Regina Bozic v. Usdc-Casd ( 2018 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
IN RE REGINA BOZIC, No. 17-70614
D.C. No.
REGINA BOZIC, on behalf of herself 3:16-cv-00733-
and all others similarly situated, BAS-MDD
Petitioner,
v. OPINION
UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF
CALIFORNIA, SAN DIEGO,
Respondent,
HENNY DEN UIJL, an individual;
SANDRA DEN UIJL, an individual;
BRYAN CORLETT, an individual;
OBESITY RESEARCH INSTITUTE, a
California Limited Liability
Company; CONTINUITY PRODUCTS, a
Delaware Limited Liability
Company; NATIONAL WEIGHT LOSS
INSTITUTE, a California Limited
Liability Company; ZODIAC
FOUNDATION, a California Limited
Liability Company; INNOTRAC
CORPORATION, a Georgia
Corporation,
Real Parties in Interest.
2 BOZIC V. USDC-CASD
Petition for Writ of Mandamus
to the United States District Court
for the Southern District of California
Argued and Submitted January 8, 2018
Pasadena, California
Filed April 25, 2018
Before: Milan D. Smith, Jr. and Michelle T. Friedland,
Circuit Judges, and Jed S. Rakoff, * Senior District Judge.
Opinion by Judge Friedland
*
The Honorable Jed S. Rakoff, Senior United States District Judge
for the Southern District of New York, sitting by designation.
BOZIC V. USDC-CASD 3
SUMMARY **
Mandamus
The panel denied a petition for a writ of mandamus that
sought to reverse an order transferring petitioner Regina
Bozic’s putative class action from the United States District
Court for the Southern District of California to the United
States District Court for the Eastern District of California.
The panel agreed with Bozic that it was clear error when
the district court transferred her action to the Eastern District
because venue was not proper there under the general venue
statute, 28 U.S.C. § 1391. The panel rejected defendants’
contentions concerning venue. First, because nothing in
Bozic’s complaint suggested that any event giving rise to her
individual claims occurred in the Eastern District, the panel
held that venue was not proper under § 1391(b)(2). The
panel also held that neither 28 U.S.C. § 1391(b)(1) nor (b)(3)
provided a basis for venue in the Eastern District where none
of the seven defendants resided in the Eastern District and
venue was proper in the Southern District. Second,
concerning defendants’ contention that the first-to-file rule
negated 28 U.S.C § 1404(a)’s requirement that an action
could be transferred only to a district where it “might have
been brought,” the panel held that the argument was
foreclosed by the plain language of § 1404(a) which allowed
transfer only to a district where it might have been brought,
a requirement that excludes the Eastern District.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
4 BOZIC V. USDC-CASD
The panel held that despite the presence of a clear legal
error, Bozic was not entitled to mandamus relief where
issuance of the writ would have no practical impact on this
case in its current procedural posture, and any injury Bozic
might face was purely speculative. The panel concluded that
the extraordinary remedy of mandamus was unwarranted at
this time.
COUNSEL
Michael T. Houchin (argued) and Ronald A. Marron, Law
Office of Ronald A. Marron, San Diego, California, for
Petitioner.
Richard P. Sybert (argued), Hazel Mae B. Pangan, and
Patrick J. Mulkern, Gordon & Rees LLP, San Diego,
California, for Real Parties in Interest.
OPINION
FRIEDLAND, Circuit Judge:
Plaintiff-Petitioner Regina Bozic requests mandamus
relief to reverse an order transferring her putative consumer
class action from the United States District Court for the
Southern District of California (“Southern District”) to the
United States District Court for the Eastern District of
California (“Eastern District”), where her action was
consolidated with a similar one previously filed in the
Eastern District. These two federal actions are stayed
pending the outcome of a third class action that is proceeding
in California state court.
BOZIC V. USDC-CASD 5
Although we agree with Bozic that it was clear error to
transfer her action to the Eastern District, issuance of the writ
would have no practical impact on this case in its current
procedural posture, and any injury Bozic might face is purely
speculative. We therefore hold that the extraordinary
remedy of mandamus is unwarranted at this time.
