Chudner v. TransUnion Interactive, Inc. et al

Filing 28

Findings & Recommendation: For the reasons stated, Defendants' Motion 15 should be granted and the action at bar should be transferred to the District of Delaware. Objections to the court's findings, if any, are due on or before 4/27/09. If objections are filed, a party may file a response to those objections within fourteen days of the filing date of the objections. Signed on 4/13/09, by Magistrate Judge John V. Acosta. (peg)

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I N T H E U N I T E D STATES D I S T R I C T C O U R T F O R THE DISTRICT OF OREGON

JEFFREY CHUDNER, Plaintiff, Civ. No. 0 8 - l l 0 3 - A C FINDINGS AND RECOMMENDATION

v.
TRANSUNlON INTERACTIVE, INC., a foreign c o r p o r a t i o n , a n d T R A N S U N l O N LLC, a foreign limited liability company,

Defendants.

ACOSTA, Magistrate Judge:
Introduction

C u r r e n t l y b e f o r e the court

IS

Defendants TransUnion Interactive, Inc. ("TUl") and

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TransUnion L L C ' s ("TransUnion") (collectively "Defendants") M o t i o n to Dismiss o r Transfer for Improper Venue or, Alternatively, to Dismiss for Failure to State a Claim. P l a i n t i f f Jeffrey Chudner ("Chudner") filed this class action o n b e h a l f o f h i m s e l f and all others similarly situated pursuant to Federal Rule o f Civil Procedure ("Rule") 23. Chudner alleges claims for r e l i e f for violations o f t h e O r e g o n U n l a w f u l T r a d e P r a c t i c e s A c t , b r e a c h o f c o n t r a c t , b r e a c h o f t h e d u t y o f g o o d f a i t h a n d fair d e a l i n g , a n d f o r e q u i t a b l e r e l i e f a r i s i n g from u n j u s t e m i c l n n e n t . Defendants argue that this action should b e dismissed for improper venue because the p a r t i e s ' agreement contained a forum selection clause providing for exclusive venue in Delaware. In the alternative, Defendants argue that the court should exercise its power to effect a discretionmy transfer to an appropriate venue, consistent with t h e interests o f justice. I f the c o u r t declines to d i s m i s s o r t r a n s f e r t h e c a s e b a s e d o n venue, D e f e n d a n t s argue t h a t c e r t a i n o f C h u d n e r ' s c l a i m s should b e dismissed for failure to state a claim. Chudner opposes D e f e n d a n t s ' motion because, h e c o n t e n d s , v e n u e i s p r o p e r i n O r e g o n , t h e forum s e l e c t i o n c l a u s e i s u n e n f o r c e a b l e , a n d e a c h o f h i s c l a i m s are a d e q u a t e l y p l e d . T h e c o u r t c o n c l u d e s t h a t t h e f o r u m s e l e c t i o n r e n d e r s v e n u e i n O r e g o n i m p r o p e r and, accordingly, Defendants' motion to dismiss for improper venue should b e granted and the matter t r a n s f e r r e d t o D e l a w a r e c o n s i s t e n t w i t h t h e f o r u m s e l e c t i o n clause. Factual Background O n or a b o u t J u l y 9 , 2 0 0 7 , C h u d n e r , a r e s i d e n t o f O r e g o n , p u r c h a s e d a T r u e C r e d i t s u b s c r i p t i o n £i'om T U I o n w w w . t r u e c r e d i t . c o m . ( D e c l a r a t i o n o f K a t e A n d e r s o n (..A n d e r s o n D e c ! . ..) . i I 6.) T r u e C r e d i t i s a s e r v i c e o f f e r i n g a c r e d i t r e p o r t that p u r p o r t s t o i n c o r p o r a t e c r e d i t i n f o r m a t i o n from tlu'ee national credit bureaus, namely TransUnion, Experian, and Equifax. !d. This service was FINDINGS A N D R E C O M M E N D A T I O N {KPR}

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advertised on T U I ' s website.' Individuals that purchase this service online at www.tlUecredit.com "are first required to accept a Service Agreement, the terms o f w h i c h are displayed on the website." (Anderson Decl. '17.) T h e "consumer[] must click an ' A C C E P T ' button that follows the Service Agreement i n order for the transaction to be completed." !d. at'il8. Chudner does n o t dispute that h e signed up for the service or that he accepted the Service Agreement. H e does, however, note that he " w a s n o t given any opportunity to negotiate any aspect o f the TrueCredit service." (Declaration o f J e f f r e y Chudner ( " C h u d n e r D e c l . " )

'1 3.)

