Opinion
CIVIL CASE NO. 3:23-CV-00677 (JCH)
2023-12-19
ULITMATE NUTRITION, INC., Plaintiff, v. LEPRINO FOODS CO., Defendant.
Irve J. Goldman, Monte E. Frank, Pullman & Comley, Bridgeport, CT, for Plaintiff. Gina R. Merrill, Laura Harris, Mark A. Kirsch, Melanie Burke, King & Spalding, New York, NY, William C. Brittan, Campbell Killin Brittan & Ray, LLC, Denver, CO, Paul Aaron Tuchmann, Wiggin and Dana LLP, New Haven, CT, for Defendant.
Irve J. Goldman, Monte E. Frank, Pullman & Comley, Bridgeport, CT, for Plaintiff.
Gina R. Merrill, Laura Harris, Mark A. Kirsch, Melanie Burke, King & Spalding, New York, NY, William C. Brittan, Campbell Killin Brittan & Ray, LLC, Denver, CO, Paul Aaron Tuchmann, Wiggin and Dana LLP, New Haven, CT, for Defendant. RULING ON DEFENDANT'S MOTION TO TRANSFER
Janet C. Hall, United States District Judge.
I. INTRODUCTION
Plaintiff Ultimate Nutrition, Inc. ("Ultimate Nutrition") brings this lawsuit under Connecticut state law, pursuant to this court's diversity jurisdiction, against Leprino Foods Company ("Leprino"). Ultimate Nutrition alleges violations of state contract law and the Connecticut Unfair Trade Practices Act ("CUTPA").
Before this court is the defendant's Motion to Transfer this case to the United States District Court of the District of Colorado. See Motion to Transfer ("Mot. to Transfer") (Doc. No. 15). The plaintiff opposes the Motion. See Memorandum of Law of Plaintiff in Opposition to Defendant's Motion to Transfer ("Pl.'s Opp.") (Doc. No. 24). For the reasons set forth below, the Motion is denied.
II. BACKGROUND
A. Factual Background
In summarizing the relevant facts, the court draws from plaintiff's Complaint, as well as materials submitted outside the pleadings, including affidavits and joint stipulations. See Tianhai Lace USA Inc. v. Forever 21, Inc., No. 16-CV-5950, 2017 WL 4712632, at *2 (S.D.N.Y. Sept. 27, 2017) ("In resolving a motion for transfer, the Court assumes allegations in the Complaint to be true, but may also look to evidence outside of the Complaint....").
1. Plaintiff's Allegations
For over twenty-five years, Ultimate Nutrition, a Connecticut corporation that sells nutrition supplements, and Leprino, a Colorado corporation that produces whey protein and dairy ingredients, had a longstanding business relationship in which Ultimate Nutrition purchased whey protein from Leprino. See Complaint ("Compl.") ¶¶ 1-3, 7, Ex. A to Notice of Removal (Doc. No. 1-1). As part of Ultimate Nutrition and Leprino's course of dealings, Ultimate Nutrition would request, and Leprino would permit, Ultimate Nutrition to "take delivery of product scheduled for delivery in one quarter in[to] the next succeeding quarter or future quarters, which was colloquially referred to as a 'roll over.'" Id. at ¶ 10.
On August 10, 2023, the plaintiff filed a Motion to Amend. See Motion to Amend (Doc. No. 44). Because the court has not granted the Motion to Amend as of the date of this Ruling, the court will cite to the original Complaint filed on April 18, 2023, for purposes of this Motion. See Compl.
In 2021, the relationship between the parties began to deteriorate. In or about early February 2021, a disgruntled supplier of Ultimate Nutrition contacted Leprino, disparaged Ultimate Nutrition and its representatives, and encouraged Leprino to stop doing business with Ultimate Nutrition. Id. at ¶ 20. Thereafter, "Leprino became less communicative, cooperative and accommodating in its business dealings with Ultimate Nutrition." Id. at ¶ 21. On September 14, 2021, in order to determine the amount of product that it would take in Quarter 3, Ultimate Nutrition asked Leprino for information on its fourth quarter pricing of whey protein. Id. at ¶ 12. Leprino refused to provide Ultimate Nutrition with the requested information. Id. Leprino then (1) told Ultimate Nutrition that it needed to inform Leprino, by the end of September 2021, of the amount of product, ordered for Quarter 3, that it would be taking; and (2) informed Ultimate Nutrition that it would not allow Ultimate Nutrition to "roll over" any of the ordered product from Quarter 3 to Quarter
4, despite the parties' prior dealings. Id. at ¶ 13. Leprino also informed Ultimate Nutrition, without prior notice, that it would not provide Ultimate Nutrition with any product in Quarter 4. Id. at ¶ 15. After making one final delivery to Ultimate Nutrition, Leprino "refused to do any business with Ultimate Nutrition" thereafter. Id. As a result of the abrupt termination of this business relationship, Ultimate Nutrition lost its preferred whey protein supplier and suffered lost profits. Id. at ¶ 16.
