Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_19-cv-00679/USCOURTS-casd-3_19-cv-00679-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity Action

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

PETER ERIC PIERMAN, 

Plaintiff, 

V. 

STRYKER CORPORATION and 

HOWMEDICA OSTEONICS CORP, 

Defendants. 

Case No.: 3:19-cv-00679-BEN-MDD 

ORDER DENYING DEFENDANTS 

MOTION TO DISMISS OR, IN THE 

ALTERNATIVE, TO TRANSFER 

[Doc. No. 6] 

Presently before the Court is Defendants' Motion to Dismiss, or in the Alternative, 

19 to Transfer. The Court has reviewed and considered all the briefing filed with respect to 

20 Defendants Motion and concludes that oral argument is not necessary to resolve the 

21 Motion. See Fed. R. Civ. P. 78. Defendants Motion is DENIED. 

22 

23 

BACKGROUND 

Plaintiff Peter Eric Pierman ("Plaintiff'), is a citizen of the State of California, who 

24 resides in San Diego County. (Doc. No. 1 ~ 6.) Defendant, Stryker Corporation 

25 ("Stryker") is a Michigan corporation with its principal place of business in Kalamazoo, 

26 Michigan. Id.~ 7. Co-Defendant, Howmedica Osteonics Corp. ("HOC") is a New Jersey 

27 Corporation which maintains its principal place of business in Mahwah, New Jersey. Id. 

28 ~ 8. 

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1 Plaintiff alleges that he was offered a position as an associate sales consultant for 

2 Stryker Craniomaxillofacial products in March 2016. As a condition of his employment, 

3 he was required to sign an employment agreement ("Agreement") containing a restrictive 

4 covenant in the form of a non-compete provision. Id. ,r 8. 

5 In 2018, Plaintiff was assigned to handle Stryker Trauma products in HOC's San 

6 Diego sales area. As before, Plaintiff was required to sign a new non-compete 

7 agreement, protecting the Defendants' trade secrets. 1 Id. ,r 13, Ex. B. The Agreement 

8 also provided that any litigation which arose out of Plaintiffs employment with HOC 

9 would be conducted exclusively in the State of New Jersey, that Plaintiff consented to the 

10 jurisdiction of the courts in New Jersey, and that the Agreement would be interpreted. 

11 under New Jersey law.2 (Doc. No. 6 at 3 .) Due to its nationwide sales force and 

12 legitimate interest in obtaining relative consistency and predictability in the legal 

13 construction and interpretation of its agreements, HOC includes similar mandatory forum 

14 selection clauses and governing law provisions in all of its agreements. Id. at 4. 

15 On April 12, 2019, the Plaintiff provided notice that he was resigning from his 

16 employment with HOC. (Doc. No. 1 ,r 24.). On that same day, his counsel sent a letter to 

17 Defendants representing that Plaintiff was voiding the forum selection and choice oflaw 

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20 1 The Stryker Non-Compete provision expressly states that it "supersedes any and all 

prior agreements between the parties with respect to the matters addressed in this 

Agreement." Id. at 15. 

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22 2 "8.2 Governing Law and Venue. Although I may work for [HOC] in various 

locations, I agree and consent that this Agreement shall be interpreted and enforced as a 

contract of the applicable state listed on Attachment Bas ofmy date of termination and 

24 shall be interpreted and enforced in accordance with the internal laws of the state without 

regardto its conflict of law rules. In such circumstances, I agree and consent that any 

and all litigation between [HOC] and me relating to this Agreement will take place 26 exclusively in the state listed on Attachment B, and I consent to the jurisdiction of the 

federal and/or state courts in the state listed on Attachment B. I consent to personal 

jurisdiction and venue in both such Courts and to service of process by United States 

28 Mail or express courier service in any such action." (Doc. No. 6 at 3.) 

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1 provisions contained in the Agreement and further notifying them that he intended to join 

2 a competitor. (Doc. No. 6 at 4.) Thereafter, Plaintiff filed the instant action. Id. 

3 Defendants now seek to have the case dismissed, or in the alternative, transferred 

4 to New Jersey pursuant to 28 U.S.C. § 1404(a). Atlantic Marine Const. Co., Inc. v. US. 

5 Dist. Court for W Dist. of Texas 571 U.S. 49, 59 (2013); see also Russel v. De Los 

6 Suenos, No. 13-CV-2081-BENDHB, 2014 WL 1028882, at *8 (S.D. Cal. Mar. 17, 2014) 

7 (dismissing case based on agreement's Mexico forum selection clause). 

