Neff Group Distributors, Inc. v. Cognex Corporation
3:22-cv-00186
W.D. Wis.Aug 5, 2022Background:
- Cognex (Massachusetts manufacturer) and Neff (regional reseller) entered successive Strategic Partnership Agreements authorizing Neff to resell Cognex products in defined territories (Indiana/Illinois; Wisconsin; Ohio/Pennsylvania/West Virginia); the latest were one-year agreements effective Jan 1–Dec 31, 2021.
- Cognex notified Neff on Nov 2, 2021 that it would allow the agreements to expire without renewal; Neff threatened claims under the Wisconsin Fair Dealership Law (WFDL) and other theories.
- Neff sued in Dane County, Wisconsin (Mar 2, 2022) asserting WFDL, Indiana Deceptive Franchise Practices Act, promissory estoppel, unjust enrichment, and seeking injunctive relief; Cognex removed to federal court and moved to transfer under a Massachusetts forum-selection clause in the agreements.
- The agreements contain identical forum-selection clauses requiring exclusive litigation in Boston, Massachusetts, with a limited carve-out allowing injunctive relief in any court for unauthorized use/dissemination of Cognex products/software/confidential information.
- The district court evaluated (1) whether the forum-selection clause is contractually valid and applicable, and (2) whether public-interest factors under 28 U.S.C. § 1404(a) outweigh the clause; it concluded the clause is valid and applicable and that public factors do not present extraordinary circumstances to deny transfer.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of forum-selection clause | Clause invalid due to fraud/unequal bargaining power | Clause presumptively valid under federal and state law | Clause valid; plaintiff offered no evidence of fraud/undue influence |
| Applicability given equitable-relief carve-out | Carve-out allows injunctive/equitable claims to be brought in any court | Claims require interpretation/enforcement of the Agreement so clause applies | Carve-out is narrow; plaintiff's claims fall within clause and must be filed in Massachusetts |
| Conflict with Wisconsin Fair Dealership Law (WFDL) | WFDL lets dealers sue in "any court of competent jurisdiction," so clause is unenforceable | WFDL does not automatically void forum clauses; disputes can be litigated in Massachusetts | WFDL is not an "extraordinary circumstance" defeating the clause; Massachusetts forum acceptable |
| § 1404(a) public-interest factors | Faster time-to-trial and local court familiarity with Wisconsin law favor Wisconsin forum | Forum-selection clause controls; public factors rarely overcome it | Public-interest factors do not clearly disfavor transfer; case transferred to District of Massachusetts |
Key Cases Cited
- Atlantic Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Texas, 571 U.S. 49 (2013) (establishes framework: enforce valid forum-selection clauses and limit § 1404(a) analysis to public-interest factors)
- Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (forum-selection clauses are presumptively valid under federal law)
- Jackson v. Payday Fin., LLC, 764 F.3d 765 (7th Cir. 2014) (forum-selection clauses presumptively valid in Seventh Circuit)
- Mueller v. Apple Leisure Corp., 880 F.3d 890 (7th Cir. 2018) (applying Atlantic Marine transfer principles)
- Research Automation, Inc. v. Schrader-Bridgeport Int’l, Inc., 626 F.3d 973 (7th Cir. 2010) (flexible § 1404(a) analysis and private/public factors discussion)
- In re Ryze Claims Sols., LLC, 968 F.3d 701 (7th Cir. 2020) (forum-selection clause weight compared to speed of forum)
- Generac Corp. v. Caterpillar, Inc., 172 F.3d 971 (7th Cir. 1999) (limits WFDL application to relationships substantially connected to Wisconsin)
- Jacobson v. Mailboxes Etc. U.S.A., Inc., 646 N.E.2d 741 (Mass. 1995) (Massachusetts recognizes enforceability of fair forum-selection clauses)
- Converting/Biophile Labs., Inc. v. Ludlow Composites Corp., 296 Wis. 2d 273 (Wis. Ct. App. 2006) (forum-selection clauses presumptively valid under Wisconsin law)
- Baldewein Co. v. Tri-Clover, Inc., 233 Wis. 2d 57 (Wis. 2000) (WFDL applies only where relationship substantially exists in Wisconsin)
- Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22 (1988) (public-interest factors relevant to transfer analysis)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard; complaint facts accepted as true for motion-to-transfer analysis)