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Plaintiff's suit for unlawful termination of sales representation contract under the Puerto Rico Sales Representative Act
IOM Corp. v. Brown Forman Corp., 09-1672, concerned a plaintiff's suit against a marketer and distributor of liquor for unlawful termination of its sales representation contract and for breach of contract and breach of the implied covenant of good faith and fair dealing pursuant to the Puerto Rico Sales Representative Act, commonly known as Law 21.
In affirming the district court's judgment in favor of the defendant, the court held that the district court properly dismissed plaintiff's Law 21 claim for failure to state a claim as the well-pleaded facts in plaintiff's complaint do not support the conclusion that it procured and closed sales on defendant's behalf. The court also held that the district court properly referred the breach of contract claim to arbitration as the arbitration clauses can be reasonably interpreted to cover plaintiff's claim that defendant breached the commercial relationship between the parties in bad faith. Lastly, the court held that the district court's attorneys' fees award to defendant withstands plain error review.