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United Sugars Corporation v. Tropical Worldwide Corp.

United States District Court, D. Minnesota

May 9, 2014

United Sugars Corporation, Plaintiff,
Tropical Worldwide Corp., Commercial Long Trading, and United Packaging Corp., Defendants.

Jeffrey Bouslog, Esq., Marie L. van Uitert, Esq., Oppenheimer Wolff & Donnelly LLP, Minneapolis, MN, on behalf of Plaintiff.

Laura N. Maupin, Esq., and Emily Grande Stearns, Esq., Barnes & Thornburg LLP, Minneapolis, MN, on behalf of Defendants.


ANN D. MONTGOMERY, District Judge.


On February 11, 2014, the undersigned United States District Judge heard oral argument on Defendants Tropical Worldwide Corp. ("Tropical Worldwide"), Commercial Long Trading, and United Packaging Corp.'s ("United Packaging") (collectively, "Defendants") Motion to Dismiss for Lack of Personal Jurisdiction or, in the Alternative for Improper Venue [Docket No. 19]; Defendants' Motion to Set Aside Default [Docket No. 25]; and Plaintiff United Sugars Corporation's ("United Sugars") Motion for Default Judgment [Docket No. 13]. For the reasons stated herein, Defendants' motion to dismiss is granted, Defendants' motion to set aside default is denied as moot, and United Sugars' motion for default judgment is denied as moot.


United Sugars is a Minnesota company that sells sugar and has its headquarters in Bloomington, Minnesota. Compl. [Docket No. 1] ¶¶ 1, 8; Decl. of Gary J. Staples ("Staples Decl.") [Docket No. 34] ¶ 1. Defendants are all Florida companies owned and operated by Florida residents Elliot Giraud, Sr. and his son Ommar Giraud. Compl. ¶¶ 2-4, 9. Tropical Worldwide is a merchant wholesaler of grocery and related products and packager of food products. Decl. of Ommar Giraud ("Giraud Decl.") [Docket No. 22] ¶ 3. Commercial Long Trading is in the real estate business. Id . United Packaging is a packager of food products. Id . Defendants operate out of facilities located in Miami, Florida (the "Miami Facilities"), do not maintain an office or advertise in Minnesota, and have never sent employees to Minnesota to conduct business. Compl. ¶ 11; Giraud Decl. ¶¶ 31-33, 35.

Defendants have a longstanding business relationship with United Sugars that began in the early 1990s. Giraud Decl. ¶ 18. For over fifteen years, Defendants have purchased large amounts of sugar from United Sugars for resale to grocery stores and wholesalers, and in 2009 Tropical Worldwide began co-packing sugar for United Sugars at Defendants' Miami Facilities. Id . ¶ 18; Compl. ¶¶ 7-8. According to Defendants' president, Ommar Giraud, United Sugars is Tropical Worldwide's largest client, and Defendants' business relationship with United Sugars is important to the success of Defendants' businsesses. Giraud Decl. ¶¶ 17-18.

During the course of the parties' business relationship, United Sugars and Defendants have entered into multiple contracts. Staples Decl. ¶ 2. These contracts identify United Sugars as a Minnesota corporation and include a choice of law and venue provision stating that actions relating to the breach, construction, or enforcement of the contract will be governed by Minnesota law and will be brought in a Minnesota court. See, e.g., id. Exs. A, B. Since at least 2003, Giraud and his employees have regularly contacted United Sugars at its Minnesota headquarters through telephone, mail, and email with respect to the parties' agreements and business transactions. Staples Decl. ¶ 3.

This action stems from an August 1, 2009 agreement between United Sugars and Tropical Worldwide titled "Proposed Co-Pack Agreement" (the "Co-Pack Agreement"). Aff. of John Doxsie [Docket No. 17] Ex. A. Under the Co-Pack Agreement, Tropical Worldwide agreed to package fine granulated sugar (the "Product") for United Sugars. Compl. ¶ 7. United Sugars alleges that because Tropical Worldwide is the alter ego of Commercial Long Trading and United Packaging, all Defendants are liable under the Co-Pack Agreement. Id . ¶¶ 7, 31-32.

As with the parties' other contracts, the Co-Pack Agreement identifies United Sugars as a Minnesota company and includes a Minnesota choice of law provision and Minnesota forum selection clause. Id . ¶ 15. The forum selection clause provides:

The parties hereto herewith submit to the jurisdiction of the District Court, Seventh Judicial District, Clay County, Minnesota, and agree that forum is the proper venue and forum for adjudication of all disputes between the parties with respect to the transactions contemplated or arising out of this Agreement or the construction, interpretation, or enforcement of this Agreement.

Co-Pack Agreement ¶ 25.

The Co-Pack Agreement also provides that Defendants will bear the risk of loss or damage to the Product that occurs before the delivery of such Product to United Sugars or to the transportation carrier delivering the Product, and requires Defendants to notify United Sugars of any destruction, damage, or loss to the Product. Compl. ¶¶ 12-13.

From 2009 to approximately June 2012, United Sugars shipped Product to Defendants' Miami Facilities, where Defendants packaged the Product and shipped it to United Sugars' customers. Compl. ¶ 8. Defendants sent co-packing invoices for the services they performed to United Sugars' Packaging Department located in Moorhead, Minnesota. Decl. of Raymond Smith ("Smith Decl.") [Docket No. 35] ¶ 5. Defendants negotiated rate changes and additional services to the Co-Pack Agreement by ...

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