Whirlpool Corporation v. The Grigoleit Company , 713 F.3d 316 ( 2013 )


Menu:
  •                     RECOMMENDED FOR FULL-TEXT PUBLICATION
    Pursuant to Sixth Circuit I.O.P. 32.1(b)
    File Name: 13a0105p.06
    UNITED STATES COURT OF APPEALS
    FOR THE SIXTH CIRCUIT
    _________________
    X
    Plaintiff-Appellant/Cross-Appellee, -
    WHIRLPOOL CORPORATION,
    -
    -
    -
    Nos. 11-2348/2421
    v.
    ,
    >
    -
    Defendant-Appellee/Cross-Appellant. -
    THE GRIGOLEIT COMPANY,
    N
    Appeal from the United States District Court
    for the Western District of Michigan at Grand Rapids.
    No. 1:06-cv-195—Paul Lewis Maloney, Chief District Judge.
    Argued: November 29, 2012
    Decided and Filed: April 12, 2013
    Before: MARTIN, SILER, and DONALD, Circuit Judges.
    _________________
    COUNSEL
    ARGUED: Matthew T. Nelson, WARNER NORCROSS & JUDD LLP, Grand Rapids,
    Michigan, for Appellant/Cross-Appellee. John M. Lichtenberg, RHOADES MCKEE
    PC, Grand Rapids, Michigan, for Appellee/Cross-Appellant. ON BRIEF: Matthew T.
    Nelson, Jeanne F. Long, WARNER NORCROSS & JUDD LLP, Grand Rapids,
    Michigan, for Appellant/Cross-Appellee. John M. Lichtenberg, Alexander F. Denton,
    RHOADES MCKEE PC, Grand Rapids, Michigan, for Appellee/Cross-Appellant.
    _________________
    OPINION
    _________________
    SILER, Circuit Judge. This case concerns a contract dispute between Plaintiff,
    Whirlpool Corporation (“Whirlpool”), and Defendant, The Grigoleit Company
    (“Grigoleit”). Grigoleit supplied knobs for Whirlpool’s washing machines and dryers
    for several years, and it sought to increase prices and amend the parties’ purchase
    contracts in late 2004. The parties reached an amended agreement in February 2005,
    1
    Nos. 11-2348/2421        Whirlpool Corp. v. Grigoleit Co.                          Page 2
    which Whirlpool terminated later that year. When Grigoleit demanded final payment,
    Whirlpool sued, arguing the contract was unenforceable. The district court upheld the
    contract but found some aspects of it unconscionable. Whirlpool appeals the district
    court’s holding that the contract is enforceable. Grigoleit cross-appeals, challenging the
    district court’s holding that two provisions are unconscionable and its determination of
    awardable damages. We AFFIRM IN PART, REVERSE IN PART, and REMAND
    the case to the district court for further proceedings consistent with this opinion.
    I.
    Whirlpool manufactures home appliances and purchased from Grigoleit knobs
    for its products for many years. The parties’ dealings were manifested in numerous
    Blanket Purchase Orders, which established prices that would be charged if and when
    Whirlpool issued a “release” for parts. Releases authorized Grigoleit to manufacture and
    ship specific parts and indicated how many additional parts Whirlpool anticipated
    needing over the next several weeks and months.
    In 2003, Whirlpool announced the impending termination of all of the appliance
    programs for which Grigoleit made parts. Grigoleit asked to participate in some of the
    replacement programs but Whirlpool declined the request. Over the next year, the
    volume of work received by Grigoleit from Whirlpool decreased significantly. Grigoleit
    continued to supply the same range of parts, in smaller volume, and continued
    manufacturing and shipping parts based upon daily releases, at prices set by Blanket
    Purchase Orders which had not been amended since the 1990s.
    On November 4, 2004, Grigoleit requested price increases, minimum volume
    commitments, and changes in the manufacturing and shipping requirements from
    Whirlpool. The next month produced little meaningful discussion, and on December 22,
    Grigoleit warned that should Whirlpool refuse to negotiate, Grigoleit would be forced
    to terminate their existing agreement and terminate all open Blanket Purchase Orders on
    January 31, 2005. In response, Whirlpool asked that Grigoleit provide justification for
    the price increases. The parties communicated over the next several weeks but were
    Nos. 11-2348/2421         Whirlpool Corp. v. Grigoleit Co.                            Page 3
    unable to reach an agreement. During negotiations, Grigoleit demanded that the new
    price terms, although not yet determined, apply retroactively to November, the time of
    Grigoleit’s initial request for price increases.
