                 FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

DIANE M. HENDRICKS; KENNETH A.        
HENDRICKS,
              Plaintiffs-Appellees,         No. 03-55754
               v.                             D.C. No.
BANK OF AMERICA, N.A.,
                        Defendant,       CV-02-03150-GHK
                                            ORDER AND
              and                            AMENDED
MUTUAL INDEMNITY (BERMUDA),                   OPINION
LTD., a Bermuda corporation,
             Defendant-Appellant.
                                      
       Appeal from the United States District Court
          for the Central District of California
        George H. King, District Judge, Presiding

                  Argued and Submitted
       January 14, 2004—San Francisco, California

                  Filed February 25, 2005
                  Amended May 24, 2005

     Before: J. Clifford Wallace, John T. Noonan, and
         M. Margaret McKeown, Circuit Judges.

                Opinion by Judge Wallace




                           5615
                 HENDRICKS v. BANK OF AMERICA             5619


                         COUNSEL

Vincent J. Connelly, Mayer, Brown, Rowe & Mawe, Chicago,
Illinois, for the defendant-appellant.

Bruce R. Meckler, Meckler Bulger & Tilson, Chicago, Illi-
nois, and Robert G. Campbell, Cox Castle & Nicholson LLP,
Los Angeles, California, for the plaintiffs-appellees.


                           ORDER

  The court’s opinion filed February 25, 2005, slip op. 2209,
and appearing at 398 F.3d 1165 (9th Cir. 2005), is hereby
amended as follows:

1.   On page 2223, line 8, delete all text from “We review the
     district court’s decision not to enforce” through the end
     of the paragraph, including the citation to Kukje Hwajae
     Ins. Co. v. M/V Hyundai Liberty, 294 F.3d 1171, 1174
     (9th Cir. 2002). Replace that text with “We review de
     novo both the district court’s application of collateral
     estoppel, see Littlejohn v. United States, 321 F.3d 915,
     919 (9th Cir. 2003), and its interpretation of the forum
     selection clause. See N. Cal. Dist. Council of Laborers v.
     Pittsburg-Des Moines Steel Co., 69 F.3d 1034, 1036 n.3
     (9th Cir. 1995).”

2.   On page 2226, second full paragraph, line 4, delete “the
     district court did not abuse its discretion” and replace
     with “the district court did not err”. In the same para-
     graph, line 8, delete “did not abuse its discretion” and
     replace with “did not err”.
5620             HENDRICKS v. BANK OF AMERICA
3.   On Page 2231, line 19, delete the entire sentence begin-
     ning with “In its findings of fact.” Replace that sentence
     with the following:

       In its findings of fact, the Commonwealth Court
       of Pennsylvania found that if a particular agree-
       ment was not enforced, Mutual might face “an
       uncertain prospect of whether [it could] honor [its]
       contractual obligations to pay dividends” and, if
       such payments could not be made, it “may face
       involuntary insolvency proceedings.” Although
       the Pennsylvania court enforced that agreement,
       the district court could reasonably conclude that
       Mutual remained in a precarious financial position
       even after enforcement of the agreement.

  With these amendments, the panel has voted to deny the
petition for panel rehearing. Judge McKeown has voted to
deny the petition for rehearing en banc, and Judge Wallace
and Judge Noonan so recommended. The full court has been
advised of the petition for rehearing en banc, and no judge has
requested a vote on whether to rehear the matter en banc. Fed.
R. App. P. 35.

  The petition for rehearing and the petition for rehearing en
banc are DENIED. No subsequent petitions for rehearing or
rehearing en banc may be filed.


                          OPINION

WALLACE, Senior Circuit Judge:

   Mutual Indemnity (Bermuda), Ltd., the defendant in the
trial court (Mutual), appeals from a district court order enjoin-
ing co-defendant Bank of America, N.A. (Bank) from honor-
ing Mutual’s efforts to draw down on a letter of credit (LOC)
                 HENDRICKS v. BANK OF AMERICA               5621
posted by Diane and Kenneth Hendricks, the trial court plain-
tiffs (the Hendricks). We have jurisdiction to review the dis-
trict court’s preliminary injunction order pursuant to 28
U.S.C. § 1292(a)(1), and we affirm.

                               I.

   The Hendricks own American Patriot Insurance Agency,
Inc. (American Patriot), a company that specializes in provid-
ing insurance products to roofing contractors. In early 1997,
the Hendricks established a commercial insurance program
for workers compensation and other insurance coverages with
underwriting assistance from Mutual Risk Management and
its subsidiaries: Mutual, Legion Insurance Company, Com-
monwealth Risk Services, L.P., and Villanova Insurance
Company (collectively, the Mutual Entities). Several contracts
govern the relationship between American Patriot and the
Mutual Entities, but only one is directly relevant here: a
“shareholder agreement,” which entitles the Hendricks to reap
certain profits and income generated by the commercial insur-
ance program and commits the Hendricks to indemnify
Mutual for losses on the program. The shareholder agreement
also requires the Hendricks to post irrevocable LOCs and
maintain the LOCs for the duration of Mutual’s outstanding
or potential liability for program losses.

