Outbound Forum Selection Clause - Alabama Heavy Equipment Dealer Act § 8-21B-1 et seq., Ala. Code 1975


Ex parte Terex USA, LLC, [Ms. 1161113, Mar. 30, 2018] __ So. 3d __ (Ala. 2018). The Supreme Court (Stuart, C.J., and Bolin, Parker, Main, Wise, and Mendheim, JJ., concur; Shaw and Bryan, JJ., concur in the result; Sellers, J., dissents) denies a petition for a writ of mandamus brought by Terex USA, LLC, which sought an order directing the Jefferson Circuit Court to enforce an outbound forum-selection clause contained in a distributorship agreement between Terex and Cowin Equipment Company, and to dismiss Cowin’s action against Terex based on improper venue pursuant to Rule 12(b)(3), Ala. R. Civ. P. The Court read provisions of the Alabama Heavy Equipment Dealer Act, § 8-21B-1 et seq., Ala. Code 1975, as pretermitting enforcement of the distributorship agreement’s forum-selection clause. Invoking traditional rules of statutory construction (Ms. *9-10), the Court focused upon § 8-21B-13’s provisions that:

Notwithstanding the terms, provisions, or conditions of any dealer agreement, any person who suffers bodily injury, loss of profit, or property damage as a result of a violation of this chapter may bring a civil action in a court of competent jurisdiction in this state to enjoin further violations and to recover the damages sustained by him or her together with the costs of the suit, including a reasonable attorney’s fee. ...”

Ms. *11-12. The Court agrees that the phrase “[n]otwithstanding the terms, provisions, or conditions of any dealer agreement,” were to be given effect and thereby permitted Cowin to file an action in Alabama even though the distributor agreement contained a provision to the contrary, i.e., the outbound forum-selection clause. Ms. *13. This is made so by § 8-21B-9’s incorporation-by-reference provision which states:

“This chapter shall be deemed to be incorporated into every dealer agreement subject to this chapter and shall supersede and control all provisions of any dealer agreement inconsistent with this chapter.”

Ms. *14. Further, § 8-21B-8(d) prohibits a party from requiring an Alabama dealer to waive any legislatively enacted protection under the Act, including the right to bring an action in this state. Section 8-21B-8(d) states:

“No supplier shall require a dealer to prospectively assent to a release, assignment, novation, waiver, or estoppel which would relieve any person from any liability or obligation under this chapter, which would limit the entitlement to recover damages under this chapter or other Alabama law, or which would waive the right to trial by jury. Any provision or agreement purporting to do so is void and unenforceable to the extent of the waiver or release. ...”

Citing (Ms. *16-18), Wimsatt v. Beverly Hills Weight Loss Clinics International, Inc., 32 Cal. App. 4th 1511, 38 Cal. Rptr. 2d 612 (1995), and Wright-Moore Corp. v. Ricoh Corp., 908 F.2d 128 (7th Cir. 1990), the Court finds that almost identical language cited in both opinions articulated strong public policy that prohibits the enforcement of choice-of-forum provisions in similar franchise agreements.

The Court therefore concludes that the legislature expressed a strong public policy against any provision in a dealer agreement which would foreclose an Alabama dealer’s right to seek redress under the Act in a court in Alabama. Ms. *23.

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