I.
In 2015, Plaintiff-Petitioner Regina Bozic purchased the
weight-loss supplement Lipozene in her home state of
Pennsylvania. Disappointed by the product, Bozic filed a
putative class action in the Southern District against the
corporate entities and individuals (collectively,
“Defendants”) responsible for the production, distribution,
and marketing of Lipozene. In addition to asserting a series
of state law claims, Bozic sought a declaratory judgment
defining Lipozene purchasers’ rights under a 2005 Federal
Trade Commission (“FTC”) consent decree that restricts
Defendants’ ability to sell weight-loss products. The
Southern District, where the decree was entered and where
Defendants reside, retains jurisdiction over matters
involving “construction, modification, and enforcement” of
that decree.
Bozic’s case is the third of its kind. At the time she filed
suit, two related putative class actions were already pending
in California: Duran v. Obesity Research Institute, LLC,
filed in the San Diego Superior Court, and Fernandez v.
Obesity Research Institute, LLC, filed in the Eastern
District. 1 All three suits assert similar state law claims
1
We GRANT Bozic’s request for judicial notice of three minute
orders from Duran and Fernandez. See United States v. Howard,
6 BOZIC V. USDC-CASD
against a largely overlapping group of defendants, although
Bozic’s request for declaratory relief under the FTC consent
decree is unique to the current action. Fernandez has been
stayed since August 2013 pending the resolution of Duran. 2
After Bozic filed this action in March 2016 in the
Southern District, Defendants moved in that court to transfer
the case to the Eastern District for consolidation with
Fernandez or, in the alternative, to stay the proceedings. The
court held that Bozic’s action was governed by the first-to-
file rule, a judicially created “doctrine of federal comity,”
Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 94–95
(9th Cir. 1982), which applies when two cases involving
“substantially similar issues and parties” have been filed in
different districts, Kohn Law Grp., Inc. v. Auto Parts Mfg.
Miss., Inc., 787 F.3d 1237, 1239 (9th Cir. 2015). Under that
rule, “the second district court has discretion to transfer, stay,
or dismiss the second case in the interest of efficiency and
judicial economy.” Cedars-Sinai Med. Ctr. v. Shalala,
125 F.3d 765, 769 (9th Cir. 1997).
Reasoning that “the Fernandez Court [had] already
determined that venue [was] proper” in the Eastern District,
381 F.3d 873, 876 n.1 (9th Cir. 2004) (explaining that we may take
judicial notice of records in other court proceedings).
2
In Duran, the San Diego Superior Court approved a final
settlement in March 2015, but that judgment was successfully appealed.
Duran v. Obesity Research Inst., LLC, 204 Cal. Rptr. 3d 896, 900 (Ct.
App. 2016). A set of objectors—themselves the named plaintiffs in
Fernandez—argued that the settlement was defective due to lack of
notice, among other alleged flaws. Id. The California Court of Appeal
agreed and reversed. Id. (“The erroneous notice injected a fatal flaw into
the entire settlement process and undermines the court’s analysis of the
settlement’s fairness.”). The case is currently pending again before the
Superior Court.
BOZIC V. USDC-CASD 7
the district court chose to transfer. Bozic then filed a petition
for a writ of mandamus asking our court to vacate the
transfer order.
II.
“The writ of mandamus is a ‘drastic and extraordinary’
remedy.” In re Van Dusen, 654 F.3d 838, 840 (9th Cir.
2011) (quoting Ex parte Fahey, 332 U.S. 258, 259–60
(1947)). A mandamus petitioner bears the burden of
establishing that “right to issuance of the writ is ‘clear and
indisputable.’” Cheney v. U.S. Dist. Court, 542 U.S. 367,
381 (2004) (quoting Kerr v. U.S. Dist. Court, 426 U.S. 394,
403 (1976)). Even when a petitioner has carried this burden,
we may not grant relief unless we are “satisfied that the writ
is appropriate under the circumstances.” Id.
We consider five factors, first outlined in Bauman v.
