Judge: Jon R. Takasugi, Case: 22STCV12686, Date: 2022-09-27 Tentative Ruling

Case Number: 22STCV12686    Hearing Date: September 27, 2022    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendants’ motions to dismiss on grounds of forum non conveniens are GRANTED.  Accordingly, the Court need not consider the remaining motions. 

            On 4/14/2022, Plaintiffs Inclusion Companies, LLC and Wellness Your Way Festival (WYWF), LLC filed suit against the Kroger Co. (Kroger), Advantage Sales & Marketing, LLC (Advantage Sales), and Advantage Solutions, Inc. (Advantage Solutions) (collectively, Defendants), alleging: (1) breach of contract; (2) breach of fiduciary duty; (3) aiding and abetting breach of fiduciary duty; (4) intentional misrepresentation; (5) negligent misrepresentation; (6) quantum meruit; (7) intentional interference with contract; (8) intentional interference with prospective economic advantage; and (9) injunctive relief.

            Now, Defendants Advantage Sales and Advantage Solutions move to dismiss on the ground of forum non conveniens. Relatedly, Kroger moves to dismiss for forum non conveniens and to quash service of summons for lack of personal jurisdiction.

Discussion

            Given that all Defendants advance substantially similar arguments, the Court has consolidated its analysis of all motions into a single ruling.

            California Code of Civil Procedure § 410.30 provides: “When a court upon motion of a party or its own motion finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just.” (Cal. Civ. Proc. § 410.30, subd. (a).)

California applies a two-step process when determining whether a motion to dismiss on the ground of forum non conveniens should be granted. First, the Court must make a threshold determination whether the alternative forum is a suitable place for trial. (David v. Medtronic, Inc. (2015) 237 Cal.App.4th 734, 742-743 [188 Cal.Rptr.3d 103].) Second, assuming a suitable alternative forum exists, the Court must consider the private and public interests in litigating the matter in California. (Stangvik v. Shiley Inc. (1991) 54 Cal. 3d 744, 751.)

Defendants argue that a suitable alternative forum exists in Cincinnati, Ohio and the balance of private and public interest factors weigh in favor of adjudicating this matter there.

            First, Defendants argue that Ohio is a suitable place for trial because Kroger is an Ohio-based defendant, with Ohio serving as its place of incorporation and its principal place of business, and the Advantage Defendants expressly submitted and consented to the jurisdiction of the courts of Ohio for purposes of this action.

Given the lack of any potential jurisdictional issues as to Kroger and the express submission of jurisdiction to the courts of Ohio by the Advantage Parties for this action, the Court agrees that Ohio is a “suitable place for trial” in this matter.

            This leaves the question of whether or not, despite the existence of Ohio as a suitable forum, the balance of private and public interests favors litigating this action in California. 

            Private interest factors are “those that make trial and the enforceability of the ensuing judgment expeditious and relatively inexpensive, such as the ease of access to sources of proof, the cost of obtaining attendance of witnesses, and the availability of compulsory process for attendance of unwilling witnesses. (Stangvik, supra, 54 Cal. 3d at p. 751.) Courts at times have labeled these factors taken together as the “proximity of evidence and witnesses.” (Century Indem. Co. v. Bank of Am. (1997) 58 Cal. App. 4th 408, 413.) 

To show that private interest factors favor litigating this action in Ohio, Defendants submitted evidence that: 

-         Defendant Kroger is an Ohio-based company, and Kroger’s key witnesses for this action reside there. (Lindholz Decl., ¶ 13.)

-         WYWF’s principal, the female-musician referenced in Plaintiffs’ complaint, is not a resident of California, but rather primarily resides in Tennessee and has ties to Alaska. (Miller Decl., ¶ 4.) When she invited Kroger employees to see the filming of a Discovery Channel Show (Compl. ¶ 6), it was in Alaska—not California.

-         Although Drinkwater purports to live in California, all of his relevant dealings in this dispute were outside the state. He repeatedly flew to Cincinnati to meet with Kroger and plan and attend the Festivals. (Lindholz Decl. at ¶ 11.)

