(CN) – A contract dispute between the Democracy Council of California and a foreign broadcaster belongs in Hong Kong courts, not in California, a federal judge in Los Angeles ruled.
U.S. District Judge Philip Gutierrez granted Hong Kong-based WRN Media Ltd.’s motion to dismiss the council’s federal lawsuit, citing a provision in their contract establishing Hong Kong as the venue for resolving any legal claims.
The Democracy Council had hired WRN to provide satellite uplink services for TV programs promoting democracy and freedom of the press in “areas of the developing world beset by war and fundamental change … with a focus in the Middle East and Latin America.”
When WRN allegedly breached the contract, the Democracy Council filed a lawsuit in Los Angeles Superior Court that was later removed to federal court.
WRN argued that California was the wrong venue based on a forum selection clause in their contract.
The Democracy Council countered that it never initialed the section of the contract containing the forum selection clause, and that the clause itself was unreasonable and unenforceable.
It pointed to an email exchange in which the council’s attorney said the group would have to give the forum selection clause “some thought,” and WRN responded, “okay.” The Democracy Council saw this as evidence that it never agreed to the clause.
“Looking at the exchange for what it is, however, shows just the opposite,” Gutierrez wrote, noting that the Democracy Council signed off on the contract eight days later. “This suggests the DCC gave the forum selection clause ‘some thought,'” he wrote.
He found the clause valid and enforceable, despite the Democracy Council’s claims that the clause was based on fraud and that litigating in Hong Kong would be prohibitively expensive.
“Without presenting any viable argument as to the existence of fraud or undue influence, the inability to have a fair ‘day in court’ in Hong Kong, or a compelling policy for keeping this case in California, DCC is bound by the Agreement and must litigate this case in Hong Kong,” Gutierrez concluded.