Click to Chat

Motion to Transfer Nevada Federal Action to New York Per Forum Selection Clause

Posted by: on Wed, Nov 11, 2015

Share this post

COME NOW Defendants VIS VIRES GROUP, INC., a New York Corporation; KBM WORLDWIDE, INC., a New York Corporation; ASHER ENTERPRISES, INC., a Delaware Corporation; SETH KRAMER; and CURT KRAMER (“Defendants”), by and through their undersigned counsel, ALBRIGHT, STODDARD, WARNICK & ALBRIGHT, and hereby file this Motion to Dismiss or in the Alternative to Transfer Venue to New York.
This motion is made and based upon the Points and Authorities attached hereto, all pleadings and papers filed in this action, and any and all arguments of counsel at the hearing of this matter.

 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO DISMISS OR IN THE ALTERNATIVE
TO TRANSFER VENUE TO NEW YORK

I. INTRODUCTION
There are eight (8) loans, each secured by a Convertible Promissory Note, from Defendants to Plaintiff attached to the Complaint, as follows:
1. Convertible Promissory Note dated May 1, 2015, in the principal amount of $64,000.00, executed by Players Network, a Nevada corporation, in favor of Vis Vires Group, Inc., a New York corporation. (Transfer Agent: Clear Trust, LLC)
2. Convertible Promissory Note dated December 3, 2014, in the principal amount of $64,000.00, executed by Players Network, a Nevada corporation, in favor of KBM Worldwide, Inc., a New York corporation. (Transfer Agent: Clear Trust, LLC)
3. Convertible Promissory Note dated October 27, 2014, in the principal amount of $104,000.00, executed by Players Network, a Nevada corporation, in favor of KBM Worldwide, Inc., a New York corporation. (Transfer Agent: Clear Trust, LLC)
4. Convertible Promissory Note dated February 19, 2013, in the principal amount of $42,500.00, executed by Players Network, a Nevada corporation, in favor of Asher Enterprises, Inc., a Delaware corporation. (Transfer Agent: Pacific Stock Transfer Co.)
5. Convertible Promissory Note dated January 11, 2013, in the principal amount of $35,000.00, executed by Players Network, a Nevada corporation, in favor of Asher Enterprises, Inc., a Delaware corporation. (Transfer Agent: Empire Stock Transfer, Inc.)
6. Convertible Promissory Note dated December 12, 2012, in the principal amount of $32,500.00, executed by Players Network, a Nevada corporation, in favor of Asher Enterprises, Inc., a Delaware corporation. (Transfer Agent: Pacific Stock Transfer Co.)
7. Convertible Promissory Note dated September 6, 2012, in the principal amount of $37,500.00, executed by Players Network, a Nevada corporation, in favor of Asher Enterprises, Inc., a Delaware corporation. (Transfer Agent: Pacific Stock Transfer Co.)
8. Convertible Promissory Note dated July 12, 2012, in the principal amount of $37,500.00, executed by Players Network, a Nevada corporation, in favor of Asher Enterprises, Inc., a Delaware corporation. (Transfer Agent: Pacific Stock Transfer Co.)
All of the Notes above, except Number 1 with Vis Vires, have been satisfied.
A. Governing Law and Forum Selection Clause
The choice of law (New York) and forum selection clause (New York) in the agreement is exclusive and mandatory. All eight Notes select New York in Paragraph 4.6 regarding governing law and forum selection, as follows:
4.6 Governing Law. This Note shall be governed by and construed in accordance with the laws of New York without regard to principles of conflicts of law. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only “in the state courts of New York or in the federal courts located in the state and county of Nassau. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury….

