806 F.2d 848 (8th Cir. 1986), 86-1849, Farmland Industries, Inc. v. Frazier-Parrott Commodities, Inc.

Docket Nº:86-1849, 86-1910.
Citation:806 F.2d 848
Party Name:FARMLAND INDUSTRIES, INC., Appellee, v. FRAZIER-PARROTT COMMODITIES, INC., Heinold Commodities, Inc., DeKalb AgResearch, Inc., Christopher R. Parrott, Horace Seixas, and John Dunn, Appellants.
Case Date:December 10, 1986
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

Page 848

806 F.2d 848 (8th Cir. 1986)




Inc., DeKalb AgResearch, Inc., Christopher R.

Parrott, Horace Seixas, and John Dunn, Appellants.

Nos. 86-1849, 86-1910.

United States Court of Appeals, Eighth Circuit

December 10, 1986

        Submitted Nov. 14, 1986.

        Rehearing and Rehearing En Banc Denied Feb. 4, 1987.

Page 849

        William J. Nissen, Chicago, Ill., for appellants.

        Alvin D. Shapiro, Kansas City, Mo., for appellee.

        Before HEANEY, Circuit Judge, FLOYD R. GIBSON, Senior Circuit Judge, and BOWMAN, Circuit Judge.

        FLOYD R. GIBSON, Senior Circuit Judge.

        Defendants appeal the district court's 1 order refusing to enforce the forum selection clause in a contract Heinold Commodities, Inc. had with plaintiff. The district court held that the suit was broader than that contemplated by the forum selection clause and refused to dismiss the case. For the reasons stated below we affirm.


        Plaintiff Farmland Industries, Inc. (Farmland) is an agricultural cooperative corporation. Defendants are Heinold Commodities, Inc. and Frazier-Parrott Commodities, Inc., commodities brokerage firms; DeKalb AgResearch, Inc., the parent corporation of Heinold and Frazier-Parrott; Christopher Parrott and Horace Seixas, employees of Frazier-Parrott; and John Dunn, stepbrother of Seixas (collectively referred to as defendants).

        On May 8, 1985 Farmland opened two commodities futures trading accounts with Heinold. An agreement was signed which contained the following forum selection clause:

        The undersigned ("Customer") agrees to bring any judicial action, including any complaint, counterclaim, cross-claim or third party complaint, arising directly, indirectly, or otherwise in connection with, out of, related to or from this Agreement or any transaction covered hereby or otherwise arising in connection with the relationship between the parties including any action by Customer against Heinold or any person who is an officer, agent, employee or associated person of Heinold at the time the cause of action arises, only in courts located within Cook County, Illinois, unless Heinold voluntarily in writing expressly submits to another jurisdiction....

        This suit arose out of activities Farmland alleges occurred prior to May 5, 1985. In its pleadings Farmland alleges that one of its employees, Ernest Pierce, entered into a kickback scheme with Christopher Parrott, Horace Seixas, and John Dunn, whereby Pierce would receive three dollars for every closed contract on Farmland's commodities account. Farmland also alleges that a sham corporation was created to receive the kickbacks and that favorable commodities contracts of Farmland were transferred to an account set up for the sham corporation.

        Farmland filed suit in the Western District of Missouri alleging fraud, breach of fiduciary duty, and violations of the Securities Act of 1933, the Securities Exchange Act of 1934, the Commodity Exchange Act, and the Racketeer Influenced and Corrupt Organizations Act. Defendants filed a motion to dismiss the action for improper venue based on the forum selection clause, or in the alternative, to transfer the case to the United States District Court for the Northern District of Illinois. Both motions were denied.

        The district court held that a transfer was improper because defendants had not made a clear showing that the balance of interests weighed in favor of transfer. The motion to dismiss was denied because the suit involved not only Heinold and individuals

Page 850

associated with Heinold, but also others outside the scope of the forum selection clause.


        I. Jurisdiction

        At the outset we are faced with the question whether the district court's order refusing to apply the forum selection clause is appealable. 2 The United States Code provides that the "courts of appeals * * * shall have jurisdiction of appeals from all final decisions of the district courts of the United States * * * except where a direct review may be had in the Supreme Court." 28 U.S.C. Sec. 1291 (1982). An exception to this rule of finality is the collateral order doctrine. A collateral order is defined as one which "finally determine(s) claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause...

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