North Country Marketing, Inc. v. Mandako Agri Marketing (2010) Ltd.

Filing 36

ORDER by Chief Judge Daniel L. Hovland denying as moot 4 Motion to Dismiss; granting 22 Renewed Motion to Dismiss (NH)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NORTH DAKOTA

)
)
)
ORDER GRANTING
Plaintiff,
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DEFENDANTS’ MOTION
vs.
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TO DISMISS
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Mandako Agri Marketing (2010) Ltd.,
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and Mandako International, Inc.
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Case No. 3:17-cv-207
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Defendants.
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______________________________________________________________________________
North Country Marketing, Inc.,

Before the Court are two motions to dismiss. North Country Marketing, Inc. (“North
Country”) brought suit against Mandako Agri Marketing (2010) Ltd. in North Dakota state court
in September of 2017. See Docket No. 1-3. Mandako Agri Marketing (2010) Ltd. removed the
case to this Court on October 6, 2017, and filed a motion to dismiss on October 12, 2017. See
Docket Nos. 1 and 4. North Country filed an amended complaint on October 27, 2017, which
added Mandako International, Inc. as a defendant. See Docket No. 7. Both Defendants (together
“Mandako”) filed a renewed motion to dismiss on November 22, 2017. See Docket No. 22. North
Country filed a response on December 6, 2017. See Docket No. 29. Mandako filed a reply on
December 20, 2017. See Docket No. 32. For the reasons set forth below, the Court grants
Mandako’s renewed motion to dismiss.

I.

BACKGROUND
The background is based on the allegations in North Country’s amended complaint, which

the Court takes as true for purposes of deciding this motion to dismiss. See Knapp v. Hanson, 183
F.3d 786, 788 (8th Cir. 1999). North Country is a North Dakota corporation with its principal

place of business in West Fargo, North Dakota. See Docket No. 7, p. 1. Mandako Agri Marketing
(2010) Ltd. and Mandako International, Inc. are corporations organized under the laws of
Manitoba, Canada, with their principal place of business in Plum Coulee, Manitoba, Canada. Id.
Mandako manufactures and sells agricultural equipment, including land rollers and vertical
tillers. See Docket No. 7-1. Mandako sells its products in the United States through a dealership
network spanning a number of states. See Docket No. 7, p. 2. North Country began marketing
Mandako products in the United States in 2004. Id. In exchange for its marketing services, the
parties orally agreed North Country would receive a 9% commission on its sales of Mandako
products. See Docket No. 7, p. 3. The parties also agreed North Country would be Mandako’s
exclusive sales representative for land rollers in the United States and the exclusive sales
representative for all other Mandako products in the states of North Dakota, South Dakota,
Minnesota, Iowa, Nebraska, and Montana. Id. Along with its sales and marketing activities, North
Country also stored and sold replacement parts for Mandako products. See Docket No. 5. North
Country received a 9% commission on non-warranty Mandako parts sales. Id. To accommodate
storing the parts, North Country increased the size of its headquarters. Id.
The parties entered into a written Sales Representative’s Agreement (the “2004
Agreement”) on July 8, 2004. See Docket No. 7, p. 6. The 2004 Agreement mirrored the terms
of the prior oral agreement. North Country would be the exclusive land roller sales representative
in the United States and the exclusive dealer for other Mandako products in the states of North
Dakota, South Dakota, Minnesota, Iowa, Nebraska, and Montana. Id. At the time of the 2004
Agreement, North Country was Mandako’s only sales representative in the United States. Id.
Mandako encouraged North Country to expand its sales territories into other states, and Mandako

