Yearby v. Am. Nat'l Ins. Co.

• Decision Date: 30 August 2021
• Docket Number: 20-cv-09222-EMC
• Parties: JOE S YEARBY, Plaintiff, v. AMERICAN NATIONAL INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Northern District of California

JOE S YEARBY, Plaintiff, v. AMERICAN NATIONAL INSURANCE COMPANY, Defendant.

No. 20-cv-09222-EMC

United States District Court, N.D. California

August 30, 2021

ORDER DENYING DEFENDANT'S MOTION TO TRANSFER, AND GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS DOCKET NOS. 39, 43

EDWARD M. CHEN, United States District Judge.

Pending before the Court are Defendant American National Insurance Company's (ANICO's) motion to transfer this case to the Southern District of Texas pursuant to 28 U.S.C. § 1404(a), or to dismiss this action pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6). See Docket Nos. 39 (“Dismiss Mot.”); 43 (“Transfer Mot.”).

For the following reasons, the Court DENIES the motion to transfer. The Court also DENIES in part and GRANTS in part the motion to dismiss with leave to amend.

I. BACKGROUND

A. Factual Allegations in the Complaint

Plaintiff Joe S. Yearby's first amended complaint (FAC) alleges as follows. Plaintiff purchased life insurance policy number UL090652 (the “Policy”) from ANICO on June 9, 1986, while he was a resident of Oakland, California. See Docket Nos. 31 (First Am. Compl. (FAC)) ⁋ 12; 43-1 (Decl. of Bruce Pavelka in Supp. of Mot. to Transfer (“Pavelka Decl.”), Ex. A-1 (“Policy”). The Policy application, which was part of the Policy, was signed by the parties in California. Policy at 31, 33. ANICO allegedly sought and obtained approval from California state insurance regulators before selling and issuing the Policy to Plaintiff. FAC ¶ 15.

In or around October 1995, Plaintiff notified ANICO that he had relocated from Oakland to Glendale, Arizona. Pavelka Decl. ¶ 9. In 2005, Plaintiff again changed his address on file with ANICO to his current address in Monroe, Louisiana. Id. The FAC thus states that Plaintiff currently “is an individual and citizen of the state of Louisiana.” FAC ¶ 12. ANICO is an insurance company organized and existing under the laws of Texas with a principal place of business in Galveston, which is in the Southern District of Texas. FAC ¶ 13; Pavelka Decl. ¶ 5.

The gravamen of Plaintiff's FAC is that, starting in 2010, ANICO considered factors beyond the terms of the Policy to determine the cost of insurance (COI) rates it charged Plaintiff under the Policy. Id. ¶ 11. More specifically, Plaintiff alleges ANICO failed to decrease its COI charges, as was required by the Policy. Id. Plaintiff brings a single cause of action for common law breach of contract to recover the alleged COI overcharges. Id. Plaintiff seeks to represent a class of ANICO policyholders who purchased life insurance policies from ANICO in California and “who have been forced since January 1, 2010 to pay unlawful and excessive COI rates, deducted from their account values on a monthly basis that are not, as the policies require, determined from time to time by ANICO based on its expectations as to future mortality experience.” FAC ⁋ 1, 33. According to the FAC, venue is proper in this District because “the events giving rise to Plaintiff's cause of action occurred in this District and because ANICO transacts business and has transacted business during the relevant time period within the Northern District of California.” Id. ¶ 16. ANICO is licensed to transact insurance in California. Id. ¶ 13. Additionally, “a substantial part of the acts and omissions giving rise to the claims on behalf of the Class set forth herein, including ANICO's issuance of Plaintiff's life insurance policy, occurred in this judicial district and/or in the San Francisco Division.” Id. ¶ 16.

B. Procedural History

Plaintiff filed his initial class action complaint on December 18, 2020 and his FAC on April 23, 2021. See Docket No. 1 (“Compl.”); FAC. ANICO filed a motion to dismiss the FAC on May 7, 2021 and a motion to transfer this case to the Southern District of Texas on May 13, 2021. See Dismiss Mot.; Transfer Mot.

II. MOTION TO TRANSFER

Under 28 U.S.C. § 1404(a), a district court has discretion to transfer a case to another district where it might have been brought. Defendant seeks to transfer this case to the Southern District of Texas, where it is incorporated and has its principal place of business. Transfer Mot. at 3. “The party seeking transfer has the burden of showing that transfer is appropriate.” Kaur v. U.S. Airways, Inc., No. C-12-5963 EMC, 2013 WL 1891391, at *2 (N.D. Cal. May 6, 2013) (citing Commodity Futures Trading Comm'n v. Savage, 611 F.2d 270, 279 (9th Cir. 1979)). “Section 1404(a) provides for transfer to a more convenient forum, not to a forum likely to prove equally convenient or inconvenient.” Mainstay Bus. Sols. v. Indus. Staffing Servs., No. ICVS-10-3344 KJM GGH, 2012 WL 44643, at *1 (E.D. Cal. Jan 9, 2012) (citing Van Dusen v. Barrack, 376 U.S. 612, 645-46 (1964)). A court considering a motion to transfer venue must determine whether venue is proper in this District; whether plaintiff could have brought the action in the transferee district; and whether the transfer will promote convenience and fairness. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988); Hoffman v. Bilaski, 363 U.S. 335, 343-44 (1960). Because the parties do not dispute that this action could be brought in this District or in the Southern District of Texas, see Transfer Mot. at 7-8, Docket No. 46 (“Transfer Opp'n”), the only question is whether this Court should transfer this action “for the convenience of the parties and witnesses, and in the interest of justice.” 28 U.S.C. § 1404(a).

