LegalForce, Inc. v. LegalZoom.com, Inc., No. 2:2018cv06147 - Document 27 (C.D. Cal. 2018)
Court Description: ORDER GRANTING DEFENDANTS MOTION TO TRANSFER VENUE 20 . The Clerk of the Court shall transfer this case to the United States District Court for the Northern District of California by Judge Otis D. Wright, II: Case Electronically transferred to the USDC Northern District of California. MD JS-6. Case Terminated. (lc) .Modified on 11/27/2018 (lc).
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LegalForce, Inc. v. LegalZoom.com, Inc. Doc. 27 O JS-6 1 2 3 4 5 6 7 8 United States District Court Central District of California 9 10 11 12 LEGALFORCE, INC., a Delaware corporation, 14 15 16 ORDER GRANTING DEFENDANT’S MOTION TO TRANSFER VENUE [20] Plaintiff, 13 Case No. 2:18-cv-06147-ODW-GJS v. LEGALZOOM.COM, INC., a Delaware corporation, Defendant. 17 18 19 I. INTRODUCTION 20 21 22 23 24 Presently before the Court is Defendant Legalzoom.com, Inc.’s Motion to Transfer Venue to the United States District Court for the Northern District of California, San Francisco Division. For the following reasons, the Court GRANTS Defendant’s Motion to Transfer Venue.1 25 26 27 28 After carefully considering the papers filed in support of the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 Dockets.Justia.com 1 II. FACTUAL AND PROCEDURAL BACKGROUND 2 Defendant Legalzoom.com, Inc. (“LegalZoom”) is in the business of providing 3 access to legal self-help solutions and pre-paid legal service plans to the public. (Mot. 4 to Transfer Venue (“Mot.”) 2, ECF No. 20-1.) 5 (“LegalForce”) is purportedly one of LegalZoom’s competitors. (Id.) Plaintiff Legalforce.com, Inc. 6 On December 19, 2017, LegalForce filed a complaint in the Northern District of 7 California, styled LegalForce RAPC Worldwide, P.C. et al. v. LegalZoom.com, Inc. et 8 al., 3:17-cv-07194-MMC (the “Northern District Action”), asserting several claims 9 against LegalZoom and other defendants. (Mot. 2; see also Decl. of Michelle C. 10 Doolin (“Doolin Decl.”) ¶ 2, ECF No. 20-2.) LegalForce filed a First Amended 11 Complaint on January 2, 2018. (Mot. 3.) Then, LegalForce subsequently sought 12 leave to amend the First Amended Complaint, which the court rejected due to 13 LegalForce’s failure to file a proposed Second Amended Complaint. (Id.) 14 defendants moved to dismiss the First Amended Complaint. 15 LegalZoom’s motion to dismiss was pending, LegalForce renewed its request for 16 leave to amend the First Amended Complaint and voluntarily dismissed every 17 defendant except LegalZoom. (Id.) The court then granted LegalZoom’s motion to 18 dismiss the First Amended Complaint for failure to state a claim. (Id.) The court 19 granted LegalForce’s request to file a Second Amended Complaint for the sole 20 purpose of curing the deficiencies identified by the court in the order granting 21 dismissal of the First Amended Complaint. (Id. at 3–4.) (Id.) The While 22 On May 17, 2018, LegalForce filed its Second Amended Complaint. (Doolin 23 Decl. Ex. 1, ECF No. 20-3.) This complaint included no new claims. (Mot. 4.) On 24 the following day, LegalForce filed a motion for leave to file a Third Amended 25 Complaint, which included six additional claims. (Doolin Decl. Ex. 6, ECF No. 26 20-3.) LegalZoom moved to dismiss the Second Amended Complaint and Legalforce 27 filed a statement of non-opposition, and instead, requested the court grant leave to file 28 a Third Amended Complaint. (See Doolin Decl. Ex. 8, ECF No. 20-3.) 2 1 The court denied LegalForce’s motion for leave to amend a Third Amended 2 Complaint, finding that disregarding the Second Amended Complaint in favor of the 3 Third Amended Complaint would “not serve the interests of judicial economy, as it 4 will unnecessarily prolong the pleading stage.” (Doolin Decl. Ex. 8.) Nonetheless, 5 the court provided LegalForce with a second opportunity to oppose LegalZoom’s 6 motion to dismiss the Second Amended Complaint. (Mot. 5.) On July 9, 2018, before 7 the court ruled on the motion to dismiss, LegalForce voluntarily dismissed the Second 8 Amended Complaint. (Id.) Without an operative complaint, the court in the Northern 9 District Action closed the case for “statistical purposes.” (Doolin Decl. Ex. 1.) 10 On July 16, 2018, LegalForce filed a complaint against LegalZoom in this 11 Court. (See generally Compl., ECF No. 1.) The Complaint contains the same claims 12 for trademark infringement and cyberpiracy that LegalForce asserted in its Third 13 Amended Complaint in the Northern District of California. (See Ex. 11, ECF No. 14 20-3.) III. LEGAL STANDARD 15 16 A district court may transfer an action to any district or division “where the 17 action might have originally been brought” to promote the convenience of the parties 18 and witnesses and the interests of justice. 