   In April 2001, the Hendricks filed an action in the Northern
District of Illinois “alleging fraud, misrepresentation, conspir-
acy, breach of contract, RICO violations and negligence aris-
ing out of” the Mutual Entities’ alleged fraudulent
mishandling of their underwriting and claims-handling prac-
tices from 1997 to 1999. Am. Patriot Ins. Agency, Inc. v. Mut.
Risk Mgmt., Ltd., 248 F. Supp. 2d 779, 781 (N.D. Ill. 2003).
The Mutual Entities moved to dismiss for lack of venue, cit-
ing the shareholder agreement’s forum selection clause, which
states: “This Agreement . . . shall be exclusively governed by
and construed in accordance with the laws of Bermuda and
any dispute concerning this Agreement shall be resolved
5622             HENDRICKS v. BANK OF AMERICA
exclusively by the courts of Bermuda.” The district court
agreed that the forum selection clause precluded the Hen-
dricks’ Illinois action and granted the motion to dismiss. Id.
at 783-86. On appeal, the Seventh Circuit affirmed. See Am.
Patriot Ins. Agency, Inc. v. Mut. Risk Mgmt., Ltd., 364 F.3d
884 (7th Cir. 2004).

   One day after filing their Illinois complaint, the Hendricks
brought an action in the Central District of California seeking
injunctive relief to prevent Mutual from drawing down on an
LOC in the possession of the Bank. The California complaint
listed both Mutual and the Bank as defendants and requested
a preliminary injunction based on California Commercial
Code section 5109(b), which provides that “[i]f an applicant
claims that . . . honor of the presentation would facilitate a
material fraud by the beneficiary on the issuer or applicant, a
court of competent jurisdiction may temporarily or perma-
nently enjoin the issuer from honoring a presentation.” CAL.
COM. CODE § 5109(b).

   The district court reviewed the Hendricks’ pleadings and
promptly issued a temporary restraining order against Mutual,
directing it to show cause why a preliminary injunction
should not be entered. After the Northern District of Illinois
filed its decision in the Illinois action, Mutual invoked collat-
eral estoppel and asked the district court to dissolve the tem-
porary restraining order and deny the Hendricks’ request for
injunctive relief. Following oral argument, the district court
determined that the Hendricks “ha[d] stated a claim for
interim relief against the Bank of America as the issuer of the
LOC . . . pursuant to . . . Section 5109.” The district court rea-
soned that collateral estoppel did not prevent the Hendricks
from seeking injunctive relief against the Bank, because the
Bank was not a party in the Illinois action against the Mutual
Entities. In addition, it concluded that Mutual was “not a nec-
essary, much less an indispensable, party to” that action
against the Bank. It therefore “stayed” the Hendricks’ claims
against Mutual and issued a “preliminary” injunction to
                 HENDRICKS v. BANK OF AMERICA               5623
remain in effect “until the earlier of the following: (1) [f]inal
resolution of the merits of the underlying claims between
Plaintiffs and the Mutual Defendants in either the Illinois fed-
eral court or Bermuda; or (2) April 14, 2006.”

                               II.

   Mutual does not challenge the district court’s decision to
stay indefinitely the Hendricks’ action against it individually.
Instead, it seeks to appeal from the portion of the district
court’s order that grants preliminary injunctive relief against
the co-defendant Bank. The Bank has chosen not to partici-
pate in Mutual’s appeal since it does not assert an independent
interest in the LOC. This raises an important threshold ques-
tion for our consideration: whether Mutual, a party to the
Hendricks’ action and the LOC beneficiary, has standing to
appeal from the district court’s preliminary injunction order
against the Bank.

   [1] We have held that a defendant may assert “standing to
contest the grant of the preliminary injunction issued against
. . . other defendants” under certain circumstances, “even
though those defendants have not appealed.” Goldie’s Book-
store, Inc. v. Superior Court, 739 F.2d 466, 468 n.2 (9th Cir.
1984). To meet our standing requirements for appeal, a defen-
dant must demonstrate that he or she was “a party at the time
judgment was entered and [was] aggrieved by the decision
being appealed.” Id.; see also In re Exxon Valdez, 239 F.3d
985, 987 (9th Cir. 2001) (concluding that a litigant had stand-
ing to appeal because it was “a party to this case from the
beginning” and “contends that it is aggrieved by the district
court’s order”). Mutual clearly satisfies these requirements
because it was both a party of record when the district court
entered its preliminary injunction and the intended beneficiary
of the enjoined LOC. See Lueker v. First Nat’l Bank of Boston
(Guernsey) Ltd., 82 F.3d 334, 337 (10th Cir. 1996) (observing
that an LOC beneficiary had standing to appeal from an
injunction entered against a co-defendant bank under similar
5624            HENDRICKS v. BANK OF AMERICA
circumstances); Andy Marine, Inc. v. Zidell, Inc., 812 F.2d
534 (9th Cir. 1987) (exercising jurisdiction over an LOC ben-
eficiary’s appeal from a district court order, which enjoined
a bank from honoring the beneficiary’s draft).

   The Hendricks also contend that Mutual lacks standing to
appeal because it steadfastly contested personal jurisdiction in
the Central District of California, but they cite no authority
which supports this argument. Were we to treat personal juris-
diction defenses under Federal Rule of Civil Procedure
12(b)(2) as waivers of appellate standing, we would essen-
tially immunize district courts’ personal jurisdiction determi-
nations from appellate scrutiny—an untenable proposition, to
be sure.

