Corrales Law PC et al v. Equal Access Justice Fund LP et al

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
CORRALES LAW PC, a California
professional corporation; MANUEL
CORRALES, JR., a California resident,
Plaintiffs,
v.
EQUAL ACCESS JUSTICE FUND LP, a
Delaware limited partnership, et al.,
Defendants.
Case No.: 25-CV-1834 JLS (MMP)
ORDER GRANTING DEFENDANTS’
MOTION TO DISMISS PLAINTIFFS’
COMPLAINT
(ECF No. 15)
Presently before the Court is Defendants’ Motion to Dismiss Plaintiffs’ Complaint
(“Mot.,” ECF No. 15). 	Also before the Court is Plaintiffs’ Opposition (“Opp’n,” ECF
No. 18), and Defendants’ Reply in Support (“Reply,” ECF No. 20). Having reviewed the
Plaintiffs’ Complaint (“Compl.,” ECF No. 1), the Parties’ briefs, the evidence, and the law,
the Court GRANTS Defendants’ Motion to Dismiss Plaintiffs’ Complaint (ECF No. 15).
BACKGROUND
Pro se Plaintiff Manuel Corrales, Jr. (“Corrales”) is a San Diego-based lawyer who
has been representing the California Valley Miwok Tribe (“CVMT”) in a number of legal
disputes for over a decade. 	Compl. ¶¶ 11, 13. 	Corrales alleges that, as a result of his
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longstanding representation of CVMT, he is owed several million dollars in previously
earned legal fees from the Tribe that have been unrealized for various reasons. 	Id. ¶ 11.
That large unrealized balance, according to Corrales, has driven interest from third-party
financiers to offer Corrales loans to cover his legal expenses in exchange for a share of the
proceeds. Id. ¶¶ 11–12.
One such third-party financier is Defendant Equal Access Justice Fund LP (“EAJF”).
According to David Childers, Portfolio Manager for Defendant B.E. Blank & Co. LP
(“BEBC”), EAJF “is a limited partnership . . . that extends financing to lawyers and law
firms like Plaintiffs Manuel Corrales and Corrales Law P.C.” 	ECF No. 13-1 (“Childers
Decl.”) ¶¶ 2, 4.1 BEBC, for context, is a Delaware-based limited partnership, which is one
of EAJF’s partners.2 Id. ¶¶ 3, 4.
On August 16, 2021, Corrales Law PC (“CLPC”) entered into a loan agreement (the
“Loan Agreement”) with EAJF for the extension of a credit facility not to exceed $700,000.
See ECF No. 2-1, Ex. A (“Agreement”) at 17, 26.3 The Loan Agreement provided for an
initial advance of $600,000 from EAJF to CLPC, with additional advances available under
certain conditions. Id. at 26. In exchange, CLPC agreed to a repayment schedule that was
tied to the law firm’s proceeds; each month CLPC was responsible to repay no less than
50% of its monthly proceeds, with possible escalations in the event CLPC’s debt
obligations grew. 	Id. at 27. CLPC also executed a Direction of Proceeds, with $505,000
of the advance directed to pay off a U.S. Claims lien, $18,000 directed to cover various
service fees, and the $77,000 remainder directed to a CLPC bank account. Childers Decl.
¶¶ 11- 12. 	Joining CLPC on the Loan Agreement as guarantor was Mr. Corrales.
Agreement at 17, 62.
1 The Court accepts Defendants incorporation by reference of their Opposition to the Preliminary
Injunction (ECF No. 13, 13-1) including the Declaration of David Childers. Mot. at 9 n.1.
2 Also named as Defendants are Benjamin E. Blank and BEB Partners LLC. 	Mr. Blank is, per
Mr. Childers, a manger of BEB Partners LLC. Childers Decl. ¶¶ 5–6. 	BEB Partners LLC is a general
partner of both EAJF and BEBC. Id.
