Avi & Co NY Corp. v. ChannelAdvisor Corp.

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AVI & CO NY CORP, Plaintiff, v. CHANNELADVISOR CORPORATION, Defendant.

No. 22 Civ. 10599 (PAE)

United States District Court, S.D. New York

May 5, 2023

OPINION & ORDER

PAUL A. ENGELMAYER, DISTRICT JUDGE

On December 15, 2022, defendant ChannelAdvisor Corporation (“ChannelAdvisor”) removed this breach of contract action from the Supreme Court of New York, New York County. Dkt. 1. The next day, counsel appeared for plaintiff Avi & Co NY Corp (“Avi”), Dkt. 4, and filed a Local Rule 7.1 corporate disclosure statement, Dkt. 5. On December 21, 2022, the parties jointly requested extensions for Avi to file the Complaint in this Court and for ChannelAdvisor to respond, Dkt. 10, which the Court immediately granted, Dkt. 11. On January 31, 2023, Avi filed the Complaint, alleging claims under New York law of common-law breach of contract, unjust enrichment, breach of express warranty, breach of implied warranty of merchantability, negligent misrepresentation, fraudulent inducement, deceptive trade practices, and false advertising. Dkt. 12 ¶¶ 28-77. These arise from Channel Advisors's alleged failure to fulfill its promises and contractual duties to facilitate Avi's management of multiple digital marketing campaigns, across multiple platforms, using ChannelAdvisor's single interface. See id ¶¶ 2-27.

On March 2, 2023, ChannelAdvisor moved to transfer this case to the Eastern District of North Carolina, Western Division under 28 U.S.C. § 1404, Dkt. 13, pursuant to a binding forum-selection clause. It filed^[1]a memorandum of law, Dkt. 16 (“Mem.”), and declarations, Dkts. 14-15, in support1 On March 9, 2023, the Court ordered Avi to file a response by March 23, 2023. Dkt. 19. Avi did not do so. On March 29, 2023, the Court granted the motion to transfer. Dkt. 20. The next day, Avi requested an extension of time to oppose the motion. Dkt. 21. The Court granted the request and vacated its March 29 order. Dkt. 22.

On April 6, 2023, Avi filed its opposition, Dkt. 23 (“Opp.”), and a declaration in support, Dkt. 24. On April 10, 2023, ChannelAdvisor replied. Dkt, 25 (“Reply”).

For the reasons below, the Court grants Channel Advisor's motion to transfer.

I. Legal Standards Governing Motions Under 28 U.S.C. § 1404(a)

Under 28 U.S.C. § 1404(a), “(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 which all parties have consented.”

In general, § 1404(a) gives district courts wide latitude as to whether to transfer venue. In re Cuyahoga Equip. Corp., 980 F.2d 110, 117 (2d Cir. 1992) (citing Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)); Guardian Life Ins. Co. of Am. v. Hernandez, No. 11 Civ. 2114 (SAS), 2011 WL 3678134, at *2 (S.D.N.Y. Aug. 22, 2011). “In deciding a motion to transfer, a court should first inquire whether the action could have been brought in the transferee district and, if yes, whether transfer would be an appropriate exercise of the Court's discretion.” Bent V. Zounds Hearing Franchising, LLC, No. 15 Civ. 6555 (PAE), 2016 WL 153092, at *3 (S.D.N.Y. Jan. 12, 2016) (internal quotation marks omitted).

Assessing whether transfer is a valid exercise of discretion ordinarily requires the Court to balance various factors, including: (1) the convenience of witnesses; (2) the convenience of the parties; (3) the location of relevant documents and the relative ease of access to sources of proof; (4) the locus of operative facts; (5) the availability of process to compel the attendance of unwilling witnesses; (6) the relative means of the parties; (7) the forum's familiarity with the governing law; (8) the weight accorded the plaintiffs choice of forum; and (9) trial efficiency and the interests of justice, based on the totality of the circumstances. Id. (citation omitted); see also Kreinberg v. Dow Chem. Co., 496 F.Supp.2d 329, 330 (S.D.N.Y. 2007); Reliance Ins. v. Six Star, Inc., 155 F.Supp.2d 49, 56-57 (S.D.N.Y. 2001).

