TLE Marketing Corporation v. WBM, LLC

Filing 22

ORDER: Defendant WBM's motion to transfer venue [ECF No. 7 ] is GRANTED. This action is TRANSFERRED to the United States District Court for the District of New Jersey. The Clerk of the Court is directed to take all steps necessary to effectuate this transfer. (Written Opinion) Signed by Judge Joan N. Ericksen on November 16, 2017. (CBC)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
TLE Marketing Corporation,
Plaintiff,
v.

Civil No. 17-CV-3812 (JNE/DTS)
ORDER

WBM, LLC,
Defendant.

This case is before the Court on the motion of Defendant WBM, LLC (“WBM”)
to transfer venue pursuant to 28 U.S.C. § 1404(a) (2012). Plaintiff TLE Marketing
Corporation (“TLE Marketing”) opposes the transfer. For the reasons set forth below, the
Court grants the motion to transfer venue to the United States District Court for the
District of New Jersey.
BACKGROUND
TLE Marketing is an independent sales agency that markets and sells the products
of manufacturers and importers. TLE Marketing Br. 3, ECF No. 16. WBM develops,
imports, and markets “various distinctive lines and brands of products.” WBM Br. 2,
ECF No. 9. In 2007, WBM and TLE Marketing signed a sales representative contract
providing that TLE Marketing would sell WBM’s products. Id.; TLE Marketing Br.
3. This arrangement continued for roughly ten years. The contract most recently entered
contains a forum-selection clause stipulating that
[a]ll disputes under this Agreement shall be resolved by litigation in the Courts of
the State of New Jersey including the federal courts therein and the parties consent
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to the jurisdiction of such courts, agree to accept service of process by mail, and
waive any jurisdictional or venue defenses otherwise available to it.
Decl. of Nafees Anjum Ex. A at 10, ¶ 7.3, ECF No. 10-1.
In June of 2017, WBM terminated the contract. WBM Br. 3; TLE Marketing Br.
6; Compl. ¶ 15, ECF No. 1-1. TLE Marketing then filed a complaint in Minnesota
asserting claims for breach of contract, wrongful termination in violation of Minn. Stat. §
325E.37, and failure to pay commissions in violation of Minn. Stat. § 325E.37 and §
181.145. Compl. ¶¶ 19-44. After filing an answer and counterclaim, WBM moved to
transfer venue to the United States District Court for the District of New Jersey. ECF No.
7. WBM contends that the above forum-selection clause requires transfer. WBM Br. 12. TLE Marketing insists that the forum-selection clause is “void, as against Minnesota
public policy,” and, therefore, the Court should deny the motion to transfer. TLE
Marketing Br. 1-2.
STANDARD OF REVIEW
28 U.S.C. § 1404(a) provides that, “[f]or the convenience of the parties and
witnesses, in the interest of justice, a district court may transfer any civil action to any
other district or division where it might have been brought.” 1 If, however, “the parties
have agreed to a valid forum-selection clause, a district court should ordinarily transfer
the case to the forum specified in that clause. Only under extraordinary circumstances
unrelated to the convenience of the parties should a § 1404(a) motion be denied.” Atl.
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Neither party disputes that venue is proper under 28 U.S.C. § 1391 in either Minnesota or New Jersey.
The Court agrees. See Rogovsky Enter., Inc. v. MasterBrand Cabinets, Inc., 88 F. Supp. 3d 1034,
1040 (D. Minn. 2015) (explaining requirement that a court determine proper venue before transferring).
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Marine Constr. Co., Inc. v. United States District Court for the Western District of Texas,
134 S. Ct. 568, 581 (2013).
In deciding whether to transfer to the preselected forum, “the plaintiff’s choice of
forum merits no weight” and the Court may not “consider arguments about the parties’
private interests.” Id. at 581-82. Rather, the Court “may consider arguments about
public-interest factors only.” Id. at 582. Those factors include “the administrative
difficulties flowing from court congestion; the local interest in having localized
controversies decided at home; [and] the interest in having the trial of a diversity case in a
forum that is at home with the law.” Id. at 582 n.6 (citation omitted). But “[b]ecause
those [public-interest] factors will rarely defeat a transfer motion, the practical result is
that forum-selection clauses should control except in unusual cases.” Id. at
582. Although such cases are “conceivable,” they “will not be common.” Id.
The plaintiff bears the burden of establishing public-interest factors amounting
to the “extraordinary circumstances” required to deny the transfer. Id.
DISCUSSION
TLE Marketing does not oppose the motion to transfer by arguing that the forumselection clause is invalid. See M.B. Rests., Inc. v. CKE Rests., Inc., 183 F.3d 750, 752
(8th Cir. 1999) (explaining that forum-selection clauses are “invalid for reasons such as
fraud or overreaching”). Instead, it argues that the clause is unenforceable as against
Minnesota public policy.
To prove this, TLE Marketing relies on Minn. Stat. § 325E.37, which is the source
of some of TLE Marketing’s claims against WBM. The statute states:
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(a) No manufacturer, wholesaler, assembler, or importer shall circumvent
compliance with this section by including in a sales representative agreement a
term or provision, whether express or implied, that includes or purports to
