Tippecanoe Beverages, Inc. v. Heineken Usa, Inc.
| Decision Date | 29 November 2005 |
| Docket Number | No. 3:04-CV-346RM.,3:04-CV-346RM. |
| Citation | 406 F.Supp.2d 1033 |
| Parties | TIPPECANOE BEVERAGES, INC., Plaintiff v. HEINEKEN USA, INC. Defendant |
| Court | U.S. District Court — Northern District of Indiana |
Lakshmi D. Hasanadka, Scott R. Alexander, Sommer Barnard Ackerson PC, Indianapolis, IN, for Plaintiff.
Phillip J. Fowler, Scott R. Leisz, Bingham McHale LLP, Indianapolis, IN, for Defendant.
A dispute has arisen regarding the existence and eventual termination of a beer wholesale distribution contract between Tippecanoe Beverages, Inc. and Heineken USA, Inc.1 Tippecanoe contends that Heineken violated Indiana's Beer Wholesaler Protection Statute by terminating its distribution contract without providing appropriate compensation. Heineken seeks summary judgment, maintaining that any oral agreement between the parties is too indefinite to be an enforceable contract and that even if the agreement is enforceable, Tippecanoe's claim for unlawful termination must fail because Heineken's status as an importer renders Indiana's Beer Wholesaler Protection Statute inapplicable. The court finds Indiana's Beer Wholesaler Protection Statute inapplicable to the alleged contract between Tippecanoe and Heineken, and so grants Heineken's motion.
Summary judgment is appropriate when "the pleadings, depositions, answers to the interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). In deciding whether a genuine issue of material fact exists, "the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). No genuine issue of material fact exists when a rational trier of fact could not find for the nonmoving party even when the record as a whole is viewed in the light most favorable to the nonmoving party. Ritchie v. Glidden Co., 242 F.3d 713, 720 (7th Cir.2001). "The mere existence of an alleged factual dispute will not defeat a summary judgment motion; instead, the non-movant must present definite, competent evidence in rebuttal." Butts v. Aurora Health Care, Inc., 387 F.3d 921, 924 (7th Cir.2004). The party with the burden of proof on an issue must show that there is enough evidence to support a jury verdict in his favor. Lawrence v. Kenosha County, 391 F.3d 837, 842 (7th Cir.2004); see also Johnson v. Cambridge Indus., Inc., 325 F.3d 892, 901 (7th Cir. 2003) () quoting Schacht v. Wisconsin Dep't of Corr., 175 F.3d 497, 504 (7th Cir.1999).
The court summarizes the facts in the light most favorable to Tippecanoe, the nonmoving party. Tippecanoe, an authorized wholesaler of alcoholic beverages in Indiana, was founded in the mid-1950's. Heineken is an importer and distributor of Heineken beer products in the United States. In the early 1960's, Tippecanoe's owner met with the district manager of Heineken's corporate predecessor to discuss an agreement by which Tippecanoe would become a wholesale distributor of Heineken products in Indiana. It was agreed that Tippecanoe would have the right to obtain and wholesale Heineken products in Indiana, but in return, would be expected to merchandise, advertise, and ensure the quality of Heineken products, as well as be of "good character," fully compensate Heineken for the products received, and file any necessary paperwork related to the sale of Heineken products.2 The agreement was to be indefinite; Tippecanoe would be allowed to continue selling Heineken products as, long as it continued to perform its obligation and Heineken was pleased with its performance as a wholesaler.
Tippecanoe began selling Heineken products, but wasn't purchasing directly from Heineken; as a sub-distributor wholesaler, Tippecanoe received Heineken products from Heineken wholesalers (direct distributors) higher up on the distribution chain. The parties dispute whether Heineken appointed Tippecanoe as an "authorized" sub-distributor, but in both a Primary Source Registration report and a letter to Indiana's Alcohol Beverage Commission, Heineken acknowledged that Tippecanoe was one of its Indiana sub-distributors selling Heineken products.3 In any event, Tippecanoe has continued to wholesale Heineken products, and before 2002, neither Heineken nor its corporate predecessor advised Tippecanoe that it was no longer authorized to wholesale Heineken brands.
Correspondence between Tippecanoe and Heineken also reflects the business relationship of importer/sub-distributor wholesaler. In a series of letters from Mr. Sperka to Mr. Greski, Heineken asked that Tippecanoe provide monthly inventory reports, information on new retail accounts that Tippecanoe was developing to carry Heineken products, and a distributor profile containing, among other things, Tippecanoe's sales territory and a list of Tippecanoe's direct distributors. Heineken told Tippecanoe of products that were being discontinued and of new products Heineken was introducing into the market. Heineken also asked that a Tippecanoe salesperson oversee a Heineken-sponsored promotional event.
