NibiruTech Ltd. v. Jang, No. 14-cv-03091 (N.D. Cal. Dec. 2, 2014)
Plaintiff NibiruTech Ltd. (“NibiruTech”), a Chinese company located in Chengdu, Sichuan Province, People’s Republic of China, brought suit in the Northern District of California against Andrew Jang and Maggie Jang, residents of California, and HJClan, Inc. (“HJClan”), a California corporation. NibiruTech had employed Andrew Jang, a United States citizen, as its marketing director in China. In its complaint, it alleged that Andrew Jang conspired with Maggie Jang to create fictitious invoices and to cause NibiruTech to issue checks to HJClan. Defendants moved to dismiss NibiruTech’s complaint, arguing that California was an improper venue and, alternatively, under the doctrine of forum non conveniens, claiming that China was the proper venue for the lawsuit.
Defendants first argued that the case should be dismissed pursuant to Fed. R. Civ. P. 12(b)(3) for improper venue based on the forum-selection clause in Andrew Jang’s employment agreement. The parties disagreed about the English translation of the employment agreement. NibiruTech argued that the forum selection clause merely provided a right to arbitration in China, whereas Defendants argued that the clause required the parties to resolve all of their disputes in China. The court did not need to resolve the parties’ translation dispute, though, because it found that neither party cited the proper legal standard to be applied under the circumstances and because it was not persuaded that a forum selection clause in Andrew Jang’s employment agreement should control the venue of litigation brought against the other defendants, who were not parties to Andrew Jang’s employment agreement.
Defendants also argued that the court should dismiss the case underforum non conveniens. They primarily argued, under the forum non conveniens balancing test, that China was an adequate forum and that the location of witnesses and relevant documents in China made China a more convenient forum than the Northern District of California. The court generally agreed with Defendants’ arguments, noting that “the Chinese courts have a significantly greater interest in resolving an employment dispute arising out of employment, in China, by a Chinese company,” and the action “probably should” be adjudicated in China. It found, though, that Defendants had failed to establish that China was an adequate forum because they did not submit proof that they had submitted to jurisdiction in the Chinese courts. Defendants alleged that Andrew Jang and Maggie Jang frequently traveled to China, and had current visas for travel to China; however, as the court stated, “that is not the same as agreeing to the jurisdiction of a Chinese court.” Accordingly, the court denied Defendants’ motion to dismiss, and retained jurisdiction over the case.
Michael Bloom of the Chicago office contributed to this summary.