2. Forum Selection Clause
According to attestations from Brian Rubino ("Rubino"), the President of Ultimate Nutrition, Ultimate Nutrition would initiate each transaction between the two companies by issuing a Purchase Order to Leprino. Declaration of Brian Rubino ("Rubino Decl.") ¶ 8 (Doc. No. 24). Ultimate Nutrition's Purchase Orders contained, inter alia, a clause on the bottom stating that, "Any cross outs, added written text, or changes to this PO by vendor after purchaser has signed are not valid and not accepted." See Purchase Orders, Pl.'s Ex. A (Doc. No. 24-1). In response, Leprino would issue a Pro Forma Invoice to Ultimate Nutrition. See Rubino Decl. ¶ 8. The bottom of the Pro Forma Invoice contained a paragraph, labeled "Limitation of Liability", which limited Leprino's liability to "an amount equal to the aggregate amounts paid by [Ultimate Nutrition] to Leprino for goods during the twelve months immediately preceding an occurrence giving rise to any [c]laim(s) against Leprino." See Pro Forma Invoices, Pl.'s Ex. A (Doc. No. 24-1). The paragraph further provided that "Buyer accepts and agrees to the limitation described in this paragraph", that "[a]cceptance is conclusively presumed to have occurred upon Buyer's receipt of the shipment of goods covered by this document", and, finally, that "this invoice and the relationship between Leprino and Buyer is subject to and governed in all respects by the Terms and Conditions attached hereto." Id. It does not appear, however, that any Terms and Conditions were attached to the Pro Forma Invoices. See id. ; Rubino Decl. ¶ 9.
Leprino does not dispute, in its Reply or in its additional pleadings, Rubino's description of this process.
After receiving a Pro Forma Invoice from Leprino, Ultimate Nutrition would pay Leprino in advance for what it ordered in its Purchase Order. See Rubino Decl. ¶ 8. Leprino "would thereafter deliver the ordered product to [Ultimate Nutrition] in Connecticut and several weeks after delivery, would send [Ultimate Nutrition] a Standard Invoice." Id. Starting in June 2014, Leprino initiated the practice of emailing Ultimate Nutrition, in addition to the Standard Invoice, a page entitled "Terms and Conditions". See Joint Answer to Questions Posed in Court's Order ("Joint Answer"), at 1 (Doc. No. 57). Both were attached to the emails as a two-page PDF. Id. at 2. Each Standard Invoice contained the same "Limitation of Liability" paragraph as the Pro Forma Invoices, including the provision that "this invoice and the relationship between Leprino and Buyer is subject to and governed in all respects by the Terms and Conditions attached hereto." See Standard Invoices, Def. Ex. A (Doc. No. 15-3). Each corresponding Terms and Conditions document contained a section, in very small but legible font, that read as follows:
Governing Law and Jurisdiction. All matters arising out of or relating to these Terms are governed by and construed in accordance with the internal laws of the State of Colorado without giving effect to any choice or conflict of law provision or rule (whether of the State of Colorado or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than those of the State of Colorado. Any legal suit, action or proceeding arising out of or relating to these Terms shall be instituted in the federal courts of the United States of America or the courts of the State of Colorado in each case located in the City of Denver and County of Denver, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.
Id. According to Rubino, "at no time were any of the Terms and Conditions" accompanying each Standard Invoice "ever invoked or even mentioned by Leprino or [Ultimate Nutrition]." Rubino Decl. ¶ 10. Rubino has also attested that, "prior to this litigation, and to the best of [his] knowledge formed after reasonable investigation, no employees [of Ultimate Nutrition] ever reviewed the Terms and Conditions that were included in the Standard Invoices" because "all Standard Invoices were received after the order had shipped and the product had been delivered to [Ultimate Nutrition], for which it prepaid against [pro forma] invoices sent by Defendant that did not contain any of the Terms and Conditions ...." Affidavit of Brian Rubino ("Rubino Aff.") ¶ 4 (Doc. No. 58). Consequently, Ultimate Nutrition "considered any given sale transaction with [Leprino] to have been concluded before it received a Standard Invoice ... and therefore did not consider there to be a need to review it." Id. Leprino sent its final Standard Invoice to Ultimate Nutrition on October 9, 2021. See Standard Invoices.
