Title: The Baldewein Company v. Tri-Clover, Inc.

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2000 WI 20 
 
SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
99-0541-CQ 
 
 
Complete Title 
of Case: 
 
The Baldewein Company,  
 
Plaintiff-Appellant, 
 
v. 
Tri-Clover, Inc.,  
 
Defendant-Appellee.  
 
 
CERTIFIED QUESTION FROM THE 7TH CIRCUIT 
 
 
Opinion Filed: 
February 29, 2000 
Submitted on Briefs: 
 
Oral Argument: 
September 9, 1999 
 
 
Source of APPEAL 
 
COURT: 
 
 
COUNTY: 
 
 
JUDGE: 
 
 
 
JUSTICES: 
 
Concurred: 
ABRAHAMSON, C.J., concurs (opinion filed). 
 
Dissented: 
 
 
Not Participating:  
 
 
ATTORNEYS: 
For the plaintiff-appellant there were briefs by 
Michael Spurlock, Eric W. Berry and Beery & Spurlock Co., L.P.A., 
Columbus, OH and W. Stuart Parsons, Daniel Janssen and Quarles & 
Brady, Milwaukee and oral argument by Richard A. Westley & Eric 
Beery. 
 
 
For the defendant-appellee there was a brief by 
Charles P. Graupner, Joshua L. Gimbel and Michael Best & 
Friedrich, LLP, and oral argument by Charles P. Graupner. 
 
 
NOTICE 
This opinion is subject to further editing 
and modification.  The final version will 
appear in the bound volume of the official 
reports. 
 
 
No. 99-0541-CQ 
 
STATE OF WISCONSIN               :  
IN SUPREME COURT 
 
 
The Baldewein Company,  
 
          Plaintiff-Appellant, 
 
     v. 
 
Tri-Clover, Inc.,  
 
          Defendant-Appellee. 
 
 
CERTIFICATION of a question of law from the United States 
Court of Appeals for the Seventh Circuit.    Certified question 
answered and cause remanded.  
 
¶1 
DIANE S. SYKES, J.  This case is before the court on 
certification from the United States Court of Appeals for the 
Seventh Circuit pursuant to Wis. Stat. § 821.01 (1997-98) and 
Circuit Rule 52.  The essential question is: when is a 
dealership 
“situated 
in 
this 
state” 
under 
Wis. 
Stat. 
§ 135.02(2),1 thereby entitling the dealer to protection under 
the Wisconsin Fair Dealership Law (WFDL)?2  Based upon the 
                     
1 Wis. Stat. § 135.02(2) provides: “'Dealer' means a person 
who is a grantee of a dealership situated in this state."  
2 The Seventh Circuit certified two questions to this court: 
1) Does the definition of dealer provided by Wis. Stat. 
§ 135.02(2) include a substantiality requirement? And 
FILED 
 
FEB. 29, 2000 
 
Cornelia G. Clark 
Acting Clerk of Supreme Court 
Madison, WI 
 
 
 
 
 
No. 
99-0541-CQ 
 
 
2 
language of the statute, as well as its history and purposes, we 
adopt a test similar to the multiple factor test advanced in 
Ziegler Co. v. Rexnord, Inc., 139 Wis. 2d 593, 606, 407 N.W.2d 
873 (1987), which considers the dealership’s total involvement 
and investment in promoting and selling the grantor’s products 
or services in the State of Wisconsin. 
¶2 
This case arises out of the termination of a 56-year 
relationship between the Baldewein Company (Baldewein) and Tri-
Clover, Inc. (Tri-Clover).  Baldewein is an Illinois corporation 
with its principal place of business in Franklin Park, Illinois. 
 Baldewein sells sanitary pumps, valves, fittings, and tubing 
for use in the food, dairy, and pharmaceutical industries.  From 
1940 until 1996, Baldewein was a distributor for Tri-Clover, a 
manufacturer of fittings, valves, pumps, and tubing.  Tri-Clover 
is a Delaware corporation with its headquarters, distribution 
center, and principal place of business in Kenosha, Wisconsin. 
                                                                  
2) If there is a substantiality requirement, is the 
evidence in the record insufficient as a matter of law to 
establish substantiality? 
The Seventh Circuit invited this court to reformulate the 
questions if “[we] feel that it would be helpful to do so.”  We 
believe 
that 
the 
reformulated 
question 
posed 
above 
more 
accurately reflects the question the court must address in this 
case.   
We do not address the second question because we find that 
a court must consider a multitude of factors to determine 
whether a dealership is situated in this state for purposes of 
the WFDL, and the record before us is not adequately developed 
to properly apply the test.  Instead, we remand the cause to the 
Seventh Circuit. 
No. 
99-0541-CQ 
 
