Reza v. Zuffa, LLC

Background

Plaintiffs Moises Reza, Frank Garza, Tanner Pendergraft, and Federico Navarrete alleged that defendants Zuffa, LLC and Neulion USA, LLC offered a digital streaming service called UFC Fight Pass. Plaintiffs alleged that they purchased the service through defendants’ website and were enrolled in automatically renewing monthly subscriptions without their knowledge or consent. They also alleged that defendants failed to provide a clear way to cancel the subscriptions.

The First Amended Class Action Complaint asserted claims under the California False Advertising Law, the California Consumers Legal Remedies Act, the California Unfair Competition Law, and claims for conversion and unjust enrichment.

Motions and Analysis

Defendants jointly moved to transfer the action under 28 U.S.C. § 1404(a) and moved to dismiss the First Amended Complaint. Defendants argued that the case should be transferred to the District of Nevada because the service’s Terms of Use contained a forum-selection clause. That clause stated that disputes arising from the service would be decided exclusively by a court located in Clark County, Nevada, and that the parties waived other jurisdictional or venue defenses.

The court explained that forum-selection clauses are generally presumed valid and that the party challenging one has a heavy burden to show that enforcement would be unreasonable and unjust. The court identified three relevant grounds for overcoming that presumption: fraud, undue influence, or excessive bargaining power in including the clause; a selected forum so difficult and inconvenient that the party would effectively lose access to court; or enforcement that would violate a strong public policy of the original forum.

The plaintiffs did not argue that the clause resulted from fraud, undue influence, or excessive bargaining power, and they did not argue that Nevada was gravely difficult or inconvenient. They instead argued that transfer would violate public policy because a Nevada court would likely dismiss their California Consumers Legal Remedies Act claim, effectively waiving their rights under that law.

The court rejected that argument. It was not persuaded that a Nevada court would necessarily dismiss the claim. The court reasoned that the Nevada court could conduct its own choice-of-law analysis and decide whether California law should apply. The transfer therefore did not prevent plaintiffs from challenging the choice-of-law provision in Nevada.

Ruling

The court granted defendants’ motion to transfer the action to the District of Nevada. It denied defendants’ motion to dismiss without prejudice to defendants’ renoticing the motion for a hearing in the District of Nevada. The court also vacated the hearing scheduled for March 31, 2023. Judge Maxine Chesney signed the order.