Rafael Rodríguez Barril, Inc. v. Conbraco Industries, Inc.

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Before Boudin, Selya and Gajarsa, *fn1 Circuit Judges.

The question in this case is whether a forum selection clause in a contract between the parties is displaced by Puerto Rico’s Sales Representatives Act of 1990, P.R. Laws Ann. tit. 10, §§ 279-279h (2009) (“Law 21″). The district court held that it was not displaced and dismissed the suit without prejudice. Although there are disputed facts as to a supposed breach of contract, the facts relating to the forum selection clause are not disputed, and that issue is dispositive on this appeal.

Conbraco Industries, Inc. (“Conbraco”), based in North Carolina, manufactures valves and other industrial products. On January 1, 1999, Conbraco and Rafael Rodríguez Barril, Inc. (“RRB”) executed a Sales Representative Agreement (“the agreement”) in North Carolina, appointing the latter as a Conbraco sales representative in Puerto Rico. One provision required RRB and its staff to “refrain from any activities which may reflect adversely upon the reputation or credibility of Conbraco or the Products.” Conbraco terminated the contract on June 27, 2008, claiming a breach of this provision by RRB several days earlier.*fn2

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