 
3 
¶3 
Baldewein 
and 
Tri-Clover 
operated 
under 
oral 
agreements for most of their relationship.  On May 24, 1985, the 
two entered into a written distributor agreement that amended 
the terms of the previous oral agreements and provided that 
Wisconsin law would govern the relationship.  The agreement 
granted Baldewein a nonexclusive right to promote and sell Tri-
Clover products in a territory consisting of Baldewein’s “normal 
marketing area,” which included the entire United States and 
several foreign countries.  Although Tri-Clover was later 
purchased by the Alfa-Laval Group, the agreement appears to have 
been unaffected by the change in Tri-Clover’s ownership, and the 
parties 
continued 
to 
operate 
under 
it 
until 
Tri-Clover 
terminated the relationship in June 1996. 
¶4 
Prior to the termination, Baldewein derived some 80 to 
90 percent of its total revenue from the sale of Tri-Clover’s 
products.  The vast majority of that business, however, was 
conducted outside the State of Wisconsin, primarily in Illinois, 
where Baldewein was headquartered.  In fact, based upon sales 
figures from both Baldewein and Tri-Clover, the district court 
concluded that although Baldewein always had some Tri-Clover 
sales in Wisconsin, for at least the first 51 years of the 
parties’ relationship, over 99 percent of Baldewein’s Tri-Clover 
sales took place outside this state.   
¶5 
Between 1992 and 1996, when the relationship was 
terminated, Baldewein’s Wisconsin sales of Tri-Clover products 
were showing slight increases, averaging between 3.9 and 4 
percent of its total annual Tri-Clover sales during those years. 
No. 
99-0541-CQ 
 
 
4 
 This development appears to have coincided with the hiring of 
two Wisconsin residents who solicited sales for Baldewein in 
this state.  It is not clear, however, whether these salespeople 
devoted all of their time to developing the Wisconsin market for 
Baldewein’s Tri-Clover product line, or whether Wisconsin was 
only part of their assigned territory.  At no time did Baldewein 
ever have an office, warehouse or other facility in Wisconsin, 
or invest in any physical plant or inventory in this state. 
¶6 
During the fiscal years 1993-1995, Baldewein spent 
approximately $40,000 per year on advertising.  It is not clear 
from the record, however, how much of this advertising budget 
was devoted exclusively to Wisconsin or could be apportioned in 
some pro rata way to the development of the Wisconsin market.  
Nor is there any indication of how much Baldewein spent on 
advertising in the years prior to 1993, either generally or in 
Wisconsin in particular.  There is a reference in the record to 
“advertising and mailings” being sent to some 111 customers and 
prospective customers in Wisconsin, but it is not specific as to 
time.   
¶7 
On June 29, 1996, Tri-Clover changed its nationwide 
distribution 
system 
and 
terminated 
its 
relationship 
with 
Baldewein.  In March 1997, Baldewein brought a diversity suit in 
the United States District Court for the Eastern District of 
Wisconsin, claiming damages under the Wisconsin Fair Dealership 
Law.  Tri-Clover counterclaimed, seeking damages based upon 
Baldewein’s failure to pay for products it had purchased on 
account. 
No. 
99-0541-CQ 
 
 
5 
¶8 
Both parties filed cross-motions for summary judgment. 
 The district court, the Honorable Rudolph T. Randa, granted 
Tri-Clover’s motion, relying on Swan Sales Corp. v. Joseph 
Schlitz Brewing Co., 126 Wis. 2d 16, 374 N.W.2d 640 (Ct. App. 
1985) and an unpublished federal district court opinion, Lewis 
Communications v. Athletic Business Publications, No. 97-C-132-S 
(W.D. Wis. Oct. 7, 1997).  Judge Randa determined that in order 
to be “situated in this state” within the meaning of the WFDL, a 
dealership must have some meaningful connection with this state, 
as represented by a “not-insignificant amount of sales in 
Wisconsin compared to its overall sales” of the grantor’s 
products.  Baldewein Co. v. Tri-Clover, Inc., No. 97-C-213, slip 
op. at 19 (E.D. Wis. Mar. 9, 1998). 
¶9 
Judge Randa concluded that to hold otherwise would 
mean “any nationwide or worldwide dealership could obtain for 
itself the protections of the WFDL by the simple trick of a 
Wisconsin choice-of-law provision and a single sale to the 
State.”  Baldewein, slip op. at 15.  He found that Baldewein’s 
sales of Tri-Clover products in Wisconsin, which at no time were 
greater than 7.3 percent and which averaged 3.5 percent to 4 
percent of its total Tri-Clover sales in the last five years of 
the parties’ relationship, were not sufficient to qualify 
Baldewein as a dealership “situated in this state” under the 
WFDL. 
¶10 Baldewein appealed the district court’s decision to 
the United States Court of Appeals for the Seventh Circuit.  The 
Seventh Circuit certified the case to us to interpret the 
No. 
99-0541-CQ 
 