The choice of law and forum selection clause quoted above is exclusive and mandatory.
II. STATEMENT OF FACTS
Players Network, Inc., a Nevada corporation, filed its complaint herein on October 26, 2015, naming Vis Vires Group, Inc., a New York corporation, KBM Worldwide, Inc., a New York corporation, and Asher Enterprises, Inc., a Delaware corporation, as Defendants.
These companies do not now, and never have, done business in Nevada, and do not own or lease any real or personal property in Nevada, and do not have, and have never had, any employees in Nevada.
Moreover, these three companies, all named as Defendants by Players Network, Inc. in the action pending in the Eighth Judicial District Court of the State of Nevada, County of Clark, do not do any advertising in Nevada.
Thus, even if there were a legitimate claim of some sort against any corporate entity , which there is not, that claim should not be brought in a way that would force the Defendants to defend this case in Nevada, since the Defendant entities and individuals have never done anything that would give Nevada jurisdiction over them, particularly in light of the mandatory and exclusive forum selection clause for New York.
Additionally, Vis Vires Group, Inc., a New York corporation; KBM Worldwide, Inc., a New York corporation; and Asher Enterprises, Inc., a Delaware corporation, do not maintain separate websites and Vis Vires, KBM and Asher Enterprises, do not conduct any advertising through any medium targeted directly at Nevada residents or at Nevada in particular.
The eight Convertible Promissory Notes attached to the Players Network Complaint all contain in Section 4.6 a governing law and forum selection clause which provides that “any action brought by either party concerning the transactions contemplated by this Note shall be brought only in the state courts of New York or in the federal courts located in the State and County of Nassau, New York.
The choice of law provision in New York and the forum selection clause in New York were and remain critical components of the sophisticated debenture agreements so that the parties could set monetary and other contractual terms.
Indeed, the forum selection clause and choice of law provisions were critical factors in the decision made by my companies to do business with Players Network, Inc.
Since the above named companies issue loans and convertible debentures and convertible notes to corporations throughout the United States, it is imperative that the Defendants be able as lenders and purchasers of securities to understand that all disputes will be resolved in a particular forum (New York) under a particular state’s laws (New York). This gives greater predictability in operating their businesses and in facing potential litigation.
The court should further take note of the following facts set forth in the Declaration of Curt Kramer, a copy of which is attached hereto as Exhibit “A,” and by this reference made a part hereof:
3.A. Convertible Promissory Note dated May 1, 2015, in the principal amount of $64,000.00, executed by Players Network, a Nevada corporation, in favor of Vis Vires Group, Inc., a New York corporation. (Transfer Agent: Clear Trust, LLC)

B. Convertible Promissory Note dated December 3, 2014, in the principal amount of $64,000.00, executed by Players Network, a Nevada corporation, in favor of KBM Worldwide, Inc., a New York corporation. (Transfer Agent: Clear Trust, LLC)

C. Convertible Promissory Note dated October 27, 2014, in the principal amount of $104,000.00, executed by Players Network, a Nevada corporation, in favor of KBM Worldwide, Inc., a New York corporation. (Transfer Agent: Clear Trust, LLC)

D. Convertible Promissory Note dated February 19, 2013, in the principal amount of $42,500.00, executed by Players Network, a Nevada corporation, in favor of Asher Enterprises, Inc., a Delaware corporation. (Transfer Agent: Clear Trust, LLC)

E. Convertible Promissory Note dated January 11, 2013, in the principal amount of $35,000.00, executed by Players Network, a Nevada corporation, in favor of Asher Enterprises, Inc., a Delaware corporation. (Transfer Agent: Empire Stock Transfer, Inc.)

F. Convertible Promissory Note dated December 12, 2012, in the principal amount of $32,500.00, executed by Players Network, a Nevada corporation, in favor of Asher Enterprises, Inc., a Delaware corporation. (Transfer Agent: Pacific Stock Transfer Co.)

G. Convertible Promissory Note dated September 6, 2012, in the principal amount of $37,500.00, executed by Players Network, a Nevada corporation, in favor of Asher Enterprises, Inc., a Delaware corporation. (Transfer Agent: Pacific Stock Transfer Co.)

H. Convertible Promissory Note dated July 12, 2012, in the principal amount of $37,500.00, executed by Players Network, a Nevada corporation, in favor of Asher Enterprises, Inc., a Delaware corporation. (Transfer Agent: Pacific Stock Transfer Co.)

4. All of the eight loans attached to the Amended Complaint as described above have been paid (by cash or conversion) with the sole exception of Loan A above with Vis Vires.

5. These companies do not now, and never have, done business in Nevada, and do not own or lease any real or personal property in Nevada, and do not have, and have never had, any employees in Nevada.

6.. In addition, Asher Enterprises, Inc. made four other loans to Plaintiff not mentioned in the Complaint as follows

A. October 28, 2013, for $12,500.00.
B. July 30, 2013, for $25,500.00.
C. May 8, 2103, for $25,500.00.
D. May 14, 2012, for $58,000.00

These four Asher Enterprises loans were all prepaid or satisfied by conversions.

7. Moreover, these three companies, all named as Defendants by Players Network, Inc. in the action filed in the Eighth Judicial District Court of the State of Nevada, County of Clark, and then removed to Federal Court, do not do any advertising in Nevada.

8. Thus, even if there were a legitimate claim of some sort against any corporate entity, which there is not, that claim should not be brought in a way that would cause my companies to appear and defend in Nevada, since to the best of my knowledge, my companies have never done anything that would give Nevada jurisdiction over them, particularly in light of the mandatory and exclusive forum selection clause for New York.