United States District Court, 557 F.2d 650 (9th Cir. 1977),
when assessing whether mandamus relief is appropriate:
(1) whether the petitioner has other adequate
means, such as a direct appeal, to attain the
relief he or she desires; (2) whether the
petitioner will be damaged or prejudiced in a
way not correctable on appeal; (3) whether
the district court’s order is clearly erroneous
as a matter of law; (4) whether the district
court’s order makes an “oft-repeated error,”
or “manifests a persistent disregard of the
federal rules”; and (5) whether the district
court’s order raises new and important
problems, or legal issues of first impression.
In re Van Dusen, 654 F.3d at 841 (quoting Bauman, 557 F.2d
at 654–55). Clear legal error is necessary, but not sufficient,
8 BOZIC V. USDC-CASD
for issuance of the writ. See Cheney, 542 U.S. at 380
(holding that the writ is appropriate only when the petitioner
has “no other adequate means to attain the relief he desires”
(quoting Kerr, 426 U.S. at 403)); In re Henson, 869 F.3d
1052, 1058 (9th Cir. 2017) (“[S]atisfying the third Bauman
factor—clear error—is necessary for granting the writ.”).
III.
Applying these standards, we conclude that although the
district court committed clear legal error by transferring this
action to the Eastern District, mandamus relief is not
appropriate. Issuance of the writ would have no practical
impact on this case in its current procedural posture. The
district court made clear that it would either transfer or stay
this case under the first-to-file rule, which the parties do not
dispute applies. If transfer were not an available option,
Bozic’s action therefore would be stayed pending a final
judgment in Duran—which is the same state it is in now in
the Eastern District. As a result, any injury Bozic might face
from the transfer is purely speculative at this point. If the
stay were eventually lifted in circumstances in which she
could proceed with her case, thus making her asserted injury
less speculative, Bozic could then file a motion in the
Eastern District to transfer her case back to the Southern
District and, if necessary, file a new petition for a writ of
mandamus in our court.
A.
The district court clearly erred by transferring this case
to the Eastern District because, under the general venue
BOZIC V. USDC-CASD 9
statute, 28 U.S.C. § 1391, venue is not proper there. 3 The
district court had discretion to transfer Bozic’s action, but
only “to any other district or division where it might have
been brought.” 28 U.S.C. § 1404(a). The phrase “where it
might have been brought” refers solely to districts where
Bozic could have originally filed suit. See Hoffman v.
Blaski, 363 U.S. 335, 344 (1960). This category cannot be
expanded by Defendants, even if they favor transfer to a
district where the action could not have been brought. Id.
Relying on the class character of Bozic’s claims,
Defendants argue that venue is proper in the Eastern District
because some putative class members presumably purchased
Lipozene in that district. And even if venue is improper
under § 1404(a), they insist that the requirements of
§ 1404(a) do not control where, as here, an action is
transferred pursuant to the first-to-file rule. We reject both
contentions.
1.
Defendants assert that purchases by putative class
members in the Eastern District comprise “a substantial part
of the events or omissions giving rise to” Bozic’s claims, and
that venue in the Eastern District is therefore proper under
3
We previously held in In re United States, 791 F.3d 945 (9th Cir.
2015), that “we should only offer guidance to the district court if the writ
would have been an appropriate remedy at the time the petition was
filed.” Id. at 954. There, however, the petitioner did not identify any
“specific act the [petitioner] would have us compel the district court to
do . . . nor [was] there any order we m[ight] vacate.” Id. at 953. By
comparison, Bozic has requested that we return her action to the Eastern
District, and this would be an appropriate remedy if we believed the
requirements for mandamus relief were satisfied. We thus see no
problem in evaluating the basis for the transfer order when assessing
whether the “clear legal error” Bauman factor is satisfied.