 
6 
“situated in this state” language in the statute.  We are 
therefore presented with a question of law, which we review 
independently.  Although we are not bound by the federal court’s 
interpretation of Wisconsin law, Daanen & Janssen, Inc. v. 
Cedarapids, Inc., 216 Wis. 2d 395, 400, 573 N.W.2d 842 (1998), 
it is nonetheless helpful to our analysis. 
¶11 In any case of statutory interpretation we must give 
effect to the intent of the legislature.  Matter of Sullivan, 
218 Wis. 2d 458, 464, 578 N.W.2d 596 (1998).  We first look for 
that intent in the language of the statute itself.  If we find 
that the language of the statute is ambiguous, we will look 
beyond it to the scope, history, context, subject matter, and 
object of the statute.  State ex rel. Jacobus v. State, 208 
Wis. 2d 39, 47, 559 N.W.2d 900 (1997).  A statute is ambiguous 
if it is capable of being understood by reasonably well-informed 
persons in more than one way.  Id. 
¶12 The statutory definition of a “dealer” appears, on its 
face, to be quite simple: a “dealer” is “a person who is a 
grantee of a dealership situated in this state.”  Wis. Stat. 
§ 135.02(2).  The definition of a “dealership,” on the other 
hand, is more complicated and is both extremely broad and highly 
nuanced: 
 
'Dealership' means a contract or agreement, either 
express or implied, whether oral or written, between 2 
or more persons, by which a person is granted the 
right to sell or distribute goods or services, or use 
a trade name, trademark, service mark, logotype, 
advertising or other commercial symbol, in which there 
is a community of interest in the business of 
No. 
99-0541-CQ 
 
 
7 
offering, selling or distributing goods or services at 
wholesale, retail, by lease, agreement or otherwise. 
 
Wis. Stat. § 135.02(3)(emphasis added). 
¶13 “Community of interest” has been the most vexing 
phrase in the dealership definition for courts faced with 
applying this law.  Our decision in Ziegler, 139 Wis. 2d at 606, 
established a multiple factor test that provides some contours 
for the concept.  The “situated in this state” language has also 
been an interpretive challenge. 
¶14 The only state court authority about the meaning of 
the “situated in this state” requirement is Swan, 126 Wis. 2d at 
20-22.  Swan held that the language was ambiguous because “a 
reasonably well-informed person might interpret it to mean 
either that the grantee (dealer) must be located in Wisconsin or 
that the dealership must be situated in Wisconsin.”  Id. at 21. 
¶15 Having found an ambiguity, the Swan court consulted 
the legislative history of the statute, tracing the “situated in 
this state” language to a 1977 effort to amend the WFDL to limit 
its application to Wisconsin dealers. Id. 21-22.  This was a 
legislative response to two federal cases, C.A. May Marine 
Supply Co. v. Brunswick Corp., 557 F.2d 1163 (5th Cir. 1977) and 
Boatland, Inc. v. Brunswick Corp., 558 F.2d 818 (6th Cir. 1977), 
which had applied the WFDL to non-Wisconsin dealers operating 
under agreements containing Wisconsin choice-of-law provisions. 
 See Diesel Serv. Co. v. AMBAC Int’l Corp., 961 F.2d 635, 638 
(7th Cir. 1992). 
No. 
99-0541-CQ 
 
 
8 
¶16 The Swan court concluded that the 1977 amendment 
adding the “situated in this state” language clearly established 
“the legislature’s intent to make the WFDL apply exclusively to 
dealerships that do business within the geographic confines of 
the state of Wisconsin.”  Swan, 126 Wis. 2d at 22.  The “doing 
business within Wisconsin” test articulated in Swan set off a 
disagreement in the federal courts about how much business in 
this state is enough to qualify.3  
¶17 The facts of the Swan case did not help delimit the 
new test at all, since the putative dealer in that case did no 
business here; although it was physically located in this state, 
it was authorized to sell the grantor’s products only in 
                     
