GERALD E. ROSEN, Chief District Judge.
This matter is presently before the Court on the Motion for Change of Venue filed by Defendants Fox Tracks, Inc., a Minnesota corporation, and its owners, Lawrence and Joan Bahr Davis. Plaintiffs Allegra Network, LLC and Allegra Holdings, LLC (collectively referred to herein as "Allegra") have responded and oppose Defendants' Motion. Having reviewed the parties' briefs, the accompanying exhibits, and the record as a whole, the Court finds that the pertinent facts and legal contentions are sufficiently presented in these materials, and that oral argument would not assist in the resolution of this matter. Accordingly, the Court will decide this matter "on the briefs." See Eastern District of Michigan Local Rule 7.1(f)(2). This Opinion and Order sets forth the Court's ruling.
This case arises out of the Defendants' alleged violation of a non-compete covenant contained in a franchise agreement entered into by Allegra Network, LLC, as franchisor, and Fox Tracks, Inc. ("Fox"), as franchisee. The Allegra plaintiffs are Michigan limited liability companies with their principal places of business in Plymouth, Michigan. Defendant Fox is a Minnesota corporation with its principal place of business in Burnsville, Minnesota. Defendants Lawrence and Joan Davis, the owners of Fox, are citizens of the State of Minnesota.
On April 8, 2003, Allegra Network entered into a written franchise agreement with Fox (the "Franchise Agreement") pursuant to which Fox would operate an Allegra Print and Imaging Center in Burnsville, Minnesota. Lawrence and Joan Davis executed a Guarantee and Assumption of Obligations Agreement (the "Guarantee") at the same time, guaranteeing Fox's obligations under the Franchise Agreement.
In order to induce Allegra to grant them a franchise, Defendants specifically agreed, among other things, that, for a two-year period following termination of the Franchise Agreement, they would not engage in the same or similar business within ten miles of the franchised location, or within five miles of any other Allegra-franchised location. Defendants also agreed that upon termination of the Franchise Agreement, it would immediately cease using the Allegra marks, return all manuals and training materials, and assign to Allegra all telephone numbers used in connection with the operation of their Allegra center.
The Franchise Agreement expired on June 13, 2013. After the termination of the Agreement, however, Defendants continued to operate an allegedly competing business at the formerly-franchised location, in violation of their post-termination obligations under the Franchise Agreement. According to Plaintiffs, in operating this competing business, Defendants used Plaintiffs' customer lists and confidential information, and advertised and held themselves out as an Allegra business. Defendants also failed to transfer the telephone number of their formerly-franchised business to Allegra as required under the Franchise Agreement.
On August 14, 2013, Plaintiffs filed a four-count Complaint against Defendants in this Court seeking injunctive relief and damages, under theories of trademark infringement (Count I), unfair competition (Count II), breach of the Franchise Agreement (Count III) and breach of the Guarantee Agreement (Count IV). On October 22, 2013, Defendants responded by way of the instant Motion for Change of Venue, seeking a change of venue to the District Court for the District of Minnesota. Defendants argue that the Franchise Agreement and the Minnesota Franchise Act (the "MFA") require that Allegra litigate its claims against them only within the State of Minnesota.
As an initial matter, the Court notes that, although Defendants ostensibly brought this motion pursuant to Fed. R. Civ. P. 12(b)(3),
As the Court noted in Atlantic Marine, in the typical case not involving a forum selection clause, a district court considering a § 1404(a) motion would "weigh the relevant factors and decide whether, on balance a transfer would serve `the convenience of parties and witnesses" and otherwise promote "the interests of justice." 134 S.Ct. at 581 (quoting 28 U.S.C. § 1404(a)). "The calculus changes, however, when the parties' contract contains a valid forum-selection clause which `represents the parties' agreement as to the most proper forum.'" Id. (quoting Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 31 108 S.Ct. 2239 (1988)). "The enforcement of valid forum-selection clauses, bargained for by the parties, protects their legitimate expectations and furthers vital interests of the justice system." Id.
Id. at 583.
With these principles in mind, the Court's analysis turns to ascertaining whether the parties here bargained for a Michigan or a Minnesota forum when entering into the Franchise Agreement.
In this case, the forum selection clause at issue is contained in Section 7 of the Rider to the Franchise Agreement.
Complaint, Ex. 1, Dkt. # 1-1, Pg. ID 63.
Notwithstanding Defendants' stated consent to this Court's venue (i.e., the "federal court of general jurisdiction nearest to Troy, Michigan"), Defendants maintain that Plaintiffs' filing suit in this Court is tantamount to "requiring litigation to be conducted outside Minnesota," thus violating the second part of Section 7 as well as Minnesota law, specifically Section 80C.21 of the Minnesota Franchise Act and Minnesota Rule 2860.4400(J).
