Wells Dairy, Inc. v. Food Movers Intern., Inc.
| Decision Date | 08 July 2008 |
| Docket Number | No. C08-4019-MWB.,C08-4019-MWB. |
| Citation | 566 F.Supp.2d 933 |
| Parties | WELLS DAIRY, INC., Plaintiff, v. FOOD MOVERS INTERNATIONAL, INC., Defendant. |
| Court | U.S. District Court — Northern District of Iowa |
Angie J. Schneiderman, Jason B. Gann, Berenstein, Moore, Berenstein, Heffernan & Moeller, LLP, Sioux City, IA, for Plaintiff.
Stanley E. Munger, Munger, Reinschmidt & Denne, Sioux City, IA, for Defendant.
TABLE OF CONTENTS
I. INTRODUCTION ........................................................ 935
II. PROCEDURAL BACKGROUND ............................................... 935
III. FACTUAL BACKGROUND .................................................. 935
IV. LEGAL STANDARDS AND ANALYSIS ........................................ 936
A. Legal Standards For Rule 12(b)(2) And Personal Jurisdiction ...... 936
B. Personal Jurisdiction Analysis ................................... 938
1. Minimum contacts .............................................. 939
2. Fair play and substantial justice ............................. 945
V. CONCLUSION ............................................................. 945
Plaintiff Wells Dairy, Inc., has sued defendant Food Movers International, Inc. (FMI), for breach of contract. In the motion currently before the court, Dkt. # 4, FMI argues the suit should be dismissed for lack of personal jurisdiction.
In late 2007, Wells Dairy filed a petition against FMI in Plymouth County District Court in Iowa. Dkt. #2. Wells Dairy's petition alleges a breach of contract claim against FMI because FMI allegedly failed to pay Wells Dairy for certain dairy products Wells Dairy sold to FMI. Wells Dairy specifically alleges that on or about July 3, 2007, and until approximately July 13, 2007, FMI sent purchase orders to Wells Dairy to buy dairy and frozen novelty products, that FMI received the products, and that FMI failed to pay Wells Dairy for the products.
FMI responded by filing notice of removal to this court on February 27, 2008, on the basis of diversity jurisdiction. Dkt. # 1. Then on March 5, 2008, FMI filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. Dkt. # 4. Wells Dairy filed its resistance on March 21, 2008. Dkt. # 8. Neither party requested oral argument, and FMI did not file a reply. See N.D. IA. L.R. 7(g) (). The matter is now fully submitted.
Wells Dairy is a corporation organized under the laws of Iowa. Wells Dairy is in the business of manufacturing, distributing, and selling, among other things, dairy and frozen novelty products. Its principal place of business is in Le Mars, Iowa, the "Ice Cream Capital of the World."2 Wells Dairy distributes its products nationwide, and has many other offices, including one in Alta Loma, California.
FMI is a food distributor, and a corporation organized under the laws of California. FMI's principal and sole place of business is in Benecia, California. As its name suggests, however, FMI distributes food to a community much larger than California. To do so, FMI purchases bulk food products from manufacturers like Wells Dairy, and then resells the products to FMI's "retail and other distributor customers for a profit." [LaMonica Aff. ¶ 5].
In May of 2005, FMI contacted Susanne Erickson to purchase dairy products from Wells Dairy. Erickson works in Wells Dairy's Alta Loma office as the company's Western Regional Sales Manager. FMI represented to Erickson that FMI is a national and international distributor of food products and that it wished to purchase Wells Dairy's products on credit and distribute the product "from the [FMI] distribution centers in Oakland, California; Dallas, Texas; Minneapolis, Minnesota; Washington, D.C.; Atlanta, Georgia; and Columbus, Ohio." [Erickson Aff. ¶ 5]. Erickson informed FMI that it would first have to be approved to purchase Wells Dairy's product on credit, and that this decision was made by the Credit and Receivables Department in Le Mars.
In late May of 2005, FMI applied for credit approval. Thomas Lamonica, as Vice-President of FMI, provided the necessary information to Erickson to support credit approval. Erickson provided this information to Wells Dairy's offices in Le Mars. Dave Bruggeman, the Director of Credit and Receivables for Wells Dairy, received FMI's credit application. Bruggeman reviewed FMI's credit application, verified the references listed on the application, and researched FMI, all from his office in Le Mars. Ultimately, Wells Dairy approved FMI's application to purchase Wells Dairy's products on credit.