    The parties still had not reached an agreement by January 31, 2005 when the
    Blanket Purchase Orders ended. At the beginning of February, Grigoleit shared its
    concern that it was suffering “extrinsic costs” as a result of the ongoing yet unfruitful
    negotiations. Grigoleit notified Whirlpool that it would impose a $10,000 charge for
    every additional week beyond February 1 that the parties failed to reach an agreement.
    The parties eventually executed an agreement at the end of February (the
    “Agreement”) whereby Whirlpool agreed to purchase and Grigoleit agreed to supply a
    much smaller volume of parts at increased prices. According to Whirlpool, it paid in
    excess of $1.3 million due to the increases above the price it was charged by alternative
    suppliers that eventually replaced Grigoleit. The Agreement included a flat fee of
    $40,000 to account for the “extrinsic costs” introduced earlier by Grigoleit, price
    increases, and an additional 8% surcharge on all parts covered under the Agreement in
    lieu of applying the new prices retroactively to November. Paragraph 5 of the
    Agreement covered liabilities and damages and is a point of much contention between
    the parties. It reads:
    Whirlpool is liable for all quantities of finished parts, components, and
    raw materials that are processed and/or procured by Grigoleit in meeting
    its obligations under previous and new blanket PO’s. Such quantities
    may exceed the amount required to cover actual quantities of finished
    parts shown on the Grigoleit order balance at a given time, e.g. minimum
    buys of raw materials, etc. The total Whirlpool liability for quantities of
    materials in excess of Grigoleit order balance shall not exceed $100,000
    and shall be limited to obligations supported by Grigoleit inventory or
    other records as follows:
    a. Finished parts shall be paid by Whirlpool at ATTACHMENT A price.
    b. In process components shall be paid by Whirlpool at Grigoleit stated
    percentage of completion of ATTACHMENT A price.
    c. Raw material, which includes purchased components, committed and
    on hand shall be paid by Whirlpool at Grigoleit laid-in invoice price plus
    Nos. 11-2348/2421        Whirlpool Corp. v. Grigoleit Co.                          Page 4
    thirty percent. Grigoleit shall ship any parts, components and raw
    materials covered under this paragraph as directed by Whirlpool.
    Paragraph 6, also a point of contention, authorized Grigoleit to ship Whirlpool parts
    according to Whirlpool’s weekly releases. It stated that “in no event will Grigoleit be
    required to hold as finished goods inventory more than 90 days.”
    Business dealings between the parties proceeded under the Agreement until the
    fall of 2005, when Whirlpool contracted Grigoleit’s remaining work to two other
    suppliers and stopped issuing releases to Grigoleit altogether. Grigoleit notified
    Whirlpool of inventories of finished parts exceeding 90 days in possession based on
    Whirlpool’s existing releases and shipped them to Whirlpool. Grigoleit also computed
    Whirlpool’s liability for parts still within Grigoleit’s possession pursuant to Paragraph
    5 of the Agreement and invoiced Whirlpool to this effect.
    Whirlpool refused to tender payment and filed suit in Berrien Circuit Court,
    asserting that the Agreement was the product of economic duress. Grigoleit moved to
    dismiss pursuant to Fed. R. Civ. P. 12(b)(6). The district court granted Grigoleit’s
    motion, holding that a claim of economic duress cannot be predicated upon a party’s
    threat to do that which it is legally entitled to do and finding that Grigoleit had an
    indisputable right to terminate its purchase orders with Whirlpool. Whirlpool was
    permitted to file an amended complaint.
    In its amended complaint, Whirlpool asserted that Grigoleit’s termination of the
    purchase orders constituted extortion and the Agreement had therefore been formed
    under economic duress and was unconscionable. Grigoleit again moved for dismissal
    and the district court found that threatening to terminate the contract was a lawful
    exercise of Grigoleit’s rights. Since a claim of economic duress requires proof of illegal
    action, Whirlpool could not sustain its claim. The district court also held that Whirlpool
    had stated a claim that the Agreement was unconscionable, and Whirlpool filed a
    second amended complaint which included a claim for damages on the theory of
    unconscionability. Grigoleit counter-claimed for damages based upon Whirlpool’s
    termination of the Agreement. Whirlpool then moved for partial summary judgment,
    Nos. 11-2348/2421       Whirlpool Corp. v. Grigoleit Co.                         Page 5
    asking the district court to construe the damages provision of the Agreement. Whirlpool
    contended that Grigoleit’s damages must be capped at Whirlpool’s volume commitment,
    plus $100,000, as provided in Paragraph 5 of the Agreement. The district court found
    that the Agreement did not support Whirlpool’s interpretation of its obligations to pay
    for finished parts and that finished parts authorized for manufacture by Whirlpool were
    subject to distinct purchase obligations under the Agreement, not confined to the
    $100,000 cap of Paragraph 5.
