210 Brands Incorporated v. Canterbury of New Zealand Limited

CourtDistrict Court, C.D. California
DecidedDecember 29, 2020
Docket2:20-cv-06853
StatusUnknown

This text of 210 Brands Incorporated v. Canterbury of New Zealand Limited (210 Brands Incorporated v. Canterbury of New Zealand Limited) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
210 Brands Incorporated v. Canterbury of New Zealand Limited, (C.D. Cal. 2020).

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE CENTRAL DISTRICT OF CALIFORNIA 10 11 210 BRANDS INCORPORATED, a Case No. 2:20-cv-06853-JWH-ASx Nevada corporation, 12 Plaintiff, ORDER ON MOTION OF 13 PLAINTIFF 210 BRANDS v. INCORPORATED TO REMAND 14 AND MOTION OF DEFENDANT CANTERBURY OF NEW ZEALAND PENTLAND GROUP LIMITED TO 15 LIMITED, an English corporation, DISMISS [ECF Nos. 24 & 12] and 16 PENTLAND GROUP LIMITED, an English corporation, 17 Defendants. 18 19 20 21 22 23 24 25 26 27 1 I. INTRODUCTION 2 Before the Court are the motion of Plaintiff 210 Brands Incorporated to 3 remand this action to state court1 and the motion of Defendant Pentland Group 4 Limited to dismiss the Complaint.2 For the reasons discussed in detail below, 5 the Court DENIES the Motion to Remand and GRANTS the Motion to 6 Dismiss on the grounds of insufficient service of process and forum non 7 conveniens. 8 II. BACKGROUND3 9 On June 10, 2020, 210 Brands filed its Complaint in Ventura County 10 Superior Court.4 210 Brands purported to serve Pentland on June 20, 2020, but 11 Pentland disputes that it was properly served.5 On July 30, 2020,6 Pentland 12 removed the action to this Court.7 13 210 Brands alleges that it entered into a License and Distribution 14 Agreement (the “License Agreement”) with Defendant Canterbury of New 15 Zealand Limited.8 “Canterbury is a United Kingdom-based sports clothing 16 17 1 Pl.’s Mot. to Remand (the “Motion to Remand”) [ECF No. 24]. 18 2 Def. Pentland’s Mot. to Dismiss the Compl. (the “Motion to Dismiss”) [ECF No. 12]. 19 3 The Court restates 210 Brands’ allegations but makes no determination 20 about their veracity at this stage of the case. See, e.g., Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 1996) (on motion to dismiss for failure to state 21 a claim, “[a]ll allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party”). 22 4 Compl. [ECF No. 43-1] at 1:1-6. 23 5 Def. Pentland’s Notice of Removal of Action from State Court to Federal Court Under 28 U.S.C. § 1441(b) (Diversity) (the “Notice of Removal”) [ECF 24 No. 1]. 6 It is not clear if removal was timely. 210 Brands contends that it effected 25 service on Pentland on June 20, 2020. Pentland removed the action to this Court on July 30, 2020—more than 30 days later. See 28 U.S.C. § 1446. A 26 defect of this type is waivable, however. Corona-Contreras v. Gruel, 857 F.3d 1025, 1029 (9th Cir. 2017) (timing of removal waivable procedural defect). 27 7 Notice of Removal [ECF No. 1]. 1 company, specializing in rugby football clothing items and accessories.”9 2 Pentland is the parent company of Canterbury.10 According to the Complaint, 3 Canterbury and Pentland are both English corporations having their principal 4 places of business in London, England.11 5 In 2011, Canterbury’s business in the United States was struggling, and 6 210 Brands was formed “in an attempt to save the Canterbury brand in the U.S. 7 and Canadian markets.”12 In 2012, “210 Brands entered into the License 8 Agreement with Canterbury for the exclusive distribution rights of Canterbury 9 products in the United States and Canada for a period of 5 years.”13 In 2017, the 10 License Agreement was renewed, and it “ran through December 31, 2022.”14 11 The License Agreement contains the following language under the 12 heading “Governing Law”: 13  “The formation, construction, validity and performance of this 14 Agreement shall be governed in accordance with the laws of England.”15 15  “The parties irrevocably submit to the exclusive jurisdiction of the courts 16 of England. Such submission shall not limit the right of Canterbury to 17 commence any proceedings arising out of this Agreement in any 18 jurisdiction it may consider appropriate.”16 19  “The Licensee waives any objection to the venue of any legal process on 20 the basis that the process has been brought in an inconvenient forum.”17 21

