Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—D. Minn.: Iowa franchise statute did not invalidate forum selection clause, (May 2, 2016)

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

A motion to remand a breach of contract case to the court designated in the forum selection clause of the parties’ business partnership agreement was granted by the federal district court in Minneapolis. An Iowa franchise statute did not render the clause unenforceable because the agreement was expressly governed by Minnesota law (Cambria Company LLC v. Renaissance Marble & Tile, Inc., April 28, 2016, Doty, D.).

Cambria Company LLC and Renaissance Marble & Tile, Inc. entered into a business partnership. The forum selection clause in the parties’ agreement required: (1) application of the laws of the state of Minnesota; and (2) claims or disputes relating the agreement and transactions between the parties be brought in the District Court of Le Sueur County, Minnesota. The clause also contained a waiver of any objection or defense based upon the venue of that court and forum non conveniens.

After Renaissance allegedly breached the agreement by failing to pay amounts due and owing, Cambria filed suit in Le Sueur County, Minnesota. After Renaissance removed the case to the federal district court in Minnesota, it filed an answer and a counterclaim, which alleged that Cambria breached the Iowa franchise statute. Cambria moved to remand pursuant to the agreement’s forum selection clause.

Renaissance argued that the Iowa statute invalidated the forum selection clause because it permits actions to be commenced wherever jurisdiction over the parties or subject matter exists, even if the agreement limits actions or proceedings to a designated jurisdiction. The court disagreed because the agreement’s choice-of-law provision required application of the laws of the State of Minnesota. As a result, Iowa law could not serve as a basis to invalidate the forum selection clause.

The court also noted that the agreement contained a waiver of any objection or defense based upon venue. It therefore concluded that Renaissance clearly waived the right to remove the matter.

The case is No. 16-412 (DSD/JSM).

Attorneys: Christopher R. Sall and Donald Chance Mark, Jr. (Fafinski Mark & Johnson, PA) for Cambria Company LLC. Terrance J. Wagener (Messerli & Kramer, PA) for Renaissance Marble & Tile, Inc.

Companies: Cambria Company LLC; Renaissance Marble & Tile, Inc.

Cases: FranchisingDistribution MinnesotaNews