10. To the best of my knowledge, Vis Vires Group, Inc., a New York corporation; KBM Worldwide, Inc., a New York corporation; and Asher Enterprises, Inc., a Delaware corporation, do not maintain public websites in their names. Vis Vires, KBM and Asher Enterprises, do not do any advertising through any medium targeted directly at Nevada residents or at Nevada in particular.

13. The eight Convertible Promissory Notes attached to the Players Network Amended Complaint all contain in Section 4.6 a governing law and forum selection clause (New York) which provides that “any action brought by either party concerning the transactions contemplated by this Note shall be brought only in the state courts of New York or in the federal courts located in the State and County of Nassau, New York.

14. The choice of law provision in New York and the forum selection clause in New York were and remain critical components of the sophisticated debenture agreements so that the parties could set monetary and other contractual terms.

15. Indeed, the forum selection clause and choice of law provisions were critical factors in the decision made by my companies to do business with Players Network, Inc.

16. Neither Players Network nor their attorneys ever complained about any of the terms of the 12 prior notes made and 11 notes satisfied since 2012, and never complained about the interest rates or the New York forum selection clause.

17. Since my companies issue loans and convertible debentures and convertible notes to corporations throughout the United States, it is imperative that we be able as lenders (and purchasers of securities) to understand that any and all disputes will be resolved in a particular forum (New York) under a particular state’s laws (New York). This gives us greater predictability in operating our business and in facing potential litigation.

