Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_06-cv-00945/USCOURTS-casd-3_06-cv-00945-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:2201 Constitutionality of State Statute(s)

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1 06cv0945 J (JMA)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

NUREAU INK, LLC, a California Limited

Liability Company, and ANTHONY C.

WILLIAMS, II, an individual,

Plaintiffs,

v.

ZOMBA RECORDING, LLC, a Delaware

Limited Liability Company, formerly known

as ZOMBA RECORDING CORPORATION,

Defendant. 

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Civil No. 06cv0945 J (JMA)

ORDER GRANTING DEFENDANT’S

MOTION TO DISMISS

Before the Court is Defendant Zomba Recording, LLC’s (“Defendant”) Motion to

Dismiss or Stay Action. [Doc. No. 18.] Plaintiffs Nureau Ink, LLC and Anthony C. Williams II

(“Plaintiffs”) have filed an Opposition, and Defendant has filed a Reply. [Doc. Nos. 27, 32.] 

Additionally, Plaintiffs and Defendant have both filed Motions for Leave to File Supplemental

Declarations. [Doc. Nos. 51, 54.] For the reasons discussed below, this Court GRANTS

Defendant’s Motion to Dismiss for improper venue. 

Case 3:06-cv-00945-J-JMA Document 58 Filed 11/29/06 Page 1 of 15
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1

Plaintiffs characterize the Zomba contract as an “amendment” to the Tommy Boy Music

contract. Plaintiffs contend that the provisions of the amendment, including the forum selection

clause, apply only to the Tommy Boy Music contract and not to the Rescue Records contract. 

(See Pls.’ Opp’n at 2.) 

2 06cv0945 J (JMA)

Background

San Diego-based Plaintiff Williams is an accomplished professional singer who owns

Mo’Soule Steppyn Records, Inc (“MSSR”). (See Def.’s Mem. of P. and A. at 2.) Plaintiff

Williams and MSSR entered into a recording contract with Rescue Records of Chula Vista in

1997. (See Pls.’ Decl. of Anthony C. Williams at 1.) Rescue Records released Plaintiff

Williams’ debut album, Pronounced-Toenay (“the Album”). Due to the success of the Album,

Plaintiff Williams and MSSR entered into a separate contract with Tommy Boy Music to aid in

the distribution and promotion of Plaintiff Williams’ music. (See Pls.’ Opp’n at 2.) Zomba

Recording Corporation, the predecessor to Defendant, eventually acquired the Rescue Records

and Tommy Boy Music contracts. (See Pls.’ Opp’n at 2; Def.’s Mem. of P. and A. at 4.) Zomba

Recording and Defendant are based in New York, have their principal places of business in New

York, and maintain all books and business activities in New York. (See Def.’s Decl. of Daniel

B. Zucker at 1.) 

In 2000, Zomba Recording, Plaintiff Williams, and MSSR entered into a new recording

contract (“Zomba contract”).1

 (See id.) The Zomba contract contains the following forum

selection clause: 

Any action or proceeding arising under this Agreement shall be brought

exclusively in the state or Federal courts located within the State of New York,

County of New York, and the parties hereto irrevocably consent to the in

personam jurisdiction and venue of such courts for any and all such actions or

proceedings, and waive any right to seek to transfer or dismiss any said action

or proceeding on the grounds of lack of personal jurisdiction, improper venue,

or inconvenient forum. 

(Def.’s Ex. 1 at 12-13.) In 2004, Defendant indisputably succeeded to Zomba Recording’s

interest to the parties’ contract. (See Def.’s Mem. of P. and A. at 5; Def.’s Decl. of Daniel B.

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Zucker at 1.) At around the same time, Plaintiff Williams formed the recording company

Nureau Ink, LLC. (See Pls.’ Opp’n at 3.) Nureau Ink is not related to MSSR, has not succeeded

in interest to the Zomba contract with Defendant, and has not participated in that agreement. 

(See id.) 

