United States District Court, E.D. Wisconsin
BAUMANN FARMS, LLP a Wisconsin limited liability partnership; GLENN HEIER; and AARON KAISER, Plaintiffs,
YIN WALL CITY, INC., an Illinois corporation; SUT I. FONG; CHOENG SAT O; YIN WALL CITY, INC., a Texas corporation; and YIN WALL CITY, DALLAS, INC., a Texas corporation, Defendants.
ORDER ON DEFENDANTS' MOTION TO DISMISS
WILLIAM E. DUFFIN U.S. Magistrate Judge
Yin Wall City, Inc. (an Illinois Corporation), Sut I. Fong,
Choeng Sat O, Yin Wall City, Inc. (a Texas corporation), and
Yin Wall City, Dallas, Inc. (a Texas corporation) (all
collectively referred to herein as “YWC”) move to
dismiss the class action complaint of plaintiffs Baumann
Farms, LLP (a Wisconsin limited liability partnership), Glenn
Heier, and Aaron Kaiser (collectively “Baumann”).
(ECF No. 11.) Having the consent of the parties (ECF Nos. 2,
10), the matter is briefed and ready for resolution.
case involves ginseng root, a root cultivated in Asia and
North America that is associated with certain medicinal
effects that sooth the recipient. According to Baumann's
complaint, Wisconsin-grown ginseng root sells at a premium of
two and one-half to three and one-half times the price of
ginseng root grown elsewhere. (ECF No. 1, at 2.) This demand
is driven by Wisconsin-grown ginseng's purity and high
levels of the medicinally active ingredient,
ginsenocide. (ECF No. 1 at 2.) Given the demand, there
have been reports of U.S. wholesalers and retailers importing
bulk ginseng from outside the United States and packaging it
as “grown in Wisconsin” so as to obtain a higher
filed this class action lawsuit alleging that the YWC
defendants engaged in precisely such behavior: YWC imported
and repackaged in-bulk (as opposed to pre-packaged) ginseng
root from China and sold it as ginseng grown in Wisconsin.
(ECF No. 1, ¶ 6.) The complaint alleges that the YWC
defendants violated section 43(a) of the Lanham Act, 15
U.S.C. § 1125(a), by falsely advertising their products
and engaging in unfair competition.
motion to dismiss challenges this court's jurisdiction.
It sets forth two grounds for dismissal: (1) this court
cannot establish either general or specific personal
jurisdiction over YWC, and (2) Baumann has not plausibly pled
the requisite amount in controversy for this court to
exercise subject matter jurisdiction over this class action.
YWC further moves for dismissal of the non-corporate
defendants (Fong and Sat O). Lastly, YWC argues that, as a
non-class action, none of the plaintiffs have demonstrated
entitlement to any damages as stand-alone plaintiffs.
previously was sued by the Ginseng Board of Wisconsin in the
Northern District of Illinois for the same underlying
conduct. (ECF No. 11 at 3.) That lawsuit was dismissed with
prejudice on July 27, 2016. (ECF No. 13-1, Exh. B.)
Nevertheless, plaintiffs possess certain information as a
result of that suit which they reference in arguing for
personal jurisdiction and meeting the amount in controversy
a declaration by defendant Sat O, all defendants avow that
they do not: (a) reside in Wisconsin; (b) maintain any office
in Wisconsin; (c) own or lease any real estate in Wisconsin;
(d) maintain any bank accounts in Wisconsin; (e) have any
personal property in Wisconsin; (f) have any telephone
listings in Wisconsin; (g) are licensed to do business in
Wisconsin; (h) maintain any active website enabling purchase
of products by any persons in Wisconsin or elsewhere; (i)
sell any product in Wisconsin, by order over the telephone or
otherwise; (j) ship any products into the State of Wisconsin;
or (k) target Wisconsin as a market for ginseng products they
package for resale, by advertising, marketing, or otherwise.
(ECF No. 12, at 1-2, ¶ 3.) Sat O's declaration
The only transaction that the YWC Defendants have had with a
Wisconsin entity is the purchase of prepackaged ginseng from
Hsu's Ginseng Enterprises Inc. of Wasusau, WI, which
product was resold in the YWC Defendants' retail stores
without any modification. This product is not the subject of
any allegations by Plaintiffs in this lawsuit.
(ECF No. 12, at 2, ¶ 5.)
Sat O's declaration that the only transaction
the YWC Defendants have had with a Wisconsin entity was the
purchase of prepackaged ginseng from Hsu's Ginseng
(“Hsu's”), Baumann presents an invoice
showing that YWC purchased $45, 000.00 worth of bulk ginseng
from “Grandco Inc.”- a company operating in
Wausau, Wisconsin-in June 2015. (ECF No. 16-4.) Baumann also
provides invoices between YWC and Hsu's that show that
YWC purchased ginseng from Hsu's several times per year
between 2008 and 2015, for a total of approximately 31
interactions.(ECF No. 16-3.)
reply, YWC admits that its contacts with Wisconsin do indeed
include the purchase of bulk ginseng from Grandco, Inc. YWC
does not say whether the June 2015 purchase evidenced by the
invoice submitted by Baumann was the only transaction between
YWC and Grandco, Inc. or only one of many. Regardless, that
admission in the reply brief is in conflict with Sat O's
challenged by a defendant, the plaintiff bears the burden of
establishing personal jurisdiction. N. Grain Mktg., LLC.
v. Greving, 743 F.3d 487, 491 (7th Cir. 2014). Where no
evidentiary hearing is held, “the plaintiff need only
make out a prima facie case of personal
jurisdiction.” Purdue Research Found. v.
Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.
2003) (emphasis in original). “In evaluating whether
the prima facie showing has been satisfied, the plaintiff
‘is entitled to the resolution in its favor of all
disputes concerning relevant facts presented in the
record.'” Id. (quoting Nelson v. Park
Indus., Inc., 717 F.2d 1120, 1123 (7th Cir. 1983)).
that in mind, the question of personal jurisdiction begins
with the laws of the state in which the federal district
court sits. Daimler AG v. Bauman, 134 S.Ct. 746, 753
(2014) (“Federal courts ordinarily follow state law in
determining the bounds of their jurisdiction over
persons.”); see also Fed. R. Civ. P.
4(k)(1)(A). “Under Wisconsin law, the jurisdictional
question has two components. First, the plaintiff must
establish that the defendants come within the grasp of the
Wisconsin long arm statute.” Steel Warehouse of
Wisconsin, Inc. v. Leach, 154 F.3d 712, ...