B. Procedural Background
On April 18, 2023, Ultimate Nutrition filed its Complaint in the Connecticut Superior Court. See Compl. Counts One, Two, and Three allege breach of impliedin-fact distribution, see id. at ¶¶ 1-17, breach of contract, see id. at ¶¶ 18-28, and breach of implied covenant of good faith and fair dealing, see id. at ¶¶ 29-32, respectively. Count Four alleges violations of CUTPA. Id. at ¶¶ 33-37. On May 24, 2023, Leprino removed the suit to this court. See Notice of Removal.
On June 5, 2023, Leprino moved to transfer this case to the District of Colorado. See Mot. to Transfer. Ultimate Nutrition opposes the Motion. See Pl.'s Opp.
III. LEGAL STANDARD
Section 1404(a) of title 28 of the U.S. Code provides that, "[f]or the convenience of 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 or to any district or division to which all parties have consented." 28 U.S.C. § 1404(a). If the parties have not agreed to a forum selection clause, "a district court considering a § 1404(a) motion ... must evaluate both the convenience of the parties and various public-interest considerations." Atl. Marine Constr. Co., Inc. v. U.S. Dist. Ct. for the W. Dist. of Tex., 571 U.S. 49, 62, 134 S.Ct. 568, 187 L.Ed.2d 487 (2013).
"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." Id. at 63, 134 S.Ct. 568 (citation and internal quotation marks omitted). The Supreme Court has held that, "[t]he presence of a valid form-selection clause requires district courts to adjust their usual § 1404(a) analysis in three ways." Id. "First, the plaintiff's choice of forum merits no weight." Id. "Second, a
court evaluating a defendant's § 1404(a) motion to transfer based on a forum-selection clause should not consider arguments about the parties' private interests." Id. at 64, 134 S.Ct. 568. A party's consent to an agreement containing a form selection cause operates as a waiver of "the right to challenge the preselected forum as inconvenient or less convenient for themselves or their witnesses, or for their pursuit of the litigation." Id. In other words, "a district court may consider arguments about public-interest factors only." Id. "[T]hose [public interest] factors will rarely defeat a transfer motion," and that "the practical result is that forum-selection clauses should control except in unusual cases." Id. Third, "when a party bound by a forum-selection clause flouts its contractual obligation and files suit in a different forum, a § 1404(a) transfer of venue will not carry with it the original venue's choice-of-law rules." Id. at 65, 134 S.Ct. 568.
In determining whether a valid, contractually agreed-upon forum clause is enforceable, courts in the Second Circuit consider:
(1) [W]hether the clause was reasonably communicated to the party resisting enforcement; (2) whether the clause is mandatory or permissive, i.e., whether the parties are required to bring any dispute to the designated forum or simply permitted to do so; and (3) whether the claims and parties involved in the suit are subject to the forum selection clause....
Martinez v. Bloomberg LP, 740 F.3d 211, 217 (2d Cir. 2014). If these criteria are met, the clause is presumptively enforceable, and "[a] party can overcome this presumption only by (4) making a sufficiently strong showing that enforcement would be unreasonable or unjust, or that the clause was invalid for such reasons as fraud or overreaching." Id.
"In resolving a motion for transfer, the Court assumes allegations in the Complaint to be true, but may also look to evidence outside of the Complaint ...." Tianhai Lace USA Inc. v. Forever 21, Inc., No. 16-CV-5950, 2017 WL 4712632, at *2 (S.D.N.Y. Sept. 27, 2017).
IV. DISCUSSION
Leprino argues that this case should be transferred to the District of Colorado because (1) the parties agreed to an enforceable forum selection clause, and (2) transfer is otherwise warranted under section 1404(a). See Defendant's Memorandum of Law in Support of Motion to Transfer ("Def.'s Mem."), at 1 (Doc. No. 15-1).
A. Forum Selection Clause
1. Applicability of Contract Formation
As a threshold matter, Leprino argues that, in assessing whether the Forum Selection Clause at issue compels transferring this case to Colorado, this court need only apply the four Martinez factors governing whether a forum selection clause is enforceable. See Defendant's Reply Memorandum of Law in Further Support of its Motion to Transfer ("Def.'s Reply") at 1-4 (Doc. No. 30). Any threshold analysis of whether the Clause is part of a valid contract under state law is, according to Leprino, unnecessary. Id. Ultimate Nutrition, however, contends that, before applying the four Martinez factors, the court must determine whether the parties contractually agreed to the Forum Selection Clause under applicable state contract law. See Pl.'s Opp. at 6.
