Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—D. Me.: Transfer of venue, pursuant to agreement, not barred by Maine equipment dealer law, (Oct 5, 2015)

By Michael Menzhuber, J.D., LL.M.

A Maine farm and industrial equipment dealer law claim, brought a federal district court in Maine, was transferred to a federal district court in Ohio, despite contentions that the dealer law’s jurisdiction and anti-waiver provisions prohibited such a transfer. The federal district court in Bangor, Maine determined that the case should be transferred because: (1) the “applicable law and venue” provision of the distributor agreement provided that venue was in Ohio; (2) the jurisdiction provision of the Maine dealer law did not conflict with this provision and bar transfer of venue to Ohio; and (3) the anti-waiver provision of the Maine dealership law did not demonstrate that Maine’s public policy was strong enough to defeat the dealership agreement’s venue requirement and bar transfer of venue to Ohio (Chadwick-BaRoss, Inc. v. Ecoverse Industries, Ltd., October 1, 2015, Torresen, N.).

Background. Chadwick-BaRoss, Inc. (C-B), a Maine corporation that sold industrial, construction, commercial, forestry, and business equipment and machinery, entered into a distribution agreement with Doppstadt US LLC (Doppstadt) to purchase certain Doppstadt products for resale. Doppstadt later merged with Ecoverse Industries, Ltd. (Ecoverse), an Ohio limited liability company.

C-B brought an action against Ecoverse, alleging violations of Maine’s Farm Machinery, Forestry Equipment, Construction Equipment and Industrial Equipment Dealerships Act. Ecoverse moved to transfer venue to the federal district court for the Northern District of Ohio.

Venue. The “applicable law and venue” provision of the distributor agreement provided that venue was in Ohio but, if any law conflicted with this provision, venue would be enforced consistent with that conflicting law. C-B argued that the dealer law conflicted with the distributor agreement because the law’s jurisdiction provision conferred jurisdiction upon the Maine courts. The court, however, agreed with Ecoverse that “conferring jurisdiction” was different from “predetermining venue.” As such, the Act simply vested Maine trial courts with jurisdiction but did not plainly require that all actions under it be brought in Maine. Therefore, the parties’ selection of an Ohio forum, as per the “applicable law and venue” provision of distributor agreement, did not conflict with the Maine dealer law.

C-B argued that the anti-waiver section of the dealer law demonstrated that Maine’s public policy was strong enough to defeat the “applicable law and venue” provision of the dealership agreement. That section stated that the provisions of the Act: (1) are “deemed to be incorporated” into every agreement between a dealer and supplier; (2) control all other provisions of the agreement; and (3) cannot be waived or varied. The court noted that this section did not explain what public interest concerns would be compromised by litigating a suit under the dealer law in Ohio. Furthermore, C-B did not point to any unusual complications in the dealer law that would require analysis by a court “at home with the law” and the jurisdiction provision in the dealer law did not evidence an overriding interest in having such disputes adjudicated solely in Maine.

Finally, the court concluded that, because the dealer law did not contain a “dealers’ choice” provision, the anti-waiver section of the law, by itself, did not created a public policy strong enough to defeat the “applicable law and venue” provision of the distributor agreement.

The case is No. 2:15-cv-136-NT.

Attorneys: John A. Hobson (Perkins Thompson, PA) for Chadwick-BaRoss Inc. Keith A. Savidge (Seeley, Savidge, Ebert & Gourash Co., LPA) and Marie E. Chafe (Cornell & Gollub) for Ecoverse Industries Ltd.

Companies: Chadwick-BaRoss, Inc.; Ecoverse Industries, Ltd.

Cases: FranchisingDistribution MaineNews