United States District Court, D. Montana, Great Falls Division
MONTANA MERCHANDISING, INC., d/b/a MONTANA MILLING, INC., HINEBAUCH GRAIN, INC., and OCC-O'CONNOR CROPS AND CATTLE, LLC, Plaintiffs,
DAVE'S KILLER BREAD, INC., GLENN DAHL, Individually and as Trustee of Glenn Dahl Family Trust, DAVID J. DAHL, Individually and as Trustee of the David Dahl Family Trust, SHOBI L. DAHL, Individually and as Trustee of the Shobi L. Dahl Family Trust, FLOWERS FOODS, INC., and GOODE PARTNERS, LLC, Defendants.
ORDER ON GOODE/DAHL DEFENDANTS' MOTION TO
Morris United States District Court Judge.
Glenn Dahl, individually and as Trustee of the Glenn Dahl
Family Trust, David J. Dahl, individually and as Trustee of
the David Dahl Family Trust, Shobi L. Dahl, individually and
as Trustee of the Shobi Dahl Family Trust, and Goode
Partners, LLC (collectively, “Dahl/Goode
Defendants”), move this Court to dismiss the First
Amended Complaint (Doc. 18) for lack of personal jurisdiction
over them. (Doc. 44 at 2.) In the alternative, the Dahl/Goode
Defendants move to strike “immaterial, impertinent and
scandalous matter” from the First Amended Complaint.
Montana Merchandising, Inc. (“MMI”), Hinebauch
Grain, Inc. (“Hinebauch”), and OCC-O'Connor
Crops and Cattle, LLC (“OCC”) allege in the First
Amended Complaint that Defendants Dave's Killer Bread,
Inc. (“DKB”), an Oregon corporation that produces
organic bread products at its main bakery facility in
Milwaukie, Oregon (see Doc. 14 at 9), and Flowers
Foods, Inc. (“Flowers”), a publicly traded
Georgia corporation that acquired DKB in 2015 (see
Doc. 14-2 at 3), failed to perform under two 2014 contracts.
(Doc. 18 at 6.) Plaintiffs further contend that DKB/Flowers
reneged on oral promises to purchase all of the organic wheat
that MMI could procure from Montana organic wheat farmers.
J. Dahl is an individual and a Trustee of the David Dahl
Family Trust. (Doc. 18 at 2.) In 2004, David rejoined his
family bread business after having served 15 years in prison.
Id. He attempted to remake his life and the life of
the family business, which became known as DKB. Id.
Under David's guidance, DKB's sales of organic bread
jumped from $3, 000, 000 to $53, 000, 000, with most of the
growth limited to Oregon and Washington. Id. at 2-3.
Dahl is an individual and a Trustee of Glenn Dahl Family
Trust. Shobi L. Dahl is an individual and Trustee of the
Shobi L. Dahl Family Trust. Id. Plaintiffs assert
that David, Glenn, and Shobi (“the Dahls”) owned
the controlling shares of stock of DKB during the part of the
time period alleged in the Complaint. Plaintiffs allege that
the Dahls worked together in the expansion of DKB's
growth and promises to purchase the organic wheat in Montana.
2013, David, the President of DKB, decided to expand
DKB's presence in a number of states, including Montana.
Id. at 3. DKB entered into a partnership with Goode
Partners, LLC (“Goode”), a New York based private
equity firm, to help guide DKB's growth into the new
markets, including Montana. Id. Plaintiffs allege
that David traveled to Montana in early 2013, on behalf of
DKB, to meet with MMI and tour MMI's plant. Plaintiffs
contend that David commenced substantive discussions with
MMI's representatives that led DKB to promise to purchase
all the organic wheat from MMI that Montana growers of
organic wheat could produce. Id.
seek to pierce DKB's corporate veil. Id.
Plaintiffs allege that DKB served as “a mere agent
and/or alter ego, ” acting on behalf of the Dahls.
Id. Plaintiffs claim that once the Dahls decided to
expand DKB with a vast amount of Montana organic wheat,
“they advanced their own personal interests above the
interests of the corporation.” Id. Plaintiffs
further assert that the Dahls “chose to use the
corporate cloak to justify their wrongs and to perpetrate
contend the Dahls “exercised complete control over the
conduct and activities of DKB in all particulars and,
specifically, in the venture regarding the Montana organic
wheat.” Id. Plaintiffs assert that the Dahls
entered into a partnership with Goode, “for their own
personal interest and not the interest of the corporation,
and embarked on a course of conduct to perpetuate fraud on
MMI and the Montana organic wheat farmers.”
allege that the Dahls, as the individual controlling
shareholders of DKB, acted to defraud its creditor, MMI.
Id. at 4. Plaintiffs claim that the Dahls
“failed and/or refused to tell Flowers Foods, Inc.,
about their promises to purchase the Montana organic wheat,
which purchase was one of the important reasons for the
expansion of the worth of DKB.” Id.
assert that the Dahls and DKB sent agents to Montana to meet
with MMI and Montana wheat farmers on multiple occasions.
Plaintiffs contend that these visits to Montana resulted in
written and oral agreements between the parties for the
production of organic wheat and milling services.
Id. at 4-6.
Motion to Dismiss
courts generally look to state law to determine the bounds of
their jurisdiction over parties. Picot v. Weston,
780 F.3d 1206, 1211 (9th Cir. 2015) (internal quotation and
citation omitted). Montana follows a two-step test for
determining whether a Montana court may exercise personal
jurisdiction over a nonresident defendant. Milky Whey,
Inc. v. Dairy Partners, 342 P.3d 13, 17 (Mont. 2015).
First, a party may be “found within the state of
Montana” and subject to general jurisdiction.
Id. Second, specific ...