The court agrees with Ultimate Nutrition. In Martinez, the Second Circuit held that federal law should be used to determine whether an otherwise mandatory and applicable forum selection clause is enforceable, and that state law should be
used to interpret said clause. Martinez, 740 F.3d at 224. At no point in Martinez did the Second Circuit hold that the Clause does not need to be part of a valid contract between the parties. Indeed, the language of Martinez suggests the opposite:
Martinez does not challenge the validity of his employment agreement [containing the forum selection clause] with Bloomberg. Nor does he contest that the agreement's forum selection clause was reasonably communicated to him, and that it is mandatory in effect. He contends, however, that his discrimination claims do not constitute disputes "arising under" his employment contract, and therefore are not governed by the forum selection clause.
Id. (emphasis added).
Leprino nonetheless appears to argue that post-Martinez, courts in this Circuit need only apply the four Martinez factors, without first analyzing whether the terms were contractually agreed to by the parties under applicable state law, and it cites the Second Circuit's ruling in Starkey v. G Adventures, Inc. in support of its argument. 796 F.3d 193, 197-98 (2d Cir. 2015) (holding that an email confirming the purchase of vacation tickets, with inserted hyperlinks to terms and conditions containing a forum selection clause, was reasonably communicated to the buyer). In Starkey, however, the court noted that the parties "forfeited any argument relating to whether, under state or Canadian contract law, the Booking Terms and Conditions became part of the parties' contract", so it did not need to address that issue. 796 F.3d at 197 n.2.
Leprino also points to a recent district court decision, Kaman Aerospace Corp. v. Cent. Copters, Inc., to bolster its argument that this court need only apply the four Martinez factors to determine the enforceability of the Forum Selection Clause. See Defendant's Motion for Permission to Provide Notice of Recently Decided Authority (Doc. No. 59) (citing Kaman Aerospace Corp. v. Cent. Copters, Inc., 22-CV-1445, 2023 WL 5530684 (D. Conn. Aug. 28, 2023)).
The court agrees with Ultimate Nutrition that Kaman is inapposite because, as in Starkey, the parties in Kaman did not contest whether the forum selection clause was part of a valid, binding contract. See Kaman, 2023 WL 5530684, at *4-5.
The calculus for courts changes when the contractual validity of a forum selection clause is a live, contested issue. Indeed, since Martinez and Starkey, courts in other cases—including a case cited by Leprino—have first analyzed whether the forum selection clause at issue constituted part of a validly agreed-upon contract between the parties, before delving into the four Martinez factors. See Laspata DeCaro Studio Corp. v. Rimowa GmbH, No. 16-CV-934, 2017 WL 1906863, at *3 (S.D.N.Y. May 8, 2017) (noting that "the threshold issue of contract formation", which the parties contested, "must be resolved before addressing whether the clause is enforceable" under the Martinez factors (citing Evolution Online Sys., Inc. v. Koninklijke PTT Nederland N.V., 145 F.3d 505, 509 (2d Cir. 1998)); Success
Although Leprino is technically correct that the Laspata court "applied Martinez without regard to state contract law", see Def.'s Reply at 2-3 (emphasis added), that is merely because the underlying law governing the particular contract at issue was German law. See Laspata, 2017 WL 1906863, at *3 ("To decide whether the parties' contract includes the [forum selection clause], the [c]ourt applies German law because the parties do."). At no point did the Laspata court give any indication that, had state law applied instead of German law, it would not have still been obligated to address "the issue of whether [the parties'] agreement incorporates the forum selection clause", i.e., the "threshold issue of contract formation". Id. The court finds defendant's characterization of the Laspata decision to be misleading.
Sys., Inc. v. CRS Inc., No. 21-CV-1391, 2023 WL 2742344, at *7 (D. Conn. Mar. 31, 2023) (stating that, because the parties dispute whether the forum selection clause was part of a contractual agreement between the parties, the court "must turn first to the threshold issue of contract formation" under applicable state law (citing Evolution, 145 F.3d at 509). This approach makes good sense—after all, a court cannot enforce a forum selection clause that has not been contractually agreed to by the parties in the first place.
Here, the parties disagree as to whether the Forum Selection Clause was part of a valid contract. As such, the court must address the threshold issue of contract formation before it applies the Martinez factors.
2. Analysis of Contract Formation
To determine whether a contract was formed between the parties, the court must first determine the applicable body of law. It is "axiomatic that contract formation is governed by state law in the United States." Wis. Province of Soc'y of Jesus v. Cassem, 373 F. Supp. 3d 378, 384 (D. Conn. 2019). In the case at bar, there are two potentially applicable bodies of state law: Connecticut law and Colorado law. Notably, Leprino's Terms and Conditions contain, in addition to the Forum Selection Clause, a Choice of Law Clause mandating the application of Colorado law to "[a]ll matters arising out of or relating to the[ ] Terms and Conditions". See Standard Invoices. Because the parties contest the contractual validity of the Terms and Conditions, however, the court cannot apply the Choice of Law Clause contained therein to resolve the issue of contract formation, because doing so would impermissibly "presume the applicability of a provision before its adoption by the parties has been established." Schnabel v. Trilegiant, 697 F.3d 110, 119 (2d Cir. 2012); accord Success Sys., Inc., 2023 WL 2742344, at *8 (refusing to apply a choice of law provision until the threshold issue of contract formation has been determined).
