1 2 3 4 5 6 7 8 9 10 11 UNITED STATES DISTRICT COURT 12 EASTERN DISTRICT OF CALIFORNIA 13 14 ACCESS BIOLOGICALS, LLC, No. 2:19-cv-01964-JAM-DB 15 Plaintiff, 16 v. ORDER DENYING DEFENDANT’S MOTION TO DISMISS OR TRANSFER 17 XPO LOGISTICS, LLC, 18 Defendant. 19 20 Access Biologicals, LLC (“Access”) filed suit against XPO 21 Logistics, LLC (“XPOL”) in September 2019. Compl., ECF No. 1. 22 Access alleges XPOL’s improper delivery of an order of fetal 23 bovine serum amounted to negligence, a breach of contract, and a 24 violation of the Carmack Amendment, 49 U.S.C. § 14706. Compl. 25 ¶¶ 18-59. Access raised these claims on its own behalf and as 26 Life Technology, Inc.’s (“LTI”) assignee. Id. 27 28 1 XPOL filed a motion to dismiss or transfer Access’s suit.1 2 Mot. to Dismiss or Transfer (“Mot.”), ECF No. 9. XPOL argues 3 each claim arises under a February 2, 2016 contract it entered 4 with LTI. Mot. at 5. This contract incorporated a forum 5 selection clause by way of XPOL’s “Standard Terms and 6 Conditions.” Id. XPOL contends this clause required Access to 7 file its suit in North Carolina. Id. at 5-6. Access filed an 8 opposition to XPOL’s motion, ECF No. 18, and XPOL filed a reply, 9 ECF No. 21. Because XPOL’s reply introduced new evidence and 10 raised new legal arguments, the Court granted Access’s request to 11 file a surreply. See Plf.’s Ex parte Application, ECF No. 25; 12 Feb. 10, 2020 Minute Order, ECF No. 26; see also Plf.’s Surreply, 13 ECF No. 27. 14 The Court finds XPOL failed to show that its February 2, 15 2016 contract with LTI covered the shipment of fetal bovine serum 16 at issue here. XPOL similarly fell short of identifying any 17 other basis for subjecting Access to the forum selection clause 18 contained in XPOL’s terms and conditions. For these reasons, the 19 Court denies XPOL’s motion to dismiss or transfer venue. 20 21 I. BACKGROUND 22 In October 2016, Access purchased 1200 liters of fetal 23 bovine serum from LTI, to be delivered to Access’s contractor 24 J.R. Scientific. Compl. ¶ 10. LTI then hired XPOL to transport 25 the order from LTI’s facility in Grand Island New York to J.R. 26
27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was 28 scheduled for February 11, 2020. 1 Scientific in Woodland, California. Compl. ¶ 11. 2 On January 6, 2017, XPOL’s subcontractor picked up the order 3 at LTI’s facility and began the cross-country delivery. Compl. 4 ¶ 14. The subcontractor arrived in Woodland, California six days 5 later. Compl. ¶15. The parties dispute exactly what happened to 6 the shipment en route, but ultimately, the USDA ordered that the 7 entire order be destroyed. See Compl. ¶¶ 14-15; Mot. at 3. 8 Access contends the destruction of their order resulted in a 9 $298,935 loss. Compl. ¶ 15. LTI filed a claim with XPOL to 10 recoup this loss, but XPOL denied it. Compl. ¶ 16. LTI then 11 assigned its claims to Access. Compl. ¶ 17. 12 13 II. OPINION 14 A. Analysis 15 Forum selection clauses “are prima facie valid and should 16 be enforced unless enforcement is shown by the resisting party 17 to be ‘unreasonable’ under the circumstances.” M/S Bremen v. 18 Zapata Off-Shore Co., 407 U.S. 1, 10 (1972). A motion to 19 dismiss premised upon the enforcement of a forum selection 20 clause amounts to a Rule 12(b)(3) motion to dismiss for improper 21 venue. Arugueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th 22 Cir. 1996). Rule 12(b)(3) motions, unlike Rule 12(b)(6) 23 motions, do not require courts to accept all of the allegations 24 in the complaint as true. Id. (citing Carnival Cruise Lines v. 25 Shute, 499 U.S. 5858 (1991)). Indeed, a party opposing the 26 enforcement of a forum selection clause must generally produce 27 “some evidence . . . to establish fraud, undue