include: (1) an application or choice of law of any other state; or (2) a waiver
of any provision of this section.
(b) Any term or provision described in paragraph (a) is void and unenforceable.
Minn. Stat. § 325E.37, subd. 7. TLE Marketing maintains that the above language
“renders void not only ‘choice of law’ contract provisions” in sales representative
contracts, “but any contract term ‘express or implied’ which either circumvents or is
contrary to any provision of the Act.” TLE Marketing Br. 1-2. The forum-selection
clause, TLE Marketing insists, is contrary to Minn. Stat. § 325E.37 and, therefore, is
“void and unenforceable.” Id. at 10.
TLE Marketing appears to concede that neither the statute nor judicial
interpretations of the statute clearly bar forum-selection clauses in sales representative
contracts. See id. at 10-11 (stating that “no court has yet rendered an opinion regarding
the scope of the [statute’s] anti-waiver provision or the question presented by this
motion”). TLE Marketing nevertheless raises two arguments that forum-selection clauses
conflict with the statute and, by extension, a Minnesota public policy. The Court
considers each in turn.
First, TLE Marketing chronicles the history of amendments to Minn. Stat. §
325E.37. It contends the amendments demonstrate that the Minnesota legislature “has
annunciated a public policy in favor of affording significant statutory protection to
commissioned independent sales representatives.” Id. at 9-10. It then explains that the
statute allows a sales representative to choose between pursuing claims in arbitration or
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in a court of law. Id. at 10 (citing Minn. Stat. § 325E.37, subd. 5). From this, it
concludes: “Implicit in this statutory mandate is the sales representative’s right, as a
matter of public policy, to choose the location of that forum.” Id. It also concludes “that
this policy is superior to that general policy sustaining the enforcement of contractual
venue provisions.” Id.
The Court disagrees. Minn. Stat. § 325E.37 says nothing about forum-selection
clauses or venue, explicitly or implicitly. It prohibits only “choice of law” clauses and
“waiver[s] of any provision of this section,” and no provision of this section relates to
forum-selection clauses or venue. Minn. Stat. § 325E.37, subd. 7. See also FergusonKeller Assocs., Inc. v. Plano Molding Co., LLC, No. 17-1713, 2017 WL 3578703 (D.
Minn. Aug. 8, 2017) (transferring action concerning Minn. Stat. § 325E.37, the same
statute at issue here, because the underlying contract contained a valid forum-selection
clause). Although TLE Marketing correctly explains that Minn. Stat. § 325E.37 reveals a
legislative intent to protect sales representatives, there is no evidence that this intent
extends to forum-selection clauses. As a result, there is no reason for the Court to
conclude, based on the statute itself, that the forum-selection clause in the contract
between WBM and TLE Marketing conflicts with a Minnesota public policy.
Second, TLE Marketing cites decisions from jurisdictions outside Minnesota to
argue that a Minnesota public policy prohibits forum-selection clauses in sales
representative contracts. Specifically, TLE Marketing cites a decision from a state court
in Illinois, a decision from a state court in New Jersey, and three decisions from federal
district courts in Wisconsin. TLE Marketing Br. 11-15. The cited decisions construe
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statutes from those jurisdictions as announcing public policies against enforcement of
forum-selection clauses. TLE Marketing argues that the statutes at issue in those cases
are similar to Minn. Stat. § 325E.37 and, therefore, this Court should follow the
reasoning in the cited decisions to conclude that Minn. Stat. § 325E.37 reflects a
Minnesota public policy against enforcement of forum-selection clauses in sales
representative contracts. Id.
Again, the Court disagrees. There is no reason to conclude, based on the cited
decisions from Illinois, New Jersey, and Wisconsin, that Minn. Stat. § 325E.37 creates a
Minnesota public policy barring forum-selection clauses in sale representative
contracts. The cited decisions are not binding on this Court. And at any rate, all the cited
decisions predate the Supreme Court’s announcement in Atlantic Marine of the exacting
showing required to overcome a valid forum-selection clause. 134 S. Ct. at 581-82
(stating that refusal to transfer to preselected venue is uncommon and warranted only in
“extraordinary circumstances,” when “exceptional factors appear to be present”). What
is more, subsequent decisions in Illinois, New Jersey, and Wisconsin have either
questioned or rejected most of the decisions to which TLE Marketing cites. See WBM
Reply 6-10, ECF No. 21.
For the above reasons, the Court finds that TLE Marketing failed to meet its heavy
burden of showing an “extraordinary circumstance” that justifies rejecting the forumselection clause for which it contracted. Therefore, IT IS ORDERED THAT:
1. Defendant WBM’s motion to transfer venue [ECF No. 7] is GRANTED.

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2. This action is TRANSFERRED to the United States District Court for the
District of New Jersey.
3. The Clerk of the Court is directed to take all steps necessary to effectuate this
transfer.

Dated: November 16, 2017
s/ Joan N. Ericksen
JOAN N. ERICKSEN
United States District Judge

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