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Kaj Foods, LLC v. Berkshire Refrigerated Warehousing, LLC

United States District Court, W.D. Wisconsin

June 15, 2017

KAJ FOODS, LLC, Plaintiff,
v.
BERKSHIRE REFRIGERATED WAREHOUSING, LLC, Defendant.

          OPINION AND ORDER

          WILLIAM M. CONLEY, District Judge

         Plaintiff KAJ Foods, LLC, alleges that defendant Berkshire Refrigerated Warehousing, LLC, breached the parties' contract, as well as committed related state law torts, by failing to ship food. Before the court is defendant's motion to dismiss for lack of personal jurisdiction or for improper venue under Federal Rules of Civil Procedure 12(b)(2) and (b)(3). In the alternative, defendant seeks to transfer venue to the Northern District of Illinois. For the reasons that follow, the court will deny both motions.

         ALLEGATIONS OF FACT[1]

         A. Overview of the Parties

         Plaintiff KAJ is a limited liability company organized under Wisconsin state law, with its principal place of business located in Stone Lake, Wisconsin. KAJ's sole member is a citizen of Wisconsin. KAJ, organized in 2015, purchases and sells distressed, short shelf-life and excess inventories.

         Defendant Berkshire is a limited liability company with its principal place of business located in Chicago, Illinois. Plaintiff alleges that BRW's members are all citizens of Illinois.[2]

         B. Breach of Contract Claim

         On April 2, 2015, KAJ met with Berkshire to establish an account and to discuss terms and fees between the parties. The parties allegedly agreed that Berkshire would slice and dice KAJ's food products for payment at the rate of $.265 per pound, and it would repack KAJ's product for payment at the rate of $.125 per pound, for a total of $.39 per pound. KAJ also allegedly agreed to pay (1) monthly storage fees within 30 days of receipt of each month's storage invoice and (2) reprocessing fees within 60 days of receipt of a reprocessing fee invoice.

         KAJ began shipping food products to Berkshire the same week the parties met, April 2, 2015. In addition to reprocessing and warehousing or storing distressed food items, Berkshire also shipped the products or arranged shipment with a common carrier.

         Focusing on Wisconsin customers for the purpose of deciding the present motion, the complaint further alleges several breaches with respect to product to be provided to KAJ's customer Indianhead Foodservice, which is located in Eau Claire, Wisconsin.

         Specifically, on June 10, 2015, Berkshire allegedly sent the wrong product and wrong bill of lading to Indianhead. On June 15 and 27, 2015, Berkshire allegedly did not have the food products ready to be picked up or loaded for Indianhead. This pattern allegedly continued for Indianhead as follows: on August 3, 2015, Berkshire again shipped the wrong order; on August 18, 2015, Berkshire failed to follow instructions to ship product; on February 19, 2016, Berkshire again shipped the wrong product. With respect to other Wisconsin-based customers, KAJ alleges that Berkshire converted the turkey bacon supplied by KAJ, then sold it for its own profit to Glacier Lake Foods, LLC, located in Rice Lake, Wisconsin. As part of that transaction, Berkshire shipped the turkey bacon to Rice Lake.[3] Finally, there are the impacts on KAJ itself in Wisconsin. For example, KAJ alleges that Berkshire also (allegedly) incorrectly sliced approximately 40, 000 pounds of turkey bacon, which resulted in KAJ losing current and future business with the California Department of Corrections.

         C. Berkshire's Other Contacts with Wisconsin

         In contrast, Berkshire emphasizes that it neither owns nor leases property in Wisconsin, has no business operations located in Wisconsin and no employees in Wisconsin. At the time that the parties entered into business, KAJ's sole member traveled to Illinois to agree on terms, while no one from Berkshire ever travelled to Wisconsin to transact business with KAJ. Similarly, the services that Berkshire performed for KAJ all occurred in Illinois, including the slicing, dicing and storage of KAJ's food products. Defendant contends that it also had no responsibility or involvement in shipping the product for its own handling to Illinois.

         As detailed above, however, Berkshire was responsible for shipping KAJ product to customers in Eau Claire and Rice Lake, Wisconsin. Berkshire also sent invoices to KAJ's office in Wisconsin. In addition, plaintiff points to the extensive communications between the ...


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