Case Split Based Upon Differing Forum Selection Clauses

Posted on October 21, 2011 by R. David Donoghue

Moran Indus. Inc. v. Baker, No. 10 C 7653, Slip Op. (N.D. Ill. May 27, 2011) (Hibbler, Sen. J.).

Judge Hibbler granted in part defendant's motion to dismiss and transfer in this Lanham Act case over Mr. Transmission and Meineke Car Care Center marks. Defendant allegedly violated franchise agreements with plaintiff Moran and plaintiff Meineke by using both plaintiffs' trademarks at defendants' auto repair shop. Moran's franchise agreement had an exclusive jurisdiction provision requiring cases be brought in the Northern District of Illinois. So, Moran's claims were not dismissed. Meineke's agreement, however, had no such exclusive provision. So, Meineke's claims were dismissed for lack of personal jurisdiction.
 

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Court has Personal Jurisdiction, but Venue is Improper

Posted on August 25, 2008 by R. David Donoghue

Moran Indus., Inc. v. Higdon, No. 07 C 6092, Slip Op. (N.D. Ill., Jul. 26, 2008) (Guzman, J.).

Judge Guzman held that the Court had personal jurisdiction over the defendants, but dismissed plaintiff’s trademark and breach of contract case for improper venue. Defendants, various franchisees of plaintiff, were all residents of and operated their franchises in various combinations of Indiana, Kentucky and Tennessee. Each relevant franchise agreement had a forum selection clause consenting to jurisdiction in the Northern District. But the Court held that the clause was permissive, allowing defendants to challenge personal jurisdiction. While defendants were not Illinois residents, their numerous contacts with plaintiff — sending plaintiff royalty payments and reports to Illinois and attending training in Illinois, among others — created personal jurisdiction.

 

While defendants were subject to personal jurisdiction in Illinois, the Court held that the Northern District was not the proper venue. A substantial part of the harm alleged occurred not in Illinois, but in Indiana, Kentucky and Tennessee. Those were the states where defendants allegedly failed to make payments, not Illinois. The Courts, therefore, dismissed the case.

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