In February of 2006, in accordance with the forum selection clause, Defendant filed an

action in the Supreme Court of the State of New York against Plaintiff Williams and MSSR,

seeking declaratory relief and damages (“the New York action”). (See Def.’s Mem. of P. and A.

at 6.) Defendant did not begin to serve the summons and complaint until April 27, 2006. (See

id.) 

On April 24, 2006, Plaintiff Williams and Nureau Ink, but not MSSR, filed the instant

action in this Court. (See id. at 7); [Doc. No. 1.] In the Complaint, Plaintiffs request a judicial

determination that the contract between Plaintiffs and Defendant is unenforceable and allege that

Defendant has engaged in unfair business practices. (Pl’s Compl. at 11-12.) In addition,

Plaintiff Williams alone, without Nureau Ink, alleges false advertising, breach of contract, and

constructive trust and accounting. (Id. at 12-16.) After filing the Complaint in this Court,

Plaintiffs also commenced an administrative claim with the California Labor & Workforce

Development Agency. (See Pls.’ Opp’n. at 4.)

In response to Plaintiffs’ actions, Defendant filed this Motion to Dismiss or Stay Action

in this Court. [Doc. No. 18]. Plaintiffs have filed an Opposition, and Defendant has followed

with a Reply. [Doc. No. 27, 32.] On October 26, 2006, Defendant moved ex parte for leave to

file the Supplemental Declaration of Jonathan D. Davis indicating that on October 23, 2006, the

Supreme Court of the State of New York denied Plaintiff Williams and MSSR’s motion to

dismiss Defendant’s case in New York. (See Suppl. Decl. of Jonathan D. Davis); [Doc. No. 51.] 

In addition, the New York court issued an Order to Show Cause and Temporary Restraining

Order, enjoining Plaintiff Williams and MSSR from advancing their case in California, and set a

hearing for arguments as to why a preliminary injunction should not be granted. (See Suppl.

Decl. of Jonathan D. Davis at 7.) Accordingly, Defendant’s ex parte request for leave to

supplement the record with this Supplemental Declaration IS GRANTED. 

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On November 15, 2006, Plaintiffs filed a Motion for Leave to File a Supplemental

Request for Judicial Notice. [Doc. No. 54.] The Court GRANTS Plaintiff’s Motion and

TAKES judicial notice that the New York court found that with respect to the injunction

“[s]ince Nureau, In[k], LLC. is not a party before [the court], [the injunction] obviously does not

cover Nureau, In[k], LLC.” (See Pls.’ Suppl. Req. Judicial Notice at 10.) 

Legal Standard

The Court of Appeals for the Ninth Circuit has held that a Federal Rule of Civil

Procedure Rule 12(b)(3) motion to dismiss for improper venue is the proper procedural vehicle

for motions to dismiss premised upon the enforcement of a forum selection clause. See Argueta

v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996). Under Rule 12(b)(3), a court need

not accept the pleadings as true, and may consider facts outside the pleadings to determine if the

forum selection clause should be enforced. See id. This interpretation of Rule 12(b)(3) is

consistent with the Supreme Court’s standard for resolving forum selection clause cases. See id.;

see generally Carnival Cruise Lines v. Shute, 499 U.S. 585 (1991). 

In ruling on a Rule 12(b)(3) motion, the court must draw all reasonable inferences and

resolve all factual conflicts in favor of the party seeking to avoid enforcement of the clause. See

Murphy v. Schneider Nat’l, Inc., 362 F.3d 1133, 1139 (9th Cir. 2004). These motions are

typically made early in litigation when the record is undeveloped, and granting a Rule 12(b)(3)

motion would prematurely terminate the case in the selected forum. See id. If the facts asserted

by the non-moving party are sufficient to preclude enforcement of the forum selection clause,

that party is entitled to remain in its chosen forum for suit unless and until the district court has

resolved all material factual issues that are in genuine dispute. See id. 

Discussion

Defendant requests that the Court dismiss the action and enforce the forum selection

clause. (See Def.’s Mem. of P. and A. at 17.) In the alternative, Defendant requests the Court to

stay this action or abstain pending the results from the New York action. (See id.) 

