Judge Kerry Bensinger, Case Number: 22STCV29641, Date: 2025-02-06 Tentative Ruling

SPECIALLY APPEARING DEFENDANT USL PRO 2, LLC’S MOTION TO DISMISS OR STAY BASED ON FORUM NON CONVENIENS

SPECIALLY APPEARING DEFENDANT USL PRO 2, LLC’S MOTION TO COMPEL ARBITRATION AND DISMISS OR STAY COURT PROCEEDINGS

Defendant USL Pro 2, LLC (“USL” or “Defendant”) operates a professional soccer league known as USL League One. The league is comprised of various franchise clubs throughout the United States. USL’s principal place of business is Hillsborough County, Florida. Plaintiff Future Legends, LLC (“Plaintiff” or “Legends”) and USL entered into a franchise agreement to operate one of the franchise clubs—the Northern Colorado Hailstorm (NoCo). Plaintiff is a Nevada limited liability company with its principal place of business in Weld County, Colorado.

On November 12, 2024, Plaintiff filed a complaint against USL alleging causes of action for (1) fraud, (2) concealment, and (3) conversion. Plaintiff alleges that part of USL’s model is to use League One to fund marketing, advertising, programming, and offset expenses for USL to promote the USL’s Championship League, the Super League, the USL as a whole in order to increase the overall value of the USL’s enterprises for eventual sale of the USL. For instance, all USL League One teams like NoCo are forced to have all games on streaming services with virtually zero return to USL League One clubs. USL also makes deals with sponsors and keeps at least half of the proceeds for itself and then either uses the balance for expenses or dribbles out some of the money to the teams. In another example, the USL League One teams created an intra-league cup, adopted by the USL. Jaggermeister entered into a multi-year deal with USL to sponsor the intra-league cup at price of $300,000 annually. USL kept half of the fee and sent a small sum to certain USL League One teams to aid their marketing. Further, the runner-up in the cup final was to receive $25,000, with the winner receiving $100,000. NoCo won the cup. However, USL failed and refused to pay the prize money. Later, in the 2024 season, NoCo and Plaintiff suffered additional financial setbacks. USL officers were in constant contact regarding the financial matters. USL agreed to pay certain expenses for Legends related to NoCo’s operations. NoCo continued to expend thousands of dollars in expenses and additional debts to operate during the 2024 season. Between June and October 2024, USL officers made statements to induce Legends to continue the 2024 season. The day after NoCo’s season ended, USL terminated its franchise agreement with Plaintiff.

Before the court are two motions filed by USL: (1) Motion to Dismiss or Stay Based on Forum Non Conveniens (“Motion to Dismiss”), and (2) Motion to Compel Arbitration and Dismiss or Stay Court Proceedings (“Motion to Compel”). The motions are fully briefed.

Because the court finds the Motion to Dismiss is meritorious, the court does not address the Motion to Compel.

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 must stay or dismiss the action in whole or in part on any conditions that may be just. (Code Civ. Proc., § 410.30, subd. (a).) This principle is the codification of the firmly established forum non conveniens doctrine, which simply provides that a court may resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a general venue statute. (Great Northern R. Co. v Superior Court (1970) 12 Cal.App.3d 105, 108-110.) The doctrine allows the court to decline to exercise the jurisdiction it has over a transitory cause of action when it believes that the action may be more appropriately and justly tried elsewhere. (Stangvik v. Shiley, Inc. (1991) 54 Cal.3d 744, 751.)

A defendant may enforce a forum selection clause by bringing a motion pursuant to California’s forum non conveniens statutes, because these statutes “are the ones which generally authorize a trial court to decline jurisdiction when unreasonably invoked and provide a procedure for the motion.” (Global Financial Distributors Inc. v. Superior Court (2019) 35 Cal.App.5th 179, 186.) A motion to dismiss for forum non conveniens “based on a forum selection clause is a special type of forum non conveniens motion. The factors that apply generally to a forum non conveniens motion do not control in a case involving a mandatory forum selection clause.” (Berg v. MTC Electronics Technologies Co. (1998) 61 Cal.App.4th 349, 358 (Berg).)

On a motion to dismiss for forum non conveniens pursuant to a mandatory forum selection clause, the only issues for the court’s consideration are (1) whether the forum selection clause is indeed mandatory, as opposed to permissive; (2) whether the forum selection clause covers the claims in the case; and (3) whether the forum selection clause is “unreasonable.” (See Berg, supra, 61 Cal.App.4th at pp. 358-359.)