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did so “at great expense in time, labor and money.” Id. Due to this effort, North Country began
“borrowing heavily to cover expenses.” See Docket No. 7, p. 7.
In July of 2014, the parties signed a new sales agreement. This began what North Country
describes as “a pattern of threatening termination of Sales Representative Agreements with North
Country and forcing North Country to enter into new agreements with reduced territories.” See
Docket No. 7, p. 10. The parties signed subsequent sales agreements in 2015 and 2016. See
Docket No. 7, pp. 9-10. The 2016 Sales Representative’s Agreement (“2016 Agreement”) limited
North Country’s exclusive representation to the states of North Dakota, South Dakota, Minnesota,
Iowa, and Wisconsin. See Docket No. 24-1, p. 3. It also contained the following forum and choice
of law provision:
This Agreement shall be governed by and shall be construed in accordance with the
laws of Manitoba. Proper legal venue for all matters related to this Agreements is
agreed as the closest to Winnipeg, Manitoba.
See Docket No. 24-1, p. 6. It also contained the following integration provision:
This Agreement constitutes the entire agreement between the parties pertaining to
its subject matter and it supersedes all prior contemporaneous agreements,
representations, and understandings of the parties. No supplement, modification,
or amendment of this Agreement shall be binding unless executed in writing by all
parties.
Id.
In September of 2017, North Country brought suit against Mandako Agri Marketing (2010)
Ltd. in North Dakota state court. See Docket No. 1-3. The complaint contained a panoply of
claims, including wrongful termination of various agreements, breach of various contracts, unjust
enrichment, and wrongful interference with business. See Docket No. 10, pp. 9-21. In an attempt
to follow North Dakota’s service of process laws, North Country filed the state action summons
and complaint with the North Dakota Secretary of State. See Docket No. 1-4. On September 15,

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2017, the Secretary of State sent the summons and complaint, along with an Admission of Service,
via registered mail, to Mandako Agri Marketing (2010) Ltd. See Docket No. 6-1.
Mandako removed the state lawsuit to this Court on October 6, 2017. See Docket No. 1.
On the same date, Mandako filed suit in Winnipeg, Manitoba, Canada. See Docket No. 5-1.
Mandako’s Canadian action brought claims for, among others, breach of contract, return of
equipment, and misappropriation of funds. See Docket No. 5-1, p. 5. On October 12, 2010,
Mandako filed a motion to dismiss the present case arguing service of process was insufficient
and, under the choice of forum provision contained in the 2016 Agreement, the proper forum is in
Winnipeg, Canada. See Docket Nos. 4 and 5. On October 27, 2017, North Country amended its
complaint. See Docket No. 7. The amended complaint alleges an oral North Dakota forum
selection agreement exists between the parties pursuant to a joint venture. See Docket No. 7, p.
22. It also added Mandako International, Inc. as a party. See Docket No. 7, p. 1. The amended
complaint and a summons were personally served on a Mandako purchasing manager in Manitoba,
Canada on November 22, 2017. See Docket Nos. 34 and 35. On the same date, Mandako renewed
its motion to dismiss alleging the same deficiencies asserted in its initial motion. See Docket Nos.
22 and 23.

III.

LEGAL DISCUSSION
This motion presents the threshold issues of whether service was adequate and whether this

Court is the proper venue for the case. Mandako asserts that neither the original nor the amended
complaint were properly served. See Docket No. 32, pp. 2-3. Mandako also argues that, given
the forum selection provision in the 2016 Agreement, venue is proper in Winnipeg, Canada. See
Docket No. 32, pp. 6-10. North Country, on the other hand, argues the parties had already verbally