III. ARGUMENT
The parties agreed that any action under the applicable agreement “shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of law. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of New York or in the federal courts located in the state and county of Nassau. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury.”
The eight Convertible Promissory Notes require any dispute to be tried in New York and be construed in accordance with the laws of New York, and all contain a provision whereby the Defendants submit themselves to the jurisdiction of New York. Indeed, in all the documents, each of the parties consents to the exclusive jurisdiction and venue of any state or federal court having its situs in New York and waives any objection based on forum non conveniens. The parties agree that the Note shall be governed by the laws of New York.
Mandatory forum selection provisions such as these are presumptively valid, and where, as here, a commercial entity has submitted to the jurisdiction of New York based upon reasonable terms in a conspicuous provision, and where they have waived any objections based upon forum non conveniens, the Court’s inquiry should end in favor of its own exercise of jurisdiction.
Plaintiff does not claim that the provisions at issue are ambiguous, or that it lacked authority to undertake them. None of the arguments Plaintiff raises in its request for the extraordinary relief of avoiding the contracts carry merit. Based upon the terms of the parties agreements, case law, and based upon the limited but sufficient facts before the Court, Defendant’s motion should be denied.
This was not a consumer transaction over a small loan where an unsophisticated entity fell blindly into a set of non-negotiable obligations in pre-formulated agreements. The Borrowers and Lenders are sophisticated businessmen, who obtained some $417,000.00 in eight convertible debenture loans from Defendants, between 2012 and 2015. The Plaintiff’s claim that it should not be held to its agreements. Indeed, despite the gravity of undertaking some $400,000.00 in debt and equity obligations, Plaintiff argues that it should be relieved from the terms of its agreements setting New York as the exclusive forum for trial.
Nevada law does not permit a party to escape contractual obligations even if they failed to read the agreement any more so than the law will excuse a crime based upon the perpetrator’s ignorance. Pentax Corp. v Boyd, 111 Nev. 1296, 1299 (1995) (Parties may be held to contracts they never read) (interpreting Colorado law); Gage v. Phillips, 26 P. 60, 61-62, 21 Nev. 15 (Nev. 1891) (“The mere statement of the defendant ‘that she did not know what she was signing, when she signed the bill of sale’ is no excuse in law.”).
Moreover, Plaintiff’s potential assertion that they failed to read the contracts or did not see the mandatory forum selection clause contained in no less than eight (8) separate agreements, while represented by separate and independent legal counsel, is not only unpersuasive, it begs credulity, and is untethered to a shred of record evidence.’ See Viega GmH v. Eighth Jud. Dist Ct., 328 P.3d 1152, 1156 (Nev. 2014) (factual disputes between property proffered evidence from party moving to dismiss based upon personal jurisdiction and facts alleged by Plaintiff “must be resolved in favor of the plaintiff.”) In fact, it stands in direct contradiction to allegations contained within the Complaint which must be taken as true for purposes of deciding this motion. See id; Security Agreement at § 5.1, a copy of which is attached to the Complaint as Exhibit 6 and incorporated herein by reference (“This Security Agreement and the other Loan Documents are the result of negotiations between Secured Party and Debtor and have been reviewed (or have had the result of negotiations between Secured Party and Debtor and have been reviewed (or have had the opportunity to be reviewed) by counsel to all such parties, and are the products of all parties.”).
Plaintiff expressly consented and submitted itself to the jurisdiction of courts in New York pursuant to the unambiguous and mandatory forum selection clauses contained in multiple agreements. Plaintiff was represented by counsel. Plaintiff, on information and belief, also entered into similar agreement with other lenders over the last four years containing conversion rights.
Mandatory forum selection clauses, such as those at issue here, are typical arrangements in commercial contracts between business entities, and veritably omnipresent when one or more of the parties is a foreign entity. See, e.g., Stewart Organization, Inc. v. Ricoh Corp.., 487 U.S. 22, 33(1988) (the ‘enforcement of valid forum selection clauses, bargained for by the parties, protects their legitimate expectations and furthers vital interests of the justice system.”) (KENNEDY, J., concurring). It is for this reason that United States Supreme Court precedent holds that contractual forum selection clauses are “prima facie valid and should be enforced unless enforcement is shown by the resisting party to be ‘unreasonable’ under the circumstances.” See MIS Bremen v. Zapata Offshore Co., 407 U.S. 1, 10 (1972). Indeed, even in a consumer context where a party has no realistic ability to negotiate the terms of a forum selection clause, the U.S. Supreme Court has found the inclusion of such clauses to be permissible, where they are reasonable. See Carnival Cruise Lines Inc. v. Shute, 499 U.S. 585, 586 (1991).
Where, as here, sophisticated parties to a commercial transaction freely agree to a mandatory forum selection provision as part of a bargained for exchange, the forum selection clause should be enforced as written. See, e.g., Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 n. 14 (1985) (“Where such forum selection provisions have been obtained through ‘freely negotiated’ agreements and are not ‘unreasonable and unjust,’ their enforcement does not offend Due Process.”); Mannetti-Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509, 514 (9th Cir. 1988) (forum selection clauses should be enforced as written).
Here, the forum selection clause was subject to negotiation and bargaining by commercial parties, both of whom were represented by independent legal counsel over a period of several years. These facts alone should be sufficient to end the inquiry. See San Antonio Management, LLC v. Eighth Judicial Dist. Court of State ex rel. County of Clark, No. 6140, 2013 WL 476691, 1 (Nev., Feb. 5, 2013) (“We have recognized the freedom parties have in drafting partnership agreements that contain forum selection clauses when they are entered into freely and voluntarily.”) The Bremen, 407 U.S. at 14 (pointing out that if a forum selection clause is apparent in the contract, but ignored by the party challenging it, the provision should not be set aside). See also Campanelli v. Altamira, 86 Nev. 838, 841 (1970) (explaining, in the context of an agreement containing an arbitration provision, that when a party accepts a written contract, he is bound by the stipulations expressed herein, regardless of whether he reads them and his subjective beliefs).
The mandatory forum selection clauses at issue are eminently reasonable under the circumstances. Players Network is a Nevada entity, while the Defendants are based in New York. Absent agreement to a mandatory forum selection provision, Defendants could easily have found themselves facing arguments as to the propriety of suit in a different country or state; subject to substantially disparate substantive and procedural legal conventions. See Shute, 499 U.S. at 566 (“a clause establishing ex ante the dispute resolution forum has the salutary effect of dispelling confusion as to where suits may be brought and defended, thereby sparing litigants time and expense and conserving judicial resources”). Alternatively, as the Plaintiff here has attempted to do, Defendants could have been wrongfully hailed into the courts of whatever state suited the Plaintiff’s efforts to avoid their contractual and monetary obligations.
Courts should only disregard mandatory forum selection clauses in extreme circumstances – none of which exist here. See Coppola v. Baron, Inc., 2:07-CV-090664-BES-RJJ, 2007 WL 4180590, 1 (D. Nev. , Nov. 20, 2007) (“Forum selection clauses are prima facie valid and enforceable absent a strong showing by the party opposing the clause that enforcement would be unreasonable or unjust, or that the clause is invalid for such reasons as fraud or overreaching.”)
The mandatory forum selection clauses are substantively equitable. There is nothing unusual about a forum selection provision that requires one party to bring suit in a particular jurisdiction, while permitting another party to bring suit elsewhere. Courts routinely enforce such provisions. See, e.g., BE & K Engineering Company, LLC v. Rock Tenn CP, LLC, 2014 WL 186835, 24 (Del.Ch. 2014) (enforcing a unilateral mandatory forum selection clause); Montoya v. Financial Federal Credit, Inc., 872 F.Supp.2d 1251, 1277 (D.N.M., 2012) (considering and rejecting same argument but in a consumer context noting “There is also nothing inherently unconscionable about a one-way forum selection clause, that makes a consumer to a transaction file in the home district of the company/supplier but gives the company/supplier discretion regarding where to file suit.”)
In December 2013, the U.S. Supreme Court issued a decision in Atlantic Marine Construction Co. v. United States District Court for the Western District of Texas, 134 S. Ct. 568 (2013), wherein the court held that if the parties contract specifies one federal district court as the forum for litigating any disputes between the parties but the plaintiff files suit in a different federal district court that lawfully has venue then therefore could be a proper place for the parties to litigate, the defendant should seek to transfer the case to the court specified in the forum selection clause by invoking the federal statute that permits transfers of venue “for the convenience of the parties and witnesses in the interest of justice.” Importantly, the court held that the parties’ contractual choice of forum should be enforced except in the most unusual cases, and that the party resisting the forum selection clause has the burden of establishing that public interests disfavoring transfer outweigh the party’s choice. Atlantic Marine is significant for the business community because it provides greater certainty regarding the enforceability of forum selection clauses, giving commercial parties that employ such clauses in their contracts greater predictability about where they will face future litigation. The court in Atlantic Marine reinforced the strong federal policy favoring the enforcement of such clauses and clarified the mechanism for such enforcement. As the court explained:
When parties have contracted in advance to litigate disputes in a particular forum, the court should not unnecessarily disrupt the parties’ settled expectations. A forum selection clause, after all, may have figured centrally in the parties’ negotiations and may have affected how they set monetary and other contractual terms; it may, in fact, have been a critical factor in their agreement to do business together in the first place. In all but the most unusual cases, therefore, the interest of justice is served by holding the parties to their bargain.

