IN RE PFA INSURANCE MARKETING LITIGATION

Background

Defendants Life Insurance Company of the Southwest, National Life Insurance Company, NLV Financial Corporation, and National Life Holding Company moved for permission to seek reconsideration of the court’s January 22, 2019 order denying motions to compel arbitration as to plaintiffs Rui Chen and Wenjian Gonzalez. In the alternative, they moved to transfer the action to the Northern District of Georgia under 28 U.S.C. § 1404(a).

The earlier arbitration ruling found that the defendants had not provided enough evidence that the plaintiffs affirmatively agreed to the terms of the Premier Financial Alliance Associate Marketing Agreement by clicking a box in an online registration form. The defendants argued that evidence submitted in the motion applied to all Premier Financial Alliance associates, including the plaintiffs and proposed class members.

Reconsideration of Arbitration Ruling

The court denied the motion for leave to seek reconsideration. It explained that, in a separate order concerning a related action, the court had found disputed material facts about whether the plaintiffs in that action entered into the Associate Marketing Agreement. Those plaintiffs stated that recruiting associates completed the online registration form for them and that they therefore never saw the agreement’s terms when they registered. Based on that reasoning, the court declined to reconsider its earlier order denying arbitration in this action.

Motion to Transfer

The court also denied the motion to transfer. Section 1404(a) permits a federal district court to transfer an action to another proper district when convenience and public-interest considerations support doing so. The defendants argued that the case could have been brought in the Northern District of Georgia and that the plaintiffs had agreed to Georgia venue and jurisdiction through the Associate Marketing Agreement.

The court gave the claimed forum-selection provision no weight because it had already found that the defendants failed to establish the existence of an agreement to arbitrate. For the same reasons, the court could not find that the venue provision bound the plaintiffs. The court also concluded that, even if the plaintiffs had agreed to it, the provision was permissive rather than mandatory. It stated that the agreement said Premier Financial Alliance “may elect” to file certain litigation in Gwinnett County, Georgia and that the parties consented to jurisdiction and venue there; it did not clearly designate Georgia as the exclusive forum. The court further found that the provision was limited to matters arising under the agreement and was not shown to cover the tort-like claims alleged in the case.

The private-convenience factors favored keeping the case in California. Plaintiff Wenjian Gonzalez resided and worked there as a Premier Financial Alliance associate. Gonzalez stated that most potential witnesses lived or worked in California, and the court noted evidence that several individuals associated with Premier Financial Alliance’s leadership worked there. The defendants did not identify necessary nonparty witnesses outside California or show that litigation costs, access to evidence, or compulsory process favored Georgia. The court also found that most claims were brought under California statutes with which the California court likely would be more familiar.

The public-interest factors also favored California. The defendants did not identify an interest or burden favoring Georgia, while California had a significant interest because many Premier Financial Alliance associates were located there and a high proportion of the relevant “Living Life” policies were sold to California consumers. The court therefore denied the motion to transfer.

Other Orders and Disposition

The court dissolved the stay previously entered in the action. It directed the plaintiffs to file a Second Amended Complaint no later than January 10, 2020, with responsive pleadings due fourteen days after filing. The order terminated Docket No. 95. Judge Yvonne Gonzalez Rogers ordered these dispositions on December 19, 2019.