Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_19-cv-01341/USCOURTS-caed-2_19-cv-01341-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Contract Dispute

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

CLIPPERCREEK, INC., a California 

corporation,

Plaintiff,

v.

INTELLIGRATED SYSTEMS, LLC, a 

Delaware limited liability; 

HONEYWELL INTERNATIONAL, INC., a 

Delaware corporation, DEPOSCO, 

INC., a Georgia corporation, and 

DOES 1 through 50, inclusive,

Defendant.

No. 2:19-cv-01341 WBS KJN

ORDER RE: DEFENDANTS’ MOTIONS 

TO DISMISS AND MOTIONS TO 

TRANSFER VENUE

----oo0oo----

Plaintiff Clippercreek, Inc. (“Clippercreek”) brings 

this action against defendants Intelligrated Systems, LLC 

(“Intelligrated”), Honeywell International, Inc. (“Honeywell”), 

Deposco, Inc. (“Deposco”), and Does 1 through 50, alleging that 

defendants fraudulently induced plaintiff into a contract for 

specialized custom technology and subsequently failed to perform 

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their obligations under the agreement. Before the court are 

defendants’ motions to dismiss, or, in the alternative, to 

transfer venue. (Docket Nos. 29, 30).

I. Factual Allegations and Procedural Background

Clippercreek manufactures and sells electric vehicle 

charging stations. (Compl. ¶ 19.) Honeywell purchased 

Intelligrated in 2016. (Compl. ¶ 20.) In late 2017 to early 

2018, Honeywell partnered with Deposco to sell integrated 

warehouse management solutions, order management solutions, and 

material handing solutions to Clippercreek. (Compl. ¶ 23.) 

Defendants toured Clippercreek’s headquarters to study 

plaintiff’s manufacturing process. (Compl. ¶ 24.) Defendants 

then held a series of marketing and sales meetings where they 

represented that defendants could design an automated system that 

could be integrated into Clippercreek’s manufacturing, material 

management, and internet sales systems. (Compl. ¶ 25.) 

The parties subsequently entered into a contract 

consisting of three documents: (1) the Master Technology 

Agreement (“MTA”), (2) the Sales Agreement, and (3) the 

Intelligrated Proposal FQ-18-51002. (Compl. ¶¶ 28-30.) The MTA 

included a forum-selection clause. (Compl. Ex. 1, at 13, ¶ 

18.2.) The clause requires the parties to bring any action under 

the agreement in the Southern District of Ohio. (Id.) Pursuant 

to the contract, plaintiff paid defendants a deposit. (Compl. ¶ 

40.) 

Prior to and after signing the contract, defendants 

assured plaintiff that defendants’ product would integrate 

Clippercreek’s manufacturing requirements. (Compl. ¶¶ 33, 35, 

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38.) For example, after the contract was signed, defendants 

assured plaintiff that the system would have the ability to autogenerate serial labels. (Compl. ¶ 37.) When Deposco sent its 

engineers to Clippercreek’s headquarters to integrate the 

technology, however, the engineers told plaintiff that the system 

would not be able to perform some of the “essential requirements 

for manufacturing.” (Compl. ¶ 45.) Two days after Deposco sent 

its engineers to plaintiff’s headquarters, Clippercreek notified 

defendants of its immediate rescission of the contract. (Compl. 

¶ 52). Plaintiffs demanded a return of the deposit, but 

defendants refused to comply with the demand. (Compl. ¶¶ 52, 

56.) 

Plaintiff then filed this action alleging the following 

six claims under California state law: (1) rescission by mutual 

and/or unilateral mistake, (2) rescission by lack of 

consideration, (3) rescission by fraud, (4) negligent 

misrepresentation, (5) breach of contract, and (6) unfair 

competition, pursuant to California Business & Professions Code § 

17200 et seq. Defendants now move to dismiss the complaint under 

Federal Rule of Civil Procedure 12(b)(6), or, in the alternative, 

transfer the case to the Southern District of Ohio, pursuant to 

28 U.S.C. § 1404(a), in accordance with the agreement’s forumselection clause.1

II. Validity of Forum-Selection Clause

 

1 Plaintiff filed its Opposition to each motion one day 

after the deadline of December 30, 2019. (Docket Nos. 33, 34.) 