8 DISCUSSION 

9 Section§ 1404(a) provides that "[f]or the convenience of the parties and witnesses, 

10 in the interest of justice, a district court may transfer any civil action to any other district 

11 court or division where it might have been brought[.]" 28 U.S.C. § 1404(a). Section§ 

12 1404(a) "does not concern the issue whether and where an action may be properly 

13 litigated. It relates solely to the question where, among two or more proper forums, the 

14 matter should be litigated to best serve the interests of judicial economy and convenience 

15 of the parties." Williams v. WinCo Foods, LLC, 2013 WL 211246, *2 (E.D. Cal. 2013) 

16 (internal quotation marks omitted). 

17 The court weighs multiple factors to determine whether a transfer of venue serves 

18 the convenience of the parties and witnesses and promotes the interests of justice. See 

19 Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir.), cert denied, 531 U.S. 

20 928 (2000); Lopez v. Chertoff, 2007 WL 2113494, *2 (N.D. Cal. 2007). "The presence of 

21 a forum-selection clause, however, changes the analysis." Karl v. ZimmerBiomet 

22 Holdings, Inc., 2018 WL 5809428, *1 (N.D. Cal. 2018). A forum-selection clause should 

23 be enforced unless the party challenging enforcement of the provision can show it is 

24 unreasonable. See MIS Bremen v. Zapata Off-shore Co., 407 U.S. 1, 10, 92 S. Ct. 1907, 

25 1913 (1972). However, "[a] contractual choice-of-forum clause should be held 

26 unenforceable if enforcement would contravene a strong public policy of the forum in 

27 which suit is brought, whether declared by statute or by judicial decision." Id. at 15, 92 

28 S. Ct. at 1916. 

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1 I. FORUM SELECTION CLAUSE. 

2 "Given the weight accorded to forum selection clauses in a 28 U.S.C. § 1404(a) 

· 3 transfer analysis," the court first examines the enforceability of the forum selection 

4 clause." See Rowsby v. Gulf Stream Coach, Inc., 2009 WL 1154130, *2 (C.D. Cal. 

5 2009). Forum selection clauses are "prima facie valid unless enforcement is 

6 unreasonable." Id. (internal quotations omitted) ( citing Bremen, 407 U.S. at 10, 92 S. Ct. 

7 at 1913). "[T]he party seeking to avoid a forum selection clause bears a 'heavy burden' 

8 to establish a ground upon which we will conclude the clause is unenforceable." Doe Iv. 

9 AOL LLC, 552 F.3d 1077, 1083 (9th Cir. 2009). A forum selection clause may be found 

10 to be unenforceable if one of the following conditions is satisfied: "( 1) if the inclusion of 

11 the clause in the agreement was the product of fraud or overreaching; (2) if the party 

12 wishing to repudiate the clause would effectively be deprived of his day in court were the 

13 · clause enforced; and (3) if enforcement would contravene a strong public policy of the 

14 forum in which suit is brought." Holland Am. Line Inc. v. Wartsila N Am., Inc., 485 F.3d 

15 450, 457 (9th Cir. 2007) (internal quotation marks omitted). 

16 Here, Plaintiffs agreement with Defendant, which he signed on February 1, 2018, 

17 contains the following forum selection clause: "[ A ]ll litigation between [HOC] and me 

18 [Plaintiff] relating to this Agreement will take place exclusively in the state listed on 

19 Attachment B[.]" (Doc. No. 6 at 3.) It also states that "this agreement shall be 

20 interpreted and enforced as a contract of the applicable state listed on Attachment B[.]" 

21 Id. Attachment B indicates that either New Jersey or Michigan law should be applied, 

22 depending upon the entity that employed Plaintiff at the time of his resignation. Id. 

23 Plaintiff argues that the forum selection clause is unenforceable because it 

24 contraven'es "the strong public policy of California" set forth in California Labor Code § 

25 925 of litigating "California-centric" labor disputes within the state. (See Doc. No. 20 at 

26 18.) Defendant responds that§ 925 does not apply because "28 U.S.C. § 1404 preempts 

27 state laws (such as Labor Code § 925) that purport to void forum selection clauses, 

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1 prohibiting federal courts from giving them weight under that statute." (Doc. No. 22 at 

2 1.) 

3 First, before embarking on the § 1404 analysis, the court must determine whether 

4 there is a "contractually valid forum-selection clause." At!. Marine Constr. Co., Inc. v. 

