Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-00791/USCOURTS-cand-3_07-cv-00791-3/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1681 Fair Credit Reporting Act

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ZACHARY HILE,

Plaintiff,

 v.

BUTH-NA-BODHAIGE, INC.,

Defendant. /

BUTH-NA-BODHAIGE, INC.,

Third-Party Plaintiff,

 v.

SAP CANADA, INC., an Ontario Canada

Corporation; TRIVERSITY CORPORATION,

a Pennsylvania corporation; and ROES 1

through 10, inclusive, 

Third-Party Defendants.

 /

No. C 07-00791 JSW

ORDER GRANTING MOTION TO

DISMISS THIRD-PARTY

COMPLAINT

INTRODUCTION

This matter comes before the Court upon consideration of the Motion to Dismiss ThirdParty Complaint filed by Third-Party Defendants SAP Canada, Inc. (“SAP”) and Triversity

Corporation (“Triversity”). Having carefully considered the parties’ papers, arguments, the

relevant legal authority, and having had the benefit of oral argument, the Court HEREBY

GRANTS Third-Party Defendants’ motion to dismiss. 

Case 3:07-cv-00791-JSW Document 39 Filed 12/14/07 Page 1 of 6
United States District Court

For the Northern District of California

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1 FACTA requires the truncation of credit card and debit card numbers that appear on

electronically-printed receipts provided by retailers to consumers in the United States. See 15

U.S.C. § 1681(c), (g).

2 Buth-Na is a wholly owned subsidiary of BSI, a global manufacturer and retailer of

beauty and cosmetic products. Triversity was a software vendor organized under the laws of

Ontario, Canada at the time the Software Agreement was executed. On October 17, 2005,

Triversity was purchased by SAP.

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BACKGROUND

On Feburary 7, 2007, Plaintiff Zachary Hile (“Hile”) filed a putative class action suit, in

which he alleges that Buth-Na-Bodhaige Inc. (“Buth-Na”) issued credit card receipts in this

judicial district in violation of the Fair and Accurate Credit Transaction Act (“FACTA”). See

15 U.S.C. § 1681(c)(g).1

 (Compl. ¶ 20.) Hile alleges that he and other putative class members

received non-truncated credit card receipts at the point-of-sale during transactions with ButhNa, in violation of FACTA. (Id. ¶ 23.) 

On August 3, 2007, Buth-Na filed a Third-Party Complaint against SAP and Triversity

for negligence, breach of contract, and breach of express warranty. Buth-Na’s claims are based

on a software license support and services agreement (the “Software Agreement”) executed on

December 31, 2004, between The Body Shop International plc (“BSI”) and Triversity.2

 (ThirdParty Compl. ¶¶ 24-35.) Buth-Na contends that SAP and Triversity are responsible for the

failure of the point-of-sale-software to properly truncate credit card or debit card account

numbers on the printed receipts. (Id. ¶ 20.)

The Software Agreement contains a provision entitled “Governing Law,” which

provides: 

The Customer hereby irrevocably submits itself solely to the law and courts of the

jurisdiction of the [sic] England and Wales. This agreement will not be governed

by the United Nations Convention on Contracts for the International Sale of Goods,

the application of which is expressly excluded. In the event of any court

proceedings, the prevailing party, with respect to a particular issue, shall be entitled

to recover its reasonable legal fees and expenses from the opposing party. 

(Id., Exh. A, ¶ 10.2.) SAP and Triversity move to dismiss the Third-Party Complaint on the

ground that this suit was filed in an improper venue. 

Case 3:07-cv-00791-JSW Document 39 Filed 12/14/07 Page 2 of 6
United States District Court

For the Northern District of California

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ANALYSIS

A. Applicable Legal Standards.

A motion to dismiss for “improper venue” based on the enforcement of a forum

selection clause is governed by Rule 12(b)(3). Argueta v. Banco Mexicano, S.A., 87 F.3d 320,

324 (9th Cir. 1996). Unlike a Rule 12(b)(6) motion, a motion under Rule 12(b)(3) does not

require that the pleadings be accepted as true, and the Court can consider facts outside the

pleadings. Id. at 324. However, the Court “must draw all reasonable inferences ... and resolve

all factual conflicts in favor of the non-moving party.” Murphy v. Schneider Nat’l. Inc., 362

F.3d 1133, 1138 (9th Cir. 2004). 

