Judge: Christian R. Gullon, Case: 25PSCV00719, Date: 2025-05-29 Tentative Ruling

Case Number: 25PSCV00719    Hearing Date: May 29, 2025    Dept: O

Tentative Ruling

(1)   MOTION TO QUASH SERVICE OF SUMMONS FOR LACK OF JURISDICTION ON BEHALF OF SPECIALLY APPEARING DEFENDANT ASTROPHYSICS ASIA, INC. is MOOT.

(2)   DEFENDANT ASTROPHYSICS ASIA, INC.’S MOTION TO DISMISS, OR ALTERNATIVELY, STAY OF ACTION FOR VIOLATION OF FORUM SELECTION CLAUSE is GRANTED.

(3)   DEFENDANT ASTROPHYSICS INC.’S MOTION TO DISMISS, OR ALTERNATIVELY, STAY OF ACTION FOR VIOLATION OF FORUM SELECTION CLAUSE is GRANTED.

As for the motions to dismiss, they are granted namely as Plaintiff has not advanced compelling arguments as to why enforcement of the forum selection clause, a clause which was presumably consented to by two sophisticated parties, would be unreasonable or unfair. Plaintiff also does not demonstrate if and why the California Constitution’s right to a jury trial for its residents/citizens would apply to a foreign entity.  

Background

This case arises from the alleged breach of a joint venture agreement.

On March 3, 2025, Plaintiff GENESIS TRANSUNITED, INC. (occasionally, “GTU”) filed suit against Defendants ASTROPHYSICS, INC. (occasionally, “AP”) and ASTROPHYSICS ASIA, INC. (occasionally, “AP Asia”) for Breach of Contract.

On April 2, 2025, ASTROPHYSICS ASIA filed the instant motion to quash and the instant motion to dismiss. That same day, Astrophysics, Inc. filed the instant motion to dismiss.

On May 13, 2025, Plaintiff filed its opposition to the motion quash. That same day, Plaintiff filed a motion for continuance to conduct jurisdictional discovery.

On May 15, 2025, Plaintiff filed an opposition to the motions to dismiss.

On May 20, 2025, Plaintiff filed an ex parte to advance the hearing date on Plaintiff’s motion for a continuance.

On May 21, 2025, Defendants filed a consolidated reply to the motions to dismiss and that same day Defendant Astrophysics Asia filed its reply in support of the motion to quash.

On May 22, 2025, three motions to be admitted pro hac vice were filed.

Discussion[1]

At the outset, the court notes, as do Defendants, that Plaintiff cites to cases that are pending review, which is prohibited under California Rules of Court Rule 8.1115, subd. (e)(1) [“Pending review and filing of the Supreme Court's opinion, unless otherwise ordered by the Supreme Court under (3), a published opinion of a Court of Appeal in the matter has no binding or precedential effect, and may be cited for potentially persuasive value only. Any citation to the Court of Appeal opinion must also note the grant of review and any subsequent action by the Supreme Court.”].) Effectively, Plaintiff’s citations to The Comedy Store v. Moss Adams LLP (2024) 106 Cal.App.5th 784, Handoush v. Lease Finance Group, LLC (2019) 41 Cal.App.5th 729, and Epicent Rx. Inc. v Superior Court (2023) 95 Cal.App. 5th 890 are misplaced. (See Reply pp. 2-3, fn. 1.)

Preliminary comment aside, Defendants argue that the case should be dismissed because Plaintiff filed the action in direct contravention of a forum selection clause contained in the Joint Venture Agreement (“Agreement”). In that Agreement, the forum selection clause mandates any dispute arising from or related to the Agreement be brought in the Philippines. 

For reasons to be discussed below, the court agrees with Defendants and dismisses the case.

i.                 Overview of the Applicable Law

The court turns to the recent case of Grove v. Juul Labs, Inc. (2022) 77 Cal.App.5th 1081 as it provides a synthesis of the law.