3 Pin citations refer to the CM/ECF numbers electronically stamped at the top of each page.
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The U.S. Claims lien relates to a previous, independent advance Corrales allegedly
received from a firm called U.S. Claims. 	Compl. ¶ 13. 	As acknowledged in their
Complaint, Plaintiffs allege that Corrales received a $200,350 advance from U.S. Claims
on May 17, 2018, which was tied to a specific case in which Corrales sought recovery of
funds on behalf of CVMT. 	Id. 	However, Plaintiffs allege that repayment of the 2018
advance was contingent upon CVMT’s success in the matter to which the advance
pertained. 	Id. 	In the event he did not prevail in the CVMT lawsuit, Corrales claims that
the U.S. Claims lien should be extinguished, thus leaving him on the hook for nothing at
all. Id.
For several reasons—including the fact that he did not prevail in the CVMT
lawsuit—Plaintiffs allege that Corrales was not responsible for repaying U.S. Claims
anything despite an accrued interest balance of over $500,000. 	Id. ¶ 13. 	Nevertheless,
U.S. Claims allegedly filed a lien with the California Secretary of State in the amount of
$518,650, which Defendants then paid off under the Loan Agreement. Id. Plaintiffs’ basic
contention in the instant suit is that the U.S. Claims lien was unenforceable, and in turn,
Defendants wrongfully created a liability on Corrales’s behalf of over $500,000 by paying
off the lien. 	Id. ¶¶ 13–14. But beyond the alleged unenforceability of the lien, Plaintiffs
further believe the Loan Agreement is unenforceable in its entirety for several reasons,
including, inter alia, the Loan Agreement’s contravention of the California Rules of
Professional 	Conduct 	and 	the 	exorbitant 	interest 	rates 	applicable 	under 	the 	Loan
Agreement. Id. ¶¶ 22, 25–27. That belief led Corrales to file this lawsuit on July 18, 2025,
seeking a declaration of rights and injunctive relief under California’s Unfair Competition
Law. See generally Compl.
This action, however, lags an earlier-filed arbitration. 	From EAJF’s perspective,
Plaintiffs have defaulted on their repayment obligations under the Loan Agreement, the
maturity date of which was August 16, 2024. 	Childers Decl. ¶ 15. 	By March 3, 2025,
EAJF maintained that the Loan Agreement was enforceable, and that Plaintiffs remained
jointly and severally responsible for repaying over $1.2 million. 	Id. ¶ 16. 	Accordingly,
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pursuant to an arbitration provision in the Loan Agreement, EAJF filed a Demand for
Arbitration against Plaintiffs with JAMS, and that arbitration remains ongoing to this day.
Id. ¶¶ 17–19.
Defendants filed the instant Motion on August 13, 2025, arguing, first, that the
Complaint should be dismissed for forum non conveniens based on the arbitration clause,
second, that the Court lacks personal jurisdiction over all Defendants—except EAJF, and
third, that the Complaint fails to state a claim. Mot. at 9.
DISCUSSION
Defendants argue that Plaintiff’s Complaint should be dismissed on forum non
conveniens 	grounds 	because 	the 	Loan 	Agreement 	contains 	valid 	and 	enforceable
arbitration and forum selection provisions. 	Mot. at 15. 	Plaintiffs argue that the Loan
Agreement is invalid and unenforceable in its entirety because (1) the Loan Agreement is
an unlawful fee-sharing agreement under California Rule of Professional Conduct 5.4(a),
(2) the 	Loan 	Agreement 	is 	unlawful 	for 	charging 	usurious 	interest 	rates 	that 	are
inconspicuously scattered throughout the contract, and (3) the Loan Agreement is void and
invalid for lack of consideration. Opp’n at 14–18, 24–25. Plaintiffs also now contend that
they challenge the Arbitration Agreement itself, arguing that the Arbitration Agreement is
invalid because (1) the Arbitration Agreement is not governed by the Federal Arbitration
Act, and (2) the Arbitration Agreement is invalid due to mistake. Id. at 18–20.
