Court Opinion

ID: 2995970
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:23:57.399653+00
Date Added: 2024-06-11T09:33:22.754206
License: Public Domain

In the
United States Court of Appeals
               For the Seventh Circuit
                         ____________
No. 01-2304
TIMOTHY J. VAN GROLL,
                                            Plaintiff-Appellant,
                               v.
LAND O’ LAKES, INC.,
                                           Defendant-Appellee.
                         ____________
           Appeal from the United States District Court
              for the Eastern District of Wisconsin.
           No. 00-C-1013—John W. Reynolds, Judge.
                         ____________
ARGUED SEPTEMBER 13, 2002—DECIDED NOVEMBER 14, 2002
                   ____________

 Before POSNER, DIANE P. WOOD, and EVANS, Circuit
Judges.
  EVANS, Circuit Judge. For 14 years, Timothy Van Groll
put on his Land O’ Lakes hat, shirt, and jacket, and car-
ried milk in his truck, emblazoned with a Land O’ Lakes
logo, to a Land O’ Lakes production facility. Van Groll
says that made him a “dealer” entitled to protection un-
der Wisconsin’s Fair Dealership Law (WFDL). The district
court judge, the late John W. Reynolds,1 disagreed: he

1
  John W. Reynolds, who passed away on January 6, 2002, at the
age of 80, had a spectacular career of public service. As Wiscon-
sin’s attorney general and governor, and later as a judge (for
almost 37 years) on the United States District Court for the
Eastern District of Wisconsin, his fingerprints are all over the
state’s history for the last half of the 20th century. All those
who knew and loved Judge Reynolds would give anything to just
once more hear his familiar “Hey, I’m John Reynolds from Green
Bay. Where were you born and raised?”
2                                             No. 01-2304

granted Land O’ Lakes’ motion for summary judgment, a
decision we review today on Mr. Van Groll’s appeal.
  Land O’ Lakes, Inc. is a Minnesota cooperative that pro-
duces and distributes milk, butter, cheese, and other
dairy products. Van Groll began transporting raw milk
from farmers to Land O’ Lakes’ Denmark, Wisconsin,
production facility in 1986 as an employee of a fellow
named Lauren Vander Kintner. In 1990 Van Groll paid
$25,000 to Vander Kintner and the two formed a part-
nership. Six years later, Van Groll bought out Vander
Kintner’s share of the partnership for $30,000.
  In January of 1996, when his buyout of Vander Kintner
became final, Van Groll and Land O’ Lakes agreed to a
deal giving Van Groll’s trucking company, creatively named
Tim Van Groll Trucking, exclusive rights to haul milk
from 12 to 30 farmers within 25 miles of the Denmark
facility. The contract was automatically renewable for suc-
cessive 1-year terms, and either party could terminate it
by providing notice of termination 30 days prior to the
end of the current term. Land O’ Lakes paid to install its
logo on Van Groll’s truck and required Van Groll to wear
a Land O’ Lakes uniform while hauling its milk. Van
Groll also followed the safety and cleanliness policies
set out in a Land O’ Lakes manual.
  Although Land O’ Lakes did not require Van Groll to
own his own equipment, Van Groll bought a truck in 1996
for $40,000. He also owned a semi-truck that he used to
haul cheese to the east coast. The milk and cheese opera-
tions produced roughly the same revenues (approximate-
ly $140,000 each in 1998), though he spent most of his
time on, and earned most of his profits from, his milk
hauling contract with Land O’ Lakes.
  Van Groll’s compensation depended on the volume of
milk, its grade, mileage, geographic region, and the size
of the farm from which the milk was hauled. He also
No. 01-2304                                               3