While not citable as legal authority, several unpublished decisions of the Nevada Supreme Court clearly demonstrate the Nevada Supreme Court’s view that forum selection clauses constitute valid consent of the parties to the selected jurisdiction. See, e.g., Jones v. Eighth Judicial Dist Court of State ex rel. County of Clark, No. 62614, 2013 WL 3044042, 1 (Nev. 2013) (finding that “the forum selection clauses in the parties’ three marital agreements constituted evidence of petitioner’s consent to jurisdiction in Nevada, sufficient to create a genuine issue of fact, and thus overcome a motion for summary judgment on this basis.”) (unpublished); Grey v. Integrated Financial Associates, Inc., No. 54906, 2010 WL 348188 1 (Nev. 2010) (rejecting argument that court lacked personal jurisdiction where contract upon which suit was brought contained provision wherein moving party had consented to application of Nevada law and to jurisdiction of Nevada courts, noting “by so stipulating, appellant gave express consent to the personal jurisdiction of the district court”) (unpublished).
The forum selection clause in the Notes at issue compels dismissal of Players Network’s action filed in Nevada against the Defendants. Significantly, in Tuxedo International Incorp. v. Rosenberg, 251 P.d 690 (Nev. 2011) (“Tuxedo Int’l”) the Nevada Supreme Court decreed that forum selection clauses are valid and should be given effect, including tort claims based on the contract.
In Tuxedo Int’l,, the Court addressed “the proper analysis to determine whether a forum selection clause applies to the tort claims pleaded by a plaintiff when the dispute is arguably related to a contract containing an applicable forum selection clause.” Id. at 690-691.
The Court concluded “the best approach for resolving this issue is one that focuses first on the intent of the parties regarding a forum selection clause’s applicability to contract-related tort claims.” Id. at 691. When this approach resolves the issue, no further inquiry is needed. The reason discussed by the Court is that this approach “further[s] the parties’ freedom to contract on this point while also being responsive enough to avoid substantial injustice when necessary.” Id. at 696; see also p. 697.
The U.S. Supreme Court also recently agreed. See, Atlantic Marine Construction Co. v. United States District Court for the Western District of Texas (2013) 134 S. Ct 568, 187 L.Ed.2d 487 (unanimously agreeing that parties can indeed choose where to be sued). “A contractual forum selection clause is ‘prima facie valid and should be enforced unless enforcement is shown by the resisting party to be unreasonable’ under the circumstances.” Docksider, Ltd. v. Sea Tech., Ltd., 875 F.Supp.2d 762, 763 (9th Cir. 1989) (quoting M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 92 S. Ct. 1907, 321 L.ED.2d 513 (1972).
Since the Note contains a New York forum selection clause and choice of law provision, all issues relating to the interpretation and enforcement of the eight Convertible Promissory Notes must be litigated in New York.
A. The Forum Selection Clause is Mandatory.
Mandatory clauses indicate that a specific form is designated for litigation. Here, the language of the Note uses the term “shall” when it provides “that such court shall have jurisdiction and venue for purposes determining all rights and obligations under this agreement.”
Such language is considered mandatory as to venue, rather than permissive, and indicates a clear intent that any action on the contract be brought and litigated in New York. This result is compelled by case law within and outside the state interpreting clauses with similar language – particularly with the sentence structure that an action “shall” be litigated or decided “in”a specific location. See, Docksider, 875 F.2d at 763-64 (clause stating that “[v]enue of any action brought hereunder shall be deemed to be in Gloucester County, Virginia” was “mandatory” and clearly designated the state court in Gloucester County, Virginia, as the exclusive forum”); see also, Yakin v. Tyler Hill Corp., 566 F.3d 72, 76 (2d Cir. 209) (clause stating that “the venue and place of trial … shall be in Nassau County, New York” was “obligatory venue language” that did not necessarily preclude a federal forum but effectively required a state court forum because the federal courthouse in Nassau County had closed); Alliance Health Grp., LLC v. Bridging Health Options, LLC, 553 F.3d 397, 399-400 (5th Cir. 2008) (clause stating that “exclusive venue for any litigation related hereto shall occur in Harrison County, Mississippi” mandated venue in Harrison County’ but “in either federal or state court, because a federal courthouse is located in that county”; also distinguishing cases where no federal courthouse existed in the designated location); Excell, Inc. v. Sterling Boiler & Mech., Inc., 106 F.3e 318, 321 (10th Cir. 1997) (clause stating that “venue shall lie in the County of El Paso, Colorado” was “mandatory and requires that any breach of contract action be brought and litigated in the [state court] of El Paso County, Colorado”).
B. The Other Approaches Identified by the Nevada Supreme Court also Require Dismissal Due to the Forum Selection Endorsement.

