Baluma, S.A. v. Sriqui

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 Baluma, S.A., Case No.: 2:20-cv-01424-JAD-EJY 4 Plaintiff Order Denying Motion to Dismiss 5 v. 6 Benjamin Sriqui, [ECF No. 5] 7 Defendant 8 This contract dispute arises from defendant Benjamin Sriqui’s failure to repay $100,000 9 that he borrowed in 2019 from Enjoy Punta del Este, a coastal resort and casino in Uruguay.1 To 10 borrow the money, Sriqui signed an agreement that contained a forum and choice-of-law clause 11 subjecting the agreement, Sriqui, and any disputes to Nevada’s courts and laws.2 So the casino 12 sued Sriqui in Nevada state court to recover under the contract, and he removed the case to this 13 court. 14 Sriqui, a Florida resident, now moves to dismiss the casino’s claims, arguing that the 15 contract’s forum-selection clause is unenforceable, stripping this court of personal jurisdiction 16 over him.3 I deny the motion because Sriqui has failed to present any evidence that would 17 prevent enforcement of the forum-selection clause. And because I find that the clause is 18 enforceable, I need not and do not reach Sriqui’s remaining personal-jurisdiction and forum non 19 conveniens arguments.4 [20] 1 ECF No. 4 at 7 ¶¶ 5–7, 9, 22–24. [21] 2 Id. at ¶ 10. 22 3 ECF No. 5. 4 See Holland Am. Line Inc. v. Wartsila N. Am., Inc., 485 F.3d 450 , 458 (9th Cir. 2007) (“Under [23] general contract principles, a forum[-]selection clause may give rise to waiver of objections to personal jurisdiction, provided that the defendant agrees to be so bound.” (citation omitted)). 1 Discussion 2 I. The forum-selection clause is enforceable. 3 Sriqui argues that the forum-selection clause that he signed is unenforceable because the 4 contract was offered on a “take-it-or-leave-it” basis. He adds that enforcing the clause would 5 offend the public policy of Nevada because its enforcement would deprive him his day in court. 6 This argument, which undergirds Sriqui’s motion, depends on his ability to demonstrate that the 7 clause is invalid. But he’s offered nothing more than his conclusory statements in his motion 8 and has failed to show that the clause is unenforceable. 9 Federal law governs the enforceability of forum-selection clauses.5 In resolving a motion 10 to dismiss under Federal Rule of Civil Procedure 12(b)(3), a court may “consider facts outside 11 the pleadings.”6 Under federal law, a contract’s forum-selection clause is presumptively valid 12 “absent a strong showing that it should be set aside.”7 There are three scenarios that can 13 overcome this presumption: (1) the clause is a “product of fraud or overreaching,” (2) “the party 14 wishing to repudiate the clause would effectively be deprived of his day in court were the clause 15 enforced,” or (3) enforcement would violate a “strong public policy” of the forum state.8 While 16 Sriqui implies that the forum-selection clause is invalid under all three scenarios, he fails to 17 establish that any of them exists here. [19] 20 5 Petersen v. Boeing Co., 715 F.3d 276, 280 (9th Cir. 2013) (citing Manetti-Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509 , 513 (9th Cir. 1988)). [21] 6 Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996). 22 7 M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972); Gemini Techs., Inc. v. Smith & Wesson Corp., 931 F.3d 911, 914 (9th Cir. 2019). [23] 8 Murphy v. Schneider Nat’l, Inc., 362 F.3d 1133, 1140 (9th Cir. 2004) (quoting Richards v. Lloyd’s of London, 135 F.3d 1289 , 1294 (9th Cir. 1998)). [1] A. Sriqui hasn’t demonstrated that Baluma procured the forum-selection clause 2 through fraud or overreaching. 3 “To establish the invalidity of a forum[-]selection clause on the basis of fraud or 4 overreaching, the party resisting enforcement must show that the inclusion of that clause in the 5 contract was the product of fraud or coercion.”9 Courts routinely find that mere disparate 6 bargaining power between the parties and the inability to negotiate the clause are insufficient to 7 invalidate a forum-selection clause.10 In Murphy v. Schneider National, Inc., for example, the 8 Ninth Circuit held that, despite evidence that an employee was unable to freely negotiate a 9 forum-selection clause, the employee’s “assertions reduce to a claim of power differential and 10 non-negotiability,” which was “not enough to overcome the strong