No. 84-454 IN THE SUPRELWCOURT OF THE STATE OF MONTANA 1985

STATE OF MONTANA, ex rel., POLARIS INDUSTRIES, INC., Relator,

THE DISTRICT COURT OF THE THIRTEENTH JUDICIAL DISTRICT, IN AND FOR THE COUNTY OF YELLOWSTONE, THE HONORABLE DIANE G. BARZ, Judge presiding, Respondents.

ORIGINAL PROCEEDING:

COUNSEL OF RECORD:
For Relator: McNamer, Thompson & Cashmore; CharlesR. Cashmore, Jr. argued, Billings, Montana

For Respondents: BergerLawFirm; Arnold Berger argued, Billings, Montana Anderson, Edwards & Molloy, Billings, Montana

Submitted: January 251 1985 ~~~id~d: February 15, 1985

Filed:: ( -.. .. : :7:j 

### :;Mr. Justice William E. Hunt, Sr., delivered the Opinion of the Court.

Relator Polaris Tndustries, Inc. filed an application for e writ of supervisory control asking this Court to reverse the Yellowstone County District Court's Order which refused to grant Polaris' motion to dismiss an action filed against itby Midland ImplementCompany, Jnc. Three issues were raised: first, whether the District Court erre? in denying Polaris1motion to dismiss; second, whether a provision in an Agreement providing an exclusive out-of-state forum for litigation is valid and enforceable in Montana; and third, whether the District Court erred in holding that Polaris' refusal to renew the Agreement rendered it void as a matter of law, thereby precluding Polaris from availing itself of the out-of-state forum provision of the Agreement. Because we hold the forum-selection clause is void,we need not address the remaining issues. On April 7, 1982, Midland entered into a written Distributor Agreement with Polaris. The Agreement provj-des Polaris would manufacture snowmobiles for commercial sale, and Midland would act as distributor for the products. The Agreement further provides that no action on claims arising from 

### the Agreement may be maintained by Midland against Polaris in any court except in Hennepin County, Minnesota District Court, or in the United States District Court in Minneapolis, Minnesota. After one year, the Agreement expired of its own terms, leaving matters such as inventory and warranty claimsbetween the parties unresolved.Midland. a.sserted that 5 28-2-708, MCA renders the forum-selection clause void. We agree. That statute provides: "Restraints upon 1ega.lproceedings void. Every stipulation or condition in a contractby which any parky thereto is restricted from enforcing his rights under the contract by the usual proceedings in the ordinary tribunals or which limits the time within which he may thus enforce his rights 

### - i.s void." (Emphasisadded.) -- The complaint of the plaintiff in this case comeswithin the provisions of the foregoing code section. The pla.intiff seeks to enforce its right under its contractwith Polarisby
a "usual proceeding" in the "ordinary tribunals" of Montana. We hold that the forum-selection clause of the Agreement is void under the statute a.s an improper restraint upon the pla.intiffls exercise of its rights. We, therefore, conclude that the District Court correct)-y denied Polaris' motion to dismiss. We deny the application forwrit of supervisory control. /?

We Concur: 

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# kfq7'&)2-

Chief JusticeJusticesJustice John C. Sheehy, special.1~ eo~curring:

1 concur in the foregoing opinion. The provisions of Art. I,Section 16, 1972 Montana Constitution, are further evidence of a strong public policy in this State that impedances to state courts may not be contenanced by us. The constitutional statement is that courts of justice shall be open to every person, and speedy remedy afforded for every injury of person, property or character. Forum selection clauses in contracts impede the right to judicial process and especially discourage a speedy remedy. A further reason for refusing validity to a forum selection clause may 

### be found in the development of long-arm jurisdiction. Whereas formerly, a state could not make a Sinding judgment 

### - in personam against an individual or corporate defendant with which the state had no contacts,
fv' ties or relations (PeJdnoyerv. Neff (1877), 95 U.S. 714, 24 L.Ed 565), with the decisions of the U.S. Supreme Court beginning in 1945 (International. Shoe Co. 

### v. State of Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 I..Ed. 95), it became recognized that due process is provided non-state residents if traditional notions of justice and fair play made them amenable to state jurisdictions away from home. See Travelers HealthAssociat.ionv. Virginia (1950),339 U.S. 643, 70 S.Ct. 927, 94 L.Ed. 1154; Perkins v. Benguet Consolidated Mining Co. (1952), 342 U.S. 437, 72 S.Ct. 413,

L/f5- /+5/ 96 L.Ed. 4; McGee v. International Life Ins. Co. f39-52), 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223; Hanson 

### v. Denckla (1958), 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283. Thus under McGee, supra., it was sufficient for due process that suit was based on a contract which had substantial connection with that state. 355 U.S., p. 223.8 

### Hon, John C. Sheehy Justice, SupremeCourt Room 414 Justice Building 215

### North Sanders Helena, Montana 59620

March 12,1985 CORRECTION.Inpreparingthis opinionforpublication,wenoted inourverification oftitlesand citations thematters listed below.Correctionshave been madeonourcopyoftheopinion.


## MAR1 8

## 1985 ETHZ!..M. &HI?]:i,ON 

### State ex rel. Polaris Industries, Inc. 

### v. District &WGts@LiZime couri 

### Thirteenth Judicial District, Yellowstone County,~o.StM.sQ@dh$anFeb. 15,1985, specially concurring

Page 4, line 15

## --- Pehnoyer

### v. Neff should read Pennoyer

### v. Neff. Page 4, line 6 from bottom

# --- 97L.Ed. 

## - 469 should read 97L.Ed. 485. 

# $

/ 7 

### Page 4, line 6 

### from bottom

# --- (1952)should read (1957).

# J Page 5,line 10 frombottom

## --- S

## - 27-2-708 should read § 

### - 28-2-708.

WESTPUBLISHINGCOMPANY Box43526 St.Paul,MN55164Fere Polaris' contact with Midland constituted very substantial connections with Montana. Under any modern concept of 

## - in personam jursidiction over non-state defendants, Polaris is plainly subject in this case to Montana's long-arm jurisdiction. It would be patently a step hack from the cases affording such jurisdiction to hold that forum selection clauses may set aside the significant growth of 

### - inpersonam jursidiction law. Montana's rules of civil procedure take notice of the growth in the lawpertaining to non-state defendants in state courts. Rule 4B provides that jurisdiction 

### of the sta.te courts stretches to include any claim for relief from the doing personally or through employees of the transaction 

### of any business in the state or entering into a contract for materials to be furnished in this state. Those activities provide the "minimum con.tactsWby the non-state resident which makes long-arm iursidiction of the non-state resident comportable with dueprocess. international

## -- Shoe Co., supra. 

### /d I therefore agree that S -2-7-2-708, MCA, states a public pol-icythat has existed in Montana.historically and has even more meaning with the d.evelopmentof the newer concepts of 1-ong-arm jurisdiction. That policy makes forum-selection clauses in contracts in our state void. There i.sa measure of protection even so for non-state residents. If there a.re not the minimum contacts necessary for long-arm jurisdiction with the state by the non-state resident, no state jursidiction exists with or without the forum selection clause.