   We recognize, of course, that a nonparty generally cannot
simultaneously challenge personal jurisdiction and assert
standing to appeal. “The rule that only parties to a lawsuit, or
those that properly become parties, may appeal an adverse
judgment, is well settled.” Marino v. Ortiz, 484 U.S. 301, 304
(1988) (per curiam). For this reason, an interested LOC bene-
ficiary who “deliberately [chooses] to remain a nonparty”
lacks standing to appeal from a district court order which per-
manently enjoined a bank from making payment on the LOC.
Citibank Int’l v. Collier-Traino, Inc., 809 F.2d 1438, 1439-41
(9th Cir. 1987).

   [2] However, Mutual was a party to the district court pro-
ceedings and was aggrieved by the preliminary injunction. It
therefore has standing to appeal the injunction. See Goldie’s
Bookstore, Inc., 739 F.2d at 468 n.2. We hold, therefore, that
Mutual has standing to appeal from the district court’s prelim-
inary injunction.

                              III.

   Mutual raises essentially two procedural challenges to the
district court’s preliminary injunction: improper venue and
                HENDRICKS v. BANK OF AMERICA              5625
lack of personal jurisdiction over a necessary and indispens-
able party. See FED. R. CIV. P. 12(b)(3) (improper venue);
FED. R. CIV. P. 19(a)-(b) (necessary and indispensable party).

                              A.

   [3] Before advancing to the merits of Mutual’s procedural
challenges, we must decide whether these issues are amenable
to appellate review at this stage. Under 28 U.S.C.
§ 1292(a)(1), we may exercise interlocutory appellate juris-
diction over the district court’s preliminary injunction and
pendent jurisdiction over any “otherwise non-appealable rul-
ing [that] is ‘inextricably intertwined’ with or ‘necessary to
ensure meaningful review of’ the order properly before us on
interlocutory appeal.” Meredith v. Oregon, 321 F.3d 807, 813
(9th Cir. 2003) (quoting Swint v. Chambers County Comm’n,
514 U.S. 35, 51 (1995)), amended by 326 F.3d 1030 (9th Cir.
2003). District court rulings are “inextricably intertwined”
with a preliminary injunction when “the legal theories on
which the issues advance [are] . . . so intertwined that we
must decide the pendent issue in order to review the claims
properly raised on interlocutory appeal, or . . . resolution of
the issue properly raised on interlocutory appeal necessarily
resolves the pendent issue.” Meredith, 321 F.3d at 814, quot-
ing Cunningham v. Gates, 229 F.3d 1271, 1285 (9th Cir.
2000). We also construe Swint’s “necessary to ensure mean-
ingful review” language narrowly to “require[ ] much more
than a tangential relationship to the decision properly before
us on interlocutory appeal.” Poulos v. Caesar’s World, Inc.,
379 F.3d 654, 669 (9th Cir. 2004).

   [4] The Hendricks contend that Mutual’s personal jurisdic-
tion and venue defenses are not “inextricably intertwined”
with the district court’s preliminary injunction. We need not
decide here whether their assertion is correct, because we con-
clude that “review of [these two defenses] is necessary to
ensure meaningful review of” the district court’s preliminary
injunction. Swint, 514 U.S. at 51.
5626             HENDRICKS v. BANK OF AMERICA
   In reaching this conclusion, we consider whether the issue
calls into question the district court’s “authority to rule on a
party’s motion for a preliminary injunction.” Meredith, 321
F.3d at 816 (emphasis added). For example, we have recog-
nized that it “is necessary” to decide subject matter jurisdic-
tion defenses “to ensure meaningful review of [a] district
court’s interlocutory rulings because if appellate courts lack
jurisdiction, they cannot review the merits of these properly
appealed rulings.” Id. (internal quotation marks omitted); see
also Wong v. United States, 373 F.3d 952, 960-61 (9th Cir.
2004) (discussing pendent jurisdiction over subject matter
jurisdiction issues). Similarly, we have invoked pendent juris-
diction under section 1292(a)(1) to decide whether a district
court lacked “authority to rule on a party’s motion for a pre-
liminary injunction” because it was “required to abstain.”
Meredith, 321 F.3d at 816. On the other hand, we have
declined to exercise pendent jurisdiction over rulings such as
the availability of a Bivens remedy that were “not a logical
predicate to the” issues properly raised on appeal and did not
“implicate the very power of the district court to issue the rul-
ings on appeal.” Wong, 373 F.3d at 961. The common thread
running throughout these decisions is our recognition that sec-
tion 1292(a)(1) furnishes pendent jurisdiction over those
questions that implicate “the very power the district court
used to issue the rulings then under consideration.” Meredith,
321 F.3d at 816 (internal brackets omitted), quoting Merritt v.
Shuttle, Inc., 187 F.3d 263, 269 (2d Cir. 1999).

   From these principles, it follows that we may exercise pen-
dent jurisdiction to review Mutual’s personal jurisdiction and
venue defenses under the particular circumstances of this
interlocutory appeal. Like the various rulings discussed in
Meredith, Mutual’s procedural defenses bear on the district
court’s power to issue the injunction, because the court would
lack authority to grant relief if (1) Mutual was a necessary and
indispensable party and immune from personal jurisdiction in
this forum, or (2) venue was improper because the forum-
selection clause precluded preliminary injunctive relief out-
                HENDRICKS v. BANK OF AMERICA               5627
side Bermuda. See Ruhrgas AG v. Marathon Oil Co., 526
U.S. 574, 584 (1999) (“Personal jurisdiction . . . is an essen-
tial element of the jurisdiction of a district court, without
which the court is powerless to proceed to an adjudication.”
(internal quotation marks and ellipsis omitted)).

