Grand Prairie Foods, Inc. v. Echo Lake Foods, Inc.

CourtDistrict Court, D. South Dakota
DecidedJanuary 4, 2024
Docket4:23-cv-04027
StatusUnknown

This text of Grand Prairie Foods, Inc. v. Echo Lake Foods, Inc. (Grand Prairie Foods, Inc. v. Echo Lake Foods, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. South Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grand Prairie Foods, Inc. v. Echo Lake Foods, Inc., (D.S.D. 2024).

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF SOUTH DAKOTA SOUTHERN DIVISION

GRAND PRAIRIE FOODS, INC., 4:23-CV-04027-KES

Plaintiff, ORDER DENYING MOTION TO DISMISS FOR IMPROPER VENUE AND MOTION TO vs. TRANSFER CASE

ECHO LAKE FOODS, INC., a Wisconsin corporation,

Defendant.

Defendant, Echo Lake Foods, Inc., moves to dismiss the above-entitled matter for improper venue, or alternatively, moves to transfer venue to the Eastern District of Wisconsin. Docket 7. Plaintiff, Grand Prairie Foods, Inc., opposes these motions. Docket 11. For the following reasons, the court denies both Echo Lake’s motion to dismiss and its motion to transfer venue to the Eastern District of Wisconsin. Background The facts as alleged are as follows:1

1 In evaluating a motion to dismiss for improper venue under Federal Rule of Civil Procedure 12(b)(3), the court may consider matters outside the pleadings. See Spanier v. Am. Pop Corn Co., 2016 WL 1465400, at *10 (N.D. Iowa Apr. 14, 2016); Multifeeder Tech., Inc. v. Brit. Confectionery Co., 2009 WL 5033958, at *1 (D. Minn. Dec. 15, 2009). For purposes of this motion, Echo Lake does not contest any of the factual assertions in the complaint. See Docket 7 at 1 n.1. Grand Prairie is a South Dakota corporation with its principal place of business in Sioux Falls, South Dakota. Docket 1 ¶ 2. Grand Prairie primarily supplies breakfast and afternoon sandwiches to convenience stores, retail

stores, and hotels. Id. ¶ 6. Echo Lake is a Wisconsin corporation headquartered in Burlington, Wisconsin that manufactures and supplies various food products, including precooked egg patties. Id. ¶¶ 7-9. To manufacture such products, Echo Lake purchases large volumes of pasteurized conventional liquid whole egg product, which are delivered to Echo Lake in tanker trucks. Docket 8 ¶ 4. Grand Prairie began purchasing egg products from Echo Lake in 2005 and specifically began purchasing Echo Lake’s egg patties in 2009. Docket 1

¶¶ 8-9. Typically, Grand Prairie purchased egg patties from Echo Lake through separate, written purchase orders. Id. ¶ 10. On March 10, 2022, Echo Lake sent Grand Prairie a letter advising that an Avian Influenza outbreak affected Echo Lake’s egg supplier, and, as a result, the price of egg patties had risen. Id. ¶¶ 11-12. In the letter, Echo Lake informed Grand Prairie that all previous purchase orders needed to be revised to reflect the increased price, which was roughly double the initial price. Id. ¶¶ 12, 14. On March 14, 2022, Echo Lake sent a second letter to Grand Prairie

indicating that the Avian Influenza outbreak was disrupting the egg supply

Thus, the court grounds its decision in the facts alleged in the complaint and the supplemental filings provided by the parties. chain and Echo Lake would monitor orders as they came in to determine whether it had adequate supply to fulfill them. Id. ¶ 13; Docket 1-2. On July 12, 2022, Grand Prairie’s President, Kurt Loudenback, emailed a

representative from Echo Lake, Justin Milbradt, inquiring about the continuing high prices for egg patties. Docket 1 ¶ 18; Docket 1-4 at 3. To combat these higher prices, Loudenback offered to deliver egg product to Echo Lake for the processing of egg patties, because Grand Prairie was able to procure eggs at a lower price. Docket 1 ¶ 21; Docket 1-4 at 3. Loudenback proposed that in return Echo Lake would reduce the price of the egg patties. Docket 1 ¶ 21; Docket 1-4 at 5. Milbradt refused this offer. Docket 1 ¶ 22. Instead, Milbradt proposed that Grand Prairie provide Echo Lake with egg product, which Echo

