Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_16-cv-04055/USCOURTS-cand-3_16-cv-04055-0/pdf.json

Nature of Suit Code: 120
Nature of Suit: Marine Contract Actions
Cause of Action: 49:81 Damaged Goods While Being Transported

---

ORDER — No. 16-cv-04055-LB

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

San Francisco Division

GOAL ZERO, LLC, et al.,

Plaintiffs,

v.

CARGO FREIGHT SERVICES, LTD.,

Defendant.

Case No. 16-cv-04055-LB 

ORDER GRANTING IN PART THE 

DEFENDANT’S MOTION TO DISMISS 

OR TRANSFER VENUE

Re: ECF No. 22

INTRODUCTION

This is a maritime shipment dispute concerning the non-delivery of solar-energy equipment.1

Goal Zero and its insurer, Falvey Cargo Underwriting, sued Cargo Freight Services for failing to 

deliver $95,183.55 in solar equipment.

2

They sued here, in the Northern District of California, but 

Cargo Freight contends that this is the wrong venue under both statute and the parties’ forumselection clause.3 Cargo Freight therefore moves to dismiss, or, alternatively, transfer the case.4

 

1 Compl. — ECF No. 1, ¶¶ 6–7. Record citations refer to material in the Electronic Case File (“ECF”); 

pinpoint citations are to the ECF-generated page numbers at the top of documents.

2

Id. ¶¶ 1–2, 6–8.

3

See generally Motion to Dismiss or Transfer — ECF No. 22.

4

Id.

Case 3:16-cv-04055-LB Document 32 Filed 12/22/16 Page 1 of 8
ORDER — No. 16-cv-04055-LB 2

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The court held a hearing on the matter on December 22, 2016.5The court grants in part the 

motion because venue is improper in this district, but the court transfers the case to the Northern 

District of Georgia rather than dismissing it.

STATEMENT

Cargo Freight received 126 cartons of Goal Zero’s solar energy equipment in Hong Kong, 

China.6 Cargo Freight agreed, under contracts of carriage and a bill of lading, to transport the 

equipment from Hong Kong to Rotterdam, Netherlands.7 But it breached these agreements and 

failed to deliver the cargo.8The plaintiffs allege that the “reasonable value of the non-delivered 

goods was $95,183.55.”9

Falvey issued an insurance policy in which it agreed to indemnify Goal Zero against loss or 

damage to the equipment while in transit.10 As a result of the non-delivery and under the policy, 

Falvey paid Goal Zero $92,683.55 and Goal Zero paid a $2,500 deductible.11 Together, then, the 

two plaintiffs (insurer and insured) have suffered a loss of $95,183.55 for the undelivered

equipment from Hong Kong to Rotterdam.

12

So they sued. Goal Zero and Falvey seek to recover the loss against Cargo Freight.13 They 

sued in this district, the Northern District of California, asserting that “[v]enue is proper under 28 

U.S.C. § 1391(b).”14 Yet Cargo Freight maintains that venue is improper here because (1) this 

district does not fall within 28 U.S.C. § 1391(b), and (2) the bill of lading contains a forum-

 

5 Minute Entry — ECF No. 31.

6 Compl. ¶ 6.

7

Id. ¶ 6, 8.

8

Id. ¶ 7.

9

Id.

10 Id. ¶ 8.

11 Id.

12 Id. ¶ 9.

13 See generally id.

14 Id. ¶ 4.

Case 3:16-cv-04055-LB Document 32 Filed 12/22/16 Page 2 of 8
ORDER — No. 16-cv-04055-LB 3

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selection clause that requires all disputes to be litigated in “the United States District Court in the 

State of Georgia to the exclusion of the jurisdiction of any other courts.”15 Cargo Freight 

accordingly moves to dismiss the case or, alternatively, transfer it to a Georgia District Court.16

GOVERNING LAW

Under Federal Rule of Civil Procedure 12(b)(3), a defendant may move to dismiss a case for 

improper venue. After a defendant challenges the venue, it is the plaintiff’s burden to show that 

venue is proper. See Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 

1979). In the context of a Rule 12(b)(3) motion, the court need not accept as true all allegations in 

the complaint, but may consider facts outside the pleadings. See Murphy v. Schneider Nat’l, Inc., 

362 F.3d 1133, 1137 (9th Cir. 2004) (citations omitted). The court is, however, “obligated to draw 

all reasonable inferences in favor of the non-moving party and resolve all factual conflicts in favor 

of the non-moving party.” Id. at 1138.

