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ISA Chicago Wholesale, Inc. v. Swisher International

September 25, 2009


The opinion of the court was delivered by: Judge Joan H. Lefkow


Plaintiff, ISA Chicago Wholesale, Inc. ("ISA"), filed a complaint against one of its suppliers, Swisher International, Inc. ("Swisher"), alleging price discrimination in violation of Section 2 of the Clayton Act, 38 Stat. 730, as amended by the Robinson-Patman Price Discrimination Act, 49 Stat. 1526, codified at 15 U.S.C. § 13 ("Robinson-Patman Act" or "Act").*fn1 ISA seeks both injunctive relief (Count I) and damages (Count II). Swisher now moves pursuant to Federal Rule of Civil Procedure 12(b)(3) to dismiss the complaint for improper venue under 28 U.S.C. § 1406(a), and for failure to state a claim pursuant to Rule 12(b)(6). In the alternative, Swisher moves to transfer the case under 28 U.S.C. § 1404(a). For the reasons stated below, the Swisher's Rule 12(b)(3) motion to dismiss for improper venue [#10] is granted.


Swisher manufactures and sells tobacco products, including its famous Swisher Sweet cigars, throughout the world. Its principal place of business, however, is in Jacksonville, Florida. ISA was, at all times relevant to this case, one of Swisher's distributors in Illinois, where ISA is based. ISA purchased cigars and other tobacco-related products directly from Swisher, and distributed them to wholesalers, sub-wholesalers and retailers until August 2008, when Swisher decided to stop selling its products to ISA. By that time, the parties were already litigating the first of two lawsuits filed by ISA in this district.

I. Swisher's Alleged Price Discrimination

In this case, ISA contends that Swisher's pricing policy was discriminatory because Swisher offered certain distributors higher discounts on its products than others. ISA alleges that Swisher normally offered it a discount of 10% off its invoice price*fn2 but offered discounts ranging from 13% to 18% or higher to certain "favored distributors"*fn3 whom ISA asserts were "similarly situated to [ISA] in that they purchase[d] similar quantities and types of Products from Swisher." Compl. ¶ 17. ISA further alleges that Swisher offered the favored distributors certain one-time or periodic discounts ("additional discounts") not available to ISA and other distributors.*fn4

Although ISA's complaint is not entirely clear, the discounted price offered by Swisher appears to have been reflected on its invoices to distributors, while the additional discounts were given off-invoice via credit memos which reimbursed the distributor.*fn5

II. The Terms of the Credit Applications

In 2005, ISA began to purchase Swisher's products on credit pursuant to the terms of credit applications executed on January 31, 2005, July 12, 2005, and January 18, 2006 ("Credit Applications"). Def.'s Mem. in Supp. of its Mot. to Dismiss at Ex. 1 (hereinafter, "Def.'s Mem.").*fn6 The Credit Applications are identical and provide in relevant part,

Any contractual disagreement between Swisher and Applicant shall be governed by the laws of the State of Florida and any legal disputes arising out of this Agreement shall be resolved in Jacksonville, Florida.

Applicant is applying for credit with Swisher Int'l, Inc. and agrees to pay all amounts when due in accordance with the above terms. Applicant understands that all purchases of products from Swisher are subject to all terms and conditions contained in the Customer Credit Application and all other terms and conditions contained in any Swisher invoices.

Id. (emphasis added).

III. The Parties' Other Litigation

On June 17, 2008, ISA filed suit in this district alleging that Swisher breached an oral promise to give ISA an additional discount on orders ISA placed at a trade show it held in 2007. See ISA Chicago Wholesale, Inc. v. Swisher Int'l Corp., Inc., No. 08 CV 3461 (N.D. Ill) (filed June 17, 2008) (hereinafter "Trade Show Discount Suit").*fn7 On November 8, 2008, Swisher filed suit against ISA and its President, Muhammad Inayat, in state court in Jacksonville, Florida to collect monies allegedly owed pursuant to the Credit Applications executed by ISA and personally guaranteed by Inayat. ISA subsequently removed the case to the federal district court for the Middle District of Florida, where it is currently pending. See Swisher Int'l, Inc. v. ISA Chicago ...

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