United States District Court, E.D. Wisconsin
U.S. PAPER MILLS CORP., et al., Plaintiffs,
WORLD PAC PAPER LLC, et al, Defendants.
DECISION AND ORDER
WILLIAM C. GRIESBACH, CHIEF JUDGE.
U.S. Paper Mills Corporation and Sonoco Products Company
brought this suit against Defendants Clifford Paper Inc.
(CPI), World Pac Paper LLC (WPP), WPP Investors LLC, Edgar L.
Smith, Jr., and Richard A. Baptiste. Plaintiffs seek six
million dollars in unpaid invoices for core board and tier
paper Defendants ordered on behalf of Procter & Gamble.
Currently before the court is Plaintiffs' motion for
reconsideration of the court's November 29, 2017 order
dismissing CPI for lack of personal jurisdiction. Because the
dismissal of CPI was not in error, Plaintiffs' motion for
reconsideration will be denied.
motion to reconsider pursuant to Rule 59(e) of the Federal
Rules of Civil Procedure allows a court to correct manifest
errors of fact or law. FDIC v. Meyer, 781 F.2d 1260,
1286 (7th Cir. 1986). "A 'manifest error' is not
demonstrated by the disappointment of the losing party. It is
the 'wholesale disregard, misapplication, or failure to
recognize controlling precedent.'" Oto v. Metro.
Life Ins. Co., 224 F.3d 601, 606 (7th Cir. 2000). The
purpose of a Rule 59(e) motion is to enable a district court
to correct its own errors and thus avoid unnecessary
appellate procedures. Divane v. KrullElec. Co., 194
F.3d 845, 848 (7th Cir. 1999). But the motion "is not
appropriately used to advance arguments or theories that
could and should have been made before the district court
rendered a judgment." LB Credit Corp. v. Resolution
Trust Corp., 49 F.3d 1263, 1267 (7th Cir. 1995). As a
result, relief under Rule 59(e) is an "extraordinary
remedy" that should only be granted in rare cases.
See Foster v. DeLuca, 545 F.3d 582, 584 (7th Cir.
2008). The decision to grant a Rule 59(e) motion "is
entrusted to the sound judgment of the district court."
Matter of Prince, 85 F.3d 314, 324 (7th Cir. 1996).
assert the court made a manifest error in concluding
Plaintiffs did not establish jurisdiction pursuant to
Wisconsin's long-arm statute, Wis.Stat. § 801.05.
First, Plaintiffs claim the court misapplied Wis.Stat. §
801.05(5)(a). This subsection provides that a court has
jurisdiction over any action which "[a]rises out of a
promise, made anywhere to the plaintiff or to some 3rd party
for the plaintiffs benefit, by the defendant to perform
services within this state or to pay for services to be
performed in this state by the plaintiff." §
801.05(5)(a). Plaintiffs contend the court did not recognize
that Plaintiffs supply of the subject product constitute
services. But Plaintiffs' complaint only characterizes
its arrangement with Procter & Gamble and the defendants
as one for goods, not services. See Compl.¶1
("This action seeks money damages against Defendants,
who acted as intermediaries for the purchase and supply of
core board and tier sheets (hereinafter, the 'subject
product') supplied by Plaintiffs for use by non-party
Procter & Gamble . . . ."); Compl. ¶ 15
("Defendants acted as intermediaries in the purchase of
paper products, specifically the subject product, between
Plaintiffs, as supplier, and Procter & Gamble, as
customer."); Compl. ¶ 16 ("Plaintiffs would
receive purchase orders submitted by Defendants and supply
the subject product ordered therein."); Compl ¶ 22
("A valid agreement existed between Plaintiffs and
Defendants for the supply of products for valuable
consideration."). Plaintiffs cannot now assert for the
first time that converting raw materials into some product
which meets customer-specified requirements and supplying
that product to the customer constitute services. See
Caisse v. Nationale de Credit Agricole v. CBI Indus.,
Inc., 90 F.3d 1264, 1270 (7th Cir. 1996) (noting that
motions for reconsideration are "not the appropriate
forum for . . . arguing matters that could have been heard
during the pendency of the previous motion").
the court were to consider this argument, it would not alter
the court's conclusion. Plaintiffs cite Regal Ware,
Inc. v. TSCO Corp., 207 Wis.2d 538, 558 N.W.2d 679 (Ct.
