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MacNeil Automotive Products Ltd. v. Cannon Automotive Ltd.

January 8, 2009

MACNEIL AUTOMOTIVE PRODUCTS LTD, AN ILLINOIS CORPORATION, PLAINTIFF,
v.
CANNON AUTOMOTIVE LTD., F/K/A/ CANNON RUBBER LTD., AUTOMOTIVE DIVISION, A UNITED KINGDOM COMPANY, DEFENDANT.



The opinion of the court was delivered by: Judge Joan B. Gottschall

MEMORANDUM OPINION & ORDER

Defendant Cannon Automotive Ltd., f/k/a/ Cannon Rubber Ltd., Automotive Division ("Cannon") moves this court to dismiss Plaintiff MacNeil Automotive Products Ltd.'s ("MacNeil's") complaint under the doctrine of forum non conveniens. For the reasons set forth below, Cannon's motion is denied.

BACKGROUND*fn1

Cannon and MacNeil have been contesting the proper forum for this lawsuit from the inception of both this and related litigation brought in the United Kingdom. Cannon is incorporated and situated in the United Kingdom. MacNeil is incorporated and situated within the Northern District. Suit was first filed by Cannon against MacNeil in the United Kingdom on November 30, 2007 under a theory of breach of contract for failure to pay monies due. MacNeil filed its own suit in this court on January 7, 2008, presenting claims under the theories of breach of contract for failure to satisfactorily perform, promissary estoppel, the Illinois Consumer Fraud and Deceptive Business Practices Act, and implied warranties. Both parties promptly asked their preferred courts to enjoin the other court from proceeding. Cannon also asked this court to stay its own proceeding under a theory of Colorado River abstention. The parties' requests were ultimately withdrawn or became moot after MacNeil accepted a default judgment in the United Kingdom, ending that litigation. Nevertheless, the forum dispute remains front and center as a result of Cannon's current motion to dismiss MacNeil's action under the doctrine of forum non conveniens.

This is a contract case involving floor mats produced by Cannon and purchased by MacNeil to be resold to car manufacturers primarily in North America. The parties or predecessor corporations had engaged in business with each other for over fifteen years. However, the relationship soured as MacNeil began filling new contracts in 2001 and 2004. MacNeil alleges that it began raising concerns about the quality of floor mats being produced by Cannon for certain new car manufacturing clients, and started receiving complaints and losing down-stream business from the same. Cannon disputes that the floor mats were deficient or that it was responsible for any of MacNeil's losses.

The parties' business relationship commenced in 1989 on an oral understanding after repeated communications through the mail and phone, a visit by a MacNeil representative to the United Kingdom, and then a visit by a Cannon representative to Illinois. The first sale between Cannon and MacNeil, for a twenty foot container of mats, was negotiated in Chicago. The parties never entered any master written contract, never specified a choice of law, and never designated a forum or mechanism to resolve any potential disputes.

MacNeil describes itself as having been Cannon's "exclusive United States distributor," which Cannon does not dispute. Nevertheless, the parties never entered into a written exclusivity or non-complete agreement, neither party received any explicit consideration for this agreement, and they did not agree to any particular volume of sales.

Given the lack of any master agreement, specific sales occurred order by order. The ordering process was initiated by a request from MacNeil to Cannon specifying the type(s) and quantity(s) of mats desired. MacNeil's orders would not include prices. Cannon would then "cube up" the request, meaning that Cannon would determine how the requested product would fit into shipping containers, and send to MacNeil a "proforma invoice" stating the precise quantities and cost for the same, the method of delivery and payment, and the date of performance.*fn2 Cannon asserts that at this stage, the sale was complete. MacNeil counters that it was their general practice for MacNeil to respond to the proforma invoice, either orally or in writing, by assenting to its terms or asking that the terms be changed. Cannon would deliver the product to an agent of MacNeil within England, and the product would then be transported by MacNeil to the United States.*fn3

Throughout their relationship, MacNeil continued distributing Cannon's product in the United States in the same manner described above. However, the dynamic changed somewhat in approximately 2001 and again in 2004 when Cannon negotiated specific agreements to provide specialized mats first to BMW, and then to Hyundai. Previously, MacNeil did not appear to have entered into any long-term contracts as a seller of Cannon products, and sold Cannon's mats on more of an ad hoc basis; in 2001, and again in 2004, both parties were aware that MacNeil now had specific performance demands that it would have to satisfy. Production of floor mats for these two car manufacturers required new and customized machinery and molds, referred to as "tooling." MacNeil designed the tooling for the BMW mats, and sent it to Cannon. For the Hyundai line, MacNeil sent Cannon specifications and Cannon designed the tooling itself.

It is not clear how or where the parties came to terms over the production of the BMW mats, but MacNeil went to England to discuss the Hyundai product line. Again, no written contract was ever signed. Throughout this time, Cannon also periodically visited Chicago to discuss the products and to review products that were allegedly deficient.

By 2006, MacNeil began seeking alternative suppliers. However, the relationship between MacNeil and Cannon continued until a meeting in 2007 where the parties attempted to work out their differences. Finding they could not do so, litigation ensued. Presently before the court is Cannon's motion to dismiss under a theory of forum non conveniens.

ANALYSIS

The doctrine of forum non conveniens permits dismissal of a case over which the district court has jurisdiction but "where trial in the plaintiff's chosen forum imposes a heavy burden on the defendant or the court, and where the plaintiff is unable to offer any specific reasons of convenience supporting this choice." Piper Aircraft Co. v. Reyno, 454 U.S. 235, 249 (1981). The doctrine is a flexible and pragmatic one, designed to avoid trials in places so "oppressive and vexatious to the defendant" that transfer is needed to avoid serious unfairness. In re Ford Motor Co., 344 F.3d 648, 651--52 (7th Cir. 2003); see also Piper, 454 U.S. at 259. This determination is committed to the sound discretion of the district court, which should balance relevant public and private interests in reaching its decision. In re Ford Motor Co., 344 F.3d at 651--52. Cannon carries the burden of persuading the court that this action should be dismissed on forum non conveniens grounds. Id at 652. The following factors are to be considered: 1) availability of an adequate ...


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