Plaintiffs argue that this case must proceed in California because the forum selection

clause does not apply to some of Plaintiffs’ claims, and does not govern all parties necessary to

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the action. (See Pls.’ Opp’n at 5-12.) Plaintiffs also contend that the clause itself contravenes

California public policy, and that enforcement of the clause would deprive Plaintiffs of certain

remedies available only in California. (See id. at 13, 17.) Even if the clause is enforceable,

Plaintiffs contend that the case must be litigated in California because Nureau Ink is a necessary

and indispensable party to the litigation, and is not subject to personal jurisdiction in New York. 

(See id. at 11-12.) 

I. The Forum Selection Clause 

Plaintiffs assert that the Zomba contract: (1) does not govern Plaintiffs’ claims relating to

the Album, and (2) does not govern Nureau Ink, a party allegedly necessary to this action. (See

Pls.’ Opp’n at 5, 6, 11.) For the reasons set forth below, the Court FINDS that the forum

selection clause governs all of Plaintiffs Williams and Nureau Ink’s claims. 

A. The Clause Governs All of Plaintiffs’ Claims 

Plaintiffs define the Zomba contract as a term used to refer to a collection of contracts and

the amendments to each contract. (See Pls.’ Opp’n at 5.) According to Plaintiffs, the Zomba

contract refers to at least two contracts: the Rescue Records Agreement and the Tommy Boy

Recording Agreement. (See id.) Because the forum selection clause’s physical location follows

after the Tommy Boy Recording Agreement, Plaintiffs contend that the forum selection clause

amends the Tommy Boy Recording Agreement. (See id.) Additionally, because the provisions

governing the Album appear under the Rescue Records Agreement and specifically state that the

Album “shall not be subject to or governed by the terms of the Tommy Boy Recording

Agreement (even as amended herein),” Plaintiffs contend that the Tommy Boy Recording

Agreement and its amendments do not apply to the Album. (See id.) Instead, Plaintiffs argue

that the Rescue Records Agreement governs the Album, and that this agreement lacks a forum

selection clause. (See id.) Thus, the first issue is whether the Zomba contract incorporates all

the contracts within, or whether the forum selection clause is an amendment applicable only to

one of many contracts. 

On its face, the Zomba contract clearly intended to incorporate both the Rescue Records

and Tommy Boy Music contracts, and bind Defendant and Plaintiff Williams, accordingly. The

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Zomba contract differentiates between the prior contracts and provisions within by assigning

specific contracts individual names. (See Def.’s Ex. 1 at 2.) For example, the Zomba contract

refers to itself as the Agreement in the first line of the contract, and then continues to make

reference to the Agreement throughout the contract, as well as in the forum selection clause. 

(See generally id.) At no point does the contract refer to the forum selection clause as an

“amendment” to the Tommy Boy Recording Agreement. (See generally id.) Further, because

the Zomba contract refers to itself as the Agreement in the first line and again at the end of the

contract, the natural reading of this language would be that this Agreement encompasses the

Rescue Records Agreement. This includes the warranties, release and discontinuances, and

forum selection clause sections. Thus, the plain language indicates that the forum selection

clause applies to the entire contract. 

The Zomba contract also explicitly assigns all rights to the recordings on the Album to

the Zomba Recording Corporation, to which Defendant is the undisputed successor in interest. 

(See Def.’s Ex. 1 at 2.) Finally, the Zomba contract provides that if “this Agreement differs from

or conflicts [with any other previous agreement] the same shall be deemed modified to conform

with . . . this Agreement.” (Id.) Even if inconsistencies exist within the contracts, the Zomba

contract, which includes the forum selection clause, ultimately controls. As a result, Plaintiffs’

claims relating to the Album are properly incorporated into the Zomba contract, and must follow

the Zomba contract’s forum selection clause. 

B. The Clause Governs Nureau Ink

All parties agree that Nureau Ink did not sign or participate in the Zomba contract. 