The Service Agreement in u s e at the time Chudner signed up for the TrueCredit service stated that Chudner was "legally bound b y [its] terms[,]" and included a section titled "Applicable Law," which read: The laws applicable to the interprertation o f t h e s e terms and conditions shall be the l a w s o f t h e S t a t e o f D e l a w a r e , U S A , a n d a p p l i c a b l e federal l a w , w i t h o u t a n y r e g a r d to any conflict o f l a w provisions. . . . You agree that any and all disputes arising under this Agreement or out o f T r u e C r e d i t ' s provision o f services to you, pursuant to this membership or otherwise, i f submitted to a court o f l a w shall be submitted to the state and federal courts o f N e w Castle County, Delaware, U S A ? (Anderson Decl., Exhibit A at 1, 8.) The Service Agreement appeared o n the subscription screen

, The cOUli agrees that b o t h TUI and TransUnion should b e bound b y and benefit from the fOlUm selection clause. I n Manetti-Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509, 5 1 4 n . 5 (9th Cir. 1988), the court stated that a forum selection clause may apply to a non-party i f the alleged conduct i s sufficiently "closely related." S e e a l s o Graham Tech. Solutions, Inc. v. Thinking Pictures, Inc., 949 F. Supp. 1427, 1434 (N.D. Cal. 1997) ("Accordingly, the conduct o f G T S I and Mr. Fuller are closely related [to] t h e contractual relationship between Mr. Graham and TPI, and the forum selection clause applies to b o t h GTSI and Mr. Fuller i n spite o f t h e fact that they are not signatories to the PSA.") Here, each c l a i m asserted against TransUnion is directly related to the Service Agreement containing the fOlUm selection clause and signed b y TUI. Thus, the conduct o f TransUnion is at least closely related to the conduct o f T U I and T U I ' s use o f TransUnion credit ratings and TransUnion should be similarly bound b y and benefit from the forum selection clause. The District Court for the District o f Delaware is located in Wilmington, Delaware, the county seat o f N e w Castle County.
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in a window that displayed only six lines at a time. (Chudner Dec!. ~ 10.) Chudner asserts that he was unable to expand this window and view the Service Agreement i n a larger fOlTI1at. ld. at ~ 11. As a result, to fully view the "Applicable L a w " provision Chudner would have h a d to click the scroll bar repeatedly. ld. at ~ 13. In September 2007, Chudner discovered that "the TrueCredit scores attributed to Equifax and Experian did not actually come from those consumer credit reporting agencies, b u t rather were prepared b y TransUnion, LLC." (Complaint ~ 9.) Chudner filed a civil action against Defendants i n t h e D i s t r i c t o f O r e g o n o n S e p t e m b e r 2 2 , 2008.

L e g a l Standard
T h e appropriate legal standard to apply to Defendants' motion to dismiss or transfer for improper venue i s seriously disputed. Defendants argue that such motions are appropriately analyzed as motions to dismiss under Rule 12(b)(3) and are subject to the analysis set forth b y the Supreme Court i n MIS Bremen v. Zapata O f f S h o r e Co., 407 U.S. 1 (1972). Chudner argues that,

n o t w i t h s t a n d i n g t h e f o r u m s e l e c t i o n c l a u s e , v e n u e is p r o p e r i n O r e g o n , a n d t h e m o t i o n s h o u l d t h u s be analyzed under the federal statue that governs venue, namely 28 U.S.C. § 1404(a) ("section 1 4 0 4 ( a ) " ) . U n d e r s e c t i o n 1404(a) a n a l y s i s , C h u d n e r m a i n t a i n s , t h e f o r u m s e l e c t i o n c l a u s e i s n o t e n f o r c e a b l e a n d v e n u e i s p r o p e r i n t h e D i s t r i c t o f Oregon. In MIS Bremen, the Supreme Court departed from its historical disfavor o f forum selection clauses and held that "such clauses are prima facie valid and should be enforced unless enforcement is shown b y the resisting party to b e 'unreasonable' under the circumstances." ld. at 10. The C o u r t ' s holding w a s limited, however, to "federal district courts sitting in admiralty." ld. Even so, the MIS

Bremen standard " h a s b e e n widely applied to forum selection clauses in genera!." Argueta v. Banco
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Mexieano, S.A., 87 F.3d 320, 325 (9th Cir. 1996).
C h u d n e r ' s argument is premised o n the analysis set forth i n Stewart Org., Inc. v. Rieoll CO/p., 4 8 7 U . S . 2 2 (1988). I n S t e w a r t , t h e S u p r e m e C o u r t d r e w a d i s t i n c t i o n b e t w e e n i t s h o l d i n g i n M I S