   [5] We recognize, of course, that we need not consider Rule
12 and Rule 19 defenses in every case “to ensure meaningful
review of” preliminary injunctions on interlocutory appeal.
Had Mutual waived the privilege to assert these defenses, for
instance, by failing to raise them “by motion” or “in a respon-
sive pleading,” we would lack pendent jurisdiction to review
them on interlocutory appeal. FED. R. CIV. P. 12(h); see also
Poulos, 379 F.3d at 672 (declining to review a district court’s
exercise of personal jurisdiction because “the district court
would have retained jurisdiction . . . regardless of whether it
asserted personal jurisdiction over [a subgroup of] defen-
dants”). In this case, however, Mutual did not waive its venue
and personal jurisdiction defenses because it raised them in a
timely manner in its first responsive pleading after securing
several reasonable extensions of the filing deadline to facili-
tate settlement negotiations. See Fed. R. Civ. P. 12(h).
Because Mutual’s procedural defenses were properly raised,
and because they attacked the district court’s authority to
grant relief, the district court had to consider the defenses as
“a logical predicate to” its preliminary injunction order.
Wong, 373 F.3d at 961. We therefore exercise pendent juris-
diction over Mutual’s two procedural defenses pursuant to
section 1292(a)(1). Cf. In re Diet Drugs, 282 F.3d 220, 230
n.5 (3d Cir. 2002) (“We have pendent appellate jurisdiction
over the issue of personal jurisdiction, because, in this case,
that issue bears upon the propriety of the preliminary injunc-
tion.” (internal quotation marks and brackets omitted)).

                              B.

  [6] Mutual contends that the district court should have dis-
missed the instant action pursuant to Federal Rule of Civil
5628              HENDRICKS v. BANK OF AMERICA
Procedure 19(b) because Mutual was not subject to personal
jurisdiction in the Central District of California. Rule 19 pro-
vides that a court must dismiss a civil action if it lacks per-
sonal jurisdiction over any “necessary” and “indispensable”
party. FED. R. CIV. P. 19(a)-(b); Takeda v. Northwestern Nat’l
Life Ins. Co., 765 F.2d 815, 819 (9th Cir. 1985) (reviewing
this analysis). A party is “necessary” if “(1) in [its] absence
complete relief cannot be afforded among those already par-
ties, or (2) [it] claims an interest relating to the subject of the
action and is so situated that the disposition of the action in
[its] absence may (i) as a practical matter impair or impede
[its] ability to protect that interest, or (ii) leave any of the per-
sons already parties subject to a substantial risk of incurring
. . . inconsistent obligations.” FED. R. CIV. P. 19(a). Whether
a party is “indispensable” is an equitable determination to be
decided based on a variety of factors, including:

     first, to what extent a judgment rendered in the per-
     son’s absence might be prejudicial to the person or
     those already parties; second, the extent to which, by
     protective provisions in the judgment, by the shaping
     of relief, or other measures, the prejudice can be
     lessened or avoided; third, whether a judgment ren-
     dered in the person’s absence will be adequate;
     fourth, whether the plaintiff will have an adequate
     remedy if the action is dismissed for nonjoinder.

FED. R. CIV. P. 19(b). If Mutual is not a “necessary” and “in-
dispensable” party to the Hendricks’ request for injunctive
relief against the Bank, its argument for dismissal based on
personal jurisdiction fails.

  Rule 19’s necessary and indispensable party “inquiry is a
practical, fact-specific one, designed to avoid the harsh results
of rigid application.” Dawavendewa v. Salt River Project
Agric. Improvement & Power Dist., 276 F.3d 1150, 1154 (9th
Cir. 2002). As such, we review the district court’s resolution
                    HENDRICKS v. BANK OF AMERICA                      5629
of this inquiry for an abuse of discretion. Kescoli v. Babbitt,
101 F.3d 1304, 1309 (9th Cir. 1996).

   [7] The district court delivered “complete relief” to the
Hendricks without Mutual’s direct participation in the suit by
enjoining the Bank from honoring a draw on the LOC pend-
ing the outcome of litigation between the Hendricks and
Mutual in another forum. FED. R. CIV. P. 19(a)(1). Moreover,
the preliminary injunction does not “as a practical matter
impair or impede [Mutual’s] ability to protect [its] interest” in
the LOC or “leave any of the persons already parties subject
to a risk of incurring . . . inconsistent obligations” in another
forum. See FED. R. CIV. P. 19(a)(2). Instead, it merely pre-
serves the asset pending a final judgment on the merits in Ber-
muda. Thus, “as a practical matter,” the preliminary
injunction does not “impede [Mutual’s] ability to protect that”
asset.1

  [8] Having rejected Mutual’s challenge to the district
court’s “necessary” party analysis, we need not decide
whether “in equity and good conscience” Mutual qualifies as
an indispensable party under Rule 19(b). See United Food &
Commercial Workers Union v. Alpha Beta Co., 736 F.2d
1371, 1381 n.18a (9th Cir. 1984). Since Mutual has not dem-
onstrated that the district court lacked personal jurisdiction
over a “necessary” party to the Hendricks’ action, the district
court could grant injunctive relief against the Bank without
deciding whether it had personal jurisdiction over Mutual
individually.

