Zeta Global Corp. v. Maropost Marketing Cloud, Inc.

Background

Zeta Global Corp. alleged that Maropost Marketing Cloud, Inc. breached a non-solicitation provision in a 2017 Master Service Agreement between Maropost and IgnitionOne, Inc. The agreement prohibited Maropost, during the agreement’s term and for one year afterward, from directly or indirectly soliciting or providing services to certain IgnitionOne customers.

After IgnitionOne entered a general assignment for the benefit of creditors, its interest in the agreement was transferred through Asset Recovery Associates, LLC. Asset Recovery later entered into agreements with Zeta under which Zeta acquired IgnitionOne’s rights, title, and interest in the agreement and assumed associated rights and future obligations. Zeta alleged that Maropost solicited at least two of the acquired clients in violation of the non-solicitation provision.

Zeta asserted claims for breach of contract, tortious interference with a contractual relationship, and declaratory judgment. The complaint also included three patent-infringement claims, which were not at issue in this motion.

Motion and legal standard

Maropost brought a partial motion to dismiss the contract-related claims, arguing that a forum-selection clause required disputes arising from or connected with the agreement to be resolved in Toronto, Ontario. Because the clause selected a foreign forum, the court considered enforcement under the doctrine of forum non conveniens, which allows a court to dismiss when another forum is required or substantially more appropriate under the governing analysis.

The court applied a four-part framework: whether the clause was communicated to the resisting party, whether it was mandatory or permissive, whether it covered the claims and parties, and whether enforcement would be unreasonable, unjust, fraudulent, or the result of overreaching. Zeta did not dispute that the clause was communicated to it or argue that enforcement would be unreasonable or invalid for fraud or overreaching.

Mandatory forum

The agreement stated: “All disputes arising out of or in connection with this Agreement shall be referred to and finally resolved under the laws of Ontario and in Toronto, Ontario.” The court held that this language was mandatory and unambiguous. It reasoned that the word “shall,” coupled with the direction that disputes be resolved “in Toronto,” required disputes covered by the clause to be brought there rather than merely allowing Toronto as one possible forum.

The court rejected Zeta’s argument that the provision was only a choice-of-law clause or applied only to Toronto municipal-law disputes. The agreement separately stated that it was governed by Ontario law, so treating the forum-selection language as only another choice-of-law provision would make part of the agreement unnecessary. The court also concluded that the phrase “and in Toronto” specifically identified the required place for resolving disputes.

Application to Zeta

Zeta was not an original signatory to the agreement. The court nevertheless applied federal law and held that a non-signatory may be bound by a forum-selection clause when it is closely related to a signatory and enforcement is reasonably foreseeable. The court found that Zeta’s interests were wholly derivative of and directly related to IgnitionOne’s interests because Zeta acquired rights under the agreement and expressly assumed associated future obligations.

The court concluded that those assumed obligations included the obligation to litigate disputes arising from the agreement in Toronto. It therefore held that Zeta was sufficiently closely related to the original signatory and was subject to the mandatory forum-selection clause.

Disposition

The court granted Maropost’s motion to dismiss. The opinion does not add a “with prejudice” or “without prejudice” qualification to that ruling. The Clerk of Court was directed to close the motion at Docket No. 32.