Bremen a n d t h e a p p r o p r i a t e s t a n d a r d to b e applied w h e n a federal d i v e r s i t y a c t i o n is c o m m e n c e d i n
a v e n u e t h a t w o u l d b e a p p r o p r i a t e u n d e r t h e federal v e n u e s t a t u t e , a l t h o u g h i t d o e s n o t c o m p o r t w i t h t h e c o n t r a c t u a l l y a g r e e d u p o n forum. I n t h i s s i t u a t i o n , t h e C o u r t " h e l d t h a t a federal c o u r t s i t t i n g i n d i v e r s i t y j u r i s d i c t i o n s h o u l d treat a r e q u e s t to enforce a forum s e l e c t i o n c l a u s e t h a t p e l w i t s v e n u e in another federal district as a m o t i o n to transfer venue under the federal v e n u e statute, the terms o f which are set o u t i n [section 1404(a)]." 14D CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE § 3803.1 ( 3 d ed. 2007) (hereinafter

" W r i g h t & Miller § 3803.1 "). B e c a u s e the CUlTent action is i n diversity and the District o f Oregon
w o u l d , n o t w i t h s t a n d i n g t h e f o r u m s e l e c t i o n clause, b e a n a p p r o p r i a t e v e n u e , C h u d n e r argues t h a t t h e c o u r t s h o u l d p r o c e e d u n d e r S t e w a r t and a n a l y z e D e f e n d a n t s ' m o t i o n u n d e r s e c t i o n 1404(a), a n approach that w o u l d m a k e t h e f m u m selection clause only o n e o f m a n y factors for the c o u r t to consider. T h e circuit courts are split as to whether a forum selection clause in a private contract c a n render v e n u e in a particular venue improper. Allowing a forum selection clause to render an otherwise appropriate v e n u e inappropriate, " s e e m s improperly to place issues o f federal l a w in the h a n d s o f p r i v a t e parties. T h e b e t t e r analytical m e t h o d , s u g g e s t e d b y t h e S u p r e m e C o u r t i n Stewart, is to determine t h e propriety o f venue according to the federal v e n u e statutes . . . . " Wright & Miller

§ 3 8 0 3 . 1 . E v e n so, t h e m a j o r i t y o f c i r c u i t courts, i n c l u d i n g t h e N i n t h C i r c u i t , " n e v e r t h e l e s s h a v e
h e l d t h a t a v a l i d forum s e l e c t i o n c l a u s e c a n r e n d e r v e n u e i n t h e o r i g i n a l forum i m p r o p e r ; t h e s e courts

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enforce v a l i d clauses u n d e r Section 1406(a) o r a R u l e 12(b)(3) m o t i o n to dismiss for i m p r o p e r venue." Id. T h e court is sympathetic to C h u d n e r ' s position that Stewart appears to m a n d a t e the approach endorsed b y Wright & Miller § 3803.1. However, this court is b o u n d b y N i n t h C i r c u i t p r e c e d e n t t h a t holds to t h e contrary. I n Argueta, 87 F . 3 d at 324, the N i n t h Circuit analyzed the d e f e n d a n t s ' m o t i o n to d i s m i s s o r t r a n s f e r f o r i m p r o p e r v e n u e b a s e d o n a f o r u m s e l e c t i o n c l a u s e i n a n i n t e m a t i o n a l agreement " a s a R u l e 12(b)(3) m o t i o n to dismiss for improper v e n u e . " See also Spradlin v. L e a r

Siegler Management Servs. Co., 926 F.2d 865, 866 (9th Cir. 1991) (in a federal diversity action
involving an clause designating forum in Saudi Arabia, t h e N i n t h Circuit a f f i n u e d t h e district c o u r t ' s " d i s m i s s a l o f [ S p r a d l i n ' s ] action for improper venue p u r s u a n t to F ederal R u l e o f Civil Procedure 12(b)(3)."); see also Mlilphy v. Schneider National, hIC., 362 F . 3 d 1133, 1137 (9th Cir. 2004) (analyzing the d e f e n d a n t ' s m o t i o n to enforce forum selection clause u n d e r 12(b)(3) in a federal d i v e r s i t y action). W i t h respect to diversity actions w h e r e a f o r u m selection clause is at issue, courts in this district h a v e consistently analyzed motions to dismiss for improper v e n u e u n d e r R u l e 12(b)(3) as well. 11 Freightliner L L C v. J. G. Trading, Inc., 06-CV -1595-ST, 2007 W L 2 0 2 9 0 6 7 (D. Or. July 1 0 , 2 0 0 7 ) , t h e c o u r t analyzed a " c h o i c e o f forum c l a u s e " u n d e r t h e N i n t h C i r c u i t ' s f r a m e w o r k i n