                                    C.

   Mutual argues next that the shareholder agreement’s forum
selection clause required the district court to dismiss the Hen-
  1
    There was no abuse of discretion in the district court’s conclusion that
Mutual is not a “necessary” party to the Hendricks’ action for injunctive
relief against the Bank.
5630            HENDRICKS v. BANK OF AMERICA
dricks’ action for improper venue. See Argueta v. Banco Mex-
icano, S.A., 87 F.3d 320, 324 (9th Cir. 1996) (holding that a
motion to dismiss based on a forum-selection clause should
be treated “as a Rule 12(b)(3) motion to dismiss for improper
venue.”). There is some ambiguity in the record as to whether
the district court actually reached Mutual’s improper venue
argument prior to issuing its preliminary injunction. After oral
argument, the court stated initially that it would “not at this
point decide . . . whether the forum selection clause is in fact
applicable [in] this case.” Later on, however, the court
returned to the venue question and reasoned that “to the extent
that [Mutual] may be making any argument with respect to
the forum selection clause or collateral estoppel, neither of
those arguments prevent us from issuing an injunction under
[section] 5109 against [the Bank] because we are making dif-
ferent determinations of issues against a different party.” That
is, the district court held that the forum selection clause did
not preclude venue, insofar as it interpreted the clause not to
apply to the Hendricks’ section 5109 claim against the Bank,
which is a nonparty to the Shareholder Agreement. We need
not decide whether this interpretation was correct, because, as
explained later, we hold that the clause does not apply for dif-
ferent reasons. We review de novo both the district court’s
application of collateral estoppel, see Littlejohn v. United
States, 321 F.3d 915, 919 (9th Cir. 2003), and its interpreta-
tion of the forum selection clause. See N. Cal. Dist. Council
of Laborers v. Pittsburg-Des Moines Steel Co., 69 F.3d 1034,
1036 n.3 (9th Cir. 1995).

   According to Mutual, the Seventh Circuit’s decision in
American Patriot Insurance Agency, Inc. v. Mutual Risk Man-
agement, Ltd., 364 F.3d 884 (7th Cir. 2004), compels the con-
clusion that venue was improper. That court held that the
shareholder agreement’s forum selection clause bars courts
outside Bermuda from adjudicating the Hendricks’ substan-
tive claims for fraud, breach of contract, and other claims. 364
F.3d at 888-90. This determination is dispositive here, Mutual
maintains, because “[c]ollateral estoppel, or issue preclusion,
                 HENDRICKS v. BANK OF AMERICA                5631
bars the relitigation of issues actually adjudicated in previous
litigation between the same parties.” Offshore Sportswear,
Inc. v. Vuarnet Int’l, B.V., 114 F.3d 848, 850 (9th Cir. 1997).

   By definition, collateral estoppel does not foreclose our
independent consideration of a district court’s venue determi-
nation unless “the issue at stake” in the instant litigation is
“identical to” an issue “alleged” and “actually litigated in the
prior litigation.” Id. The venue issues under consideration
here do not meet this test. In the Illinois action, the Hendricks
sought a final judgment on the merits of their dispute with the
Mutual Entities, so the Seventh Circuit had no occasion to
consider the precise venue question posed in this case:
whether the shareholder agreement’s forum selection clause
prevents courts outside Bermuda from issuing temporary
injunctions to secure assets pending a final judgment on the
merits in Bermuda. Collateral estoppel might preclude the
Hendricks from bringing a common law fraud or misrepresen-
tation action in the Central District of California. However,
that is different from the Hendricks seeking temporary injunc-
tive relief in this forum to preserve an asset, which was not
an issue “actually adjudicated in the” Illinois case. Id.

   Turning to the merits of Mutual’s improper venue defense,
we presume that the shareholder agreement’s forum selection
clause is prima facie valid and enforceable unless the Hen-
dricks can show that enforcement would be “ ‘unreasonable’
under the circumstances.” Bremen v. Zapata Off-Shore Co.,
407 U.S. 1, 10 (1972); see also Arguenta, 87 F.3d at 325
(“Although Bremen is an admiralty case, its standard has been
widely applied to forum selection clauses in general.”). To the
extent the forum selection clause applies here, the Hendricks
have the burden “ ‘to show that trial in the contractual forum
would be so gravely difficult and inconvenient that [they] will
for all practical purposes be deprived of [their] day in court.’ ”
Manetti-Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509, 515
(9th Cir. 1988), quoting Bremen, 407 U.S. at 18.
5632            HENDRICKS v. BANK OF AMERICA
   [9] The question presented here is significantly different,
however, from the typical forum selection clause case. The
Hendricks do not dispute the forum selection clause’s valid-
ity, nor do they contest the Seventh Circuit’s determination
that the clause is enforceable where applicable; instead, they
contend that the clause’s scope does not extend to actions
designed to preserve assets pending a judgment on the merits
in the contractually selected forum. Whether the Hendricks
must secure a preliminary injunction in Bermuda to preserve
this asset or may claim protection under the California statute
is a question of first impression in our circuit. However, our
reasoning in an analogous admiralty case, Polar Shipping,
Ltd. v. Oriental Shipping Corp., 680 F.2d 627 (9th Cir. 1982),
is instructive:

    It is clear from The Bremen and its Ninth Circuit
    progeny that where there is an enforceable foreign
    court selection clause, dismissal of the action is gen-
    erally appropriate. However neither the Supreme
    Court in The Bremen, nor this court, has addressed
    the issue of whether . . . the district court, instead of
    unconstitutionally dismissing the action, may ensure
    the availability of security pending a determination
    of the merits in the contractually selected forum. . . .

