Anyone who has been in business for any length of time knows that disagreements are going to crop up. The larger the operation is, the bigger the disputes are likely to be. As the business expands beyond its initial market into other cities, counties and states, the issues can be more complicated from a legal standpoint. With growth also comes an expansion in the number of possible courts that may have some measure of jurisdiction in resolving business disputes that arise.
Exercising control over where the proceedings occur is one legal strategy for achieving the most desirable outcome. To that end, many contracts stipulate that the first forum for handling dispute claims is arbitration — a process that has been shown to be efficient and cost effective. But as the case of one North Carolina-based business shows, sometimes getting issues into the preferred venue can be a challenge.
Primo Water Corp. is dealing with a legal challenge from three Texas companies that don’t like its activities in their territory. They are apparently claiming that an agreement between Primo and another company involving some customer service and business functions amounts to breach of contract, fraud and conspiracy.
The plaintiffs filed suit last year, but earlier this month a federal judge in Texas dismissed the case and directed that the matter be handled through alternative dispute resolution processes in North Carolina. That’s as is called for in existing contracts. The decision was made without prejudice, which means that the suit can be filed again.
A lot can be said for maintaining home field advantage in sports and in the legal system. That appears to be what has happened in this case. But Primo also likely expects that taking its case through ADR will prove more to its benefit.