BBJ, Inc. et al v. MillerCoors, LLC et al

Filing 92

Judge Indira Talwani: ORDER entered adopting in part Report and Recommendations re 10 Motion to Dismiss for Failure to State a Claim. SEE FULL ORDER ATTACHED. 1. The MillerCoors Defendants Motion to Dismiss 10 is DENIED without prejud ice 2. Within two weeks of this order, the parties shall confer and file a joint statement setting forth a single proposed schedule (or if no agreement can be reached, a single statement setting forth the competing proposals) for resolving the threshold issues presented by the motion to dismiss and the issues remaining following this courts finding regarding the forum selection clause. (Bartlett, Timothy)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
____________________________________
)
BBJ, INC., et al.,
)
)
Plaintiffs,
)
)
v.
)
Civil Action No. 12-11305-IT
)
MILLERCOORS, LLC, et al.,
)
)
Defendants.
)
____________________________________)
ORDER DENYING WITHOUT PREJUDICE MILLERCOORS, LLC, COORS BREWING
COMPANY, MILLER BREWING COMPANY, AND RENEE CUSACK’S MOTION TO
DISMISS
January 20, 2015
Before the court is the Motion to Dismiss [#10] filed by Defendants MillerCoors, LLC
(“MillerCoors”), Coors Brewing Company (“Coors”), Miller Brewing Company (“Miller”), and
Renee Cusack (“Cusack”) (collectively, the “MillerCoors Defendants”). In her Report and
Recommendation on Defendants’ Motions to Dismiss (“Report and Recommendation”) [#76],
the Magistrate Judge recommended that the court grant the MillerCoors Defendants’ motion to
dismiss based on the forum selection clause in an agreement between MillerCoors and Plaintiffs.
The court ADOPTS the recommendation that the forum selection clause is enforceable as to
MillerCoors, but DENIES the recommendation as to Coors, Miller, and Cusack. Because this
decision creates new issues not briefed by the parties and leaves open various issues not reached
by the Magistrate Judge, the court HOLDS that the forum selection clause is enforceable as to
MillerCoors and that Coors, Miller, and Cusack have not established that the clause is
enforceable as to them. The court DENIES the motion WITHOUT PREJUDICE to allow the
parties an opportunity to present motions and arguments in light of the court’s findings.

I.

Legal Standard
A party may file “specific written objections” to a magistrate judge’s Report and

Recommendation on a dispositive motion within fourteen days of service of the recommended
disposition. Fed. R. Civ. P. 72(b)(2). The district judge, in turn, “must determine de novo any
part of the magistrate judge’s disposition that has been properly objected to.” Id. 72(b)(3); see
also 28 U.S.C. § 636(b). “When no timely objection is filed, the court need only satisfy itself
that there is no clear error on the face of the record in order to accept the recommendation.” Fed.
R. Civ. P. 72(b) advisory committee’s note on 1983 addition.
II.

The Forum Selection and Integration Clauses
The Magistrate Judge recommended granting the MillerCoors Defendants’ motion to

dismiss on the ground that the forum selection clause in the 2009 License Agreement provides
that disputes under the Agreement shall be resolved by the state or federal courts in Colorado,
and that the integration clause in that same Agreement provides that the Agreement supersedes
prior agreements. Plaintiffs object to the recommended finding and ruling that the forum
selection clause and integration clause in the 2009 Agreement with MillerCoors apply to claims
arising out of a 2007 oral agreement and 2008 purchase order contract with Coors. The
MillerCoors Defendants respond that the forum selection clause and integration clause apply to
all claims, and that the interests of justice would be served by dismissing this action rather than
transferring it to the District of Colorado. The court finds that Plaintiffs and MillerCoors have
agreed, through the forum selection and integration provisions, that the proper forum for their
dispute is Colorado. The court also finds, however, that the other defendants have not
established that they are covered by this same forum selection provision.

2

A. MillerCoors
The Magistrate Judge’s recommendation to grant the motion to dismiss was based on the
forum selection clause and integration clause of the 2009 License Agreement with MillerCoors.
The forum selection clause provides that:
All disputes under this Agreement shall be resolved by the courts of the State of
Colorado including the United States District Court for Colorado and the parties
consent to the jurisdiction of such courts, agree to accept service of process by
mail, and hereby waive any jurisdictional or venue defenses otherwise available to
it [sic].
Doc. #13 at § 12.02. The integration clause provides in relevant part that:
This Agreement . . . shall constitute the entire Agreement between LICENSEE
and LICENSOR with respect to the subject matter hereof; [and] shall supersede
all other previous negotiations, commitments and writings . . . .
Id. at § 12.07. “Licensor” is defined in the License Agreement as “MillerCoors LLC.” Id. at 1.
These provisions dictate that: (1) the only agreement concerning the subject matter of the
contract that can be enforced between Plaintiffs and MillerCoors is the 2009 License Agreement;
and (2) Plaintiffs and MillerCoors have agreed to resolve all disputes under the 2009 License
Agreement in Colorado.
Plaintiffs argue that the Magistrate Judge improperly ignored Plaintiffs’ claims arising
from their oral agreement and purchase order with Coors. They fail to explain, however, how
Coors’s alleged actions give rise to claims against MillerCoors that are not subject to the forum
selection clause. As the Magistrate Judge noted, even if Plaintiffs’ claims against MillerCoors
concerned an earlier agreement or other logoed items, the plain language of the License
Agreement reflects that it applied to all such logoed items and integrated all prior agreements.
Accordingly, and on review of the Amended Complaint and the 2009 License Agreement, the
court agrees with the Magistrate Judge that Plaintiffs and MillerCoors have agreed, through the
forum selection and integration provisions, that the proper forum for the dispute between
3