    The enforceability of foreign court selection clauses
    is a matter of judicially-created contract law. The
    question, then, is, what does the contract permit or
    require? Does it permit attachment in another forum,
    and maintenance of the attachment pending decision
    in the contractually selected forum? . . .

    It is clear . . . that the parties intended that they
    would litigate the merits of any dispute . . . in
    [another] forum. There is, however, no indication . . .
    that the parties intended to limit proceedings to
    obtain prejudgment security to that forum. . . .
                 HENDRICKS v. BANK OF AMERICA               5633
    We hold that in an admiralty action, absent express
    intent to the contrary, a forum selection clause pro-
    viding that all disputes under the charter will be
    determined by a selected foreign court neither pre-
    cludes a plaintiff from commencing an action in the
    district court to obtain security by maritime attach-
    ment, nor prohibits the district court from ensuring
    the availability of security adequate to satisfy a
    favorable judgment by the selected forum.

Id. at 631-33 (internal citations omitted).

   [10] Although we cautiously confined Polar Shipping’s
holding to admiralty actions, there is no compelling reason
why the analysis developed in that case should not apply to
temporary injunctions issued under section 5109(b). In both
Polar Shipping and the instant case, “[t]he enforceability of
foreign court selection clauses is a matter of judicially-created
contract law,” meaning that “the intent of the parties governs
the extent to which [the district court] may exercise its juris-
diction” to preserve assets pending a judgment in the contrac-
tually designated forum. Polar Shipping, 680 F.2d at 632; see
also Bremen, 407 U.S. at 12 (rejecting the argument that
forum selection clauses “oust” a district court of jurisdiction,
and describing the proper inquiry as “whether [the] court
should have exercised its jurisdiction to do more than give
effect to the legitimate expectation of the parties”).

   In this case, the forum selection clause manifests the par-
ties’ consensus to litigate the merits of “any dispute concern-
ing [the Shareholder] Agreement” in Bermuda. But the case
before us is not about the agreement itself or its validity. On
the contrary, there is “no indication from either the [agree-
ment] or the record, that [the parties] intended to limit pro-
ceedings to obtain prejudgment security to that forum. If the
parties had so intended they could easily have worded [the
forum selection clause] to so provide. They did not do so.”
Polar Shipping, 680 F.2d at 632; see also Gregorio T. v. Wil-
5634             HENDRICKS v. BANK OF AMERICA
son, 59 F.3d 1002, 1004 (9th Cir. 1995) (observing that in
granting a preliminary injunction “we do not review the
underlying merits of the case”).

   [11] Since Mutual has not shown from the language of the
shareholders agreement or presented any evidence that the
parties intended to limit actions outside Bermuda for prejudg-
ment injunctive relief, the district court did not err by con-
cluding that the Central District of California was an
appropriate venue for the Hendricks’ action under section
5109(b) to preserve the LOC. We hold that the district court
did not err in denying Mutual’s motion to dismiss the Hen-
dricks’ action for improper venue.

                              IV.

   Mutual did not address the merits of the injunction in its
pleadings filed in district court because of counsel’s fear that
challenging the fraud allegations would have submitted
Mutual to its jurisdiction. At the oral argument, Mutual did
make passing reference to the merits. Although Mutual argu-
ably waived its challenge to the merits, as the question is a
close one, we address the merits of Mutual’s appeal on this
point.

   With these procedural hurdles behind us, we turn at last to
the merits of the district court’s preliminary injunction. “Our
review is limited and deferential.” Southwest Voter Registra-
tion Educ. Project v. Shelley, 344 F.3d 914, 918 (9th Cir.
2003) (en banc). We must affirm the injunction “unless the
district court (1) abused its discretion or (2) based its discre-
tion on an erroneous legal standard or on clearly erroneous
findings of fact.” Satava v. Lowry, 323 F.3d 805, 810 (9th Cir.
2003).

                               A.

   Mutual argues that the district court’s preliminary injunc-
tion was inappropriate because the Hendricks’ action does not
                 HENDRICKS v. BANK OF AMERICA                  5635
anticipate a final judgment on the merits in the Central Dis-
trict of California. Pursuant to Federal Rule of Civil Proce-
dure 64, “all remedies providing for seizure of person or
property for the purpose of securing satisfaction of the judg-
ment ultimately to be entered in the action are available under
the circumstances and in the manner provided by the law of
the state in which the district court is held.” Thus, we look to
California law to determine whether the district court could
grant a preliminary injunction even though final resolution of
the underlying fraud claim would not occur in that court.