3  See CSS-Wisconsin Office v. Houston Satellite Sys. Inc., 
779 F. Supp. 979 (E.D. Wis. 1991)(“situated in this state” 
requirement satisfied as long as dealership conducts some 
business in Wisconsin; thus an Indiana corporation that made an 
unspecified number of sales in this state merited protection of 
WFDL); Diesel Serv. Co. v. AMBAC Int’l Corp., 961 F.2d 635 (7th 
Cir. 1992)(WFDL applies to dealerships that do some business in 
state, including a Minnesota dealer which made 34 percent of its 
sales 
of 
the 
grantor’s 
products 
in 
Wisconsin); 
Lewis 
Communications v. Athletic Bus. Publications, No. 97-C-132-S, 
slip op. at 15 (W.D. Wis. Oct. 7, 1997)(dealers must establish 
more than a de minimis connection with Wisconsin to be entitled 
to protection under WFDL; therefore, a California dealership 
that made some sales, but provided no evidence of the extent of 
dealership activities in Wisconsin, was not situated in this 
state); Baldewein Co. v. Tri-Clover, Inc., No. 97-C-213, slip 
op. at 16, 20 (E.D. Wis. Mar. 9, 1998)(dealer must meet some 
minimum level of sales in Wisconsin over the course of the 
entire relationship in order to justify application of the WFDL; 
thus dealer that never made more than seven percent of its sales 
in this state was not protected).   
 
No. 
99-0541-CQ 
 
 
9 
overseas markets.  The Swan court simply concluded that under 
these circumstances, the “subject matter of this agreement is 
not ‘situated in this state.’”  Id. at 22.  And so the problem 
of the applicability of the WFDL to multi-state dealers 
operating only partially in Wisconsin remained essentially 
unresolved, despite Swan. 
¶18 Part of the problem is purely linguistic.  The statute 
says the “dealership”not the “dealer”must be situated in this 
state, but defines “dealership” as a “contract or agreement,” 
which can hardly be said to be “situated” anywhere, especially 
since the definition of “dealership” includes both written and 
oral agreements.4  Wis. Stat. § § 135.02(2) and (3).  The Swan 
court said the “dealership” must do business within the 
geographic confines of this state, but this is impossible, since 
(here we are again) a “dealership” is a “contract or agreement,” 
which cannot “do business” at all, only “dealers” can.  So we 
agree, at least, with the Swan court’s conclusion that there is 
an ambiguity here, and turn to the statute’s history, context, 
and purpose to help us interpret its language. 
¶19 Prior to the enactment of the WFDL in 1974, Wisconsin 
had no regulatory scheme protecting dealerships or franchises, 
and so the matter was left entirely to contract between the 
parties.  California Wine Ass’n v. Wisconsin Liquor Co., 20 
                     
4 A written contract could conceivably be “situated” 
somewhere in a literal sense, but an interpretation of the 
statute that focused on the physical location of the document 
itself would be nonsensical.  An oral contract or agreement 
clearly cannot be “situated” anywhere.   
No. 
99-0541-CQ 
 
 
10
Wis. 2d 110, 121 N.W.2d 308 (1963).  The oil embargo of 1973, 
and the strain it placed on state gasoline retailers, prompted 
the 
legislature 
to 
revive 
previous 
attempts 
to 
pass 
comprehensive dealer protection legislation.  Michael A. Bowen & 
Brian E. Butler, The Wisconsin Fair Dealership Law § 1.3(2nd ed. 
1998).  The WFDL was signed into law in April of 1974. 
¶20 As originally enacted, the WFDL did not contain the 
“situated in this state” requirement.  That language was added 
in 1977, as noted above, in response to the C.A. May Marine and 
Boatland cases, which had applied the WFDL to protect dealers 
operating entirely out of state based solely on Wisconsin 
choice-of-law provisions in the dealership agreements. 
¶21 The legislature amended the WFDL to prevent similar 
applications of the WFDL in the future.  Diesel Serv., 961 F.2d 
at 638.  One option considered and ultimately rejected was a 
change 
in 
the 
definition 
of 
“dealership” 
to 
mean 
“a 
contract . . . by which a person in this state is granted the 
right to sell or distribute goods.”  Swan, 126 Wis. 2d at 21-22. 
 Instead, the legislature focused on the definition of “dealer,” 
amending it to include only “dealership[s] situated in this 
state.”  Id. at 22. 
¶22 The Swan court concluded from this legislative history 
and the juxtaposition of terms that the phrase “situated in this 
state” modifies “dealership” rather than “dealer.”  Id.  We 
agree.  We note that the legislature’s rejection of the “person 
in this state” language and adoption of the phrase “dealership 
situated in this state” is evidence that it wanted the focus to 
No. 
99-0541-CQ 
 