    The district court conducted a bench trial to determine whether the Agreement
    was unconscionable and held it to be partially enforceable. It held that under the
    Michigan Uniform Commercial Code, a commercial contract or one of its provisions
    may be deemed unconscionable only upon a showing of both substantive and procedural
    unconscionability. It found that the prices set under the Agreement were substantively
    unconscionable because they were not supported by any evidence and, to the contrary,
    evidence presented during the bench trial established that Grigoleit was already
    pocketing a profit on its sales to Whirlpool prior to renegotiating prices. Only two
    aspects of the price increases were found to also be procedurally unconscionable and
    thus unenforceable. The district court found that Grigoleit hastily introduced the
    $40,000 “extrinsic costs” charge and the additional 8% surcharge, which left Whirlpool
    without a meaningful opportunity to negotiate or refuse them. It concluded that these
    provisions were unconscionable and unenforceable.
    Whirlpool appeals, arguing that the district court erred in holding that the
    Agreement was not unconscionable. Whirlpool also challenges the holding that illegal
    activity, as opposed to merely wrongful conduct, is required to assert economic duress.
    Grigoleit cross-appeals the district court’s findings that the “extrinsic costs” fee and
    additional 8% increase are unconscionable.
    II.
    Under Michigan law, unconscionability is a question of law left to the courts,
    Andersons, Inc. v. Horton Farms, Inc., 
    166 F.3d 308
    , 323 (6th Cir. 1998), and we review
    such holdings de novo. See also Gianni Sport Ltd. v. Gantos, Inc., 
    391 N.W.2d 760
    , 761
    Nos. 11-2348/2421        Whirlpool Corp. v. Grigoleit Co.                            Page 6
    (Mich. Ct. App. 1986). However, unconscionability is determined by analyzing the facts
    and circumstances present when a contract was made, and a court’s findings in these
    regards are reviewed for clear error. 
    Andersons, 166 F.3d at 323
    .
    A. Unconscionability.
    Whirlpool first argues that an agreement may be held unconscionable on the
    basis of substantive unconscionability alone. Unconscionability is governed by Section
    440.2302 of the Michigan Compiled Laws, which states:
    (1) If the court as a matter of law finds the contract or any clause of the
    contract to have been unconscionable at the time it was made the court
    may refuse to enforce the contract, or it may enforce the remainder of the
    contract without the unconscionable clause, or it may so limit the
    application of any unconscionable clause as to avoid any unconscionable
    result.
    A court interpreting Michigan law must answer two questions when determining whether
    contracts are unconscionable: “(1) What is the relative bargaining power of the parties,
    their relative economic strength, the alternative sources of supply, in a word, what are
    their options?; and (2) Is the challenged term substantively reasonable?” Allen v. Mich.
    Bell Tel., 
    171 N.W.2d 689
    , 692 (Mich. Ct. App. 1969). These inquiries speak to
    procedural unconscionability and substantive unconscionability, respectively. Clark v.
    DaimlerChrysler Corp., 
    706 N.W.2d 471
    , 474 (Mich. Ct. App. 2005) (citing Nw.
    Acceptance Corp. v. Almont Gravel, Inc., 
    412 N.W.2d 719
    , 723 (Mich. Ct. App. 1987)).
    Whirlpool argues that unconscionability is determined on a sliding scale and that
    a substantial degree of substantive unconscionability is alone sufficient to render an
    agreement unenforceable, even absent a finding of procedural unconscionability.
    Grigoleit responds that under well-settled Michigan law, both substantive and procedural
    components must be established before an agreement will be held unconscionable.
    Many courts employ a balancing approach to the question of unconscionability,
    “and to tip the scales in favor of unconscionability, most courts seem to require a certain
    quantum of procedural plus a certain quantum of substantive unconscionability.”
    Nos. 11-2348/2421        Whirlpool Corp. v. Grigoleit Co.                           Page 7
    Citizens Ins. Co. of Am. v. Proctor & Schwartz, Inc., 
    802 F. Supp. 133
    , 144 (W.D. Mich.
    1992) (overruled on other grounds) (emphasis added) (internal quotation marks omitted).