28 U.S.C. § 1404(a). Section 1404(a) 19 “gives a district court broad discretion to transfer a case to another district where 20 venue is also proper.” Amini Innovation Corp. v. JS Imports, Inc., 497 F. Supp. 2d 21 1093, 1108 (C.D. Cal. 2007); see also Commodity Futures Trading Comm’n v. 22 Savage, 611 F.2d 270, 279 (9th Cir. 1979) (“Weighing of the factors for and against 23 transfer involves subtle considerations and is best left to the discretion of the trial 24 judge.”). 25 Alternatively, a district court has the inherent power to transfer or dismiss an 26 action if it believes the case arises from judge-shopping. Alvarado v. Bank of Am., 27 N.A., No. CIV. S-08-2862 LKK/DAD, 2009 WL 720875, at *2 (E.D. Cal. Mar. 17, 28 2009) (citing Hernandez v. City of El Monte, 138 F.3d 393, 399 (9th Cir. 1998)). 3 1 Pursuant to this district’s Local Rules, “[i]t is not permissible to dismiss and thereafter 2 refile an action for the purpose of obtaining a different judge.” C.D. Cal. L.R. 3 83-1.2.1. Moreover, “[w]henever an action is dismissed by a party or by the Court 4 before judgment and thereafter the same or essentially the same claims, involving the 5 same or essentially the same parties, are alleged in another action, the later-filed 6 action shall be assigned to the judge to whom the first-filed action was assigned.” 7 C.D. Cal. L.R. 83-1.2.2. IV. DISCUSSION 8 9 The Court finds this case is appropriate for transfer back to the Northern 10 District of California pursuant to both § 1404(a) and the Court’s inherent authority to 11 prevent judge shopping. 12 A. Transfer Pursuant to § 1404(a) 13 To transfer this case to the Northern District of California, the Court must find: 14 1) the transferee court is one where the action “might have been brought,” and 2) the 15 parties’ and witnesses’ conveniences, as well as the interests of justice, favor transfer. 16 Metz v. U.S. Life Ins. Co., 674 F. Supp. 2d 1141, 1145; see also Hatch v. Reliance Ins. 17 Co., 758 F.2d 409, 414 (9th Cir. 1985). 18 19 1. The transferee court is one where the action “might have been brought.” 20 Transferring pursuant to § 1404(a) requires “demonstrating that subject matter 21 jurisdiction, personal jurisdiction, and venue would have been proper if the plaintiff 22 had filed the action in the district to which transfer is sought.” Metz, 674 F. Supp. 2d 23 at 1145. Here, subject matter jurisdiction exists because LegalForce’s infringement 24 claims arise under federal law and the remaining claims are a part of the same case or 25 controversy. See 28 U.S.C. §§ 1331, 1367. Personal jurisdiction is also proper 26 because both parties’ principal place of business is in California. See Daimler AG v. 27 Bauman, 571 U.S. 117, 137 (1990); (see also Compl. ¶¶ 2, 3.). Lastly, venue is proper 28 in the Northern District of California because both parties assert that a substantial part 4 1 of the events giving rise to this claim occurred there. 2 Accordingly, LegalForce could have brought, and actually did bring, this action in the 3 Northern District of California. 4 (Doolin Decl. Ex. 6.) 2. Convenience and interests of justice. 5 As the Northern District of California is a proper venue, as established above, 6 the decision to transfer turns on the convenience of parties and witnesses, and the 7 interests of justice. See Young Props. Corp. v. United Equity Corp., 534 F.2d 847, 8 852 (9th Cir. 1976). 9 a. Convenience of the parties and witnesses. 10 Generally, “[t]he weight given to the plaintiff’s choice of forum diminishes 11 when the plaintiff resides outside the chosen forum.” Siddiqi v. Gerber Prods. Co., 12 No. CV 12-1188 PA (RZx), 2012 WL 11922412, at *4 (C.D. Cal. Mar. 26, 2012). 13 Here, LegalForce does not reside in the Central District of California. (Mot. 2.) 14 LegalForce is a Delaware corporation with its principal place of business in Mountain 15 View, California. (Id.) Thus, LegalForce’s choice of forum is given minimal weight. 16 Alternatively, the Northern District of California is a convenient forum for both 17 parties, given that LegalForce originally filed this case in the Northern District’s San 18 Francisco division, and LegalZoom is moving to transfer the case back to that district. 19 (Doolin Decl. Ex. 1.) Regarding witnesses, LegalZoom does not anticipate that any 20 witnesses will be called. (Mot. 13.) LegalForce offers nothing more than conjecture 21 and speculation regarding the location of possible witnesses. LegalForce fails to 22 identify the witnesses that would have information sufficient to support its claims and 23 notes only that they would “probably” be found in the Central District of California. 