 
11
be on the substance of the dealership, not the location of the 
dealer.  A “dealership” under the law is not a person or a 
partnership or a corporation.5  See Wis. Stat. § 135.02(3).  A 
“dealership” is a “contract or agreement,” generally between a 
supplier 
and 
a 
reseller, 
which 
is 
characterized 
by 
the 
“community of interest” concept embodied in the law.  Id.  In 
other 
words, 
a 
“dealership” 
is 
a 
contract 
or 
agreement 
establishing a particular sort of commercial relationship, 
defined in such a way as to “encompass an extraordinarily 
diverse set of business relationships not limited to the 
traditional franchise.”  Ziegler, 139 Wis. 2d at 602.  And so 
the focus of the analysis must be on whether the business 
relationship at issue can be said to be situated in this state. 
¶23 As we made clear in Ziegler, the “community of 
interest” concept serves to limit the application of the WFDL 
and requires a person seeking the protections of the law “to 
demonstrate a stake in the relationship large enough to make the 
grantor’s power to terminate, cancel or not renew a threat to 
the economic health of the person (thus giving the grantor 
inherently superior bargaining power).”  Id. at 605.  Similarly, 
the “situated in this state” concept limits the application of 
the WFDL to commercial relationships that exist in some 
                     
5 That would be too easy.  The location of a person or a 
partnership or a corporation is generally readily ascertainable. 
 But nothing has been easy in the interpretation of the WFDL’s 
scope and reach, a task that has fallen mostly to the federal 
courts sitting in diversity. 
No. 
99-0541-CQ 
 
 
12
substantial way in this state (and otherwise satisfy the 
definition in the statute). 
¶24 This interpretation of the statutory language is 
consistent with the stated purposes and policies of the WFDL.  
Wisconsin Statutes § 135.025(1) provides that the WFDL is to be 
“liberally construed and applied to promote its underlying 
remedial purposes and policies.”  Those policies are: 1) to 
promote the public interest in fair business relations between 
dealers and grantors; 2) to protect dealers from unfair 
treatment by grantors, who inherently have superior economic 
power and superior bargaining power in the negotiation of 
dealerships; 3) to provide dealers with rights and remedies in 
addition to those existing by contract or common law; and 4) to 
govern all dealerships to the full extent consistent with the 
constitutions of the state and the United States.6  Wis. Stat. 
§ 135.025(2). 
                     
6 
We 
note, 
as 
the 
Seventh 
Circuit 
has, 
that 
any 
“extraterritorial application of the WFDL would, at the very 
least, raise significant questions under the Commerce Clause.”  
Morley-Murphy Co. v. Zenith Elecs. Corp., 142 F.3d 373, 379 (7th 
Cir. 1998).  Although the issue is not directly present in this 
certification, Baldewein’s counsel implicitly acknowledged the 
potential constitutional problem when he suggested in oral 
argument that the “Wisconsin sales” test established by the 
district court might be appropriate in considering the measure 
of damages in multi-state dealer cases such as this.  The 
suggestion essentially was that the problems associated with 
applying the WFDL to dealers operating largely out of state can 
be solved by limiting recovery to lost profits associated only 
with the Wisconsin market.  We do not specifically address the 
constitutional issue, however, as it is not directly before us. 
No. 
99-0541-CQ 
 
 
13
¶25 A dealership is a symbiotic relationship.  The dealer 
benefits by generating income through sales, without having to 
undertake the expense of manufacturing.  The grantor benefits by 
having the dealer 
undertake 
important 
marketing 
functions 
through investment in inventory, receivables and facilities, and 
by applying its efforts and experience in merchandising and 
selling the product. 
¶26 The WFDL protects dealers who have made a substantial 
investment in the dealership and who are substantially dependent 
on the grantor’s product line.  Ziegler, 139 Wis. 2d at 605.  
The statute’s requirement of a “community of interest” between 
the parties captures this concept and ensures that the WFDL’s 
protections apply only to those business relationships that 
involve a higher level of financial interdependence than the 
typical vendor-vendee relationship.  Id. at 604-05. 
¶27 When a dealer sinks substantial resources into its 
relationship with a particular grantortime, money, employees, 
facilities, 
inventory, 
advertising, 
trainingor 
derives 
substantial revenue from the relationship (as a percentage of 
its total), or some combination of the two, the grantor’s power 
to terminate, cancel, or not renew the relationship becomes a 
substantial threat to the economic health of the dealer and a 
community of interest can be said to exist.  When a substantial 
part of this investment is made in Wisconsin, or the dealer's 
Wisconsin sales of the grantor's products account for a 
substantial percentage of the dealer's total sales of the 
grantor’s products, or some combination of the two, the 
No. 
99-0541-CQ 
 
