United States District Court, E.D. Wisconsin
DECISION AND GRANTING DEFENDANT'S MOTION TO
William C. Griesbach, Chief Judge United States District
Valley Bakers Cooperative Association filed this breach of
contract action against Defendant Osage Food Products Inc. on
October 18, 2016. The court dismissed the complaint without
prejudice on October 21, 2016 because Valley Bakers failed to
properly plead and establish subject matter jurisdiction. On
October 28, 2016, Valley Bakers filed an amended complaint.
The case is presently before the court on Osage's motion
to dismiss pursuant to Rule 12(b)(1) of the Federal Rules of
Civil Procedure for lack of jurisdiction. Osage asserts that
Valley Bakers has not established that the parties are
completely diverse and that its damages exceed the
jurisdictional minimum. For the following reasons,
Osage's motion will be granted.
to the amended complaint, Valley Bakers is a wholesale baking
cooperative authorized to do business in the State of
Wisconsin. (Am. Compl. ¶ 1, ECF No. 4.) On January 28,
2016, Valley Bakers and Osage entered into a contract for the
sale of pecans. (Id. ¶ 6.) Pursuant to the
terms of the contract, Osage agreed to supply 75, 000 pounds
of pecans of varying sizes. (Id. ¶¶ 7-8.)
Valley Bakers alleges that since August 29, 2016, Osage has
refused to supply the pecans at the contracted prices.
(Id. ¶ 14.) As a result, Valley Bakers had to
purchase the remaining quantity of pecans from other
suppliers at higher prices. (Id. ¶ 15.) Valley
Bakers filed this suit seeking specific performance and
reviewing the plaintiff's complaint in regard to any
motion to dismiss, all well-pleaded facts are assumed to be
true, and all such facts, as well as the reasonable
inferences therefrom, are viewed in the light most favorable
to the plaintiff. Gutierrez v. Peters, 111 F.3d
1364, 1368-69 (7th Cir. 1997). A motion to dismiss under Rule
12(b)(1) challenges the jurisdiction of this court over the
subject matter related in the complaint. The plaintiff bears
the burden of establishing that the jurisdictional
requirements have been met. Schaefer v. Transp. Media,
Inc., 859 F.2d 1251, 1253 (7th Cir. 1988). If material
factual allegations are contested, the proponent of federal
jurisdiction must “prove those jurisdictional facts by
a preponderance of the evidence.” Meridian Sec.
Ins. Co. v. Sedowski, 441 F.3d 536, 543 (7th Cir. 2006).
When the moving party “launches a factual attack
against jurisdiction, the district court may properly look
beyond the jurisdictional allegations of the complaint and
view whatever evidence has been submitted on the issue to
determine whether in fact subject matter jurisdiction
exists.” Apex Digital, Inc. v. Sears, Roebuck &
Co., 572 F.3d 440, 444 (7th Cir. 2009) (internal
quotation marks and citations omitted).
Bakers' amended complaint asserts that the case is being
brought pursuant to 28 U.S.C. § 1332, which confers
diversity jurisdiction on federal courts. For a suit to be
based on diversity jurisdiction, there must be complete
diversity of citizenship and an amount in controversy in
excess of $75, 000. 28 U.S.C. § 1332(a); Carden v.
Arkoma Assoc., 494 U.S. 185, 187 (1992). “Under
the rule of complete diversity, if there are residents of the
same state on both sides of a lawsuit, the suit cannot be
maintained under the diversity jurisdiction even when there
is also a nonresident party.” Krueger v.
Cartwright, 996 F.2d 928, 931 (7th Cir. 1993) (citation
omitted); see also Owen Equip. & Erection Co. v.
Kroger, 437 U.S. 365, 373 (1978). When the parties do
not meet the requirements to establish diversity
jurisdiction, subject matter jurisdiction does not exist.
Home Fed. Sav. Bank v. Ticor Title Ins. Co., 695
F.3d 725, 729 (7th Cir. 2012). As such, the district court
lacks the authority to adjudicate the matter and must dismiss
the case. See Murray v. Conseco, Inc., 467 F.3d 602,
605 (7th Cir. 2006).