5 the US. Dist. Ct.for W Dist. a/Texas, 571 U.S. 49, 62 n. 5, 134 S. Ct. 568,581 n. 5 

6 (2013) ("Atlantic Marine"); See Moretti v. Hertz Corp., 2014 WL 1410432, *2 (N.D. Cal. 

7 2014) (noting that before engaging in analysis of forum selection clause pursuant to 

8 Atlantic Marine, a "[c]ourt must first determine whether a valid forum-selection clause 

9 exists within the subject contract"); Trendsettah USA v. Swisher Int'! Inc., 2015 WL 

10 12697653, *2 (C.D. Cal. 2014) ("Before the court may consider the impact of any forum 

11 selection clause on plaintiffs choice of forum and the motion to transfer, it must first 

12 determine whether a contract exists and, if so, whether it contains the forum selection 

13 clause at issue.") (internal quotation marks omitted). In other words, "[t]o determine the 

14 enforceability of a forum selection clause, a federal court must [first] ask whether a 

15 contract existed under state law." Kellerman v. Interisland Launch, 2015 WL 6620604, 

16 *3 (W.D. Wash. 2015); Glob. Power Supply, LLC v. Acoustical Sheetmetal Inc., 2018 

17 WL 3414056, *2 (C.D. Cal. 2018) ("Although federal law governs the interpretation and 

18 enforcement of forum selection clauses, state law governs contract formation and the 

19 interpretation of an agreement's terms.") (internal quotation marks omitted). 

20 Section 925 provides that "[a]n employer shall not require an employee who 

21 primarily resides and works in California, as a condition of employment, to agree to a 

22 provision that would do either of the following: (1) [r]equire the employee to adjudicate 

23 outside of California a claim arising in California [or] (2) [d]eprive the employee of the 

24 substantive protection of California law with respect to a controversy arising in 

25 California." Cal. Lab. Code§ 925(a). "Any provision of a contract that violates 

26 subdivision (a) is voidable by the employee, and if a provision is rendered void at the 

27 request of the employee, the matter shall be adjudicated in California and California law 

28 shall govern the dispute." Cal. Lab. Code§ 925(6). Section§ 925 further provides that it 

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1 "shall apply to a contract entered into, modified, or extended on or after January 1, 

2 2017." Cal. Lab. Code§ 925(f). 

3 Here, there is no dispute that Plaintiff is a California citizen who resides and works 

4 in San Diego, California. (Doc. No. 1 at 3 .) Next, Plaintiff signed the Agreement as a 

5 condition of his employment on February 1, 2018. Id. February 1, 2018, is after January 

6 1, 2017, the effective date of§ 925. (See Doc. No. 20 at 1-2.) Finally, Plaintiff was not 

7 represented by counsel when he signed the Agreement. Id. 

8 Considering the aforementioned facts, it is clear that § 925 not only applies, but the 

9 forum selection clause, in this case, violates both prongs of§ 925(a) by (1) requiring 

10 labor disputes that arise within California to be adjudicated in another state, and (2) by 

11 imposing another state's laws on California employees. See Cal. Labor Code§ 925. In 

12 other words, the clause violates "California's strong public policy against enforcing 

13 forum-selection clauses in employment agreements."3 Karl, 2018 WL 5809428, at *3; cf. 

14 Jones v. GNC Franchising, Inc., 211 F:3d 495, 498 (9th Cir. 2000) ("[Bremen] teaches 

15 that a strong public policy may be declared by statute.") ( citing MIS Bremen, 407 U.S. at 

16 15, 92 S. Ct. at 1916) (internal quotation marks. omitted). 

17 Lastly, Defendant's assertion that§ 925 is preempted, is unconvincing.4 See 

18 Stewart Organization, Inc. v. Ricoh Corp.487 U.S. 22 (1988). The Court concurs that 

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21 3 "In an analogous context, [the Ninth Circuit] made unenforceable a forum22 

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selection clause due to California's strong public policy as expressed in an analogous . 

statute[.]" Karl, 2018 WL 5809428, at *2 (citing Jones, 211 F.3d at 498) (concluding 

that, "[b ]y voiding any clause in a franchise agreement limiting venue to a non-California 

forum for claims arising under or relating to a franchise located in the state ... [California 24 Business and Professions Code] § 20040.5 expresses a strong public policy of the State of 

California to protect California franchises from the expense, inconvenience, and possible 

prejudice of litigating in a non-California venue"). 

