Bozic v. U.S. Dist. Court for the S. Dist. of Cal.

• Decision Date: 25 April 2018
• Docket Number: No. 17-70614,17-70614
• Citation: 888 F.3d 1048
• Parties: IN RE Regina BOZIC, Regina Bozic, on behalf of herself and all others similarly situated, Petitioner, v. 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.
• Court: U.S. Court of Appeals — Ninth Circuit

888 F.3d 1048

IN RE Regina BOZIC,Regina Bozic, on behalf of herself and all others similarly situated, Petitioner,

v. 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.

No. 17-70614

United States Court of Appeals, Ninth Circuit.

Argued and Submitted January 8, 2018, Pasadena, California

Filed April 25, 2018

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.

Before: Milan D. Smith, Jr. and Michelle T. Friedland, Circuit Judges, and Jed S. Rakoff,^* Senior District Judge.

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.

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 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, 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, 67 S.Ct. 1558, 91 L.Ed. 2041 (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, 124 S.Ct. 2576, 159 L.Ed.2d 459 (2004) (quoting Kerr v. U.S. Dist. Court , 426 U.S. 394, 403, 96 S.Ct. 2119, 48 L.Ed.2d 725 (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, for issuance of the writ. See Cheney , 542 U.S. at 380, 124 S.Ct. 2576 (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, 96 S.Ct. 2119 ) ); 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 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, 80 S.Ct. 1084, 4 L.Ed.2d 1254 (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 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...