received a 10 percent fee for delivering detergents and
other supplies to the producers on his route. Van Groll
did not inventory or take title to any milk he hauled,
nor did he sell any dairy products for Land O’ Lakes.
Land O’ Lakes never paid Van Groll for deliveries of but-
ter, cheese, and other products that he made to the pro-
ducers for their personal consumption.
  By 1999 Land O’ Lakes sought to terminate the agree-
ment with Van Groll. That spring, knowing that Land
O’ Lakes would end its dealings with him in January 2000,
Van Groll was the only Land O’ Lakes hauler to reject
a generous severance package offered if he would agree
to cancel the contract early. In the months that followed,
Land O’ Lakes transferred some of the customers on Van
Groll’s route to other haulers. On November 19, 1999, Land
O’ Lakes sent Van Groll a letter terminating the agreement,
and the relationship ended, 4 years after it had started, in
January 2000.
  We review a grant of summary judgment de novo, view-
ing all of the facts, and drawing all reasonable inferences
therefrom, in favor of the nonmoving party. Fritcher v.
Health Care Serv. Corp., 301 F.3d 811, 815 (7th Cir. 2002).
Summary judgment should be granted if the “pleadings,
depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of
law.” Fed. R. Civ. P. 56(c).
  Under the WFDL, “a grantor shall provide a dealer at
least 90 days’ prior written notice of termination, cancel-
lation, nonrenewal or substantial change in competitive
circumstances.” Wis. Stat. § 135.04. Van Groll claims
Land O’ Lakes violated the notice provision by substan-
tially changing the circumstances of their contract and in
terminating the agreement. Judge Reynolds held that
4                                              No. 01-2304

the notice provision did not apply because Van Groll was
not a “dealer” under the WFDL. Van Groll’s appeal can
only succeed if this determination was wrong.
  A “dealer” under Wisconsin law is “a grantee of a dealer-
ship situated in [Wisconsin].” Wis. Stat. § 135.02(2). A
“dealership” requires:
    1. A contract or agreement, either expressed or im-
       plied, whether oral or written, between 2 or more
       persons;
    2. 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;
    3. in which there is a community of interest in the
       business of offering, selling or distributing goods
       or services at wholesale, retail, by lease, agreement
       or otherwise.
Wis. Stat. § 135.02(3)(a). We need only consider the sec-
ond element, which Van Groll claims his business satis-
fies because Land O’ Lakes granted him the right both
to distribute goods and use its trademark.
  The WFDL is intended “[t]o protect dealers against
unfair treatment by grantors, who inherently have supe-
rior economic power and superior bargaining power in the
negotiation of dealerships.” Wis. Stat. § 135.025(2)(b). See
also John Maye Co. v. Nordson Corp., 959 F.2d 1402, 1405
(7th Cir. 1992) (“The WFDL is intended to protect small
businesses (dealers) that deal in the goods or services of
a larger company (grantor) and which, because of the
link between their economic health and their ability to
deal in the grantor’s goods or services, are in an inferior
bargaining position and could be unfairly exploited by
the grantor.”); Kenosha Liquor Co. v. Heublein, Inc., 895
F.2d 418, 419 (7th Cir. 1990) (“We have deduced from
No. 01-2304                                               5

the structure and history of the statute a central func-
tion: preventing suppliers from behaving opportunisti-
cally once franchisees or other dealers have sunk substan-
tial resources into tailoring their business around, and
promoting, a brand.”). The statute should be “liberally
construed . . . to promote its underlying remedial pur-
poses and policies.” Wis. Stat. § 135.025(1).
  Van Groll argues that “dealer” should be read so broad-
ly as to include a hauler who has made little investment
into the specific product or brand he hauls. He relies on
Moodie v. School Book Fairs, Inc., 889 F.2d 739 (7th Cir.
1989), where we held that a truck driver who delivered
books to school book fairs was a “dealer” within the mean-
ing of the WFDL. Under the written agreement in that
case, defendant SBF required Moodie to maintain a place
to store the books and a truck to haul the books. Moodie,
who was the exclusive area “distributor” under the con-
tract, handed out business cards and other materials
featuring the SBF trademark.
  Land O’ Lakes points to Rakowski Distributing, Inc. v.
Marigold Foods, Inc., 193 F.3d 504 (7th Cir. 1999), where
we held that a milk hauler who had not made a substan-
tial investment was not a “dealer” under the WFDL:
   Unlike Moodie, Rakowski was not required to pur-
   chase trucks or to build storage facilities in order to
   satisfy the agreement, even though Rakowski found
   it convenient to do so. As far as the record shows, Mari-
   gold would have been equally satisfied if Rakow-
   ski had leased its trucks and facilities, as long as the
   products reached its customers in a timely and safe
   manner. By making the capital expenditures it did,
   Rakowski was able to increase its profits at the same
   time as it served Marigold more effectively. Per-
   haps most important, unlike Moodie, Rakowski’s re-
   sponsibilities under the hauling contract were lim-
6                                             No. 01-2304

