Virginia Lawyers Weekly VA Lawyers Weekly
Where the parties agreed that any dispute would be litigated in the Eastern District of Virginia, a company alleging fraudulent conduct in connection with cash advance agreements must litigate its claims in the EDVA. Although one count was not subject to the forum-selection clause, it must also be litigated in the EDVA to avoid the same issues being litigated in two forums.
Background
According to the complaint, plaintiff Blue Rock is a New Jersey corporation and restaurant in New Jersey. Defendant Invision Funding LLC is a Virginia limited liability company and defendant Kapitus Servicing Inc. is a Virginia corporation.
Between Aug. 5, 2014, and April 2, 2018, plaintiff and defendants entered into eleven separate “cash advance” agreements. The agreements set forth that Invision would provide cash advances to Blue Rock, and Blue Rock would, in turn, pay back the cash advances, with interest, by allowing Kapitus, on behalf of Invision, to withdraw a specified percentage of Blue Rock’s credit card sales. In its complaint, plaintiff alleges that defendants engaged in fraudulent conduct related to these cash advance agreements.
Defendants argue that this action should be transferred to the Eastern District of Virginia based on the forum selection clause. Defendants maintain that, pursuant to the forum selection clause, plaintiff has waived its right to oppose any motion or application made by defendants to transfer this proceeding. Plaintiff contends that even if the forum selection clause does apply, the public interest factors weigh in favor of denying transfer because of the significant public policy difference between New Jersey and Virginia. In addition, Plaintiff submits that the forum selection clause does not apply to his New Jersey Consumer Fraud Act, or NJCFA, claim, because that claim falls outside the clause’s scope.
Transfer
At the outset, the moving party must demonstrate that the venue for transfer under section 1404(a) is one “where [the action] may have been brought or to any district or division to which all parties have consented.” Here, defendants have demonstrated that plaintiff consented to the jurisdiction of the Eastern District of Virginia by agreeing to the forum selection clause. For these reasons, I find that the Eastern District of Virginia is a forum where the action may have been brought, and therefore, is a proper transferee forum.
Having concluded that the Eastern District of Virginia is a proper venue under § 1404(a), the court turns to whether transfer is appropriate in light of the public interest factors, or if, on the other hand, exceptional circumstances exist which necessitate retention of this case in this district. In light of the private interest factors weighing entirely against plaintiff, and the public interest factors, which tip slightly in favor of transfer, I find that plaintiff has failed to meet its burden of proving that this case constitutes an “unusual circumstance” that overcomes the application of a valid forum selection clause. Therefore, based on the forum selection clause, transfer to the Eastern District of Virginia is appropriate.
NJCFA claim
Plaintiff contends that, because the clause covers “any suit, action or proceeding to enforce or arising out of this Agreement[,]” and because its NJCFA claim “arises out of pre-Agreement conduct and not the Agreement itself[,]” the NJCFA claim falls outside the clause’s scope.
The court finds that the factors overwhelmingly weigh in favor of transferring the NJCFA claim rather than severing it from the four other claims to be transferred to the Eastern District of Virginia. Having already analyzed the public interest factors, the court further adds that severing factually overlapping claims would implicate a number of private and public factors, all in a manner that would weigh heavily in favor of transferring the claim.
These factors include the convenience of the parties and witnesses, practical considerations that could make the trial easy, expeditious or inexpensive, and the relative administrative difficulty in the two fora resulting from court congestion. In that connection, the Third Circuit has admonished that courts “should not sever [claims] if the defendant over whom jurisdiction is retained is so involved in the controversy to be transferred that partial transfer would require the same issues to be litigated in two places.”
Defendants’ motion to transfer venue granted.
Wagner Holding Corp. v. Invision Funding LLC, Case No. 21-10538, Dec. 20, 2021. DNJ (Wolfson). VLW 021-3-558. 13 pp.