presumption in favor of 11 enforcing forum[-]selection clauses.”11 Similarly, in the ticket-purchase context, the Supreme 12 Court in Carnival Cruise Lines, Inc. v. Shute upheld a forum-selection clause within a form 13 contract, rejecting the argument “that a non[-]negotiated forum-selection clause in a form ticket 14 contract is never enforceable simply because it is not the subject of bargaining.”12 Not only does 15 Sriqui offer nothing more than conclusory assertions that he couldn’t negotiate the forum16 selection clause before signing it, but even assuming that’s the case, unequal bargaining power 17 over a form contract is insufficient to demonstrate that the casino fraudulently included the 18 clause.13 Sriqui’s broad assertions are thus insufficient to demonstrate that the casino included 19 the forum-selection clause fraudulently or by overreaching. [20] 9 Petersen, 715 F.3d at 282 (quotation marks omitted) (emphasis in original). [21] 10 Murphy, 362 F.3d at 1141 . 22 11 Id. 12 Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 593 (1991). [23] 13 Generally, when a party seeks to enforce a forum-selection clause under Rule 12(b)(3), factual disputes and reasonable inferences are drawn in the non-moving party’s favor. Murphy, 362 1 B. Sriqui hasn’t shown that he would be deprived of his day in court. 2 Sriqui also argues that enforcing the forum-selection clause would be so burdensome as 3 to “tak[e] away his day in court.”14 But this is a “heavy burden,” requiring a showing that trial in 4 the forum “would be so difficult and inconvenient that [he] would effectively be denied a 5 meaningful day in court.”15 To do so, Sriqui must present more than mere speculation and 6 “general and conclusory allegations of fraud and inconvenience” even where a forum-selection 7 clause is “troubl[ing].”16 For example, in Spradlin v. Lear Siegler Management Services, the 8 Ninth Circuit “reluctantly” upheld a forum-selection clause where a litigant failed to provide 9 “any facts” about the inconvenience and “failed even to offer any specific allegations as to travel 10 costs, availability of counsel in [the forum], location of witnesses, or his financial ability to bear 11 such costs and inconvenience.”17 Like the Spradlin litigant, Sriqui has offered only speculation 12 from his attorneys that it would be challenging for him to defend himself out of his home state, 13 that the relevant witnesses reside outside of Nevada, and that litigating here would be financially 14 burdensome.18 Sriqui hasn’t provided any evidence or specific facts, however, that rise to the [16] F.3d at 1138. Sriqui suggests that the presumption should work in his favor because he is seeking to avoid enforcement and, as the Murphy court noted in dicta, “a party seeking to avoid [17] enforcement” is entitled to the presumption. ECF No. 9 at 2 (citing Murphy, 362 F.3d at 1139 ). While normally a Rule 12(b)(3) motion is brought to enforce a forum-selection clause, Sriqui [18] moves under Rule 12(b)(3) to avoid one. So he is both the moving party and the party seeking to avoid enforcement. But I need not resolve which party is entitled to the presumption here [19] because Sriqui doesn’t present any disputed facts or evidence to resolve in his favor. 20 14 ECF No. 5 at 6. 15 Argueta, 87 F.3d at 325 (quoting Pelleport Invs., Inc. v. Budco Quality Theatres, Inc., 741 21 F.2d 273, 281 (9th Cir. 1984)). [22] 16 Spradlin, 926 F.2d 865 , 868–69 (9th Cir. 1991); see also Manetti-Farrow, Inc, 858 F.2d at 515. 23 17 Spradlin, 926 F.2d at 869 . 18 See ECF No. 5 at 6. 1 level of a deprivation of his day in court in Nevada. Absent an evidentiary showing of true, 2 severe inconvenience, I cannot disregard the forum-selection clause. 3 C. Enforcing the forum-selection clause wouldn’t offend Nevada public policy. 4 Finally, Sriqui argues that enforcing the forum-selection clause would offend Nevada’s 5 public policy—as announced in Tandy Computer Leasing v. Terina’s Pizza19—of resolving cases 6 on their merits because he would be “deprive[d]” “of his day in court.” In Tandy, the Nevada 7 Supreme Court disregarded a forum-selection clause because defending the lawsuit in a different 8 forum would “probably cost more” “than to just cave in.”20 But Tandy involved a suit between a 9 computer lessor and a local pizza joint, and the computer equipment at issue “was not very 10 expensive.”21 The amount in controversy here is far more significant, and Sriqui offers nothing 11 to suggest that this case presents the same concerns about acquiescence that troubled the Tandy 12 court. Sriqui has thus failed to demonstrate that the cost of litigating in Nevada would be 13 extensive enough that this case wouldn’t be decided on its merits. 