Plaintiffs contend that as a result, the forum selection clause does not bind Nureau Ink. (See

Pls.’ Opp’n at 6.) Defendant contends that (1) Nureau Ink is a “sham party” created by Plaintiffs

solely for the purpose of eluding the forum selection clause, and (2) even if Nureau Ink had

standing to sue, it is so closely related to the action at hand that it is “foreseeably bound.” (See

Def.’s Mem. of P. and A. at 16.) Plaintiffs counter that any disputed factual issues as to the

legitimacy of Nureau Ink’s operations and as to whether the contract was intended to bind nonparties to the contract, should be resolved in their favor. (See Pls.’ Opp’n at 8, 10); see Murphy,

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2

The relevant considerations include: “the commingling of funds and other assets; the

failure to segregate funds of the individual and the corporation; the unauthorized diversion of

corporate funds to other than corporate purposes; the treatment by an individual of corporate

assets as his own; the failure to seek authority to issue stock or issue stock under existing

authorization; the representation by an individual that he is personally liable for corporate debts;

the failure to maintain adequate corporate minutes or records; the intermingling of the individual

and corporate records; the ownership of all the stock by a single individual or family; the

domination or control of the corporation by the stockholders; the use of a single address for the

individual and the corporation; the inadequacy of the corporation’s capitalization; the use of the

corporation as a mere conduit for an individual’s business; the concealment of the ownership of

the corporation; the disregard of formalities and the failure to maintain arm’s-length transactions

with the corporation; and the attempts to segregate liabilities to the corporation.” Mid-Century

7 06cv0945 J (JMA)

362 F.3d at 1133, 1139. While Defendant has failed to show that Plaintiff Nureau Ink is a “sham

party,” the Court, nevertheless, FINDS that Plaintiff Nureau Ink is so closely related to the

underlying contractual relationship as to be bound by the forum selection clause. 

1. Defendant Has Failed to Show that Nureau Ink is a “Sham Party”

Defendant argues that Plaintiff Williams is attempting to avoid the forum selection clause

by adding as co-plaintiff a company that Plaintiff recently formed. (See Def.’s Mem. of P. and

A. at 15.) The Court construes Defendant’s contention as an alter ego argument. The alter ego

doctrine arises when a party claims that an opposing party is using the corporate form unjustly

and in derogation of the moving party’s interests. See Mid-Century Ins. Co. v. Gardner, 9 Cal.

App. 4th 1205, 1211 (1992). The Ninth Circuit applies the law of the forum state in determining

whether a corporation is an alter ego of an individual. See SEC v. Hickey, 322 F.3d 1123, 1128

(9th Cir. 2003). Under California law, an alter ego relationship exists if: (1) “there is such a

unity of interest and ownership that the individuality, or separateness, of the said person and

corporation has ceased, and (2) an adherence to the fiction of the separate existence of the

corporation would . . . sanction a fraud or promote injustice.” Id. (citations omitted). The

burden to overcome the presumption of the separate existence of the corporate entity rests with

the moving party. See Mid-Century Ins. Co., 9 Cal. App. 4th at 1211. 

Here, the Court need not examine the various factors as to whether an alter ego

relationship exists, because Defendant fails to bring forth relevant evidence in support of this

alter ego contention.2

 Defendant only contends that Nureau Ink was recently established, that

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Ins. Co., 9 Cal. App. 4th at n.3 (citing Associated Vendors, Inc. v. Oakland Meat Co., 210 Cal.

App. 2d 825, 838-40 (1962)). 

3

 Because Plaintiff and Defendants agree on the issue of Nureau’s ownership, the Court

TAKES JUDICIAL NOTICE of Nureau Ink’s ownership as per Defendant’s request. (See

Def.’s Decl. of Peter J. Anderson at 6; Pls.’ Decl. of Coates at 2.) 

8 06cv0945 J (JMA)

the registered agent is Plaintiffs’ counsel, and that Plaintiff Williams is the only principal.3 (See

Def.’s Decl. of Peter Anderson.) However, Plaintiffs assert that Nureau Ink has engaged in the

legitimate business of selling records for artists other than Plaintiffs, and Defendant does not

dispute this finding in his Reply. (See Pls.’ Decl. of Williams; Coates.) Absent any evidence of

impropriety, Plaintiffs are perfectly free to establish and own other companies that engage in

similar businesses. Lastly, under the Murphy standard, the Court must resolve disputed factual

issues such as whether Nureau Ink is a legitimate business in favor of the non-moving party,

Plaintiffs. See Murphy, 362 F.3d at 1133, 1139. Consequently, Defendant has not met its

burden to show that Nureau Ink is indeed a “sham party.” 