    The Michigan Court of Appeals in Allen v. Michigan Bell recognized that
    unconscionability requires “an absence of meaningful choice on the part of one of the
    parties together with contract terms which are unreasonable [sic] favorable to the other
    
    party.” 171 N.W.2d at 692
    (emphasis added). Therefore, “merely because the parties
    have different options or bargaining power, unequal or wholly out of proportion to each
    other, does not mean that the agreement of one of the parties to a term of a contract will
    not be enforced against him; if the term is substantively reasonable it will be enforced.”
    
    Id. Likewise, “if
    the provision is substantively unreasonable, it may not be enforced
    without regard to the relative bargaining power of the contracting parties.” 
    Id. Accordingly, federal
    courts consistently observe that Michigan law requires a party to
    demonstrate both procedural and substantive unconscionability. See Pichey v. Ameritech
    Interactive Media Servs., Inc., 
    421 F. Supp. 2d 1038
    , 1044-45 (W.D. Mich. 2006);
    Citizens 
    Ins., 802 F. Supp. at 144
    (“[A] determination of unconscionability cannot be
    made with respect to the subject provision based on its ‘substantive’ content alone, but
    must be premised upon the ‘procedural’ factors.”).
    In defense of its position that substantive unconscionability alone is sufficient to
    deem an agreement unconscionable, Whirlpool cites to numerous courts from other
    states that have endorsed this view. However, none of these cases comes from Michigan
    or implicates Michigan law. Also, as Grigoleit correctly notes, most of these cases do
    not arise under the Uniform Commercial Code, nor from contracts between commercial
    parties. Because Michigan law is consistent and clear, the district court properly held
    that both substantive and procedural unconscionability are required to hold an agreement
    unenforceable.
    1. Substantive unconscionability.
    We need not determine whether the district court properly concluded that the
    Agreement’s price terms are substantively unconscionable because we uphold the district
    court’s finding of no procedural unconscionability on all terms except for the
    Nos. 11-2348/2421        Whirlpool Corp. v. Grigoleit Co.                          Page 8
    $40,000 fee and the 8% surcharge, and we find the district court erred in finding
    those two charges to be procedurally unconscionable. The question of substantive
    unconscionability is irrelevant.
    2. Procedural unconscionability.
    Procedural unconscionability is determined by evaluating the bargaining power
    of the parties, their relative economic strength, and their alternative sources of supply.
    Gianni 
    Sport, 391 N.W.2d at 761-62
    . “[T]he most important factors in determining
    procedural unconscionability are (1) whether the relatively weaker party had an
    alternative source with which it could contract, and (2) whether the contract term in
    question was in fact negotiable.” 
    Andersons, 166 F.3d at 324
    . Although courts should
    not substitute their judgment for that of freely contracting parties, “[i]mplicit in the
    principle of freedom of contract is the concept that at the time of contracting each party
    has a realistic alternative to acceptance of the terms offered.” Nw. Acceptance 
    Corp., 412 N.W.2d at 723
    (internal quotation marks omitted). As the Michigan Court of
    Appeals explained in Northwest Acceptance Corp.,
    Where goods and services can only be obtained from one source (or
    general sources on noncompetitive terms) the choices of one who desires
    to purchase are limited to acceptance of the terms offered or doing
    without. Depending on the nature of the goods or services and the
    purchaser’s needs, doing without may or may not be a realistic
    alternative. Where it is not, one who successfully exacts agreement to an
    unreasonable term cannot insist on the court’s enforcing it on the ground
    that it was “freely” entered into, when it was not. He cannot in the name
    of freedom of contract be heard to insist on enforcement of an
    unreasonable contract term against one who on any fair appraisal was not
    free to accept or reject that term.
    
    Id. at 723–24
    (internal quotation marks omitted).
    We must determine whether the district court clearly erred in determining that
    the $40,000 flat fee and 8% surcharge are procedurally unconscionable. First and
    foremost in this discussion is our consideration that Whirlpool is a large, sophisticated
    corporation, presumably capable of competent negotiation. “[U]nconscionability is
    Nos. 11-2348/2421        Whirlpool Corp. v. Grigoleit Co.                           Page 9
    rarely found in a commercial context . . . .” 