10 BOZIC V. USDC-CASD
28 U.S.C. § 1391(b)(2). Even putting aside whether the
purchase of Lipozene by some fraction of putative class
members might qualify as “a substantial part of the
events”—and further that no members of Bozic’s putative
class have so far been identified—Defendants’ argument
fails. Whether before or after class certification, the claims
of unnamed class members can never make permissible an
otherwise impermissible venue. Rather, in a class action, the
“events” in question are only those involving the named
plaintiffs. See Abrams Shell v. Shell Oil Co., 343 F.3d 482,
490 (5th Cir. 2003) (explaining that “all named plaintiffs to
a class action must satisfy the venue requirements”); see also
2 Newberg on Class Actions § 6:36 (5th ed.) (“The analysis
of where a substantial part of the events took place, in a class
action, looks to the events concerning the named plaintiffs’
claims, not all of the class members’ claims.”). Otherwise,
a nationwide class action could be transferred to any district
in the country, thus abrogating the venue statute altogether.
Nothing in Bozic’s Complaint suggests that a substantial
part of the events giving rise to her individual claims—or,
indeed, any event giving rise to her individual claims—
occurred in the Eastern District. Nor have Defendants
offered any evidence or legal theory connecting Bozic’s
individual claims to the Eastern District. Bozic purchased
Lipozene in Pennsylvania, and Defendants’ Lipozene
business operations are based entirely in the Southern
District. By contrast, venue is proper in the Eastern District
in Fernandez, the related federal class action, because
several of the named plaintiffs in Fernandez purchased
Lipozene in the Eastern District. Fernandez v. Obesity
Research Inst., LLC, No. 2:13-cv-00975-MCE-KJN, 2013
WL 4587005, at *3 (E.D. Cal. Aug. 28, 2013). Contrary to
Defendants’ argument, it is irrelevant that Bozic is herself a
member of the putative class in Fernandez; whether venue
BOZIC V. USDC-CASD 11
is proper under § 1391(b)(2) in this action depends only on
the events surrounding Bozic’s claims.
Nor does § 1391(b)(1) or (b)(3) provide a basis for venue
in the Eastern District. None of the seven defendants in this
action reside in the Eastern District, as would be required for
venue under § 1391(b)(1). And § 1391(b)(3) applies only if
there is no district where venue lies under § 1391(b)(1) or
(b)(2). Because venue is proper in the Southern District, this
residual provision does not apply. Thus, the Eastern District
is not an available venue for this action.
2.
Defendants also contend that the first-to-file rule negates
§ 1404(a)’s requirement that an action may be transferred
only to a district where it “might have been brought.” We
disagree.
Defendants’ argument on this score presents what
appears to be an issue of first impression in the courts of
appeals. But Defendants’ argument is foreclosed by the
plain language of § 1404(a), which provides in relevant part
that “a district court may transfer any civil action to any other
district or division where it might have been brought.” See
Van Dusen v. Barrack, 376 U.S. 612, 616 (1964) (explaining
that the “transfer power is . . . expressly limited by the final
clause of § 1404(a) restricting transfer to those federal
districts in which the action ‘might have been brought’”). A
contrary understanding of the interaction between the first-
to-file rule and § 1404(a) would allow a judge-made doctrine
to contravene a congressionally enacted statute—a result
that the Supreme Court has made clear we cannot
countenance. See Nostrand v. Little, 362 U.S. 474, 477
(1960) (“Where the language of a statute is plain,
unambiguous, and well understood according to its natural
12 BOZIC V. USDC-CASD
and ordinary sense and meaning, the statute itself furnishes
a rule of construction beyond which the court cannot go.”).
Although the first-to-file rule guides the district court’s
exercise of discretion in handling related cases, the
requirements of § 1404(a) cabin the exercise of that
discretion. 4
Because the district court could only transfer this action
to a district “where it might have been brought” under
§ 1404(a)—a requirement that excludes the Eastern
District—we conclude that the district court committed clear
legal error by granting Defendants’ motion to transfer.
B.
Despite the presence of a clear legal error, we hold that
Bozic is not entitled to mandamus relief. Mandamus may
sometimes be appropriate to correct a clearly erroneous
transfer order. See Commercial Lighting Prods., Inc. v. U.S.
Dist. Court, 537 F.2d 1078, 1079 (9th Cir. 1976); Pac. Car
& Foundry Co. v. Pence, 403 F.2d 949, 951–52 (9th Cir.
