Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_15-cv-05981/USCOURTS-cand-4_15-cv-05981-1/pdf.json

Parties Involved:
Audiencearc, Inc.
Plaintiff
Aaron Mann
Plaintiff
Punchkick Interactive, Inc.
Defendant

Document Text:

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

AARON MANN, AN INDIVIDUAL, AND 

AUDIENCEARC, INC., A CALIFORNIA 

CORPORATION, 

Plaintiff, 

v. 

PUNCHKICK INTERACTIVE, INC., AND DOES 

1 THROUGH 20, INCLUSIVE

Defendant. 

Case No. 4:15-cv-05981-YGR 

ORDER GRANTING DEFENDANT’S MOTION 

TO TRANSFER

Re: Dkt. No. 17 

On February 17, 2016, Defendant Punchkick Interactive, Inc. (“PKI”) filed a motion to 

transfer venue. (Dkt. No. 17.) PKI requests transfer of this action to the Southern District of Ohio 

pursuant to a forum selection clause. Plaintiffs Aaron Mann and AudienceArc, Inc. (collectively 

“AudienceArc”) opposed the motion. (Dkt. No. 19.) 

Having carefully considered the briefing and evidence submitted and the record in this 

case, and for the reasons stated herein, the Court GRANTS PKI’s motion to transfer pursuant to the 

forum selection clause. 

I. FACTUAL AND PROCEDURAL BACKGROUND

On June 28, 2013, PKI and AudienceArc1 entered into a written agreement and statement 

of work under which PKI would provide AudienceArc with “strategic mobile consult[ing]” 

services for the development of an application (“the App”) for Visa/Ingo. (Declaration of Ryan 

Unger (“First Unger Decl.”), Dkt. No. 17-2, Exh. A [“June SOW”].) On July 9, 2013, PKI 

delivered its final work product under the June SOW to AudienceArc. (Declaration of Aaron 

Mann (“Mann Decl.”), Dkt. No. 19-1, ¶ 6.) 

 1

 Defendant AudienceArc was formerly known as SocialArc, Inc.. (Dkt. No. 1, Notice of 

Removal, at Exh. 1 [First Amended Complaint], ¶ 1.) The initial agreement was between PKI and 

SocialArc, Inc. However, for ease of reference, the Court will refer to both entities as 

AudienceArc. 

Case 4:15-cv-05981-YGR Document 33 Filed 04/28/16 Page 1 of 6
2 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

According to PKI’s Chief Technology Officer, Ryan Unger, in August 2013 the parties 

discussed an additional project for Visa as an extension of the services under the June SOW. 

(Reply Declaration of Ryan Unger (“Second Unger Decl.”), Dkt. No. 21-2, ¶ 2.) At that time, 

Mann requested PKI to send him an estimated invoicing schedule for the additional development 

work. (Reply Declaration of Michelle Woods (“Second Woods Decl.”), Dkt. No. 21-3, Exh. A.) 

In response to Mann’s request, PKI sent Mann an estimated invoicing schedule. (Id.) In his email 

response, Mann acknowledged receipt of the schedule and approved it, stating “[g]ot it and in the 

system to be paid.” (Id.) 

Thereafter, PKI sent invoices to AudienceArc for the additional development work that it 

performed and AudienceArc made payments towards these invoices. (Mann Decl., ¶ 9.) 

However, by January 2014, AudienceArc had failed to pay outstanding invoices for the work 

performed by PKI, totaling $110,648. (Declaration of Michelle Woods (“First Woods Decl.”), 

Dkt. No. 17-3, ¶ 3.) On February 17, 2014, Mann made a $10,000 payment towards the 

outstanding invoices, and stated that this was the “first in a series” of payments that would be 

made to PKI. (Id., Exh. B.) At the time, Mann apologized for the unpaid invoices and cited 

financial problems as the reason AudienceArc was unable to pay the invoices and even discussed 

the possibility of a merger. (First Unger Decl., Exh. B and C.) In March 2014, Unger contacted 

Mann about the outstanding invoices, which then totaled over $200,000. (First Woods Decl., ¶ 5, 

Exh. C.) Mann’s response was apologetic and explained that the company was in a “cash crunch” 

and he was seeking outside funding to pay its debts. (Id., Exh. C.) 

 In March 2015, PKI filed suit against Mann and AudienceArc in Illinois State Court 

alleging claims for breach of contract, fraud on creditors and violations of the Uniform Fraudulent 

Transfers Acts based upon AudienceArc’s failure to pay for the additional work alleged to have 

been undertaken pursuant to the June SOW. (Second Unger Decl., Exh. B [Illinois Complaint].) 