Bakers alleges that it is a wholesale baking cooperative,
which is an unincorporated entity. An unincorporated
entity's citizenship “depends on the citizenship of
‘all [its] members.'” Americold Realty
Trust v. Conagra Foods, Inc., 136 S.Ct. 1012, 1015
(2016) (quoting Carden, 494 U.S. at 195-96). The
citizenship of an unincorporated entity must be “traced
through however many layers of partners or members there may
be.” Meyerson v. Showboat Marina Casino
P'ship, 312 F.3d 318, 320 (7th Cir. 2002). Stated
differently, when an unincorporated entity is comprised of
other entities that have multiple citizenships, the district
court must know “each member's citizenship, and if
necessary each member's members' citizenships.”
Hicklin Eng'g, L.C. v. Bartell, 439 F.3d 346,
348 (7th Cir. 2006), abrogation on other grounds
recognized by RTP LLC v. ORIX Real Est. Capital, Inc.,
827 F.3d 689 (7th Cir. 2016).
Bakers asserts that the parties are diverse because Osage is
incorporated in Missouri and has its principal place of
business there, and “none of the members of Valley
Bakers are citizens of the State of Missouri.” (Am.
Compl. ¶ 1.) Although the allegations in the amended
complaint regarding the parties' citizenships appear
facially sufficient, there are external facts that call the
court's jurisdiction into question. In response to
Osage's motion to dismiss, Valley Bakers submitted a list
of its 489 members and their citizenship. (ECF No. 11-7.)
This list reveals that some of Valley Bakers' members are
themselves unincorporated entities. Nevertheless, Valley
Bakers has not verified that the unincorporated entities'
members are not citizens of Missouri. As such, Valley Bakers
has failed to establish that the parties are completely
diverse in response to the defendant's challenge, and its
amended complaint must be dismissed for lack of subject
Valley Bakers demonstrated complete diversity of citizenship,
its amended complaint would be dismissed because the amount
in controversy does not exceed $75, 000. Generally, a court
will accept the plaintiff's uncontested “good faith
allegation of the amount in controversy unless it
‘appear[s] to a legal certainty that the claim is
really for less than the jurisdictional amount.'”
McMillian v. Sheraton Chi. Hotel & Towers, 567
F.3d 839, 844 (7th Cir. 2009) (internal citations omitted).
Where, as here, the defendant contests the plaintiff's
“allegation of the amount in controversy, the plaintiff
must support its assertion with competent proof.”
Id. To satisfy this burden, the plaintiff must do
more than “point to the theoretical availability of
certain categories of damages.” Am. Bankers Life
Assur. of Fla. v. Evans, 319 F.3d 907, 909 (7th Cir.
Valley Bakers has not met its burden. This action is a suit
for specific performance and a claim for damages. Valley
Bakers alleges that Osage only supplied 28, 830 of the 75,
000 pounds of pecans it was required to provide under the
contract and has refused to supply the remaining pecans at
the contracted purchase price. It asserts it is entitled to
specific performance and that Osage must supply the remaining
46, 170 pounds of pecans under the contract. Valley Bakers
contends that it has satisfied the jurisdictional minimum
because the cost of the outstanding pecans totals $266,
862.60. However, it offered no evidence tending to show that
this is the type of case that warrants specific performance.
See U.C.C. § 2-716(1) (“Specific
performance may be decreed where the goods are unique or in
other proper circumstances.”). The fact that Valley
Bakers was able to purchase such a large quantity of pecans
elsewhere demonstrates that the goods in this case are not
unique. By only pointing to the theoretical availability of a
certain category of damages, Valley Bakers failed to provide
competent proof to justify its allegation of the amount of
Valley Bakers introduced evidence demonstrating that the real
amount of its damages is much lower than the alleged amount
in controversy. In its amended complaint, Valley Bakers
asserts that it purchased the outstanding amount of pecans it
needed from other suppliers at higher unit prices. (Am.
Compl. ¶ 15.) As a result, it paid a total of $24,
831.57 more than it would have under the contract with Osage.
(ECF No. 11-3.) “In the standard case of a seller's
breach of a contract for the sale of goods where the buyer
covers by purchasing the same product in the market, damages
are readily calculable by subtracting the contract price from
the market price and multiplying by the quantity specified in
the contract.” Walgreen Co. v. Sara Creek Property
Co., B.V., 966 F.2d 273, 277 (7th Cir. 1992); see
also U.C.C. § 2-713. Applying this standard, the
court concludes that Valley Bakers' alleged damages are
significantly less than the jurisdictional minimum. Its
amended complaint must therefore be dismissed.
foregoing reasons, Osage's motion to dismiss (ECF No. 8)
is GRANTED. The action is dismissed without
prejudice. The Clerk of ...