Argueta and MlIIIJhy, b o t h o f which adopt the MIS Bremen fi·amework. !d. at *2. i l l a recent
d e c i s i o n , t h e n C h i e f J u d g e H a g g e r t y c o n s i d e r e d w h e t h e r a c a s e p r o p e r l y r e m o v e d to federal c o u r t u n d e r 28 U.S.C. § 1441 could subsequently b e dismissed pursuant to R u l e 12(b)(3) for improper venue. Premier Jets, Inc. v. AlliedSignal, Inc., No. 08-142-HA, 2008 U.S. Dis!. LEXIS 32596, at *5-6 (D. Or. Apr. 21, 2008). Judge Haggerty concluded that such dismissal w a s proper. See id., at

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*9-10 ("Although it did n o t explicitly address the Kerobo 3 theOlY, the Ninth Circuit has a f f h m e d the dismissal o f a case based o n improper venue under a fOlUm selection clause after the case was removed under § 1441 (a)." (citing Spradlin, 926 F.2d 865)); s e e also B a r h y t e Specialty Foods, Inc.
v. A c c u t e k P a c k a g i n g Equipment Co., No. 07-855-JE, 2007 U.S. Dist. LEXIS 64409, at *7 (D. Or.

Aug. 28, 2007) ("In actions such as this, which are based u p o n diversity o f t h e parties' citizenship, the interpretation and enforcement o f forum selection clauses are questions o f federa11aw. I n analyzing a motion to dismiss for improper venue pursuant to Rule 12(b)(3), the court m u s t draw all reasonable inferences i n favor o f the non-moving party, and must resolve all factual issues i n that p a r t y ' s f a v o r . " ( i n t e r n a l c i t a t i o n s omitted)). B a s e d o n t h e a b o v e analysis a n d i n r e c o g n i t i o n o f e s t a b l i s h e d N i n t h C i r c u i t p r e c e d e n t , t h e court analyzes Defendants' motion to dismiss as a m o t i o n to dismiss for improper venue under Rule 12(b)(3). Accordingly, " t h e pleadings need n o t be accepted as h u e . . . and the court m a y consider facts outside o f the pleadings." Murphy, 362 F.3d at 1137 (intemal citations omitted). T h e court also must " d r a w all reasonable inferences i n favor o f the non-moving p a r t y and resolve all factual conflicts in favor o f the non-moving p a l i y . . . . " Id. at 1138.
Discussion

.L.

Enforceability o f the F o r u m S e l e c t i o n Clause I n M I S B r e m e n , t h e S u p r e m e C o u r t h e l d t h a t forum s e l e c t i o n c l a u s e s " a r e p r i m a f a c i e valid

v. Southwestern Clean Fuels, C0I1)., 285 F.3d 531 (6th Cir. 2002) is a Sixth Circuit opinion that adopted the Stewart approach and reversed the district cOUli's dismissal for improper venue under R u l e 12(b)(3), remanding the case for analysis consistent w i t h Stewart and 28 U.S.C. § 1 4 0 4 ( a ) . However, this case "is contrary to Ninth Circuit law and does n o t b i n d this cOUli." Waters v. A d v e n t Prod. Dev., No. 07-2089 BTM(LSP), 2008 U.S. Dist. LEXIS 50686, at *18-19 (S.D. Cal. June 2 6 , 2 0 0 8 ) .
3 Kerobo

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and should b e enforced unless enforcement is shown by the resisting party to b e ' u m e a s o n a b l e ' under the circumstances." 407 U.S. at 1O. The C o m t explained that a fOlum selection clause should b e e n f o r c e d u n l e s s the n o n - m o v i n g p a t t y " c o u l d c l e a r l y s h o w t h a t e n f o r c e m e n t w o u l d b e umeasonable and unjust, o r that the clause was invalid for such reasons as £I'aud o r overreaching."
!d. at 15. The exceptions set forth in MIS Bremen have been narrowly const11led. Argueta, 87 F.3d

at 325. To be deemed unenforceable, a f011lm selection clause must fall into at least one o f three categories: A forum selection clause is umeasonable i f (1) its incorporation into the contract was the result o f fraud, undue influence, o r overweening bargaining power; (2) the selected f011lm is so gravely difficult and inconvenient that the complaining p a l t y w i l l for all practical purposes be deprived o f its day i n court; or (3) enforcement o f the clause would contravene a strong public p o l i c y o f the forum i n which the suit is brought.
[d. (intel11al citations and quotations omitted).

