Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_16-cv-02458/USCOURTS-cand-4_16-cv-02458-23/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Petition for Removal

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

IN RE GENERAL CAPACITOR

Case No. 16-cv-02458-HSG 

ORDER GRANTING DEFENDANTS’

CHOICE OF LAW MOTION, DENYING 

PLAINTIFFS’ CHOICE OF LAW 

MOTION, AND DENYING WITHOUT 

PREJUDICE THE PARTIES’ MOTIONS

FOR SANCTIONS BASED ON 

SPOLIATION

Re: Dkt. Nos. 241, 240, 220, 206 

Currently pending before the Court are the parties’ motions regarding whether California 

or Florida law governs claims asserted by Enertrode Inc. (“ETI”) and Linda Zhong (collectively, 

“Plaintiffs”), and General Capacitor Co. Limited (“GC LTD”), General Capacitor International 

Inc. (“GC ITL”), General Capacitor LLC (“GC LLC)

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, Jianping Zheng, and Wanjun Cao

(collectively, “Defendants”). Dkt. Nos. 240 (“Pl. Br.”), 241 (“Def. Br.”). Each side also filed an 

opposition and a reply. Dkt. Nos. 243 (“Pl. Opp.”), 244 (“Def. Opp.”), 245 (“Def. Reply”), 246 

(“Pl. Reply”). On September 12, 2018, the Court heard argument on the motions. Later that day, 

the parties clarified that the choice of law dispute concerns only two claims: (1) GC Defendants’ 

claim against Zhong for breach of employment contract; and (2) Zhong’s claim against GC 

Defendants’ for failure to pay wages. See Pl. Br. at 1-2; Dkt. No. 249 (stipulating that Florida law 

applies to GC Defendants’ breach of fiduciary duty claims against Zhong). After carefully 

considering the parties’ arguments, the Court GRANTS Defendants’ choice of law motion, and 

DENIES Plaintiffs’ motion. 

 

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For purposes of this order, Defendants GC LTD, GC ITL and GC LLC are collectively referred 

to as “GC Defendants.” 

Case 4:16-cv-02458-HSG Document 250 Filed 09/14/18 Page 1 of 4
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I. DISCUSSION

Plaintiffs argue that the Court should use California choice of law principles and apply 

California substantive law to evaluate the parties’ employment claims. Defendants take the 

opposite position, contending that the Court should adopt Florida choice of law principles, and

should consequently apply Florida substantive law. There is no dispute that a Florida district court

transferred Defendants’ later-filed lawsuit to this Court, citing both the “first-to-file” rule and 28 

U.S.C. § 1404(a). See General Capacitor Int’l Inc. et al. v. Zhong, Case No. 4:16-cv-265-

MW/CAS, Dkt. No. 29, at *9 (“Transfer is thus appropriate under either the first-filed rule or 

under 28 U.S.C. § 1404(a).”).2 This Court subsequently consolidated Defendants’ later-filed 

lawsuit with Plaintiffs’ claims (which were initially filed in this district) for purposes of efficiency 

and judicial economy. See Dkt. No. 52. 

“When a change of venue occurs pursuant to 28 U.S.C. § 1404(a), ‘(t)he transferee district 

court must be obligated to apply the state law that would have been applied if there had been no 

change of venue.’” S. A. Empresa De Viacao Aerea Rio Grandense v. Boeing Co., 641 F.2d 746, 

749 (9th Cir. 1981) (quoting Van Dusen v. Barrack, 376 U.S. 612, 639 (1964)). The Court 

accordingly applies Florida choice of law principles to determine which state’s substantive law 

governs. See id.; Fireman’s Fund Ins. v. Gerling Am. Ins., No. C 07-06302 CRB, 2008 WL 

918502, at *1 (N.D. Cal. Apr. 3, 2008) (applying Florida choice of law principles and substantive 

contract law based on a Section 1404(a) transfer from a Florida district court); accord Z-Rock 

Commc’ns Corp. v. William A. Exline, Inc., No. C 03-02436 WHA, 2004 WL 1771569, at *6 

(N.D. Cal. Aug. 6, 2004) (Z-Rock) (“By applying the law of the transferee court, Van 

Dusen prevented the defendant from forum shopping.”). Plaintiffs, moreover, fail to present on 

point affirmative authority supporting their claim that California choice of law principles apply

even after a Section 1404(a) transfer. See Pl. Br. at 3 n.1 (citing Klaxon Co. v. Stentor Elec. Mfg. 

