September 18, 2019
from the United States District Court for the Eastern
District of Wisconsin. No. 2:17-cv-1731 - J.P. Stadtmueller,
Kanne, Hamilton, and Barrett, Circuit Judges.
BARRETT, CIRCUIT JUDGE.
company that enters a dealership agreement with a
manufacturer takes a risk. Investing in the sale of the
manufacturer's products may generate significant profits.
But if a manufacturer pulls out, a dealer who has made that
investment may be left high and dry. To give dealers some
protection, the Wisconsin Fair Dealership Law makes it
difficult for manufacturers to simply walk away. If a
manufacturer terminates, substantially changes, or fails to
renew a dealership agreement without good cause, the statute
entitles the dealer to relief.
Machinery Sales sued Yama Seiki for violating this statute.
According to PMT, it had an exclusive-dealership arrangement
with Yama Seiki, which the latter breached by using other
companies to promote the sale of its machines. Yet PMT has
failed to show that it had any dealership agreement with Yama
Seiki, much less an exclusive one. To qualify as a dealership
under the statute, PMT must have either possessed the right
to sell or distribute Yama Seiki's products or made more
than de minimis use of Yama Seiki's corporate symbols.
But PMT never stocked any of Yama Seiki's products,
collected money for their sale, or made more than de minimis
use of Yama Seiki's logos. Because no reasonable jury
could render a verdict in PMT's favor, we affirm the
district court's grant of summary judgment in favor of
Seiki is a California manufacturer of machine tools. PMT, a
Wisconsin corporation, sought to become the exclusive dealer
for Yama Seiki turning machines in eastern Wisconsin. To that
end, it negotiated with Clive Wang, the operations manager of
the division that makes the machines. The parties disagree
about whether Wang orally granted exclusive-dealer status to
PMT in the course of these discussions, but they agree that
Wang issued an exclusive letter of dealership to PMT in
December 2015. This letter conditioned exclusive-dealer
status on terms that included meeting sales requirements of
$1, 000, 000 or 15 machines in a year, stocking one machine
on PMT's showroom floor, and developing a marketing plan
for the machines.
rejected the letter because it did not believe it could reach
the sales requirements. But two months later, PMT offered to
take stock of two machines in exchange for an
exclusive-dealer agreement. PMT followed this offer with an
application for dealership status and a proposal to negotiate
further. Wang did not address the offer; instead, he
responded that he was "not sure if you are aware that
you are in 'exclusive' status" to sell Yama
Seiki turning machines. PMT believed that this communication
amounted to an exclusivity agreement with open-ended terms.
never took stock of any machines, but it did facilitate their
sale by soliciting customers, negotiating sales prices, and
connecting the customers with Yama Seiki. The customers then
paid Yama Seiki, after consenting to its usual sales terms.
PMT was then responsible for installation and warranty work,
which it subcontracted to its sister company. When a sale was
completed, Yama Seiki paid PMT the difference between the
negotiated sales price and the dealer price. The parties
disagree about whether Yama Seiki was required to fulfill
every order facilitated by PMT, but they agree that Yama
Seiki never in fact rejected a PMT order.
the start of 2015 and May 2018, PMT derived 55% of its income
and 74% of its profits from Yama Seiki sales, the remainder
apparently coming from sales of other machine tools and
accessories. PMT spent $3, 803.14 on advertising during the
alleged exclusive-dealership period, though only $1, 200 of
this is identified as specifically related to Yama Seiki
products. PMT did not operate its own website but was instead
included as part of its sister company's site. The
section of the site related to machine sales used the Yama
Seiki logo and advertised Yama Seiki products alongside tools
and accessories from other manufacturers.
than a year after Wang told PMT that it was in
"exclusive status/' PMT discovered that others were
selling Yama Seiki turning machines in eastern Wisconsin. PMT
approached Wang, who stated that PMT was "not [an]
exclusive distributor/' citing its rejection of the
letter outlining the sales requirements. PMT then sued Yama
Seiki, alleging that it had violated Wisconsin's Fair
Dealership Law, Wis.Stat. §§ 135.03-135.04, by
breaching an exclusive-dealership agreement. Yama Seiki moved
for summary judgment on the ground that PMT was not a
dealership under the statute. The district court determined
that PMT had not raised a triable issue on the dealer-status
question and granted the motion.
Wisconsin Fair Dealership Law provides that
"grantors" may not "terminate, cancel, fail to
renew or substantially change the competitive circumstances
of a dealership agreement without good cause." Wis.Stat.
§ 135.03. The statute's protections, however, extend
only to ...