2. Nureau Ink is Closely Related to the Contractual Relationship

Defendant contends that Nureau Ink is so closely related to the contractual relationship

between Plaintiff Williams and Defendant that Nureau Ink is “foreseeably bound” by the forum

selection clause. (See Def.’s Reply at 4.) For the following reasons, the Court FINDS that

Nureau Ink is bound by the forum selection clause. 

The Ninth Circuit provides that “a range of transaction participants, parties and

non-parties, should benefit from and be subject to forum selection clauses.” Manetti-Farrow,

Inc. v. Gucci Am., Inc., 858 F.2d 509, 514 n.5 (9th Cir. 1988) (citing Clinton v. Janger, 583 F.

Supp. 284, 290 (N.D.Ill. 1984)); see also Graham Tech. Solutions, Inc. v. Thinking Pictures,

Inc., 858 F.2d 509, 514 (N.D.Cal. 1997). Whether a non-signatory to a contract may be bound

by the contract’s forum selection clause, depends on whether “the alleged conduct of the nonparties is so closely related to the contractual relationship that the forum selection clause applies

to all defendants.” Id. In Manetti-Farrow, the Ninth Circuit disagreed with the plaintiff’s

contention that only signatories of the contract were bound by the forum selection clause, and

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found that the non-plaintiffs were also bound by the clause as a result of their being closely

related to the contractual relationship. Id. 

 Defendant asks that this Court rely on the reasoning of the Court of Appeals for the

Seventh Circuit in Hugel v. Corporation of Lloyd’s, 999 F.2d 206 (7th Cir. 1993). In Hugel,

Plaintiff Hugel, a New Orleans, Louisiana resident, signed a contract with the Corporation of

Lloyd’s containing a forum selection clause designating English courts as the court of choice. 

Hugel, 999 F.2d at 207. His two co-plaintiffs did not sign the agreement. Id. However, Hugel

owned 99% of the stock of one co-plaintiff, which owned 100% of the stock of the second coplaintiff. Id. During an investigation into misconduct regarding Hugel’s co-plaintiff

corporations, Hugel provided Lloyd’s with information about the corporation under an assurance

of confidentiality. Id. Hugel and his corporations eventually sued Lloyd’s for breach of contract

and confidentiality. Id. The Seventh Circuit enforced the forum selection clause against the

non-signatory parties, finding a close relationship between Hugel and the non-signatory

plaintiffs, because Hugel alone involved his corporations, and supplied information to Lloyd’s

regarding these two corporations. See Hugel, 999 F.2d at 208, 210. 

In the present case, Plaintiff Nureau Ink falls under the Manetti-Farrow standard for

enforcement of a forum selection clause on non-parties to a contract, i.e., Plaintiff Nureau Ink is

so closely related to the contractual relationship as to be bound by the clause. Nureau Ink’s

claims of unfair business practices and for declaratory relief inextricably involve the contractual

relationship between Defendant and Plaintiff Williams. In the Complaint, Plaintiffs state that

“Nureau Ink wishes to work with Mr. Williams in recording his music[,]” and that “[b]ased on

Zomba’s statements and actions to date, Mr. Williams has a reasonable apprehension that Zomba

will sue him for breach of the alleged contract that Zomba maintains is still in effect; and Nureau

Ink has a reasonable apprehension that Zomba will sue it if it does any work with Mr. Williams

in recording his music.” (Compl. at 9.) Accordingly, Nureau Ink’s claims are directly related to

the interpretation of the contract between Defendant and Plaintiff Williams. See Graham Tech.

Solutions, Inc., 858 F.2d at 514. 