    ited to transporting Marigold products to Marigold’s
    customers. Rakowski did not maintain its own inven-
    tory of Marigold’s products, place Marigold products
    on customer shelves, monitor customer inventories, or
    schedule future deliveries.
Rakowski, 193 F.3d at 508. We found Rakowski’s situa-
tion to be less like Moodie’s and more like that of the
plaintiff in Kania v. Airborne Freight Corp., 99 Wis. 2d
746, 300 N.W.2d 63 (1981), where the Wisconsin Supreme
Court found that a strictly limited cartage service was
not a dealer where a trucking company merely picked
up packages from customers and dropped them off at a
central location.
   Van Groll suggests his case is more like Moodie and less
like Rakowski or Kania. The facts suggest otherwise. First,
Van Groll argues that he lost the substantial investment
he made to secure the Land O’ Lakes contract. Specifically,
he points to the $55,000 he gave to Vander Kintner, first
to form a partnership and then to assume full control of
it, and the $40,000 he spent in 1996 to buy a new truck.
  Van Groll now claims that Land O’ Lakes insisted that
he buy out Vander Kintner because Land O’ Lakes man-
agement did not like him and did not like dealing with
partnerships. In his deposition, however, Van Groll admit-
ted both that he wanted to buy out Vander Kintner and
that, had he not bought out Vander Kintner, the partner-
ship likely would have continued hauling milk for Land
O’ Lakes. Therefore, the $55,000 he gave to Vander Kintner
was simply a business decision Van Groll made; it was
not an investment in his relationship with Land O’ Lakes.
  As for the cost of the truck, Land O’ Lakes never re-
quired Van Groll to own his own equipment. As far as it
was concerned, it could have been leased. Van Groll claims
leasing was not economically feasible, but most of Land
O’ Lakes’ other haulers chose to do just that. In fact,
No. 01-2304                                              7

Land O’ Lakes offered a program designed to help its
milk haulers lease equipment at below-market rates.
  In addition, Van Groll’s claim that his truck could not
be converted for other uses simply shows that he in-
vested in his trucking business, not in his relationship
with Land O’ Lakes. While the truck was specially equipped
to haul milk, there is no reason Van Groll could not
have accepted another job hauling milk for any of the
many other dairies or haulers in the area. Moreover, Van
Groll sold his truck in 2000 for its fair market value of
$23,000, suggesting that there were viable uses for it.
  Next, Van Groll notes a number of other factual differ-
ences between his situation and the one in Rakowski, but
none of those differences makes Van Groll any more of
a dealer under the WFDL. First, Van Groll claims he had
a formal grant of an exclusive territory, something Rakow-
ski lacked. Rakowski, however, “was Marigold’s exclusive
Chicago-area hauler.” Rakowski, 193 F.3d at 505-06. The
difference in the formality of the agreement, if such a
difference even existed, matters little since the two had
the same exclusive rights in practice.
   Next, Van Groll, citing his noncompete clause and the
instruction manual Land O’ Lakes gave him, claims that
his interests were more intertwined with Land O’ Lakes’
than those in Rakowski. Although it is important to con-
sider the parties’ entire relationship, Rakowski, 193 F.3d
at 509 (Ripple, J. dissent), the noncompete clause and
the instruction manual here are not sufficient to establish
a dealership. The noncompete clause applied only to the
member farmers Van Groll served; he was free to de-
liver milk to or from anyone else. As such, his relation-
ship with Land O’ Lakes did not preclude his finding
work after Land O’ Lakes terminated the relationship.
Additionally, much of the manual consisted simply of
applicable federal and state regulations. The “control” Van
8                                             No. 01-2304