   [12] California law expressly allows “a court of competent
jurisdiction [to] temporarily . . . enjoin” a bank from honoring
a letter of credit “or grant similar relief” if the plaintiff claims
that honor would “facilitate a material fraud” by the benefi-
ciary on the plaintiff and certain requirements are satisfied.
CAL. COM. CODE § 5109(b). The statute contains no require-
ment that final resolution of the merits must occur in the same
court that grants the “temporar[y]” or “similar” relief.
Although the district court used the word “preliminary” in
describing the injunction, section 5109(b) permits “temporar-
[y]” injunctions and also allows a court to “grant similar
relief.” The district court could just as well have entered a
“temporary” injunction rather than a “preliminary” injunction.
We conclude that the power to do so is not determined by
which of the two designations the district court uses. In the
case before us, it is obviously a form of relief expressly autho-
rized by the state statute. The district court had authority to
grant the interim relief pursuant to section 5109.

                                B.

   The final issue presented for our review is the district
court’s application of the discrete legal standards for injunc-
tive relief. The district court granted the Hendricks’ complaint
for injunctive relief because it found “there [was a] sufficient
showing of likelihood of success on the merits of [their] claim
of material fraud” and that there was “certainly a possibility
5636             HENDRICKS v. BANK OF AMERICA
of irreparable injury inasmuch as once released, the money is
likely . . . to be dissipated in light of [Mutual’s] questionable
financial circumstances.” We review this determination for an
abuse of discretion. Gorbach v. Reno, 219 F.3d 1087, 1091
(9th Cir. 2000) (en banc).

                               1.

  [13] Because the district court issued its order pursuant to
section 5109, we evaluate Mutual’s likelihood of success
according to section 5109’s standard:

    If an applicant claims that a required document is
    forged or materially fraudulent or that honor of the
    presentation would facilitate a material fraud by the
    beneficiary on the issuer or applicant, a court of
    competent jurisdiction may temporarily . . . enjoin
    the issuer from honoring a presentation or grant sim-
    ilar relief against the issuer or other persons only if
    the court finds that: . . . on the basis of the informa-
    tion submitted to the court, the applicant is more
    likely than not to succeed under its claim of . . .
    material fraud . . . .

CAL. COM. CODE § 5109(b) (emphasis supplied). Put differ-
ently, this provision authorizes the district court to grant
injunctive relief only if the record shows that allowing Mutual
to draw down on the LOC “more likely than not” would facil-
itate a material fraud by Mutual.

   The district court concluded that the Hendricks established
a sufficient probability of success on the merits, because they
established a prima facie case of fraud, which Mutual did not
challenge in its opposition to the court’s order to show cause.
The court cited the uncontroverted affidavit of Eric Bossard,
a former Legion Insurance Company executive, which
revealed that the Mutual Entities systematically under-
reserved claims and misrepresented the extent of the Hen-
                HENDRICKS v. BANK OF AMERICA              5637
dricks’ liability for program losses. Whether the Hendricks
originally posted their LOC in reliance on these fraudulent
representations does not render the fraud immaterial, as
Mutual alleges, because the Hendricks submitted affidavit tes-
timony that they maintained the LOC with the Bank—and
thereby exposed themselves to even greater losses—in reli-
ance on the Mutual Entities’ representations. As the district
court recognized, allowing Mutual to draw on the LOC could
“facilitate a material fraud” by aggravating the Hendricks’
loss if Mutual turns out to be insolvent and, hence, judgment-
proof. CAL. COM. CODE § 5109(b).

   [14] Mutual contends that the Bossard affidavit only estab-
lishes misrepresentations by employees of Mutual Entities
other than Mutual, the LOC beneficiary. This distinction
between Mutual and the other Mutual Entities is irrelevant for
present purposes, because the Bossard affidavit also states
that the Mutual Entities were “acting as one in the marketing
and implementation of” the Hendricks’ insurance program;
fraudulent statements by these employees were part of a coor-
dinated fraud scheme in which Mutual played a key role.
Mutual’s intimate involvement in this scheme is evidenced by
its President’s signature on the letter agreement which formal-
ized the parties’ reinsurance arrangement, and its acceptance
of payment for the “phantom” reinsurance. Given this unop-
posed evidence of Mutual’s participation in the Mutual Enti-
ties’ fraud scheme, the district court did not abuse its
discretion by concluding the “likelihood of success” require-
ment was satisfied.

                              2.

   [15] Section 5109(b) does not incorporate the common law
irreparable injury requirement. However, some federal and
state courts have applied this standard to suits for injunctive
relief under U.C.C. section 5-109. See, e.g., Interco, Inc. v.
First Nat’l Bank of Boston, 560 F.2d 480 (1st Cir. 1977)
(requiring a showing of “irreparable harm and inadequacy of
5638             HENDRICKS v. BANK OF AMERICA
legal remedies” for injunctive relief under Massachusetts
General Laws chapter 106, section 5-109 (quoting Beacon
Theaters, Inc. v. Westover, 359 U.S. 500, 506-07 (1959)); In
re Commco Tech., L.L.C., 258 B.R. 63, 64-65 (Bankr. D.
Conn. 2001) (explaining that a plaintiff must make a showing
of irreparable harm to qualify for a preliminary injunction
under Minnesota Statute section 336.5-109 (2000)).

