S&J Rentals, Inc. v. Hilti, Inc.

294 F. Supp. 3d 978
CourtDistrict Court, E.D. California
DecidedMarch 22, 2018
DocketNo. 2:17–cv–01492–MCE–KJN
StatusPublished
Cited by7 cases

This text of 294 F. Supp. 3d 978 (S&J Rentals, Inc. v. Hilti, Inc.) 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
S&J Rentals, Inc. v. Hilti, Inc., 294 F. Supp. 3d 978 (E.D. Cal. 2018).

Opinion

MORRISON C. ENGLAND, JR., UNITED STATES DISTRICT JUDGE

S & J Rentals, Inc., ("S & J") seeks redress on behalf of both itself and a putative class from Hilti, Inc. ("Hilti") for alleged illegal business practices. S & J's First Amended Complaint ("FAC") sets forth a single cause of action alleging that Defendant violated California's Unfair Competition Law ("UCL"), California Business and Professions Code §§ 17200 - 17204. ECF No. 4, at 9-10. Currently before the Court is Hilti's Renewed Motion to Dismiss S & J's case under the doctrine of forum non conveniens or, in the alternative, to strike S & J's request for a jury trial.1 Hilti's Motion is predicated upon the forum selection and choice of law clauses contained within credit applications submitted to Hilti by S & J. In opposition, S & J urges the Court to refrain from enforcing these clauses on the grounds that doing so contravenes California's public policy of affording its citizens effective class action remedies. According to S & J, such remedies are not available in Oklahoma, the designated forum. For the reasons set forth below, Hilti's motion is GRANTED.2

BACKGROUND

S & J is a California corporation that rents construction equipment to the public.3 Hilti, an Oklahoma corporation with its headquarters in Texas, develops, manufactures, and markets products for construction, building maintenance, and mining. Specifically, Hilti is the U.S. distributor for the TE 3000-AVR breakers, hand-guided electric tools that are used for chiseling concrete, masonry, asphalt, and other excavation work.

In 2008 and 2010, S & J contracted with Hilti to open a line of credit to facilitate the purchase of new power tools and other related equipment. Two agreements in that regard were executed. For both, S & J signed and submitted to Hilti credit applications (Credit Applications), the signature lines of which stated the following:

IN CONSIDERATION OF HILTI'S GRANTING OF CREDIT, APPLICANT AND PERSONAL GUARANTOR ("CUSTOMER"), HEREBY AGREE THAT ALL TRANSACTIONS MADE PURSUANT HERETO SHALL BE GOVERNED BY HILTI'S STANDARD TERMS AND CONDITIONS
*982OF SALE PRINTED ON THE REVERSE SIDE HEREOF.

Def.'s Mot. Dism., ECF No. 49-1, 4:13-16. In addition, the "CONSENT TO JURISDICTION" section of the Credit Applications' Terms and Conditions provided:

All transactions made pursuant hereto shall be deemed to have been made and entered into in Tulsa, Oklahoma. Any and all disputes arising directly or indirectly from such transactions shall be resolved in the courts of the County of Tulsa, State of Oklahoma, to the exclusion of another court, and any resulting judgment may be enforced by any court having jurisdiction of such an action. All transactions shall be governed by and construed in accordance with the laws of the State of Oklahoma.

Id. at 4:23-27.

S & J subsequently made several tool purchases using the line of credit, one of which was for a TE 3000-AVR breaker chiseling tool in 2012. S & J alleges that it did not know when it purchased products from Hilti that the products were equipped with a "pre-programmed 'automatic shut off' function that causes [them] to shut down after a specified number of operational hours." Pl.'s Opp. Mot. Dism., ECF No. 57, 2:11-12. According to S & J, to reactivate the tools, Hilti's customers must send them back to Hilti and pay a servicing fee, which S & J alleges is required regardless of whether the tools actually need any maintenance, repair, or servicing. S & J alleges that Hilti failed to adequately disclose this process to its consumers, and that such failure constitutes an unfair business practice under the UCL.

S & J filed its FAC on May 9, 2016. On June 21, 2016, Hilti filed a motion in which it sought to enforce the parties' forum section clause and have the case transferred to the District Court for the Northern District of Oklahoma. Hilti also moved to dismiss the action or, in the alternative, to strike S & J's jury demand. The parties briefed the issues raised in Hilti's motion, focusing primarily on whether the case should be transferred. Although S & J did contend in a footnote that the forum selection clause referred to Oklahoma state courts, it did not argue the motion to transfer should be denied on that basis. Instead, S & J argued that the forum selection clause was unenforceable because it would contravene a strong public policy of California. According to S & J, enforcing the forum selection clause would contravene California's public policy of ensuring its citizens have access to class action suits because: (1) Oklahoma's consumer protection statute had no extraterritorial effect; and (2) S & J would not be able to attain class status under Oklahoma's class action statute. Hilti, on the other hand, argued that the forum selection clause did not limit S & J to Oklahoma state court, and claimed that since S & J could bring its suit in a federal court in Oklahoma under Federal Rule of Civil Procedure 23, enforcing the forum selection clause did not contravene California's public policy in favor of class actions.

Ultimately, this Court agreed with Hilti and granted the motion to transfer to the Northern District of Oklahoma. The district judge assigned to the case, however, subsequently issued an Order to Show Cause questioning the propriety of transfer to that district.4 Following the parties' briefing on that issue, the court directed that the case be transferred back to this Court to reconsider whether Hilti's "motion to transfer should have been denied or *983whether the case should have been dismissed under forum non conveniens." Order, ECF No. 44, 9-10.

The Northern District correctly noted that the unavailability of a federal forum in Oklahoma changes the degree to which California's interests are implicated, and, consequently, this Court's analysis of whether enforcing the forum selection and choice of law clause contravenes a public policy of California. Following transfer of the case back to this Court, Hilti refiled its motion to dismiss, and that motion is currently before the Court for adjudication. Hilti argues that enforcing the contract still does not contravene a public policy of California and seeks dismissal on forum non conveniens grounds. Alternatively, Hilti moves to strike S & J's jury request pursuant to Federal Rule of Civil Procedure 12(f). S & J, on the other hand, argues that Oklahoma consumer protection and class action statutes preclude it from bringing its suit in Oklahoma state court, thereby contravening California's public policy in favor of ensuring that its citizens have effective class action remedies.

STANDARD

A. Federal Rule of Civil Procedure 12(b)(3)

Rule 12(b)(3) and 28 U.S.C.

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Bluebook (online)
294 F. Supp. 3d 978, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sj-rentals-inc-v-hilti-inc-caed-2018.