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Rite-Hite Company LLC v. Niagara Bottling LLC

United States District Court, E.D. Wisconsin

April 23, 2019




         1. INTRODUCTION

         This case involves hundreds of dock levelers that the defendant, Niagara Bottling, LLC (“Niagara”), purchased from the plaintiffs, Rite-Hite Company, LLC, Rite-Hite Products Corporation, and Arbon Equipment Corporation (collectively “Rite-Hite”), between 2009 and 2015. Beginning in 2014, the dock levelers began to fail. In August 2018, Niagara sent a demand letter to Rite-Hite seeking more than $3 million because the dock levelers did not conform to industry standards.

         On September 7, 2018, instead of responding to the letter, Rite-Hite filed this action seeking a declaration of no liability with respect to Niagara's charges in the demand letter of negligence and breach of warranty. On September 21, 2018, Niagara filed a complaint against Rite-Hite in the Central District of California, seeking coercive relief based on the same conduct underlying the claims in this action for which the plaintiffs seek declaratory relief. See Niagara Bottling, LLC v. Rite-Hite Company, LLC et al., No. 5:18-cv-2032-PSG-SHK (C.D. Cal.) (the “California Action”).

         Now before the Court is Niagara's motion to dismiss, stay, or transfer venue to the Central District of California. (Docket #16). For the reasons explained below, the motion will be granted, and this case will be dismissed.


         Resolution of this motion turns on Niagara's request for dismissal under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. When considering such a motion, the district court accepts as true all well-pled factual allegations and draws reasonable inferences from the allegations in favor of the plaintiff. See Capitol Leasing Co. v. FDIC, 999 F.2d 188, 191 (7th Cir. 1993). The court may also look beyond the allegations of the complaint and consider affidavits and other evidence to determine whether subject matter jurisdiction exists. See id.


         Rite-Hite is a manufacturer of loading dock equipment and other industrial products. It is headquartered in Milwaukee, Wisconsin. Niagara is a bottle manufacturer headquartered in Ontario, California.

         From 2009 to 2015, Niagara purchased more than 200 dock levelers from Rite-Hite for use at its facilities in Rialto, California; Atlanta, Georgia; Plainfield, Illinois; Columbus, Ohio; Houston, Texas; Tacoma, Washington; and Kenosha, Wisconsin. Dock levelers are ramp-type devices that bridge the gap between Niagara's distribution plants and trucks awaiting shipment. At the facilities for which Niagara purchased dock levelers from Rite-Hite, it also purchased laser-guided vehicles (“LGVs”) from Elettric 80, Inc. (“E80”), a company headquartered in Skokie, Illinois. LGVs are forklifts that autonomously load pallets carrying Niagara's products onto trucks ready for shipment.

         Beginning in 2014, the dock levelers began to fail, and Rite-Hite began making repairs at Niagara's facilities. Niagara believes that both E80 and Rite-Hite are to blame. It claims that E80 misrepresented the actual weight of its LGVs, which were heavier than promised, and Rite-Hite knowingly sold dock levelers that were not manufactured in accordance with industry standards, which called for a higher weight tolerance than Rite-Hite's levelers had. As a result, Niagara says it spent more than $3 million replacing failed dock levelers.

         On August 3, 2018, Niagara sent Rite-Hite a demand letter, alleging its bases for Rite-Hite's liability. The letter opens with the following paragraph:

This letter serves as the formal written demand of Niagara Bottling, LLC (“Niagara”) for payment of $3, 066, 925, which represents the amount that Niagara has incurred thus far as a result of Arbon/Rite-Hite's (“Rite-Hite”) failure to provide dock levelers (“Equipment”) that conformed to industry standards. As you know, due to the Seller's gross negligence, thus far eight Niagara facilities (“Facilities”) suffered dock leveler failures that rendered them useless.

(Docket #1-1). The letter goes on to explain its belief that Rite-Hite dock levelers do not meet industry standards and have failed prematurely, and thus failed to comply with the parties' agreement. Finally, ...

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