If venue is improper, the court may either dismiss the case without prejudice, or, if it is in the 

“interest of justice,” transfer the case “to any district or division in which it could have been 

brought.” 28 U.S.C. § 1406(a); In re Hall, Bayoutree Assocs., Ltd., 939 F.2d 802, 804 (9th Cir. 

1991) (if a court decides to dismiss a case for improper venue, dismissal must be without 

prejudice). Ordinarily, the interest of justice requires transferring the case to the proper venue 

rather than dismissing the case. See Baeta v. Sonchik, 273 F.3d 1261, 1264–65 (9th Cir. 2001).

ANALYSIS

1. The Bill of Lading

A bill of lading “is the basic transportation contract between the shipper-consignor and the 

carrier; its terms and conditions bind the shipper and all connecting carriers.” S. Pacific Transp. 

Co. v. Commercial Metals Co., 456 U.S. 336, 342 (1982). The plaintiffs initially raised two issues 

 

15 See generally Motion to Dismiss or Transfer; Wong Decl. — ECF No. 22-1, Ex. A at 5 (paragraph 

22).

16 See Motion to Dismiss or Transfer at 16.

Case 3:16-cv-04055-LB Document 32 Filed 12/22/16 Page 3 of 8
ORDER — No. 16-cv-04055-LB 4

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regarding the bill of lading: (1) whether the document, particularly page two, was properly 

authenticated; and (2) whether the contract terms are ambiguous and render venue proper in this 

district. At the court’s suggestion, though, the parties conferred about the document’s 

authenticity.17 The plaintiffs now concede that the document is what Cargo Freight asserts — a 

true and correct copy of the bill of lading — but still raise issue with the inconsistency (and 

ambiguity) of its terms.18

Courts “interpret and resolve disputes concerning maritime contracts such as [a bill of lading] 

according to federal law.” Starrag v. Maersk, Inc., 486 F.3d 607, 616 (9th Cir. 2007) (citing 

Norfolk S. Railway Co. v. Kirby, 543 U.S. 14, 23 (2004)). “Since the bill of lading is the contract 

of carriage between shipper and carrier, familiar principles of contract interpretation govern its 

construction.” Yang Ming Marine Transp. Corp. v. Okamoto Freighters Ltd., 259 F.3d 1086, 1092 

(9th Cir. 2001) (quoting Henley Drilling Co. v. McGee, 36 F.3d 143, 148 n.11 (1st Cir. 1994)).

“Contract terms are to be given their ordinary meaning, and whenever possible, the plain language 

of the contract should be considered first.” Starrag, 486 F.3d at 616 (quoting Klamath Water 

Users Protective Ass’n v. Patterson, 204 F.3d 1206, 1210 (9th Cir. 1999)) (internal quotations and 

alteration omitted). 

Two principles of contract interpretation are most relevant here. First, “[a]ny ambiguity in the 

bill of lading must be construed in favor of the shipper and against the carrier” because bills of 

lading are contracts of adhesion and usually drafted by the carrier. All Pacific Trading, Inc. v. 

Vessel M/V Hanjin Yosu, 7 F.3d 1427, 1431 (9th Cir. 1993). A term is ambiguous “if it is 

reasonably susceptible of more than one construction or interpretation.” Castaneda v. Dura-Vent 

Corp., 648 F.2d 612, 619 (9th Cir. 1981); see 11 Williston on Contracts § 32:2 (4th ed.). Second,

“‘specific terms and exact terms are given greater weight than general language.’” Royal Ins. Co. 

of Am. v. Orient Overseas Container Line Ltd., 525 F.3d 409, 420 (6th Cir. 2008) (quoting 

Restatement (Second) of Contracts § 203 (1981)). 