LEGAL STANDARD
The Ninth Circuit has previously held that motions to dismiss based on a forum
selection clause are properly construed as Rule 12(b)(3) motions to dismiss for improper
venue. 	See Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996). 	The
Supreme Court has “since instructed that whether a forum selection clause warrants
dismissal is properly analyzed under the doctrine of forum non conveniens.” JPaulJones,
L.P. v. Zurich Gen. Ins. Co. (China) Ltd., 533 F. Supp. 3d 999, 1004 (D. Ore. 2021) (citing
Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. Dist. of Texas, 571 U.S. 49, 55–56 (2013)
(finding that a Rule 12(b)(3) motion permits dismissal only where venue is wrong or
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improper which is independent of a contractual forum selection clause)). “[F]orum
selection clauses should be analyzed under the federal transfer statute, 28 U.S.C. § 1404(a),
unless the moving party seeks a non-federal forum, in which case forum non conveniens is
the appropriate doctrinal analysis.” Id. (quoting Milliner v. Bock Evans Fin. Couns., Ltd.,
114 F. Supp. 3d 871, 876 (N.D. Cal. 2015)). “An arbitration provision can be construed as
a forum selection clause.” Milliner, 114 F. Supp. 3d 876 (quoting Polimaster Ltd. v. RAE
Systems, Inc., 623 F.3d 832, 837 (9th Cir. 2010)).
In applying the forum non conveniens analysis, the “practical result is that a forum-
selection clause ‘should control except in unusual cases.’” Yei A. Sun v. Advanced China
Healthcare, Inc., 901 F.3d 1081, 1088 (9th Cir. 2018) (quoting Atl. Marine, 571 U.S. at
64). The typical forum non conveniens analysis differs in several ways when considering
a forum selection clause. See Uy v. Pac. Life Ins. Co., No. SACV 23-1854-CJC (ADSx),
2023 WL 12224070, at *2 (S.D. Cal. Dec. 12, 2023). 	First, the plaintiff bears the burden
of showing why the court should not transfer or dismiss the case to the agreed forum. See
Yei A. Sun, 901 F.3d at 1087 (citing Atl. Marine, 571 U.S. at 64). Also, “[t]he plaintiff’s
subsequent choice of forum merits no weight.” 	Id. (citation omitted). Second, the court
must “deem the private-interest factors to weigh entirely in favor of the preselected forum,”
because they have “waived ‘the right to challenge the preselected forum as inconvenient’”
by agreeing to a forum-selection clause. 	Cooley v. Target Corp., No. SA CV 20-00876-
DOC-JDE, 2020 WL 7230985, at *2 (C.D. Cal. Oct. 12, 2020) (quoting Atl. Marine, 571
U.S. at 66).4 The court must still consider factors related to the public interest,5 however,
4 Private interest factors include “relative ease of access to sources of proof; availability of compulsory
process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility
of view of premises, if view would be appropriate to the action; and all other practical problems that make
trial of a case easy, expeditious and inexpensive.” Yei A. Sun, 901 F.3d 1087–88 (citing Atl. Marine, 571
U.S. at 64, 62 n.6).
5 Public interest factors include “the administrative difficulties flowing from court congestion; the local
interest in having localized controversies decided at home; [and] the interest in having the trial of a
diversity case in a forum that is at home with the law.” Yei A. Sun, 901 F.3d 1088 (citing Atl. Marine, 571
U.S. 64, 62 n.2).
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“those factors will rarely defeat a transfer motion.” JPaulJones, 333 F. Supp. 3d at 1005
(quoting Yei A. Sun, 901 F.3d 1088).