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agreed, pursuant to a joint venture, that venue should be in North Dakota. See Docket No. 29, pp.
9-10. North Country claims that, to the extent the parties agreed otherwise in the 2016 Agreement,
North Country was under duress and their written agreement should be held void as
unconscionable. See Docket No. 29, pp. 10-12. The Court concludes the doctrine of forum non
conveniens applies to this case and consequently dismisses the suit without reaching the issue of
service of process. See Sinochem Int’l Co. v. Malaysian Int’l Shipping Corp., 127 S.Ct. 1184,
1192 (2007) (a district court need not address other threshold issues, including jurisdictional issues,
before dismissing a suit on forum non conveniens grounds).
This Court had occasion to explain the doctrine of forum non conveniens in Star Insurance
Company v. Continental Services, Inc., 916 F. Supp. 2d 936, 941 (D.N.D. 2013). The Court
explained:
In the seminal case discussing the forum non conveniens doctrine, the
United States Supreme Court explained that the doctrine gives courts the power, in
exceptional cases, to decline jurisdiction even when jurisdiction exists and venue is
proper. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 506–07, 67 S.Ct. 839, 91 L.Ed.
1055 (1947). . . . It is a discretionary doctrine which vests in the district courts the
power to abstain from the exercise of jurisdiction even where authorized by statute
if the litigation can be more appropriately conducted in a foreign tribunal. The
doctrine presupposes the existence of an adequate alternative forum where the
matter can be resolved. Id.; Cent. States Indus. Supply, Inc. v. McCullough, 218
F.Supp.2d 1073, 1081 (N.D. Iowa 2002). If such a forum exists, the trial court must
balance a number of non-exhaustive “public interest” and “private interest” factors
first set forth in Gilbert in making the forum determination. The “private interest”
factors consist of the following:
1) the relative ease of access to sources of proof;
2) the availability of compulsory process for attendance of unwilling, and
the cost of obtaining attendance of willing, witnesses;
3) the possibility of view of the premises, if view would be appropriate to
the action; and
4) all other practical problems that make trial of a case easy, expeditious
and inexpensive.
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McCullough, 218 F.Supp.2d at 1081. The “public interest” factors consist of the
following:
1) administrative difficulties flowing from court congestion;
2) the forum’s interest in having localized controversies decided at home;
3) the interest in having the trial of a diversity case in a forum that is at
home with the law that must govern the action;
4) the avoidance of unnecessary problems in conflict of laws, or in the
application of foreign law; and
5) the unfairness of burdening citizens in an unrelated forum with jury
duty.
Star Ins. Co. at 941 (emphasis in original).
The Court first finds an alternative forum exists. “This requirement is satisfied, ordinarily,
if the defendant is amenable to process in the alternative jurisdiction.” De Melo v. Lederle Labs.,
801 F.2d 1058, 1061 (8th Cir. 1986). The parties are currently engaged in litigation before the
Court of Queen’s Bench for Manitoba, in Winnipeg, Canada. See Docket Nos. 5-1. Thus, the
preliminary requirement of an alternative forum is satisfied.

The Court now turns to its

consideration of the private and public interest factors.
There is generally a strong presumption in favor of a plaintiff’s choice of forum. Piper
Aircraft Co. v. Reyno, 454 U.S. 235, 257 (1981). However, the presumption shifts against the
plaintiff when the parties’ agreement contains a forum selection clause:
[A]s the party defying the forum-selection clause, the plaintiff bears the burden of
establishing that transfer to the forum for which the parties bargained is
unwarranted. Because plaintiffs are ordinarily allowed to select whatever forum
they consider most advantageous (consistent with jurisdictional and venue
limitations), we have termed their selection the “plaintiff’s venue privilege.” But
when a plaintiff agrees by contract to bring suit only in a specified forum—
presumably in exchange for other binding promises by the defendant—the plaintiff
has effectively exercised its “venue privilege” before a dispute arises. Only that

