Abeyta v. DMCG, Inc.

Background

Robert Abeyta filed a proposed class action against DMCG, Inc. in Alameda County Superior Court. DMCG removed the case to the Northern District of California. The complaint alleges that DMCG, doing business as “Bail Hotline Bail Bonds,” failed to provide disclosures required by California consumer-protection laws when Abeyta cosigned documents financing a $15,500 non-refundable bail-bond premium for the purpose of bailing a friend out of jail. Abeyta alleges that he paid a $4,500 down payment and one $300 installment payment, and that DMCG later tried to collect the remaining balance.

The complaint asserts claims under California’s Unfair Competition Law and the Rosenthal Fair Debt Collection Practices Act. Abeyta seeks to represent a class of people who cosigned qualifying bail-bond credit agreements without the required notice and who owed, were asked to make, or made payments on or after October 3, 2018, subject to the class definition stated in the complaint.

DMCG’s Venue Motions

DMCG moved to dismiss under Federal Rule of Civil Procedure 12(b)(3) and 28 U.S.C. § 1406(a), arguing that venue was improper because the promissory note contained a clause stating that litigation arising from the bail bond would take place in Riverside, California. In the alternative, DMCG moved to transfer the case to the Central District of California under 28 U.S.C. § 1404(a).

The court rejected dismissal under Rule 12(b)(3) and § 1406(a). It explained that a forum-selection clause may be enforced through a transfer motion under § 1404(a), rather than through a motion to dismiss for improper venue. The court also held that venue was proper in the Northern District because the case was filed in a state court located within that federal district and was then removed to federal court.

Venue-Selection Clause

The court held that the clause selecting Riverside was void and unenforceable. Under federal law, a contractual venue clause generally is enforceable unless the party opposing it makes a strong showing that enforcement would be unreasonable or unjust, including because it conflicts with a strong public policy specifically related to venue.

The court found that California Code of Civil Procedure § 395(b)-(c) expresses such a policy. Section 395(b) identifies certain counties—including the county where a consumer signed the contract, lived when signing it, or lives when the action begins—as proper venues for actions arising from qualifying consumer transactions. Section 395(c) makes contractual provisions waiving those venue protections void and unenforceable.

DMCG argued that § 395(b) did not apply because the bail bond was for Abeyta’s friend rather than for Abeyta or his household. The court disagreed, reasoning that a bail-bond premium agreement is a consumer credit contract for primarily personal, family, or household purposes under the same statutory language used in California’s cosigner-disclosure law. The court also rejected DMCG’s argument that § 395(b) did not apply to a proposed class action, noting that DMCG had not cited authority supporting that position.

Because Abeyta signed the agreements and lived in Alameda County, the court concluded that the Riverside venue clause conflicted with California’s venue policy and could not be enforced.

Discretionary Transfer

The court separately considered whether to transfer the case under § 1404(a). That statute permits transfer for the convenience of the parties and witnesses and in the interest of justice. The court considered factors including where the agreements were made, the plaintiff’s choice of forum, the parties’ contacts with the forums, litigation costs, witnesses, evidence, the venue clause, and public policy.

The court found that several factors favored keeping the case in the Northern District or weighed against transfer. Abeyta executed the agreements in Alameda County, his claims arose from events there, and DMCG maintained several bail-bond offices in the district. Abeyta had no contacts with the Central District, although proposed class members might have contacts there. The court treated the venue-clause and public-policy factors as not favoring transfer because the clause was unenforceable.

The court found that a factor concerning litigation costs might favor transfer because many witnesses would be DMCG employees, but it ultimately treated that factor as neutral because transferring the case could simply shift inconvenience from one side to the other. The court also treated access to evidence as largely neutral because documents could be located in both districts and much discovery would be conducted electronically.

Disposition

The court concluded that transfer to the Central District would not further the convenience of the parties or the interests of justice. Judge Susan Illston therefore denied DMCG’s motion to dismiss and alternative motion for transfer of venue. The opinion addresses venue and transfer; it does not decide the merits of Abeyta’s underlying consumer-protection and debt-collection claims.