influence, 28 overweening bargaining power, or such serious inconvenience in 1 litigating the selected forum so as to deprive that party of a 2 meaningful day in court.” Argueta, 87 F.3d at 324 (quoting 3 Pelleport Investors, Inc. v. Budco Quality Theaters, Inc., 741 4 F.2d 273, 280 (9th Cir. 1984), abrogated on other grounds by 5 Powerpex Corp. v. Reliant Energy Services, Inc., 551 U.S. 224, 6 235-36 (2007) (emphasis in original)). Here, however, Access 7 avoids this heavy burden of production because XPOL failed to 8 identify a forum selection clause that covers Access’s claims. 9 As Access argues, “[i]n resolving a motion to transfer 10 involving a forum-selection clause, ‘[t]he threshold issue is 11 whether the forum-selection clause applies to Plaintiff’s 12 claims.” Opp’n at 4 (quoting Henry v. Cent. Freight Lines, 13 Inc., No. 2:16-cv-00280-JAM-EFB, 2017 WL 4517836, at *2 (E.D. 14 Cal. Oct. 10, 2017)). XPOL contends its February 2016 contract 15 with LTI sets forth the agreed-upon terms for the January 2017 16 shipment from Grand Island to Woodland. Mot. at 5-6. In 17 support of this position, XPOL focuses on a single sentence 18 within the agreement: “Except as modified herein, any 19 transportation or logistics services provided by XPOL are 20 subjected to XPOL’s standard terms and conditions . . . .” Id. 21 at 5 (citing Ex. A to Perry Decl., ECF No. 19). XPOL’s standard 22 terms and conditions, in turn, contain a forum selection clause 23 requiring the parties to file suit in North Carolina “in the 24 event of any disagreement or dispute.” Mot. at 5-6 (quoting Ex. 25 A. to Perry Decl. at 16). XPOL contends its shipment from LTI’s 26 Grand Island facility to J.R. Scientific plainly falls within 27 the category of “any transportation or logistics services.” 28 Mot. 3-4. 1 Access urges the Court to, instead, interpret the sentence 2 XPOL identified in context of the broader document. Opp’n at 4- 3 6. The Court finds Access’s method of contract interpretation 4 is the proper one. See Lennar Mare Island, LLC v. Steadfast 5 Insurance Co., 176 F. Supp. 3d 949, 955 (E.D. Cal. 2016). Using 6 this approach, the relevant portion of the contract reads: 7 Purpose: The standard operating procedures of this document 8 have been established between Life Technologies and XPOL to define agreed best practices for the 9 administration and transportation of Life Technologies’ shipments as shown in Schedule 1. 10 Scope: 11 XPOL will arrange with third party independent contractor licensed motor carriers (“Carriers”) for 12 truckload transportation of Life Technologies’ shipments, in the laneways specified in Schedule 1, 13 for the rates and terms specified therein, in accordance with the requirements set out herein. Life 14 Technologies’ shipments shall be transported as “exclusive use” shipments, meaning no other shippers’ 15 freight may be transported in the same trailer at the same time as Life Technologies’ shipments. Except as 16 modified herein, any transportation or logistics services provided by XPOL are subject to XPOL’s 17 standard terms and conditions . . . . Current version at Effective Date is attached as Schedule 2. 18 Ex. A to Perry Decl. at 1. The Schedule 1 attachment lists two 19 laneways—one between Grand Island, NY and Chester, NY; the other 20 between Grand Island, NY and Charlottetown, PE. Id. at 3. 21 The February 2016 contract’s plain language states that the 22 purpose of the agreement was to “define agreed best practices 23 for the administration and transportation of Life Technologies’ 24 shipments as shown in Schedule 1.” Ex. A to Perry Decl. at 1.
