R. L. Mlazgar Associates, Inc. v. Focal Point, L.L.C.
- Nancy Brasel
- 0:22-cv-00942
- U.S. District Court · District of Minnesota
- 49
In R. L. Mlazgar Associates, Inc. v. Focal Point, L.L.C., Judge Nancy E. Brasel ruled that lighting products manufacturer Focal Point illegally terminated its sales agent Mlazgar without proper notice or good cause under Minnesota law, allowing that claim and a breach of contract claim to proceed to trial on damages, while dismissing Mlazgar's trade secrets, tortious interference, conspiracy, and other tort claims, and granting Mlazgar summary judgment on most of Focal Point's counterclaims.
Sales agents and manufacturers in the lighting products industry operating under the Minnesota Termination of Sales Representatives Act; businesses using sales representative agreements with Illinois governing law clauses that may be voided by Minnesota's anti-waiver statute; companies asserting trade secrets claims where alleged misappropriation involves indirect corporate affiliates rather than the named defendants; parent companies seeking to rely on qualified privilege when intervening in subsidiaries' contracts.
What happened
R. L. Mlazgar Associates, Inc. v. Focal Point, L.L.C. is a dispute between a Minnesota-based lighting products sales agent, Mlazgar, and its former manufacturer-client, Focal Point, L.L.C. (along with Focal Point's corporate parent Legrand Holding, Inc. and related company Legrand North America, LLC). Mlazgar had served as Focal Point's exclusive sales agent in Eastern Wisconsin and Michigan's Upper Peninsula under a one-year renewable contract. In February 2022, Focal Point gave Mlazgar only thirty days' notice of termination — far short of the ninety days required by the Minnesota Termination of Sales Representatives Act (a state law protecting sales agents from abrupt, unjustified contract endings) — without stating a legally valid reason and without giving Mlazgar a chance to fix any problems. Focal Point then replaced Mlazgar with a competing agency, JTH-Wisconsin, which had been secretly recruited with the involvement of Focal Point's corporate parent, including a $250,000 payment to JTH.
The parties filed cross-motions for summary judgment — each side asking the court to rule in its favor without a full trial — on multiple claims. Mlazgar sued for violations of the Minnesota sales agent protection law, misappropriation of trade secrets under both state and federal law, breach of contract, and several business torts including tortious interference and civil conspiracy. Focal Point and its corporate family countersued for trademark infringement, breach of contract, and related claims arising from Mlazgar's continued listing of Focal Point's name and logo on its website after the termination.
Judge Nancy E. Brasel ruled that Focal Point clearly violated the Minnesota Termination of Sales Representatives Act by terminating Mlazgar without ninety days' notice, without good cause, and without an opportunity to cure — and that Mlazgar qualifies as a protected 'sales representative' under that statute. The question of how much money Focal Point owes Mlazgar for this violation will go to a jury at trial. The court also allowed Mlazgar's breach of contract claim to proceed to trial, finding that a jury could reasonably conclude that Focal Point improperly shared Mlazgar's confidential sales order information with the competing agency JTH. However, Judge Brasel dismissed Mlazgar's trade secrets claims (finding no evidence Defendants misappropriated protected information), its tortious interference and civil conspiracy claims (finding insufficient evidence of wrongful conduct by Defendants toward third-party manufacturers), and its aiding-and-abetting claim. On the counterclaims, the court dismissed three that Focal Point voluntarily dropped, ruled that Mlazgar owed no damages for trademark infringement (though any injunction request was found to be moot), and dismissed Focal Point's Illinois consumer protection counterclaim because the disputed conduct did not occur primarily in Illinois.
The detailed version
Case Overview Case: R. L. Mlazgar Associates, Inc. v. Focal Point, L.L.C., et al., No. 22-CV-942 (NEB/DJF) Court: United States District Court, District of Minnesota Judge: Nancy E. Brasel, United States District Judge Date: August 11, 2025
Parties - Plaintiff: R. L. Mlazgar Associates, Inc. ('Mlazgar'), a Minnesota-based lighting products sales agent. - Defendants: Focal Point, L.L.C. ('Focal Point'), a lighting products manufacturer; Legrand Holding, Inc. ('Legrand Holding'), Focal Point's corporate parent; and Legrand North America, LLC ('Legrand North America'), which provides shared services for Legrand Holding.