The Nevada Supreme Court further instructs in Tuxedo Int’l that if the initial “intent of the parties” approach does not resolve the issue, the “district court must determine whether resolution of the tort-based claims pleaded by the plaintiff relates to the interpretation of the contract.” Tuxedo Int’l, supra, 251 P.3d at 691.
Here, in addition to an alleged breach of contract cause of action regarding the Convertible Promissory Notes, the complaint also includes a cause of action for alleged tortious and contractual breach of the implied covenant of good faith and fair dealing based on the Convertible Promissory Notes.
Therefore, using this approach, Players Network’s complaint undisputedly alleges tort-based claims relating to the interpretation of the Convertible Promissory Notes. In other words, the tort claim does not stand on its own but is dependent on the contract based claim as it is premised on a tortious breach of the Convertible Promissory Notes, which contain the New York and New York law forum selection endorsement.
The last approach the Nevada Supreme Court instructs should be used, if first two approaches do not resolve the issue, is for the District Court to “determine whether the plaintiff’s contract-related tort claims involve the same operative facts as a parallel breach of contract.” Id. at 691.
Applying this approach, the allegations in support of all causes of action are grounded upon and are dependent on an interpretation of the Note to Plaintiff . In essence, without the Court interpreting the Convertible Promissory notes, Plaintiff has no claims. The tort based claims are clearly dependent and related to the interpretation of the Convertible Promissory Notes.
Therefore, under all approaches set forth in Tuxedo Int’l, the forum selection clause set forth in the Choice of Law/Consent to Jurisdiction Endorsement to each Convertible Promissory Note applies to this suit. Plaintiff’s suit against Defendants must be dismissed.
C. None of the Defendants are Subject to the Jurisdiction of the Nevada Courts, as They Have Had No Contacts with Nevada Sufficient to Confer Jurisdiction Over Such Defendants.