 
14
dealership relationship can be said to be situated here within 
the meaning of the WFDL. 
¶28 The district court recognized the importance of a 
meaningful connection to Wisconsin in order to justify the 
application of the WFDL to a multi-state dealership.  It adopted 
a “sufficiency of Wisconsin sales” test to determine that 
Baldewein’s dealership was not situated in this state.  We agree 
that Wisconsin sales are an important factor in determining 
whether a dealership is situated here.  However, since the focus 
of the analysis is on the Wisconsin portion of the dealership 
relationship, broadly defined, the inquiry must extend beyond 
just Wisconsin sales. It must involve an analysis of the 
totality of the dealership investment that is specialized to the 
marketing of the grantor’s products in this state; in other 
words, the amount of money and other resources the dealer has 
sunk into the development of the Wisconsin market, in addition 
to the amount of sales or revenue the dealer derives from this 
state.7  
¶29 In Ziegler, we declined to create a minimum percent-
of-sales test for determining whether a “community of interest” 
                     
7 The district court’s decision to require a minimum level 
of Wisconsin sales is logical and consistent with the history of 
the “situated in this state” language and the factual realities 
of these cases; it just does not take the analysis quite far 
enough.  We agree with the district court’s observation that the 
legislature cannot have intended to permit dealers to invoke the 
protections of the WFDL by a single sale or minimal sales into 
this state.  The “situated in this state” language was adopted 
to close an applicability loophole, not open it wider. 
No. 
99-0541-CQ 
 
 
15
exists under the WFDL.  Ziegler, 139 Wis. 2d at 602.  Similarly, 
we decline to create a minimum percent-of-sales test for 
determining whether a dealership is situated in this state.8  We 
recognize, however, that Wisconsin sales percentages are highly 
significant to the analysis.  In many cases, the dealer’s level 
of sales in Wisconsin may be the single most influential factor 
in determining whether the 
dealership 
is 
situated 
here.9  
However, as in the “community of interest” analysis, other 
factors 
indicative 
of 
an 
investment 
in 
the 
dealership 
relationship, and more particularly, other factors indicative of 
an investment in the relationship in Wisconsin, are also part of 
the “situated in this state” equation. 
¶30 The multiple factor “community of interest” test in 
Ziegler can be adapted to this inquiry and is consistent with 
the legislative intent to protect investments in dealership 
                     
8 Accordingly, we do not address Baldewein’s argument that 
the district court’s “percentage of sales” test violates both 
the Wisconsin and United States Constitutions. 
9 This is consistent with the post-Ziegler reality that 
courts and counsel in WFDL cases often look to sales or revenue 
figures first to determine whether a community of interest 
exists. For "community of interest" analysis, the higher the 
percentage of overall sales or revenue generated from the 
grantor’s products, the less important the other indicators of 
“investment” become, because the loss of a significant sales- or 
revenue-generating product line is more easily seen as a threat 
to the economic health of the dealer.  For "situated in this 
state" analysis, the higher the percentage of Wisconsin sales or 
revenues generated from the grantor's products, the less 
important the other indicators of "investment" become, because a 
substantial level of sales activity in this state is more easily 
seen as indicative of a substantial investment in and reliance 
upon the Wisconsin market.   
No. 
99-0541-CQ 
 
 
16
relationships when the dealer makes a substantial investment in 
the 
Wisconsin 
market, 
measured 
by 
facilities, 
inventory, 
employees and the like, or when the dealer derives a substantial 
percentage of its total sales or revenues from Wisconsin, or 
some combination of the two.  Therefore, to determine whether a 
dealership is “situated in this state” under the WFDL, courts 
should examine the following factors: 1) percent of total sales 
in Wisconsin (and/or percent of total revenue or profits derived 
from Wisconsin); 2) how long the parties have dealt with each 
other in Wisconsin; 3) the extent and nature of the obligations 
imposed on the dealer regarding operations in Wisconsin; 4) the 
extent and nature of the grant of territory in this state; 6) 
the extent and nature of the use of the grantor’s proprietary 
marks in this state; 7) the extent and nature of the dealer’s 
financial investment in inventory, facilities, and good will of 
the dealership in this state; 8) the personnel devoted to the 
Wisconsin market; 9) the level of advertising and/or promotional 
expenditures in Wisconsin; and 10) the extent and nature of any 
supplementary services provided in Wisconsin.10  We do not intend 
                     
10 By adapting the Ziegler “community of interest” test to 
the interpretation and application of the “situated in this 
state” requirement of the WFDL, we do not mean to suggest that 
the latter inquiry henceforward shall subsume the former.  There 
will, of course, be cases in which multi-product line, multi-
state dealers sue under the WFDL and will have to demonstrate a 
sufficient “community of interest” under Ziegler to meet the 
definition of “dealership” before any inquiry is made into 
whether enough of that “community of interest” exists in 
Wisconsin for the dealership to be “situated” here within the 
meaning of the statute.   
No. 
99-0541-CQ 
 