Defendant moves to dismiss Plaintiff’s case for forum non conveniens. The motion is brought to enforce a Florida forum selection clause in the franchise agreement signed by the parties on November 2, 2020. The motion is brought under Code of Civil Procedure section 410.30.

A forum selection clause is mandatory if it “contains express language of exclusivity of jurisdiction” or otherwise “specif[ies] a mandatory location for litigation.” (Olinick v. BMG Entertainment (2006) 138 Cal.App.4th 1286, 1294 (the following clause was mandatory: “[t]he parties agree to the exclusive jurisdiction and venue of the Supreme Court of the State of New York for New York County and/or the United States District Court for the Southern District of New York for the resolution of all disputes arising under th[e] Agreement” was mandatory).)

CONSENT AND IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION LOCATED IN HILLSBOROUGH COUNTY, FLORIDA, AND WAIVE ANY OBJECTION TO THE JURISDICTION AND VENUE OF SUCH COURTS. ANY LAWSUIT ARISING OUT OF OR RELATING TO THIS AGREEMENT MUST BE BROUGHT IN A COURT OF COMPETENT JURISDICTION IN HILLSBOROUGH COUNTY, FLORIDA.”

The court finds that the Agreements contain a mandatory forum clause. As in Olinick, the clause provides that the team operator (here, Plaintiff) agrees to submit “to the exclusive jurisdiction and venue of any state or federal court of competent jurisdiction located in Hillsborough County, Florida and waive any objection to the jurisdiction and venue of such courts. Any lawsuit arising out of or relating to this agreement must be brought in a court of competent jurisdiction in Hillsborough County, Florida.” This express language is clear and unequivocal. Gibson does not offer any argument to the contrary.

Plaintiff alleges claims for fraud, concealment, and conversion, but argues only that the forum selection clause does not cover the conversion claim. Defendant argues the forum selection clause applies to all the claims because each of the alleged acts and omission arise from the parties’ franchise relationship and in connection with the parties’ franchise agreement.

The court agrees with Defendant. The language of the mandatory forum selection clause is broad. And, Plaintiff’s conversion claim, which is based upon Defendant’s alleged refusal to award NoCo with prize money, arises from NoCo’s participation in the USL League. The franchise agreement governs NoCo’s participation in the USL League. (See Complaint, ¶¶ 20, 27, 34.) Each of Plaintiff’s causes of action, arise from or relate to the franchise agreement.

In an attempt to carve out the conversion claim, Plaintiff cites Lee v. Hanley (2015) 61 Cal.4th 1225, 1240. That case, however, simply has no application here. In Lee, the High Court granted review to decide “whether an attorney’s refusal to return a former client’s money after the client terminated the representation was ‘a wrongful act or omission … arising in the performance of professional services’ under [Code of Civil Procedure] section 340.6(a).” (Lee, 61 Cal.4th at p. 1229.) The Court held that plaintiff’s conversion claim did “not necessarily depend on proof that [defendant] violated a professional obligation, [so] her suit [was] not barred by section 340.6(a).” (Id. at p. 1240.) The holding was narrowed to consider wrongful acts or omissions “arising in the performance of professional service[s].” (Id. at p. 1233.)

Unlike Lee, this case does not involve professional services or raise statute of limitations issues. Rather, Plaintiff’s claims are inextricably linked to its franchise relationship with Defendant. Plaintiff’s arguments lack traction.

“When a case involves a mandatory forum selection clause, it will usually be given effect unless it is unfair or unreasonable. Moreover, a court will normally reject any claims that the chosen forum is unfair or inconvenient. Also, a court will usually honor a mandatory forum selection clause without extensive analysis of factors relating to convenience.” (Richtek USA, Inc. v. uPI Semiconductor Corp. (2015) 242 Cal.App.4th 651, 661 (cleaned up).) “[T]he party opposing the enforcement of a forum-selection clause (generally the plaintiff) bears the burden of proof.” (Cal-State Bus. Prod. & Servs., Inc. v. Ricoh (1993) 12 Cal.App.4th 1666, 1680.) “That burden, however, is reversed when the claims at issue are based on unwaivable rights created by California statutes. In that situation, 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.” (Verdugo v. Alliantgroup, L.P. (2015) 237 Cal.App.4th 141, 147–48.) “FEHA rights are unwaivable.” (Armendariz v. Found. Health Psychcare Servs., Inc. (2000) 24 Cal.4th 83, 112.)

Here, Plaintiff does not offer any arguments to show the forum selection clause is unfair or unreasonable. Plaintiff therefore concedes that the forum selection clause is fair and reasonable.

Kerry Bensinger

Judge of the Superior Court