Plaintiffs and MillerCoors is Colorado. MillerCoors is entitled to enforce this forum selection
clause.
B. Miller, Coors, and Cusack
The argument as to why the forum selection clause protects the other defendants is less
clear. Plaintiffs’ complaint confuses the issue by using the term “defendants” without
specifying which defendant is at issue. Nonetheless, there seems little dispute that Miller, Coors,
and Cusack are separate parties, are not signatories to the License Agreement, and do not appear
to have any obligations under the 2009 Agreement. Such non-parties generally are not bound by
such an agreement. See E.E.O .C. v. Waffle House, Inc., 534 U.S. 279, 294 (2002) (“It goes
without saying that a contract cannot bind a nonparty.”); Arthur Andersen LLP v. Carlisle, 556
U.S. 624, 631 (2009) (explaining that E.E.O .C. v. Waffle House referred to an entity “which
obviously had no third-party obligations under the contract in question”).1 While “‘traditional
principles’ of state law allow a contract to be enforced by or against nonparties to the contract
through ‘assumption, piercing the corporate veil, alter ego, incorporation by reference, thirdparty beneficiary theories, waiver and estoppel,’” Arthur Andersen LLP, 556 U.S. at 631
(quoting 21 R. Lord, Williston on Contracts § 57:19, p. 183 (4th ed.2001)), Defendants have
made no showing that any of these principles apply to Miller, Coors, or Cusack.
Defendants argue that Miller, Coors, and Cusack should have the benefit of the License
Agreement because they are “closely related” on two grounds. First, Defendants point out that
Plaintiffs’ allegations relating to the 2009 License Agreement “are incorporated in counts against
each of the defendants.” Doc. #11, at 8. Plaintiffs’ Amended Complaint certainly is not a model
of clarity. That said, the fact that allegations against one defendant are combined in causes of
1

While both of these cases dealt with arbitration clauses, the Supreme Court has explained that “[a]n agreement to
arbitrate before a specified tribunal is, in effect, a specialized kind of forum-selection clause . . . .” Scherk v.
Alberto-Culver Co., 417 U.S. 506, 519 (1974).

4

actions with allegations against other defendants does not make those defendants subject to the
2009 License Agreement.
Second, Defendants argue that they are closely related because MillerCoors is a joint
venture of Miller and Coors, and Cusack is an employee of Coors. Miller and Coors, however,
remain separate entities from MillerCoors and have made no suggestion here that their interests
are somehow derivative of MillerCoors’s interests, or that it was in any way foreseeable that
Miller, Coors, or Coors’s employee would be bound by the forum selection clause entered into
with MillerCoors, or that Miller, Coors, and Cusack’s conduct was related to the 2009 License
Agreement. The district court cases relied on by Defendants are thus distinguishable. See Noel
v. Walt Disney Parks & Resorts U.S., Inc., No. 10-40071-FDS, 2011 WL 1326667, at *8-9 (D.
Mass. Mar. 31, 2011) (finding clearly foreseeable that Disney Resorts was subject to forumselection clause entered into with Disney Travel where plaintiffs purchased a vacation package
through Disney Travel for a stay at a resort owned by Disney Resorts, and “were not aware of
the difference between Disney Resorts and Disney Travel employees during telephone calls with
Disney representatives”); D.I.P.R. Mfg., Inc. v. Perry Ellis Int'l, Inc., 472 F. Supp. 2d 151, 154
(D.P.R. 2007) (holding that nonparty who admited that party to agreement did business through
non-party, asserted that non-party and party complied with all of their obligations under the
Agreement, and economically benefitted from the agreement was subject to agreement’s forum
selection clause).
Accordingly, the court concludes that Defendants have not shown that Plaintiffs’ claims
against Miller, Coors, and Cusack are subject to the forum selection clause.
III.

