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Saratoga Potato Chip Company, Inc. v. Classic Foods, Inc.

United States District Court, N.D. Indiana

April 20, 2015

Saratoga Potato Chips Company, Inc., a/k/a Olde York Potato Chips, et al., Plaintiffs,
Classic Foods, Inc. et al., Defendants.



A. Introduction

In 2012, Plaintiff Saratoga Potato Chips (“Saratoga”) filed an action against Defendant Classic Foods, Inc., alleging breach of contract. On May 6, 2014, the Court entered a final judgment against Classic Foods in the amount of $386, 646.56, plus attorney’s fees. The following month, Saratoga amended its complaint to add Balance Foods, Inc., as a defendant under the theories of alter ego and successor liability. Before the Court is Defendant Balance Food’s motion to dismiss the case in its entirety for lack of personal jurisdiction, or in the alternative, to transfer the case to the United States District Court for the Central District of California, Southern Division. (DE 76).

B. Background

On October 18, 2012, Saratoga filed this breach of contract action against Defendants Cuetara and its alleged subsidiary, Classic Foods, Inc. (“Classic”), in the Allen Superior Court. (DE 1.) Defendants removed the case here based on diversity of citizenship, 28 U.S.C. § 1332. (DE 2.) This suit stems from Defendants’ purported failure to pay almost $369, 000 for snack foods ordered from Saratoga during July 2011 to January 2012, and failure to make payments under an August 2012 agreement settling a prior lawsuit filed by Saratoga on the matter. (DE 1.)

On April 22, 2014, the parties stipulated to a final judgment against Classic in the amount of $368, 646.56, which the Court granted. (DE 57.) Accordingly, on May 7, 2014, the Clerk entered a judgment in favor of Saratoga and against Classic in the same amount. (DE 58, 60.) On June 4, 2014, Saratoga filed a supplemental pleading, seeking to add Balance as a defendant liable for Classic’s debt under theories of alter ego and successor liability. (DE 63.) In doing so, Saratoga asserts it discovered that on April 7, 2014-after the partial summary judgment was granted–Classic transferred, without notice to Saratoga, all of its assets to Balance, a corporation controlled by Florencio Cuetara, the President of Classic and Cuetara. (Pl.’s Mem. of Law 4.) Saratoga alleges that Classic’s “pre-acquisition business is now being conducted by Balance Foods in substantially the same manner, by substantially the same personnel, at the same physical facility, and using much of the same equipment and supplies.” (Pls.’ Mem. of Law 4.) As Saratoga sees it, Defendants have employed a scheme to render Classic judgment-proof in this suit. (Pl.’s Mem. of Law 5.)

On September 23, 2014, Defendant Balance filed a motion to dismiss, or in the alternative motion to transfer the case. Defendant argues that it lacks the significant contacts with the state of Indiana that would grant the Court personal jurisdiction over it, and so the Court should dismiss the entire case under Rule 12(b)(2). In addition, on October 22, 2014, Plaintiff filed a motion to strike Balance’s reply brief in support of its motion to dismiss, and an accompanying memorandum in support. Plaintiff argues that Balance raised new evidence and arguments in its attempt to transfer the case, which should be stricken. (DE 90.)

C. Standard of Review

A motion to dismiss under 12(b)(2) generally places the burden on the plaintiff to establish jurisdiction. See RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir.1997). The plaintiff may make a prima facie showing of jurisdiction by demonstrating, via affidavits or other written materials, facts that, if true, would be sufficient to establish jurisdiction over the non-resident defendant. See Reliable Tool & Mach. Co., Inc. v. U-Haul Intl’l, Inc., 837 F.Supp. 274, 278 (N.D. Ind. 1993). Any conflicts in the facts must be resolved in favor of the non-moving party. Id. at 279.

In a diversity action filed pursuant to 28 U.S.C. § 1332, a federal district court has personal jurisdiction over a non-resident defendant “only if a court of the state in which it sits would have such jurisdiction.” Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 779 (7th Cir.2003). Determining whether jurisdiction over an out-of-state defendant is proper involves two inquires: (1) whether the forum state’s long-arm statute allows jurisdiction, and (2) whether assertion of personal jurisdiction violates due process. See Anthem Ins. Cos. v. Tenet Healthcare Corp., 730 N.E.2d 1227, 1232 (Ind. 2000); see also Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239, 1243 (7th Cir. 1990). Indiana courts determine their personal jurisdiction over nonresident defendants by applying the long-arm statute set forth in Indiana Trial Rule 4.4(A), which extends personal jurisdiction to the limits allowed under the Due Process Clause of the Fourteenth Amendment to the United States Constitution. See LinkAmerica Corp. v. Cox, 857 N.E.2d 961, 967 (Ind. 2006). Accordingly, the court “need only engage in a single search for the outer limits of what due process permits.” Reliable Tool v. U-Haul, 837 F.Supp. at 278; see also Purdue Research v. Sanofi-Synthelabo, 338 F.3d at 779 (citing Int’l Med. Group, Inc. v. Am. Arbitration Ass’n, Inc., 312 F.3d 833, 846 (7th Cir.2002)).

D. Discussion

(1) Plaintiff’s Motion to Strike is Denied

As a preliminary matter, the Court must rule on Plaintiff’s motion to strike Balance’s reply brief in support of its motion to dismiss. “Where new evidence is presented in either a party’s reply brief or affidavit in further support of its summary judgment motion, the district court should permit the nonmoving party to respond to the new matters prior to disposition of the motion . . . or else strike that new evidence.” Baugh v. City of Milwaukee, 823 F.Supp. at 1457 (E.D. Wisc. 1993).

The Court denies Plaintiff’s motion, but has considered the additional arguments made in its memorandum of law in ...

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