N. Grain Mktg., LLC v. Greving

• Decision Date: 18 February 2014
• Docket Number: No. 12–2653.,12–2653.
• Citation: 743 F.3d 487
• Parties: NORTHERN GRAIN MARKETING, LLC, Plaintiff–Appellant, v. Marvin GREVING, Defendant–Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

743 F.3d 487

NORTHERN GRAIN MARKETING, LLC, Plaintiff–Appellant,

v.Marvin GREVING, Defendant–Appellee.

No. 12–2653.

United States Court of Appeals,Seventh Circuit.

Argued June 4, 2013.

Decided Feb. 18, 2014.

Trent L. Bush, Attorney, Ward, Murray, Pace & Johnson, Sterling, IL, for Plaintiff–Appellant.

Robert E. Shumaker, Attorney, Dewitt Ross & Stevens S.C., Madison, WI, for Defendant–Appellee.

Before FLAUM, SYKES, and HAMILTON, Circuit Judges.

SYKES, Circuit Judge.

Marvin Greving has lived and farmed in southeastern Wisconsin since April 1971. In 2003 he began contracting to sell his grain to Northern Grain Marketing, LLC, an Illinois-based grain buyer. Northern Grain claims that Greving repudiated several contracts formed years after the parties first began contracting and seeks almost $1 million in damages from him. When Greving refused to arbitrate the dispute, Northern Grain filed this action in the district court in Rockford, Illinois, seeking an order compelling arbitration. Greving moved to dismiss for lack of personal jurisdiction. The court granted that motion and Northern Grain took this appeal.

We affirm. Greving lacks minimum contacts with Illinois that would permit the district court, consistent with the due-process clause of the Fourteenth Amendment, to exercise specific personal jurisdiction over him. As relevant to this dispute, Greving only set foot in Illinois once—to attend a seed-corn meeting in Rochelle in early 2003, several months before the parties entered into the first of their grain contracts. It was there that he met Tom Wilson, who became his point of contact with Northern Grain. But even assuming that Greving's attendance at this seed-corn meeting enters the personal-jurisdiction calculus for the later-formed contracts at issue here, there is no indication in the record that Greving attended the meeting in an effort to find grain buyers. And virtually everything else about Greving's contractual relationship with Northern Grain was based in Wisconsin. When Greving met with Wilson, they met either at his Wisconsin farm or at a Denny's restaurant in Delavan, Wisconsin. Greving delivered his Wisconsin-grown grain to a grain elevator in Wisconsin. Of course, the checks he received from Northern Grain were drawn on Illinois banks, but that does not show that he purposefully availed himself of the privilege of conducting business in Illinois. So although it may seem convenient as a practical matter for Greving to defend this suit in Rockford, the Constitution doesn't permit the Illinois courts—and, thus, federal district courts in Illinois—to exercise jurisdiction over him.

I. Background

Marvin Greving is a longtime Wisconsinite. Although he graduated from high school in Iowa and attended college in New York, he has lived and farmed in Walworth County, in rural southeastern Wisconsin, since April 1971, and has owned his own farm in Elkhorn since 1977. He and his wife conduct their personal and business activities in Wisconsin, and their children attended Wisconsin schools. Greving has a Wisconsin driver's license, Wisconsin insurance, and pays taxes into the Wisconsin treasury. He purchases his seed, fertilizer, pesticides, and other farm equipment from Wisconsin vendors.

In 2003 Greving traveled some 70 miles from his farm to attend a seed-corn meeting held at an insurance agency in Rochelle, Illinois. This was essentially a trade show sponsored by a seed company at which farmers could learn more about the latest technology in seed corn. While there, Greving met Wilson, a grain originator for Northern Grain.¹ Northern Grain is a limited-liability company organized underDelaware law but located in Harmon, Illinois. It buys and markets grain, and Wilson's job duties included contracting with farmers for the purchase of grain. While it appears that Wilson attended the seed-corn meeting for the purpose of making contacts with farmers like Greving, there is no indication that Greving attended the meeting with an eye toward marketing his own grain to buyers.

Wilson's efforts paid off. He and Greving kept in touch by phone after the meeting, and eventually Greving agreed to sell grain to Northern Grain. At the time of initial contracting, Greving knew that Northern Grain was located in Illinois. Greving and Northern Grain, via Wilson, entered into a series of similar contracts over the course of the next nine years or so. When Greving and Wilson met, they did so at a Denny's restaurant in Delavan, Wisconsin, or at Greving's farm. The typical contracting process involved an oral agreement followed by a written confirmation. Northern Grain would pay Greving by checks drawn on Illinois banks. Pursuant to the terms of the contracts, Greving produced the grain and delivered it to one of several Wisconsin grain elevators.