Here, however, the court need not determine whether Connecticut law or Colorado law applies to the issue of contract formation because the relevant principles of contract law are substantively similar under the law of both states. See, e.g., Success Sys., Inc., 2023 WL 2742344, at *8 (applying both Connecticut law and Minnesota law because "the relevant principles of contract formation are substantially the same under" both states); Precision Trenchless, LLC v. Saertex multiCom LP, No. 19-CV-0054, 2022 WL 596740, at *8 (D. Conn. Feb. 28, 2022) (noting that the court need not resolve the "thorny" choice-of-law question because "North Carolina and Connecticut courts take substantively similar approaches to analyzing contract formation"). Both states require mutual assent to an exchange, and the terms thereof, between two or more competent parties for legal consideration. Compare Saint Bernard Sch. of Montville, Inc. v. Bank of Am., 312 Conn. 811, 830, 95 A.3d 1063 (2014) (noting that, to form a valid contract in Connecticut, there must be mutual understanding between the parties of the contract terms (citing Presidential Cap. Corp. v. Reale, 231 Conn. 500, 508, 652 A.2d 489 (1994))), with French v. Centura Health Corp., 509 P.3d 443, 449 (Colo. 2022) (noting that a valid contract in Colorado "requires mutual assent" to a contract's material terms). Notably, both states have also statutorily adopted section 2-207 of the Uniform Commercial Code ("U.C.C."), commonly known as the "battle of the forms". See Conn. Gen. Stat. § 42a-2-207; Colo. Rev. Stat. Ann. § 4-2-207.
According to Ultimate Nutrition, in each sales transaction between Ultimate Nutrition and Leprino, Ultimate Nutrition
would submit a Purchase Order, i.e., the offer, and "pay Leprino in advance for what it ordered by its purchase orders." Rubino Decl. ¶ 8. Leprino would, in turn, submit a Pro Forma Invoice, and then ship the product to Ultimate Nutrition. Id. Thus, according to Ultimate Nutrition, "a contract was formed at the stage of [Ultimate Nutrition]'s issuance of a purchase order and Leprino's responsive [Pro Forma] [I]nvoice or its shipment of the product ordered", which constituted acceptance. Pl.'s Opp. at 9-10 (citing Conn. Gen. Stat. § 42a-2-206(b); Colo. Rev. Stat. Ann. § 4-2-206(b)). Notably, Leprino does not contest Ultimate Nutrition's description of this order process; nor does it contest Ultimate Nutrition's contract formation analysis. Ultimate Nutrition further contends that, under section 2-207 of the Uniform Commercial Code—as well as its statutory counterparts in Connecticut and Colorado—Leprino's Terms and Conditions were additional proposed terms that never became part of the parties' contract. U.C.C. Section 2-207 provides, in part:
(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
• (a) the offer expressly limits acceptance to the terms of the offer;
• (b) they materially alter it; or
• (c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received....
Conn. Gen. Stat. § 42a-2-207; Colo. Rev. Stat. Ann. § 4-2-207. Ultimate Nutrition argues that the second exception applies to Leprino's Terms and Conditions and, by extension, the Forum Selection Clause contained therein.
In addition, Ultimate Nutrition argues, briefly, that the first exception also applies because its Purchase Orders, pursuant to U.C.C. section 2-207(2)(a), "expressly limit[ed] acceptance to the terms of the offer." See Pl.'s Opp. at 13 (citing Conn. Gen. Stat. § 42a-2-207(2)(a); Colo. Rev. Stat. Ann. § 4-207(2)(a)). Ultimate Nutrition's Purchase Orders stated, in part, that, "Any cross outs, added written text, or changes to this PO by vendor after purchaser has signed are not valid and not accepted." See Purchase Orders.
At least one court in this Circuit has found purchase orders containing similar language to constitute offers that, pursuant to section 2-207, expressly limit acceptance to the terms of the offer. See Great Am. Ins. Co. v. M/V Handy Laker, No. 96 Civ. 8737, 2002 WL 32191640, at *6 (S.D.N.Y. Dec. 20, 2002) (holding that, where a purchase order stated that "no changes in this purchase order shall be acceptable unless confirmed in writing by the purchaser", such language "limited acceptance to the terms stated in [the] purchase order"). However, because the court finds that the material alteration exception is dispositive to the contract formation analysis, it need not consider whether the first exception applies.
