In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 05-2636

PRATIMA J. MUZUMDAR and TRANQUIL PASSAGE,

Plaintiffs-Appellants, v.

WELLNESS INTERNATIONAL NETWORK, LTD.,

WIN NETWORK, INC., RALPH OATS, CATHY OATS,

and SHERI MATTHEWS,

Defendants-Appellees. ____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 04 C 6175—Charles R. Norgle, Sr., Judge.

____________

Nos. 05-2686 & 05-2827

RICHARD SHARIF, ABDUL RASHID, et al.,

Plaintiffs-Appellants, v.

WELLNESS INTERNATIONAL NETWORK, LTD.,

WIN NETWORK, INC., RALPH OATS, CATHY OATS,

and SHERI MATTHEWS,

Defendants-Appellees. ____________

Appeals from the United States District Court

for the Northern District of Illinois, Eastern Division.

Nos. 02 C 3047 & 02 C 5801—Samuel Der-Yeghiayan, Judge.

____________

ARGUED JANUARY 12, 2006—DECIDED FEBRUARY 17, 2006

____________
2 Nos. 05-2636, 05-2686 & 05-2827

1 The Sharif and Rashid actions were consolidated and were

the subject of the first decision in this court. The Muzumdar

plaintiffs withdrew from the first appeal.

Before FLAUM, Chief Judge, and BAUER and EVANS,

Circuit Judges.

EVANS, Circuit Judge. These cases are before us again:

this time the issue involves forum selection clauses. Previously, in Sharif v. Wellness International Network, Ltd., 376

F.3d 720 (7th Cir. 2004)1

, we reviewed and reversed a

denial of a motion to compel arbitration with the result that

claims of less than $100,000 were subject to arbitration.

That left some claims for consideration by the court. Before

us now the question is “what court?”

The cases were filed in the United States District Court

for the Northern District of Illinois. The Muzumdar case

comes to us from Judge Charles R. Norgle, Sr. and the

Sharif and Rashid cases from Judge Samuel DerYeghiayan. The result in all three was the same: They were

dismissed without prejudice pursuant to forum selection

clauses found in the relevant contracts. Both judges found

that the proper forum was Dallas County, Texas. The plaintiffs appeal.

A challenge to venue based upon a forum selection clause

can appropriately be brought as a motion to dismiss the

complaint under Federal Rule of Civil Procedure 12(b)(3).

Our review of the enforceability of a forum selection

clause is de novo. Continental Ins. Co. v. M/V Orsula,

354 F.3d 603 (7th Cir. 2003).

The lawsuits involve distributorship contracts that the

plaintiffs had with Wellness International Network (WIN).

The appellants contend that while WIN claims to be in the

business of selling health and wellness products, it
Nos. 05-2636, 05-2686 & 05-2827 3

2 IFC held open the question as to whether state or federal

law applies in a dispute over a forum selection clause when

the case is dismissed rather than transferred pursuant to 28

U.S.C. § 1404(a). We see no need to examine that question in

this case.

was actually engaged in an illegal pyramid scheme. The

appellants assert a number of claims, including violations of

the Racketeer Influenced and Corrupt Organizations Act

(18 U.S.C. § 1962), federal securities laws, and various

Illinois statutes.

Each appellant signed either an associate agreement

or a distributor agreement. The associate agreement says:

JURISDICTION AND VENUE OVER ANY DISPUTES

ARISING OUT OF THIS AGREEMENT SHALL BE

PROPER ONLY IN THE FEDERAL OR STATE

COURTS IN DALLAS COUNTY, TEXAS.

The distributor agreement says:

ANY DISPUTE OR CLAIM ARISING UNDER OR IN

CONNECTION WITH THIS AGREEMENT OR WITH

RESPECT TO THE BUSINESS RELATIONSHIP

ESTABLISHED BY THIS AGREEMENT . . . SHALL

BE PROPER ON/BEFORE AN ARBITRATION

PANEL CONVENED, OR IN A STATE OR FEDERAL

COURT PRESIDING IN, DALLAS, DALLAS COUNTY,

TEXAS . . . .

The clauses certainly seem clear enough, especially because

under either federal or Illinois law, forum selection clauses

are valid and enforceable. IFC Credit Corp. v. Aliano Bros.

Gen. Contractors, Inc., 2006 WL 230179, ___ F.3d ___ (7th

Cir. Feb. 1, 2006).2

 There is no ambiguity about where the

parties agreed to litigate this dispute. What, then, do the

appellants argue?
4 Nos. 05-2636, 05-2686 & 05-2827

They contend that language in the WIN rules and

regulations negates the mandatory forum selection clause.