Defendants request for the court to construe plaintiff’s delay as 

a non-opposition to defendants’ motions. (Docket Nos. 36, 37.) 

A one-day delay does not prejudice defendants, so the court will 

consider the plaintiff’s opposition.

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Forum selection clauses “are presumptively valid” and 

“should be honored ‘absent some compelling and countervailing 

reason.’” Murphy v. Schneider Nat’l, Inc., 362 F.3d 1133, 1140 

(9th Cir. 2004) (quoting M/S Bremen v. Zapata Off-Shore Co., 407 

U.S. 1, 12 (1972)); see also Atl. Marine Const. Co. v. U.S. Dist. 

Court for W. Dist. of Texas, 571 U.S. 49, 63 (2013) (“[A] valid 

forum-selection clause [should be] given controlling weight in 

all but the most exceptional cases.”). The party opposing the 

enforcement of a forum selection clause has the “heavy burden” of 

showing that it is “‘unreasonable’ under the circumstances.” 

Bremen, 407 U.S. at 10, 18. A forum selection clause is 

unreasonable under three circumstances: “(1) ‘if the inclusion of 

the clause in the agreement was the product of fraud or 

overreaching’; (2) ‘if the party wishing to repudiate the clause 

would effectively be deprived of his day in court were the clause 

enforced’; [or] (3) ‘if enforcement would contravene a strong 

public policy of the forum in which suit is brought.’” Murphy, 

362 F.3d at 1140 (quoting Richards v. Lloyd’s of London, 135 F.3d 

1289, 1294 (9th Cir.1998)).

Plaintiff does not contend that enforcement of the 

clause would contravene California public policy. The court 

therefore evaluates only the first two exceptions to the 

enforcement of forum-selection clauses.

1. Fraud and Overreaching

Plaintiff argues that “[t]he [complaint] makes a strong 

showing that . . . the MTA containing the forum-selection clause 

. . . was affected by fraud, undue influence and a huge 

differential in bargaining power.” (Pl.’s Opp. to Mot. to 

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Dismiss at 14 (Docket No. 33).) 

Plaintiff’s allegations are insufficient to decline 

enforcement of the forum-selection clause on the grounds of 

fraud. “For a party to escape a forum selection clause on the 

grounds of fraud, it must show that ‘the inclusion of that clause 

in the contract was the product of fraud or coercion.’” 

Richards, 135 F.3d at 1297 (quoting Scherk v. Alberto–Culver Co., 

417 U.S. 506, 518 (1974)). To do so, a party “must show that the 

inclusion of the clause itself into the agreement was improper; 

it is insufficient to allege that the agreement as a whole was 

improperly procured.” Mahoney v. Depuy Orthopaedics, Inc., No. 

2:7-cv-1321 AWI SMS, 2007 WL 3341389, at *7 (E.D. Cal. Nov. 8, 

2007); see also Scherk, 417 U.S. at 519 n. 14 (The fraud 

exception in Bremen “does not mean that any time a dispute 

arising out of a transaction is based upon an allegation of fraud 

. . . the clause is unenforceable.”); Richards, 135 F.3d at 1297

(“[S]imply alleging that one was duped into the signing of the 

contract is not enough.”). 

Here, the complaint alleges that defendant fraudulently 

induced plaintiff into signing the MTA. The complaint does not, 

however, allege that defendant fraudulently introduced the forumselection clause into the agreement. Indeed, the complaint does 

not even mention the forum-selection clause. Plaintiff therefore 

cannot avoid enforcement of the clause on the grounds of fraud. 

Cf. Richards, 135 F.3d at 1297 (finding that a forum-selection 

clause was not the product of fraud where plaintiff made “no 

allegations as to the inclusion of the choice clauses 

themselves”).

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Moreover, “[t]he Ninth Circuit has made it clear that 

neither power differential between the parties or the nonnegotiability of a contract are sufficient to invalidate a forum 

selection clause.” E. & J. Gallo Winery v. Andina Licores S.A., 

440 F. Supp. 2d 1115, 1126 (E.D. Cal. 2006) (Ishii, J.) (citing 

Murphy, 362 F.3d at 1141). Accordingly, the exception to the 

enforcement of a forum-selection clause for fraud and 

overreaching does not apply here.

