Premier Wine & Spirits, a South Dakota Corporation v. E. & J. Gallo Winery, a California Corporation

Premier Wine & Spirits (Premier), a South Dakota corporation, brought suit against E. & J. Gallo Winery (Gallo), a California corporation. Jurisdiction depended on diversity of citizenship. The suit was originally brought in South Dakota and transferred to the Eastern District of California pursuant to a provision in the contract between Premier and Gallo. Premier claimed breach of the implied covenant of good faith and fair dealing, wrongful termination of its distributorship by Gallo, violation of the California Franchise Investment Law, the California Franchise Relations Act, and the South Dakota Franchise Act, and breach of fiduciary duty by Gallo; it further contended that the termination clause in the distributorship agreement was unconscionable. The district court gave summary judgment for Gallo. 644 F.Supp. 1431 . We affirm.

FACTS

Premier is a wholesaler of liquor in South Dakota with annual sales as of 1983 in excess of $8 million. Gallo is a producer of wines which are nationally distributed. Beginning in 1959 Gallo agreed that Premier should distribute its wines in South Dakota. The agreement at issue here was entered into on October 17, 1977. It provided for Premier…