 

17 See Order — ECF No. 28.

18 Joint Status Report — ECF No. 30 at 2.

Case 3:16-cv-04055-LB Document 32 Filed 12/22/16 Page 4 of 8
ORDER — No. 16-cv-04055-LB 5

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Here, the plaintiffs argue that the bill of lading is ambiguous because it contains two forumselection clauses.19 On the front, it says: “Any proceedings against the Carrier must be brought in 

the courts of the United States of America and no other court.”20 On the back: “All disputes in any 

way relating to this Bill of Lading shall be determined by the United States District Court in the 

State of Georgia to the exclusion of the jurisdiction of any other courts . . . .”21 Thus, according to 

the plaintiffs, the bill of lading is ambiguous and contradictory because it designates two different 

forums: any court in the United States versus only a federal District Court in Georgia.22 And as 

such, they ask the court to construe the terms against Cargo Freight (the carrier) and hold that 

venue is proper in this district, which would fall within the front page’s broad language.

But there is no ambiguity. The front incorporates the reverse where it says that the goods 

would be “transported in accordance with all of the items printed, written, typed or stamped in or 

on the front and back pages of this Bill of Lading.”23 And page two’s specific language gives 

meaning to, and carries more weight than, the broad language on page one. By the plain language 

of the agreement, the parties agreed to litigate their disputes in a Georgia District Court. The 

backside, Georgia-specific forum-selection clause consequently controls.

2. Venue Is Improper and the Court Transfers the Case

The court next considers whether venue is “improper” in this district, and if so, whether the 

case should be dismissed or transferred.

2.1 Venue Is Improper Under 28 U.S.C. § 1391

Section 1406(a) and Rule 12(b)(3) require a district court to dismiss or transfer a case if venue 

is “wrong” or “improper” in that district. See 28 U.S.C. § 1406(a); Fed. R. Civ. P. 12(b)(3); 

 

19 Opposition at 6.

20 Wong Decl. Ex. A at 4.

21 Id. at 5, 7 (paragraph 22 of the backside terms and conditions).

22 Opposition at 4–5, 6.

23 Wong Decl. Ex. A. at 4.

Case 3:16-cv-04055-LB Document 32 Filed 12/22/16 Page 5 of 8
ORDER — No. 16-cv-04055-LB 6

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Atlantic Marine Const. Co., Inc. v. United States Dist. Ct. for the W. Dist. of Tex., 134 S. Ct. 568, 

577 (2014). “This question — whether venue is ‘wrong’ or ‘improper’ — is generally governed by 

28 U.S.C. § 1391.” Atlantic Marine, 134 S. Ct. at 577. Under that section, venue is proper in: 

(1) a judicial district in which any defendant resides, if all defendants are residents 

of the State in which the district is located;

(2) a judicial district in which a substantial part of the events or omissions giving 

rise to the claim occurred, or a substantial part of the property that is the subject of 

the action is situated; or 

(3) if there is no district in which an action may otherwise be brought as provided in 

this section, any judicial district in which any defendant is subject to the court’s 

personal jurisdiction with respect to such action. 

28 U.S.C. § 1391(b). If the case falls within one of these three categories, venue is proper. Atlantic

Marine, 134 S. Ct. at 577. “[I]f it does not, venue is improper, and the case must be dismissed or 

transferred under § 1406(a).” Id. A forum-selection clause “has no bearing on whether a case falls 

into one of the categories of cases listed in § 1391(b).” Id.

For venue purposes, a corporate defendant resides “in any judicial district in which such 

defendant is subject to the court’s personal jurisdiction with respect to the civil action.” 28 U.S.C. 

§ 1391(c)(2). In states with multiple judicial districts, such a corporation resides “in any district in 

that State within which its contacts would be sufficient to subject it to personal jurisdiction if that 

district were a separate State.” Id. § 1391(d). “[I]f there is no such district, the corporation shall be 

deemed to reside in the district within which it has the most significant contacts.” Id.