2. Deprivation of Day in Court

To avoid enforcement of a forum selection clause for 

deprivation of day in court, “trial in the contractual forum 

[must] be so gravely difficult and inconvenient that [the 

plaintiff] will for all practical purposes be deprived of his day 

in court.” Bremen, 407 U.S. at 18. The Ninth Circuit has held 

that a plaintiff’s “physical and financial limitations” could 

show such a deprivation. Murphy, 362 F.3d at 1143. Allegations 

of such limitations, including allegations related to “travel 

costs, availability of counsel . . ., location of witnesses, or 

[plaintiff’s] ability to bear such costs and inconvenience” must 

be “specific.” Spradlin v. Lear Siegler Mgmt. Servs. Co., 926 

F.2d 865, 869 (9th Cir. 1991). 

Plaintiff argues that litigation in the Southern 

District of Ohio is unreasonable because (1) the single owner of 

Clippercreek would have to travel “thousands of miles” for trial, 

(2) the cost for witnesses to travel would be “prohibitive,” (3) 

subpoena power under Federal Rule of Civil Procedure 45(c)(1)(A) 

would not reach “essential” witnesses, (4) plaintiff “would not 

be able to show the trier of fact Plaintiff’s manufacturing and 

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production site in Auburn, CA,” and (5) some of plaintiffs’ 

claims (e.g., violation of California’s unfair competition law) 

are not available in Ohio. (Pl.’s Opp. to 

Honeywell/Intelligrated Mot. to Dismiss at 14.). The court 

considers each in turn.

Plaintiff’s first two allegations related to the 

ability to travel are not sufficiently specific for the court to 

find that enforcement of the clause would deprive plaintiff of 

its day in court. In Murphy v. Schneider National, Inc., the 

Ninth Circuit evaluated a forum-selection clause in an employment 

contract that required plaintiff, a resident of Oregon, to 

litigate all claims under the contract in Wisconsin. 362 F.3d at 

1142-43. The court found that plaintiff’s “financial troubles 

and physical limitations would bar him from litigating his claim” 

in Wisconsin. Id. at 1143. The plaintiff in Murphy submitted an 

affidavit wherein plaintiff disclosed in detail his income, 

outstanding bills, and credit card debt. Id. at 1142. He also 

detailed his physical injuries that “prevent[ed] him from sitting 

in a position of limited mobility for more than one hour” and 

“impair[ed] his ability to drive.” Id. The Murphy plaintiff

also explained why his wife would not be able to drive him to 

Wisconsin. Id. Taken together, the court found that enforcement 

of the clause would deprive plaintiff of his day in court. Here, 

by contrast, plaintiff Clippercreek merely states that the trip 

would be long, and the costs would be “prohibitive.” Such 

allegations are not sufficiently specific to conclude that 

plaintiff would not be able to litigate in Ohio.

Plaintiff’s allegations about the inability to subpoena 

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essential witnesses are similarly conclusory. Plaintiff does not 

identify who these witnesses are or where they are located. See

Spradlin, 926 F.2d 865, 869 (9th Cir. 1991). Importantly, 

plaintiff does not allege that those witnesses must be physically 

present for plaintiff to pursue the action. Cf. Argueta v. Banco 

Mexicano, S.A., 87 F.3d 320, 327 (9th Cir. 1996) (“[E]ven if 

[plaintiff]’s fear of returning to Mexico is genuine, [plaintiff] 

do[es] not provide any information showing that [plaintiff]’s 

physical presence in Mexico is required to pursue the civil 

action.”).

Plaintiff’s assertion that transferring the action to 

Ohio would prevent plaintiff from showing the jury plaintiff’s 

manufacturing site is likewise insufficient. The evidence that 

would be presented in California and Ohio would be the same: 

plaintiff can rely on experts and pictures to fully describe the 

site. Further, the court is not aware of any authority requiring 

a jury field trip for a plaintiff to pursue litigation, and, at 

any rate, this court is unlikely to consider such an option if 

requested. 