Chudner contends that the forum selection clause contained i n the Service Agreement is unenforceable on each o f t h e three grounds. First, the inclusion o f the forum selection clause in the contract was the result o f fraud and overreaching resulting from unequal bargaining power and inconspicuous terms. Second, enforcement o f t h e clause will effectively deprive Chudner o f his day in court because he will b e forced to litigate his action i n Delaware. Third, enforcement o f the forum selection clause is contraty to Oregon's public policy regarding consumer contracts. The court will address each argument in turn.

a.

Fraud and Overreaching

Chudner argues that inclusion o f the forum selection clause should b e deemed unconscionable for fraud o r overreaching because, first, the patties did not have equal bargaining

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power; second, Chudner had n o opportunity to negotiate the terms o f t h e contract; and third, the forum selection clause w a s included in the contract in s u c h a w a y as to surprise consumers. Chudner fails to m e e t his burden on each point. In Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 593 (1991), the Supreme Court held t h a t t h e i n c l u s i o n o f forum s e l e c t i o n clauses i n f o n n contracts w h e r e t h e p a r t i e s h a v e u n e q u a l bargaining p o w e r is pem1issib1e, depending o n the facts and circumstances at hand. T h e Court reasoned that forum selection clauses "ha[ ve] the sa1utmy effect o f dispelling any confusion about w h e r e s u i t s arising from t h e c o n t r a c t m u s t b e b r o u g h t a n d defended, s p a r i n g litigants t h e time a n d expense," involved i n litigating t h e question o f appropriate forum. ld. a t 593-94. However, such clauses " a r e subject to judicial scrutiny for fundamental fairness." !d. at 595. F o n n contracts entered into o n t h e I n t e m e t are n o t treated differently from traditional form contracts. See Cairo, Inc. v.

Crossmedia Servs., No. C 04-04825 JW, 2005 U.S. Dist. LEXIS 8450, at *12 (N.D. Cal. Apr. 1,
2 0 0 5 ) ( u p h o l d i n g a f o r u m s e l e c t i o n c l a u s e i n a n I n t e r n e t f o r m c o n t r a c t and n o t i n g : " [ w ] h i l e n e w c o m m e r c e o n the Internet has exposed courts to m a n y n e w situations, it has not fundamentally changed the principles o f contract." (quoting Register. com, Inc. v. Verio, Inc., 3 5 6 F . 3 d 393 (2d. Cir. 2004»). C o n t r a r y to C h u d n e r ' s a r g u m e n t , a n o n - n e g o t i a b l e f o r m c o n t r a c t w h e r e t h e p a r t i e s h a v e unequal bargaining power is not presumptively invalid. See Panetta v. S A P Am., Inc., 2005 U.S. Dist. LEXIS 36813, at *9-10 (N.D. Cal. July 26, 2005) ('" [T]ake it o r leave i t ' adhesion contracts do n o t necessarily render a forum-selection clause unenforceable. These agreements are enforceable as long as they are n o t 'unreasonable.'" (internal citations omitted) (citing Carnival Cruise Lines, 499 U.S. at 593-94; Batchelder v. Kawamoto, 147 F.3d 915, 919 (9th Cir. 1 9 9 8 » ) . Chudner FINDINGS A N D R E C O M M E N D A T I O N

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provides no analysis as to w h y this form contract should be treated differently. His allegation that the contract was the result o f unequal bargaining power and no negotiation is insufficient to establish that the forum selection clause is void for fundamental fairness. Chudner argues that the TrueCredit forum selection clause was a surprise to consumers, because i t was contained i n a small text-box that required the consumer to scroll down repeatedly to read it i n full. See Chudner Dec!.
~

13 ("I scrolled through the text o f the Service Agreement

looking for the clause that purports to require litigation o f claims i n Delaware. In order to find that text I had to click approximately 48 times o n the scroll bar."). Although Chudner contends that this renders the forum selection clause hidden and, thus, unenforceable, that fact is simply insufficient to render the forum selection clause invalid due to surprise. Furthelmore, the Service Agreement i s fully accessible in its entirety fi'om Defendants' website home page, under "Terms o f U s e . " Chudner offers no other rationale upon which to find that the c l a u s e ' s inclusion was fundamentally unfair. b. Whether Chlldner will b e Deprived o fHis D a y in COllrt