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4

 Plaintiffs also assert that the contract does not govern the general public on whose

behalf certain claims were brought. (See Pls.’ Opp’n at 11.) Plaintiffs argue that Plaintiffs’

claims for false advertising and unfair business practices, as well as the administrative claims

before the California Labor & Workforce Development Agency, are being pursued largely to

benefit the general public. (See id.) However, Plaintiffs have not shown how the general public

is a party to the instant action or even why any potential benefit that the general public could

derive should prohibit all Plaintiffs in the instant case from being subject to the forum selection

clause. 

10 06cv0945 J (JMA)

Additionally, Nureau Ink was formed and is wholly-owned by Plaintiff Williams. (Id. at

2.) Nureau Ink now “wishes to employ Mr. Williams as a recording artist and sell, distribute,

market, and promote his music throughout the world.” (Id.) Thus, Nureau Ink’s desired conduct

is intricately related to the contractual relationship between Mr. Williams and Defendant. Also,

Mr. Williams has been temporarily enjoined by the New York state court from prosecuting or

otherwise advancing the present action, and the validity of the underlying contractual

relationship is currently at issue in the New York case. Furthermore, Plaintiff Nureau Ink,

through its founder and owner, should have been fully aware of the forum selection clause and

anticipated being potentially subject to such clause. Nevertheless, Plaintiff Nureau Ink is so

closely related to the underlying issues as to be bound by the forum selection clause.4

II. The Forum Selection Clause is Enforceable

Plaintiffs contend that the forum selection clause is unreasonable and therefore

unenforceable because it strongly contravenes California public policy. (See Pls.’ Opp’n at 13.) 

Federal law governs the enforcement of forum selection clauses in diversity cases. See ManettiFarrow, 858 F.2d at 513. These clauses are presumptively valid and are honored absent some

compelling and countervailing reason otherwise. See M/S Bremen v. Zapata Off-Shore Co., 407

U.S. 1, 10 (1972); see also Argueta, 87 F.3d at 325. A forum selection clause may be

unreasonable if (1) its incorporation into the contract was the result of fraud, undue influence, or

overweening bargaining power; (2) the selected forum is so gravely difficult and inconvenient

that the complaining party will for all practical purposes be deprived of its day in court; or (3)

enforcement of the clause will contravene a strong public policy of the forum in which the suit is

brought. See Argueta, 87 F.3d at 325. Under this standard the party seeking to show that the

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clause is unreasonable “has a heavy burden of showing that trial in the chosen forum would be

so difficult and inconvenient that the party would effectively be denied a meaningful day in

court.” See id. (citations omitted). For the reasons set forth below, the Court FINDS the forum

selection clause is reasonable and thus enforceable. 

A. The Clause was Not the Product of Fraud

Plaintiffs do not contend that the forum selection clause was the result of fraud, undue

influence, or overweening bargaining power. As such, the Court need not address this factor. 

B. The Selected Forum is Not Gravely Inconvenient

Plaintiffs allude in their declarations to Plaintiff Williams’ poor financial state and the

costs of flying witnesses to New York. (See Pls.’ Decl. of Anthony C. Williams at 3.) However,

financial hardship alone is not enough avoid enforcement of the forum selection clause. See

Murphy, 362 F.3d at 1142 (holding that a combination of financial hardship and physical

inability to travel may effectively deprive an individual of his or her day in court). Plaintiffs

have not brought other evidence to satisfy their “heavy burden” of showing that the chosen

forum would deny them of their day in court. See Argueta, 87 F.3d at 325. In fact, the opposite

seems true because Plaintiff Williams is already litigating this case in New York. (See Suppl.

Decl. of Jonathan D. Davis.) As a result, the selected forum is not gravely inconvenient. 

C. The Clause Does Not Contravene California Public Policy 

1. Choice of Law

Before exploring this issue, the Court first addresses the parties’ disagreement over

whether the substantive effect of the choice of law clause may be considered in determining the

enforceability of the forum selection clause, or if the forum selection clause acts alone. 

(Compare Pls.’ Opp’n at 14-17 with Def.’s Reply at 8-9.)