“Forum selection clauses are prima facie valid, and are enforceable absent a strong

showing by the party opposing the clause ‘that enforcement would be unreasonable or unjust, or

that the clause [is] invalid for such reasons as fraud or overreaching.’” Manetti-Farrow, Inc. v.

Gucci America, Inc., 858 F.2d 509, 514 (9th Cir. 1988) (emphasis and brackets in original)

(citing M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972)). “[B]ecause enforcement

of a forum clause necessarily entails interpretation of the clause before it can be enforced, ...

federal law applies to interpretation of forum selection clauses.” Id. at 513. 

B. Venue in England or Wales is Mandatory.

SAP and Triversity contend that the “Governing Law” clause is a mandatory forum

selection clause, which requires that all claims arising from the Software Agreement be brought

in the courts of England and Wales. (Br. at 5.) Buth-Na does not argue that enforcement of the

forum selection clause would be unreasonable or unjust. Nor does it argue that it is invalid due

to fraud or overreaching. Rather, Buth-Na argues that the forum selection clause is permissive

and means only that Buth-Na consented to be sued in England or Wales but not that all suits

would be brought there.

In the Ninth Circuit, “[t]he prevailing rule,” with regard to forum selection clauses is

“that where venue is specified with mandatory language the clause will be enforced.”

Docksider, Ltd. v. Sea Technology, Ltd., 875 F.2d 762, 764 (9th Cir. 1989). However, “[w]hen

only jurisdiction is specified the clause will generally not be enforced without some further

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United States District Court

For the Northern District of California

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3 The Hunt Wesson court contrasted this language with the forum selection

clause at issue in Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273 (9th

Cir. 1984). That clause provided “[A]ny and all disputes arising out of or in connection with

this Agreement shall be litigated only in the Superior Court for Los Angeles, California (and

in no other), and Exhibitor hereby consents to the jurisdiction of said court.” See Hunt

Wesson, 817 F.2d at 77 (quoting Pelleport, 741 F.2d at 275 (emphasis added in Hunt

Wesson)). The court noted that the clause in Pelleport used language that referenced the

exclusivity of the court as the appropriate forum, and thus used language that “mandates that

the designated courts are the only ones which have jurisdiction.” Conversely, the forum

selection clause at issue in Hunt Wesson “clearly falls short of designating an exclusive

forum.” Id. at 77. The Court notes that in Pelleport the Ninth Circuit was not called upon to

determine whether the clause was mandatory or permissive, and it is only in subsequent

opinions that the court has construed that clause to be mandatory. 

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language indicating the parties’ intent to make jurisdiction exclusive.” Id.; see also Northern

Cal. Dist. Council of Laborers v. Pittsburg-Des Moines Steel Co., 69 F.3d 1034, 1037 (9th Cir.

1995) (“To be mandatory, a clause must contain language that clearly designates a forum as the

exclusive one.”) (emphasis added). If, however, “the language says nothing about [the forum]

having exclusive jurisdiction” the clause is permissive and does not preclude suit elsewhere. 

See Hunt Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 75, 77 (9th Cir. 1987). 