Chudner argues that the court will deprive h i m o f h i s day in court should it require h i m to litigate in a forum "thousands o f miles away." ( P l a i n t i f f s Opposition B r i e f ( " P I . ' s Opp. Br.") 17.) T h e s t a n d a r d s e t f o r t h i n M i S B r e m e n r e q u i r e s t h e n o n - m o v a n t to d e m o n s t r a t e t h a t l i t i g a t i o n i n t h e contractually chosen venue would b e "gravely difficult and inconvenient." 407 U.S. at 18. This standard presents a heavy burden for the non-movant, as cases i n this circuit amply demonstrate. I n Argueta v. Banco Mexicano, S.A., Argueta, the non-movant, argued that enforcement o f the o t h e r w i s e valid f m u m s e l e c t i o n c l a u s e w o u l d e f f e c t i v e l y deny h i m h i s d a y i n c m u i b y r e q u i r i n g t h e litigation take place i n Mexico. Prior to filing the action, Argueta met w i t h Banco Mexicano, the F l N D I N G S AND R E C O M M E N D A T I O N

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defendant, at which time he was seized, interrogated, and ultimately confined b y the Mexican government for over a year. H e feared that a return to Mexico, pursuant to the fmum selection clause, would mean another arrest or an unfair hearing. The N i n t h Circuit affirmed the district c o u r t ' s e n f o r c e m e n t o f t h e forum s e l e c t i o n c l a u s e b e c a u s e A r g u e t a h a d n o t p r o v e n t h a t " l i t i g a t i o n i n Mexico would subject Argueta to risk o f physical h a r m or that Argueta [was] unable to obtain counsel to represent h i m i n Mexico." !d. at 327. Al'gueta's circumstances, though clearly more challenging than Chudner's, did n o t b a r enforcement o f the fOlUm selection clause. I n S p r a d l i n , a n o t h e r N i n t h C i r c u i t decision, t h e p l a i n t i f f w a s e m p l o y e d b y a m i l i t a r y contractor incorporated i n Delaware and headquartered in Oklahoma. Pursuant to his employment in Saudi Arabia, Spradlin entered into an employment agreement w i t h a clause providing that "[t]he c o u r t s o f S a u d i A r a b i a s h a l l h a v e sole j u r i s d i c t i o n o v e r a n y d i s p u t e s arising o u t o f t h i s E m p l o y m e n t Agreement." Id. at 866. The Ninth Circuit affirmed the district c o u r t ' s enforcement o f t h e clause i n p a r t b e c a u s e S p r a d l i n ' s a l l e g a t i o n s o f i n c o n v e n i e n c e r e g a r d i n g t h e d i f f i c u l t y a n d e x p e n s e o f travel to Sandi Arabia were insufficient to demonstrate that Spradlin would be deprived o f his day i n court. T h e arguments o f the plaintiff i n Premier Jets v. AlliedSignal Inc. bear a greater similarity to C h u d n e r ' s position in this case. Premier Jets claimed, essentially, that it would be deprived o f its day in court because " i t would be more expensive and inconvenient for the case to b e litigated in [the contractual forum]." T h e court disagreed, first, because Arizona, the contractual forum, w a s not a " p a r t i c u l a r l y d i s t a n t o r f o r e i g n f o r u m [ ; ] " s e c o n d , b e c a u s e c o u n s e l w i t h e x p e r t i s e i n O r e g o n l a w could still appear as counsel i n Arizona i f admitted pro hac vice; and third, because the expense o f litigating in Arizona would be minimal i n relation to the claimed damages. Here, the same factors apply. First, Delaware i s not a particularly remote or foreign forum; though it m a y require a few {KPR}

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more hours oftravel, it is n o t significantly more inconvenient o r expensive to travel to Delaware than a state nearer to Oregon. Second, current counsel may b e permitted to proceed pro hac vice and litigate the case i n Delaware themselves, i f Chudner so desires. Third, the action is intended to proceed as a class action; although a n y o n e potential plaintiff's damages are small, collectively the potential damage award should render the increased costs associated w i t h travel to Delaware de minimis as well. Fourth, the court notes that, in the age o f electronic filing, a substantial portion o f litigation can take place anywhere a party has access to the Internet. See Pratt v. Silversea Cl1Iises,