Nevada’s long-arm statute, NRS 14.065, is broadly written to effectuate jurisdiction, “on any basis not inconsistent with the Constitution of this state or with the Constitution of the United States.” NRS 14.065(1). Accordingly, Nevada largely looks to the federal courts to determine the extent to which it may exercise jurisdiction over out-of-state defendants. See, e.g., Casentini v. District Court, 110 Nev. 721, 877 P.2d 535, 539 (1994): “Nevada has long construed its long-arm statute ‘to be broad enough to reach the outer limits of federal constitutional due process.” Levison v. District Court, 103 Nev. 404, 406, 742 P.2d 1024, 1025 (1987).
Under those federal constitutional standards, jurisdiction may be exercised based upon a theory of either general or specific jurisdiction. As is shown by the Affidavit of Defendant Curt Kramer attached herewith as Exhibit A, neither prerequisite is met in this case.
For example, “general jurisdiction [exists] where a defendant is held to answer in a forum for causes of action unrelated to the defendant’s forum activities.” Trump v. District Court, 109 Nev. 687, 699, 857 P.2d 740, 748 (1993) (citations omitted). “General jurisdiction over the defendant ‘is appropriate where the defendant’s forum activities are so “substantial” or “continuous and systematic” that [the defendant] may be deemed present in the forum.'” Id. (citations omitted).
In this case, as shown by the Declaration of Defendant Curt Kramer attached hereto, as Exhibit A, Mr. Kramer is a lifelong resident of New York and the entity Defendants have no employees in Nevada, and have no property or on-going presence in Nevada. While Mr. Kramer sometimes visits Nevada for entertainment, neither he nor his companies have any continuing presence here. The corporate Defendants sometimes advertise in national publications or on the internet that are available in both Nevada and the other states, but do not conduct any targeted advertising in Nevada. Accordingly, none of the Kramer Defendants’ contacts with the State of Nevada have been either “substantial” nor “continuous and systematic,” such that Nevada certainly has no general jurisdiction over the Defendants.
D. Lack of Specific Jurisdiction
Alternatively, Plaintiff must demonstrate that specific jurisdiction is appropriate. In order to establish specific jurisdiction over a Defendant:
It must first be established that the defendant “purposefully established ‘minimum contacts’ in the forum state by “conduct in connection with the forum state . . . such that he [or she] should reasonably anticipate being hailed into court there.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S. Ct. 2174, 2183, 85 L. Ed. 2d 528 (1985) (citing International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95 (1945), and World-wide Volkswagen Corp v. Woodson, 444 U.S. 286, 295, 100 S. Ct. 559, 566, 62 L. Ed. 2d 490 (1980)). In determining whether an out-of-state defendant can “reasonably anticipate” being hailed into a foreign forum, due process requires “‘some act by which the defendant purposefully avail[ed] itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.'” Id., 471 U.S. at 475, 105 S. Ct. at 2183 (quoting Hansen v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1240, 2 L. Ed. 2d 1283 (1958)).

Casentini v. District Court, 110 Nev. 721, 877 P.2d 535, 539 (1994).
Likewise, the next two prerequisites, “that the cause of action arose out of or is connected to the acts purposefully engaged in by the defendant in the forum state,” id., or that “the assertion of personal jurisdiction . . . comport with [traditional notions of] ‘fair play and substantial justice,'” (Id., citations omitted) are likewise not met in this case. The Defendants never engaged in any activity “in the forum state,” relating to the subject transaction, and the assertion of personal jurisdiction by Nevada over these foreign residents for activities having to do with a loan would not comport with any notions of “fair play and substantial justice” but would merely be a means to cause undue expense and burden to these Defendants, which Defendants purposely included New York forum selection clauses in their Convertible Promissory Notes to avoid being hauled into court in Nevada or elsewhere.
It is overwhelmingly clear in this case that Nevada has no grounds for asserting either specific or general jurisdiction over any of the Defendants. Accordingly, this Nevada court lacks jurisdiction over Defendants and the Plaintiff’s Complaint, as against Defendants, must be dismissed.
The Plaintiff has presented no allegations in the Complaint indicating that Defendants have done business in Nevada, either generally for purposes of general jurisdiction.
Even if the Plaintiff were to produce evidence that one or more of the Defendants listed in the Complaint has ever done business in Nevada, that does not mean that the other Defendants can be sued in this jurisdiction without the Plaintiff also producing evidence with respect to each of the Defendants named by the Plaintiff having engaged in conduct based upon which Nevada can exercise jurisdiction over each such Defendant. Thus, even if this court allows this matter to proceed as to one or more of the Defendants, it must still be dismissed as to any Defendant over whom Nevada has no jurisdiction.
E. Even if the Court Were to Rule that Nevada had Jurisdiction Over any of the Moving Defendants, the Case Should Still be Transferred to a More Appropriate Venue on the Grounds of Forum Non Conveniens.

