Hupy & Abraham SC v. Quintessa LLC
2:21-cv-00577
E.D. Wis.Nov 19, 2021Background
- Hupy & Abraham, S.C. sued Quintessa LLC in the Eastern District of Wisconsin (complaint filed May 5, 2021) and moved for an emergency preliminary injunction; Quintessa moved to dismiss under Rule 12(b)(3)/(6).
- The parties executed a February 3, 2021 contract: Quintessa provided bulk legal-marketing and screening services; Hupy prepaid $100,000 and Quintessa deducted for qualifying retainers.
- The contract contains a broad AAA arbitration clause requiring arbitration in Oklahoma City for virtually all disputes and a separate clause requiring any non‑arbitrable disputes to be litigated exclusively in Oklahoma County state court; choice of law: Oklahoma.
- Hupy gave 30‑day nonrenewal notice on April 1, 2021 and demanded credits for allegedly unqualified plaintiffs; dispute over continuing retention prompted the lawsuit and injunction motion.
- The court evaluated enforceability of the arbitration/forum‑selection clauses under Atlantic Marine, rejected Hupy’s unconscionability arguments, concluded the contractual forum selection governs, and dismissed the case without prejudice under the doctrine of forum non conveniens; the preliminary injunction was denied as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of arbitration clause (unconscionability) | Clause is procedurally and substantively unconscionable (unequal bargaining power; carve‑out for Quintessa; remote forum) | Clause is negotiated and valid; Hupy had meaningful choice; carve‑out narrow; location negotiable | Arbitration clause is valid under Oklahoma and Wisconsin law; unconscionability not shown |
| Appropriate remedy to enforce forum clause | Venue in EDWI is proper; should proceed here | Contract requires arbitration or Oklahoma forum; where clause points to nonfederal forum, enforce via forum non conveniens dismissal | Under Atlantic Marine, forum selection to a state forum is enforced via forum non conveniens; dismissal appropriate |
| Public‑interest / localization factors | Wisconsin has an interest (Hupy HQ; clients located in WI/IL/IA) | Oklahoma has comparable local interest and parties agreed to Oklahoma forum | Public‑interest factors do not overcome the parties’ forum choice; dismissal stands |
| Preliminary injunction | Emergency relief needed to stop Quintessa’s alleged continued retention | Forum selection/arbitration governs and case should be dismissed | Injunction denied as moot after dismissal |
Key Cases Cited
- Atlantic Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., 134 S. Ct. 568 (2013) (forum‑selection clauses pointing to state fora are enforced by forum non conveniens; contractual forum choice controls and private‑interest factors drop out).
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) (challenges to the validity of an arbitration clause may be decided by a court).
- Mueller v. Apple Leisure Corp., 880 F.3d 890 (7th Cir. 2018) (district court may treat a 12(b)(3) motion invoking a forum‑selection clause as a forum non conveniens dismissal).
- Haber v. Biomet, Inc., 578 F.3d 553 (7th Cir.) (when arbitration clause points to another forum, district court outside that forum cannot compel arbitration and may dismiss).
- Jackson v. Payday Fin., LLC, 764 F.3d 765 (7th Cir. 2014) (an agreement to arbitrate is a form of forum‑selection clause).
- Wis. Auto Title Loans, Inc. v. Jones, 714 N.W.2d 155 (Wis. 2006) (Wisconsin standards for procedural and substantive unconscionability).