Principle Solutions LLC v. Feed.Ing BV

Filing 75

ORDER signed by Judge Rudolph T. Randa on 5/30/2014 GRANTING 68 Motion to require Participation in Discovery. Principle and Zimmer MUST participate in discovery concerning Zimmer's alleged alter ego liability to Feed.Ing for debts of Principle. Principle and Zimmer MUST NOT REFUSE to produce documents or provide discovery on the basis that alter ego discovery should occur at some later time. (cc: all counsel) (cb)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
PRINCIPLE SOLUTIONS, LLC,
Plaintiff-Counterclaim-Defendant,
v.
FEED.ING B.V.,
Defendant-Counterclaimant,
and

Case No. 13-C-223

NATURAL BALANCE PET FOODS, INC.,
and JERRY BALL,
Defendants,
___________________________________
FEED.ING. B.V.,
Third-Party Plaintiff,
v.
KEVIN ZIMMER,
Third-Party Defendant.

DECISION AND ORDER
This matter is before the Court on the Civil L. R. 7(h) expedited nondispositive motion of Third-Party Plaintiff Feed.Ing B.V. (“Feed”) for an order
requiring Counterclaim Defendant Principle Solutions, LLC (“Principle”) and ThirdParty Defendant Kevin Zimmer (“Zimmer”) to participate in discovery regarding

Zimmer’s alleged alter ego liability to Feed for debts of Principle (“alter ego
discovery”).
Rule 26 of the Federal Rules of Civil Procedure governs the scope of discovery
in federal civil cases. The federal discovery rules are liberal in order to assist in the
preparation for trial and settlement of litigated disputes. See Bond v. Uteras, 585 F.3d
1061, 1075 (7th Cir. 2009). The Court’s discovery processes and rules are used to
require litigants to produce otherwise private information. See id.
While a party may object to discovery requests on the ground of relevance, that
term is broadly defined under Rule 26. Rule 26(b)(1) allows parties to discover
information “regarding any nonprivileged matter that is relevant to any party’s claim
or defense. Relevant information need not be admissible at the trial if the discovery
appears reasonably calculated to lead to the discovery of admissible evidence.” Fed.
R. Civ. P. 26(b)(1). See Nw. Mem’l Hosp. v. Ashcroft, 362 F.3d 923, 930 (7th Cir.
2004). District courts have broad discretion in determining motions to compel. See
Peals v. Terre Haute Police Dep’t, 535 F.3d 621, 629 (7th Cir. 2008).
Feed’s amended third-party complaint against Zimmer alleges that Principle is
a limited liability company organized under Wisconsin law. (ECF No. 46.) The
parties are in apparent agreement that this Court should apply Wisconsin law on the
alter ego issue. In recent years Wisconsin courts have followed “[t]he general rule . . .
that a plaintiff’s alter ego theory is governed by the law of the state in which the
business at issue is organized.” Rual Trade Ltd. v. Viva Trade LLC, 549 F. Supp. 2d
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1067, 1077 (E.D. Wis. 2008) (citing Restatement (Second) of Conflict of Laws § 307
(regarding corporations). See also Taurus IP, LLC v. DaimlerChrysler Corp., 726
F.3d 1306, 1336-37 (Fed. Cir. 2013); Select Creations, Inc. v. Paliafito Am., Inc., 852
F. Supp. 740, 744 (E.D. Wis. 1994).
Wisconsin law provides for alter ego liability as follows:
“[T]he existence of the corporation as an entity apart from the natural
persons comprising it will be disregarded, if corporate affairs are
organized, controlled and conducted so that the corporation has no
separate existence of its own and is the mere instrumentality of the
shareholder and the corporate form is used to evade an obligation, to
gain an unjust advantage or to commit an injustice.”
Consumer’s Co-op. of Walworth Cnty. v. Olsen, 142 Wis. 2d 465, 476, 419 N.W.2d
211, 214 (Wis. 1988) (citation omitted). Feed’s second claim for relief in its amended
third-party complaint is for alter ego liability. Feed may pursue discovery relevant to
that claim. Therefore, Feed’s motion is granted.
NOW, THEREFORE, BASED ON THE FOREGOING, IT IS HEREBY
ORDERED THAT:
Feed’s Civil L. R. 7(h) expedited non-dispositive motion to require Principle
and Zimmer to participate in alter ego discovery (ECF No. 68) is GRANTED.
Principle and Zimmer MUST participate in discovery concerning Zimmer’s
alleged alter ego liability to Feed for debts of Principle; and

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Principle and Zimmer MUST NOT REFUSE to produce documents or
provide discovery upon the basis that alter ego discovery should occur at some later
time.
Dated at Milwaukee, Wisconsin, this 30th day of May, 2014.
BY THE COURT:

__________________________
HON. RUDOLPH T. RANDA
U.S. District Judge

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