 
17
this list to be all-inclusive.  The inquiry should focus on the 
nature and extent of the dealership’s development of, investment 
in and reliance upon the Wisconsin market.   
¶31 It should be noted that the location of the grantor is 
not one of the factors we have listed.  Baldewein argues that 
since Tri-Clover is headquartered in Kenosha, and risk of loss 
passed in Kenosha, 100 percent of its sales can be considered to 
have been made in Wisconsin, and thus the WFDL should apply.  We 
disagree.  The location of the grantor’s business and the 
passing of risk have nothing to do with the policies underlying 
the WFDL.  The law focuses on protecting investments in 
dealership relationships in Wisconsin; the location of the 
grantor is irrelevant to the analysis of whether a substantial 
investment has been made here or a substantial percentage of 
sales occurs here, or some combination of the two, so that the 
law’s protections come into play.  Any interpretation to the 
contrary would punish Wisconsin manufacturers for locating their 
facilities in this state, a result that the legislature can 
hardly have intended. 
¶32 Furthermore, it is abundantly clear that a Wisconsin 
choice-of-law 
provision 
will 
not 
operate 
to 
trigger 
the 
application of the WFDL.  Indeed, choice-of-law provisions in 
dealership agreements have nothing to do with the “situated in 
this state” analysis at all. 
¶33 We recognize that our adaptation of the Ziegler test 
to the interpretation of the “situated in the state” language in 
the WFDL does not establish the brightest of demarcation lines 
No. 
99-0541-CQ 
 
 
18
between those dealerships that are situated here and those that 
are not.  As with so much else under the WFDL, courts will have 
to sort out the applicability of this law case by case.  But 
this approach has the best chance of ensuring that the law will 
be applied to those dealership relationships it was intended to 
protect, and no others. 
¶34 Because the record before us is undeveloped on at 
least some of the factors that are relevant to the test we have 
established, we do not decide whether the evidence is sufficient 
to conclude that Baldewein is “a grantee of a dealership 
situated in this state.” Therefore, we remand this case to the 
Seventh Circuit for further proceedings consistent with this 
opinion.   
By the Court.—Question answered and cause remanded to the 
United States Court of Appeals for the Seventh Circuit for 
further proceedings consistent with this opinion. 
 
 
No. 99-0541.ssa 
 
1 
¶35 SHIRLEY S. ABRAHAMSON, CHIEF JUSTICE (concurring).  I 
write separately to apply the multiple-factor test to the facts 
of this case.  Rather than remand the cause, I conclude that 
there is sufficient evidence to hold that the dealership in 
question is indeed "situated in this state," so that the 
Wisconsin Fair Dealership Law (WFDL) is applicable. 
¶36 Two overriding principles govern the applicability of 
the multiple-factor test to the facts.  First, the legislature 
has declared that the purpose of the WFDL is remedial and has 
instructed the courts to interpret the law liberally.11  The 
legislature has further affirmed that the underlying purpose and 
policies of the law essentially are to promote fair business 
relations between dealers and grantors, recognizing that dealers 
must be protected against unfair treatment by grantors, who 
inherently have superior economic power and superior bargaining 
power.12  Moreover the legislature has provided that the law 
                     
11 Wis. Stat. § 135.25(1) (1997-98) states: 
(1) This chapter shall be liberally construed and 
applied to promote its underlying remedial purposes 
and policies. 
 
All subsequent references to the Wisconsin Statutes are to 
the 1997-98 version unless otherwise noted. 
12 Wis. Stat. § 135.25(2) states: 
(2) The underlying purposes and policies of this 
chapter are: 
(a) To promote the compelling interest of the public 
in 
fair 
business 
relations 
between 
dealers 
and 
grantors, and in the continuation of dealerships on a 
fair basis; 
No. 99-0541.ssa 
 
2 
shall apply to all dealerships to the full extent consistent 
with the Wisconsin and U.S. constitutions.13  Thus if the WFDL 
can constitutionally apply to a dealership, the court should 
apply it. 
¶37 Second, "community of interest" and "situated in this 
state" are not the same, although similar factors are used to 
determine both statutory elements.  See majority op. ¶ 30 at 
n.10.  The multiple factors set forth in the majority opinion 
are not the exclusive factors to determine "situated in this 
state." 
¶38 The first factor is the percentage of the dealership’s 
total sales in Wisconsin.  During 1995 and part of 1996, the 
last two fiscal years of the dealership’s existence before being 
terminated 
by 
Tri-Clover, 
sales 
to 
Wisconsin 
customers 
constituted over 7% of Baldewein's sales of Tri-Clover products. 
 When I consider the last five years before termination, from 
1992 through 1996, sales to Wisconsin customers constituted 
about 4% of Baldewein’s sales of Tri-Clover products, for a 
total of over $200,000 in sales.  These numbers are significant. 
                                                                  
(b) To protect dealers against unfair treatment by 
grantors, who inherently have superior economic power 
and superior bargaining power in the negotiation of 
dealerships; 
(c) To provide dealers with rights and remedies in 
addition to those existing by contract or common law; 
(d) To govern all dealerships, including any renewals 
or amendments, to the full extent consistent with the 
constitutions of this state and the United States. 
 
