Bindman v. MH Sub I, LLC

Background

Boris Bindman sued MH Sub I, LLC, doing business as Internet Brands and referred to in the opinion as “Martindale.” The complaint alleged breach of contract, breach of the implied duty of good faith and fair dealing, unjust enrichment or quasi-contract, unfair and deceptive practices under California Business Code section 17200, and violations of the California Consumers Legal Remedies Act.

Before joining Martindale’s Lead Generation Program, Bindman accepted general terms and conditions. Those terms provided that disputes would be governed by California law and that the parties irrevocably agreed to the exclusive jurisdiction and venue of the courts of Los Angeles County and the Central District of California, respectively. Bindman used the services from August 30, 2018, until cancelling in early May 2019, and filed this action in the Northern District of California on May 14, 2019.

The court had previously denied MH Sub I’s motion to compel arbitration, and MH Sub I appealed that denial. MH Sub I then moved to transfer the action under the forum-selection clause or, alternatively, to stay the action while the appeal was pending.

Arguments

MH Sub I argued that the forum-selection clause required transfer to the Central District of California. Bindman argued that MH Sub I had waived the clause by admitting that venue was proper in the Northern District, stating that litigation should proceed there if arbitration did not apply, seeking to preserve that court’s ability to monitor arbitration, and filing dispositive relief there.

Bindman also argued that enforcing the clause would conflict with the Northern District’s public policy against forum shopping. The court explained that a forum-selection clause is generally enforced unless the party resisting it shows that enforcement would be unreasonable or unjust. Relevant circumstances can include fraud or undue influence in obtaining the clause, an exceptionally difficult or inconvenient selected forum, or conflict with a strong public policy of the court where the case was filed.

Court’s Analysis

The court rejected Bindman’s waiver argument. Although it agreed that MH Sub I should have sought enforcement of the forum-selection clause earlier or at the same time as its arbitration motion, it found that this timing did not clearly and unequivocally show an intent to give up the clause.

The court also rejected the public-policy argument. Because the proposed transfer was to another federal district within California, the Central District was not an unreasonable forum. The court found that the Central District was a viable forum for Bindman’s contract and California statutory claims, and that the early stage of the case meant enforcement of the clause was not unjust. The court concluded that Bindman had not met the required burden to show that enforcing the clause would be unreasonable or unjust.

Disposition

The court held that the forum-selection clause was valid and enforceable and granted MH Sub I’s motion to transfer the case to the Central District of California. Because the transfer motion was granted, the court denied as moot MH Sub I’s alternative motion to stay the action pending appeal. Judge Susan Illston signed the order on February 28, 2020.