The WIN rules state:

Each distributor hereby irrevocably and unconditionally

submits themselves and their property to the nonexclusive jurisdiction of any arbitration panel convened,

or a court of competent jurisdiction in Dallas, Dallas

County, Texas, whichever is applicable, it being acknowledged that the relationship between any

distributor and WIN is performable, in part, in Dallas

County, Texas, and further irrevocably and unconditionally waives, to the fullest extent that a distributor

may legally and effectively do so, any objection that

such distributor may have now or hereafter to such

venue, including the defense of an inconvenient forum.

This provision, written in the usual mumbo-jumbo of

lawyer-speak, supersedes the contract language, appellants

argue, because the contract says so. The associate contract

and the distributor contract state:

I HAVE READ THE WIN RULES & REGULATIONS

AND I AGREE THAT THEY ARE INCORPORATED

BY REFERENCE INTO THIS AGREEMENT IN

PRESENT FORM AND THAT THEY ALSO MAY

BE AMENDED BY WIN FROM TIME TO TIME.

The distributor agreement further states:

IN THE EXTENT THAT THERE ARE ANY CONFLICTS BETWEEN THIS AGREEMENT AND THE

WIN RULES & REGULATIONS, THE WIN RULES &

REGULATIONS SHALL GOVERN.

The argument is that the WIN rules contain language—“non-exclusive jurisdiction”—which renders the

forum selection clauses permissive; because the WIN

Rules govern, the argument continues, the forum selection clauses are merely permissive. Appellants leap from
Nos. 05-2636, 05-2686 & 05-2827 5

the phrase “non-exclusive jurisdiction” to the issue of forum,

or venue, because the provision in the WIN rules is entitled

“Venue.” However, that word cannot carry so much weight.

The WIN rules also provide that titles and subtitles are

inserted for convenience and do not affect the meaning of

the rules, and the provision itself refers only to jurisdiction.

Therefore, what the WIN rules provide is a nonexclusive jurisdictional provision, requiring the appellants to

submit to the personal jurisdiction of the Texas courts. We

cannot find that a provision which requires appellants to

submit to the “non-exclusive” jurisdiction of Texas courts

somehow undermines a very strongly worded forum selection clause containing mandatory language: “SHALL BE

PROPER ONLY” or “SHALL BE PROPER” in Dallas

County, Texas. We have found such mandatory language to

require enforcing a forum selection clause. We have

said that where venue is specified with mandatory or

obligatory language, the clause will be enforced; where only

jurisdiction is specified, the clause will generally not be

enforced unless there is some further language indicating

the parties’ intent to make venue exclusive. See Paper

Express, Ltd. v. Pfankuch Maschinen GmbH, 972 F.2d

753 (7th Cir. 1992).

Appellants also spend a good deal of time trying to

convince us that because the contracts themselves are void

and unenforceable as against public policy—i.e., they set

out a pyramid scheme—the forum selection clauses are also

void. The logical conclusion of the argument would be that

the federal courts in Illinois would first have to determine

whether the contracts were void before they could decide

whether, based on the forum selection clauses, they should

be considering the cases at all. An absurdity would arise if

the courts in Illinois determined the contracts were not void

and that therefore, based on valid forum selection clauses,

the cases should be sent to Texas—for what? A determination as to whether the contracts are void?
6 Nos. 05-2636, 05-2686 & 05-2827

What is true is that a forum selection clause can be found

invalid because the clause itself was procured by fraud. As

the Court established in The Breman v. Zapata Off-Shore

Co., 407 U.S. 1, 15 (1972), a forum selection clause will be

enforced unless it can be clearly shown “that enforcement

would be unreasonable and unjust, or that the clause was

invalid for such reasons as fraud or overreaching.” Appellants make no attempt to show that the forum selection

clause was itself obtained by fraud.

The appellants contend, however, that this contract was a

contract of adhesion. We reject that contention.

The appellants were parties to a somewhat sophisticated

business deal. It is hard to conclude that they would have

signed a contract worth more than $100,000 without

considering its provisions. Contrast this situation with

one involving a truly nonnegotiated contract. In Carnival

Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991), the Supreme Court held that even a forum selection clause in a

commercial passage contract—that is, a ticket for a

cruise—was enforceable. The forum selection clauses in

these cases are enforceable.

Accordingly, the judgments of the district courts dismissing these cases are AFFIRMED.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—2-17-06