United States District Court, W.D. Washington
DWAYNE KULA, individually and as sole shareholder of Everlite 99, LLC, and DRK Enterprises, LLC; DRK ENTERPRISES, LLC; and EVERLITE 99, LLC, for itself and derivatively as shareholder of EWM International, LLC, Plaintiffs,
EVERY WATT MATTERS, LLC; EWM-LED, LLC; ASB HOLDING GROUP, LLC; GEORGE BLACKSTONE; STANLEY BRETTSCHNEIDER; ANDREW BRETTSCHNEIDER; and NEAL FORSTHOEFFEL, Defendants.
J. McConnell, Jr. United States District Judge
action arises from a business deal involving Plaintiffs
Dwayne Kula, DRK Enterprises, and Everlite 99, and Defendants
Every Watt Matters, EWM-LED, ASB Holding Group, George
Blackstone, Stanley Brettschneider, Andrew Brettschneider,
and Neal Forsthoeffel. Defendants have moved to dismiss the
matter under Federal Rule of Civil Procedure 12(b)(2), (3),
and (6) for lack of personal jurisdiction, improper venue,
and failure to state a claim. ECF No. 22. The Defendants have
also moved to strike Plaintiffs' purported sur-reply to
the motion to dismiss. ECF No. 42. For the reasons discussed
below, the Court exercises its discretion to transfer this
action under 28 U.S.C. § 1404(a) and DENIES both motions
U.S.C. § 1404(a) provides that, "[f]or the
convenience of parties and witnesses, in the interest of
justice, a district court may transfer any civil action to
any other district or division where it might have been
brought." Transfer under § 1404(a) is not dependent
on the initial forum being "wrong, " and allows for
transfer "to any district where venue is also
proper." Atl. Marine Constr, Co. v. U.S. Dist. Court
for W. Dist. of Tex., 134 S.Ct. 568, 579 (2013).
"It is well settled that a court may transfer a case sua
sponte" under this provision. Desmond v. Nynex
Corp., 37 F.3d 1484, 1994 WL 577479, *3 (1st Cir. 1994).
relevant to this case, § 1404(a) "provides a
mechanism for enforcement of forum-selection clauses that
point to a particular federal district." Atl.
Marine, 134 S.Ct. at 579. Furthermore, "proper
application of § 1404(a) requires that a forum-selection
clause be 'given controlling weight in all but the most
exceptional cases.'" Id. (quoting
Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 33
(1988) (Kennedy, J., concurring)); see also Rivera v.
Centro Medico de Turabo, Inc., 575 F.3d 10, 18 (1st Cir.
2009) (forum selection clauses prima facie valid and should
be enforced unless unreasonable).
case, the Plaintiffs assert several contractual claims
against the Defendants, including a derivative claim for
breach of contract (Count I), a claim for breach of the
implied covenant of good faith and fair dealing (Count III),
and a claim for breach of fiduciary duty (Count IV). The
contract central to these claims appears to be the amended
agreement governing the operation of EWM International, Inc.,
an entity comprised of Mr. Kula, Mr. Blackstone, and Messrs.
Brettschneider, via their respective memberships in the
entities Everlite, Every Watt Matters, and ASB Holding Group.
SeeEGF No. 11ffl 14, 33, 34, 41, 45, 49. This
contract, attached by Plaintiffs as Exhibit A to their
Complaint, contains the following clause:
18.13 Venue. Any action or proceeding arising out of
this Agreement will be litigated in courts located in King
County, Washington. Each party consents and submits to the
jurisdiction of any local, state, or federal court located in
King County, Washington.
ECF No. 1-1 at 18.
a mandatory forum selection clause. See Rivera, 575
F.3d at 17 (holding that "the threshold question in
interpreting a forum selection clause is whether the clause
at issue is permissive or mandatory, " and that
"[p]ermissive forum selection clauses, often described
as 'consent to jurisdiction' clauses, authorize
jurisdiction and venue in a designated forum, but do not
prohibit litigation elsewhere .... In contrast, mandatory
forum selection clauses contain clear language indicating
that jurisdiction and venue are appropriate exclusively in
the designated forum" (second alteration in original)
(quoting 14D Charles Alan Wright, Arthur R. Miller &
Edward H. Cooper, Federal Practice and Procedure
§ 3803.1 (3ded. 1998))); Summit Packaging Sys.,
Inc. v. Kenyon & Kenyon, 273 F.3d 9, 12 (1st Cir.
2001) ("The parties' choice of the word
'will'-a word 'commonly having the mandatory
sense of "shall" or "must"'-
demonstrates their exclusive commitment to the two named
forums. Most succinctly, the plain meaning of the phrase
'will be submitted' is that the course of action is
required, not discretionary." (quoting Black's
Law Dictionary 1102 (6th ed. 1991))).
mandatory forum selection clause has a "strong
presumption of enforceability, " and ought to be
enforced unless the resisting party can show one of three
criteria: "that enforcement would be unreasonable and
unjust, or that the clause was invalid for such reasons as
fraud or overreaching . .. [or that] enforcement would
contravene a strong public policy of the forum in which suit
is brought." Rivera, 575 F.3d at 18
(alterations in original) (quoting M/S Bremen v. Zapata
Offshore Co., 407 U.S. 1, 15 (1972)).
Plaintiffs argue that enforcing this clause would be
unreasonable because not all parties in this action are privy
to this contract. Aside from the fact that all Plaintiffs in
this action assert all of the contract claims against all
Defendants, see ECF No. 1 ¶¶ 67-72, 77-85, it is
clear that at least Plaintiff Everlite 99 and Defendants
Every Watt Matters and ASB Holding Group are privy to the
contract. See ECF No. 1-1 at 20. To
transfer some of the claims as to some of the parties while
not transferring the others would "ignore the
fundamental principle of judicial economy."
Rivera, 575 F.3d at 24. As the First Circuit has
held, '"claims involving the same operative
facts' as a claim for breach of contract that is subject
to a forum selection clause should also be litigated in the
forum chosen by the parties." Id. (quoting
Lambert v. Kysar, 983 F.2d 1110, 1121 (1st Cir.
there is no evidence of fraud. For a forum selection clause
to be unenforceable because of fraud, Plaintiffs must show
that the inclusion of that clause in the contract
was the product of fraud or coercion. Lambert, 983
F.2d at 1121 (citing Scherk v. Alberto-Culver Co.,
417 U.S. 506, 519 n.14 (1974)). Plaintiffs have not done so.
Plaintiffs have offered no evidence that enforcing this forum
selection clause would contravene a strong public policy of
to effectuate the mandatory forum selection clause, the Court
exercises its discretion under 28 U.S.C. § 1404(a) and
orders this action transferred to the United States District
Court for the Western District of Washington.Defendants'
Motion to ...