24 (LegalForce’s Opp’n to LegalZoom’s Mot. to Transfer (“Opp’n”) 11, ECF No. 23.) 25 However, to the extent LegalForce has any witnesses, they are more likely located in 26 the Northern District, where LegalForce’s principal place of business is located. 27 Accordingly, transferring this case to the Northern District does not appear to cause 28 inconvenience to the parties or witnesses. 5 b. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The interests of justice favor transfer. In deciding whether the interests of justice favor transfer to another district court, a court should consider: (1) the location where the relevant agreements were negotiated and executed, (2) the state that is most familiar with the governing law, (3) the plaintiff’s choice of forum, (4) the respective parties’ contacts with the forum, (5) the contacts relating to the plaintiff’s cause of action in the chosen forum, (6) the differences in the costs of litigation in the two forums, (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses, and (8) the ease of access to sources of proof. Jones v. GNC Franchising, Inc., 211 F.3d 495, 498–99 (9th Cir. 2000). Since many of the factors are inapplicable to the case at hand, the Court will discuss only the relevant factors. i. Plaintiff’s choice of forum is a result of judgeshopping. Generally, a “[p]laintiff’s choice of forum, while taken into account, is not a sufficiently strong factor to deny the motion to transfer” venue. F.T.C. v. Watson Pharm., Inc., 611 F. Supp. 2d 1081, 1090 (C.D. Cal. 2009). A key “‘interest of justice’ factor is the prevention of forum shopping.” Wireless Consumers All., Inc. v. T-Mobile USA, Inc., No. C 03-3711 MHP, 2003 WL 22387598, at *5 (N.D. Cal. Oct. 14, 2003). “If there is any indication that plaintiff’s choice of forum is the result of forum shopping, plaintiff’s choice will be accorded little deference.” Williams v. Bowman, 157 F. Supp. 2d 1103, 1106 (N.D. Cal. 2001). Moreover, “concerns of forum-shopping are potentially present when a plaintiff pursues litigation outside his home district.” Mitchell v. Deutsche Bank Nat’l Tr. Co., No. SAVC 15-01307-CJC (JCGx), 2015 WL 12867746, at *3 (C.D. Cal. Oct. 29, 2015). Forum shopping could reasonably be inferred if the plaintiff files the same or similar case represented by the same law firm in a different district after receiving unfavorable rulings there. See 6 1 Carrera v. First Am. Home Buyers Prot. Co., No. CV 11-10242-GHK (FFMx), 2012 2 WL 13012698, at *6 (C.D. Cal. Jan. 24, 2012); see also Alexander v. Franklin 3 Resources, Inc., No. C 06–7121 SI, 2007 WL 518859, at *4 (N.D. Cal. Feb. 14, 2007). 4 “[E]vidence of plaintiff’s attempt to avoid a particular precedent from a particular 5 judge weighs heavily in the context of [the interests of justice] and would often make 6 the transfer of venue proper.” Wireless Consumers All., 2003 WL 22387598, at *5. Here, LegalForce’s actions indicate forum-shopping. 7 LegalForce filed its 8 claims in this district after receiving unfavorable rulings in the Northern District. 9 Judge Chesney granted LegalZoom’s motion to dismiss the First Amended Complaint, 10 eventually allowed a limited revision through a Second Amended Complaint, and 11 denied leave to file a Third Amended Complaint. (Mot. 8.) When LegalForce did not 12 get the result it wanted in the Northern District Action, it dismissed that action and 13 refiled the same case here. (Mot. 8.) 14 LegalForce argues, “[i]f plaintiff is seeking a new judge, defendant also has 15 reasons to reverse-forum shop and be heard before a judge that has once ruled in its 16 favor.” Shields v. Amerigas Propane, Inc., No. 2:15-cv-00754-KJM-EFB, 2015 WL 17 5436772, at *4 (E.D. Cal. Sept. 15, 2015). LegalForce also contends that “the record 18 supports an equal likelihood of forum and/or judge shopping by both parties, weighing 19 neither for nor against transfer.” (Opp’n 13 (quoting Shields, 2015 WL 5436772, at 20 *4).) However, unlike Shields, the parties in this case did not stipulate to dismiss the 21 Northern District Action. 22 voluntarily dismiss its case. Further, this Court has not issued any orders and has not 23 decided any substantive motions (except for the one currently before this Court). 24 LegalForce’s attempt to find a new court for claims previously rejected by the 25 Northern District Action is not well taken by this Court. Accordingly, this factor 26 weighs in favor of transferring back to the Northern District. 27 /// 28 /// Plaintiff LegalForce, on its own accord, decided to 7 ii. 1 Difference in cost of litigation in the two forums. 