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1 2 3 4 5 6 7 8 9 10 11 UNITED STATES DISTRICT COURT 12 EASTERN DISTRICT OF CALIFORNIA 13 14 ACCESS BIOLOGICALS, LLC, No. 2:19-cv-01964-JAM-DB 15 Plaintiff, 16 v. ORDER DENYING DEFENDANT’S MOTION TO DISMISS OR TRANSFER 17 XPO LOGISTICS, LLC, 18 Defendant. 19 20 Access Biologicals, LLC (“Access”) filed suit against XPO 21 Logistics, LLC (“XPOL”) in September 2019. Compl., ECF No. 1. 22 Access alleges XPOL’s improper delivery of an order of fetal 23 bovine serum amounted to negligence, a breach of contract, and a 24 violation of the Carmack Amendment, 49 U.S.C. § 14706. Compl. 25 ¶¶ 18-59. Access raised these claims on its own behalf and as 26 Life Technology, Inc.’s (“LTI”) assignee. Id. 27 28 1 XPOL filed a motion to dismiss or transfer Access’s suit.1 2 Mot. to Dismiss or Transfer (“Mot.”), ECF No. 9. XPOL argues 3 each claim arises under a February 2, 2016 contract it entered 4 with LTI. Mot. at 5. This contract incorporated a forum 5 selection clause by way of XPOL’s “Standard Terms and 6 Conditions.” Id. XPOL contends this clause required Access to 7 file its suit in North Carolina. Id. at 5-6. Access filed an 8 opposition to XPOL’s motion, ECF No. 18, and XPOL filed a reply, 9 ECF No. 21. Because XPOL’s reply introduced new evidence and 10 raised new legal arguments, the Court granted Access’s request to 11 file a surreply. See Plf.’s Ex parte Application, ECF No. 25; 12 Feb. 10, 2020 Minute Order, ECF No. 26; see also Plf.’s Surreply, 13 ECF No. 27. 14 The Court finds XPOL failed to show that its February 2, 15 2016 contract with LTI covered the shipment of fetal bovine serum 16 at issue here. XPOL similarly fell short of identifying any 17 other basis for subjecting Access to the forum selection clause 18 contained in XPOL’s terms and conditions. For these reasons, the 19 Court denies XPOL’s motion to dismiss or transfer venue. 20 21 I. BACKGROUND 22 In October 2016, Access purchased 1200 liters of fetal 23 bovine serum from LTI, to be delivered to Access’s contractor 24 J.R. Scientific. Compl. ¶ 10. LTI then hired XPOL to transport 25 the order from LTI’s facility in Grand Island New York to J.R. 26
27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was 28 scheduled for February 11, 2020. 1 Scientific in Woodland, California. Compl. ¶ 11. 2 On January 6, 2017, XPOL’s subcontractor picked up the order 3 at LTI’s facility and began the cross-country delivery. Compl. 4 ¶ 14. The subcontractor arrived in Woodland, California six days 5 later. Compl. ¶15. The parties dispute exactly what happened to 6 the shipment en route, but ultimately, the USDA ordered that the 7 entire order be destroyed. See Compl. ¶¶ 14-15; Mot. at 3. 8 Access contends the destruction of their order resulted in a 9 $298,935 loss. Compl. ¶ 15. LTI filed a claim with XPOL to 10 recoup this loss, but XPOL denied it. Compl. ¶ 16. LTI then 11 assigned its claims to Access. Compl. ¶ 17. 12 13 II. OPINION 14 A. Analysis 15 Forum selection clauses “are prima facie valid and should 16 be enforced unless enforcement is shown by the resisting party 17 to be ‘unreasonable’ under the circumstances.” M/S Bremen v. 18 Zapata Off-Shore Co., 407 U.S. 1, 10 (1972). A motion to 19 dismiss premised upon the enforcement of a forum selection 20 clause amounts to a Rule 12(b)(3) motion to dismiss for improper 21 venue. Arugueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th 22 Cir. 1996). Rule 12(b)(3) motions, unlike Rule 12(b)(6) 23 motions, do not require courts to accept all of the allegations 24 in the complaint as true. Id. (citing Carnival Cruise Lines v. 25 Shute, 499 U.S. 5858 (1991)). Indeed, a party opposing the 26 enforcement of a forum selection clause must generally produce 27 “some evidence . . . to establish fraud, undue influence, 28 overweening bargaining power, or such serious inconvenience in 1 litigating the selected forum so as to deprive that party of a 2 meaningful day in court.” Argueta, 87 F.3d at 324 (quoting 3 Pelleport Investors, Inc. v. Budco Quality Theaters, Inc., 741 4 F.2d 273, 280 (9th Cir. 1984), abrogated on other grounds by 5 Powerpex Corp. v. Reliant Energy Services, Inc., 551 U.S. 224, 6 235-36 (2007) (emphasis in original)). Here, however, Access 7 avoids this heavy burden of production because XPOL failed to 8 identify a forum selection clause that covers Access’s claims. 