By: WISCONSIN LAW JOURNAL STAFF//July 28, 2014//
U.S. Court of Appeals for the 7th Circuit
Civil
Civil Procedure — standing
A party to a contract with a forum-selection clause has standing to sue to prevent arbitration.
“This case for standing is even stronger. A forum-selection clause with a company would be worth little if it could be avoided by merely pursuing the company’s affiliate or its employees as individuals. Our decision in American Patriot Insurance Agency, Inc. v. Mutual Risk Management, Ltd., 364 F.3d 884 (7th Cir. 2004), makes clear that the McDonalds’ obligations could not be so easily avoided. That case involved a number of affiliated insurance companies that entered into a web of contracts with the plaintiff. The plaintiff sued some but not all of the insurers. We allowed the named defendants to enforce a forum-selection clause contained in one of the contracts even though none of the defendants were signatories to that particular document. The contracts, we explained, functioned as a package. If a plaintiff could ‘defeat a forum-selection clause by its choice of provisions to sue on, of legal theories to press, and of defendants to name in the suit,’ then ‘such clauses would be empty.’ Id. at 888; see also Frietsch v. Refco, Inc., 56 F.3d 825, 827–28 (7th Cir. 1995); Hugel v. Corp. of Lloyd’s, 999 F.2d 206, 209–10 (7th Cir. 1993). That reasoning is equally applicable here, where the Bank signed the particular contract at issue but was not itself named as a respondent in the McDonalds’ arbitration de-mand.” Reversed and Remanded.
13-2635 J.P. Morgan Chase Bank, N.A., v. McDonald
Appeal from the United States District Court for the Northern District of Illinois, Zagel, J., Hamilton, J.