2 For purposes of judicial economy, a court’s familiarity with the facts of a case 3 and legal issues weigh in favor of transferring to that district. See Carerra, 2012 WL 4 13012698, at *6. “[T]his instant case will require consideration of many of the issues 5 considered in [the previous action], … . [and] [j]udicial resources are conserved when 6 an action is adjudicated by a court that has already committed judicial resources to the 7 contested issues and is familiar with the facts of the case.” 8 5436772, at *6–7 (E.D. Cal. Sept. 15, 2015). Shields, 2015 WL 9 Here, LegalForce alleged essentially the same claims based on the same 10 underlying facts as asserted in the Northern District Action. (Mot. 5.) Moreover, 11 since Judge Chesney presided over the matter for nearly 8 months, she is readily 12 familiar with the parties and the facts of this case. Judge Chesney issued numerous 13 substantive orders in that case, and in many instances, attempted to resolve the 14 numerous pleading issues caused by LegalForce’s lack of diligence in properly 15 pleading its case. LegalForce argues that Judge Chesney does not have familiarity 16 with the new claims that were also present in the Third Amended Complaint because 17 she rejected the complaint as premature. (Opp’n 5, 14.) However, Judge Chesney 18 recognized LegalForce’s attempt to waste judicial resources (as it has done in this case 19 as well) by prematurely attempting to file another amended complaint without 20 addressing the deficiencies identified by LegalZoom in the motion to dismiss. See 21 Order Den. as Premature Pl.’s Mot. for Leave to File Third Am. Compl., Northern 22 District Action (N.D. Cal. June 20, 2018). 23 LegalForce to plead new causes of action as identified in the proposed Third 24 Amended Complaint does not mean that Judge Chesney was not familiar with the 25 underlying facts of the case. That Judge Chesney did not allow For the reasons discussed above, it is appropriate to transfer this case to the 26 27 Northern District of California pursuant to U.S.C. § 1404(a). 28 /// 8 1 B. Court’s Inherent Power to Prevent Judge-Shopping 2 Additionally, the Court finds it proper to transfer this case back to the Northern 3 District pursuant to its inherent authority. Courts possess inherent powers that are 4 “governed not by rule or statute but by the control necessarily vested in courts to 5 manage their own affairs so as to achieve the orderly and expeditious disposition of 6 cases.” Link v. Wabash R. Co., 370 U.S. 626, 630–31 (1996). Judge shopping abuses 7 the judicial process and a court may dismiss the action or impose other suitable 8 sanctions. Hernandez, 138 F.3d at 398–99. Moreover, “[w]henever an action is 9 dismissed by a party or by the Court before judgment and thereafter the same or 10 essentially the same claims, involving the same or essentially the same parties, are 11 alleged in another action, the later-filed action shall be assigned to the judge to whom 12 the first-filed action was assigned.” C.D. Cal. L.R. 83-1.2.2. 13 Here, LegalForce abused the judicial process by judge-shopping. LegalForce 14 voluntarily dismissed the Northern District Action and refiled the case in this district. 15 LegalForce’s only basis for dismissing its case and refiling in this district is 16 speculation that “Judge Chesney made it clear that she did not wish for this case to 17 come before her.” (Opp’n 5.) However, Judge Chesney closed the case because 18 LegalForce voluntarily dismissed its Second Amended Complaint. See Notice of 19 Voluntary Dismissal, Northern District Action (N.D. Cal. July 9, 2018). Without an 20 operative complaint, there is no case or controversy before the court. Based on the 21 Court’s review of the pleadings before this Court and those in the Northern District 22 Action, the only basis the Court can infer from LegalForce’s voluntary dismissal and 23 subsequent refiling in another district is to forum shop. Although the Court is inclined 24 to levy monetary sanctions against LegalForce for its blatant forum-shopping, the 25 Court will instead exercise its inherent authority to transfer this case back to the 26 United States District Court for the Northern District of California. 27 /// 28 /// 9 V. CONCLUSION 1 2 For the reasons discussed above, the Court GRANTS LegalZoom’s Motion to 3 Transfer Venue. The Clerk of the Court shall transfer this case to the United States 4 District Court for the Northern District of California. 5 6 IT IS SO ORDERED. 7 November 27, 2018 8 9 10 11 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10
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