Here, the case does not fall within § 1391(b). First, Cargo Freight (the only defendant) is a 

Georgia corporation, and the plaintiffs offer no indication that Cargo Freight “resides” in this 

district for purposes of venue.24 See 28 U.S.C. § 1391(c)(2). Indeed, no party resides in 

California.25 Second, none of the events relating to the dispute occurred in this district — a fact the 

plaintiffs concede.26 Third, the plaintiffs do not allege in their complaint and do not argue in their

opposition that Cargo Freight is subject to personal jurisdiction in this district with respect to this 

 

24 Compl. ¶ 2. 

25 Id. ¶ 1–2.

26 Opposition at 2–3; Compl. ¶ 6.

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ORDER — No. 16-cv-04055-LB 7

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action. Venue is therefore improper in the Northern District of California and the case must be 

dismissed or transferred. See 28 U.S.C. § 1406(a). 

2.2 The Court Transfers the Case Instead of Dismissing It

Where venue is improper, the district court must “dismiss, or if it be in the interest of justice, 

transfer such case to any district or division in which it could have been brought.” 28 U.S.C. 

§ 1406(a). The decision of whether to dismiss or transfer the case is within the district court’s 

discretion, but typically, “if there is another district or division in which the action could have 

been brought, transfer is preferred to the harsh remedy of dismissal.” Schwarzer, Tashima & 

Wagstaffe, Rutter Group Prac. Guide: Federal Civ. Pro. Before Trial § 4:577 (The Rutter Group 

2016). In exercising its discretion, the court should consider the facilitation of an “expeditious and 

orderly adjudication of [the] case[] and controvers[y] on [its] merits.” Carter v. Reese, No. C 12-

5537 MMC, 2013 WL 1149812, at *2 (N.D. Cal. Mar. 19, 2013) (quoting Goldlawr, Inc. v. 

Heiman, 369 U.S. 463, 466–67 (1962)) (alterations in original).

Here, the plaintiffs could have filed the case in a federal Georgia District Court because venue 

is proper in at least one of Georgia’s three districts and the parties agreed to litigate there. Cargo 

Freight is a Georgia citizen and thus subject to personal jurisdiction in that state.27 Georgia has 

multiple districts, though, and the parties did not brief the issue of in which district venue would 

have been proper under 28 § 1391(d). The forum-selection clause is also silent as to which of 

Georgia’s three districts the parties intended. At the hearing, Cargo Freight’s counsel asked for 

transfer to the Northern District of Georgia. Under § 1391, venue is “proper” there. It also 

comports with the parties’ forum-selection clause.

Cargo Freight argues that dismissal, not transfer, is appropriate here.

28 It asserts that “courts 

have consistently dismissed, rather than transferred, maritime cargo claims brought by 

sophisticated, represented plaintiffs in improper fora.”29 But, in the cases it cites, the forum-

 

27 See Compl. ¶ 2; Motion at 8 (“[Cargo Freight] is a citizen of Georgia.”).

28 Reply — ECF No. 27 at 6–7.

29 Id. at 6.

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ORDER — No. 16-cv-04055-LB 8

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selection clauses point to foreign forums and federal courts cannot transfer a case to a foreign 

tribunal. See M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 3 (1972) (forum selection clause 

obligated the parties to litigate disputes in the English courts); Vimar Seguros y Reaseguros, S.A. 

v. M/V Sky Reefer, 515 U.S. 528, 531 (1995) (bill of lading required disputes to be arbitrated in 

Tokyo by the Tokyo Maritime Arbitration Commission); American Home Assurance Co. v. TGL 

Container Lines, Ltd., 347 F. Supp. 2d 749, 757, 762–64 (N.D. Cal. 2004). The case here does not 

present the same obstacle. The court thinks that judicial economy would best be served by 

transferring the case rather than dismissing it.

CONCLUSION

The court grants in part Cargo Freight’s motion and transfers the case to the Northern District 

of Georgia. 

IT IS SO ORDERED.

Dated: December 22, 2016

______________________________________

LAUREL BEELER

United States Magistrate Judge

Case 3:16-cv-04055-LB Document 32 Filed 12/22/16 Page 8 of 8