Tyson Fresh Meats, Inc. v. Lauer Ltd.

918 F.Supp.2d 835

TYSON FRESH MEATS, INC., Plaintiff,

v.LAUER LIMITED, L.L.C.; L & L Pork, Inc.; Lauer Finishing, L.L.C.; Coleridge Grain & Feed, L.L.C.; Robert Lauer, David Hansen, Dale Hansen, Roy D. Miller, and James Kuchta, Defendants.

No. 11–CV–4040–DEO.

United States District Court,

N.D. Iowa,

Western Division.

Jan. 16, 2013.

Brian C. Buescher, Kutak Rock, LLP, Omaha, NE, for Plaintiff.

Jonathan J. Blum, Daniel L. Hartnett, Crary Huff Inkster Sheehan Riggenberger Harnett & Storm PC, Sioux City, IA, for Defendants.

Memorandum and Opinion Order

DONALD E. O'BRIEN, Senior District Judge.

+-----------------+
¦TABLE OF CONTENTS¦
+-----------------¦
¦                 ¦
+-----------------+

+---------------------------------------------------+
¦I. ¦INTRODUCTION                              ¦841 ¦
+---+------------------------------------------+----¦
¦   ¦                                          ¦    ¦
+---+------------------------------------------+----¦
¦II.¦FACTS                                     ¦842 ¦
+---------------------------------------------------+

+------------------------------------------+
¦  ¦A.¦Lauer Limited                  ¦842 ¦
+--+--+-------------------------------+----¦
¦  ¦B.¦Individual Defendants          ¦843 ¦
+--+--+-------------------------------+----¦
¦  ¦C.¦Defendant L & L Pork           ¦844 ¦
+--+--+-------------------------------+----¦
¦  ¦D.¦Lauer Finishing                ¦845 ¦
+--+--+-------------------------------+----¦
¦  ¦E.¦Coleridge Grain                ¦845 ¦
+------------------------------------------+

+-------------------------------------------------------------------+
¦    ¦                                                       ¦      ¦
+----+-------------------------------------------------------+------¦
¦III.¦PERSONAL JURISDICTION                                  ¦846   ¦
+-------------------------------------------------------------------+

+------------------------------------------------------------------------+
¦    ¦A.  ¦Overview of Plaintiff's Personal Jurisdiction Arguments¦847   ¦
+----+----+-------------------------------------------------------+------¦
¦    ¦B.  ¦Personal Jurisdiction as to Lauer Limited              ¦848   ¦
+------------------------------------------------------------------------+

+----------------------------------------------------+
¦   ¦   ¦1.¦General Jurisdiction                ¦848 ¦
+---+---+--+------------------------------------+----¦
¦   ¦   ¦2.¦Specific Jurisdiction               ¦849 ¦
+----------------------------------------------------+

+----------------------------------------------------------------------------+
¦    ¦    ¦Whether Piercing the Corporate Veil and/or Alter Ego      ¦       ¦
¦    ¦C.  ¦Theory Can Confer Jurisdiction Over Shareholders or Third ¦849    ¦
¦    ¦    ¦Party Entities                                            ¦       ¦
+----+----+----------------------------------------------------------+-------¦
¦    ¦D.  ¦Piercing the Corporate Veil and Alter Ego Theory          ¦849    ¦
+----------------------------------------------------------------------------+

+----------------------------------------------------+
¦   ¦   ¦1.¦Choice of Law                       ¦849 ¦
+---+---+--+------------------------------------+----¦
¦   ¦   ¦2.¦Piercing the Corporate Veil         ¦850 ¦
+----------------------------------------------------+

+----------------------------------------------------------------------------+
¦    ¦    ¦   ¦a. ¦Grossly Inadequate Capitalization                 ¦851    ¦
+----+----+---+---+--------------------------------------------------+-------¦
¦    ¦    ¦   ¦b. ¦Solvency/Insolvency at the Time the Debt at Issue ¦852    ¦
¦    ¦    ¦   ¦   ¦was Incurred                                      ¦       ¦
+----+----+---+---+--------------------------------------------------+-------¦
¦    ¦    ¦   ¦c. ¦Diversion by Owners of Entity Funds or Assets to  ¦853    ¦
¦    ¦    ¦   ¦   ¦Their Own or Other Improper Uses                  ¦       ¦
+----+----+---+---+--------------------------------------------------+-------¦
¦    ¦    ¦   ¦   ¦Entity as a Mere Facade for the Personal Dealings ¦       ¦
¦    ¦    ¦   ¦d. ¦of the Owners and Disregard of Corporate          ¦854    ¦
¦    ¦    ¦   ¦   ¦Formalities                                       ¦       ¦
+----+----+---+---+--------------------------------------------------+-------¦
¦    ¦    ¦   ¦e. ¦Conclusion                                        ¦855    ¦
+----------------------------------------------------------------------------+

+----------------------------------------------------+
¦   ¦   ¦3.¦Alter Ego Theory                    ¦855 ¦
+----------------------------------------------------+

