Court Opinion

ID: 9478241
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:43:45.49211+00
Date Added: 2024-06-11T17:46:18.929640
License: Public Domain

MAGILL, Circuit Judge,
dissenting.
Today the court concludes that the public policy of Minnesota overrides the choice of law provision agreed upon by the parties. Because I believe that the majority has underestimated both the bargaining power Modern Computer Systems, Inc. (MCS) had when it agreed to the terms of its franchising agreement with Modern Banking Systems, Inc. (MBS) and the applicability of Tele-Save Merchandising Co. v. Consumers Distributing Co., 814 F.2d 1120 (6th Cir.1987), to this case, I respectfully dissent.
In Tele-Save, the Sixth Circuit upheld a choice of law provision in a supply agreement despite the existence of an Ohio statute that (like the Minnesota Franchise Act) includes a non-waiver provision. The court concluded that it was obligated to enforce the provision for the following reasons: the parties had agreed in advance to the law to be applied to future disputes; contacts between the parties were fairly evenly divided between the state chosen in the contract and the plaintiffs state; the parties were not of unequal bargaining strength; and the application of the law chosen in the contract was not repugnant to the public policy of the plaintiffs state. Id. at 1123. An analysis like that in Tele-Save should have been applied in this case and the same result should have been reached.
Neither party here denies that the franchise agreement (signed on October 22, 1980) calls for the application of Nebraska law in the event of a dispute. Paragraph 16 of the agreement plainly states that “[t]he parties agree that this agreement shall be governed by the laws of Nebraska.” MBS is incorporated and has its principal place of business in Nebraska, the negotiation and signing of the agreement took place in Nebraska, and the choice of law provision calls for the use of Nebraska law, so I believe the majority’s apparent conclusion that all of the most important contacts in this case are in Minnesota, is mistaken.
The majority is particularly unpersuasive in its conclusion that the parties possessed significantly disparate levels of bargaining power. In prior proceedings in this case, a Minnesota state court specifically found that at the time of their agreement, MCS and MBS were not of unequal bargaining power. Modern Computer Systems v. Modern Banking Systems, No. 104618, slip op., Dakota County, Minnesota, October 19, 1987 (unpublished memorandum opinion).1 The court concluded that “[t]he contract is not adhesive. There is no evidence of a great disparity in bargaining power between the parties * * *.” Id.
Although I recognize that the literature of franchising law is strewn with reports of sophisticated and financially powerful franchisors taking advantage of relatively inexperienced franchisees, I do not believe that the facts in this case fit that stereotype. This matter involves multi-million-dollar dealings between two computer companies in a market encompassing a tristate region. To give MCS the benefit of protection under the Minnesota Franchising Act after they knowingly waived that protection (it is significant to note that they did so without attempting to negotiate for more favorable choice of law terms) strikes me as unduly paternalistic. Some evidence of oppressive, unreasonable or unfair use of superior bargaining position, as in a contract of adhesion, is required before a court is justified in disregarding a mutually agreed upon choice of law provision. No such extreme circumstances exist in this case. Further, the majority seems to enunciate a standard-*1347less per se rule of “unfairness” and “unreasonableness.”
Lastly, I am unpersuaded by the argument that the public policy of Minnesota demands application of Minnesota law in this case. Granted, the Minnesota Franchise Act evinces a policy in favor of offering franchisees in Minnesota remedies greater than those available under traditional common law, but what of Minnesota’s traditional willingness to enforce parties’ choice of law agreements? See Milliken and Co. v. Eagle Packaging Co., 295 N.W.2d 377 (1980) (enunciating the rule that when parties agree that the law of another state shall govern their agreement, Minnesota courts will interpret and apply the law of the state where such an agreement is made); see also Combined Insurance Co. of America v. Bode, 247 Minn. 458, 77 N.W.2d 533 (1956) (parties to a contract acting in good faith and without an intent to evade the law may agree that the law of the state in which the contract is made shall govern its interpretation); see also OT Industries, Inc. v. OT-TEHDAS OY, 346 N.W.2d 162 (1984) (Minnesota routinely permits parties to control choice of law by express contractual agreements).
To conclude, I believe that the majority has given MCS the benefit of statutory protection that is better reserved for cases involving extremely unfair dealings. In this case, a computer company simply struck a bargain that turned out badly; there is no evidence of unconscionable exploitation of superior bargaining power. Therefore, I believe Nebraska law should have been applied as per the agreed upon choice of law provision, and this court should have affirmed the district court’s denial of injunctive relief because of MBS’ failure to demonstrate irreparable injury.

. Ordinarily, we do not cite unpublished opinions in this circuit. Eighth Circuit Local Rule 8(i) indicates that “[no] party may cite an opinion that was not intended for publication by this or any other federal or state court * * *.” However, Rule 8(i) goes on to make an exception “when the cases are related by virtue of an identity between the parties or the causes of action." Since the parties and causes of action in the instant case are identical to those in the Dakota County District Court case, Rule 8(i) authorizes this citation. See, e.g., Judge Arnold’s majority opinion in Jones v. Mabry, 723 F.2d 590, 596 (1983) (there is no impropriety in the use of an unpublished opinion when causes of action are identical).