Because little authority exists on this topic, the Court finds the reasoning in Swenson v. TMobile USA Inc., 415 F. Supp. 2d 1101 (S.D. Cal. 2006), instructive. In Swenson, the Southern

District of California explained that forum selection clauses and choice of law provisions are

separate entities requiring separate analyses. See Swenson, 415 F. Supp. 2d at 1104. Under

Swenson, the question is not whether the application of the forum selection clause would violate

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the policy of the other party’s state, but rather if enforcement would violate the policy of the

other party’s state as to the forum for litigation. Id. at1106. If a court had to consider the effects

of the choice of law provision in determining the enforceability of the forum selection clause,

courts would then be required to make a determination of the outcome on the merits in the

transferee forum, and then consider whether that outcome would conflict with the public policy

of the transferor forum, all at the outset of the action. Swenson, 415 F. Supp. 2d at 1105. The

Swenson court declined to evaluate the underlying merits of its case at hand in order to

determine whether the forum selection clause should be enforced. See id. at 6. 

In the instant case, Plaintiffs contend that the forum selection and choice of law clauses

operate in tandem, so that this Court must decide the validity of the choice of law clause prior to

deciding the enforceability of the forum selection clause. (See Pls.’ Opp’n at 14-16.) The Court

finds Defendant’s argument particularly persuasive here, that Plaintiffs are “cleverly, but

impermissibly, combining the forum selection and choice of law analyses.” (Def.’s Mem. of P.

and A. at 12, 13 (citing Swenson, 415 F. Supp. 2d at 1104).) Plaintiffs cite to Hall v. Sup. Ct. of

Orange Cty., 150 Cal. App. 3d 411, 416 (1983), where the California Court of Appeal held that a

“determination as to the validity of the choice of law provision is prerequisite to a determination

of whether the forum selection clause should be enforced.” Id. However, federal law governs

the analysis of the effect and scope of forum selection clauses. See Manetti-Farrow, 858 F.2d at

512-13. Furthermore, as in Swenson, this view would force courts to examine the merits of the

underlying case in order to determine if the forum selection clause should be enforced. See

Swenson, 415 F. Supp. 2d at 1105. This view unduly complicates the analysis in future cases,

and negates the purpose of the forum selection clause: to grant parties the certainty freely

bargained for in the contract.

In addition, this case is unlike Hall where both choice of law and forum selection

provisions were before the court; here, Plaintiffs do not contend that the choice of law provision

is inapplicable, but rather, are attempting to use the choice of law provision to negate the

enforceability of the forum selection clause. This Court will not speculate on the end result of

litigation if this case is allowed to proceed in New York, in order to determine if that end result

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would contravene California public policy. As a result, the Court will not address choice of law

arguments as they pertain to the enforceability of the forum selection clause here. 

2. Plaintiffs Fail to Show that Enforcement of the Clause Would

Contravene Strong California Public Policy

Plaintiffs bring a number of choice of law based arguments as to why this forum selection

clause would contravene California public policy. (See Pls.’ Opp’n at 14-16.) For the reasons

discussed above, the Court will not address these arguments. 

However, Plaintiffs also contend that California has a uniquely strong public policy in

protecting artistic labor. (See Pls.’ Opp’n at 13.) Plaintiffs request this Court to take judicial

notice of a specific finding, which states, “Artistic labor is an important resource to the people of

California,” as the public policy of the state of California. (See Pls.’ Request for Judicial Notice,

Ex. D.) This Court DECLINES to take judicial notice of what is alleged to be the public policy

of the state, as such a matter is not appropriate for judicial notice. 

Further, while Plaintiffs contend that they are pursuing California specific remedies

available to recording artists under the California Unfair Competition Act and Private Attorney

General Labor Act, Plaintiffs do not contend or provide evidence as to why New York, a state

itself vital to the entertainment industry, cannot provide equivalent protections or remedies

specific to recording artists. (See Pls.’ Opp’n at 17-18.) Thus, Plaintiffs have failed to carry

their burden to show that enforcement of the forum selection clause would be unreasonable and

contra California public policy. 

