Estate of Jacqueline Nelson v. Herman Miller, Inc.

Background

The Estate of Jacqueline Nelson, Patrice Nelson, and Georges Mico Nelson sued MillerKnoll, Inc., formerly known as Herman Miller, Inc. (“HMI”), over intellectual property developed or owned by the late George Nelson. The operative complaint asserted six causes of action: fraud, conspiracy to commit fraud, unjust enrichment, trademark infringement under the Lanham Act and common law, unfair competition, and cancellation of certain design registrations.

The plaintiffs alleged that HMI used the George Nelson Foundation (“GNF”) to persuade Jacqueline Nelson to sign an Intellectual Property Assignment Agreement (“IPAA”) transferring her rights in the Nelson intellectual property to GNF. The IPAA stated that Michigan law governed the agreement and that legal proceedings concerning it could be brought exclusively in federal or state courts located in Michigan. HMI was not a signatory to the IPAA. The plaintiffs also alleged that a settlement in a separate Illinois case unwound the IPAA and returned any rights held by GNF to the plaintiffs.

Motion to Transfer

HMI moved under 28 U.S.C. § 1404(a) to transfer the action to the United States District Court for the Western District of Michigan. In the alternative, HMI moved to dismiss under Rule 12(b) of the Federal Rules of Civil Procedure.

The court explained that a valid forum-selection clause—the parties’ agreement about where disputes may be litigated—normally receives controlling weight. The court concluded that the Illinois settlement did not prevent HMI from relying on the clause. Under either federal law or Michigan law, a contract’s procedural provisions can survive rescission, and HMI was not a party to the settlement that allegedly unwound the IPAA.

The court found that the clause was mandatory because it required legal actions to be brought “exclusively” in Michigan. The clause was also reasonably communicated because it was written in clear and unambiguous language. Although HMI did not sign the IPAA, the court held that Michigan law could permit a closely related non-signatory to enforce a forum-selection clause. The court found that the plaintiffs themselves alleged a close relationship between HMI and GNF by describing GNF as HMI’s proxy or alter ego.

The court further held that all of the plaintiffs’ claims were “with respect to” the IPAA. The fraud and conspiracy claims depended on the alleged inducement of Jacqueline Nelson to sign the IPAA; the unjust-enrichment claim depended on HMI’s alleged receipt of benefits through that agreement; and the trademark and unfair-competition claims depended on ownership rights established through the IPAA. The court also found that the plaintiffs had not shown that the forum-selection clause itself resulted from fraud or overreaching, or that enforcement would otherwise be unreasonable or unjust.

Disposition

Judge Jesse M. Furman granted HMI’s motion to transfer the case to the United States District Court for the Western District of Michigan. HMI’s alternative motion to dismiss was denied as moot and without prejudice to renewal following the transfer. The clerk was directed to terminate the motion, transfer the action, and close the Southern District of New York case. The court did not decide the underlying merits of the plaintiffs’ intellectual-property and fraud claims.