AudienceArc moved to dismiss the Illinois Complaint for improper venue pursuant to the forum 

selection clause contained in the June SOW. (Declaration of Henry Burgoyne, Dkt. No. 32-1 and 

32-4, Exh. C [Illinois Motion to Dismiss].) As Mann and AudienceArc there argued, “to the 

extent that the [June SOW] agreement attached to the complaint is in any way relevant...the 

Case 4:15-cv-05981-YGR Document 33 Filed 04/28/16 Page 2 of 6
3 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

parties agreed that ‘any and all claims and demand relating or pertaining in any way’ to that 

agreement ‘shall’ be resolve[d in] Ohio.” (Id., Exh. 3 at 1, quoting June SOW at 6.) On 

November 4, 2015, the Illinois court granted AudienceArc’s motion to dismiss for improper venue 

finding that the forum selection clause in the June SOW applied and required dismissal in favor of 

venue in Ohio. (First Unger Decl., Exh. D [Illinois Order].) 

On November 4, 2015, the same day as the Illinois state court order dismissing the Illinois 

Complaint, AudienceArc the instant declaratory relief action was commenced in San Francisco 

Superior Court. (Notice of Removal, Dkt. No. 1, ¶ 1.) In their complaint, AudienceArc and Mann 

allege four declaratory relief claims that are the mirror image of the claims in the Illinois 

Complaint, i.e. (1) Declaratory Relief re Breach of Contract; (2) Declaratory Relief re Fraudulent 

Transfers of Assets; (3) Declaratory Relief re Fraud on Creditors; and (4) Indebitus Assumpsit. 

(Id., Exh. A.) On December 22, 2015, the case herein was removed to this Court by PKI. (Id.) 

II. LEGAL STANDARD

PKI moves pursuant to 28 U.S.C. section 1404(a) to transfer this action to the Southern 

District of Ohio based upon the forum selection clause contained in the June SOW. Section 

1404(a) states: 

[f]or the convenience of parties and witnesses, in the interest of justice, a district 

court may transfer any civil action to any other district or division where it 

might have been brought or to any district or division to which all parties have 

consented. 

Section 1404(a) “does not condition transfer on the initial forum’s being ‘wrong’ . . . [a]nd it 

permits transfer to any district where venue is also proper . . . or to any other district to which the 

parties have agreed by contract or stipulation.” Atlantic Marine Const. Co. v. U.S. Dist. Court, 

134 S. Ct. 568, 579 (2013). Forum selection clauses may be enforced through a motion to transfer 

under section 1404(a). Id. 

“In the typical case not involving a forum selection clause, a district court considering a 

[section] 1404(a) motion . . . must evaluate both the convenience of the parties and various publicinterest considerations. Ordinarily, the district court would weigh the relevant factors and decide 

whether, on balance, a transfer would serve ‘the convenience of parties and witnesses’ and 

Case 4:15-cv-05981-YGR Document 33 Filed 04/28/16 Page 3 of 6
4 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

otherwise promote ‘the interest of justice.’” Atlantic Marine, 134 S.Ct. at 581 (quoting section 

1404(a)). However, “the calculus changes . . . when the parties’ contract contains a valid forum 

selection clause.” Id. “[A] valid forum selection clause should be given controlling weight in all 

but the most exceptional cases,” and the “plaintiff bears the burden of establishing that transfer to 

the forum for which the parties bargained is unwarranted.” Id. (citation and brackets omitted). In 

these circumstances, “the plaintiff’s choice of forum merits no weight” and the court “should not 

consider arguments about the parties’ private interests.” Id. The forum selection clause waives 

the parties’ “right to challenge the preselected forum as inconvenient . . . [and the] district court 

may consider arguments about public-interest factors only.” Id. at 582. 

III. DISCUSSION 

PKI argues that the forum selection clause contained in the June SOW governs this action. 

The forum selection clause provides: 

Ohio law will apply to determine the validity and enforceability of this 

agreement and any and all such claims and demand relating or pertaining in any 

way to the services of PKI secured by this agreement; and any such claims 

and/or demand shall be determined exclusively by and limited to the venue and 

jurisdiction of State and Federal Courts in the Western Division of the Southern 

District of Ohio. 

(June SOW at 6.) PKI further contends that because AudienceArc obtained the dismissal of the 

nearly identical Illinois Complaint by asserting that the June SOW’s forum selection clause 

governed it, AudienceArc should now be “estop[ped]” from asserting that the forum selection 

clause does not apply to the present action. 

The doctrine of judicial estoppel provides that “[w]here a party assumes a certain position 

in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply 

because his interests have changed, assume a contrary position,” particularly where the change of 

position prejudices the other party. New Hampshire v. Maine, 532 U.S. 742, 749 (2001) (quoting 

Davis v. Wakelee, 156 U.S. 680, 689 (1895)); see also Baughman v. Walt Disney World Co., 685 

F.3d 1131, 1133 (9th Cir. 2012) (prior statements need not be made under oath; “what matters is 

that [the party] pressed a claim in the earlier lawsuits that is inconsistent with the position she’s 

taking in our case.”) The doctrine’s purpose is “to protect the integrity of the judicial process by 