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initial choice deserves deference, and the plaintiff must bear the burden of showing
why the court should not transfer the case to the forum to which the parties agreed.
Atlantic Marine Const. Co. v. United States Dist. Court for the W. Dist. of Tex., 571 U.S. 49, 6465 (2013) (internal citation omitted). Thus, when the parties have agreed to a forum-selection
clause, “[a] court accordingly must deem the private-interest factors to weigh entirely in favor of
the preselected forum.” Id. at 65.
North Country attacks the validity of the 2016 Agreement’s forum selection clause on a
number of grounds. First, North Country argues that the parties verbally agreed North Dakota
would be the proper forum pursuant to their alleged joint venture. See Docket No. 29, pp. 8-10.
The Court notes that, although North Country has asserted the existence of a joint venture, it has
not pled any specific facts concerning the parties alleged decision to make North Dakota their
chosen forum. For example, it is not clear when, where, or how the parties came to this purported
oral agreement. Even assuming the parties had orally agreed to a North Dakota forum, they
subsequently agreed to a Canadian forum in writing. The 2016 Agreement contains an integration
provision that states it supersedes “all prior contemporaneous agreements, representations, and
understandings of the parties.” See Docket No. 24-1, p. 6.
North Country also challenges the Winnipeg forum selection provision on grounds that the
various sales representative agreements do not manifest its intent. North Country argues: “To the
extent that there may be any signed agreements between North Country and defendants naming
Winnipeg as the proper venue, they were acquired by defendants through duress and
unconscionable dealings.” See Docket No. 29, p. 10. North Country asserts Mandako had
knowledge of North Country’s strained financial position and Mandako used that knowledge to
leverage a number of increasingly unfavorable sales representative agreements, including the 2016

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Agreement containing the forum selection provision. See Docket No. 7, pp. 9-10 and Docket No.
29, pp. 11-12.
“Unconscionability is a doctrine which allows courts to deny enforcement of a contract
because of procedural abuses arising out of the contract’s formation or substantive abuses relating
to the terms of the contract.” Strand v. U.S. Bank Nat’l Assoc. ND, 2005 ND 68, ¶ 4, 693 N.W.2d
918 (citing Weber v. Weber, 1999 ND 11, ¶ 11, 589 N.W.2d 358). Procedural abuses relate to
deficiencies in the contract formation process and encompass factors relating to unfair surprise,
oppression, and inequality of bargaining power. Id. at ¶ 7. Substantive abuses concern the contract
provision in question and occur when the terms of a contract are unreasonably unfavorable, impair
the bargaining process, or contravene the public interests. Id at ¶ 10 (quoting 8 Richard A. Lord,
Williston on Contracts § 18.10 (4th ed. 1998).
The Court finds the facts of this case, as pled by North Country, do not meet the
requirements for unconscionability. Even if Mandako used North Country’s unfavorable financial
situation as leverage in negotiations, North Country is a sophisticated commercial entity. North
Country engaged in business across a number of states, over a number of years, with a number of
dealerships, and as this case demonstrates, with at least one foreign corporation. Although North
Country may have felt compelled to enter into the 2016 Agreement because of its debt, this does
not amount to unconscionability given this commercial context. The Court, having determined
the parties’ choice of forum provision is valid and not unconscionable, assumes all of the private
interest factors weigh in favor of a Winnipeg forum. See Atlantic Marine, 571 U.S. at 64.
The Court turns now to the second part of its inquiry—the public interest factors. North
Country argues these factors weigh in its favor because most of its sales have been in North Dakota
and it anticipates calling witnesses from North Dakota. See Docket No. 29, p. 14. Mandako argues

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the opposite, contending its connection to Manitoba’s economy and the parties’ Canadian choice
of law provision tilt the scale in its favor. “[P]ublic interest factors favor dismissal where the court
would be required to untangle choice of law problems and analyze foreign law.” Fraizer v. St.
Jude Med., Inc., 609 F. Supp. 1129, 1132 (D. Minn. 1985). After weighing the factors, the Court
concludes the public interest does not outweigh the parties’ written forum selection. See Atlantic
Marine, 571 U.S. at 62. (“a valid forum-selection clause should be given controlling weight in all
but the most exceptional cases”).

IV.

CONCLUSION
The Court has carefully reviewed the entire record, the parties’ filings, and the relevant

law. For the reasons set forth above, the Defendants’ renewed motion to dismiss (Docket No. 22)
is GRANTED and the Plaintiff’s amended complaint is DISMISSED. The Court also DENIES
AS MOOT Mandako Agri Marketing (2010) Ltd.’s motion to dismiss (Docket No. 4).
IT IS SO ORDERED
Dated this 10th day of May, 2018.
/s/ Daniel L. Hovland
Daniel L. Hovland, Chief Judge
United States District Court

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