22 9 Id. ¶ 2. 23 10 Id. ¶ 15. 11 Id. ¶¶ 14 & 15. 24 12 Id. ¶ 19. 25 13 Id. 26 14 Id. 15 Id., Ex. A (License Agreement) at ¶ 34.1. 27 16 Id. ¶ 34.2. 1 According to 210 Brands, after it executed the License Agreement, “JD 2 Sports sold the Canterbury brand to Pentland.”18 After the sale to Pentland, 3 “210 Brands’ efforts to build the Canterbury brand were constantly 4 interrupted” by a “revolving door” of executives at Pentland.19 210 Brands 5 repeatedly received approval from Defendants for its business plans, and, in 6 reliance, it made a substantial investment that it would not have made “if it had 7 known at that time that Pentland did not intend to afford it a reasonable 8 opportunity to earn a return on that investment.”20 210 Brands also invested 9 resources in an opportunity to become a distributor of Mitre products, another 10 Pentland brand.21 11 Among other things, 210 Brands secured an agreement with Rugby 12 Canada, which “instantly increased its business in the Canadian market by 30% 13 year over year.”22 Subsequently, however, Pentland advised 210 Brands that it 14 “planned to restructure and make significant changes to its business model and 15 personnel.”23 Rather than allowing 210 Brands to control its supply chain, 16 Pentland “insisted on taking over that aspect of the business.”24 Pentland then 17 mismanaged 210 Brands’ orders and shipments, which led to a loss in revenue, 18 and 210 Brands was “forced . . . to use its credit facilities with its vendors 19 directly as it had done before to order products in an effort to climb out of the 20 financial difficulties that were caused by Pentland.”25 Pentland subsequently 21 used this debt “to attempt to manufacture a basis for default under the Renewed 22

23 18 Compl. ¶ 21. 19 Id. ¶ 22. 24 20 Id. ¶ 26. 25 21 Id. ¶¶ 31-33. 26 22 Id. ¶ 34. 23 Id. ¶ 36. 27 24 Id. ¶ 37. 1 License Agreement.”26 In February 2019, citing 210 Brands’ debt, Pentland 2 “halted shipments of its licensed products,”27 which led to a further 3 deterioration in 210 Brands’ financial condition.28 Pentland then put pressure 4 on 210 Brands to pay down its debt to its vendors, eventually terminating the 5 Renewed License Agreement, purportedly on the basis of 210 Brands’ debt.29 6 Within a week of sending 210 Brands a Notice of Termination of the Renewed 7 License Agreement, Pentland received hundreds of thousands of dollars by 8 fulfilling existing orders.30 Pentland also benefited from an order for apparel 9 from a major clothing retailer.31 10 In essence, 210 Brands alleges that Pentland induced it to invest in the 11 expansion of its business, but then pretextually terminated the Renewed License 12 Agreement unfairly to appropriate the business opportunities that 210 Brands 13 had developed.32 210 Brands asserts claims for relief for: (1) Violation of 14 California Franchise Investment Law; (2) Violation of California Franchise 15 Relations Act; (3) Violation of California Unfair Practices act; (4) Violation of 16 California Unfair Competition Law; (5) Breach of the Covenant of Good Faith 17 and Fair Dealing; (6) Intentional Interference with Contractual and Business 18 Relationships; (7) Promissory Estoppel; (8) Negligent Misrepresentation; and 19 (9) Intentional Misrepresentation.33 20 On August 6, 2020, Pentland filed the instant Motion to Dismiss. 21 Pentland’s Motion raises several threshold issues; Pentland contends that the 22

23 26 Id. 27 Id. ¶ 50. 24 28 Id. ¶ 51. 25 29 Id. ¶ 54-56. 26 30 Id. ¶¶ 57 & 58. 31 Id. ¶¶ 59-61. 27 32 See, e.g., id. ¶ 64.

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Bluebook (online)
210 Brands Incorporated v. Canterbury of New Zealand Limited, Counsel Stack Legal Research, https://law.counselstack.com/opinion/210-brands-incorporated-v-canterbury-of-new-zealand-limited-cacd-2020.