Scherk v. Alberto-Culver Co.

Alberto-Culver Company (plaintiff), an Illinois-based American company, bought businesses and related trademarks from Fritz Scherk (defendant), a German citizen living in Switzerland whose businesses were registered in Germany and Liechtenstein; the contract designated Illinois law but required all disputes to be arbitrated before the International Chamber of Commerce in Paris. After discovering competing trademark claims post-sale, Alberto-Culver sued Scherk in U.S. federal court alleging securities fraud, and the district court, relying on a securities-law provision voiding waivers of a judicial forum, denied Scherk's motion to compel arbitration and enjoined it; the Seventh Circuit affirmed.