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4 The Supreme Court has been clear that these matters are fundamentally state law 

concerns which must be respected by federal courts sitting in di~ersity under the Erie 

Doctrine. Erie R. Co. v. Timpkins, 304 U.S. 64 (1938). Even in the context of the broad 

preemptive swathe under the FAA, this principle holds true. First Options of Chicago, 

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1 "[t]he holding of Stewart is very narrow and does not impact in any way the continuing 

2 applicability of the Bremen analysis." (Doc. No. 20 at 16.) Specifically, the Ninth 

3 Circuit in Jones v. GNC Franchising, Inc., 211 F .3d 495 (9th Cir. 2000), explicitly held 

4 that, under Bremen, a forum selection clause that is rendered void by a state statute is 

5 invalid and unenforceable. Id. at 497-98. Moreover, the court in Jones went on to hold, 

6 consistent with Stewart, that in the context of a § 1404 analysis, California's strong 

7 public policy of providing a protective local forum for its own citizens was a relevant and 

8 important factor, among others, to be considered in denying a motion for transfer of 

9 venue under§ 1404(a). See Id. 

10 Accordingly, given that the agreement at issue "falls within Section§ 925's orbit 

11 and contravenes California's strong public policy against litigating labor disputes out-of12 state[,]" "[the] forum-selection clause [in Plaintiffs contract] is unreasonable ... and 

13 shall not be enforced. Nor shall the choice of law provision, for the same reasons." Karl, 

14 2018 WL 5809428, at *4. 

15 II. CONVENIENCE AND FAIRNESS FACTORS. 

16 "Because the forum-selection clause has been found to be unenforceable, this order 

17 considers the factors of§ 1404(a) to decide the defendant['s] motion to transfer[,]" Karl, 

18 2018 WL 5809428, at *5, ratherthan engaging in a modified Atlantic Marine analysis. 

19 To determine whether to exercise their "broad discretion" to transfer venue under§ 

20 1404, Amini Innovation Corp. v. JS Imports, Inc., 497 F. Supp. 2d 1093, 1108 (C.D. Cal. 

21 2007), district courts weigh various factors of "convenience and fairness." Jones, 211 

22 F.3d at 498. While there is no definitive list, courts typically look to some or all of the 

23 following factors to determine whether transfer to the alternative forum is proper: ( 1) the 

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26 Inc. v. Kaplan, 514 U.S. 938 (1995) ("When deciding whether the parties agreed to 

27 arbitrate a certain matter (including arbitrability), courts generally ... should apply 

ordinary state-law principles that govern the formation of contracts."). (Doc. No. 20 at 

28 17 n. * 6.) 

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1 plaintiff's choice of forum; (2) the convenience of the parties; (3) the convenience of the 

2 witnesses; (4) the ease of access to the evidence; (5) the familiarity of each forum with 

3 the applicable law; (6) the feasibility of consolidation of other claims; (7) any local 

4 interest in the controversy; (8) the relative court congestion in each forum; and (9) the 

5 availability of compulsory process. See Decker Coal Co. v. Commonwealth Edison Co., 

6 805 F.2d 834, 843 (9th Cir. 1986); Atlantic Marine, 571 U.S. at 62 n. 6, 134 S. Ct. at 581 

7 n. 6 (describing "[f]actors relating to the parties' private interests" and "[p]ublic-interest 

8 factors" for a court to consider in determining whether to transfer an action; Jones, 211 

9 F.3d at 498-99 (same). 

10 The Court first considers Plaintiff's choice of forum, which is "generally 

11 accorded" "great weight[.]" Lou v. Belzberg, 834 F.2d 730, 739 (9th Cir. 1987), cert. 

12 denied, 485 U.S. 993 (1988). However, the weight granted to "plaintiff's chosen venue is 

13 substantially reduced where [it] ... lacks a significant connection to the activities alleged 

14 in the complaint." Williams v. Bowman, 157 F. Supp. 2d 1103, 1106 (N.D. Cal. 2001) 

15 (internal quotation marks omitted). 

16 Defendant contends the forum selection clause is valid under Federal law because 

17 § 1404 "leaves no room for the operation of state laws which purport to void forum 

18 selection clauses or otherwise render them ineffective." (Doc. No. 22 at 8.) Moreover, 

19 even if this Court were to disregard Stewart and use state law to determine whether a 

20 forum selection clause exists, the cases relied upon by Plaintiff to argue that California 

21 state law should govern are also distinguishable because they involved allegations that 

22 some defect occurred in the process of contract formation. See Moretti v. Hertz Corp.,· 

23 No. C 13-02972, 2014 WL 1410432, at *2-3 (N.D. Cal. April 11, 2014) (whether a party 

24 received notice and agreed to a forum selection clause at the time of contract formation.) 

