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Traffic and Parking Control Co. Inc. v. Global Traffic Technologies LLC

United States District Court, E.D. Wisconsin

March 21, 2017



          J.P. Stadtmueller U.S. District Judge

         Plaintiff, Traffic and Parking Control Co., Inc. (“TAPCO”), filed an action against Defendant, Global Traffic Technologies, LLC (“GTT”), in Milwaukee County Circuit Court. In its original complaint, TAPCO alleged that it was as a dealer for GTT's products. The complaint arises from GTT's attempt to terminate the dealership agreement, which TAPCO believes was a violation of both the agreement and the Wisconsin Fair Dealership Law (“WFDL”), Wis.Stat. § 135.01 et seq. See (Docket #1-1).

         GTT removed the action to this Court pursuant to 28 U.S.C. § 1441 on the basis of the Court's diversity jurisdiction under 28 U.S.C. § 1332(a)(1). (Docket #1). On January 31, 2017, TAPCO moved to remand the case to state court, arguing that the amount in controversy did not cross the statutory threshold set out in Section 1332. (Docket #5). Shortly thereafter, on February 8, 2017, GTT filed a motion to dismiss TAPCO's complaint, arguing that it had failed to state a claim for violation of the WFDL or for breach of contract. (Docket #7).[1] Both motions are fully briefed and, for the reasons stated below, they will be denied.

         1. RELEVANT FACTS

         The relevant facts are drawn from TAPCO's amended complaint, which it filed on March 1, 2017. (Docket #13).[2] The Court relies upon the amended complaint, despite the fact that GTT's motion was first directed at the original complaint, because Count II, the count for which GTT seeks dismissal, was not altered in the amended complaint. See (Docket #13, #14, #20). Thus, the amendment has no effect on the Court's analysis.

         TAPCO acts as a dealer for GTT's products, which include traffic and parking control devices and services. The arrangement permitted TAPCO to sell GTT's goods and use GTT's trademarks and other intellectual property for marketing. The companies' dealership agreement (the “Agreement”) was dated April 8, 2010 and was amended on January 31, 2016. TAPCO alleges that GTT drafted the relevant portions of the Agreement.

         For reasons not explained in the complaint or the parties' briefing, their relationship soured in late 2016. TAPCO claims that GTT sent it an email on November 3, 2016, announcing that the Agreement would be cancelled effective February 1, 2017. According to TAPCO, the November 3 email provides no reason whatsoever for the proposed cancellation. Thus, TAPCO believes that GTT does not have “good cause” to cancel the Agreement as required under the WFDL. See Wis. Stat. § 135.03. Additionally, although a section of the Agreement purports to give either party the power to terminate the Agreement without cause on ninety days' written notice, TAPCO asserts that this provision is “in variance” with the WFDL and is unenforceable. As a result, TAPCO wants the Court to declare the November 3, 2016 notice of cancellation to be void.

         TAPCO also raises a claim for breach of contract. In addition to claiming that the provision providing for termination without cause is invalid under the WFDL, TAPCO alleges that GTT's failure to provide any reason for its proposed cancellation violates its common-law duty of good faith and fair dealing. Moreover, TAPCO claims that the November 3, 2016 email is itself a violation of the Agreement because it does not constitute “written” notice, which under the Agreement is only achieved by personal delivery, registered mail, prepaid post with receipt requested, or facsimile. See (Docket #8-2 at 26 ¶13.9). As with the WFDL claim, TAPCO prays for a declaration that the cancellation is void and injunctive relief against the proposed cancellation. TAPCO does not seek compensatory damages or attorney's fees in this action. See (Docket #13 at 11-12, 14-15).

         2. DISCUSSION

         The two pending motions can be resolved fairly easily. First, the Court finds that the amount in controversy meets the jurisdictional threshold. Second, the Court finds that TAPCO's allegations sufficiently state a claim for breach of contract. The Court will address each issue in turn.

         2. 1Diversity Jurisdiction and the Amount in Controversy

         Section 1441 allows a defendant to remove any civil action commenced in state court to the district court sitting in the district and division in which the action is pending. 28 U.S.C. § 1441(a). The state case must be one in which the district court would have original jurisdiction. Id. If the plaintiff believes that removal was improper, it can request remand to the state court. Id. § 1447(c).

         Here, GTT asserts that this Court has jurisdiction based on the diversity statute, Section 1332. To establish the district court's diversity jurisdiction under Section 1332(a)(1), a removing defendant must show not only complete diversity of citizenship between the parties (something TAPCO does not challenge here), but also that the amount in controversy exceeds $75, 000.00, exclusive of interest and costs. Id. § 1332(a)(1). The amount in controversy at the time of removal controls the existence of jurisdiction. See Tropp v. Western-Southern Life Ins. Co., 381 F.3d 591, 595 (7th Cir. 2004). In the Seventh Circuit, this inquiry is not confined to the plaintiff's prayer for damages. Instead, it includes more generally “the amount at stake to either party to the suit.” BEM I, L.L.C. v. Anthropologie, Inc., 301 F.3d 548, 553 (7th Cir. 2002).

         As the proponent of the Court's jurisdiction, GTT has the burden of showing by a preponderance of the evidence facts that suggest the amount-in-controversy requirement is met. Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir. 2006). However, GTT must merely provide a “good-faith estimate” that the stakes exceed $75, 000. Oshana v. Coca-Cola Co., 472 F.3d 506, 511 (7th Cir. 2006). Once this is achieved, the plaintiff can defeat jurisdiction only if “it appears to a legal certainty that the claim is really for less than the jurisdictional amount.” St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 ...

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