In Hunt Wesson, the forum selection clause provided that “[t]he courts of California,

County of Orange, shall have jurisdiction over the parties in any action at law relating to the

subject matter or the interpretation of the contract.” Hunt Wesson, 817 F.2d at 76. The court

noted that “[a]lthough the word ‘shall’ is a mandatory term,” when read in conjunction with the

remainder of the clause, “it mandates nothing more than that the Orange County courts have

jurisdiction.” Id. at 77.3

 

Similarly, Council of Laborers, the Ninth Circuit concluded that a forum selection

clause that provided “[a] decision of the Board of Adjustment ... or the decision of a permanent

arbitrator shall be enforceable by a petition to confirm an arbitration award filed in the Superior

Court of the City and County of San Francisco, State of California” was permissive. Council of

Laborers, 69 F.3d at 1036. The court reasoned that “[t]he language ‘shall be enforceable’ is no

less permissive than the ‘shall have jurisdiction’ language in Hunt Wesson.” Id. at 1037. 

Again, the court concluded the forum selection clause, while using mandatory language did not

contain language that demonstrated the requisite exclusivity of the chosen forum and, thus, must

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be construed to be permissive. Id.

In contrast to the forum selection clauses at issue in Hunt Wesson and Council of

Laborers, the forum selection clause at issue in the Docksider case provided that “Licensee

hereby agrees and consents to the jurisdiction of the courts of the State of Virginia. Venue of

any action brought hereunder shall be deemed to be in Gloucester County, Virginia.” 

Docksider, 875 F.2d at 763. The court held that this forum selection clause was mandatory,

because the latter clause demonstrated the parties’ “intent to make jurisdiction exclusive.” Id. at

764. Similarly, in Koresko v. RealNetworks, Inc., 291 F. Supp. 2d 1157 (E.D. Cal., 2003) the

district court determined that a forum selection clause that provided that the plaintiff

“consent[s] to the exclusive jurisdiction of the state and federal courts sitting in the State of

Washington” was mandatory, because it clearly made reference to the exclusivity of the forum. 

Id. at 1162.

In this case, the forum selection clause provides that “[t]he Customer hereby irrevocably

submits itself solely to the law and courts of the jurisdiction of the [sic] England and Wales.” 

(Third-Party Compl., Exh. A, ¶ 10.2 (emphasis added).) The Court concludes that like the

forum selection clauses in Pelleport, Docksider, and Koresko, the forum selection clause is

mandatory. The Court’s conclusion is further reinforced when it compares this clause to the

forum selection clause at issue Hsu v. OZ Optics Ltd., 211 F.R.D. 615 (N.D. Cal., 2002), which

provided that “[e]ach of the parties submits itself to the non-exclusive jurisdiction of the Ontario

Courts.” Id. at 618. The Hsu court concluded that “[t]he plain language of this provision

cannot bear the interpretation offered by defendant. Instead, the clause must be interpreted as a

permissive forum selection clause.” Id. In this case, the parties stated that jurisdiction vests

solely in the courts of England and Wales. Thus, unlike the parties in Hsu, they used language

designating the exclusivity of the forum. See Pelleport, 741 F.2d at 275 (use of term “only”

established exclusivity); Manetti-Farrow, 858 F.2d at 511 (using term “sole” rendered forum

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For the Northern District of California

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4 At the hearing on this motion, Buth-Na argued that because the forum

selection clause did not contain such language as “any action” pertaining to the Software

Agreement or “all disputes arising from or out of” the Software Agreement, the clause could

not be considered mandatory. However, the clause does make reference to “any court

proceedings.” Further, in the Koresko case, a clause similar to the forum selection clause at

issue here was held to be mandatory notwithstanding the fact that it did not include such

language. Koresko, cite. Accordingly, the failure to include the “any and all disputes”

language does not alter the Court’s conclusion.

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selection clause mandatory and enforceable).4

CONCLUSION

For the foregoing reasons, SAP and Triversity’s motion to dismiss the Third-Party 

Complaint for improper venue, pursuant to Fed. R. Civ. P. 12(b)(3), is GRANTED. A separate

judgment shall issue as to these parties, and the Clerk is directed to terminate SAP and

Triversity from this action.

IT IS SO ORDERED.

Dated: December 14, 2007 

JEFFREY S. WHITE

UNITED STATES DISTRICT JUDGE

Case 3:07-cv-00791-JSW Document 39 Filed 12/14/07 Page 6 of 6