“‘Only under extraordinary circumstances unrelated to the convenience of the
parties’ should a motion to enforce a forum-selection clause be denied.” 	Yei A. Sun, 901
F.3d at 1088 (citing Atl. Marine, 571 U.S. at 62). 	Thus, forum selection clauses are
controlling unless “the plaintiff made a strong showing that: (1) the clause is invalid due to
‘fraud or overreaching,’ (2) ‘enforcement would contravene a strong public policy of the
forum in which suit is brought, whether declared by statute or by judicial decision,’ or (3)
‘trial in the contractual forum will be so gravely difficult and inconvenient that [the litigant]
will for all practical purposes be deprived of his day in court.’” Id. (quoting M/S Bremen
v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972)). 	Further, a “forum selection clause is
presumptively valid; the party seeking to avoid a forum selection clause bears a ‘heavy
burden’ to establish a ground upon which [the court would conclude that] the clause is
unenforceable.” Doe 1 v. AOL LLC, 552 F.3d 1077, 1083 (9th Cir. 2009) (quoting Bremen,
407 U.S. at 17).
I. 	Validity of the Arbitration Agreement
The Court must first decide whether the Arbitration Agreement is valid and
enforceable. 	In the Court’s Order denying Plaintiff’s Preliminary Injunction (“Order”,
ECF No. 17) the Court concluded that “this case likely belongs in arbitration” thus making
injunctive relief improper. 	Order at 6. 	The Court agrees with its previous analysis and
finds the Arbitration Agreement valid and enforceable.
In deciding whether a case is properly arbitrable, courts must generally “determine
two ‘gateway’ issues: (1) whether there is an agreement to arbitrate between the parties;
and (2) whether the agreement covers the dispute.” Brennan v. Opus Bank, 796 F.3d 1125,
1130 (9th Cir. 2015) (citing Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84
(2002)). Courts generally resolve those issues by “apply[ing] ordinary state-law principles
that govern the formation of contracts.” First Options of Chi., Inc. v. Kaplan, 514 U.S. 938,
944 (1995); see also 9 U.S.C. § 2. 	If the answer to both questions is yes, a court must
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enforce the agreement and compel arbitration. See, e.g., Lifescan, Inc. v. Premier Diabetic
Servs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004). 	Doubts regarding the scope of an
agreement must be resolved in favor of arbitration. See Mastrobuono v. Shearson Lehman
Hutton, Inc., 514 U.S. 52, 62 (1995).
“[A]s a matter of substantive federal arbitration law, an arbitration provision is
severable from the remainder of the contract.” Buckeye Check Cashing, Inc. v. Cardegna,
546 U.S. 440, 445 (2006). 	Under this so-called severability principle, “unless the
challenge is to the arbitration [or delegation] clause itself, the issue of the contract’s validity
is considered by the arbitrator in the first instance.” Coinbase, Inc. v. Suski, 602 U.S. 143,
150 (2024) (alteration in original) (quoting Buckeye, 546 U.S. at 445–46). Put differently,
“[i]ssues regarding the validity or enforcement of a putative contract mandating arbitration
should be referred to an arbitrator, but challenges to the existence of a contract as a whole
must be determined by the court prior to ordering arbitration.” Sanford v. MemberWorks,
Inc., 483 F.3d 956, 962 (9th Cir. 2007) (emphasis in original).
First, regarding whether the dispute at issue is covered by the Arbitration Agreement,
the Court previously concluded that Sections 11.15(a) and (b) of the Loan Agreement
“unmistakably 	establish 	that 	the 	Loan 	Agreement 	contemplates 	mandatory 	JAMS
arbitration as the exclusive venue for dispute resolution, with minor exceptions not relevant
here.” 	Order at 7–8. 	Therefore, the Court has already concluded that the Arbitration
Agreement, if valid, covers the dispute at issue.
Second, regarding the validity of the Arbitration Agreement, the Court does not find
it necessary to rehash Plaintiffs’ arguments regarding the enforceability of the Loan
Agreement in its entirety that were already addressed in its previous Order, as “the basis of
challenge [must] be directed specifically to the agreement to arbitrate before the court will
intervene.” Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 71 (2010) (citing Prima Paint
Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967)). 	The Court thus rejects
Plaintiffs’ 	arguments 	that 	the 	Loan 	Agreement 	is 	unenforceable 	for 	violations 	of
California’s ethical rules, usury interest rates, or lack of consideration. See Order at 8–9.
