Home Depot Can't Transfer Slimmed-Down Contract Dispute to Georgia, Judge Rules
The lawsuit filed by a mobile electronics maker accuses Home Depot of reneging on an 2017 agreement to buy custom-made cell phone accessories with the Home Depot trademark.
September 12, 2019 at 05:50 PM
3 minute read
The original version of this story was published on New York Law Journal
(Photo: John Disney/ALM)The lawsuit filed by mobile electronics manufacturer ESI Cases and Accessories Inc. accused the retail giant of reneging on an 2017 agreement to buy $1.8 million worth of custom-made cellphone accessories featuring the Home Depot trademark.
The complaint claimed Home Depot instead offered to pay for only "a portion" of the products after they were finished at half off the price under an initial agreement.
Home Depot tried to have the entire case transferred from the Southern District of New York to Atlanta. Attorneys for the company pointed to an often-used forum-selection clause in its contract, mandating civil lawsuits be brought in either the Atlanta division of the U.S. District Court for the Northern District of Georgia or the Fulton County Superior Business Court.
U.S. District Judge Jesse M. Furman in Manhattan on Tuesday acknowledged courts have typically "given broad effect" to forum-selection clauses like the one Home Depot employed. However, it was not clear from the contract language what subject matter the provision was intended to cover.
"The problem for Home Depot is that the SBA provides little insight into what the 'subject matter' of the contract is," Furman wrote in a 19-page opinion.
"The bottom line is that absent any evidence that the 'subject matter' of the [contract] encompasses the manufacture of custom-made goods, the court cannot conclude that Home Depot has carried its burden to show that ESI's claims relating to the alleged manufacturer agreement fall within the scope of the [contract] and its forum-selection clause," he said.
The ruling granted Home Depot's motion to transfer one count covering a separate transaction and dismissed ESI's claims for unjust enrichment and fraudulent concealment. But the rest of the suit for breach of contract and promissory estoppel would be allowed to proceed in the Southern District.
Terrence Oved and Andrew Urgenson, who represent ESI, praised the decision in a statement Thursday.
"Our client is pleased that the court issued a comprehensive, thorough and well-reasoned opinion confirming its right to pursue its claims against Home Depot in New York, the appropriate forum of its choosing," said the attorneys, who are partners at Oved & Oved in New York.
An attorney for Home Depot did not respond to a request for comment by deadline.
The company is represented by Ronan P. Doherty and Benjamin Thorpe of Bondurant, Mixson & Elmore and David M. Pollack of Lewis Brisbois Bisgaard & Smith.
The case is ESI Cases and Accessories v. Home Depot Product Authority.
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