U.S. Venture Inc. v. Mccormick Transp. LLC
| Decision Date | 03 November 2015 |
| Docket Number | Case No. 15-C-990 |
| Parties | U.S. VENTURE INC., Plaintiff, v. MCCORMICK TRANSPORT LLC and JOEL MCCORMICK, Defendants. |
| Court | U.S. District Court — Eastern District of Wisconsin |
Plaintiff U.S. Venture, Inc., sued Defendant McCormick Transport, LLC, for damages in the amount of $261,768 allegedly due U.S. Venture under a fuel oil purchase contract. Defendant Joel McCormick was sued under a personal guaranty he signed as a condition of the agreement between U.S. Venture and McCormick Transport. U.S. Venture is a citizen of the State of Wisconsin and Joel McCormick and both members of McCormick Transport are citizens of Michigan. Federal jurisdiction therefore exists under 28 U.S.C. § 1332. The case is before the court on the defendants' motion to dismiss for lack of personal jurisdiction. For the reasons that follow, the motion will be granted.
U.S. Venture is a Wisconsin corporation with its principal place of business located in Appleton, Wisconsin and is engaged in the business of buying and selling fuel oil on the open market. (Compl. ¶ 2, ECF No. 1.) McCormick Transport is a Michigan business that transports fuel oil to customers in the State of Michigan. It operates entirely in Michigan and has no Wisconsin customers. Prior to May of 2014, Joel McCormick, acting as an agent of McCormick Transport, contacted U.S. Venture, apparently by telephone, to inquire about purchasing fuel oil. (Posanski Aff. ¶ 2, ECF No. 12-2.) On May 14, 2014, after this initial contact, Joel McCormick signed a contract authorizing his company to buy fuel oil from U.S. Venture at a terminal in Ferrysburg, Michigan. (Id. ¶ 4.) The first transaction under the contract was for the purchase of 42,000 gallons of fuel oil at a fixed rate. (Id.) Subsequently, similar orders were made on June 3, 2014, and July 14, 2014. (Id. ¶¶ 5, 6.) On July 14, 2014, Joel McCormick executed a personal guaranty on behalf of McCormick Transport, which allowed for the purchase of fuel oil on credit. (Id. ¶ 11.)
All contact between the parties was through e-mail, fax, and telephone calls. (Id. ¶ 8.) All invoices and payments were directed by McCormick Transport to U.S. Venture's offices in Appleton, Wisconsin. (Id. ¶ 9.) At no time did an agent of McCormick Transport visit Wisconsin for business related purposes involving U.S. Venture. (McCormick Aff. ¶ 7, ECF No. 8.) When a purchase of fuel oil was made, U.S. Venture would direct its open market purchase of the fuel oil to the Ferrysburg, Michigan terminal. (Id. ¶ 12.) The fuel oil that McCormick Transport purchased was not shipped from Wisconsin. Instead, it was sent to the Ferrysburg terminal via the Wolverine Pipeline where McCormick Transport was able to withdraw the requested amount and deliver it to various locations in Michigan. (Id.)
In a dispute over personal jurisdiction the plaintiff initially bears the burden of proving that jurisdiction exists. RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997). A federal court exercising diversity jurisdiction has personal jurisdiction over a defendant when a court of the state in which the federal court sits would have such jurisdiction. Id. In Wisconsin, there is a two-step process for determining whether personal jurisdiction exists over a non-resident. Kopke v. A. Hartrodt S.R.L., 2001 WI 99, ¶ 8, 245 Wis. 2d 396, 629 N.W.2d 662; Johnson Litho Graphics of Eau Claire, Ltd. v. Sarver, 2012 WI App 107, ¶ 6, 344 Wis. 2d 374, 824 N.W.2d 127. First, it must be determined whether Wisconsin's long-arm statute, section 801.05, confers jurisdiction over the defendant. Id. The statute "must be read broadly" and "liberally construed in favor of exercising jurisdiction." Lincoln v. Seawright, 104 Wis. 2d 4, 9, 14, 310 N.W.2d 596 (1981). If the long-arm statute by its terms confers jurisdiction, then the inquiry shifts to whether exercising personal jurisdiction over the party comports with the due process principles of "minimum contacts" and "traditional notions of fair play and substantial justice." Regal Ware, Inc. v. TSCO Corp., 207 Wis. 2d 538, 542, 558 N.W.2d 679 (Ct. App. 1996) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).