14 Plus, it wasn’t the financial considerations alone that made the Tandy forum-selection 15 clause unenforceable from a public-policy standpoint—it was also the provision’s design.22 The 16 clause in Tandy was “buried on the very bottom of the back page,” “in very fine print, in a 17 paragraph labelled MISCELLANEOUS,” far from the signature line, with “[n]othing on the front 18 page” to indicate the presence of the “clause on the back page.”23 And the computer lessor’s 19 sales agent admitted that she never “advise[d] customers that they should read the back terms of [20] 21 19 Tandy Comput. Leasing, Inc. v. Terina’s Pizza, Inc., 784 P.2d 7 (Nev. 1989). [20] Id. at 8 . [21] Id. 23 22 Id. [23] Id. 1|| the lease agreement.”** Our facts are materially distinguishable. Unlike the inconspicuous, 2\| hidden, back-page clause in Tandy, the forum-selection language in Sriqui’s contract appears directly above his signature in the same font size as the other provisions.”> 4 Date: (¢ a ZN Pay to the Order of Baluma 8.A. $100.0 1 rousand di [5] I authorize payee to complete any of the following items on thi negotiable instrument: (1) any missing amounts; (2) a date; (3) the 6 name, account number, and/or address, and branch of any bank or financial institution: and (4) iny electronic coding of the above items. This information can be for the any account from which | 7 may in the future have the right to withdraw funds, regardless of whether that account now exists, or whether I provided the Information on the account to the payee. | acknowledge that | g incurred the debt evidence by this instrument pursuant to a credit igreement that is subject to the laws of the state of Nevada. I agree that any dispute regarding or involving this instrument, the debt, or 9 the payee shall be brought only in court, state or federal, in Nevada. | hereby submit to the jurisdiction of any court, state or federal, in Nevada. In addition to any amounts authorized by law, | agree to pay all cost of collection, including the payee’s attorneys’ fees and 10 court costs. A credit instrument is identical to a personal check Whether drawing or passing a credit instrument knowing there are insufficient funds in an account upon it m iy be drawn, or with the 11 Intent to defraud, in a crime in the State of Nevada. which may result in criminal prosecution [13] SIGNATURI [14] As the Nevada Supreme Court noted in U.S. Home Corporation v. Michael Ballesteros Trust, a 16]| clause that “is in the same size font as the other provisions” is not “fatally inconspicuous.””6 Sriqui has thus failed to make the case that this clause violates a strong public policy in Nevada.?’ [20] Id. °5 ECF No. 5 at 24. 21 . U.S. Home Corp. v. Michael Ballesteros Trust, 415 P.3d 32, 41 (Nev. 2018). 221|7’ Because the forum-selection clause is enforceable, I need not and do not reach Sriqui’s argument that I should dismiss this case under the doctrine of forum non conveniens. But even if 23}| the clause were unenforceable, that doctrine doesn’t apply to this situation because Sriqui could move to transfer to other available federal forums under 28 U.S.C. § 1404 (a). See Sinochem Intern. Co. Ltd. v. Malaysia Intern. Shipping Corp., 549 U.S. 422, 430 (2007) (“The common- 1 Conclusion 2 IT IS THEREFORE ORDERED that Sriqui’s motion to dismiss [ECF No. 5] is DENIED. (Doe U.S. District Judge JenniferA. Dorsey 5 February 1, 2021 [20] 1 law doctrine of forum non conveniens ‘has continuing application [in federal courts] only in cases where the alternative forum is abroad,’ and perhaps in rare instances where a state or 09 territorial court serves litigational convenience best.” (quoting Am. Dredging Co. v. Miller, 510 US. 443, 449 n.2 (1994)). And if Sriqui seeks dismissal so this case can be litigated in the 3 Florida state courts, he hasn’t demonstrated that those courts are adequate because, under Florida law, gambling debts are unenforceable. Young v. Sands, Inc., 122 So.2d 618, 619 (Fla. Dist. Ct. App. 1960).