1968). But if clear legal error were sufficient for mandamus
relief, every erroneous interlocutory order would warrant
issuance of the writ. See Bankers Life & Cas. Co. v. Holland,
346 U.S. 379, 382–83 (1953) (rejecting the notion that
“every interlocutory order which is wrong might be
reviewed under the All Writs Act” and declining to issue a
writ of mandamus where the court’s order, “even if
erroneous,” “involved no abuse of judicial power”). That is
why, when deciding whether to issue the writ, we also look
4
Defendants’ reliance on Pacesetter Systems, Inc. v. Medtronic,
Inc., 678 F.2d 93 (9th Cir. 1982), is unavailing. There the district court
dismissed, rather than transferred, the second-filed action. Id. at 94. We
therefore had no cause to consider the interaction between § 1404(a) and
the first-to-file rule.
BOZIC V. USDC-CASD 13
to “whether the petitioner has other adequate means . . . to
attain the relief he or she desires,” “whether the petitioner
will be damaged or prejudiced in a way not correctable on
appeal,” “whether the district court’s order makes an ‘oft-
repeated error,’ or ‘manifests a persistent disregard of the
federal rules,’” and “whether the district court’s order raises
new and important problems, or legal issues of first
impression.” In re Van Dusen, 654 F.3d 838, 841 (9th Cir.
2011) (quoting Bauman v. U.S. Dist. Court, 557 F.2d 650,
654–55 (9th Cir. 1977)). And here, these remaining Bauman
factors collectively weigh against issuing the writ. See
Bauman, 557 F.2d at 654–55.
1.
In evaluating the remaining Bauman factors, we first
consider whether the “party seeking the writ has no other
adequate means, such as a direct appeal, to attain the relief
he or she desires,” and, relatedly, whether the “petitioner will
be damaged or prejudiced in a way not correctable on
appeal.” Id. at 654; see also Cheney v. U.S. Dist. Court,
542 U.S. 367, 380 (2004). These factors are not satisfied
here. Indeed, Bozic cannot even attain the relief she
desires—the opportunity to litigate her own case
immediately in a proper forum—through issuance of the
writ. Because it would be inappropriate to wield “one of ‘the
most potent weapons in the judicial arsenal,’” Cheney,
542 U.S. at 380 (quoting Will v. United States, 389 U.S. 90,
107 (1967)), when a petitioner faces no imminent injury—
and will have other options available if that ever changes—
these circumstances weigh heavily against granting
mandamus relief.
Bozic does not dispute that the first-to-file rule applies
here. That rule allows a court to transfer, stay, or dismiss a
later-filed suit in deference to an earlier-filed suit, see
14 BOZIC V. USDC-CASD
Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622, 623 (9th
Cir. 1991), and the district court made clear that it would do
one of those things here. If we were to grant mandamus
relief and return Bozic’s action to the Southern District
having held that transfer is not an option, the court would
therefore almost certainly stay the case pending the outcome
in Duran. 5 Bozic’s case would thus remain in the same
posture regardless of the transfer—namely, stayed pending
the outcome in Duran. Bozic’s petition might have been
more responsive to her articulated concern had she also
requested that we reverse the district court’s conclusion that
the first-to-file rule applied, thereby precluding any
subsequent stay in the Southern District. Bozic has
expressly acknowledged, though, that a stay pursuant to the
first-to-file rule is appropriate in this case.
If Duran were eventually resolved in a manner that
would have preclusive effect on the federal actions, Bozic’s
options for challenging the Duran judgment would remain
the same regardless of whether we had granted this petition.
Bozic argues that she will suffer irreparable harm absent the
writ because any resolution of Duran will not provide
sufficient relief. 6 But Bozic’s ability to contest the Duran
5
Because Defendants did not move to dismiss, the Southern District
would presumably stay the case if it had occasion to choose between the
remaining options provided by the first-to-file rule. Of course, if the
Southern District chose to dismiss instead, our having granted Bozic’s
mandamus petition would only have moved her farther from her
requested relief.
