Niagara Bottling, LLC v. Rite-Hite Co. LLC

2019 WL 1768875 (2019)

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Nature of the Case

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Facts

Rite-Hite (D) is a manufacturer of loading dock equipment and other industrial products. P is a bottle manufacturer. From 2009 to 2015, P purchased more than 200 dock levelers from D. Beginning in 2014, the dock levelers began to fail, and D began making repairs at P's facilities. P believes that D knowingly sold dock levelers that were not manufactured in accordance with industry standards, which called for a higher weight tolerance than D's levelers had. As a result, P says it spent more than $3 million replacing failed dock levelers. On August 3, 2018, P sent D a demand letter, alleging its bases for D's liability. D's general counsel, Antonio Catalano, responded by filing a complaint in this Court on September 7, 2018, seeking a declaration that it did not breach any warranty to P and that it was not negligent in its dealings with P. On September 21, 2018, P filed suit against D in the Central District of California. P then filed the instant motion, asking that this Court either dismiss this case for lack of subject-matter jurisdiction based on D's alleged lack of standing, decline to exercise subject-matter jurisdiction, and dismiss in favor of allowing the Central District of California to decide the issues underlying both cases, stay this action until the California Action is resolved, or transfer this case to the Central District of California. D filed a similar motion in the California Action, asking that the case be stayed or transferred. The court in California issued an order denying D's request. D then filed its answer to P's complaint in the California Action. D's motion to transfer and P's opposition to that motion are both grounded in part on forum selection clauses contained in forms the parties exchanged throughout the course of their business relationship. Between 2009 and 2015, the parties engaged in several separate transactions. For each transaction, D would send P a quote for the purchase and installation of dock levelers at a specific bottling facility. P would then respond with a purchase order to complete the purchase. The quotes sent by D for purchases prior to September 25, 2014, did not contain a forum selection clause. For purchases after September 25, 2014, the quote form D sent contained a provision that read: ...This transaction shall be governed by the laws of the state of Wisconsin. The post-September 25, 2014 quote forms also contained a provision that reads, in relevant part: This Order expressly limits acceptance to the terms and conditions stated herein and any additional or different terms prepared by Purchaser in a purchase order or otherwise are objected to and rejected. All of the purchase orders P sent contained a clause on every page that read: All purchases made by Niagara are hereby expressly conditioned upon Seller's acceptance of, and agreement to abide by, Niagara's 'Standard Purchase Terms & Conditions,' without alteration or addition of Seller's terms. The parties agree that jurisdiction for the purpose of all issues of law, fact, or equity arising out of and/or in any way related to the Purchase Order, or any additions, amendments, or supplements thereto, shall be in the state or federal courts located in the State of California, only, and venue for the purpose of such a proceeding shall be in the County of San Bernardino, only. The interpretation of the Purchase Order, as well as any dispute related to or arising from the Purchase Order, shall be governed by California law. The D quote forms sent after September 25, 2014, and all of the P purchase orders, contained forum selection clauses pointing to different forums. And these documents each contained provisions expressly conditioning the purchase on acceptance of all of the terms contained in them, without modification. The parties also dispute whether the contract should be governed by the UCC which applies to contracts for the sale of goods, or the common law, which applies to contracts for services.