    Pichey, 421 F. Supp. 2d at 1045
    (citations
    omitted). In fact, agreements involving commercial parties on both ends have only been
    found unconscionable in context of extreme, blatant, unavoidable inequities, such as
    those where damages are limited even where a contract is wholly unperformed, See
    
    Allen, 171 N.W.2d at 693
    , and those where parties are given no opportunity to review
    or read an agreement before signing it, see Nw. Acceptance 
    Corp., 412 N.W.2d at 721
    ,
    724. No such extreme circumstances are present here. As the district court observed,
    Whirlpool failed to negotiate in good faith with Grigoleit until February 2005. In fact,
    Whirlpool rebuffed and even ignored Grigoleit’s efforts to discuss modifying the parties’
    contract until that time. The $40,000 flat fee and 8% increase, although agreed upon in
    the eleventh hour, were not the result of strong-arming or foul play. Both fees
    essentially represent payment for the delay in reaching an agreement, and that delay
    could have been avoided entirely by Whirlpool. Because Whirlpool created its own
    unfavorable circumstances, we cannot conclude that the terms it agreed to under such
    circumstances were non-negotiable.
    Moreover, Whirlpool proposed the $40,000 flat fee and 8% increase. It did so
    to avoid paying even higher amounts in fees for the delay it caused by failing to
    negotiate in good faith earlier. It is plainly illogical to deem terms unconscionable
    where they were proposed by the complaining party itself and no allegations of fraud or
    duress are presented. See Roussalis v. Wyoming Med. Ctr., Inc., 
    4 P.3d 209
    , 246 (Wyo.
    2000) (“[W]e find it difficult to accept the notion that a party who proposes an allegedly
    unconscionable term can be viewed as an innocent party who is oppressed or unfairly
    surprised by a provision of its own making.”); Hill v. Hill, 
    380 S.E.2d 540
    , 546 (N.C. Ct.
    App. 1989). Because Whirlpool proposed the $40,000 flat fee and 8% increase in lieu
    of higher payments to Grigoleit for delays that Whirlpool itself caused, there is no unfair
    oppression or absence of bargaining power in the parties reaching these terms.
    Whirlpool’s     strongest   argument     in   support    of   finding   procedural
    unconscionability is that, because Grigoleit was the sole source of parts for a particular
    line of washing machines and dryers, Whirlpool was left without an alternative source
    Nos. 11-2348/2421        Whirlpool Corp. v. Grigoleit Co.                         Page 10
    from which to procure parts. Although it is true that Grigoleit was Whirlpool’s sole
    supplier of knobs, this arrangement was by Whirlpool’s own design. As a Whirlpool
    representative testified at trial, sole-source arrangements allow Whirlpool to avoid a
    number of manufacturing and design costs. For this benefit, Whirlpool mindfully elects
    to enter into such arrangements with its suppliers. In exchange however, Whirlpool
    inherently accepts the risk that a disagreement with one of its suppliers may cause a
    manufacturing delay. Therefore, Whirlpool’s inability to order the specific parts in
    question from another supplier does not conclusively render the terms it agreed to
    unconscionable. Furthermore, Whirlpool in fact did have other suppliers from which it
    could purchase parts, as evidenced by its ability to replace Grigoleit as a supplier within
    a few short months of seeking out alternatives.
    Although the $40,000 flat fee and 8% increase may be unfavorable to Whirlpool,
    the district court unmistakably erred in finding these terms procedurally unconscionable.
    Whirlpool created the urgent and unfavorable conditions under which it proposed these
    terms, and it had ample time and opportunity to negotiate more favorable terms. More
    importantly, Whirlpool had the resources, experience, and ability to avoid these terms
    entirely, yet chose not to do so.
    3. Whether the agreement, partially or in its entirety, is
    unconscionable.
    As discussed above, both procedural and substantive unconscionability are
    required in order to hold a provision or an entire agreement unconscionable. Having
    found that the “extrinsic costs” charge and 8% surcharge are not procedurally
    unconscionable, it follows that they cannot be held unenforceable. Moreover, because
    these terms are not unconscionable, Whirlpool’s argument in favor of holding the entire
    agreement unenforceable fails. Absent a finding of procedural unconscionability, there
    are no grounds upon which we should consider whether the entire agreement is
    unenforceable.
    Nos. 11-2348/2421         Whirlpool Corp. v. Grigoleit Co.                       Page 11
    4. Certification of unconscionability question to the Michigan
    Supreme Court.
    In the alternative to concluding that the Agreement is unconscionable, Whirlpool
    asks us to certify to the Michigan Supreme Court the issue of whether substantive
    unconscionability alone, particularly as to an excessive price term, is sufficient to deem
    an agreement unconscionable.
