Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-02083/USCOURTS-azd-2_08-cv-02083-0/pdf.json

Nature of Suit Code: 196
Nature of Suit: Franchise
Cause of Action: 28:1332 Diversity-Breach of Contract

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Noodles Development, LP, a Texas

limited partnership, 

Plaintiff, 

vs.

DaNoonas, LLC, an Indiana limited

liability company; and William McKay,

an individual, 

Defendants. 

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No. CV-08-2083-PHX-DGC

ORDER

Noodles Development, LP (“Noodles”) is a Texas limited partnership with its

principal place of business in Scottsdale, Arizona. Noodles is a franchisor of “Nothing But

Noodles” restaurants. DaNoonas, LLC is an Indiana limited liability company formed by

William McKay, a resident of Indiana. On June 25, 2003, Noodles and DaNoonas entered

into a Master Development Agreement and a Franchise Agreement. Pursuant to those

contracts, DaNoonas opened two Nothing But Noodles restaurants in Indiana: the 96th Street

restaurant and the Indiana Avenue restaurant.

Noodles filed a complaint against DaNoonas and McKay on November 12, 2008.

Dkt. #1. Noodles alleges that Defendants sold the Indiana Avenue Restaurant to Noodles’

largest market competitor in direct contravention of the parties’ agreements. Id. ¶ 22. The

complaint asserts four claims: breach of contract, promissory estoppel, individual liability,

and intentional interference with contract. Id. ¶¶ 23-53.

Case 2:08-cv-02083-DGC Document 20 Filed 04/22/09 Page 1 of 4
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Defendants’ request for oral argument is denied because the parties have fully briefed

the issues and oral argument will not aid the Court’s decision. See Lake at Las Vegas

Investors Group, Inc. v. Pac. Dev. Malibu Corp., 933 F.2d 724, 729 (9th Cir. 1991).

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Defendants have filed a motion to dismiss. Dkt. #14. The motion has been fully

briefed. Dkt. ##15, 18. For reasons that follow, the Court will grant the motion.1

I. Forum Selection Clause.

Defendants argue that this Court is an improper venue based on the forum selection

clause in the Franchise Agreement providing that Indiana is the exclusive forum for any

dispute between the parties: “The federal and state courts located in the City of Indianapolis,

State of Indiana shall have sole and exclusive venue and jurisdiction for all matters of every

kind and nature concerning the parties hereto, this and all other agreements between the

parties and all other matters.” Dkt. #14-2 at 3. Defendants seek dismissal for improper

venue pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure. Dkt. #14 at 1;

see Kukje Hwajae Ins. Ltd. v. M/V Hyundai Liberty, 408 F.3d 1250, 1254 (9th Cir. 2005)

(“A motion to enforce a forum-selection clause is treated as a motion pursuant to [Rule]

12(b)(3).”) (citing Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (1996)).

“A forum selection clause is presumptively valid; the party seeking to avoid a forum

selection clause bears a ‘heavy burden’ to establish a ground upon which [the court] will

conclude the clause is unenforceable.” Doe 1 v. AOL LLC, 552 F.3d 1077, 1083 (9th Cir.

2009) (quoting M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 17 (1972)). In Bremen, the

Supreme Court identified three circumstances where enforcement of a forum selection clause

would be unreasonable: the clause was the product of fraud or overreaching, enforcement

would deprive a party of his day in court, or enforcement would contravene a strong policy

of the forum where the suit was brought. 407 U.S. at 12-18; see Argueta, 87 F.3d at 324-25;

Murphy v. Schneider Nat’l, Inc., 362 F.3d 1133, 1140 (9th Cir. 2004).

Noodles does not attempt to establish any of these circumstances. Instead, Noodles

contends that its claims arise solely from Defendants’ sale of the Indiana Avenue restaurant

and the franchise agreement relating to that restaurant provides that venue is appropriate in

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Arizona. Dkt. #15 at 2. Defendants correctly note that the franchise agreement relied on by

Noodles was never executed. Dkt. #18 at 2; see Dkt. #1-3 at 4-60. Noodles asserts that the

agreement is nonetheless enforceable because the parties performed in accordance with the

terms of agreement (Dkt. #15 at 2-3), but cites no evidence or legal authority in support of

this assertion.

The Franchise Agreement entered into by the parties provides that Indiana courts shall

be the “sole and exclusive venue” for all disputes between the parties. Dkt. #1-2 at 53. That

provision is presumed valid. See Doe 1, 552 F.3d at 1083. Noodles has not carried its heavy

burden of showing that enforcement of the provision would be unreasonable. 

II. General Venue Statute.

Because the question of which franchise agreement applies in this case could be

viewed as a question of fact that cannot be resolved at this preliminary stage of the litigation,

the Court will address Defendants’ alternative argument. Defendants contend that Noodles

has not shown proper venue under 28 U.S.C. § 1391(a). Dkt. #14 at 1-2, 6-7. That statute

provides that a civil action may be brought only in “a judicial district where any defendant

resides, if all defendants reside in the same State, [or] a judicial district in which a substantial

part of the events or omissions giving rise to the claim occurred[.]” 28 U.S.C. § 1391(a)(1)-

(2). A review of the complaint makes clear that the District of Arizona is not the proper

venue for this action. Defendants reside in Indiana (see Dkt. #1 ¶¶ 4-5), and the alleged

breach of the Franchise Agreement and related tortious conduct occurred in Indiana (id. ¶¶

7-11). This action therefore should have been filed in Indiana. See Costlow v. Weeks, 790

F.2d 1486, 1488 (9th Cir. 1986) (complaint should have been filed in Alaska rather than

Washington because all defendants resided in Alaska and “virtually all of the activity

providing the basis of the complaint took place in Alaska”).

Noodles asserts that venue is proper in Arizona because Defendants paid franchise

royalties to Noodles in Arizona and negotiated the purchase of two Nothing But Noodles

franchises. Dkt. #15 at 2. Noodles, however, has presented no evidence showing that

Defendants conducted negotiations in Arizona.

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Given this ruling, the Court need not address the argument that the Court lacks

personal jurisdiction over Defendants.

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Noodles further asserts that venue is proper because McKay was a member of the

Nothing But Noodles Franchise Advisory Board and appeared at Board meetings in Arizona.

Id. But even if this were true, those trips do not amount to a substantial part of the events

giving rise to Noodles’ claims.

Noodles has identified some connections to Arizona, but the Court finds them to be

only marginally related to the claims in this case. “Events or omissions that might only have

some tangential connection with, or no real relationship to, the claims in litigation are not

sufficiently ‘substantial’ to support venue.” Kelly v. Qualitest Pharm., Inc., No.

CIV-F-06-116 AWI LJO, 2006 WL 2536627, at *8 (E.D. Cal. Aug. 31, 2006) (citation

omitted).

III. Conclusion.

Noodles “bears the burden of showing that venue is proper in [this] district.” Kelly,

2006 WL 2536627, at *7; see Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491,

496 (9th Cir. 1979). Noodles has not shown that the forum selection clause designating

Indiana as the exclusive venue is unenforceable, nor has Noodles shown that venue is proper

in this district under 28 U.S.C. § 1391(a). The Court will dismiss this action for improper

venue. See Fed. R. Civ. P. 12(b)(3).2

IT IS ORDERED:

1. Defendants’ motion to dismiss (Dkt. #14) is granted.

2. The Clerk is directed to terminate this action.

DATED this 22nd day of April, 2009.

 

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