App. 1996) and Generac Corp. v. Omni Energy Systems,
Inc., 19 F.Supp.2d 917 (E.D. Wis. 1998) for the
proposition that the manufacture and supply of materials
constitute a service, but these cases are inapposite. In
Regal Ware, for instance, the plaintiffs obligation
under the brokerage agreement included "manufacturing
and shipping of cookware; approving sales orders submitted by
TSCO to Regal Ware; and sending TSCO commission checks drawn
on a Wisconsin bank." 207 Wis.2d at 543. The court
determined the plaintiff established personal jurisdiction
because it performed these services in Wisconsin.
Generac Corp., the plaintiff sought a declaratory
judgment finding that the distributor's territory under
the distributorship agreement was not exclusive. 19 F.Supp.2d
at 919. Under the parties' contractual arrangement, the
plaintiff was responsible for manufacturing and shipping
services in Wisconsin as well as approving all of the
defendant's sales orders in Wisconsin. The defendant did
not dispute that the plaintiff performed services under their
distributorship agreement but instead asserted it had
conducted no business in Wisconsin. The court concluded the
plaintiff satisfied the requirement of Wisconsin's
long-arm statute because the plaintiff provided services in
Wisconsin. Id. at 921.
cases are distinguishable from the instant one because the
additional services the plaintiffs performed in Regal
Ware and Generac transformed the manufacturing
and shipping arrangements into service contracts. In this
case, Plaintiffs provided no additional services beyond
manufacturing and shipping. Under Plaintiffs' proposed
construction of the term, any contract for the sale of goods
would turn into one for services. The court declines to
construe "services" so broadly. Simply put,
Plaintiffs have not established that this action relates to
"services performed in this state by the plaintiff'
as required by Wis.Stat. § 801.05(5)(a).
addition, Plaintiffs assert the court erred in finding that
the Administrative Services and Raw Material Supply Agreement
entered into between CPI and WPP did not benefit Plaintiffs.
Under the Services Agreement, CPI agreed to perform services
for WPP, including the management of WPP's accounts
payable, accounts receivable, finance, invoices, and other
administrative functions in exchange for a negotiated rate of
compensation. Plaintiffs assert CPI's obligation to
manage "mill accounts payable" under the agreement
constituted a promise to Plaintiffs that CPI would pay for
the product it supplied to the World Pac enterprise. But the
promise to manage mill accounts payable was a promise CPI
made to WPP, not to Plaintiffs. Though Plaintiffs received
payments from CPI for the product it supplied to Procter
& Gamble, CPI was obligated to make these payments on
behalf of WPP pursuant to the Service Agreement. As a result,
the Service Agreement, and the promises memorialized therein,
were not made for Plaintiffs' benefit. In sum, it was not
err to conclude the facts do not support a finding of
personal jurisdiction under § 801.05(5)(a).
also take issue with the court's conclusion that the
facts did not support a finding of personal jurisdiction
under Wis.Stat. § 801.05(5)(d). This provision provides
that Wisconsin courts have jurisdiction over any action that
"[r]elates to goods, documents of title, or other things
of value shipped from this state by the plaintiff to the
defendant on the defendant's order or direction."
§ 801.05(5)(d). Although Plaintiffs assert the court
must consider the facts supporting their breach of contract
claim as well as their conversion claim to determine whether
personal jurisdiction exists under this provision,
Plaintiffs' allegations do not establish jurisdiction
under this provision because CPI did not order or direct
Plaintiffs to ship the products to Procter & Gamble.
Plaintiffs seek six million dollars in unpaid invoices for
core board and tier paper delivered to Procter & Gamble
between late-June 2017 and August 29, 2017. But CPI did not
order these goods; WPP did. Any shipments CPI requested
before June 2017 are not relevant to the instant litigation,
and Plaintiffs cannot point to these orders to establish
jurisdiction under this provision. Because this lawsuit does
not relate to goods that were shipped by Plaintiffs at CPFs
direction, Plaintiffs' allegations do not support a
finding of personal jurisdiction under § 801.05(5)(d).
Plaintiffs' arguments do not convince me that I committed
an error of law or fact in this case. Accordingly, their