The first step in the analysis is to determine whether McCormick Transport and Joel McCormick are subject to personal jurisdiction under Wis. Stat. § 801.05. U.S. Venture asserts that personal jurisdiction can be established under multiple sections of the statute. It specifically points to the following provisions:
Although U.S. Venture references all of the above quoted sections of Wisconsin's long-arm statute, it offers no specific argument under any particular provision. Instead, U.S. Venture notes that Wisconsin's long-arm statute is to be "liberally construed in favor of exercising jurisdiction" and states in conclusory fashion that "it can be concluded that personal jurisdiction exists under numerous sections." (Pl.'s Mem. In Opp. at 4, 5.) U.S. Venture devotes most of its brief to the argument that the exercise of jurisdiction over the defendants would not offend due process.
The question of whether Wisconsin's long-arm statute confers jurisdiction over the defendant is not the same as whether the exercise of such jurisdiction would offend due process, however. Unlike many states, Wisconsin has not included in its statute a "catch-all" provision extending its reach to the full limits allowed under the Due Process Clause of the United States Constitution. Compare 735 Ill. Comp. Stat. 5/2-209(c) (). Although Wisconsin regards compliance with the State's long-arm statute as "'prima facie compliance' with the due process requirements," Lincoln, 104 Wis. 2d at 10, the two are not thesame and both requirements must be met.
Plaintiff's focus on the question of due process is nevertheless understandable in light of the Seventh Circuit's decision in Felland v. Clifton, 682 F.3d 665 (7th Cir. 2012). There the court stated that the two-prong framework that the Wisconsin Supreme Court had adopted for deciding whether a state court had personal jurisdiction over a non-consenting foreign defendant "should not be taken to imply that the long-arm statute limits the exercise of personal jurisdiction any more than basic considerations of due process." Id. at 678. "To the contrary," the Felland court explained, "the constitutional and statutory questions tend to merge; compliance with the Wisconsin long-arm statute creates a presumption that constitutional due process is satisfied, although the defendant of course has the opportunity to dispute personal jurisdiction on purely constitutional grounds." Id. "Once the requirements of due process are satisfied," the Felland court stated, "there is little need to conduct an independent analysis under the specific terms of the Wisconsin long-arm statute itself because the statute has been interpreted to go to the lengths of due process." Id.
But Felland dealt with a case that clearly fell within the provisions of Wisconsin's long-arm statute, as the court had "no trouble" concluding that the plaintiff had established personal jurisdiction under the "local act or omission" provision of the statute. Id. at 678-79 (citing Wis. Stat. § 801.05(3)). Felland did not hold that Wisconsin courts exercise jurisdiction over foreign non-consenting defendants in cases that do not come within any subsection of its long-arm statute. To so hold would be to ignore the plain language of the statute and disregard the two-step approach for determining whether personal jurisdiction exists that Wisconsin courts continue to follow. See Rasmussen v. General Motors Corp., 2011 WI 52, ¶ 15, 335 Wis. 2d 1, 803 N.W.2d 623; Carlson v. Fidelity Motor Group, LLC, 2015 WI App 16, ¶ 8, 360 Wis. 2d 369, 860 N.W.2d 299. Itherefore turn to the specific provisions of the Wisconsin long-arm statute cited by U.S. Venture.
Consistent with federal constitutional law, Wisconsin's long-arm statute addresses both general jurisdiction and specific jurisdiction. See Rasmussen, 2011 WI 52, ¶ 15; Nagel v. Crain Cutter Co., 50 Wis. 2d 638, 648-50, 184 N.W.2d 876 (1971). Specific jurisdiction applies when a foreign defendant has purposely directed his activities to residents of the state, and the litigation results from injuries alleged to have arisen out of those activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.8 (1984)); Rasmussen, 2011 WI 52, ¶ 15. On the other hand, "if the defendant has 'continuous and systematic' contacts with a state, the defendant is subject to general jurisdiction there in any...
To continue reading
Request your trial