9 As Access argues, “[i]n resolving a motion to transfer 10 involving a forum-selection clause, ‘[t]he threshold issue is 11 whether the forum-selection clause applies to Plaintiff’s 12 claims.” Opp’n at 4 (quoting Henry v. Cent. Freight Lines, 13 Inc., No. 2:16-cv-00280-JAM-EFB, 2017 WL 4517836, at *2 (E.D. 14 Cal. Oct. 10, 2017)). XPOL contends its February 2016 contract 15 with LTI sets forth the agreed-upon terms for the January 2017 16 shipment from Grand Island to Woodland. Mot. at 5-6. In 17 support of this position, XPOL focuses on a single sentence 18 within the agreement: “Except as modified herein, any 19 transportation or logistics services provided by XPOL are 20 subjected to XPOL’s standard terms and conditions . . . .” Id. 21 at 5 (citing Ex. A to Perry Decl., ECF No. 19). XPOL’s standard 22 terms and conditions, in turn, contain a forum selection clause 23 requiring the parties to file suit in North Carolina “in the 24 event of any disagreement or dispute.” Mot. at 5-6 (quoting Ex. 25 A. to Perry Decl. at 16). XPOL contends its shipment from LTI’s 26 Grand Island facility to J.R. Scientific plainly falls within 27 the category of “any transportation or logistics services.” 28 Mot. 3-4. 1 Access urges the Court to, instead, interpret the sentence 2 XPOL identified in context of the broader document. Opp’n at 4- 3 6. The Court finds Access’s method of contract interpretation 4 is the proper one. See Lennar Mare Island, LLC v. Steadfast 5 Insurance Co., 176 F. Supp. 3d 949, 955 (E.D. Cal. 2016). Using 6 this approach, the relevant portion of the contract reads: 7 Purpose: The standard operating procedures of this document 8 have been established between Life Technologies and XPOL to define agreed best practices for the 9 administration and transportation of Life Technologies’ shipments as shown in Schedule 1. 10 Scope: 11 XPOL will arrange with third party independent contractor licensed motor carriers (“Carriers”) for 12 truckload transportation of Life Technologies’ shipments, in the laneways specified in Schedule 1, 13 for the rates and terms specified therein, in accordance with the requirements set out herein. Life 14 Technologies’ shipments shall be transported as “exclusive use” shipments, meaning no other shippers’ 15 freight may be transported in the same trailer at the same time as Life Technologies’ shipments. Except as 16 modified herein, any transportation or logistics services provided by XPOL are subject to XPOL’s 17 standard terms and conditions . . . . Current version at Effective Date is attached as Schedule 2. 18 Ex. A to Perry Decl. at 1. The Schedule 1 attachment lists two 19 laneways—one between Grand Island, NY and Chester, NY; the other 20 between Grand Island, NY and Charlottetown, PE. Id. at 3. 21 The February 2016 contract’s plain language states that the 22 purpose of the agreement was to “define agreed best practices 23 for the administration and transportation of Life Technologies’ 24 shipments as shown in Schedule 1.” Ex. A to Perry Decl. at 1. 