+----------------------------------------------------------------------------+
¦    ¦    ¦   ¦   ¦Whether Coleridge Grain and Lauer Finishing       ¦       ¦
¦    ¦    ¦   ¦a. ¦Control and Have a Sufficient Unity of Ownership  ¦858    ¦
¦    ¦    ¦   ¦   ¦with Lauer Limited Such That Lauer Limited has an ¦       ¦
¦    ¦    ¦   ¦   ¦Independent Existence in Form Only                ¦       ¦
+----------------------------------------------------------------------------+

+---------------------------------------------------+
¦   ¦E. ¦Intentional Interference with Contract¦860 ¦
+---------------------------------------------------+

+----------------------------------------------------+
¦   ¦   ¦1.¦General Jurisdiction                ¦861 ¦
+---+---+--+------------------------------------+----¦
¦   ¦   ¦2.¦The Calder   Effects Test           ¦861 ¦
+----------------------------------------------------+

+---------------------------------------------------+
¦   ¦                                          ¦    ¦
+---+------------------------------------------+----¦
¦IV.¦IMPROPER VENUE                            ¦862 ¦
+---+------------------------------------------+----¦
¦   ¦                                          ¦    ¦
+---+------------------------------------------+----¦
¦V. ¦CHANGE OF VENUE                           ¦864 ¦
+---+------------------------------------------+----¦
¦   ¦                                          ¦    ¦
+---+------------------------------------------+----¦
¦VI.¦CONCLUSION AND SUMMARY                    ¦865 ¦
+---------------------------------------------------+

I. INTRODUCTION

On May 2, 2011, Tyson Fresh Meats, Inc. (hereinafter “Plaintiff”), filed a Complaint against the original Defendants: Lauer Limited, L.L.C. (hereinafter “Lauer Limited”); L & L Pork, Inc. (hereinafter “L & L Pork”); Robert Lauer, and David Hansen. Docket No. 2. On February 13, 2012, Plaintiff filed their First Amended Complaint, again naming the original Defendants and the following newly added Defendants: Coleridge Grain & Feed, L.L.C.; Lauer Finishing, L.L.C. (Lauer Finishing); Dale Hansen, Roy Miller, and James Kuchta. Docket No. 26.

Plaintiff alleges the following causes of action: (1) breach of contract against all Defendants; (2) unjust enrichment against all Defendants; and (3) intentional interference with contract against L & L Pork, Inc.; Coleridge Grain, L.L.C.; and David Hansen and Robert Lauer.

Currently before this Court, is: (1) newly added Defendants' Motion to Dismiss Due to Lack of Personal Jurisdiction and Improper Venue, or in the Alternative, Motion for Change of Venue; and (2) original Defendants' Joinder in Motion to Dismiss Due to Improper Venue or, in the Alternative, Motion for Change of Venue, which fully adopts the arguments set forth in their Co-defendants' brief. Docket No. 30.

II. FACTS

Plaintiff is a corporation organized under the laws of the State of Delaware with a packing facility located near Storm Lake, Iowa. Docket No. 26, 2. Plaintiff's headquarters are in Dakota Dunes, South Dakota. Id.

The United States' hog industry can be broken into four types of operations: (1) sow/farrowing or birthing operations, (2) nursery operations, (3) finishing operations, and (4) packer/ processing operations. See Tyson Foods, Inc., Fiscal 2010 Fact Book, available from Tyson Foods, Inc. Plaintiff, as well as acting as a food distributor, maintains pork packing/processing plants, including one in Storm Lake, Iowa. Id. A farrowing or birthing operation consists of the care of a sow herd during gestation, farrowing, and lactation. See Iowa State University Extension and Outreach: Ag Decision Maker, Returns from Farrowing and Finishing Hogs, available at http:// www. extension. iastate. edu/ agdm/ livestock/ html/ b 1– 30. html, last visited January 15, 2013. Baby hogs are typically weaned from their mothers at between 19 to 21 days of age. Id. After being weaned, hogs are generally sold to a nursery where they are housed for approximately “6 weeks before being sold” to a finishing operation as 50 pound feeder pigs. Id. Finishing operations then house and feed the hogs until they reach approximately 270 pounds, at which point they are sold to processing plants such as Plaintiff. Id. From birth to finished pig takes approximately 184 days. Id.

This Court includes this basic information related to the structure of the hog industry to aid in understanding the relationship of the Defendants, which, as will become apparent throughout this Memorandum and Opinion Order, is essential to determining whether this Court can exercise personal jurisdiction over them. The remainder of this Section will consider the nature of each Defendant individually, the relationship between each Defendant, and the actions of each Defendant relevant to Plaintiff's causes of action.

A. Lauer Limited

Defendant Lauer Limited was a Nebraska Limited Liability Corporation that acted as a hog finishing operation with its principal place of business in Lyons, Nebraska. Docket No. 26, 2. During the relevant time period, the members of Lauer Limited were David Hansen, Dale Hansen, Roy Miller, Robert Lauer, and James Kuchta. Docket No. 26, 3. In July and again...