Baumann Farms, LLP et al v. Yin Wall City Inc et al

Filing 21

ORDER signed by Magistrate Judge William E Duffin on 12/6/15. IT IS THEREFORE ORDERED that defendants' motion for reconsideration is denied. (ECF No. 20 ). Defendants shall answer or file other responsive pleadings no later than December 19, 2016. (cc: all counsel) (mlm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
BAUMANN FARMS, LLP,
a Wisconsin Limited Liability Partnership;
GLENN HEIER; and AARON KAISER
Plaintiffs,
v.

Case No. 16-CV605

YIN WALL CITY, INC., an Illinois corporation;
SUT I. FONG; CHOENG SAT O;
YIN WALL CITY, INC., a Texas corporation; and
YIN WALL CITY, DALLAS, INC., a Texas Corporation,
Defendants.
ORDER
On November 29, 2016, this court issued an Order (ECF No. 19) denying the
defendants’ motion to dismiss the plaintiffs’ class action complaint on a variety of
grounds. Defendants now move the court to reconsider one aspect of that decision—
whether the court may exercise specific personal jurisdiction over the defendants. (ECF
No. 20.)
Defendants assert that this court incorrectly applied the Supreme Court’s
decision in Walden v. Fiore, 134 S. Ct. 1115 (2014), when it concluded that the YWC

defendants had expressly targeted the Wisconsin ginseng market, creating the requisite
minimum contacts with the forum state. Defendants contend that they have no
jurisdictionally relevant contact with Wisconsin and their activities do not show “some
act by which the defendant purposefully avails itself of the privilege of conducting
activities within the forum State.” (ECF No. 20 at 3) (quoting N. Grain Mktg., LLC v.
Greving, 743 F.3d 487, 492 (7th Cir. 2014)). And the YWC defendants assert that the case
at bar is distinguishable from Calder v. Jones, 465 U.S. 783 (1984) (discussed in detail in
Walden v. Fiore), where the Supreme Court found “minimum contacts” with California
because the special nature of the tort of libel worked a reputational harm that was said
to “occur” in that state.
The court disagrees. In Calder v. Jones, the allegedly libelous story concerned the
California activities of a California resident. The brunt of the harm caused by the story
was suffered in California. Thus, the court concluded that jurisdiction over the
defendants (residents of Florida) was proper in California based on the “effects” of their
Florida conduct in California. 465 U.S. at 788-89.
Similarly, here the complaint alleges that the defendants through their false
advertising engaged in unfair competition, which is “understood to be concerned with
injuries to business reputation and present and future sales.” Lexmark Intern., Inc. v.
Static Control Components, Inc., 134 S. Ct. 1377, 1389-90 (2014) (the goal of § 1125 of the
Lanham Act was to protect competitors). The plaintiffs allege that, by falsely branding

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their inferior ginseng as having been grown in Wisconsin, the defendants intended to
boost their sales. In the process, they knowingly damaged the reputation of ginseng
actually grown in Wisconsin. The brunt of the harm of that unfair competition was
suffered in Wisconsin by Wisconsin ginseng farmers.
As stated by the court in Calder v. Jones, knowing that the brunt of the injury
caused by their false advertising would be felt by ginseng farmers in Wisconsin, the
defendants must “reasonably anticipate being haled into court” here to answer for their
false advertising. 465 U.S. at 790 (quoting World-Wide Volkswagen Corp. v. Woodson, 444
U.S. 286, 297 (1980)). A Wisconsin ginseng farmer need not go to Illinois to seek redress
from persons who knowingly cause injury in Wisconsin.
IT IS THEREFORE ORDERED that defendants’ motion for reconsideration is
denied. Defendants shall answer or file other responsive pleadings no later than
December 19, 2016.
Dated at Milwaukee, Wisconsin this 6th day of December, 2016.

_________________________
WILLIAM E. DUFFIN
U.S. Magistrate Judge

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