The court agrees with Ultimate Nutrition's contract formation analysis and it, in turn, finds that, based on the factual record currently before the court and for purposes of this Motion, the Terms and Conditions—and, by extension, the Forum Selection Clause—did not constitute part of a valid, binding contract between the parties. As Ultimate Nutrition notes in its Opposition, this court has previously held that, under Connecticut law, the "belated addition of a clause limiting the scope or forum of a party's future claims constitutes
a 'material alteration'" of the contract. See Precision Trenchless, 2022 WL 596740, at *10 (emphasis added); accord Nesbitt Div., Mestek, Inc. v. Magnolia, No. CV980579571S, 1998 WL 951026, at *4 (Conn. Super. Ct. Dec. 21, 1998) (finding that a forty-five-day limitation for submission of claims on the reverse side of a letter acknowledging receipt of a purchase order was a material alteration when the limitation was excluded from the earlier purchase order and accompanying documents). Other courts in this Circuit have similarly held that the belated addition of a forum selection clause constitutes a "material alteration". See, e.g., Armstrong Pumps, Inc. v. Brewer-Garrett Co., No. 08-CV-911A, 2010 WL 447394, at *3 (W.D.N.Y. Feb. 2, 2010) (holding that proposing a forum selection clause as an addition or modification to a preexisting contract constitutes a "material alteration[ ] and [is] unenforceable without explicit consent from all parties to be bound").
The court in Armstrong applied New York contract law, which, like Connecticut and Colorado, has adopted section 2-207. See N.Y. U.C.C. § 2-207.
However, where one party proposes additional terms that materially alter a preexisting contract, the terms may nonetheless become part of the parties' contract through a prior course of dealing. See Precision Trenchless, 2022 WL 596740, at *10; TSR Silicon Res., Inc. v. Broadway Com Corp., No. 06-CV-9419, 2007 WL 4457770, at *3-4 (S.D.N.Y. Dec. 14, 2007). Both Connecticut law and Colorado law recognize a course of dealing as "a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct." Conn. Gen. Stat. § 42a-1-303; Colo. Rev. Stat. Ann. § 4-1-303. The Second Circuit has emphasized that "[a]n inference of the parties' common knowledge or understanding that is based upon a prior course of dealings is [a] question of fact." New Moon Shipping Co., Ltd. v. MAN B & W Diesel AG, 121 F.3d 24, 31 (2d Cir. 1997).
The court notes that the Terms and Conditions, attached to Leprino's Standard Invoices, contain language expressly conditioning Leprino's acceptance on Ultimate Nutrition agreeing to its additional terms. See Standard Invoices ("Leprino's acceptance of any order is expressly subject to Buyer's assent to each and all of the terms and conditions set forth herein.").
However, as discussed above, for each transaction, Leprino accepted Ultimate Nutrition's offer by sending a responsive Pro Forma Invoice and shipping the ordered goods; the Terms and Conditions were not transmitted until after acceptance occurred and each transaction was complete. As such, the inclusion of this language in Leprino's Terms and Conditions is immaterial to this court's analysis.
Here, the court finds that the Forum Selection Clause did not become part of Ultimate Nutrition and Leprino's contract through their prior course of dealing. Ultimate Nutrition has acknowledged that it received, via email, each of the Terms and Conditions attached to the Standard Invoices, which Leprino began emailing in 2014. See Joint Answer. Courts in this Circuit have found that, where one party has repeatedly received invoices containing a forum selection clause, and has never objected, such invoices may become part of the parties' contract. See, e.g., TSR, 2007 WL 4457770, at *3-4; K.K.D. Imports, Inc. v. Karl Heinz Dietrich GmbH & Co. Intern Spedition, 36 F. Supp. 2d 200, 203 (S.D.N.Y. 1999). However, there are other circumstances here that, nevertheless, weigh against a finding that the Forum Selection Clause became part of the parties'
contract through their prior course of dealing. Although Ultimate Nutrition acknowledges receiving the Terms and Conditions, it attests, via affidavits proffered by its President, that these Terms were never "invoked or even mentioned by Leprino", Rubino Decl. ¶ 10—which Leprino does not dispute—and that, "to the best of [his] knowledge formed after reasonable investigation," "no employee in [the] company ever reviewed the Terms and Conditions that were included in the Standard Invoices Plaintiff received from Defendant," Rubino Aff. ¶ 4. Indeed, other courts in this Circuit have been reluctant to find contract formation, through a course of dealing, under such circumstances. See Precision Trenchless, 2022 WL 596740, at *11 (declining to find that the terms and conditions at issue were incorporated into the parties' contract, via prior course of dealing, in part because there was no "record evidence indicat[ing] that the parties have ever invoked any of the Terms and Conditions over the course of their relationship"); One Step Up, Ltd. v. Kmart Corp., No. 97-CV-1469, 1997 WL 391117, at *3 (S.D.N.Y. July 11, 1997) (declining to find that the repeated sending of purchase orders containing a forum selection clause incorporated that clause into the parties' contract via course of dealing because there was no evidence that the recipient party had ever "signed, confirmed, or otherwise acknowledged any of the purchase orders that it had received... over the years").