Background Mlazgar acquired Elan, the prior sales agent for Focal Point's products in Eastern Wisconsin and Michigan's Upper Peninsula (the 'Territory'), in October 2020. It inherited Elan's sales representative agreement with Focal Point and brought on former Elan employees. Shortly after, seven of those employees — led by Justin Hendrickson — began secretly coordinating with JTH Lighting Alliance, Inc. ('JTH') and Legrand Holding's Vice President of Sales David Michals to form a competing agency. In December 2020, an email thread called 'The Plan' detailed JTH's intent to: (1) hire seven Mlazgar employees; (2) become the sales agent for various manufacturers in the Territory; and (3) receive a market development payment from Legrand Holding. This plan materialized in January 2021: the seven employees departed Mlazgar, formed JTH Lighting Alliance Wisconsin, LLC ('JTH-Wisconsin'), and Legrand Holding advanced $250,000 through Legrand North America to JTH.
Despite this disruption, Mlazgar and Focal Point formalized their relationship with a new Sales Representative Agreement on March 10, 2021, for a one-year renewable term. However, Focal Point gave Mlazgar only thirty days' written notice of termination in February 2022, citing only that it was 'entertaining a new course of direction,' and did not provide an opportunity to cure. Focal Point then named JTH-Wisconsin as its exclusive Territory agent. Mlazgar filed suit on April 14, 2022.
Legal Standard The court applied the standard for summary judgment under Federal Rule of Civil Procedure 56(a): a party is entitled to judgment without trial if there is no genuine dispute as to any material fact and the party is entitled to judgment as a matter of law. On cross-motions, the court views the record in the light most favorable to each non-moving party in turn.
Rulings
Count I — Minnesota Termination of Sales Representatives Act (MTSRA) [Minn. Stat. § 325E.37]
Choice of Law
Although the Sales Representative Agreement contained an Illinois governing law clause, the MTSRA includes a statutory anti-waiver provision voiding any choice-of-law clause that attempts to circumvent the statute's protections for Minnesota-domiciled sales representatives. The court held the Illinois clause void and unenforceable with respect to the MTSRA claim.
Adequacy of Notice
The MTSRA requires ninety days' written notice of termination with stated reasons and a sixty-day opportunity to cure. Focal Point provided only thirty days' notice, no cure opportunity, and no valid statutory 'good cause' reason — saying only that it was pursuing a 'new course of direction.' The court found these to be clear violations.
Whether Mlazgar Is a 'Sales Representative'
Focal Point argued Mlazgar did not qualify under the statute's definition (a person who 'contracts with a principal to solicit wholesale orders and who is compensated, in whole or in part, by commission') and that the fourth specific exclusion applied (persons who 'distribute, sell, or offer the goods . . . to end users, at retail'). The court rejected both arguments. Mlazgar solicits orders from electrical distributors — middlemen who then resell to electrical contractors — not from the contractors (end users) directly, and not 'at retail.' The court distinguished the 1993 Robbins & Myers case, where the sales agent sold directly to manufacturing end users, because here the distributors resell the goods (evidenced in part by Focal Point charging no sales tax on distributor sales). The court held Mlazgar is a protected 'sales representative.'
Ruling
Focal Point's motion for summary judgment on Count I is DENIED. Mlazgar's motion for summary judgment on Focal Point's liability under Count I is GRANTED. The amount of damages — including potential damages for both unlawful termination and unlawful non-renewal — is a disputed fact question reserved for trial.
Counts III & IV — Trade Secrets (MUTSA and DTSA) Mlazgar alleged Defendants misappropriated its database of business information acquired from Elan. The court found that, of Mlazgar's entire claimed database, only three items were ever possessed or viewed by Defendants or their subsidiaries: (1) a contact list of customer names and email addresses sent by former employee Hendrickson from his JTH account; (2) a photometric report (a lighting design document) with Elan branding, found with Legrand Holding subsidiary Kenall; and (3) a screenshot of Mlazgar's internal sales figures sent by Hendrickson to JTH's CEO.
The court held none of these three items individually or collectively constitutes a trade secret. The contact list contained readily ascertainable customer information. The photometric report was based on publicly available specifications. The sales figures screenshot would be readily available to Legrand Holding as OCL's owner, and Mlazgar publicly filed the screenshot in related state court litigation, destroying any secrecy. Even if the documents were trade secrets, the court found no evidence of misappropriation by Defendants — Focal Point received the contact list innocently in response to a normal inquiry; the photometric report was only exchanged between JTH and Kenall (non-parties); and a Focal Point employee testified she never received the screenshot.
