Morgan Tire of Sacramento, Inc. v. Goodyear Tire & Rubber Co.

60 F. Supp. 3d 1109, 2014 U.S. Dist. LEXIS 159856, 2014 WL 6390282
CourtDistrict Court, E.D. California
DecidedNovember 13, 2014
DocketNo. 2:13-cv-2135 KJM AC
StatusPublished
Cited by9 cases

This text of 60 F. Supp. 3d 1109 (Morgan Tire of Sacramento, Inc. v. Goodyear Tire & Rubber Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morgan Tire of Sacramento, Inc. v. Goodyear Tire & Rubber Co., 60 F. Supp. 3d 1109, 2014 U.S. Dist. LEXIS 159856, 2014 WL 6390282 (E.D. Cal. 2014).

Opinion

ORDER

KIMBERLY J. MUELLER, District Judge.

On March 14, 2014, the court heard argument on defendants’ motion to transfer or, in the alternative, to dismiss. Lawrence Skidmore and Kathleen Lyon appeared for plaintiff; Eric Enson appeared for defendants. Following the hearing, the court ordered supplemental briefing, which has now been filed. After considering the parties’ papers and arguments, the court GRANTS defendants’ motion to transfer.

I. BACKGROUND

On October 15, 2013, plaintiff Morgan Tire of Sacramento (Morgan Tire) filed a complaint alleging conversion, breach of county contracts and piggy-back contracts, intentional interference with prospective business advantage, breach of the covenant of good faith and fair dealing, and unfair business competition against Goodyear Tire and Rubber Company (Goodyear) and Wingfoot Commercial Tire Systems (Wing-foot) (collectively defendants). ECF No. 1.

Defendants filed a motion to change venue or dismiss on December 10, 2013. ECF No. 13. On December 31, 2013, plaintiff filed its first amended complaint (FAC). ECF No. 16. The court then denied the motion to dismiss as moot. ECF No. 17.

On January 21, 2014, defendants filed a new motion to transfer or to dismiss. ECF No. 20. Plaintiff opposed the motion, defendants filed a reply and plaintiffs filed an objection to new evidence defendants filed with the reply. ECF Nos. 23-25.

On February 25, 2014, the court asked the parties for supplemental briefing and rescheduled the hearing on the motion. ECF No. 26. The parties filed their supplemental briefs. ECF Nos. 27-28. Following the March 14, 2014, hearing, the court asked for additional supplemental briefing. ECF No. 31. As noted, the parties have now submitted their supplemental briefs in response to the court’s order. ECF Nos. 34-35.

II. ALLEGATIONS OF THE FIRST AMENDED COMPLAINT

Morgan Tire is a distributor of new tires and for twenty years, until December 2011, operated under a distributorship subject to a New Tire Agreement with Goodyear. FAC, ECF No. 16 ¶ 9 & Ex. A. In January 2012, Goodyear sent another agreement to Morgan Tire, but the latter did not sign it. ECF No. 16 ¶ 11. However, Morgan Tire and Goodyear agreed to continue to do business “under a partly written and partly oral agreement under those terms of the New Tire Agreement acknowledged by the well-established course of business dealings by and between [them] ...including supplying Goodyear tires to national accounts, ordering tires, prices and payment and credit terms for tires. Id. The parties have not previously been in any legal disputes. Id.

In 2001, Morgan Tire opened a Goodyear retread tire plant under a distributorship agreement for retread sales, the Retread Agreement. Id. ¶ 12. The parties have not executed a written Retread Agreement since 2003, but have continued to do business under a partly written, partly oral agreement reflecting their course of business dealings and reflecting [1112]*1112the terms of the Retread Agreement regarding supplying retreads to national accounts and ordering, pricing and payment. Id. ¶ 13.

The New Tire and Retread Agreements, collectively the Distributorship Agreements, gave Morgan the exclusive right to service Goodyear’s national accounts, such as UPS and Federal Express; Goodyear tires were preapproved for these accounts. Id. ¶ 15.

Since 1993, Morgan Tire has had written agreements to supply new Goodyear tires to the County of Sacramento. Since 2009, it has had an agreement to supply the County with Goodyear retreads. Id. ¶ 17. In 2012 Morgan Tire again secured a contract with Sacramento County to supply both new and retread tires, using the pricing figures Goodyear employees input directly into Morgan Tire’s bid package. Id. ¶¶ 18, 20.' In order to fulfill its obligations to the County, Morgan Tire entered into a written subcontract with Goodyear for the latter to supply Morgan Tires with the requirements of the County contract. Id. ¶ 19. The City of Roseville and City of Sacramento piggy-backed onto Sacramento County’s agreement with Morgan Tire. Id. ¶ 22.

As part of its agreement to supply Morgan Tire with the retread material necessary to satisfy the County contract, Goodyear required Morgan Tire to use its “cushion and precure” process and to purchase and install new equipment at Morgan Tire’s retread plant. Id. ¶21 & Ex. D.

When Morgan Tire began talking about a retread agreement with Continental Tire some of Goodyear’s employees said Goodyear would not be pleased and would cancel Morgan Tire’s contract. Id. ¶ 24. On January 17, 2013, Morgan Tire received a letter from Goodyear terminating the Distributorship Agreements. Even before the termination went into effect, Goodyear cut off Morgan Tire’s access to Goodyear’s online ordering and accounting system and to the credit balances Morgan Tire had amassed. Id. ¶29. As a result, Morgan Tire did not have enough tire material on hand to honor its contracts with Sacramento County and the City of Roseville. Id. ¶ 3L Goodyear later told Sacramento County and the piggy-back contract parties its subsidiary Wingfoot could fulfill the contract at the same price as Morgan Tire. Id. ¶ 32.

The First Amended Complaint makes five claims: (1) conversion against Goodyear; (2) breach of the Sacramento County and piggy-back contracts, against Goodyear; (3) intentional interference with prospective business advantage against Goodyear and Wingfoot; (4) breach of the covenant of good faith and fair dealing against Goodyear; (5) unfair competition against Goodyear and Wingfoot.

III. MOTION TO TRANSFER

A. Standard

Under 28 U.S.C. § 1404(a) 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 .... for the convenience of parties and witnesses.” 28 U.S.C. § 1404(a). Typically, in considering such a transfer, the court “must evaluate both the convenience of the parties and various public-interest considerations,” “weighting] the relevant factors and decid[ing] whether, on balance, a transfer would serve ‘the convenience of the parties and witnesses’ and otherwise promote ‘the interests of justice.’ ” Atl. Marine Constr. Co. v. U.S. Dist. Court, — U.S. — 134 S.Ct. 568, 581, 187 L.Ed.2d 487 (2013) (quoting 28 U.S.C. § 1404(a)).

[1113]*1113“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.” Id. (citation and internal-quotation marks omitted). Under such circumstances, “a proper application of § 1404(a) requires that a forum-selection clause be given controlling weight in all but the most exceptional cases.” Id. at 579 (citation and internal quotation marks omitted). By “[e]nforc[ing] ...

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60 F. Supp. 3d 1109, 2014 U.S. Dist. LEXIS 159856, 2014 WL 6390282, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morgan-tire-of-sacramento-inc-v-goodyear-tire-rubber-co-caed-2014.