Moreover, based on the undisputed facts, it does not appear, to this court, that Leprino's process for sending Ultimate Nutrition the Terms and Conditions was sufficient to "clearly place[ ] [Ultimate Nutrition] on notice" of the Terms and, therefore, the Forum Selection Clause contained therein. TSR, 2007 WL 4457770, at *4. It is undisputed that, for each transaction, Ultimate Nutrition would issue a Purchase Order and Leprino would send, in response and prior to the delivery of the goods, a Pro Forma Invoice. See Rubino Decl. ¶ 8; Declaration of Brenten Terrence Nauslar ("Nauslar Decl."), Def.'s Attach. 1, at ¶ 5 (Doc. No. 15-2). It does not appear that these Pro Forma Invoices ever contained any of the attached Terms and Conditions that Leprino now seeks to invoke. See Pro Forma Invoices; Rubino Decl. ¶ 9; Rubino Aff. ¶ 4; accord Nauslar Decl. ¶ 5 (attesting that the Standard Invoices, but not the Pro Forma Invoices, contained the Terms and Conditions at issue). Rather, as Ultimate Nutrition attests—and Leprino does not dispute—Leprino only emailed Ultimate Nutrition its Standard Invoices, along with the attached Terms and Conditions, after the goods were delivered and the relevant transaction complete. See Rubino Decl. ¶ 9; Rubino Aff. ¶ 4. Leprino could have included the Terms in its predelivery Pro Forma Invoices but it, apparently, chose not to include them until each transaction was already complete. The court, therefore, cannot conclude, under these circumstances, that this sequence of conduct "establish[ed] a common basis of understanding" and mutual assent between the parties sufficient to render the Forum Selection Clause part of the parties' contract. Conn. Gen. Stat. § 42a-1-303; Colo. Rev. Stat. Ann. § 4-1-303. As
Indeed, even if the court had applied the four Martinez factors without first addressing the threshold issue of contract formation, it likely would not have found that the Clause was "reasonably communicated" to Ultimate Nutrition. In assessing reasonable communication —the first Martinez factor—"courts generally consider whether the party seeking to enforce a forum selection clause contained in another document made that document available to the other party and sufficiently directed the other party's attention to it." Kaman, 2023 WL 5530684, at *5. Based on the aforementioned facts, the court cannot conclude that Leprino sufficiently directed Ultimate Nutrition's attention to the Forum Selection Clause at issue.
such, the court finds, based on the existing factual record, that the Forum Selection Clause contained in the Terms and Conditions was not part of a valid, binding contract between Ultimate Nutrition and Leprino, and it therefore declines to transfer venue pursuant to the Clause.
B. Factors Under 28 U.S.C. § 1404
Having found that the Forum Selection Clause was not part of a valid contract between the parties, the court must also consider whether transfer is otherwise warranted under section 1404(a) of title 28 of the United States Code. When determining whether to transfer venue under section 1404(a), courts consider multiple factors, including:
(1) the convenience of the witnesses; (2) the convenience of the parties; (3) the location of relevant documents and the relative ease of access to sources of proof; (4) the locus of operative facts; (5) the availability of process to compel the attendance of unwilling witnesses; (6) the relative means of the parties; (7) the forum's familiarity with the governing law; (8) the weight accorded the plaintiff's choice of forum; and (9) trial efficiency and the interests of justice.
Leticia v. United States, No. 22-CV-7527, 2023 WL 7110953, at *6 (E.D.N.Y. Oct. 27, 2023) (quoting W.P.V. v. United States, No. 21-CV-4436, 2023 WL 1991426, at *3 (S.D.N.Y. Feb. 14, 2023)). "Section 1404(a) reposes considerable discretion in the district court to adjudicate motions for transfer ...." Red Bull Assocs. v. Best W. Int'l, 862 F.2d 963, 967 (2d Cir. 1988). Generally, a plaintiff's choice of forum weighs heavily in a motion to transfer venue. See Leticia, 2023 WL 7110953, at *6; accord JetBlue Airways Corp. v. Helferich Pat. Licensing, LLC, 960 F. Supp. 2d 383, 400 (E.D.N.Y. 2013) ("A plaintiff's choice of forum usually weighs heavily in considering a motion to transfer venue."). "Therefore, the party seeking transfer must make a 'clear and convincing showing that the balance of convenience strongly favors the alternate forum.'" Leticia, 2023 WL 7110953, at *6 (quoting Xiu Feng Li v. Hock, 371 Fed. App'x 171, 175 (2d Cir. 2010) (summary order)).