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The Court disagrees. 

Here, as in Karl, 

Defendant['s] corporate headquarters may be [outside of California] but, 

defendant[] hired [a] California citizen[] as [a] sales representative[] and 

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implemented policies that allegedly violate California labor laws. That 

defendant[] [is] headquartered [outside of California] does not negate the 

local impact of [its] decisions when they are implemented elsewhere. 

Moreover, as pied in plaintiffls'] complaint, the operative facts of this action 

occurred within California which has a strong interest in adjudicating labor 

disputes within the forum. Plaintiff has established significant contacts 

between the chosen forum and the allegations of his complaint. 

7 2018 WL 5809428, at 5 (internal citations and quotation marks omitted); See Schultz v. 

8 Hyatt Vacation Mktg. Corp., 2011 WL 768735, *5 (N.D. Cal. 2011) (similar). Thus, 

9 Plaintiffs choice of forum weighs heavily against transfer. 

10 The Court next considers the convenience of the parties. Given that Defendant 

11 employed Plaintiff in California, (see Doc. No. 1 at ,r,r 2, 6, 12, and 13), aside from 

12 asserting that it seeks "relative consistency and predictability in the legal construction and 

13 interpretation of its agreements", Defendant has not demonstrated that litigating in 

14 California would be an inconvenience. (Doc. No. 6 at4.) Plaintiff, on the other hand, is 

15 a California citizen. (Doc. No. 1 ,r 2.) He would be inconvenienced by having to travel 

16 to New Jersey, the district to which Defendant seeks transfer. (Doc. No. 20 at 14.) Thus, 

17 this factor weighs heavily against transfer. 

18 As for the convenience of non-party witnesses, ease of access to evidence, and 

19 docket congestion, the Defendant does not even address these factors, and Plaintiff 

20 merely provides them lip-service, (see, generally, Doc. No. 20 at 13-14) so the Court 

21 finds them to be neutral. 

22 The next factor, familiarity with governing law, weighs slightly against transfer. 

23 This case involves only one state law claim. (See Doc. No. 1 ,r,r 29 - 37.) Given the 

24 Court's finding that the choice of law provision of the contract is unenforceable, the 

25 Plaintiffs claims under§ 925 will be governed by California law. See Cal. Labor Code§ 

26 925(b) ("[I]f a provision is rendered void at the request of the employee, ... California 

27 law shall govern the dispute."); (Doc. No. 1 ,r,r 29-37.) While this district and the District 

28 of New Jersey are equally familiar with federal law, "this district is more familiar with 

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1 the state laws underlying the California ... claims. But since other federal courts are fully 

2 capable of applying California law, this factor weighs only slightly against transfer.'' 

3 Karl, 2018 WL 5809428, at *6. 

4 Finally, the Court considers the local interest in the controversy. Here, 

5 "California's strong public policy as discussed in the above forum-selection analysis ... 

6 shows that the local interest in adjudicating this action is great. Section § 925 expresses 

7 California's interest in preventing contractual circumvention of its labor law -tipping the 

8 scales against transfer." Karl, 2018 WL 5809428, at *7 (denying motion to transfer 

9 under§ 1404 after finding forum selection clause unenforceable under§ 925 and that 

10 plaintiffs choice of forum parties' convenience, familiarity with governing law, and local 

11 interest in controversy weighed against transfer). 

12 In sum, even assuming, arguendo, that this case could have been brought in New 

13 Jersey, consideration of the§ 1404(a) convenience factors weighs against transfer. 

14 Plaintiff filed the instant action in this District, and his choice is afforded great weight. 

15 Three of the§ 1404(a) factors - convenience of the parties, governing law, and local 

16 interest in the controversy - weigh against transfer, and none of the others favor transfer. 

1 7 Given that the balance of factors weighs against transfer, the Court finds that Defendants 

18 have not met their burden to make a "strong showing of inconvenience to warrant 

19 upsetting the plaintiffts'] choice of forum." Decker, 805 F.2d at 843. 

CONCLUSION 

Based on the foregoing, IT IS ORDERED THAT: 

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1. Defendants Motion to Dismiss, or in the Alternative, Transfer is DENIED. 

2. Defendant shall file an answer to the Compla· 

24 I'F IS SO ORDERED. 

25 Dated: January ffe2020 

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o later than February 3, 2020. 

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