Northern Grain alleges that Greving repudiated several oral contracts providing for the delivery of grain between December 2010 and December 2012. Greving denies ever having entered into these contracts and claims that he had to continuously fend off Wilson's efforts to get him to sign documents purporting to be written confirmations of these contracts. He claims that these alleged contracts involved quantities of grain greater than his farm had ever produced in a given year and that he resisted Wilson's efforts to get him to sign the documents despite assurances that Northern Grain would work with him in meeting the quantities and Wilson's protestation that he could get fired if Greving didn't sign. Greving did not sign any of the documents.

Each of the unsigned documents contains fine-print provisions stating that (1) disputes would be subject to arbitration by the National Grain and Feed Association (“NGFA”); and (2) Greving would be obligated to cover Northern Grain's efforts to enforce the contract, including its costs and reasonable attorney's fees, plus compound interest at the rate of 18% per annum.

In November 2011 Greving received a copy of an arbitration complaint that Northern Grain had filed with the NGFA. Shortly thereafter, he received a letter that included a proposed Arbitration Services Contract, which contained a provision stating that Greving would submit to arbitration by the NGFA. In January 2012 Greving, through counsel, responded to the letter and declined to submit to arbitration.

In February 2012 Northern Grain filed an action to compel arbitration in federal court in the Western Division of the Northern District of Illinois, located in Rockford. The complaint invoked the court's diversity jurisdiction. See28 U.S.C. § 1332; see also Federal Arbitration Act, 9 U.S.C. § 4; Vaden v. Discover Bank, 556 U.S. 49, 59, 129 S.Ct. 1262, 173 L.Ed.2d 206 (2009) (explaining that the relevant provision of the Federal Arbitration Act “ ‘bestow[s] no federal jurisdiction but rather requir[es] [for access to a federal forum] an independent jurisdictional basis' over the parties' dispute.”) (alterations in original) (quoting Hall Street Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 581–82, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008)). In the underlying claim, Northern Grain seeks almost $1 million in damages plus interest, costs, and attorney's fees.

A few days after this action was filed, the district court required Northern Grain to amend its jurisdictional allegations to identify the principal place of business of its member corporations, which Northern Grain did on March 1, 2012. The summons wasn't issued for two more weeks and wasn't returned executed until March 28, 2012. In the meantime, and before learning of Northern Grain's federal-court lawsuit, Greving independently filed suit in Wisconsin state court seeking, among other relief, a declaration that the dispute over the alleged contracts was not subject to arbitration and that the alleged contracts were invalid and unenforceable. He had company, too: Three Illinois farmers joined him as coplaintiffs.²

After being served by Northern Grain, Greving moved to dismiss the Illinois lawsuit. He asserted that the district court lacked personal jurisdiction over him, that venue was improper in Rockford, that Northern Grain had failed to state a claim, and that the “doctrine of abstention” required dismissal because he already had an action arising out of the same facts pending in Wisconsin state court. The district court dismissed the case on personal jurisdiction grounds without addressing Greving's other arguments, and Northern Grain took this timely appeal. Neither party urges us to reach the other issues raised in Greving's motion; personal jurisdiction is the sole issue.

II. Discussion

We review a dismissal for lack of personal jurisdiction de novo. Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 712 (7th Cir.2002) (citing Logan Prods., Inc. v. Optibase, Inc., 103 F.3d 49, 52 (7th Cir.1996)). The plaintiff bears the burden of establishing personal jurisdiction when the defendant challenges it. Purdue Res. Found. v. Sanofi–Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.2003). Where, as here, the district court rules on a defendant's motion to dismiss based on the submission of written materials without holding an evidentiary hearing, the plaintiff “ ‘need only make out a prima facie case of personal jurisdiction.’ ” Id. (quoting Hyatt, 302 F.3d at 713). We resolve factual disputes in the plaintiff's favor when evaluating whether that showing has been made, id., though in the present case, the facts material to the personal-jurisdiction question are undisputed.

Personal jurisdiction refers to a court's “power to bring a person into its adjudicative process.” Black's Law Dictionary 930 (9th ed.2009). A federal district court's personal jurisdiction over a defendant is established in a diversity-jurisdiction case when the plaintiff serves the defendant with a summons or files a waiver of service, but only so long as the defendant is subject to the jurisdiction of a court of general jurisdiction in the state where the...