Groll claims Land O’ Lakes exerted over him consisted
mainly of requiring Van Groll to wear a clean uniform
and to keep the milk clean while dropping it off at the
Denmark facility.
  Finally, Van Groll attempts to distinguish Rakowski
based on the fact that, while neither driver carried an
inventory, Van Groll did not carry an inventory because
there was no logical or economic reason for him to do so.
While a dealer need not necessarily keep an inventory,
the fact that Van Groll has an excuse for not keeping
one does not, by itself, make him a dealer.
  In addition to claiming that he distributed goods, Van
Groll argues that his business qualifies as a dealer-
ship because of his use of the Land O’ Lakes trademark.
For the use of a trademark to make a business a dealer-
ship under the WFDL, “more is required than the mere
right to use a commercial symbol, or even de minimus use.”
John Maye Co., 959 F.2d at 410. A plaintiff must make
a “substantial investment in the trademark.” Moodie,
889 F.2d at 743. In Moodie, we explained the reason for
requiring investment:
    The rationale behind this holding is that de minimus
    investment in a trademark is not sufficient for the
    alleged dealer to be “over the barrel” so as to warrant
    protection under the WFDL. As the WFDL protects
    dealers who face inherently superior bargaining pow-
    er, those dealers with only a de minimus investment
    in the grantor’s trademark are not implicated.
Moodie, 889 F.2d at 743. There, we held that the mere
use of business cards did not amount to a “substantial
investment,” even though the plaintiff at times printed
his own cards. 889 F.2d at 743. See also Foerster, Inc. v.
Atlas Metal Parts Co., 105 Wis. 2d 17, 20, 313 N.W.2d 60
(Wis. 1981) (holding that “there must be more than the
mere use of a calling card identifying a manufacturer’s
No. 01-2304                                               9

representative as an agent for a company before such
representatives are ‘dealerships.’ ”).
  Similarly, in Rakowski, we held that the plaintiff, who
had a Marigold logo on his truck and handed out Mari-
gold business cards and other materials, did not have
a right to use Marigold’s trademark, even though the
plaintiff paid part of the cost to install the logo onto
his truck.
  Simply put, defining “dealership” in terms of trade-
mark use is meant to protect against situations in which
a dealer spends money advertising for or promoting a
company, an investment that is lost when the company
terminates the relationship. See generally John Maye Co.,
959 F.2d at 1405. Van Groll made no such investment in
Land O’ Lakes. Land O’ Lakes paid all of the costs of
putting a logo on Van Groll’s truck, and Land O’ Lakes
provided Van Groll with his uniform.
  Van Groll also claims the $55,000 he paid Vander Kintner
was for the right to use the Land O’ Lakes trademark. That
investment, however, was a simple start-up cost of Tim
Van Groll Trucking and was not tied to the Land O’ Lakes
logo at all. Again, the truck and rights he received from
Vander Kintner could have been used to haul milk for any
company, not just Land O’ Lakes, so that investment
was not lost when Land O’ Lakes terminated the contract.
Using Van Groll’s logic, any money invested into his
trucking business would have been an investment in the
logo, a result the WFDL never intended. See generally
John Maye Co., 959 F.2d at 1405; Foerster, 105 Wis. 2d
at 20-21, 313 N.W. at 66-67.
  In sum, we agree with Judge Reynolds’ conclusion
that “Van Groll cannot distinguish Rakowski in any ma-
terial way.” Because Land O’ Lakes did not grant Van
Groll the right to distribute goods or to use its trademark,
we do not need to reach the question of whether there
10                                           No. 01-2304

was a community of interest between the parties, the
final hurdle that would have to be cleared before a re-
versal of the summary judgment order could be granted.
Accordingly, we AFFIRM the judgment of the district court.

A true Copy:
      Teste:

                       ________________________________
                       Clerk of the United States Court of
                         Appeals for the Seventh Circuit

                  USCA-02-C-0072—11-14-02