“The calculus changes, however, when the parties' contract contains a valid forum-selection clause, which ‘represents the parties' agreement as to the most proper forum.'” Atl. Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., 571 U.S. 49, 63 (2013) (quoting Stewart, 487 U.S. at 31). A forum-selection clause is “presumptively enforceable” if the moving party can demonstrate that (1) the clause was reasonably communicated to the party challenging enforcement; (2) the clause is mandatory, rather than permissive, in nature; and (3) the clause encompasses the plaintiffs claims. Phillips v. Audio Active Ltd., 494 F.3d 378, 383 (2d Cir. 2007); Cfirstclass Corp. v. Silverjet PLC, 560 F.Supp.2d 324, 328 n.2 (S.D.N.Y. 2008) (citing Phillips to note that the Second Circuit has suggested that the second and third prongs of this inquiry are governed by the state law specified in the contract's choice-of-law provision). If these conditions are satisfied, the clause must be enforced unless the party opposing transfer makes a “sufficiently strong showing that enforcement would be unreasonable or unjust, or that the clause was invalid.” Martinez v. Bloomberg LP, 740 F.3d 211, 217 (2d Cir. 2014) (quoting Phillips, 494 F.3d at 383-84). “[A] court evaluating a defendant's § 1404(a) motion to transfer based on a forum-selection clause should not consider arguments about the parties' private interests,” and “as a consequence, a district court may consider arguments about public-interest factors only.” Atl. Marine Constr. Co., 571 U.S. at 64. When considering such factors alongside a valid forum-selection clause, “[o]nly under extraordinary circumstances unrelated to the convenience of the parties should a § 1404(a) motion be denied.” Id. at 62.

II. Analysis

ChannelAdvisor argues that the forum-selection clause is presumptively enforceable because this lawsuit could have been brought in the Eastern District of North Carolina, the forum-selection clause was reasonably communicated to Avi, and public factors weigh in favor of transfer. See Mem. at 8-17. Avi does not dispute the forum-selection clause's validity. See Opp. at 7-13. Instead, it argues the clause's enforcement would be “unreasonable and unjust” because “it would deprive [Avi] of the ability to compel the testimony of a crucial witness”'-Joe Cohen-who was director of operations at Avi & Co until December 2021, negotiated and signed the relevant agreements, and oversaw their implementation. See id. at 1; Dirt. 24 ¶¶ 4-5. ChannelAdvisor replies that this argument is inconsistent with Atlantic Marine'?, holding that private interests are not to be considered; Avi has not established that Cohen is unwilling to testify voluntarily; and Cohen's refusal to appear at trial would not constitute “extraordinary circumstances.” Reply at 2-5.

After careful review of the parties' memoranda and accompanying materials, see Bent, 2016 WL 153092, at *1 n.1 (considering affidavits and agreement in deciding § 1404 motion), the Court grants the motion to transfer venue for the following reasons.

A. The Forum-Selection Clause Is Presumptively Enforceable

The forum-selection clause is enforceable, as is undisputed. It was reasonably and repeatedly communicated to Avi, who agreed to its terms. Dkt. 14 ¶¶ 7-11 (Avi signed statements of work incorporated into Master Services Agreement), 13-16; id., Exs. 1-7. It is clearly mandatory; it states that “each party irrevocably and unconditionally consents and submits to the exclusive jurisdiction of the applicable courts located in Wake County, North Carolina.” Dkt. 14, Ex. D § 11.3 (emphasis added)^[2]; see, e.g, Cap. Bank, N.A. v. Cameron, 231 N.C.App. 326, 330-31 (2013) (“[M]andatory forum selection clauses recognized by our appellate courts have contained words such as ‘exclusive' or ‘sole' or ‘only' which indicate that the contracting parties intended to make jurisdiction exclusive.”); Mark Grp. Int'l, Inc. v. Still, 151 N.C.App. 565, 568 (2002) (same). Finally, substantially for the reasons ChannelAdvisor outlines, see Mem. at 12-15, the forum-selection clause encompasses Avi's claims here. Dkt. 14, Ex. D § 11.3 (clause encompasses “any action, suit or proceeding arising out of or relating to the agreement”). Avi's claims, at core, attack ChannelAdvisor's alleged failures to fulfill its contractual obligations-and would therefore require analyzing the agreement and its terms. Cf., e.g., Cfirstclass Corp., 560 F.Supp.2d at 330 (forum-selection clause encompassed tortious interference and unjust enrichment claims where they necessarily required analyzing agreement); Anselmo v. Univision Station Grp., Inc., Lio. 92 Civ. 1471 (RLC), 1993 WL 17173, at *2 (S.D.N.Y. Jan. 15,1993) (forum-selection clause should be enforced where “‘the gist' of those claims is a breach of [the contractual] relationship”).

The forum-selection clause is, therefore, presumptively enforceable.

B. Avi Has Not Shown Transfer Would Be Unreasonable and Unjust

Avi's opposition to transfer is based solely on the asserted unwillingness of Cohen to testify. See Opp. at 7-13. That argument falls short.

Atlantic Marine specifically prohibits a court from considering parties' private interests where a motion to transfer based on a forum-selection clause has been made. See 571 U.S. at 64. The convenience and availability of witnesses are classic private interests. See id. at 63 n.6 (defining “private interests” to include “relative ease of access to sources of proof availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of unwilling, witnesses;... and all other practical problems that make a trial of a case easy, expeditious and inexpensive”); see also id. at 64 (“When ...