Ltd., No. C 05-0693 SI, 2005 U.S. Dist. LEXIS 14339, at *12 (N.D. Cal. July 13, 2005) (noting that
"the availability o f electronic filing and video and teleconferencing technology limits the need for travel. I n addition, in civil case[ s], a plaintiff may pursue a claim without appearing i n C O U l t in person. "). The whole o f C h u d n e r ' s argument o n this point is that " i t makes little sense to require an O r e g o n p l a i n t i f f to ' s p e n d t h e t i m e a n d r i s k t h e e x p e n s e n e c e s s a r y t o ' l i t i g a t e h i s c l a i m t h o u s a n d s o f m i l e s away p a r t i c u l a r l y i n light o f O r e g o n ' s s t a t e d p u b l i c p o l i c y against s u c h a r e q u i r e m e n t . " ( P l . ' s Opp. Br. 17 (citing Vasquez-Lopezv. B e n e f i c i a l Oregon, hIC., 210 Or. App. 553, 571, 1 5 2 P . 3 d 940 (2007)).) Chudner has established only that, for him, a transfer to Delaware w i l l be more inconvenient and expensive. This is insufficient to invalidate a forum selection clause. See Pratt, 2005 U.S. Dist. 14339, at *11-12 ("To meet the heavy burden required to overcome the presumption that a forum selection clause i s valid, plaintiff must show that it is an impossibility for her to try her case, n o t s i m p l y a l e s s c o n v e n i e n t o r effective m e a n s o f d o i n g so.") C h u d n e r h a s n o t e s t a b l i s h e d that h e w i l l b e d e p r i v e d o f h i s d a y i n c o u r t i f t h e f o r u m s e l e c t i o n c l a u s e is e n f o r c e d .

II
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c.

Oregon Public Policy

C h u d n e r cites O R S 8 1 . 1 5 0 i n s u p p o r t o f h i s c o n t e n t i o n t h a t Oregon h a s a s t r o n g p u b l i c p o l i c y p r e c l u d i n g e n f o r c e m e n t o f t h e f o r u m s e l e c t i o n c l a u s e . U n d e r this s t a t u t e , " [ a ] c o n s u m e r m a y r e v o k e a p r o v i s i o n i n a consumer contract that requires t h e consumer to assert a claim against the other party to the contract, o r respond to a claim b y the other party to the contract, in a f o m m that i s n o t i n this state." OR. REv. STAT. 81.150(2) (2007). Chudner, who entered into h i s agreement i n 2007, acknowledges that this p r o v i s i o n applies only to consumer contracts entered into after J a n u m y 1, 2 0 0 8 , b u t a r g u e s t h a t i n p a s s i n g t h i s l a w " t h e O r e g o n L e g i s l a t u r e a r m o u n c e d a c l e a r p o l i c y i n favor o f allowing Oregon consumers to litigate consumer complaints in Oregon courts." (PI. ' s Opp. Br. 13.) A l t h o u g h n o t m a d e e x p l i c i t , C h u d n e r ' s a r g u m e n t i s t h a t t h e c o u r t s h o u l d r e c o g n i z e t h e n o w c o d i f i e d p u b l i c p o l i c y against c o n s u m e r c o n t r a c t forum s e l e c t i o n c l a u s e s a n d a p p l y i t r e t r o a c t i v e l y to c o v e r a contract entered into p r i o r to the date the statute becam e effective. C h u d n e r relies heavily o n Vasquez-Lopez, 2 1 0 Or. App. 553. I n Vasquez-Lopez, t h e defendant mortgage c o m p a n y w a s accused o f "engag[ing] i n predatOlY lending p r a c t i c e s " and fraudulent inducement. !d. at 556. T h e defendant m o v e d " t o compel arbitration p u r s u a n t to an a r b i t r a t i o n r i d e r t o t h e l o a n c o n t r a c t , b u t the t r i a l c o u r t d e n i e d t h e m o t i o n o n t h e g r o u n d t h a t t h e arbitration rider w a s unconscionable." Id. T h e Oregon Court o f Appeals affirmed the trial c o u r t ' s decision, finding b o t h procedural and substantive unconscionability at play. I n its opinion, the court outlined unconscionabiltiy analysis under O r e g o n law. T h i s analysis is inapplicable here, however, as the general rule states that " [ fJederal law governs the validity o f a fOl11m selection clause."