The parties do not dispute that this litigation could have been brought in the District of Colorado.
Here, the court finds that the factors cited by Leprino are insufficient to outweigh Ultimate Nutrition's choice of forum. Notably, the first factor, convenience of witnesses, appears to weigh slightly in favor of Leprino. When assessing this factor, courts primarily consider "the relative convenience of non-party witnesses" and require the party moving under section 1404(a) to "specify the key witnesses to be called and make a general statement of what their testimony will cover." See MAK Mktg., Inc. v. Kalapos, 620 F. Supp. 2d 295, 309 (D. Conn. 2009). Leprino attests that it plans to call Marlena Zimmerman, a former employee at Leprino who was "primarily responsible for managing the Ultimate Nutrition account day to day" and is therefore "among the most knowledgeable current or former employees of Leprino with respect to ... any 'course of dealing' that may have existed between the parties...." Declaration of Ian Wale ¶¶ 2, 4 (Doc. No. 30-1). However, Ultimate Nutrition has also testified that it plans to call a nonparty witness from Connecticut, albeit an expert witness, and both parties intend to call employee witnesses from their respective companies. See Nauslar Decl. ¶ 4; Def.'s Mem. at 13-14; Rubino Decl. ¶¶ 11-12; Pl.'s Opp. at 19-20. Thus, although the court agrees that Zimmerman's testimony
slightly tilts this factor in Leprino's favor, it is not significant enough, in this court's view, to override plaintiff's choice of forum.
It is less clear whether the availability of compulsory process—a related factor—similarly leans in Leprino's favor. As Ultimate Nutrition notes, it is not clear, from the available information, that Zimmerman "would be unwilling to travel to Connecticut to testify in this matter", which would tilt this factor in favor of transfer. See MAK Mktg., 620 F. Supp. 2d at 311.
The other relevant factors are, in this court's view, mixed. As to the locus of operative facts, the parties do not contest that the breach alleged in Ultimate Nutrition's Complaint occurred in Colorado. Def.'s Mem. at 14-15; Pl.'s Opp. at 22. Indeed, it appears that most of the operative facts, as alleged in the Complaint, occurred in Colorado. See Compl. As such, this factor weighs in favor of transfer, though it is not dispositive. See MAK Mktg., 620 F. Supp. 2d at 312 (finding that the locus of the operative facts, while "weigh[ing] in favor of transfer", was nonetheless "not enough to outweigh the substantial consideration given the plaintiff's choice of forum"). By contrast, the relative means of the parties weighs against transfer because Ultimate Nutrition appears to be a much smaller company than Leprino, with fewer resources. See Nauslar Decl. ¶ 3; Rubino Decl. ¶ 4. The court finds that the other factors are neutral. Both sides concede that the convenience of the parties neither favors nor disfavors transfer. See Def.'s Mem. at 16; Pl.'s Opp. at 21. The location of relevant evidence is also neutral because "[d]ocumentary evidence is easily transportable and not voluminous" and its place "is not a compelling consideration." Flores v. United States, 142 F. Supp. 3d 279, 289 (E.D.N.Y. 2015) (quoting JetBlue Airways, 960 F. Supp. 2d at 399); accord Charter Oak Fire Ins. Co. v. Broan-Nutone, LLC, 294 F. Supp. 2d 218, 221 (D. Conn. 2003) (noting that modern "electronic storage deprive[s] this issue of practical or legal weight"). Familiarity with the governing law is also effectively neutral because, regardless of whether Connecticut or Colorado law applies, this case is unlikely to involve particularly complex or novel questions of state law, and this court is capable of applying the substantive law of another state. See Leticia, 2023 WL 7110953, at *8. Finally, the court sees no compelling reason for why trial efficiency and the interest of justice weigh in either direction.
The court therefore finds that, on balance, the remaining factors are insufficient to overcome the substantial deference owed to the plaintiff's choice of forum. Accordingly, the court declines to transfer venue under section 1404(a).
V. CONCLUSION
For the reasons stated above and based on the factual record before the court, the Motion to Transfer (Doc. No. 15) is denied.
SO ORDERED.