Proper Means to Enforce the Forum Selection Clause as to MillerCoors and the
Remaining Issues Raised in the MillerCoors Defendants’ Motion to Dismiss

5

Plaintiffs, when confronted with the recommended dismissal of all claims, argued that the
interest of justice favored transfer rather than dismissal because most, if not all, of their claims
against the MillerCoors Defendants will be time-barred by the applicable statutes of limitation
should the case be dismissed and Plaintiffs refile in Colorado. Doc. #83, at 11-12. The
MillerCoors Defendants, again with the Magistrate Judge’s recommendation that the entire
action should be dismissed, agreed with Plaintiffs’ assertion that claims will be time-barred, but
argued that the court should nonetheless dismiss the case pursuant to 28 U.S.C. § 1406(a).
It does not appear that either of these arguments were raised with the Magistrate Judge.
The Supreme Court has recently rejected the use of 28 U.S.C. § 1406(a) in forum selection cases,
finding that venue is not “improper” for purposes of that statute based on a forum selection
clause. Atl. Marine Constr. Co., Inc. v. U.S. Dist. Court for the W. Dist. of Tex., 134 S.Ct. 568,
579-80 (2013) (“Whether the parties entered into a contract containing a forum-selection clause
has no bearing on whether a case falls into one of the categories of cases listed in [28 U.S.C.] §
1391(b). As a result, a case filed in a district that falls within § 1391 may not be dismissed under
§ 1406(a) . . . .”). Instead, a forum selection clause “may be enforced through a motion to
transfer under § 1404(a)” or, if the clause points to a state or foreign forum, “through the
doctrine of forum non conveniens,” and not through an improper venue § 1406(a) or Rule
12(b)(3) motion. Id. Here, however, Defendants have not sought to transfer under 28 U.S.C. §
1404(a).
Instead, Defendants moved to dismiss the action under Federal Rule of Civil Procedure
12(b)(6). The Supreme Court in Atlantic Marine Constr. Co. explicitly declined to express a
view as to whether a Rule 12(b)(6) motion is a proper alternative for enforcing a forum selection
clause. See id. at 580. The First Circuit has concluded that the use of Rule 12(b)(6) to evaluate

6

forum selection clauses is still permissible in this circuit, but has also noted that it is the “practice
for dismissals due to forum selection clauses to be dismissed without prejudice so the case may
be refilled in the appropriate forum.” Claudio-De Leon v. Sistema Universitario Ana G.
Mendez, No. 13-1198, 2014 WL 7269767, at *5 & n.3 (1st Cir. Dec. 22, 2014). The court is
confronted here with the fact that such a dismissal, even if labeled “without prejudice,” will have
the effect of barring suit against MillerCoors. Such an enforcement of the forum selection clause
would not allow the resolution of the dispute in the agreed upon forum but rather, would serve as
a bar to Plaintiffs’ claims, a result perhaps contrary to the Supreme Court’s decision in Atlantic
Marine Constr. Co.
The appropriate resolution is further complicated by this court’s determination that the
forum selection clause can be enforced by MillerCoors, but not Miller, Coors, and Cusack. If the
action is dismissed against MillerCoors as urged by the MillerCoors Defendants, the case would
remain in this district for further proceedings relating to Miller, Coors, and Cusack.
Alternatively, if the case is transferred, the entire case must be transferred or Plaintiffs must
successful move to sever the claims against Miller, Coors, and Cusack. The MillerCoors
Defendants’ motion to dismiss raised additional arguments not yet reached by the Magistrate
Judge, Doc. #86, at 7 n.1, but MillerCoors has not stated if the court should reach these
additional arguments as to MillerCoors in light of the finding that Plaintiffs and MillerCoors
have selected another forum for the resolution of their disputes.
In light of these issues, the court is denying the MillerCoors Defendants’ motion to
dismiss without prejudice. The parties shall present to the court a proposed schedule for
resolving the threshold issues presented by the motions to dismiss and the issues remaining
following this court’s finding regarding the forum selection clause. The court anticipates such a

7

schedule could include the filing of an amended complaint replacing the term “defendant” or
“defendants” with the specific party referenced (but not adding causes of action or parties), joint
or separate motions to transfer the action to the District of Colorado pursuant to 28 U.S.C. §
1404, joint or separate motions to sever the claims against MillerCoors pursuant to Federal Rule
of Civil Procedure 21 and to dismiss or transfer them based on the forum selection clause, and
renewed motions to dismiss based on grounds other than the forum selection clause.
IV.

Conclusion
For the foregoing reasons,
1.

The MillerCoors Defendants’ Motion to Dismiss [#10] is DENIED without

prejudice;
2.

Within two weeks of this order, the parties shall confer and file a joint statement

setting forth a single proposed schedule (or if no agreement can be reached, a single statement
setting forth the competing proposals) for resolving the threshold issues presented by the motion
to dismiss and the issues remaining following this court’s finding regarding the forum selection
clause.
IT IS SO ORDERED.
January 20, 2015
/s/ Indira Talwani
United States District Judge

8