April 20, 2022

Another Wisconsin Lighting Battle: Mlazgar Sues Focal Point

Focal Point’s jump from Mlazgar to JTH has inspired a long list of grievances

The longstanding lighting agent rivalry between Upper Midwest lighting agents, Mlazgar Associates and JTH Lighting Alliance has evolved into a startling and well-documented legal battle between the two companies during the last year. In what seems to be a loosely related, yet independent complaint, Mlazgar is now suing architectural lighting manufacturer, Focal Point Lighting, in U.S. District Court for alleged breach of an agent-manufacturer contract relating to the Wisconsin territory.

Mlazgar makes numerous claims against Focal Point including:

Focal Point’s attempted termination of Mlazgar was not a lawful termination.
During Mlazgar's representation of Focal Point, JTH Lighting solicited sales of Focal Point’s products and has been paid commissions by Focal Point on those sales.
Focal Point withheld commissions from Mlazgar.
Focal Point directed existing and prospective customers of Mlazgar to place their orders through JTH Lighting and refused to accept and process sales orders received from Mlazgar.

The backstory:
Elan Lighting was the Focal Point representative in Wisconsin when Mlazgar and Elan joined forces in late 2020. Since Mlazgar purchased the assets of Elan, most (if not all) of Elan's agent-manufacturer lighting contracts did not automatically transfer to Mlazgar, so the agency collaborated with its Elan manufacturer partners to draw up new contracts – including one with Focal Point. According to the complaint, Mlazgar and Focal Point signed a representative contract in March 2021 for a 1-year term that would renew annually.

In early February 2022, Focal Point’s Vice-President of Sales reportedly sent an email and letter to Scott St. Marie, Mlazgar’s President, informing Mlazgar that Focal Point was terminating the agent contract.

Enter archrival, JTH:
Focal Point's termination notice did not lead to the typical end of an agent-manufacturer partnership. Focal Point selected agent rival JTH as the new Wisconsin agent – the same JTH that Mlazgar is suing in Minnesota courts for alleged unethical and unlawful conduct. JTH had expanded into Wisconsin over the last 18 months, and thus was expanding its already existing Focal Point representation in the Dakotas and Minnesota into the entire state of Wisconsin.

According to the Focal Point and JTH websites, JTH is the agent of record in Wisconsin. Yet Mlazgar still shows Focal Point on its line card in Wisconsin, perhaps because it is alleging that Focal Point’s termination did not satisfy state laws. Mlazgar asserts that Focal Point did not terminate for good cause, stating multiple times that Focal Point’s termination letter did not cite any reasons for the termination.

Interesting developments to watch:

Mlazgar's initial lawsuit does not contain answers to many questions that arise from it. Based on our layperson interpretation, it seems possible that all the allegations could possibly be tied to the contention that the termination was not valid, with Mlazgar's stance possibly being that they are the rightful and current Focal Point representative in Wisconsin.
Mlazgar’s headquarters is in Minnesota. The lawsuit is filed in Minnesota and cites many Minnesota statutes. But the termination in question relates to Wisconsin (and possibly Michigan’s upper peninsula.) Minnesota is reputed to have contract law that holds contract terminations to a higher-than-normal standard. Will Minnesota law apply to the Wisconsin territory termination?
The recap above is solely a recap of Mlazgar’s complaint. We reached out to Focal Point’s parent company, Legrand, as well as Mlazgar for comment. Both parties did not comment.
We look forward to learning what Focal Point’s counterarguments to the complaint are – in matters such as this, there is usually more to the story.

Mlazgar is requesting that the court declare the termination invalid, thus extending Mlazgar's Focal Point representation through at least March 2023. They are also demanding unpaid commissions and other damages in excess of $75,000.

In 2017, Mlazgar sued Crenshaw Lighting for commissions reported to be in the $300,000 - $500,000 range related to the Minnesota State Capitol project. That suit ended with an out-of-court settlement.