inclusion
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of the forum selection clause in that contract. Pl.’s Supplemental Br. (March 14, 2014), ECF No.
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27 at 5–6, 9; Defs.’ Supplemental Br. (March 14, 2014), ECF No. 28 at 2–4; see also Welles v.
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Turner Entm’t Co., 503 F.3d 728, 738 (9th Cir. 2007) (a court sitting in diversity applies state’s
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choice-of-law principles; in California, absent a choice of law by the parties, contract is
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interpreted by law of place of performance and creation); Aspect Grp. v. Movietickets.com, Inc.,
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No. 05-3125, 2006 WL 5894608, at *6 (C.D. Cal. Jan. 24, 2006); Alcatel, 2010 WL 883831, at
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*13 (“[A] party seeking to enforce a forum selection clause has the initial burden of establishing
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the existence and applicability of the forum selection clause.”).
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Despite defendants’ argument that California law applies, they rely on some out-
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of-state cases to support their position. For example, they argue a forum selection clause survives
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the termination of a contract, ECF No. 24 at 7, but cite to cases from the Eastern District of
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Pennsylvania and the Northern District of Illinois. Moreover, those cases address the situation
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where a party is suing for a claim that arose when a contract containing a forum selection clause
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was in force, but had expired or been terminated by the time suit was brought. See, e.g., Advent
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Elecs. Inc. v. Samsung Semiconductor, Inc., 709 F. Supp. 843 (N.D. Ill. 1989). These cases do
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not assist defendants.
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Defendants do cite to New Image Painting, Inc. v. Home Depot U.S.A., Inc., a
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Central District case, in support of their claim that a forum selection clause is not rendered invalid
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when a later agreement does not specifically revoke it. No. 09-1224, 2009 WL 4730891 (C.D.
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Cal. Dec. 7, 2009). In that case, plaintiff alleged the forum selection clause in a contract was
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superseded by a later oral agreement. Id. at *4. The court rejected the claim, finding that for the
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oral agreement to supersede the written agreement, there must be a novation, yet plaintiff did not
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present sufficient evidence a novation had occurred. Id.2 In this case, in contrast, plaintiff alleges
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there was no existing contract with a forum selection clause. New Image Painting does not
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control.
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The parties do agree that the Uniform Commercial Code (UCC) applies to the
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question of contract formation and contract terms. Although there is a split of authority whether
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distributorship agreements are governed by the UCC, see Boyd v. Oscar Fisher Co.,
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210 Cal. App. 3d. 368, 378–79 (1989), California courts have applied its provisions to such
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agreements. See, e.g., Varni Bros. Corp. v. Wine World, Inc., 35 Cal. App. 4th 880 (1995)
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(applying gap filling provisions of the UCC and custom and usage to a form distributorship
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contract).
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Under the UCC, “[a] contract for sale of goods may be made in any manner
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sufficient to show agreement, including conduct by both parties which recognizes the existence of
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such a contract.” Cal. Com. Code § 2204; see also Cal. Com. Code § 2206(1)(a) (“An offer to
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make a contract shall be construed as inviting acceptance in any manner and by any medium
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reasonable in the circumstances.”). Plaintiff argues that when the parties act as though they have
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a contract, section 2207(3) applies to fill in the terms. ECF No. 27 at 6. Under that section,
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“A novation is the substitution of a new obligation for an existing one,” and is “a
contractual doctrine.” Howard v. Cnty. of Amador, 220 Cal. App. 3d 962, 977 (1990) (citing Cal.
Civ. Code § 1530).
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“[c]onduct by both parties which recognizes the existence of a contract is sufficient to establish a
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contract for sale although the writings of the parties do not otherwise establish a contract. In such
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case the terms of the particular contract consist of those terms on which the writings of the parties
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agree, together with any supplementary terms incorporated under any other provisions of this
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code.” See Apex LLC v. Sharing World, Inc., 206 Cal. App. 4th 999, 1011 (2012) (using gap
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filling provisions of the UCC to supply terms for time and place for payment and delivery when
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these were not included in the contract).