In Federal Court, the common law doctrine of forum non conveniens has been codified as 28 U.S.C. § 1404(a) which indicates that a civil action may be transferred “[f]or the convenience of parties and witnesses, in the interest of justice.”
In Federal Courts, a case may not be dismissed on grounds of forum non conveniens unless the alternative forum is located abroad. Otherwise, Congress’s codification of the doctrine “provided for transfer, rather than dismissal, when a sister federal court is the more convenient place for trial of the action.” Sinochem International Co. Ltd. v. Malaysia International Shipping Corp. 549 U.S. 422, 127 S.Ct. 1184, 1190-91 (2007).
In the present matter, the Notes were drafted and funded in New York, such that deposition testimony from any percipient witnesses will need to be pursued in states other than Nevada. None of the Defendants’ principals or employees reside in Nevada. Moreover, any judgment obtained against the Defendants in Nevada will ultimately need to be localized in another state, such as New York, where the Defendant corporations do business and the individual Defendants reside, in order to enforce the same, since Defendants have no assets in Nevada and execution proceedings will therefore not be able to commence in Nevada in any event. Indeed, under NRS 21.270(b) these Defendants could not even be required to sit for a judgment debtor’s examination in Nevada since they are not residents of any county in this state.
Thus, it is difficult to conceive how any of the factors which are to be weighed in determining whether to transfer a case under 28 USC § 1404 could possibly weigh in favor of a Convertible Promissory Note case, with New York corporations and New York individual Defendants, and a New York forum selection clause, to remain pending in Nevada. This case should be transferred to a more appropriate forum, such as a U.S. District Court for the Eastern District of New York, where a related case is pending involving the same parties and the same Note with Vis Vires.
Accordingly, even if the Court should rule that Nevada has jurisdiction over any one of the moving Defendants on technical grounds, the Court should still transfer this action under 28 USC § 1404 to the New York Federal Court where the related case is pending.
It should also be noted that, even if the present Motion to Dismiss for Lack of Jurisdiction were denied as to one or more of the Defendants, it could still be granted as to the remaining Defendants, or the correct entity doing business under that name once properly named. If this occurred it would make more sense, in the present matter, to have the case adjudicated in New York, which is where the transaction took place and where the witnesses will thus be available, than in Nevada, especially if any of the Defendants named or to be named by the Plaintiff are not subject to jurisdiction in Nevada in any event. A forum where all of the Defendants might be subject to jurisdiction (if such a forum exists) would be more appropriate than having different suits proceed in different districts.
IV. CONCLUSION
This case involves eight separate Convertible Promissory Notes entered into over a period of several years, each containing a mandatory forum selection clause in New York and mandatory choice of law provisions to apply New York law. The federal courts and the Nevada courts construe such mandatory forum selection provisions to be presumptably valid, particularly here in a commercial context between two sophisticated commercial borrowers and lenders. Whereas, here, sophisticated parties to a commercial transaction freely agree to a mandatory forum selection provision as part of a bargain for exchange, the forum selection clause should be enforced as written. The mandatory forum selection clauses at issue here are eminently reasonable under the circumstances, since New York is where the lenders are located. When parties have contracted in advance to litigate disputes in a particular forum, the court should not unnecessarily disrupt the parties settled expectations. Here, the forum selection clause figured centrally in the parties’ negotiations and affected how they set monetary and other contractual terms. It was a critical factor in the agreement to do business together in the first place. Therefore, the interest of justice is best served by holding the parties to their bargain and the case should therefore be either dismissed or transferred to the Eastern District of New York to be consolidated with a similar companion, related case pending therein.
Therefore, the entirety of this action should be dismissed for lack of jurisdiction or transferred to a different district on the grounds of forum non conveniens, under 28 U.S.C. §1404.
DATED this _____ day of November, 2015.
ALBRIGHT, STODDARD, WARNICK\
& ALBRIGHT

By__________________________________
G. MARK ALBRIGHT, ESQ.,
Nevada Bar No. 1394
WILLIAM H. STODDARD, SR., ESQ.
Nevada Bar No. 1477
801 South Rancho Drive, Suite D-4
Las Vegas, Nevada 89106
Att

 

About the Authors: The law firm of Albright, Stoddard, Warnick & Albright is an A-V Rated Nevada-based full-service law firm having attorneys licensed in Nevada, California and Utah. Our firm’s practice includes a strong emphasis on personal injury accidents. Call us at 702-384-7111.

Note: This article, and any other information you obtain at this website, is not offered as legal advice, nor should it be relied upon as such, nor is it a solicitation for legal services. Only a licensed attorney can advise you with respect to your specific legal needs. We welcome your contacting our firm to discuss such representation. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.