Case 4:15-cv-05981-YGR Document 33 Filed 04/28/16 Page 4 of 6
5 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

prohibiting parties from deliberately changing positions according to the exigencies of the 

moment.” New Hampshire, 532 U.S. at 749-50 (internal citations and quotations omitted); see 

also New Edge Network v. F.C.C., 461 F.3d 1105, 1114 (9th Cir. 2006) (internal quotation marks 

omitted) (“Courts apply the doctrine where a party’s later inconsistent position presents a risk of 

inconsistent determinations.”). A court considers several factors when deciding whether to apply 

the doctrine in a particular case. “First, a party’s later position must be clearly inconsistent with 

its earlier positon.” New Hampshire, 532 U.S. at 750 (internal quotations omitted). Second, the 

court considers “whether the party has succeeded in persuading a court to accept that party’s 

earlier positon, so that judicial acceptance of an inconsistent position in a later proceeding would 

create the perception that either the first or second court was misled.” Id. (internal quotations 

omitted). Third, the court considers “whether the party seeking to assert an inconsistent position 

would derive an unfair advantage or impose an unfair detriment on the opposing party if not 

estopped.” Id. at 751. 

Here, the factors stated in New Hampshire favor a finding that AudienceArc is estopped 

from denying that the June SOW’s forum selection clause applies to the complaint herein. 

AudienceArc’s position here is inconsistent with the one it persuaded the Illinois court was 

correct. AudienceArc would derive an unfair advantage if it were to defeat PKI’s original choice 

of forum by asserting that venue is only proper in Ohio, but then deny that the venue provision 

applied in order to maintain its own choice of forum in the mirror-image declaratory relief action. 

Thus, the Court finds that under the doctrine of judicial estoppel,2

 AudienceArc is bound 

by its assertion of the forum selection clause in the Illinois action and is equitably barred from 

arguing that the forum selection clause does not apply to the present action. AudienceArc has 

 2

 PKI argued both that AudienceArc was “estop[ped]” from arguing against application of 

the forum selection clause, and that AudienceArc’s position in the Illinois action was a judicial 

admission that the clause applied. The concepts of judicial admission and judicial estoppel closely 

related. However, judicial estoppel is not limited to inconsistent positions taken in the same 

litigation, but extends to situations where a court relied on or accepted a party’s previous 

inconsistent position. See Casa del Caffe Vergnano S.P.A. v. ItalFlavors, LLC, No. 13-56091, 

__F.3d__, 2016 WL 1016779, at *4 (9th Cir. Mar. 15, 2016) (citing Rissetto v. Plumbers & 

Steamfitters Local 343, 94 F.3d 597, 605 (9th Cir. 1996), Hamilton v. State Farm Fire & Cas. Co., 

270 F.3d 778, 783 (9th Cir. 2001)). 

Case 4:15-cv-05981-YGR Document 33 Filed 04/28/16 Page 5 of 6
6 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

failed to raise any exceptional circumstances or public interest factors that would preclude the 

enforcement of the forum selection clause.3 See Atlantic Marine, 134 S. Ct. at 581 (“a valid forum 

selection clause should be given controlling weight in all but the most exceptional cases”); see T 

& M Solar & Air Conditioning v. Lennox Int’l Inc., 83 F. Supp. 3d 855, 868 (burden on plaintiff to 

show exceptional circumstances). 

Therefore, for the reasons stated above, PKI’s motion to transfer is GRANTED. 

IV. REQUEST FOR SANCTIONS

In light of the foregoing, AudienceArc’s request for sanctions against PKI under 28 U.S.C. 

section 1927 for pursuing a frivolous motion to transfer is DENIED. Cf. Lahiri v. Universal Music 

& Video Distribution Corp., 606 F.3d 1216 (9th Cir. 2010) (sanctions appropriate under section 

1927 where attorney unreasonably and vexatiously multiplies the proceedings by knowingly and 

recklessly pursuing frivolous action, misrepresenting legal rulings, and litigating in bad faith for 

five years). 

V. CONCLUSION

For the foregoing reasons, the Court GRANTS PKI’s motion to transfer this action to the 

Southern District of Ohio. The Clerk of Court shall transfer the file in this action to the United 

States District Court for the Southern District of Ohio. 

This Order terminates Docket Number 17. 

IT IS SO ORDERED. 

Dated: April 28, 2016 

______________________________________ 

 YVONNE GONZALEZ ROGERS

 UNITED STATES DISTRICT COURT JUDGE

 3

 AudienceArc’s argument that PKI waived its right to enforce the forum selection clause, 

based on inapposite, unpublished, out of circuit, pre-Atlantic Marine cases, fails to persuade the 

Court. See In Re Rationis Enterprises, Inc., 1999 WL 6364 (S.D.N.Y. 1999) (relying 

reasonableness inquiry overruled by Atlantic Marine); Pirolo Bros v. Angelo Maffei and Figli, 

SAS, 1989 WL 20945 (S.D.N.Y. 1989) (finding a lack of evidence of waiver of a forum selection 

clause based upon on New York contract law). 

Case 4:15-cv-05981-YGR Document 33 Filed 04/28/16 Page 6 of 6