Until 2002, an administrative rule known as Rule 28 prohibited companies from restricting the sale of their beer to certain wholesalers or to certain geographic areas. Barco Beverage Corp. v. Indiana Alcoholic Beverage Comm'n, 595 N.E.2d 250, 253 (Ind.1992); 905 IAC 1-281(3). As a result of the sunset of Rule 28, exclusive beer distributorship territories are no longer forbidden in Indiana. Little Beverage Co., Inc. v. DePrez, 777 N.E.2d 74, 77 (Ind App.2002). Heineken maintains it made the business decision to restrict the sale of its products to certain wholesalers and despite its relationship with Tippecanoe, Tippecanoe wasn't assigned a territory when Heineken assigned a number of its wholesalers exclusive territories. In July 2002, Heineken instructed its direct distributors to sell no more Heineken products to Tippecanoe. Tippecanoe has been unable to wholesale Heineken products since then.
When this action was commenced,4 Indiana's Beer Wholesaler Protection Statute provided in relevant part:
It is unlawful for a beer wholesaler or a brewer in this state, or a brewer or other person located outside this state who sells beer to a permittee in this state for the purpose of importation and resale within this state to:
* * * * * *
(2) cancel or terminate an agreement or contract between a beer wholesaler and a brewer for the sale of beer unfairly, and without due regard for the equities of the other party.
IND.CODE § 7.1-5-5-9. Interpretation of a statute is a question of law for the court and so an appropriate subject for disposition by way of summary judgment. FED. R. CIV. P. 56; Masters v. Hesston Corp., 291 F.3d 985, 989 (7th Cir.2002). Heineken contends that Tippecanoe's claim for unlawful termination must fail because Heineken's status as an importer makes Indiana's Beer Wholesaler Protection Statute inapplicable. Tippecanoe contends that the Beer Wholesaler Protection Statute applies not only to contracts between wholesalers and brewers, but also to contracts between wholesalers and importers like Heineken, because a contrary interpretation leads to an absurd result and undermines the statute's purpose. The court cannot agree with Tippecanoe's contention.
A federal court applying a state statute is bound by the construction given a statute by the highest court within the state. Schad v. Borough of Mount Ephraim, 452 U.S. 61, 65, 101 S.Ct. 2176, 68 L.Ed.2d 671 (1981). Legislative intent is a matter of state law on which the highest court in the state speaks with finality. Exxon Corp. v. Eagerton, 462 U.S. 176, 181 n. 3, 103 S.Ct. 2296, 76 L.Ed.2d 497 (1983). The single case in which the Indiana Supreme Court has interpreted the Beer Wholesaler Protection Statute provides little guidance since it involved a contract between a brewer and a wholesaler. See Miller Brewing v. Best Beers, 608 N.E.2d 975, 980 (Ind.1993). Thus, the court applies Indiana's rules of statutory construction in interpreting the Beer Wholesaler Protection Statute. Karlin v. Foust, 188 F.3d 446, 457 (7th Cir.1999).
When a statute's language is unambiguous, the court presumes words appearing in the statute were intended to have meaning, and strives to give those words their plain and ordinary meaning. Citizens Financial Services, FSB v. Innsbrook Country Club, Inc., 833 N.E.2d 1045, 1054 (Ind. App.2005). Using the plain and ordinary meaning of "brewer" and "importer", the statute is unambiguous on its face. A brewer — one that manufactures brewed beverages — and a importer — one whose business is the importation and sale of goods from another country — are separate and distinct entities within the distribution process and are not interchangeable. See WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 275 and 1135 (1981) (unabridged). The statute isn't susceptible to multiple constructions that would demand additional judicial construction. Because the statute is unambiguous, it must be held to mean what it plainly expresses, and the court must give the language a literal interpretation so as to carry the statute into effect without limiting its extent or extending its operation. Burks v. Bolerjack, 427 N.E.2d 887, 889-890 (Ind.1981); accord, In re Whyte, 164 B.R. 976, 983 (Bankr. N.D.Ind.1993).
Tippecanoe says that a strict interpretation undermines the statute's purpose and creates an absurd result since there is no logical reason to protect the wholesaler who deals with a brewer, but not protect the...
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INTERPRETING STATE STATUTES IN FEDERAL COURT.
...than those of any foreign tribunal, however respectable"). (37) See, e.g., Tippecanoe Beverages, Inc. v. Heineken USA, Inc., 406 F. Supp. 2d 1033, 1036 (N.D. Ind. 2006) (citing Exxon and ruling that "the court applies Indiana's rules of statutory construction in interpreting the [Indiana (3......