Courts engage in an “individualized, case-by-case consideration of convenience and fairness” to determine if transfer is appropriate. Stewart Org., 487 U.S. at 29 (quoting Van Dusen, 376 U.S. at 622). This individualized inquiry requires the Court to consider the following factors: (1) plaintiff's choice of forum, (2) convenience of the parties, (3) convenience of the witnesses, (4) ease of access to the evidence, (5) familiarity of each forum with the applicable law, (6) feasibility of consolidation with other claims, (7) any local interest in the controversy, and (8) the relative court congestion and time to trial in each forum. See, e.g., Gonzales v. Charter Commc'ns, LLC, No. 20-CV-02689-EMC, 2020 WL 5074024, at *2 (N.D. Cal. Aug. 24, 2020). “Weighing of the factors for and against transfer involves subtle considerations and is best left to the discretion of the trial judge.” Ventress v. Japan Airlines, 486 F.3d 1111, 1118 (9th Cir. 2007) (quoting Savage, 611 F.2d at 279). “A district court is not restricted to the pleadings on a motion to transfer and may consider, inter alia, undisputed facts supported by affidavits, depositions, stipulations, or other relevant documents.” Esquer v. StockX, LLC, No. 19-CV-05933-LHK, 2020 WL 3487821, at *2 (N.D. Cal. June 6, 2020).

The Court will evaluate each of these factors in order of relative importance to decide the transfer motion.^[1]

A. Plaintiff's Choice of Forum (First Factor)

“The defendant must make a strong showing of inconvenience to warrant upsetting the plaintiff's choice of forum, ” which is generally “accorded significant deference.” See Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). FAC ⁋ 12; Policy at 31, 33. In Lou v. Belzberg, the Ninth Circuit explained that

[i]n judging the weight to be accorded [plaintiff's] choice of forum, consideration must be given to the extent of both [plaintiff's] and the [defendants'] contacts with the forum, including those relating to [plaintiff's] cause of action. . . . If the operative facts have not occurred within the forum and the forum has no interest in the parties or subject matter, [plaintiff's] choice is entitled to only minimal consideration.

834 F.2d 730, 739 (9th Cir. 1987) (emphasis added) (citations omitted). Applying Lou, courts in this district have given a plaintiff's choice of forum varying levels of deference depending on whether there is evidence of forum shopping, the plaintiff resides in the forum, and the plaintiff chose a forum with no connection to the underlying dispute. See e.g., Doe v. Epic Games, Inc., 435 F.Supp.3d 1024, 1041 (N.D. Cal. 2020) (“A Plaintiff's choice of forum receives only minimal deference if the operative facts did not occur within the forum and the forum has no interest in the parties or subject matter.”); Gonzales, 2020 WL 5074024, at *2 (“[W]here plaintiffs have engaged in forum shopping or chosen a forum with no connection to the underlying dispute, ‘the burden on the defendant is reduced and it is easier for the defendant to show that the balance of convenience favors transfer.'” (quoting Gupta v. Perez, No. 5:14-cv-01102 HRL, 2014 WL 2879743, *3 (N.D. Cal. June 24, 2014)); Kaur, 2013 WL 1891391, at *3 (“To be sure, ‘[w]here a plaintiff does not reside in the forum, the Court may afford plaintiff's choice considerably less weight.'” (quoting Vu v. Ortho-McNeil Pharm., Inc., 602 F.Supp.2d 1151, 1156 (N.D. Cal. 2009)); Inherent.com v. Martindale-Hubbell, 420 F.Supp.2d 1093, 1100 (N.D. Cal. 2006) (“[T]he degree to which courts defer to the plaintiff's chosen venue is substantially reduced when the plaintiff's choice is not its residence or where the forum lacks a significant connection to the activities alleged in the complaint.”). Although Plaintiff no longer resides here, his choice of forum is nonetheless entitled to significant deference because there is no evidence of forum shopping and this District has a strong connection to the underlying dispute given that all the policies in the proposed class were issued in California.

ANICO first argues that Plaintiff's choice of forum is entitled to little deference because he moved out of this District long before ANICO allegedly failed to reduce the COI charges in violation of the...