-         Other than Drinkwater, the only other Inclusion employee with whom Kroger communicated regarding the planning of the Festivals resides in Chicago. (Id. at ¶ 10.)

-         Tellingly, no Kroger employee ever traveled to California to meet with Inclusion or otherwise plan for the Festivals. (Id. at ¶ 9.)

-         Inclusion’s own website identifies Bentonville, Arkansas as its primary address.

-         Kroger anticipates that the majority of its witnesses with useful or relevant knowledge are located in Cincinnati, including, but not limited to, Colleen Lindholz, Jane Dierkers, and Daniel Price (Lindholz Decl. at ¶ 13). These individuals may possess information concerning Kroger’s relationship with Plaintiffs. In addition, the majority of the individuals employed by Advantage, or whom Advantage will indicate are witnesses that have useful or relevant information, are present in Cincinnati, including, but not limited to, Lisa Haubner, Morgan Reno, Kristen May, Suzanne Ewen, and Cynthia Oxley. 3 (Id. at ¶ 14.) These individuals also likely possess information concerning the parties’ relationships, the production of the Festivals, and the reasons the relationships soured.

-         Central allegations took place in Cincinnati, Ohio, including:

o   From 2018 to 2021, three of the four Festivals were held in Cincinnati (Compl. ¶ 32);

o   A fifth Festival is scheduled to take place in Cincinnati in 2022 (id. at ¶ 43);

o   Plaintiffs seek injunctive relief with respect to the planning and organization of the 2022 Festival in Cincinnati (id. at ¶ 101);

o   Drinkwater’s meeting with Kroger’s Jill McIntosh, where McIntosh allegedly requested a pitch from Drinkwater, occurred in Cincinnati in April 2017 (Compl. ¶ 24; Lindholz Decl. at ¶ 12);

o   Drinkwater came to Cincinnati for other meetings to plan for the Festivals and for the conferences themselves (id. at ¶ 11);

o   The vendors that Plaintiffs failed to timely pay in 2019 and 2021 are local to Cincinnati (Compl. ¶ 48(a-b); Lindholz Decl. at ¶ 17);

o   The Underground Railroad Freedom Center, which was left unkempt as a result of a Festival, requiring the Chamber of Commerce to clean the mess, is located in Cincinnati (Compl. ¶ 48(d); Lindholz Decl. at ¶ 18);

o   Plaintiffs allege that they were removed from the permit application for the 2022 Festival as a result of deceptive acts directed towards the City of Cincinnati (Compl. ¶ 51); and

o   The Advantage Defendants maintain an office in Cincinnati, which is the office that planned the festivals (Lindholz Decl. at ¶ 16.)

Based on this evidence, Defendants argue “even at this early stage of the litigation, it is clear that the majority of the facts in question occurred in Cincinnati, that most of the relevant employees of the parties reside in Cincinnati, and, more importantly, that virtually all of the relevant third-party witnesses reside in Cincinnati. It would benefit all parties to have the third-party witnesses residing within the jurisdiction and subpoena power of the court hearing this case.” (Kroger Motion to Dismiss, p. 7: 20-24.)

Public interest factors include “avoidance of overburdening local courts with congested calendars; protecting the interests of potential jurors so that they are not called upon to decide cases in which the local community has little concern; and weighing the competing interests of California and the alternate jurisdiction in the litigation.” (Stangvik, supra 54 Cal.3d at p. 751 (citing Piper Aircraft Co. v. Reyno (1981) 454 U.S. 235, 259-261.)

