Little Caesar Enterprises, Inc. et al v. Miramar Quick Service Restaurant Corporation et al

Filing 27

ORDER denying 5 Motion to Transfer Case. Signed by District Judge Terrence G. Berg. (AChu)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVSION
LITTLE CAESAR ENTERPRISES,
INC., LC TRADEMARKS, INC.,
Plaintiffs,
vs.
MIRAMAR QUICK SERVICE
RESTAURANT CORPORATION,
SILON CORPORATION, KHALID
DRIHMI, ABDEL DRIHMI,
Defendants.

2:18-CV-10767-TGB

ORDER DENYING MOTION TO
TRANSFER (DKT. 5)

This case arises out of Franchise Agreements entered into between
Plaintiff Little Caesar Enterprises, Inc. and Defendants relating to
Defendants’ operation of four Little Caesar’s pizza restaurants in
Massachusetts and Connecticut. Defendants filed a motion seeking to
have this action dismissed pursuant to 28 U.S.C. § 1406(a) or transferred
to the District of Massachusetts pursuant to 28 U.S.C. § 1404(a).
Pursuant to E.D. Mich. LR 7 .1(f)(2), no hearing will be held because the
Court finds that oral argument will not significantly aid the decisionmaking process. For the reasons set forth below, Defendants’ motion is
DENIED.
BACKGROUND
Plaintiff Little Caesar Enterprises, Inc. is a Michigan corporation
with its principal place of business in Detroit, Michigan (Dkt. 1, Compl.
¶ 1).

Plaintiff franchises independent businesses to operate Little

Caesar’s pizza restaurants throughout the United States (Id.). Plaintiff
LC Trademarks, Inc. is also a Michigan corporation with its principal
place of business in Detroit, Michigan (Id. ¶ 2.) It owns the trademark,
service mark, and trade name “LITTLE CAESARS” and related marks
(Id.).
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Defendant Miramar Quick Service Restaurant Corporation owned
and operated two Little Caesar’s franchises in Connecticut and
Massachusetts pursuant to Franchise Agreements it entered into with
Little Caesar with an effective date of November 19, 2013 (Compl. ¶ 3).
Defendant Silon Corporation also owned and operated two Little Caesar’s
franchises in Connecticut pursuant to two separate Franchise
Agreements with an effective date of December 29, 2015 (Id. ¶ 4).
Defendant Khalid Drihmi is an officer and shareholder of Defendants
Miramar Quick Service Restaurant Corporation and Silon Corporation,
and personally guaranteed the obligations of those entities under their
Franchise Agreements (Id. ¶ 5). Defendant Abdel Drihmi is an officer and
shareholder of Defendant Silon Corporation, and personally guaranteed
the obligations of that entity under its Franchise Agreements (Id. ¶ 6).
The Franchise Agreements at issue contain an express waiver by
Defendants of any objection to venue in this Court in the event of
litigation. Specifically, Section 23.2 of the Franchise Agreements
provides:
Venue. Any action brought by Franchisee or any affiliate or
principal against Little Caesar shall be brought exclusively, and
any action brought by Little Caesar against Franchisee or any
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affiliate or principal may be brought, in the federal district court
covering the location at which Little Caesar has its principal place
of business at the time the action is commenced[.] The parties waive
all questions of personal jurisdiction or venue for the purpose of
carrying out this provision. Franchisee, its affiliates and principals
shall not dispute jurisdiction or venue in any forum established
under this Section and shall not attempt to change venue
established under this Section based on forum non conveniens or
any other reason (Dkt. 2, Ex. 1, Franchise Agreement).
In

February

2018,

Plaintiff

terminated

Defendants’

Franchise

Agreements based on, among other things, Defendants’ alleged failure to
operate their restaurants in conformance with Little Caesar’s prescribed
methods, standards, and procedures; their alleged failure to timely
provide to Little Caesar financial records and other information related
to their franchises, which Little Caesar had requested in connection with
an audit of their franchises; and their alleged failure on multiple
occasions to make timely payments to Little Caesar’s affiliate, Blue Line
Foodservice Distribution, Inc., for food and supply deliveries (Compl. ¶¶
40-62). Plaintiffs also allege that Defendants have continued to operate
their Little Caesar’s franchises in violation of their post-termination
obligations (Compl. ¶ 61). Accordingly, Little Caesar filed this lawsuit to
enforce the termination, raising claims for breach of the Franchise
Agreements, trademark infringement, unfair competition, and trade
dress infringement.
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ANALYSIS
In signing the Franchise Agreements, Defendants agreed that they
would “not dispute jurisdiction or venue” should Little Caesar file suit in
this district. “As with personal jurisdiction, [a] [d]efendant may waive
objection to venue, and courts will generally enforce waivers made by
agreement.” FCA US LLC v. Bullock, No. 17-cv-13972, 2018 WL 1875597,
at *5 (E.D. Mich. Apr. 19, 2018) (alteration in original) (citing ViSalus,
Inc. v. Smith, No. 13-cv-10631, 2013 WL 2156031, at *8 (E.D. Mich. May
17, 2013). Defendants have not challenged the validity or enforceability
of the forum selection clause in the Franchise Agreements, and thus have
consented to venue in this Court.
Plaintiffs also correctly note that, even in the absence of the forum
selection clause, venue would be proper in this district because a
substantial part of the events or omissions giving rise to Plaintiffs’ claims
occurred here. The federal venue statute “does not require venue in the
district with the most substantial contacts to the dispute. Rather, it is
sufficient that a substantial part of the events occurred in the
challenge[d] venue, even if a greater part of the events occurred

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elsewhere.”

ViSalus, Inc., 2013 WL 2156031, at *3.

Plaintiffs are

headquartered in this District.
Defendants’ argument that this case should be transferred to
Massachusetts under 28 U.S.C. § 1404(a) is equally unavailing. In
Section 23.2 of their Franchise Agreements, Defendants expressly
waived any objection to venue in this Court. The Supreme Court’s
unanimous decision in Atlantic Marine clarified the weight that a district
court considering a motion to transfer pursuant to Section 1404(a) must
give to a contractual forum selection clause such as the one at issue in
this case. A forum selection clause “‘represents the parties’ agreement as
to the most proper forum’” and such provisions “‘[should be] given
controlling weight in all but the most exceptional cases.’” 571 U.S. at 63
(quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 31, 33 (1988)).
Defendants motion is not well-taken. In signing the Franchise
Agreements, Defendants consented to being sued in this forum.
CONCLUSION
For the reasons set forth above, Defendants’ motion to dismiss or
transfer this case (Dkt. 5) is DENIED. The parties are hereby directed
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to meet and confer, and then file a Rule 26(f) discovery plan within
fourteen (14) days of the date of this order. The Court will then convene
a telephonic scheduling conference, and thereafter issue a scheduling
order.
SO ORDERED.

BY THE COURT:
s/Terrence G. Berg
TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE
Dated: November 15, 2018

Certificate of Service
I hereby certify that this Order was electronically submitted on
November 15, 2018, using the CM/ECF system, which will send
notification to each party.
s/A. Chubb
Case Manager

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