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Also under the UCC, a “course of dealing between the parties . . . is relevant in
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ascertaining the meaning of the parties’ agreement, may give particular meaning to specific terms
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of the agreement, and may supplement or qualify the terms of the agreement.” Cal. Com. Code §
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1303(d). “A ‘course of dealing’ is a sequence of conduct concerning previous transactions
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between the parties to a particular transaction that is fairly to be regarded as establishing a
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common basis of understanding for interpreting their expressions and other conduct.” Cal. Com.
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Code § 1303(b). See also Expeditors Int’l of Wash., Inc. v. Official Creditors Comm. of CFLC,
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Inc. (In re CFLC, Inc.), 166 F.3d 1012, 1017 (9th Cir. 1999). It “‘usually refers to previous
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dealings between parties which indicate the parties previously agreed on a specific issue that is
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now in dispute.’” Id. at 1017 (quoting the underlying bankruptcy decision, Expeditors Int’l of
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Wash., Inc. v. Official Creditors Comm. of CFLC, Inc., 209 B.R. 508 (B.A.P. 9th Cir. 1997)).
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Although courts are split over the question whether supplementary terms under § 2207(3)
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encompass terms implied by a course of dealing, Nuaire, Inc. v. Merrill Mfg. Corp., No. 11-
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1249, 2012 WL 3229380, at *5 (D. Minn. Aug. 6, 2012), California courts appear to recognize
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that a course of dealing may be a source of contract terms. C9 Ventures v. SVC-West, L.P, 202
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Cal. App. 4th 1483, 1498-99 (2012) (in dicta). “An inference of the parties’ common knowledge
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or understanding that is based upon a prior course of dealing is a question of fact.” In re CFLC,
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166 F.3d at 1017.
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Plaintiff argues the parties’ course of dealing supplies terms relating to their actual
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business, but the course of dealing does not cover the forum selection clause. ECF No. 27 at 6;
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ECF No. 23 at 14.
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Defendants contend that the order acknowledgement forms provide further
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evidence that the parties’ relationship is governed by a valid and enforceable forum selection
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clause. ECF No. 35 at 2. According to this argument, the forms are part of the parties’ decades-
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long course of dealing, supplying the terms of the parties’ contractual relationship.
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Plaintiff does not appear to deny it received the order acknowledgement forms
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defendants claim Goodyear faxed: plaintiff admits it requested Goodyear stop faxing the forms
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and says that the forms were “thrown away.” ECF No. 34-1 ¶ 6. Plaintiff challenges the forms
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on the grounds that they are “partial page, illegible, and seemingly altered,” and were attached to
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a declaration made by “someone that had no direct knowledge of the same.” ECF No. 34 at 4.
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Plaintiff also objects to the court’s consideration of the forms because no proof of transmission
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was attached. ECF No. 27 at 7.
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A confirmation that a fax reached its destination, such as a confirmation page or
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destination phone number on a copy of the document, creates a rebuttable presumption that the
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fax was received. See Renegade Oil, Inc. v. Progressive Cas. Ins. Co., 101 P.3d 383, 386 (Utah
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Ct. App. 2004); Stevens v. Shipping & Terminal Co. v. JAPAN RAINBOW II MV, 334 F.3d 439,
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444 (5th Cir. 2003) (affirming district court’s determination that fax confirmation of successful
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transmission raises presumption of receipt). The absence of such confirmation information
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negates the rebuttable presumption in favor of receipt, but does not create a rebuttable
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presumption against receipt. Renegade Oil, 101 P.3d at 386 (determining “without confirmation
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information that the [f]ax reached its destination, the trial court had to weigh the conflicting
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testimonial evidence”).
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Here, defendants have not provided confirmation pages or destination phone
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numbers for the order acknowledgement forms, and therefore have not created a rebuttable
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presumption that plaintiff received the fax. As a result, whether the order acknowledgment forms
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were received by plaintiff is an issue of fact, which this court must resolve in favor of plaintiff for
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the purposes of establishing the existence of a forum selection clause. See Alcatel, 2010 WL
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883831, at *13.
