JACK MYERS v. CRITEO CORP., ET AL.
Case No.: 1-14-CV-272632
DATE: February 5, 2015
TIME: 9:00 a.m.
DEPT.: 7

The unopposed application by Robert B. Lovett to appear Pro Hac Vice as counsel for Defendants is GRANTED.

Defendants’ Motion to Dismiss or Stay this action on the ground that New York is a more appropriate forum is DENIED. “When a court upon motion of a party or its own motion finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions as may be just.” CCP §410.30(a). The Court is not required to make findings of fact in ruling on such a motion. Cal-State Business Products & Services, Inc. v. Ricoh (1993) 12 Cal App 4th 1666, 1676. “[A] resident of one of our sister states who files suit in California is entitled to due deference under the circumstances presented, not a strong presumption, in favor of its choice of forum. That deference is to be weighed and balanced by the trial court along with all the other pertinent factors, including the defendant’s residence or principal place of business, and has no direct bearing on the moving defendant’s burden of proof.” National Football League v. Fireman’s Fund Insurance Co. (2013) 216 Cal App 4th 902, 929. The moving party need not demonstrate that California is “seriously inconvenient forum.” Id. at 930-933.

The burden of proof nonetheless remains with Defendants. “In analyzing such a motion, California courts follow the procedure outlined in Stangvik. The first step is determining ‘whether the alternative forum is a ‘suitable’ place for trial. If it is, the next step is to consider the private interests of the litigants and the interests of the public in retaining the action for trial in California.’ The threshold issue of whether an alternative forum is suitable is nondiscretionary, subject to de novo review. ‘The threshold issue of suitability of the alternative forum is . . . determined by a two-pronged test: There must be jurisdiction over the defendant and the assurance that the action will not be barred by a statute of limitations.’ . . . The secondary balancing inquiry is subject to an abuse of discretion standard of review . . . ‘The private interest factors are those that make trial and the enforceability of the ensuing judgment expeditious and relatively inexpensive, such as the ease of access to sources of proof, the cost of obtaining attendance of witnesses, and the availability of compulsory process for attendance of unwilling witnesses. The public interest factors include avoidance of overburdening local courts with congested calendars, protecting the interests of potential jurors so that they are not called upon to decide cases in which the local community has little concern, and weighing the competing interests of California and the alternative jurisdiction in the litigation.” Hahn v. Diaz-Barba (2011) 194 Cal App 4th 1177, 1186-1187, internal citations omitted.

Defendants here have failed to satisfy the suitability test. “It is well settled under California law that the moving parties satisfy their burden on the threshold suitability issue by stipulating to submit to the jurisdiction of the alternative forum and to waive any applicable statute of limitations.” Hahn, supra, at 1190. While Defendants concede that New York (as well as California) has jurisdiction over them by stating that their principal place of business is in New York, Defendants do not stipulate to waive any statute of limitations defense should this action be dismissed or stayed in favor of a breach of contract action filed in New York. They simply suggest that such a claim would not be currently time barred. Defendants do not concede the validity of the California choice–of-law clause in the Advisory Board Agreement which would preserve the application of California’s 4-year limitations period in CCP §337 for claims of breach of a written contract in any suit filed by Plaintiff in an alternative forum. To the contrary, Defendants argue in their simultaneously filed demurrer that Plaintiff cannot establish a breach of the Advisory Board Agreement and claim it is simply an unenforceable agreement to agree.

Even if it were necessary for the Court to proceed to the second test and balance the private interests of the parties with California’s interest in keeping the case, Defendants have failed to meet their burden. They have not shown that New York has more of a connection to the facts of this case than California (where Plaintiff alleges one of the breaches occurred) and there is no pending New York case in which Plaintiff is assured his claims would be deemed timely and heard on their merits whereas the California Complaint is timely and alleges a breach of a contract expressly subject to California law. Any possible complications to discovery caused by French privacy laws and inconvenience to witnesses residing in France would be equally present in New York. Plaintiff argues that many of the witnesses reside in California and that many documents are likely located at Defendants’ Palo Alto office.

Should these circumstances change, the Court has the power to revisit the issue on its own motion. See Williamson v. Mazda Motor of America, Inc. (2012) 212 Cal App 4th 449, 454 (“Merely because a defendant brings an unsuccessful forum non conveniens motion shortly after a case is filed should not deprive the trial court of its independent statutory authority to subsequently reconsider the issue once the facts of the litigation are more fully developed.”)

As the Motion to Dismiss or Stay is denied, the Court will proceed to rule on Defendants’ demurrer. The Court in ruling on a demurrer considers only the pleading under attack, any attached exhibits (part of the “face of the pleading”) and any facts or documents for which judicial notice is properly requested and may be granted. The Court cannot consider extrinsic evidence in ruling on a demurrer or motion to strike. Accordingly none of the declarations submitted with other motions are relevant to the Court’s analysis of the demurrer. “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” Piccinini v. Cal. Emergency Management Agency (2014) 226 Cal App 4th 685, 688, citing Blank v. Kirwan (1985) 39 Cal.3d 311, 318.

Defendants’ demurrer to the Complaint’s 1st and 3rd causes of action for breach of contract (breach of the Warrant Grant and of the Advisory Board Agreement respectively) on the ground that both fail to state sufficient facts is OVERRULED as to both claims. To properly state a breach of contact claim a plaintiff must allege: 1) the existence of a (valid) contract; 2) Plaintiff’s performance or excuse for nonperformance; 3) Defendant’s breach, and; 4) damage to Plaintiff resulting from that breach. Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal. App. 4th 221, 228. Specific fact pleading is not required. The Complaint at 58-63 (1st cause of action) and at 69-76 (3rd cause of action) adequately alleges these elements as to the Warrant Grant and Advisory Board Agreement. Contrary to Defendants’ argument, it is well settled that a plaintiff need not quote the material terms of or attach the contract at issue. See Construction Protective Services v. TIG Specialty Ins. Co. (2002) 29 Cal 4th 189, 199 (“plaintiff may plead the legal effect of the contract rather than its precise language.”)

Defendants’ demurrer to the Complaint’s 2nd and 4th causes of action for breach of the implied covenant of good faith and fair dealing on the ground that they both fail to state sufficient facts is SUSTAINED with 10 days’ leave to amend. “The covenant of good faith and fair dealing, implied by law in every contract, exists merely to prevent one contracting party from unfairly frustrating the other party’s right to receive the benefits of the agreement actually made. The covenant thus cannot ‘be endowed with an existence independent of its contractual underpinnings.’ It cannot impose substantive duties or limits on the contracting parties beyond those incorporated in the specific terms of their agreement.” Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 349-350. “[W]here breach of an actual term is alleged, a separate implied covenant claim, based on the same breach, is superfluous.” Id. at 327. As presently pled the 2nd and 4th causes of action are “superfluous” as stated in Guz. They each do nothing more than repeat in slightly more detail the alleged breaches of contract. See Complaint at 67 (2nd cause of action) repeating the basis for the 1st cause of action alleged at 62 and Complaint at 80 (4th cause of action) repeating the basis for the 3rd cause of action alleged at 74. As this is a challenge to Plaintiff’s initial pleading, leave to amend is granted.

Defendants’ Motion for a Protective Order staying all discovery pending the outcome of Defendants’ Motion to Dismiss or Stay for Inconvenient Forum, and, if necessary Defendants’ Demurrer is MOOT.