Argueta, 87 F . 3 d at 324. A l t h o u g h the public policy o f t h e "fol11m in w h i c h the s u i t is brought," is
relevant to t h e enforceability analysis, the standards for unconscionability u n d e r Oregon l a w are

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themselves inapplicable to this c o u r t ' s determination.
I n essence, ORS 81.150 makes fOl11m selection clauses i n consumer contracts unenforceable

i n Oregon, where the consumer was a resident o f Oregon at the time the contract was formed, so long as the consumer revokes the clause, in writing, within a reasonable time after the dispute arises. However, this statute is unavailable to Chudner, as the contract i n question was formed prior to January 1, 2008, the effective date o f O R S 81.150. Chudner argues that, although the statute does not strictly apply to his contract with Defendants, the public policy it announces should still be applied to bar enforcement o f the fOl11m selection clause. T h e court does n o t agree that the public policy mmounced by ORS 81.150 is retroactively applicable to the present case. To the extent that ORS 81.150 stands for Oregon's disapproval o f fOl11m selection clauses i n consumer contracts, the statute, and thus the public policy it represents, was not formally in place until 2008. The court declines to retroactively modify the terms o f a contract entered into u n d e r a particular legal framework to comply with a statement o f public policy announced after that contract's fonnation. This would be contrmy to principles o f contract law, as it would deprive Defendants o f one o f t h e benefits for which they bargained. To do so also would undermine the statute itself, which the Oregon legislature made effective o n a specific date. Therefore, enforcement o f the parties' 2007 agreement, including its fOl11m selection provision, is not contrary to public policy and, for all the reasons stated, should be enforced. 2. Dismissal o r Transfer Rather than dismiss an action where venue is improper, the court may exerCise its discretionmy power to transfer the action pursuant to 28 U.S.C. § 1406. " T h e district court o f a district in which is filed a case laying venue in the wrong division or district shall dismiss, or i f it
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be i n the interest o fj u s t i c e , transfer s u c h case to a n y district o r division i n w h i c h i t c o u l d h a v e b e e n b r o u g h t . " 28 U . S . C . § 1 4 0 6 ( a ) ( 2 0 0 7 ) . T h e c o u r t m u s t d e c i d e w h e t h e r i t i s i n t h e i n t e r e s t s o f j u s t i c e to dismiss the a c t i o n w i t h o u t p r e j u d i c e o r transfer i t to the appropriate venue, i n this case, the U n i t e d S t a t e s D i s t r i c t C o u r t for t h e D i s t r i c t o f D e l a w a r e . T h e c o m t c o n c l u d e s t h a t t h e i n t e r e s t s o f j u s t i c e are best s e r v e d b y t r a n s f e r to the District o f Delaware, consistent w i t h t h e v e n u e p r o v i s i o n i n the Security Agreement. Because D e f e n d a n t s ' m o t i o n to dismiss for i m p r o p e r v e n u e u n d e r R u l e 12(b)(3) is dispositive i n this malter, t h e court n e e d n o t perfOllli analysis pursuant to 28 U.S.C. § 1404(a) o r R u l e 12(b)(6). D e f e n d a n t s ' m o t i o n to dismiss for failure to state a c l a i m is therefore d e n i e d as m o o t w i t h leave to r e f i l e i n t h e a p p r o p r i a t e venue.

COl/elusion
F o r the r e a s o n s above stated, D e f e n d a n t s ' m o t i o n should b e granted a n d t h e a c t i o n at b a r should b e transferred to t h e D i s t r i c t o f Delaware.

II II II
Scheduling Order
T h e above F i n d i n g s a n d R e c o m m e n d a t i o n w i l l b e referred to a U n i t e d States D i s t r i c t J u d g e for review. Objections, i f any, are due no later than April 27 , 2 0 0 9 . I f n o objections are filed, r e v i e w o f t h e F i n d i n g s a n d R e c o n m l e n d a t i o n w i l l go u n d e r a d v i s e m e n t o n t h a t d a t e . I f o b j e c t i o n s are f i l e d , a n y p a r t y m a y f i l e a r e s p o n s e w i t h i n f o u r t e e n d a y s a f t e r t h e d a t e t h e o b j e c t i o n s a r e filed. R e v i e w o f t h e F i n d i n g s a n d R e c o n m l e n d a t i o n w i l l g o u n d e r a d v i s e m e n t w h e n

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the r e s p o n s e is d u e o r filed, w h i c h e v e r date is earlier. D A T E D t h i s 1 3 t h d a y o f April, 2009.

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