Defendants argue that this action does little to further the general public interests in California, especially in light of Ohio’s competing interest. In support, Defendants argue:

…this case is about the Plaintiffs’ alleged relationship with an Ohio corporation that involved Festivals primarily held in Cincinnati, Ohio. (Lindholz Decl. at ¶¶ 6, 8.) Tens of thousands of Cincinnati-area residents have attended these Festivals. (Id. at ¶ 7.) Ohio has an interest in determining disputes that relate to significant events within its borders that effect its citizens, businesses, and economy. In addition, Plaintiffs acknowledge that Kroger ended its relationship with Plaintiffs in light of Plaintiffs’ failure to pay vendors. (Compl. at ¶ 48(a-b).) Each of these unpaid vendors, which were ultimately paid by Kroger, are local to Cincinnati. (Lindholz Decl. at ¶ 17.) Moreover, as Plaintiffs acknowledge, Kroger cited the condition of the Underground Railroad Freedom Center as a basis for ending its relationship with Plaintiffs. (Compl. at ¶ 48(d).) Again, this involves another Ohio entity. Plaintiffs claim that public officials for the City of Cincinnati were misled about the permit for the upcoming 2022 festival (Id. at ¶ 11)—naturally, the City of the Cincinnati has an interest in its own permits, and in the testimony of its employees with knowledge of them. Most importantly, Plaintiffs seek to enjoin the parties’ efforts in furtherance of the 2022 Cincinnati festival (id. at p. 18), an act that could affect not only the Cincinnati citizens that would attend the event, but the Cincinnati venue that would host it, the Cincinnati vendors that would support it, and the Cincinnati hotels and restaurants that would serve those who travel to it.

In light of California’s lack of concern in this matter, proceeding in this Court would only clutter California’s dockets and consume courtroom resources with a lawsuit that primarily focuses on events that took place 2,175 miles away in Ohio. It would also result in California jurors’ attention to a case for which they have little interest. As such, the public interest factors heavily weigh in favor of dismissal on the ground of forum non conveniens.

(Krogers Motion, 9: 1-5.)

In opposition, Plaintiffs largely focus on their own contacts with California.  See Plaintiffs’ Memorandum in Opposition. at 12 (“Pls.’ Memo. in Opp.”) (“Plaintiffs’ performance of numerous services in California pursuant to the parties’ agreement— including budgeting, banking, bank financing, accounting, financial reporting, and contracting— is given great weight.”); see also id. at 7 (discussing Plaintiffs’ contacts with California).)  While this information is relevant to whether or not the Court has jurisdiction over Plaintiffs, it does not speak to whether or not Defendants have the requisite contact with California to justify jurisdiction.

Similarly, Plaintiffs argue that Defendants do “substantial” business in California, and there are material witnesses based in California. However, for reasons identified by Kroger in reply, the Court is unpersuaded:

Indeed, Plaintiffs’ purported “material” witnesses include people who handle Jewel’s calendar; those that have knowledge of her music deals; an attorney that Plaintiffs seemingly insinuate will waive Jewel’s attorney-client privilege; individuals involved with Plaintiffs’ financing and accounting; and others that, apparently, were tangentially involved with Plaintiffs but Plaintiffs do not make clear whether they have any familiarity with the festivals or Plaintiffs’ relationship with Kroger. (See Drinkwater Decl. at ¶ 15.) Under Plaintiffs’ logic of identifying material witnesses, anyone tangentially related to Plaintiffs in California could be a material witness including the hypothetical California mailman who delivered a check from Plaintiffs to Advantage or Plaintiffs’ hypothetical California tax accountant. Other than Mr. Drinkwater, Kroger lacks any recollection of the individuals Plaintiffs identify. (Second Lindholz Decl. at ¶ 11.) Rather, Kroger has identified individuals with information actually related to the parties’ dispute, most of whom are in Cincinnati, and if Kroger were to similarly begin listing names of individuals who had tangential involvement in the festivals as potential witnesses because they performed ministerial tasks, the list could include many dozens, if not hundreds, of individuals in the Cincinnati area. (Id.)

            (Reply, 5: 18-6:6.)

The Court agrees that Ohio is a suitable forum, and the balance of private and public factors weigh heavily in favor of dismissal on the ground of forum non conveniens. Based on this conclusion, the Court need not consider Kroger’s motion to quash.

Based on the foregoing, Defendants’ motion to dismiss on grounds of forum non conveniens are granted. 

It is so ordered.

Dated:  September    , 2022

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar. 

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