Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—N.D. Ill.: Forum selection clause mandated transfer of settlement agreement complaint, (Feb 1, 2016)

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

A dealer’s complaint, that its principal breached their settlement agreement, was remanded to state court by the federal district court in Chicago, since the settlement agreement expressly provided that any disputes would be brought in Illinois state court (Midwest Mailing & Shipping Systems, Inc. v. Neopost USA Inc., January 28, 2016, Der-Yeghiayan, S.).

Midwest Mailing & Shipping Systems, Inc. entered into a dealership agreement with Neopost USA, Inc., a business services company, under its former name, F.M.E. Corporation. Pursuant to the terms of the dealership agreement, Midwest was granted an exclusive territory in which to act on behalf of Neopost.

In 2002, Midwest participated with other dealers in a suit against Neopost in an Illinois state court. After a settlement agreement was reached by the parties, Midwest contended that Neopost breached the terms of that agreement. Midwest brought the action in state court, and Neopost removed it to federal court. Midwest then moved to have the action remanded to state court.

After determining that the settlement agreement’s forum section clause was valid, enforceable, and consistent with public interest, the court agreed with Midwest that the clause expressly provided that any dispute over the enforcement terms of the agreement would be brought in Illinois state court.

The court dismissed arguments by Neopost that the dealership agreement, which did not have such a limiting forum selection clause, was controlling because: (1) nothing in the dealership agreement negated the settlement agreement’s forum selection clause; (2) the settlement agreement expressly provided that it superseded any conflicts with prior dealership agreements; and (3) Midwest’s action was to enforce the terms of the settlement agreement, not the dealership agreement.

The case is No. 15 C 7752.

Attorneys: Leonard A. Gail (Massey & Gail) and Robert C. Goldberg (Schoenberg, Fisher, Newman & Rosenberg, Ltd.) for Midwest Mailing & Shipping Systems, Inc. Michael Eidel (Fox Rothschild LLP) for Neopost USA Inc.

Companies: Midwest Mailing & Shipping Systems, Inc.; Neopost USA Inc.

Cases: FranchisingDistribution IllinoisNews