A section 410.30 motion is a proper vehicle for enforcing a forum selection clause. California favors contractual forum selection clauses so long as they are entered into freely and voluntarily, and their enforcement would not be unreasonable. Both California and federal law presume a contractual forum selection clause is valid and place the burden on the party seeking to overturn the forum selection clause. Thus, when a section 410.30 motion is based on a mandatory forum clause, arguments ‘that the previously chosen forum is unfair or inconvenient are generally rejected.’ Instead, the party opposing the motion must establish that enforcement of the clause would be unreasonable. (Id. at p. 1090, internal citations and quotations omitted.)[2]

Nonetheless, there is a burden-shifting mechanism when the party opposing the motion argues that enforcing the mandatory forum selection clause would impede upon an unwaivable right. (See Verdugo v. Alliantgroup, L.P. (2015) 237 Cal.App.4th 141.) “[W]hen the claims at issue are based on unwaivable rights created by California statutes…the party seeking to enforce the forum selection clause bears the burden to show litigating the claims in the contractually-designated forum will not diminish in any way the substantive rights afforded ... under California law.” (Id. at p. 147, internal quotation omitted.)

ii.               Overview of the Facts

The complaint is one for an alleged breach of an Agreement.[3] The pertinent facts regarding the Agreement are as follows:

-        In 2017, Plaintiff and Defendants (collectively, the “Parties”) approached Senator Richard Gordon to discuss the possibility of them providing security protocol equipment for the Philippines Bureau of Customs, namely airport X-ray machines (the “Project”) (Complaint ¶8)

-        The Parties agreed to jointly pool their resources to bid on the Project and entered into the Agreement. (¶11; see also Agreement, Section 1 [“The primary purpose of the Joint Venture is to participate in the public bidding to be conducted by the Bureau of Customs Bids and Awards Committee for Philippine Airports/Ports.”].)

-        The Agreement was entered on or about July 27, 2018. (Gelacio Decl., ¶3)

-        Section 13.13 of the Agreement provides as follows: Article 5, Section 4, states: Governing Law - This Agreement shall be governed by and construed according to the laws of the Republic of the Philippines. Venue of any court action arising from this Agreement shall be exclusively laid before the proper court of the _____, Philippines.)

-        Pursuant to the Agreement, AP Asia was authorized to act as a distributor for AP. (¶12)

-        In the Agreement, the Parties agreed to distribute profits as follows: 20% for AP, 20% for AP Asia, and 60% for GTU. (¶13)

-        The Parties secured the winning bid. (¶14)

-        Despite the Bureau of Customs paying AP and AP Asia (¶17), Defendants refused to pay the amount owed to Plaintiff. (¶20)

iii.             Application of the Law to the Facts

In opposition, Plaintiffs argue that the motion should fail because “Defendants do not even mention the burden of proof, let alone satisfy the burden of proof. (Opp. p. 5:13-14.) But Plaintiffs bear the burden, not Defendants, and Plaintiffs fail to satisfy their burden.  

a.     Jury Trial

Citing to the case of The Comedy Store v. Moss Adams LLP, supra, Plaintiff requests this court to refuse to enforce the Philippines venue provision of the Philippines contract because enforcing it would violate the public rights of California’s residents. Setting aside that the case is on appeal and thus cannot be cited, as noted in opposition, unlike the plaintiff in the Comedy Store that was a standup comedy venue in Los Angeles, here, the Plaintiff is not a California resident. (Reply pp. 2-3, citing Comedy Store, supra, at p. 789 [“California courts will refuse to defer to the selected forum if to do so would substantially diminish the rights of California residents….”], emphasis added.) Here, Plaintiff is a Philippines entity seeking to come to California to enforce a Philippine Agreement entered into in the Philippines, performed in the Philippines and allegedly breached in the Philippines by the alleged failure to pay Plaintiff Philippine pesos received from the Philippines government in connection with a Philippines project.

b.     Fairness

Plaintiff argues that “[i]t would be fundamentally unfair for a California manufacturer to include a California choice-of-law provision in its Dealership Agreement with a foreign dealer thereby protecting itself under California law but then enforce a Philippines forum selection clause and thereby deprive the same dealer of its right under California law to a jury trial.” (Opp. p. 6:23-26; see also Opp. p. 6:2-4 [“Declining to enforce the forum selection clause here would also be consistent with fundamental fairness, which as noted above, is relevant to a court’s consideration of whether to enforce a forum selection clause.”].) Though not squarely addressed in Reply, the argument appears to be that there are/were various agreements at play. The court finds the argument unpersuasive as the Agreement (the joint venture) is the relevant/material agreement.