FMI's authorization to purchase Wells Dairy's product on credit included nonstandard shipping terms. Consistent with its standard operating procedure, Wells Dairy initially offered to deliver its product to FMI's place of business in California, and include such delivery costs as part of the purchase order price. FMI refused, however, and insisted that Wells Dairy's product be for "customer pick up" in Le Mars. [Erickson Aff. ¶ 10]. FMI specifically "requested this arrangement because it sought a $75.00 per pallett pick-up allowance for bringing in its own trucks and picking up the product." [Erickson Aff. ¶ 10].
After receiving credit authorization, and from June 25, 2005, until July 30, 2007, FMI faxed over one hundred purchase orders to Wells Dairy in Le Mars to purchase over six million dollars of Wells Dairy product. Deb Gran, Food Service Sales Account Coordinator for Wells Dairy, was responsible for entering, handling, processing, and providing customer support for FMI's purchase orders. FMI received $6,470,035.06 worth of product from Wells Dairy during this time period. FMI was invoiced for these purchases from Wells Dairy's offices in Le Mars, and FMI made regular payments to Wells Dairy during this time by mailing a check drawn on FMI's California bank account to Wells Dairy in Le Mars.
The current lawsuit involves eleven allegedly fulfilled yet unpaid purchase orders faxed by FMI to Wells Dairy during the first two weeks in July of 2007. The eleven purchase orders requested product worth almost a half a million dollars. Each purchase order included a "HOW SHIP" field, along with other fields to denote who the purchase order was for, when it was requested, etc. The "HOW SHIP" field was always filled in with "Customer Picku[p]." . In addition, the purchase orders indicated Wells Dairy was to ship the requested product to "Food Movers International, BLUE BUNNY 800-942-3800 x223, # 1 BLUE BUNNY DR., LE MARS, IA 51031." . FMI never told Erickson or Gran that anyone other than FMI would be picking up Wells Dairy's product in Le Mars. Gran always believed that the trucks picking up Wells Dairy's products for FMI were working for FMI.
Wells Dairy's complaint "must state sufficient facts ... to support a reasonable inference that [FMI] may be subjected to jurisdiction in the forum state." Steinbuch v. Cutler, 518 F.3d 580, 585 (8th Cir.2008). "`Once jurisdiction ha[s] been controverted or denied, [the plaintiff] ha[s] the burden of proving such facts.'" Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir.2004) (quoting Block Indus, v. DHJ Indus., Inc., 495 F.2d 256, 259 (8th Cir.1974)). Wells Dairy need not, however, establish jurisdiction by a preponderance of the evidence until an evidentiary hearing is held, or until trial. Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir.1991). For Wells Dairy to survive FMI's motion to dismiss under Rule 12(b)(2) for lack of personal jurisdiction, Wells Dairy "`need only make a prima facie showing of jurisdiction,' and may do so by affidavits, exhibits, or other evidence." Romak USA, Inc. v. Rich, 384 F.3d 979, 983 (8th Cir.2004) (quoting Epps v. Stewart Info. Services Corp., 327 F.3d 642, 647 (8th Cir.2003)). When examining Wells Dairy's prima facie showing, the court "must view the evidence in the light most favorable to [Wells Dairy] and resolve factual conflicts in its favor." Id. at 983-84.
This court "may assume jurisdiction over a foreign defendant only to the extent permitted by the forum state's longarm statute and by the Due Process Clause of the Constitution." Dakota Indus., Inc. v. Ever Best Ltd., 28 F.3d 910, 915 (8th Cir.1994). Iowa's long-arm statute3 "expands Iowa's jurisdictional reach to the widest due process parameters allowed by the United States Constitution." Hammond v. Fl. Asset Fin. Corp., 695 N.W.2d 1, 5 (Iowa 2005) (discussing Iowa Rule of Civil Procedure 1.306). "As a result, the Court is left with the sole issue of whether exercising personal jurisdiction over [the] nonresident Defendant is consistent with principles of due process." Brown v. Kerkhoff, 504 F.Supp.2d 464, 499-500 (S.D.Iowa 2007); see Bell Paper Box, Inc. v. U.S. Kids, Inc. (Bell Paper I), 22 F.3d 816, 818 (8th Cir.1994) ().
"The Due Process Clause requires `minimum contacts' between the nonresident defendant and the forum state before the court may exercise jurisdiction over the defendant." Coen v. Coen, 509 F.3d 900, 905 (8th Cir.2007) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559 (1980)). The Eighth Circuit Court of Appeals has explained sufficient minimum contacts as follows:
"Sufficient contacts exist when the defendant's conduct and...
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