The opinion of the court was delivered by: Wolin, District Judge.
This matter comes before the Court on defendant's motion to (1)
to Rule 12 of the Federal Rules of Civil Procedure, or in the
alternative, (2) transfer venue pursuant to 28 U.S.C. § 1404(a).
Defendant, Tektronix, Inc. ("Tektronix"), argues that the
District of New Jersey is an improper forum to hear this case. In
making this argument, defendant points to a forum-selection
clause in an agreement signed by the parties which directs any
litigation to be brought in Oregon. Plaintiff, Cadapult Graphic
Systems, Inc. ("Cadapult"), opposes the motion. Cadapult
maintains that the forum-selection clause is invalid because it
is contained in a franchise agreement, thus, making it
presumptively invalid pursuant to New Jersey law. See Kubis &
Perszyk Assocs., Inc. v. Sun Microsystems, Inc., 146 N.J. 176,
680 A.2d 618 (1996). The matter has been decided on the papers,
pursuant to Rule 78 of the Federal Rules of Civil Procedure. For
the reasons stated below, the Court will grant defendant's motion
to transfer venue to the District of Oregon.
Plaintiff, Cadapult, is a Delaware corporation with its
principal place of business in New Jersey. Cadapult is in the
business of reselling digital color printers and supplies and
providing parts and service for such printers. Defendant,
Tektronix, is an Oregon corporation with its principal place of
business in Oregon. Tektronix is in the business of manufacturing
and selling digital color printers and supplies, including a
patented form of solid ink for color printers.
In October 1988, Cadapult entered into an agreement with
Tektronix, entitled "Value Added Dealer Agreement," pursuant to
which Cadapult could purchase Tektronix products at a discounted
price for resale and could use Tektronix's trademark and
advertising materials in connection with the resale of Tektronix
products. Under the terms of this agreement, Tektronix appointed
Cadapult to be an "authorized value added dealer." In August
1991, the parties entered into a subsequent "Value Added Dealer
Agreement" (the "Agreement"). Cadapult remains a "value added
dealer" pursuant to the August 1991 Agreement.
Both agreements contain a forum-selection clause. The clause
Governing Law. This Agreement and the rights of the
parties hereunder shall be governed by the laws of
the State of Oregon. Any litigation between the
parties shall be commenced and prosecuted in the
state and federal courts in Oregon.
Cadapult contends that this clause was non-negotiable.
Specifically, Cadapult asserts that, at the time of contracting,
it was a fledgling company and that it "feared" negotiations may
jeopardize its status as a "value added dealer."
Tektronix, on the other hand, maintains that Cadapult "had
every opportunity to negotiate" this clause. Indeed, Tektronix
points to an established procedure which it follows in
negotiating dealer's concerns. Moreover, defendant asserts that
they never advised Cadapult that this clause was non-negotiable,
nor did Cadapult object to the inclusion of this clause. Further,
they point out that, in 1991, Cadapult was an established
business with three years experience.
In August 1999, Cadapult filed a multicount complaint in this
Court. Notably, the complaint alleged no violation of the "Value
Added Dealer Agreement." Similarly, it did not allege that
Tektronix's practices pursuant to this Agreement violated the New
Jersey Franchise Practices Act ("Franchise Act"). Instead,
Cadapult's complaint alleged, inter alia, (1) Franchise Act
violations of a different agreement, entitled the "Premier Plus
Reseller Program," (2) breach of contract, and (3) various
federal and state statutory violations.
As to the alleged Franchise Act violations relating to the
"Premier Plus Reseller Program," the Court, in a prior opinion,
has already found those allegations substantially
devoid of merit. See Cadapult Graphic Systems, Inc. v.
Tektronix, Inc., Civ. No. 99-3779, Memorandum Op., Aug. 25,
1999. At the outset of this action Cadapult moved, based on the
alleged Franchise Act claims, for a temporary restraining order
and a preliminary injunction. Cadapult maintained that defendant
violated the Franchise Act because defendant discontinued
Cadapult's participation in the "Premier Plus Reseller Program."
The Court denied Cadapult's motion, holding that Cadapult would
not likely succeed on the merits. See id. at 7-9. The court did
so because the "Premier Plus Reseller Program" did not constitute
a franchise agreement within the meaning of the Franchise Act.
Specifically, the Court found that Cadapult failed to demonstrate
a "written agreement," a "license to Use Tektronix's tradename or
trademark," and a "community of interest" between Cadapult and
Tektronix. See id.; see also N.J.S.A. § 56:10-3(a) (defining a
"franchise" as a "written agreement in which a person grants to
another person a license to use a trade name, trade mark, service
mark, or related characteristics, and in which there is a
community of interest in the marketing of goods or services. . .
After the Court denied the preliminary injunction, Tektronix
brought the instant motion. In this motion, Tektronix seeks
either dismissal or transfer of this case pursuant to the
above-quoted forum-selection clause. Cadapult, however, maintains
that the forum-selection clause is invalid under the New Jersey
Supreme Court's decision, Kubis & Perszyk Assocs., Inc. v. Sun
Microsystems, Inc., 146 N.J. 176, 680 A.2d 618 (1996).*fn1 For
the reasons discussed immediately below, the Court will grant the
motion to transfer, finding that the facts of this case do not
The present motion hinges around the Agreement's
forum-selection clause. "In federal court, the effect to be given
a contractual forum selection clause in diversity cases is
determined by federal not state law." Jumara v. State Farm Ins.
Co., 55 F.3d 873, 877 (3d Cir. 1995); see also Stewart Org.,
Inc. v. Ricoh Corp., 487 U.S. 22, 27-32, 108 S.Ct. 2239, 101
L.Ed.2d 22 (1988).
Section 1404(a) provides:
For the convenience of parties and witnesses, in the
interest of justice, a district court may transfer
any civil action to any other district or ...