United States District Court, E.D. Wisconsin
DECISION AND ORDER
ADELMAN DISTRICT JUDGE.
Freeze Dried LLC filed a complaint in Waukesha County Circuit
Court alleging breach of contract and other claims. The
defendant, Redline Chambers, Inc., removed the case to this
court under the diversity jurisdiction. See 28
U.S.C. § 1332. The pleadings allege that Wisconsin
Freeze Dried's sole member is a natural person who is a
citizen of Wisconsin, that Redline Chambers is incorporated
under Utah law and has its principal place of business in
Utah, and that the amount in controversy exceeds $75, 000.
Therefore, this court has subject-matter jurisdiction.
However, Wisconsin Freeze Dried has moved to remand on the
ground that its claims fall within the scope of a contractual
forum-selection clause that requires litigation in Waukesha
County Circuit Court. I consider this motion below. See
Roberts & Schaefer Co. v. Merit Contracting, Inc.,
99 F.3d 248, 252 (7th Cir. 1996) (“Enforcing a forum
selection clause in a contract is a permissible basis for
Freeze Dried produces freeze-dried animal food. In Fall 2017
it began communicating with Redline Chambers regarding the
construction and delivery of custom-built freeze-drying
equipment. On December 15, 2017, the parties signed a non-
disclosure agreement “to facilitate discussions and
negotiations surrounding the potential contract between [the
parties] and to protect the confidential and proprietary
information held secret by [Wisconsin Freeze Dried].”
Compl. ¶ 7. The non-disclosure agreement contained the
following choice-of-law provision and forum-selection clause:
This Agreement shall be constructed [sic] in accordance with
the laws of the State of Wisconsin, without regard to its
conflict of law rules. The forum shall be with the Circuit
Court of Waukesha County, State of Wisconsin.
Affidavit of Chris Bessent, Ex. A. ¶ 14, ECF No. 11-3.
the parties signed the non-disclosure agreement, Wisconsin
Freeze Dried shared information with Redline Chambers about
the equipment it needed. Eventually, Redline Chambers sent
Wisconsin Freeze Dried a proposal. On April 24, 2018,
Wisconsin Freeze Dried sent Redline Chambers a purchase order
for the equipment. It made a down payment on the equipment on
May 2, 2018 and a further installment payment on June 19,
Freeze Dried alleges that Redline Chambers represented that
the equipment would be shipped for delivery in August 2018.
However, on August 1, 2018, Redline Chambers told Wisconsin
Freeze Dried that production was behind schedule and that
delivery would be delayed until November or later.
Thereafter, the parties agreed to cancel part of the order.
But they could not reach agreement on what to do with certain
components that Redline Chambers had already manufactured.
The resulting impasse caused Wisconsin Freeze Dried to demand
November 30, 2018, Redline Chambers commenced an action
against Wisconsin Freeze Dried in the United States District
Court for the District of Utah. Redline Chambers alleged,
among other things, that Wisconsin Freeze Dried breached the
parties' contract by failing to pay the full purchase
price for the equipment.
week later, Wisconsin Freeze Dried commenced the present
action against Redline Chambers in the Waukesha County
Circuit Court. Wisconsin Freeze Dried alleges primarily that
Redline Chambers breached the parties' contract by
failing to deliver the promised equipment within the
specified time. It also alleges claims for fraud, various
forms of misrepresentation, and conversion arising out of
Redline Chambers' failure to deliver the promised
equipment. Finally, it alleges that Redline Chambers breached
the parties' non-disclosure agreement by sending an email
“blast” to all or nearly all its clients and
prospective clients that included photos of the equipment
Wisconsin Freeze Dried had ordered. Compl. ¶ 26.
Wisconsin Freeze Dried alleges that these photos were
confidential information protected by the non-disclosure
agreement and that the photos are trade secrets. It alleges
that Redline Chambers committed trade-secret theft by
disclosing the photos to its customers.
noted, Redline Chambers removed the Wisconsin action to this
court under the diversity jurisdiction. Wisconsin Freeze
Dried now moves to remand the entire case on the ground that
the forum-selection clause found in the non-disclosure
agreement requires litigation of all claims in the Waukesha
County Circuit Court.
Chambers does not dispute that the forum-selection clause in
the nondisclosure agreement requires litigation of all claims
within its scope in state rather than federal court. However,
it contends that some of the claims Wisconsin Freeze Dried
alleges in its complaint are not within the scope of the
clause. This dispute over the meaning of the non-disclosure
agreement must be resolved under Wisconsin law, which, the
parties agree, applies to this question.
Wisconsin law, the court's goal in interpreting a
contract is to give effect to the parties' intentions.
Ash Park, LLC v. Alexander & Bishop, Ltd., 363
Wis.2d 699, 712 (2015). The language of the contract controls
the court's interpretation. Id. When the terms
of a contract are clear and unambiguous, the court construes
the contract's language according to its literal meaning.
Id. Contract language is ...