25 Schedule 1 does not include a laneway between Grand Island, NY 26 and Woodland, CA. The Court would have to adopt an 27 unnecessarily strained reading of the contract to find that its 28 1 terms nonetheless govern this unenumerated route. The more 2 natural interpretation of the seemingly-broad language XPOL 3 identifies is that any transportation or logistics services 4 provided by XPOL for the laneways listed in Schedule 1 are 5 subject to XPOL’s terms and conditions. Accordingly, the Court 6 finds that the forum selection clause incorporated into the 7 February 2, 2016 contract does not apply to any claims arising 8 out of XPOL’s January 2017 shipment to Woodland, CA. 9 The Rate Confirmation Sheet XPOL discusses in its reply 10 brief does not alter the Court’s conclusion. See Reply at 3-4. 11 After LTI hired XPOL to transport Access’s order of fetal bovine 12 serum to California, XPOL sent LTI a Rate confirmation Sheet. 13 Id. This form included a disclosure purporting to subject “any 14 transportation brokerage and/or other transportation 15 intermediary-related services provided by XPO” to the company’s 16 “Customer Standard Terms and Conditions.” Ex. A to Supp. Perry 17 Decl., ECF No. 22. Although it is not entirely clear from the 18 reply, XPOL seems to argue that this disclosure either (1) 19 reinforces the notion that the February 2016 contract bound the 20 January 2017 shipment to XPOL’s terms and conditions; or (2) 21 provides an independent contractual basis for subjecting the 22 January 2017 shipment to XPOL’s terms and conditions. See Reply 23 at 3-5. The Court does not find either argument persuasive. 24 First, as Access argues, the fact that the February 2016 25 contract and the Rate Confirmation Sheet for the January 2017 26 order both reference XPOL’s terms and conditions does little to 27 suggest the 2016 contract governed the 2017 shipment. The sheet 28 does not reference the February 2016 contract or any of the 1 laneways listed in Schedule 1 of that agreement. The Court 2 lacks any basis for viewing these two distinct arrangements as 3 one. Second, the Rate Confirmation Sheet does not stand as its 4 own contract. XPOL maintains that, based on its terms and 5 conditions, LTI agreed to be bound by XPOL’s terms and 6 conditions when it tendered the fetal bovine serum to XPOL’s 7 subcontractor. Reply at 4-5 (quoting Ex. A to Perry Decl. at 8 5). Tautologically, this argument uses standards set forth in 9 XPOL’s terms to determine that LTI was bound by XPOL’s terms. 10 The Court is not convinced. 11 XPOL’s central critique is that Access is trying to have 12 its cake and eat it too—that Access claims the February 2016 13 contract to invoke its benefits but then disavows the agreement 14 to avoid its obligations. But the Court does not find any 15 indication that Access’s suit flows from rights the February 16 2016 contract created. Because XPOL failed to identify a forum- 17 selection clause that applies to Access’s claims, the Court 18 denies XPOL’s Rule 12(b)(3) motion. 19 B. Page Limits 20 The Court’s Order re Filing Requirements (“Order”), ECF No. 21 4-2, limits memoranda in support of and opposition to motions to 22 dismiss to fifteen pages. Order at 1. It limits reply 23 memoranda to five pages. Id. A violation of the Order requires 24 the offending counsel (not the client) to pay $50.00 per page 25 over the page limit to the Clerk of Court. Id. Moreover, the 26 Court does not consider arguments made past the page limit. Id. 27 XPOL’s brief exceeded the page limit by three pages. XPOL’s 28 counsel must therefore send a check payable to the Clerk for the 1 | Eastern District of California for $150.00 no later than seven 2 days from the date of this Order. 3 4 Til. ORDER 5 For the reasons set forth above, the Court DENIES XPOL’s 6 | motion to dismiss or transfer Access’s suit. 7 IT IS SO ORDERED. 8 Dated: March 6, 2020 kA 10 teiren staves odermacr 7008 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28