Finally, plaintiff’s allegation that plaintiff would 

not be able to pursue numerous causes of action in Ohio also does 

not establish that plaintiff would be deprived of their day in 

court. The prescribed forum need not be identical to plaintiff’s 

preferred forum –- it need only provide plaintiff with “a 

meaningful day in court.” Pelleport Inv’rs, Inc. v. Budco 

Quality Theatres, Inc., 741 F.2d 273, 281 (9th Cir. 1984); id. at 

325. Plaintiff could bring breach of contract or negligence 

claims that may entitle plaintiff to relief similar to that 

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sought in California.2 Because plaintiff has failed to carry the 

“heavy burden of showing that the trial in [Ohio] would be so 

difficult and inconvenient that [plaintiff] would effectively be 

denied a meaningful day in court,” the court finds that the 

forum-selection clause at issue is enforceable. 

III. Motion to Transfer Venue

In deciding a § 1404(a) motion to transfer pursuant to 

a forum-selection clause, “a district court may consider 

arguments about public-interest factors only.” Atl. Marine, 571 

U.S. at 64. The Supreme Court has made it clear that the 

“plaintiff’s choice of forum merits no weight.” Id. Instead, 

plaintiff must “establish[] that transfer to the forum for which 

the parties bargained is unwarranted.” Id. at 63. Further, when 

a plaintiff has agreed to a forum-selection clause, he may not 

“challenge the preselected forum as inconvenient or less 

convenient for themselves or their witnesses, or for their 

pursuit of the litigation.” Id. Because the Supreme Court has 

so limited a party’s ability to challenge a forum-selection 

clause, district courts may deny enforcement of the clause only 

in “unusual cases.” Id.

Plaintiff does not offer reasons additional to those 

above for the court to deny the transfer of this action to the 

Southern District of Ohio. The Supreme Court’s decision in 

Atlantic Marine explicitly forecloses consideration of all of 

plaintiff’s arguments because all relate to the convenience of 

 

2 The MTA includes a choice-of-law provision that 

mandates the application of Ohio state law. (Compl. Ex. 1, at 

13, ¶ 18.2.) Plaintiff has not provided any reason why the laws 

of Ohio would deprive plaintiff of all possible relief.

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the forum and none concern the public interest. See 571 U.S. at 

581-583. Accordingly, the court will enforce the forum selection 

clause and transfer the action. 

The court declines defendants’ invitation to dismiss 

the action pursuant to Federal Rule of Civil Procedure 12(b)(3). 

(Mot. to Dismiss at 6-7 (Docket No. 30).) Rule 12(b)(3) permits 

the court to dismiss a case based on improper venue. “[A] forumselection clause does not render venue in a court ‘wrong’ or 

‘improper’ within the meaning of . . . Rule 12(b)(3).” Atl. 

Marine, 571 U.S. at 59. Rule 12(b)(3) therefore “[is] not [a] 

proper mechanism[] to enforce a forum-selection clause.” Id. at 

61. 

The appropriate vehicle to enforce the clause at issue 

is § 1404(a). The Supreme Court held that the only “appropriate 

enforcement mechanisms” are § 1404(a) and the forum non 

conveniens doctrine. Id. Section 1404(a) applies where, as is 

the case here, the forum-selection clause points to another 

federal court. Id. at 60.

When considering a § 1404(a) motion involving a valid 

forum-selection clause, the “district court should ordinarily 

transfer the case to the forum specified in that clause.” Id. at 

62. “Only under extraordinary circumstances . . . should a § 

1404(a) motion be denied.” Id. The court has concluded that 

such circumstances do not exist here. Accordingly, transfer, and 

not dismissal, is proper.

IT IS THEREFORE ORDERED that defendants’ motions to 

transfer venue (Docket Nos. 29, 30) be, and the same hereby are, 

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GRANTED.3 

This action is hereby TRANSFERRED to the United States

District Court for the Southern District of Ohio.

Dated: January 14, 2020

 

3 Because the court has chosen to transfer the case, the 

court does not reach defendants’ Rule 12(b)(6) challenges to the 

sufficiency of the complaint.

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