III. Nureau Ink is not a Necessary Party to the Action

The Court finds that Nureau Ink must be bound by the forum selection clause, and must

litigate in the selected forum of New York. However, Nureau Ink insists that it is a necessary

party to this action, not subject to personal jurisdiction in New York, and thus must litigate this

case in California. (Pl’s Opp’n at 12.) For the reasons set forth below, the Court FINDS that

Nureau Ink is not a necessary party. 

Even though Nureau Ink insists that it is a necessary party, Plaintiffs do not attempt to

argue that Nureau Ink is a necessary party pursuant to the Federal Rule of Civil Procedure Rule

19 factors, but argue via comparison of the instant case to Falconwood Fin. Corp. v. Griffin, 838

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 Under Federal Rule of Civil Procedure Rule 19, a party must be joined if (1) in the

person’s absence complete relief cannot be accorded among the parties; or (2) the person claims

an interest relating to the subject of the action and is so situated that the disposition of the action

in the person’s absence may (I) as a practical matter impair or impede the person’s ability to

protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of

incurring multiple or otherwise inconsistent obligations by reason of the claimed interest. See

Fed. R. Civ. P. 19.

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F. Supp. 836 (S.D.N.Y. 1993). In Falconwood, the parties agreed to litigate in New York as per

the forum selection clause, but the court transferred the case to Tennessee on a motion to transfer

for convenience, in part because another party could join. See Falconwood, 838 F. Supp. at 839. 

However, the court stopped short of finding that the party in Tennessee was indispensable as

required under a Rule 19 analysis, instead allowing transfer of the case in the “interest of

justice.” See id. at 842 n.5 (“Because I find . . . the alleged role of [third party] in this dispute

implicates the ‘interest of justice,’ I make no finding as to whether [the third party] . . . is an

indispensable party.”). Further, the court stated that this is “the very rare case, where in spite of

defendants’ agreement to the exclusive jurisdiction of this court, a motion to transfer in the

interest of justice will prevail.” Id. at 843. 

Plaintiffs in this case do not bring a 28 U.S.C. § 1404(a) motion for transfer for

convenience, nor do Plaintiffs attempt to argue any of the factors relevant to the disposition of

such a motion. Consequently, Plaintiffs have failed to show that the absence of Nureau Ink or

the general public in this litigation would implicate the “interest of justice.” As a result,

Falconwood is inapplicable. Furthermore, because Plaintiffs do not attempt to argue the Rule 19

factors, the Court will not speculate as to whether or how judgment in New York may impair or

impede Plaintiffs’ ability to protect their interests.5

 In addition, Defendant has not sued Nureau

Ink. If Nureau Ink wishes to pursue its claim, Nureau Ink can have its day in court, because

Nureau Ink is free to intervene or join in the action in New York. For the reasons set forth

below, this Court FINDS that Nureau Ink is not a necessary party. 

IV. The Court Dismisses the Instant Action

Having decided that proceeding in a California forum is improper, the Court FINDS that

dismissal is the proper course of action. As stated by the Supreme Court, “[o]rdinarily it would

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be uneconomical as well as vexatious for a federal court to proceed in a declaratory judgment

suit where another suit is pending in a state court presenting the same issues, not governed by

federal law, between the same parties.” Brillhart v. Excess Ins. Co., 316 U.S. 491, 495 (1942);

see also Swenson, 415 F. Supp. 2d at 1105. As held by the court in Swenson, this Court “would

be needlessly determining issues of state law, would be helping [Plaintiffs] avoid state court

proceedings, and would be furthering duplicative litigation if it heard the merits of this case.” 

Swenson, 415 F. Supp. 2d at 1106. In this case, the suit is pending in state court in New York,

Plaintiffs’ motion to dismiss the New York action has been denied, and Plaintiff Williams has

been temporarily enjoined from advancing the instant action. Therefore, there is no reason for

this Court to interfere with the presumption that the entire suit be heard in the chosen forum. 

Conclusion

For the reasons set forth above, this Court GRANTS Defendant’s Motion to Dismiss for

improper venue.

IT IS SO ORDERED.

DATED: November 29, 2006

HON. NAPOLEON A. JONES, JR.

United States District Judge

cc: Magistrate Judge Adler

 All Counsel of Record

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