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Defendants also argue that after the New Tire Agreement expired, the parties
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continued to perform as before; their conduct implies they mutually assented to a new contract
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containing the same provisions as the New Tire Agreement, including that agreement’s forum
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selection clause. Defendants rely on Bowlin’s Inc. v. Ramsey Oil Co., a UCC case from the New
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Mexico Court of Appeals, to support their argument that all the terms of the expired contract
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continued in force.3 In Bowlin’s, the plaintiff had had a contract with Texaco for the delivery of
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gasoline, which included a provision that it notify Texaco of any irregularities in the delivery
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within two days. 662 P.2d 661, 672 (N.M. Ct. App. 1983). Although the contract with Texaco
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expired, Ramsey Oil entered into an oral contract for the deliveries, changing only the manner of
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payment. Id. The court found the provision for inspection and notification of any problems
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became part of the oral contract based on the “course of dealing for more than three years under a
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contract identical in all respects other than to whom payment would be made. . . .” Id.
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Plaintiff distinguishes Bowlin’s on the ground that the terms imported through the
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course of dealing were those relating to the day-to-day running of the business. Although
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plaintiff does not support its argument with citation to any case law, some cases have suggested a
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course of dealing incorporates those provisions the parties have addressed over the course of the
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contracts. New Moon Shipping Co., Ltd. v. Man B & W Diesel AG, 121 F.3d 24, 31 (2d Cir.
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1997) (“Evidence of a prior course of dealing may establish a party’s awareness of and consent to
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intended contractual terms. . . . Typically, a course of dealings analysis focuses on the actions of
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the parties with respect to a specific issue that the parties may have encountered before. On this
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basis, a factfinder could reasonably infer that the parties have impliedly incorporated this
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understanding into their subsequent contracts.”). Plaintiff alleges the parties have not been in
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litigation before, suggesting they had never encountered the forum selection clause.
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Nevertheless, there are cases finding a forum selection clause incorporated into a
contract through a course of dealing even in the absence of any evidence of litigation history
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Defendants also rely on National Union Fire Ins. Co. v. Showa Shipping Co.,
No. 97-16374, 16375, 1999 U.S. App. LEXIS 516, at *9 n.6 (9th Cir. Jan. 13, 1999). Under
Ninth Circuit Rule 36–3(c), this decision may not be cited as precedent and therefore will not be
considered by this court.
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between the contracting parties. See Bell, Inc. v. IFS Industries, Inc., 742 F. Supp. 2d 1049, 1053
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(D.S.D. 2010) (finding forum selection clause to be part of contract when it had been part of
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every invoice for eight years); but see Ben-Trei Overseas, L.L.C. v. Gerdau Ameristeel US, Inc.,
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No. 09-153, 2010 WL 582205, at *5 (N.D. Okla. Feb. 10, 2010) (single contract with forum
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selection clause between parties did not establish course of dealing). In this case, the parties
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conducted business under the New Tire Agreement for nearly twenty years, and after that
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agreement expired, continued to conduct business according to its terms. During that time, the
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forum selection clause contained in that agreement drew no objection from plaintiff. This clause
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is part of the parties’ contract.
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3. Does the forum selection clause cover all of the claims?
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In Manetti-Farrow, Inc. v. Gucci America, Inc., the Ninth Circuit said that
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“because enforcement of a forum selection clause necessarily entails interpretation of the clause
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before it can be enforced, federal law . . . applies to the interpretation of forum selection clauses.”
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858 F.2d 509, 513 (9th Cir. 1988).
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The clause in this case provides that “Dealer agrees that Dealer shall commence,
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and that Goodyear may commence, any action arising out of or relating to this Agreement in state
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or federal court in Summit County, Ohio.” ECF No. 16 at 32 ¶ 30.
