Wisconsin Fair Dealership Case Law Update: F&C Flooring Distributors, Inc. v. Junckers Hardwood

Axley Brynelson’s Distribution and Franchise Team publishes the Wisconsin Fair Dealership Case Law Update as an online resource for developments in the Wisconsin Fair Dealership Law.

F&C Flooring Distributors, Inc. v. Junckers Hardwood, Inc. 
United States District Court for the Eastern District of Wisconsin, December 4, 2009 

Facts: F&C Flooring Distributors distributes hardwood floors manufactured by Junckers Hardwood, Inc. F&C Flooring Distributors began distributing Junckers’ floors in 2004. In late 2006, Junckers downsized its business and F&C Flooring Distributors became dissatisfied with the level of service provided by Junckers. By the end of 2008, the parties’ relationship had for the most part ended. F&C Flooring Distributors filed this lawsuit alleging that Junckers violated the Wisconsin Fair Dealership Law. Junckers moved for summary judgment asking the Court to dismiss the lawsuit claiming that there was not a community of interest to justify a finding that F&C Flooring Distributors was a protected dealer under the statute. The Court looked at all of the facets of the relationship and determined that the revenues and profits generated by the distributorship were only slightly more than 5% of F&C’s Flooring Distributors’ gross profits in 2006 and less than 2% in 2007 and less than 3% in 2008.

Ruling: The Court determined that such figures indicate that defendant did not have the “plaintiff over a barrel.” The Court looked at the other factors and found that the plaintiff could not show that the loss of Junckers’s brands would translate into drastically reduced sales or that it would affect sales of plaintiff’s other lines. The Court stated that the community of interest standard is a demanding one and that the record could not support the plaintiff’s assertion that the defendant had it “over a barrel.” Thus, the Court determined that no reasonable fact finder could conclude that the relationship between the parties involved a community of interest. Accordingly, the Court determined no dealership exists within the meaning of the Wisconsin Fair Dealership Law.

Bottom Line: This case is an illustration of the factual analysis done by courts when determining whether a distributor is a protected dealer under the statute; however, it followed the “over the barrel” line of analysis, which has subsequently been abandoned by the Wisconsin Court of Appeals. See The Water Quality Store, LLC v. Dynasty Spas, Inc.

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