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Vista Partners, Inc. v. BrainScope Company, Inc.

United States District Court, D. Colorado

April 11, 2019

VISTA PARTNERS, INC., Plaintiff,
v.
BRAINSCOPE COMPANY, INC., Defendant.

          RECOMMENDATION RE: MOTION TO TRANSFER VENUE [ECF. #24]

          S. Kato Crews, United States Magistrate Judge.

         This order addresses Defendant BrainScope Company, Inc.'s (“BrainScope”) Motion to Transfer Pursuant to 28 U.S.C. § 1404(a) (“Motion”). [ECF. #24.] Plaintiff Vista Partners, Inc. (“Vista”) filed a Response [ECF. #42], which was followed by BrainScope's Reply. [ECF. #55.] The Motion was referred to the magistrate judge on April 4, 2019. [ECF. #62.] The Court has reviewed the Motion and related briefing, the entire case file, and the applicable law. The Court concludes that oral argument would not materially assist in deciding this matter. For the following reasons, the Court RECOMMENDS that the Motion be GRANTED.

         BACKGROUND

         In its Complaint, Vista alleges that in November 2014, it entered into a Confidentiality Agreement with BrainScope to evaluate a potential business relationship. [ECF. #1 at ¶ 28.] This agreement required that “[a]ll actions arising under this Agreement shall be filed and maintained only in a state or federal court sitting in the State of Maryland, except that Recipient may enforce a judgment or order in any court of competent jurisdiction, ” and that “[t]he parties hereby consent to and waive any objection to the personal jurisdiction of, and venue in, such courts.” [ECF. #1-1 at ¶9.]

         The parties then entered into negotiations, which culminated in a Collaboration Agreement that would govern the parties' working relationship. [ECF. #1 at ¶¶34-36.] This agreement also contained a forum-selection clause, stating in pertinent part:

The Parties agree that any litigation between them may only be brought in courts located within Maryland, and each Party consents to the jurisdiction of those courts. However, either Party may bring an action in any court of proper jurisdiction for purposes of seeking an injunction to stop or prevent a breach of this Contract by the other Party.

[ECF. #1-2 at p.21 (emphasis added).]

         In October 2015, the parties entered into a second Confidentiality Agreement, to evaluate “a potential business combination.” [ECF. #1 at ¶59.] The second agreement provided that BrainScope could enforce its rights under the contract pursuant to “the laws of the State of Maryland” and that “all actions arising under this Agreement shall be filed and maintained only in a state or federal court sitting in the State of Maryland.” [ECF. #1-3 at ¶9.] The agreement further stated that if Vista wished to enforce its rights, the contract would be interpreted under Colorado law and “all actions arising under this Agreement shall be filed and maintained only in a state or federal court sitting in Denver, Colorado.” [Id.] The second Confidentiality Agreement expressly superseded the first Confidentiality Agreement but was explicit that it did not terminate or supersede “the confidentiality obligations of the parties under that certain Collaboration Agreement.” [Id. at ¶13.]

         Vista initiated this action on January 15, 2019, asserting, among other things, claims for breach of contract, fraudulent inducement, and rescission. [ECF. #1.] Vista seeks injunctive and declaratory relief, and an award of actual, consequential, and exemplary damages as well as restitution. [Id. at pp. 33-35.] However, BrainScope, citing the forum-selection clause in the Collaboration Agreement, seeks an order requiring a transfer of venue to the United States District Court for the District of Maryland.

         STANDARD OF REVIEW

         “For the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” 28 U.S.C. § 1404(a). Ordinarily, the party bringing a motion for transfer under § 1404(a) “bears the burden of establishing that the existing forum is inconvenient.” Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1515 (10th Cir. 1991). The calculus changes, however, when the parties' contract contains a valid forum-selection clause, which “represents the parties' agreement as to the most proper forum.” Stewart Org. v. Ricoh Cor., 487 U.S. 22, 31 (1988). In such instances, the motion to transfer should be granted absent “extraordinary circumstances unrelated to the convenience of the parties.” Atl. Marine Constr. Co. v. United States Dist. Court, 571 U.S. 49, 52 (2013).

         In the presence of a valid forum-selection clause, a “plaintiff's choice of forum merits no weight, and the plaintiff, as the party defying the forum-selection clause, has the burden of establishing that transfer to the forum for which the parties bargained is unwarranted.” Id. at 574. In addition, the Court may not consider the parties' private interest, but rather, must consider only public interests. Id. “Because public-interest factors will rarely defeat a transfer motion, the practical result is that forum-selection clauses should control except in unusual cases.” Id.

         ANALYSIS

         A. ...


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