13 Wis. Stat. § 135.25 (2)(d). 
No. 99-0541.ssa 
 
3 
 Baldewein might be doing business in numerous states with sales 
of Tri-Clover products constituting 4% - 7% of its sales in each 
of the states.  If each of those states had a fair dealership 
law like Wisconsin's, accepting Tri-Clover’s position would mean 
that no state fair dealership law governs the dealership.  This 
result cannot be correct. 
¶39 The second factor listed is the length of the parties' 
dealings in Wisconsin.  This factor strongly favors a finding 
that the WFDL applies to this dealership.  The parties had a 
dealership relationship for 56 years, beginning in 1940, and 
Wisconsin sales were solicited and made every year.   
¶40 The third factor identified is the extent and nature 
of the obligations imposed on the dealer regarding operations in 
Wisconsin.  The record indicates that the dealership imposed 
significant requirements on Baldewein, including a minimum 
amount of annual sales of Tri-Clover products and maintenance of 
a minimum amount of Tri-Clover goods in stock at all times. 
¶41 The fourth factor is the extent and nature of the 
grant of territory in Wisconsin.  Tri-Clover granted Baldewein 
the 
non-exclusive 
right 
to 
distribute 
Tri-Clover 
goods 
throughout the entire state of Wisconsin. 
¶42 The fifth factor is the extent and use of Tri-Clover’s 
proprietary marks.  Baldewein appears to have done significant 
advertising 
with 
Tri-Clover’s 
name 
and 
corporate 
logo.  
Baldewein submitted into evidence copies of its ads in the 
Chicago Yellow Pages indicating that Baldewein carried Tri-
Clover’s products.  The president of Baldewein, Valentin 
No. 99-0541.ssa 
 
4 
Baldewein, stated in his affidavit that he believed that these 
Yellow Pages are distributed in some parts of Wisconsin.  In 
addition, Baldewein sent a calendar each year to its customers 
that showed Tri-Clover’s logo and stated that Baldewein was an 
"authorized dealer" of Tri-Clover goods.  Baldewein also sent 
solicitation letters to customers and potential customers that 
stated, near the beginning of the letter, "As we are the oldest 
stocking distributor of Tri-Clover equipment . . . ."  The exact 
number of these letters sent to Wisconsin customers is not 
known. 
¶43 The 
sixth 
factor 
is 
the 
extent 
and 
nature 
of 
Baldewein’s financial investment in inventory, facilities, and 
good will in the state.  Tri-Clover emphasizes that Baldewein 
never maintained an office in Wisconsin.  However, Baldewein did 
purchase all of Tri-Clover's goods "free on board" in Wisconsin 
and therefore the risk of loss transferred to Baldewein in 
Wisconsin.14  Furthermore, Baldewein employees on occasion 
traveled to Tri-Clover’s office in Kenosha, Wisconsin, to pick 
up shipments.  Baldewein's vice president also personally 
visited the Tri-Clover office in Kenosha to attend training 
sessions and to discuss business. 
¶44 The seventh factor is the personnel devoted to the 
Wisconsin market.  Throughout the 1990s Baldewein employed two 
                     
14 Based on this fact and the fact that Wisconsin law 
governed the transactions between the parties, Baldewein argues 
that all the sales between the parties should be considered 
"Wisconsin sales," even if they were eventually sold by 
Baldewein in other states.  This argument is rejected. 
No. 99-0541.ssa 
 
5 
Wisconsin residents to solicit business and make sales in 
Wisconsin. 
¶45 The eighth factor is the level of advertising in 
Wisconsin.  Baldewein sent advertisements and solicitations to 
111 Wisconsin customers, largely promoting Tri-Clover products. 
 The president of Baldewein owned a home in Wisconsin during the 
1980s and personally solicited Wisconsin customers.  
¶46 Regarding the ninth factor, we do not have evidence 
about supplementary services provided in Wisconsin. 
¶47 Given that the legislature has directed the WFDL to be 
applied 
broadly 
and 
to 
the 
full 
extent 
of 
Wisconsin's 
constitutional powers, I conclude that the totality of facts 
demonstrates that the dealership is "situated in the state" 
under Wis. Stat. §135.02(2).  The multiple-factor test is 
properly aimed at excluding dealerships that have a de minimis 
relation with Wisconsin.  Because the dealership in this case 
had substantial contacts with Wisconsin, the protections of the 
WFDL should apply. 
¶48 For the reasons stated, I concur.