   We need not decide whether there is an irreparable injury
requirement for issuance of an injunction because the Hen-
dricks contend that their risk of irreparable harm is “virtually
self-evident,” and their argument is persuasive. They assert
that Mutual and the other Mutual Entities are “in serious
financial straits” and would likely dissipate the LOC funds
before the Hendricks could obtain a judgment on the merits
in Bermuda. The district court agreed with this assessment of
Mutual’s financial circumstances.

   The Hendricks submitted several documents from which
the district court could reasonably conclude that Mutual’s ten-
uous financial circumstances would imperil the Hendricks’
ability to recoup assets drawn from the LOC. Two of these
documents are particularly important: (1) an affidavit of Wil-
liam Taylor, a Pennsylvania state deputy insurance commis-
sioner overseeing the rehabilitation of two of the Mutual
Entities; and (2) an unpublished disposition dated Novem-
ber 25, 2002 from the Commonwealth Court of Pennsylvania
relating to the rehabilitation proceedings. These records are to
the effect that as recently as December 23, 2002—just four
months before the district court entered its preliminary
injunction—Mutual “conceded in its public statements and its
filings that it [was] insolvent.” Taylor’s affidavit specifically
describes a “letter . . . sent by David Ezekiel on behalf of
[Mutual] ‘to all Scheme Creditors,’ ” which “stated that ‘the
Company has suffered losses over the past 18-24 months
which have resulted in the Company becoming insolvent.’ ”
In its findings of fact, the Commonwealth Court of Pennsyl-
vania found that if a particular agreement was not enforced,
                 HENDRICKS v. BANK OF AMERICA                5639
Mutual might face “an uncertain prospect of whether [it
could] honor [its] contractual obligations to pay dividends”
and, if such payments could not be made, it “may face invol-
untary insolvency proceedings.” Although the Pennsylvania
court enforced that agreement, the district court could reason-
ably conclude that Mutual remained in a precarious financial
position even after enforcement of the agreement. Mutual did
not submit any evidence to demonstrate that its financial cir-
cumstances have improved since December 2002. We hold,
therefore, that the district court did not abuse its discretion by
concluding that the Hendricks would face a significant threat
of irreparable injury if a preliminary injunction did not issue
to prevent the Bank from honoring Mutual’s draw. See In re
Estate of Ferdinand Marcos, 25 F.3d 1467, 1480 (9th Cir.
1994) (“[A] district court has authority to issue a preliminary
injunction where the plaintiffs can establish that money dam-
ages will be an inadequate remedy due to impending insol-
vency of the defendant . . . .”).

   In a supplemental paper submitted after oral argument pur-
suant to Rule 28(j) of the Federal Rules of Appellate Proce-
dure, Mutual contended that a recent unpublished decision of
the Sixth Circuit arising out of related litigation “supports
Mutual Indemnity’s argument in this court that the district
court’s injunction should be reversed.” That decision, Hen-
dricks v. Comerica Bank, No. 03-1952, 2004 WL 2940879
(6th Cir. Dec. 20, 2004), reversed an injunction granted by the
Eastern District of Michigan preventing a bank from honoring
Mutual’s draws against letters of credit obtained by the Hen-
dricks, because the Hendricks had “failed as a matter of law
to show irreparable harm.” Id. at *1. The Sixth Circuit rea-
soned that “other courts have denied injunctions in cases in
which it was unlikely that any foreign court could hear the
underlying claim,” and that “the chance that Mutual Indem-
nity is or will become bankrupt and will not be able to satisfy
a judgment obtained against it presents less threat of irrepara-
ble harm than the chance that there will not even be a pro-
ceeding available in which to obtain that judgment.” Id. at *5.
5640             HENDRICKS v. BANK OF AMERICA
In other words, the Sixth Circuit held that a showing of a ben-
eficiary’s insolvency is insufficient as a matter of law to
obtain an injunction preventing a bank from honoring the ben-
eficiary’s draw on an international letter of credit.

   We need not and do not decide whether to adopt the Sixth
Circuit’s holding. Mutual did not argue in this court that evi-
dence of its insolvency could not establish irreparable injury;
rather, Mutual argued that “[i]njunctive relief is unwarranted
when the plaintiff has . . . not demonstrated that the defen-
dants cannot pay a judgment that might be entered on the
plaintiff’s underlying claims,” and that “[t]here is no evidence
. . . that [Mutual] is or [is] about to be insolvent.” That is,
instead of arguing that it was irrelevant whether or not Mutual
was insolvent, Mutual contended that the Hendricks simply
had made no such showing. Since Mutual did not argue that
a showing of insolvency could not establish the requisite
irreparable harm, we decline to consider that argument now.
See Int’l Union of Bricklayers v. Martin Jaska, Inc., 752 F.2d
1401, 1404 (9th Cir. 1985) (“[W]e will not ordinarily consider
matters on appeal that are not specifically and distinctly raised
and argued in appellant’s opening brief.”). In addition, we
also do not consider whether the Sixth Circuit’s decision is
binding here as a mater of collateral estoppel, law of the case,
or any other doctrine, because Mutual has made no such argu-
ment.

                               V.

   As Mutual has not shown that the district court “abused its
discretion” or “based its discretion on an erroneous legal stan-
dard or on clearly erroneous findings of fact,” Satava, 323
F.3d at 810, we affirm the district court’s preliminary injunc-
tion.

  AFFIRMED.
