Watch & Accessory Co v. Garmin International Inc
1:21-cv-00382
E.D. Wis.Dec 30, 2021Background
- Oct 2015: WatchCo and Garmin signed a written "Domestic Dealer Agreement – Specialty Market" appointing WatchCo a non-exclusive, independent dealer; agreement included Kansas choice-of-law and exclusive Kansas state-court jurisdiction clause.
- Garmin sold product to WatchCo at deep discounts (initially 45% then 35% off MRP); in Feb 2021 Garmin sent a letter conditioning discounts on WatchCo’s sales channel (15% off if selling on marketplaces like Amazon; 25% if selling only on WatchCo’s website; 35% retained only if majority brick-and-mortar sales and no Amazon sales).
- Garmin’s letter gave WatchCo 60 days to elect a business model and stated discounts would drop to 15% after 90 days if no election was made.
- WatchCo sued in Wisconsin state court under the Wisconsin Fair Dealership Law (WFDL), alleging Garmin’s pricing change was a substantial change in competitive circumstances and that Garmin failed to give required notice/cure rights; sought injunction, damages, and fees.
- Garmin removed under diversity jurisdiction, moved to dismiss (12(b)(6) and forum non conveniens); the court had earlier dismissed the first complaint for failure to plead "dealer" under WFDL but allowed amendment.
- The court (Dec. 30, 2021) held the forum-selection clause binding under federal law (Atlantic Marine), found no extraordinary circumstances, and dismissed WatchCo’s amended complaint on forum non conveniens grounds without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of forum-selection clause against WFDL public-policy objection | Cutter supports refusing enforcement because WFDL is remedial and contracts may not vary its effect | Atlantic Marine and federal law favor enforcing valid forum clauses; parties agreed Kansas state courts | Forum clause enforceable; no extraordinary circumstances; dismissal on forum non conveniens |
| Contractual invalidity of forum clause (fraud/coercion/unconscionability) | WatchCo did not allege fraud/coercion; relied on public-policy objection instead | Clause is contractually valid and not challenged on ordinary contract grounds | Court treated clause as contractually valid and proceeded under Atlantic Marine steps |
| Whether WFDL bars enforcement / choice-of-law concern | WFDL forbids varying its effect by contract, so Kansas forum/choice-of-law could deny WFDL protection | Choice-of-law and statutory-protection questions are for the forum-selected court; federal law governs forum-enforcement analysis | Court: choice-of-law is open; WFDL objection does not present extraordinary circumstances to defeat clause; dismissal without prejudice |
Key Cases Cited
- Atlantic Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., 571 U.S. 49 (2013) (federal policy enforces valid forum-selection clauses absent extraordinary circumstances)
- Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22 (1988) (plaintiff’s forum choice receives no deference when parties contractually selected a forum)
- Stroitelstvo Bulgaria Ltd. v. Bulgarian-American Enter. Fund, 589 F.3d 417 (7th Cir. 2009) (explains forum non conveniens in Seventh Circuit)
- Mueller v. Apple Leisure Corp., 880 F.3d 890 (7th Cir. 2018) (forum-selection clauses are enforced through forum non conveniens)
- Stawski Distrib. Co. v. Browary Zywiec SA, 349 F.3d 1023 (7th Cir. 2003) (forum-selection clauses enforceable even where choice-of-law may deny a plaintiff’s preferred statutory protection)
- Cutter v. Scott & Fetzer Co., 510 F. Supp. 905 (E.D. Wis. 1981) (refused to enforce forum clause in WFDL case based on Wisconsin public-policy concerns)