In the Dealership Agreement, AP appointed GTI as its exclusive dealer of its x-ray screening system(s) in the Philippines. (See Gelacio Decl., Ex. A.) The Dealership Agreement included a choice-of-law provision stating that it shall be governed by and construed and enforced in accordance with the laws of the State of California and that The Dealership Agreement was the “entire agreement” between the parties relating to the subject matter thereof, and that any modifications or amendments of the Agreement must be in writing. Moreover, also prior to the signing of the Agreement, the parties entered into a verbal agreement under which GTI was to receive and the verbal agreement was not subject to any choice-of-law provision or forum selection clause. (Opp. p. 6.)

But these agreements, the Dealership Agreement and purported oral agreement, are irrelevant because they preceded the Agreement. (Thus, any evidentiary objections based upon relevance are sustained.) The Dealership Agreement was entered into on 6/13/2017 and according to the first page of the Dealership Agreement, it “supersede[d] and replace[d] all prior agreements” between the Parties (italics added), but the Agreement was entered in 2018. A joint venture is defined as an association of persons with the intent, by way of an express or implied contract, to engage in and carry out a single business venture for joint profit, for which purpose they combine their efforts, property, money, skills, and knowledge, without creating a partnership or corporation, pursuant to an agreement that there will be a community of interest among them as to the purpose of the undertaking and that each participant will stand in the relation of principal, as well as agent, to each of the others, with an equal right to control the means employed to effect the common purpose of the venture. (See e.g., Holtz v. United Plumbing & Heating Co. (1957) 49 Cal.2d 501.) Here, the purpose of the Agreement is for the parties “ to pool their resources together” for the “primary purpose of the Joint Venture is to participate in the public bidding to be conducted by the Bureau of Customs Bids and Awards Committee for Philippine Airports/Ports.” (Complaint, Ex. A [Agreement].) With that, as the Agreement is the agreement that matters and not the Dealership Agreement or the oral agreement, then it is neither unfair nor unreasonable that terms of that Agreement to dictate the outcome of this action.

c.      Philippines Law

To the extent that Plaintiff argues that under Philippines law the right to a jury trial does not exist, the court sustains Defendants’ evidentiary objections on that front. Plaintiff relies upon the declaration of Mervin Mateo, who is licensed to practice law in New York and was “previously licensed to practice law in the Philippines. (Mateo Decl., p. 2.)  Mr. Mateo’s testimony concerning the civil jury system in the Philippines lacks foundation, particularly from

an attorney has not been licensed in the Philippines for 20 years and is not qualified to practice law in the Philippines due to his failure to complete continuing legal education requirements. (Mateo Decl., p. 2.)[4]

d.     The Parties are Sophisticated

A mandatory forum selection clause is valid and enforceable so long as it is entered into freely and voluntarily. (Smith, Valentino & Smith, Inc. v. Sup. Court (1976) 17 Cal.3d 491, 495-96.) Though not argued by Defendants, it is worth noting that there is no indication that the parties did not freely enter into the Joint Venture Agreement.  This favorable treatment is attributed to the “law's devotion to the concept of one's free right to contract, and flows from the important practical effect such contractual rights have on commerce generally.” (America Online, Inc. v. Superior Court (2001) 90 Cal.App.4th 1, 11.) This court sees no reason to depart from clearly demarcated rules defining contracts which here, the parties agree in their Agreement to the Philippines as the appropriate venue. 

Conclusion

All in all, “[g]iven the importance of forum selection clauses, both the United States Supreme Court and the California Supreme Court have placed a heavy burden on a plaintiff seeking to defeat such a clause, requiring it to demonstrate that enforcement of the clause would be unreasonable under the circumstances of the case.” (Lu v. Dryclean-U.S.A of California, Inc. (1992) 11 Cal.App.4th 1490, 1493.) Here, Plaintiff did not advance compelling arguments as to why enforcement of the forum selection clause, a clause which was presumably consented to by two sophisticated parties, would be unreasonable or unfair. Based on the foregoing, the motions to dismiss are granted. As for leave to amend, that is denied as Plaintiff has failed to offer what the proposed amendment would be, or how it would be based on the same general set of facts as its current breach of contract claim. As for the request for jurisdictional discovery, the relevance of additional discovery for purposes of a motion to dismiss is unclear as all the relevant evidence is known to the parties.