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Plaintiffs add two challenges to the Arbitration agreement itself that were not
addressed in the Court’s prior Order: (1) the Arbitration Agreement is not governed by the
Federal Arbitration Act (“FAA”), and (2) the Arbitration Agreement is invalid due to
mistake. Opp’n at 18–20.
Plaintiffs argue that California law, rather than the FAA, applies to the Loan
Agreement because the FAA only applies to “a contract evidencing a transaction involving
commerce” and there is no mention of commerce in the Loan Agreement. 	Id. at 18.
Therefore, Plaintiffs conclude that the Court’s contention that Plaintiffs need to prove that
the Arbitration Agreement itself is unenforceable instead of the Loan Agreement as a whole
is incorrect. 	Id. 	Defendants correctly point out that “California has adopted the
severability doctrine [from Prima Paint, 388 U.S. at 402] and made it applicable, as a
matter of state law, even to contracts that do not fall under the FAA.” Bruni v. Didion, 160
Cal. App. 4th 1272, 1285 (2008) (citing Ericksen, Arbuthnot, McCarthy, Kearney & Walsh,
Inc. v. 100 Oak St., 35 Cal. 3d 312, 322–24 (1983)). 	Thus, Plaintiffs’ argument misses the
mark, and the Prima Paint severability principles are applicable.
Plaintiffs then attempt to argue that they did in fact challenge the Arbitration
Agreement in paragraph 35 of the Complaint. 	Opp’n at 19. 	Plaintiffs contend that the
Arbitration Agreement is an “invalid arbitration venue provision” based upon an alleged
“mistake” concerning whether there is a JAMS office in Delaware, where the arbitration
was set to take place. 	Compl. ¶ 35. 	Plaintiffs contend that both Parties were “mistaken
about the fact that JAMS had an office in Delaware when in fact they did not” and based
on this mistake they are entitled to rescind the Arbitration Agreement. 	Opp’n at 19.
Defendants argue that Plaintiffs are not owed rescission because it is nonsensical that this
mistake led to their consent to arbitrate and arbitrating this dispute would not cause any
material harm to Plaintiffs. Reply at 5.
“A contract may also be rescinded if the consent of the rescinding party was given
by mistake.” Habitat Trust for Wildlife, Inc. v. City of Rancho Cucamonga, 175 Cal. App.
4th 1306, 1332 (2009) (citing Cal. Civ. Code § 1689, subd. (b)(1)). “The party attempting
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to void the contract as a result of mistake must also show that it would suffer material harm
if the agreement were enforced. . . .” Id. (citing Guthrie v. Times-Mirror Co., 51 Cal. App.
3d 879, 886 (1975)); see also Grocery Outlet, Inc. v. Naftali, Inc., No. 23-CV-5254-CRB,
2025 WL 436635, at *5 (N.D. Cal. Feb. 7, 2025) (“To properly rescind a contract under
the doctrine of mistake, a party still must allege some form of injury or harm that would
result in substantial unfairness were the contract to be enforced.”) (citing Donovan v. RRL
Corp., 26 Cal. 4th 261, 282 (2001)).
The Court is not convinced that the mistake over the lack of a JAMS office in
Delaware induced Plaintiffs into entering into the Arbitration Agreement. 	Plaintiffs
contend that “[o]ver Plaintiffs’ objections and at Defendants’ urging, JAMS refused to
change the location to San Diego,” thus JAMS “will conduct arbitration with a New York
or Pennsylvania arbitrator and export the non-Delaware arbitrator to a rented office
somewhere in Delaware.” Compl. ¶ 35. Plaintiffs allege that “Plaintiffs will be required
to travel to Delaware to defend themselves against Defendants’ unlawful arbitration.” Id.
The Court is unpersuaded that the lack of a JAMS office in Delaware is a mistake that
would have led Plaintiffs to not enter into the Arbitration Agreement had they been aware.
