Court Opinion

ID: 204713
Source: CourtListenerOpinion
Date Created: 2011-02-14 21:41:03+00
Date Added: 2024-06-11T17:27:45.395617
License: Public Domain

NONPRECEDENTIAL DISPOSITION
                             To be cited only in accordance with Fed. R. App. P. 32.1

                        United States Court of Appeals
                                        For the Seventh Circuit
                                        Chicago, Illinois 60604
                                        Argued November 3, 2010
                                        Decided February 14, 2011

                                                    Before

                                   FRANK H. EASTERBROOK, Chief Judge

                                   ANN CLAIRE WILLIAMS, Circuit Judge

                                   REBECCA R. PALLMEYER, District Judge1

No. 09-3578
                                                                       Appeal from the United
KAY BEER DISTRIBUTING, INC.,
                                                                       States District Court for the
      Plaintiff-Appellant,
                                                                       Eastern District of Wisconsin.
                  v.
                                                                       No. 07-C-1068
ENERGY BRANDS, INC., and                                               William C. Griesbach, Judge.
THE AMERICAN BOTTLING COMPANY,
     Defendants-Appellees.

                                                     Order

   Between 2002 and 2007, Kay Beer Distributing handled the Glacéau line of “en-
hanced water” products (vitaminwater, fruitwater, and smartwater) in some counties of
Wisconsin. Kay Beer originally purchased the products from Energy Brands, their man-
ufacturer. In 2005 Cadbury Schweppes Bottling Group (which has since merged into
The American Bottling Group) became the exclusive Glacéau distributor in Wisconsin.
Kay Beer then purchased the products from Cadbury for resale. Two years later, Coca-
Cola Corp. acquired a controlling interest in Energy Brands and decided to distribute
Glacéau products through its own network, which does not include Kay Beer.

   1   Of the Northern District of Illinois, sitting by designation.
No. 09-3578                                                                           Page 2

    This suit under the diversity jurisdiction followed. Kay Beer contends that Energy
Brands broke its distributorship contract and violated the Wisconsin Fair Dealership
Law, Wis. Stat. Ch. 135; it also maintains that Cadbury should disgorge what it de-
scribes as unjust enrichment (Coca Cola bought out Cadbury’s distributorship, and
Cadbury did not share any of the proceeds with Kay Beer). Defendants denied these
contentions and pleaded an affirmative defense: that in 2005 Kay Beer had released all
claims based on any distributorship contract. The district court’s first opinion granted
summary judgment in defendants’ favor on all claims except breach of contract. 2009
U.S. Dist. LEXIS 17733 (E.D. Wis. Feb. 20, 2009). That claim was set for trial. Before the
trial was held, the judge narrowed the issues by concluding that the 2005 release extin-
guished Kay Beer’s claims based on the distributorship realignment that year. 2009 U.S.
Dist. LEXIS 92519 (E.D. Wis. Oct. 5, 2009). Trial then began but did not reach the jury; the
judge granted Energy Brands’ motion for judgment as a matter of law under Fed. R.
Civ. P. 50, ruling that Kay Beer had not produced any evidence of an oral contract. Its
witnesses testified to their “understanding” of events, but not to exchanges of promises
that could form a contract or delineate its terms.

    We affirm for substantially the reasons given by the district court. On appeal, Kay
Beer does not identify any concrete promises by Energy Brands that could form a dis-
tributorship contract for a term of years (or, as Kay Beer contends, a contract that was to
last as long as the distributor used its “best efforts” to sell Glacéau products). A contract
that lacks a duration clause may be ended at will. Flores v. Raz, 250 Wis. 2d 306, 640
N.W.2d 159 (Wis. App. 2002). One side’s “understanding” is no substitute for a specific
promise. Contracts in Wisconsin depend on the words exchanged between the parties,
not on one side’s hopes, beliefs, or understandings. See Frantl Industries, Inc. v. Maier
Construction, Inc., 68 Wis. 2d 590, 229 N.W.2d 610 (1975); Skycom Corp. v. Telstar Corp.,
813 F.2d 810 (7th Cir. 1987) (Wisconsin law). The conclusion that Kay Beer and Energy
Brands never formed a distributorship contract makes it unnecessary to discuss the ef-
fect of the 2005 release. It also knocks out the unjust-enrichment claim against Cadbury:
the end of the distributorship did not affect any of Kay Beer’s legal rights, so there was
no need for compensation from either Energy Brands or Cadbury.

    As for the Wisconsin dealership statute: Glacéau products never accounted for more
than 3% of Kay Beer’s sales or profits. Kay Beer did not make any investments specific
to Glacéau. The district court therefore correctly concluded that the “community of in-
terest” required for application of the state statute, see Ziegler Co. v. Rexnord, Inc., 139
Wis. 2d 593, 605, 407 N.W.2d 873, 879 (Wis. 1987), did not come into being. Kay Beer
maintains that the “community of interest” question can never be resolved by summary
judgment, but that contention rests on a belief that state law controls procedural issues
in federal litigation. It doesn’t; the allocation of tasks between judge and jury is a matter
of forum law. See Mayer v. Gary Partners & Co., 29 F.3d 330 (7th Cir. 1994). (This makes it
unnecessary to decide whether Wisconsin’s courts would have submitted the issue to a
jury.) Kay Beer’s remaining arguments do not require discussion.

                                                                                   AFFIRMED