Ruling
Defendants' motion for summary judgment on Counts III and IV is GRANTED.
Count VI — Breach of Contract Mlazgar alleged Focal Point breached the Sales Representative Agreement's confidentiality provision by forwarding Mlazgar's sales order forms — which contained Mlazgar's confidential financial data about distributor clients — to JTH without Mlazgar's permission. Focal Point's own Vice President of Sales testified to this disclosure. Applying Illinois contract law (as the MTSRA anti-waiver provision does not extend to the non-MTSRA breach of contract claim), the court found genuine disputes of material fact as to breach and damages.
Ruling
Defendants' motion for summary judgment on Count VI is DENIED. This claim proceeds to trial on both liability and damages.
Count VII — Aiding and Abetting Breach of Fiduciary Duty Mlazgar alleged Defendants substantially assisted seven former employees in breaching their fiduciary duties of loyalty and confidentiality. The court applied Minnesota law and found the claim failed on both theories: (1) no evidence showed Defendants knew the employees were misappropriating confidential information, which is required for aiding and abetting liability; and (2) on the loyalty theory, there was no evidence of harm to Mlazgar from any solicitation Defendants allegedly encouraged, because Mlazgar still retains its contract as OCL's sales agent in the Territory.
Ruling
Defendants' motion for summary judgment on Count VII is GRANTED.
Counts IX & X — Tortious Interference with Contract and with Prospective Economic Advantage The court applied Minnesota law, finding no outcome-determinative conflict requiring a different choice-of-law analysis. The court held that Legrand Holding had a qualified privilege — a legal defense allowing a parent company to intervene in its wholly-owned subsidiaries' contracts — supported by a legitimate good-faith business justification (an established JTH relationship in other Midwest markets and shifting industry dynamics). No evidence of bad faith or malice was found. As to non-Legrand manufacturers that lost business to JTH, the court found no evidence that Defendants tortiously induced those companies to breach their contracts with Mlazgar; awareness of JTH's plans is not the same as engaging in tortious conduct.
Ruling
Defendants' motion for summary judgment on Counts IX and X is GRANTED.
Count VIII — Civil Conspiracy Because the court granted summary judgment for Defendants on all underlying tort claims, Mlazgar's civil conspiracy claim — which requires a viable underlying tort — also fails.
Ruling
Defendants' motion for summary judgment on Count VIII is GRANTED.
Defendants' Counterclaims
Counterclaim Counts I, III, V (Voluntarily Dismissed)
Defendants requested voluntary dismissal of their breach of contract, false designation of origin, and consumer fraud counterclaims. The court DISMISSED these WITH PREJUDICE under Federal Rule of Civil Procedure 41(a)(2).
Counterclaim Count II — Trademark Infringement (Lanham Act § 32)
After termination, Mlazgar continued to list Focal Point's registered mark on its public line card and website until September 16, 2022, after Focal Point filed counterclaims. The court analyzed whether this was brought properly under Section 32 of the Lanham Act (which covers unauthorized use of registered marks likely to cause confusion), concluding a confusion-as-to-affiliation theory can be brought under Section 32. However, on actual damages, the court found no evidence that Mlazgar's use of the mark actually caused confusion in the marketplace — Focal Point's own corporate representative conceded there was 'nothing that directly points to it.' On injunctive relief, the court found the request moot: even accepting Mlazgar's theory that the agreement was never validly terminated, any right to use the mark would have expired on March 10, 2023 (one year after the original agreement was set to expire), mooting any prospective injunction. Mlazgar's motion for summary judgment is GRANTED as to Defendants' request for actual damages and DENIED AS MOOT as to injunctive relief.
Counterclaim Count IV — Illinois Uniform Deceptive Trade Practices Act (IUDTPA)
The IUDTPA does not apply extraterritorially — it requires that the disputed conduct occur 'primarily and substantially in Illinois.' The court balanced nine factors and found that most factors pointed to Minnesota, Wisconsin, or Michigan as the location of the relevant conduct. Defendants did not respond to Mlazgar's argument on this point. Summary judgment GRANTED to Mlazgar.
What Goes to Trial 1. The amount of damages owed by Focal Point to Mlazgar for violating the MTSRA (Count I). 2. Liability and damages on Mlazgar's breach of contract claim regarding Focal Point's disclosure of confidential sales order forms to JTH (Count VI).
Reviewer note from the AI+
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