Plaintiffs now want the arbitration to take place in San Diego, and the arbitration is still
taking place in Delaware regardless of the existence of a JAMS office. The Court is also
not convinced that Plaintiffs would suffer any material harm if forced to arbitrate for the
same reasons the Court found a lack of irreparable harm in its previous Order. See Order
at 10–11. 	Further, the arbitration is already underway, and Plaintiff is free to bring, and
has brought, any and all challenges to the Loan Agreement in the ongoing arbitration. See
Mot. at 15 n.5. Therefore, the Court is also unpersuaded by this argument.
The Court finds that the Arbitration Agreement is valid and enforceable and will
now consider whether to dismiss this case under forum non conveniens.
II. 	Forum non conveniens
As discussed above, forum-selection clauses are controlling unless “the plaintiff
made a strong showing that: (1) the clause is invalid due to ‘fraud or overreaching,’ (2)
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‘enforcement would contravene a strong public policy of the forum in which suit is brought,
whether declared by statute or by judicial decision,’ or (3) ‘trial in the contractual forum
will be so gravely difficult and inconvenient that [the litigant] will for all practical purposes
be deprived of his day in court.’” Yei A. Sun, 901 F.3d at 1088 (quoting Bremen, 407 U.S.
at 15).
First, as discussed above, the Arbitration Agreement is valid and enforceable, and
further, Plaintiffs do not allege that the Arbitration Agreement is invalid due to fraud or
overreaching. See Compl. ¶ 35. Second, enforcement of the Arbitration Agreement does
not contravene a strong public policy of the forum in which suit is brought. 	On the
contrary, “California has 	a ‘strong public policy 	in 	favor of enforcing 	arbitration
agreements.’” Solo v. Am. Ass’n of Univ. Women, 187 F. Supp. 3d 1151, 1157 (S.D. Cal.
2016) (quoting Broughton v. Cigna Healthplans of California, 21 Cal. 4th 1066, 1074
(1999)). 	Further, reflected in the FAA are both a “liberal federal policy favoring
arbitration” and the “fundamental principle that arbitration is a matter of contract.” AT&T
Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (first quoting Moses H. Cone Mem’l
Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983); and then quoting Rent-A-Center,
561 U.S. at 67)). 	Third, arbitration proceedings are already underway, and there is no
evidence that Plaintiffs would be “deprived of [their] day in court.” 	Yei A. Sun, 901 F.3d
at 1088 (quoting Bremen, 407 U.S. at 15).
Additionally, considering the public interest factors (“the administrative difficulties
flowing from court congestion; the local interest in having localized controversies decided
at home; [and] the interest in having the trial of a diversity case in a forum that is at home
with the law”), the Court concludes that the balance of the public interest factors weighs in
favor of enforcing the Arbitration Agreement. 	Yei A. Sun, 901 F.3d 1088 (citing Atl.
Marine, 571 U.S. 64, 62 n.2). First, the arbitration is already underway in Delaware. Mot.
at 17. Second, the Southern District of California’s interest in this case is minimal as this
is an “arms-length transaction between two business entities” and the choice of law under
the Loan Agreement is Delaware. 	See Mot. at 18, Agreement at 67. 	Third, “Plaintiffs,
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who bear the burden of showing transfer is unwarranted, have failed to address any of the
public interest factors, let alone demonstrate that the factors weigh against transfer.” Cole
v. Quest Diagnostics, Inc., 22-CV-892 JLT SKO, 2023 WL 6201702, at *4 (E.D. Cal. Sept.
22, 2023).
Therefore, the Court concludes that, under forum non conveniens, Plaintiffs’ case is
properly brought before the pending JAMS arbitral forum in Delaware.
CONCLUSION
In light of the foregoing, the Court GRANTS Defendants’ Motion to Dismiss
Plaintiffs’ Complaint (ECF No. 15) WITHOUT LEAVE TO AMEND. As this concludes
the litigation in this matter, the Clerk SHALL close the file.
IT IS SO ORDERED.
Dated: February 5, 2026
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