Federal Court Enforces Forum-Selection Clause in Dealer Agreement
Background Facts
For nearly a decade, G.W. Van Keppel Company served as the exclusive dealer for Cemen Tech, Inc. — an Iowa-based manufacturer of concrete trucks and mixing equipment — across Oklahoma and several other states. Their written dealer agreement included a mandatory forum-selection clause requiring all disputes to be resolved in Iowa courts. When Cemen Tech terminated the agreement in January 2026, Van Keppel filed suit in federal court in Oklahoma, alleging violations of the Oklahoma Fair Practices Act (OFPA), the Kansas Outdoor Power Equipment Dealership Act, and the Missouri Merchandising Practices Act. Cemen Tech moved to transfer the case to the Southern District of Iowa.
Legal Holding
The Court enforced the forum-selection clause and transferred the case to Iowa. Van Keppel’s central argument was that the clause violated Oklahoma public policy as expressed in the OFPA. The Court, instead, found that the OFPA actually permits dealers to sue suppliers in “a court of competent jurisdiction” without geographic restriction—unlike provisions limiting other plaintiffs to Oklahoma courts. In the Court’s view, a dealer who agrees to a forum-selection clause is simply exercising that statutory venue choice in advance.
The Court also distinguished Alabama’s Heavy Equipment Dealers Act (AHEDA), which the Alabama Supreme Court in Cowin Equipment Co. v. Terex USA found expressed a strong public policy against outbound forum-selection clauses. The key differences: the AHEDA lets aggrieved persons sue in Alabama “[n]otwithstanding the terms, provisions, or conditions of any dealer agreement” and prohibits suppliers from requiring dealers to sign prospective releases of statutory obligations. These are provisions the OFPA simply does not contain. The Court concluded that the AHEDA “provides more unequivocal protections than the OFPA” and, unlike the OFPA, does not permit dealers to pursue claims in any competent jurisdiction — so the two statutes reflect fundamentally different public policies. Because the clause was valid, the court applied Atlantic Marine and held that Van Keppel’s private convenience concerns could not overcome the bargained-for forum.
Lessons Learned
This decision is good news if you include forum-selection clauses in your dealer or distribution agreements. Here are the key takeaways:
- Your clause likely controls. Under Atlantic Marine, a valid forum-selection clause is effectively outcome-determinative on a transfer motion — the dealer must show “unusual” circumstances to avoid it.
- State dealer-protection statutes are not all the same. There are sharp textual distinctions between Oklahoma’s OFPA — which gives dealers venue flexibility — and Alabama’s AHEDA, which mandates an in-state forum and bars contractual workarounds. The enforceability of your forum-selection clause may turn on the specific language of each state’s dealer-protection statute, so review them carefully wherever your dealers operate.
- Draft with precision. The clause here survived despite a typographical error naming two different Iowa counties — but don’t count on every court being as forgiving. Clean, consistent drafting eliminates one more line of attack.