Lake would pay Grand Prairie premium price for, and the price of the egg patties would stay the same. Docket 1-4 at 1-2. Loudenback agreed and the parties decided Grand Prairie would deliver one tanker truck of eggs to Echo Lake per week, subject to written purchase orders. Docket 1 ¶ 25; Docket 1-4 at 1. After that, a Grand Prairie employee would generally reach out via email to an Echo Lake employee asking whether Echo Lake needed egg product. See Docket 9 ¶ 14; Docket 9-2 at 3. The Echo Lake employee would respond and

send the requisite purchase order confirming the time and location of delivery. Docket 9-2 at 1-3. Grand Prairie would then precure egg product for Echo Lake through third-party suppliers and arrange for tanker trucks to pick up the egg product from those suppliers and deliver it to Echo Lake’s facilities in Wisconsin. Docket 9 ¶ 16. During the course of the agreement, the parties agreed that Grand

Prairie would provide more truckloads of egg product to Echo Lake. See Docket 1-5. On September 7, 2022, an Echo Lake employee emailed 47 separate purchase orders to Grand Prairie for egg product to be delivered on varying dates between September and February. Docket 9-5 at 3-4. Grand Prairie confirmed these orders. Id. at 2. On November 2, 2022, a Grand Prairie employee emailed Echo Lake informing it that the price of egg product was increasing, due to an Avian Influenza outbreak, and that the purchase orders needed to be revised to reflect the new price. Docket 9-6. On November 16,

2022, a Grand Prairie employee again emailed Echo Lake—this time advising that because of the Avian Influenza outbreak, Grand Prairie would be unable to fulfill many of Echo Lake’s purchase orders for egg deliveries in 2022. Docket 1 ¶ 27; Docket 1-6 at 7. In a response email, Echo Lake stated it would withhold the funds it owed Grand Prairie for the egg deliveries to offset the cost of purchasing eggs on its own. Docket 1 ¶ 29; Docket 1-6 at 2. On December 15, 2022, Echo Lake sent a letter to Grand Prairie asserting that all future purchase orders for egg patties must be prepaid. Docket 1 ¶ 30; Docket 1-7.

Thereafter, Grand Prairie ceased ordering egg patties from Echo Lake and filed this action alleging breach of contract, unjust enrichment, and seeking a declaratory judgment. Docket 1 ¶ 31, 34-44. Echo Lake now moves to dismiss this action for improper venue. See Docket 7. In the alternative, Echo Lake moves for venue to be transferred to the Eastern District of Wisconsin, because it is a more convenient forum. Id. Grand Prairie opposes these motions arguing (1) venue is proper because a substantial portion of the events giving rise to the

claim took place in South Dakota and (2) transfer to Wisconsin would only shift the inconvenience onto Grand Prairie. See Docket 11 at 6-16. Discussion I. Motion to Dismiss for Improper Venue Parties may move to dismiss a case for improper venue under Federal Rule of Civil Procedure 12(b)(3). Under Rule 12(b)(3), the moving party bears the burden of establishing that venue is improper. United States v. Orshek, 164 F.2d 741, 742 (8th Cir. 1947); PKG Contracting, Inc. v. Smith & Loveless, Inc.,

2020 WL 906760, at *5 (D.S.D. Feb. 25, 2020). “The question of whether venue is ‘wrong’ or ‘improper’ is generally governed by 28 U.S.C. § 1391.” PKG Contracting, 2020 WL 906760, at *5. Under § 1391(b), venue is proper in three circumstances. First, venue is proper in a district where “any defendant resides, if all defendants are residents of the State in which the district is located[.]” 28 U.S.C. § 1391(b)(1). Second, venue is proper in any district where “a substantial part of the events or omissions giving rise to the claim occurred[.]” 28 U.S.C. §

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