First, there is nothing in the contractual language limiting Defendants' selection of a Minnesota court as a forum should they, as Franchisors, choose to file suit. See Ramada Worldwide, Incl. v. Grand Rios Investments, LLC, 2013 WL 5773085 at * 3 (D.N.J. Oct. 23, 2013) (construing a substantially similar Minnesota franchise agreement provision in denying defendant's motion for change of venue and finding that "[t]he Franchise Agreement does not contain any language indicating that Grand Rios or the other defendants waived any right to file suit in Minnesota." Id.)
Second, there is nothing in the contractual language or in the referenced Minnesota statutes or rule precluding parties to a franchise agreement from agreeing to a forum selection.
Section 80C.21 of the Minnesota Franchise Act states:
Minn. Stat. § 80C.21.
Defendants contend that the "anti-waiver" language in § 80C.21 precludes a franchisor from having to litigate in a non-Minnesota forum. Defendants read too much into this statutory provision. "A plain reading of the statute's language indicates that the rule is designed to prohibit waiver of the protections afforded to franchisees under the statute." Ramada Worldwide, supra, 2013 WL 5773085 at *3. See also Long John Silvers, Inc. v. Nickleson, 923 F.Supp.2d 1004, 1010 (W.D. Ky. 2013) ("The MFA's anti-waiver provision simply operates to prohibit the franchising contract from abrogating or contradicting rights afforded to Minnesota franchisees under the MFA.") Cf., Hoodz Intern., LLC v. Toschiaddi, 2012 WL 883912 (E.D. Mich. Mar. 14, 2012) (construing similar anti-waiver provision in California Franchise Relations Act and holding that that section of the CFRA "does not guarantee franchisees that they will litigate disputes in California; it merely ensures they will have the opportunity to do so." Id. at * 5 (quoting Big O Tires, LLC v. Felix Bros, Inc., 724 F.Supp.2d 1107, 1114 (D. Colo. 2010)).
The rights afforded Minnesota franchisees are set forth in §§ 80C.02 through 80C.22 of the MFA.
The only remotely relevant section here is § 80C.14 pertaining to "unfair practices," which provides:
Minn. Stat. § 80C.14.
Defendants do not, however, argue that commencing litigation outside Minnesota is an unfair or inequitable practice, and nothing in the cited provisions of the MFA so provide. Instead, Defendants rely upon Minnesota Rule 2860.4400, promulgated by the commissioner pursuant to 80C.14, which provides, in relevant part, that
It shall be unfair and inequitable for any person to:
Minn. R. 2960.4400(J).
Defendants make the same argument based on this rule that they made based on Section 80C.21 — i.e., that by filing suit in this Court Plaintiffs, in effect, have required them to waive their "rights to any procedure, forum or remedies provided for by the laws of [Minnesota]." However, nothing in the choice of forum provision in any way diminishes Defendants' right to avail themselves of Minnesota laws. A choice of forum is not tantamount to a choice of law. See Robbins & Meyers, Inc. v. J.M. Huber Corp., 2001 WL 967606 at *3 (W.D.N.Y. 2001) ("A choice-of-law clause and a forum selection clause are not the same, and address different needs and concerns.")
Id. (quoting In re Lois/USA, Inc., 264 B.R. 69, 101 (Bankr. S.D.N.Y. 2001).
In sum, construing the language of the forum selection clause in its entirety, the Court finds that the forum selection clause designating venue in Michigan is proper and valid since it does not operate as a waiver of Defendants' rights under the Minnesota Franchise Act.
The decision in Atlantic Marine now provides the analytical framework a court should employ when a valid and enforceable forum selection clause exists between the parties and one party moves to transfer venue pursuant to 28 U.S.C. § 1404(a). Since considerations of private factors such as convenience of the parties and their friendly witnesses automatically weigh in favor of the preselected forum, as the Supreme Court directed in Atlantic Marine, the court should only consider the public interest factors in deciding Defendants' motion. Atlantic Marine, 134 S.Ct. at 583. Although aware of the Atlantic Marine holding and its bearing upon a motion for transfer of venue under Section 1404(a), Defendants failed to advance any public interest factors or any other relevant 1404(a) factors supporting the transfer of the case to Minnesota. Defendants bear the burden of showing that public-interest factors overwhelmingly favor a transfer of venue. Id.
Defendants' likely argument, although solely hypothetical since it was never raised, that Minnesota would have been a more appropriate forum given the familiarity of Minnesota federal judges with litigation involving franchises operating in Minnesota, would have been easily refuted. Two of the counts of the Plaintiffs' complaint allege federal claims for violation of the Lanham Act with which federal judges in Michigan are just as familiar as their colleagues in District of Minnesota. The other two counts assert common law claims of breach of contract law. The Court knows of no exceptional features that would render it impossible of difficult for judges sitting in the Eastern District of Michigan to apply Minnesota law in deciding these common law claims. Therefore, the Court declines Defendants' invitation to transfer this case to the U.S. District Court for the District of Minnesota.
For all of the foregoing reasons,
IT IS HEREBY ORDERED that Plaintiff's Motion to Transfer Venue
SO ORDERED.
See Complaint, Ex. 1, Dkt. # 1-1, Pg ID 49.