6
Duran in fact shows the opposite, by demonstrating that nothing
irreparable would follow from an initial resolution in that case. There
the Court of Appeal reversed the settlement after the named plaintiffs
from the Fernandez action filed objections that identified significant
flaws in the initial settlement agreement. See Duran v. Obesity Research
Inst., LLC, 204 Cal. Rptr. 3d 896, 900 (Ct. App. 2016).
BOZIC V. USDC-CASD 15
judgment in no way depends on where her case is stayed.
Duran is still a putative class action. If the class in Duran
were ever certified—whether as a settlement class or a
litigation class—then Bozic would be able to choose to opt
out or intervene regardless of whether her own separate case
was pending in the Southern or Eastern District. See Cal.
Civ. Code § 1781(e); Hernandez v. Restoration Hardware,
Inc., 409 P.3d 281, 288–89 (Cal. 2018) (“Potential class
members in [California] can opt out of the class action
litigation and pursue their own litigation against the same
class defendant, timely intervene in the action or proceeding,
or move to set aside the judgment.”). This petition thus has
no effect on Bozic’s options.
Moreover, in the event Duran were resolved in a manner
that did not preclude Bozic’s claims and the stay of her
action were lifted—for example, if she opted out of any
certified class in Duran—then Bozic could, in reliance on
our opinion, file a motion in the Eastern District to transfer
her case back to the Southern District. If that motion were
unsuccessful, she could then refile for mandamus. At that
point, any potential injury from her case remaining in the
Eastern District would be far less speculative, 7 and we could
7
Bozic’s primary argument for why she is prejudiced by having her
case in the Eastern District is that the Southern District has exclusive
jurisdiction to adjudicate her claim regarding the FTC consent decree.
But Bozic lacks standing to enforce that decree, meaning an inability to
pursue enforcement in the Eastern District cannot injure her in any
relevant way. See United States v. FMC Corp., 531 F.3d 813, 821 (9th
Cir. 2008) (holding that a third party lacks standing to enforce a
governmental consent decree where, as here, the decree does not include
“a clear expression of a different intent”). We have not definitively
resolved whether third-party beneficiaries always lack standing to
enforce a consent decree or, rather, whether third-party beneficiaries are
presumed to lack standing absent a clear statement to the contrary. See
id. But because the FTC consent decree contains no indication that third-
16 BOZIC V. USDC-CASD
evaluate whether she would be prejudiced in a way that
warranted mandamus relief. 8
2.
The rest of the Bauman factors similarly do not support
granting the writ. Bozic has no colorable argument that
“[t]he district court’s order is an oft-repeated error, or
manifests a persistent disregard of the federal rules.”
Bauman, 557 F.2d at 655. And although it appears that the
interaction of the first-to-file rule and § 1404(a) is a question
of first impression, see id., we have now decided that
question in the process of evaluating the “clear legal error”
Bauman factor. Thus, the “first impression” Bauman factor
has little relevance here. See Christensen v. U.S. Dist. Court,
844 F.2d 694, 697 (9th Cir. 1988) (“All factors are not
relevant in every case and the factors may point in different
directions in any one case.”).
party beneficiaries have enforcement rights, Bozic’s petition does not
require exploring this ambiguity.
Moreover, there is no dispute that the Eastern District has both
subject matter jurisdiction over the remainder of this dispute and
personal jurisdiction over Defendants. There is thus no risk that the
Eastern District might adjudicate an action when it lacks the power to do
so. See Libby, McNeill, & Libby v. City Nat’l Bank, 592 F.2d 504, 510
(9th Cir. 1978) (“Venue is not jurisdictional.”).
8
Even then, it is not clear that mandamus relief would be
appropriate. Cf. Wash. Pub. Utils. Grp. v. U.S. Dist. Court, 843 F.2d
319, 325 (9th Cir. 1987) (declining to issue a writ of mandamus to order
a change in venue even though the petitioners might have been “required
to endure the expense and inconvenience of a second massive trial”).
BOZIC V. USDC-CASD 17
IV.
For all these reasons, we conclude that Bozic has not
shown the necessary clear and indisputable right to issuance
of the writ. The petition is therefore DENIED.