 

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Plaintiffs request judicial notice of both the docket and transfer order in the Florida action. See 

Dkt. Nos. 243-1, 247-1. The Court GRANTS Plaintiffs’ request to the extent that Plaintiffs ask 

that the Court take notice of the existence of these publicly filed court documents. See Khoja v. 

Orexigen Therapeutics, Inc., No. 16-56069, 2018 WL 3826298, at *7 (9th Cir. Aug. 13, 2018) 

(detailing this circuit’s standard for judicial notice). 

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Co., 313 U.S. 487, 496 (1941)). The application of Florida choice of law principles is therefore 

proper. 

“Florida has traditionally applied the lex loci contractus rule for choice of law 

determinations regarding issues of contract law.” Trumpet Vine Investments, N.V. v. Union 

Capital Partners I, Inc., 92 F.3d 1110, 1119 (11th Cir. 1996); State Farm Mut. Auto Ins. Co. v. 

Roach, 945 So. 2d 1160, 1163-64 (Fla. 2006); Fioretti v. Massachusetts Gen. Life Ins. Co., 53 

F.3d 1228, 1235 (11th Cir. 1995) (“When resolving conflict-of-laws issues in contract actions, the 

Florida Supreme Court has unambiguously indicated its intent to . . . adhere to the traditional rule 

of lex loci contractus.”); Z-Rock, 2004 WL 1771569, at *15 ( “With respect to contract claims, 

Florida applies the lex loci contractus rule to determine choice of law.”). In applying the 

lex loci contractus rule to employment contracts, courts look to the place that the contract was 

made and performed to determine which state’s law governs. See Trumpet Vine Investments, N.V., 

92 F.3d at 1119 (“Under the lex loci contractus method issues concerning the validity and 

substantive obligations of contracts are governed by the law of the place where the contract is 

made. . . . A contract is made where the last act necessary to complete the contract is 

performed.”); Moreira v. Franca, No. 15-21439-CIV, 2016 WL 4808955, at *3 n.1 (S.D. Fla. Feb. 

3, 2016) (analyzing an employment contract under Florida law and the lex loci contractus 

doctrine); Hendricks v. Smartvideo Techs., Inc., 511 F. Supp. 2d 1219, 1226 (M.D. Fla. 2007)

(examining claims for a breach of an oral employment contract using the lex loci contractus 

doctrine). 

Applying the lex loci contractus doctrine to this case, Florida law governs the parties’

claims concerning the substance and validity of Zhong’s employment contract with General 

Capacitor (“GC”). The evidence shows that: (1) General Capacitor is located in Florida and does 

not have any facilities or operations in the State of California; (2) Zhong executed her employment 

contract with GC-entities in Florida; (3) Zhong performed the majority of her work under that 

contract in Florida; (3). See Dkt. No. 241-1 (“Zheng Decl.”) ¶¶ 13-14, 21, Dep. Ex. 11 (stating 

that Zhong would spend three weeks in Florida, and two weeks in California). Though Plaintiffs 

contend that Zhong in fact spent more time in California, Pls. Opp. at 8-10, Plaintiffs do not 

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dispute that her work for GC occurred primarily in Florida. See Def. Reply at 5.

The Court likewise concludes that, under the circumstances, California wage and hour 

statutes do not apply to claims brought by Zhong pursuant to her GC contract. See Cotter v. Lyft, 

Inc., 60 F. Supp. 3d 1059, 1061 (N.D. Cal. 2014) (declining to apply California wage and hour 

laws where employees worked in other states); Aguilar v. Zep Inc., No. 13-CV-00563-WHO, 2014 

WL 4245988, at *11 (N.D. Cal. Aug. 27, 2014) (“The extraterritorial application of California law 

is improper where non-residents of California raise claims based on conduct that allegedly 

occurred outside of the state.”). Zhong’s work for GC, as discussed, occurred primarily in Florida, 

and any claim for unpaid wages is therefore appropriately governed by that state’s laws. 

II. CONCLUSION

For these reasons, the Court GRANTS Defendants’ choice of law motion, and DENIES 

Plaintiffs’ choice of law motion. The Court SETS a further pretrial conference for October 30, 

2018 at 3:00 p.m. Finally, for the reasons discussed at the September 12, 2018 pretrial conference, 

the Court DENIES WITHOUT PREJUDICE as premature the parties’ motions for sanctions 

based on spoliation. Dkt. Nos. 206, 220. The spoliation issue will be decided at trial based on the 

evidence presented. 

IT IS SO ORDERED.

Dated:

______________________________________

HAYWOOD S. GILLIAM, JR.

United States District Judge

9/14/2018

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