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The Ninth Circuit and courts in this circuit have recognized that the scope of a
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forum or venue selection clause is not necessarily limited to contract claims. Manetti-Farrow,
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Inc., 858 F.2d at 514 (claims of tortious interference with prospective economic relations covered
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by forum selection clause ); Perry v. AT&T Mobility LLC, No. C-01488 SI, 2011 WL 4080625, at
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*3-4 (N.D. Cal. Sept. 12, 2011) (forum selection clause can cover tort or statutory claims and
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interpreting forum selection provision broadly when it governed suits “relating to” the contract).
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In Manetti-Farrow, the plaintiff had entered into an exclusive dealership contract
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with Gucci. The contract contained a forum selection clause establishing Florence, Italy as the
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forum for any litigation “regarding interpretation or fulfillment” of the contract. 858 F.2d at 510.
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When Gucci terminated the dealership, plaintiff filed suit in the Northern District of California
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against Gucci and several members of the Gucci family, alleging conspiracy to interfere with
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contractual relations, conspiracy to interfere with prospective economic advantage, tortious
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interference with contract, tortious interference with prospective economic advantage, breach of
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the covenant of good faith and fair dealing, and unfair trade practices. Id. at 511. The court said
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that “[w]hether a forum selection clause applies to tort claims depends on whether resolution of
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the claims relates to interpretation of the contract,” and found that because Manetti-Farrow’s
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claims involved “the central conflict over the interpretation of the contract,” they were governed
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by the forum selection clause. Id. at 514 (internal citation & quotation marks omitted). If the
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claims “arise out of the contractual relation and implicate the contract’s terms,” they are covered
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by the forum selection clause in the contract. Crescent Int’l, Inc. v. Avatar Cmtys., Inc., 857 F.2d
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943, 944 (3d Cir. 1988).
All of plaintiff’s claims arise out of the contractual relation in this case. For
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example, plaintiff alleges that Goodyear breached the covenant of good faith and fair dealing by
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refusing to wind up outstanding amounts due to plaintiff, allegations which also underlie the
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conversion claim; plaintiff’s claim to amounts due flows from the underlying Distributorship
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Agreements. In addition, the prices for tires Goodyear supplied for plaintiff to use in the County
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and piggy-back contracts flowed from the parties’ Distributorship Agreements.
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Finally, Wingfoot may also rely on the forum selection clause even though it was
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not a party to any contract with plaintiff. A forum selection clause may apply to non-signatories
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when the alleged conduct of those parties is closely related to the contractual relationship.
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Holland Am. Line Inc. v. Wärtsilä N. Am., Inc., 485 F.3d 450, 456 (9th Cir. 2007) (citing Manetti-
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Farrow, 858 F.2d at 514 n.5); see also Sawyer v. Bill Me Later, Inc., No. 10-04461, 2011 WL
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7718723, at *4 (C.D. Cal. 2011) (a person may enforce a forum selection clause he did not sign if
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he was a third party beneficiary of the contract, a successor in interest to the contract, or an agent
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intended to benefit from the contract). Wingfoot’s conduct as described in the complaint is
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closely related to the contractual relationship at issue in this case.
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4. Is the clause enforceable?
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Once the court finds a valid forum selection clause, it should refuse to enforce it
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only in “exceptional cases,” based on an evaluation of public-interest, not private factors. Atl.
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Marine Constr. Co., 134 S. Ct. at 581–82. Relevant factors include “‘the administrative
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difficulties flowing from court congestion; the local interest in having localized controversies
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decided at home; [and] the interest in having the trial of a diversity case in a forum that is at home
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with the law.’” Id. at 581 n. 6 (quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n.6 (1981).
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In this case plaintiff points only to the prejudice it will suffer if the case is transferred to Ohio.
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Accordingly, it has not borne its burden of showing exceptional circumstances justify a refusal to
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enforce the clause.
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IV. CONCLUSION
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For the reasons set forth above, the court GRANTS defendants’ motion to transfer.
IT IS SO ORDERED.
DATED: November 12, 2014.
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UNITED STATES DISTRICT JUDGE
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