    Pursuant to Michigan Court Rule 7.305(B), when “consider[ing] a question that
    Michigan law may resolve and that is not controlled by Michigan Supreme Court
    precedent, the court may on its own initiative or that of an interested party certify the
    question to the Michigan Supreme Court.”
    Whether substantive unconscionability may alone invalidate an agreement is not
    an issue of first impression or unsettled Michigan law. As explained, Michigan law
    requires a party asserting unconscionability to prove both procedural and substantive
    unconscionability. See 
    Pichey, 421 F. Supp. 2d at 1044-45
    ; Citizens 
    Ins., 802 F. Supp. at 144
    ; Allen v. Michigan 
    Bell, 171 N.W.2d at 692
    . Therefore, we will not certify this
    issue to the Michigan Supreme Court.
    B. Economic duress.
    Whirlpool also requests that we certify a question to the Michigan Supreme
    Court regarding its claim of economic duress. In its complaint and first amended
    complaint, Whirlpool asserted that the Agreement was a product of economic duress.
    Whirlpool argued it only entered into the Agreement because Grigoleit threatened to
    interrupt Whirlpool’s manufacturing operations by terminating Blanket Purchase Orders
    as of January 31, 2005. The district court granted Grigoleit’s motion to dismiss this
    claim on the basis that, under Michigan law, one seeking to avoid a contract claimed to
    be the product of duress must plead illegal compulsion. Because Whirlpool failed to
    plead “anything even remotely illegal or unlawful,” it failed to state an economic duress
    claim.
    Nos. 11-2348/2421        Whirlpool Corp. v. Grigoleit Co.                         Page 12
    On appeal, Whirlpool argues that although Michigan law currently requires
    illegal action as an element of a claim for economic duress, a more recent dissent in the
    Michigan Supreme Court suggests that the issue is unsettled. As early as 1881, the
    Michigan Supreme Court held that illegal action is a necessary element of economic
    duress. Hackley v. Headley, 
    8 N.W. 511
    , 512-13 (Mich. 1881) (“Duress exists when one
    by the unlawful act of another is induced to make a contract or perform some act under
    circumstances which deprive him of the exercise of free will.”). Since Hackley,
    Michigan courts have repeatedly and consistently required illegal action to prove
    economic duress. See e.g., Quartell v. Great Lakes Bancorp, No. 183368, 
    1996 WL 33347624
    , at *2 (Mich. Ct. App. 1996); Enzymes of Am., Inc. v. Deloitte, Haskins &
    Sells, 
    523 N.W.2d 810
    , 814 (Mich. Ct. App. 1994), rev’d on other grounds, 
    539 N.W.2d 513
    (Mich. 1995); Apfelblat v. Nat’l Bank Wyandotte-Taylor, 
    404 N.W.2d 725
    , 728
    (Mich. Ct. App. 1987) (“Duress requires compulsion or coercion by which one is
    illegally forced to act by fear of serious injury to person, reputation or fortune. Fear of
    financial ruin alone is insufficient to establish economic duress; it must also be
    established that the person applying the coercion acted unlawfully.”). More recently, in
    Stefanac v. Cranbrook Educ. Cmty., Justice Levin, dissenting, noted that Michigan law
    on economic duress “may have lagged behind” other states which no longer require
    illegal action. 
    458 N.W.2d 56
    , 74 n. 40 (Mich 1990) (Levin, J., dissenting). Although
    it is true that Michigan law may be different than that of other states, Justice Levin’s
    remark on this issue does not suggest that it is unsettled, as argued by Whirlpool. To the
    contrary, Justice Levin continues in his dissent to note that “fairly recent Michigan
    cases” continue to cite and apply Hackley’s requirement of illegal action. 
    Id. For this
    reason, we decline to certify Whirlpool’s economic duress question to the Michigan
    Supreme Court.
    C. Damages limitation pursuant to the Agreement.
    Whirlpool’s final argument on appeal concerns the district court’s interpretation
    of damages pursuant to Paragraph 5 of the Agreement. Specifically, Whirlpool argued
    in its brief that Paragraph 5 limits Whirlpool’s liability to $100,000. However,
    Nos. 11-2348/2421       Whirlpool Corp. v. Grigoleit Co.                       Page 13
    Whirlpool withdrew its position at oral argument and no longer challenges the district
    court’s ruling. For this reason, we decline to review this issue on appeal.
    III.
    We AFFIRM the district court’s ruling that the Agreement is enforceable.
    However, we REVERSE the district court’s holding that the $40,000 flat fee and 8%
    increase are unconscionable and direct entry of a judgment in favor of Grigoleit on its
    cross-appeal.