A federal court in New Mexico denied a supplier’s motion to transfer venue after finding that a forum selection clause was invalid under New Mexico law. Rawson Inc. v. Associated Materials, LLC, 2025 WL 137811 (D.N.M. Sept. 30, 2025).
Rawson distributes building materials, including windows manufactured by Associated Materials, throughout southern New Mexico and west Texas. In 2020, Rawson expanded operations into the Dallas, Austin, and San Antonio markets with the intent to sell Associated Materials’ window products. Shortly after expanding, Rawson alleged that Associated Materials (1) would not accept orders for delivery to the new markets, (2) required Rawson to pay more than other distributors for Associated Materials products, and (3) failed to pay Rawson over $300,000 in rebates and credits. Rawson sued Associated Materials in New Mexico federal court alleging breach of contract, breach of the duty of good faith and fair dealing, and price discrimination. Associated Materials moved to dismiss the case, and alternatively, to transfer the case to Delaware, citing a forum selection clause contained in certain terms and conditions on Associated Materials’ website.
The court denied the motion, determining that the forum selection clause was not properly incorporated into the parties’ distribution agreement under New Mexico law. The court first found that the agreement did not make clear reference to the forum selection clause because it did not state which terms and conditions from the website were incorporated in the agreement. The court further reasoned that Associated Materials could have made the forum selection clause readily ascertainable by including the clause in the agreement’s “Additional Terms and Conditions” section. The court next found that it was unclear whether Rawson knew of and assented to the forum selection clause because the agreement’s reference to “Additional Terms and Conditions” gave no meaning to those respective terms and because Rawson did not initial an acknowledgment line following the “Additional Terms and Conditions” section. Thus, the court declined to enforce the forum selection clause and declined to transfer the case.