Background: The origins of the fictional Everfresh Juice Co.

John Labatt, Ltd. is a multinational corporation domiciled in Toronto, Canada. In 1983 Labatt acquired Holiday Juice Ltd., a juice processor based in Windsor, Ontario. In 1986-87 Labatt acquired three more juice processors, all of them U.S.-based—Boden Products, Inc. of Franklin Park, Illinois; Ever Fresh Juice Co. of Warren, Michigan; and Wagner Juice Co., of Chicago.

Labatt upgraded the Boden Products’ plant into a state-of-the-art bottling facility. Labatt sold the Wagner plant but kept the customer list.

Initially, each of the acquired companies was allowed to operate semi-autonomously.  In 1987-88 Labatt created a corporate staff with centralized authority over operations at the three remaining plants—Windsor, Warren, and Franklin Park.  The corporate staff was headquartered at the upgraded facility in Franklin Park.

In 1988-89, Labatt consolidated its orange juice acquisitions into two corporations named Everfresh Inc., one domiciled in Ontario, Canada, and wholly-owned by Labatt; the other, domiciled in the State of Michigan and wholly-owned by JLI, Inc., a California holding company wholly-owned by Labatt. The Canadian Everfresh Inc. became titular owner of the plant in Windsor, Ontario; the entity domiciled in Michigan became titular owner of processing plants in Franklin Park, Illinois, and Warren, Michigan. 

The two corporations operated seamlessly as a single enterprise—both had the same chief executive officer, and as of April 1988, when the Canadian Everfresh Inc. moved its headquarters to Franklin Park, Illinois, both occupied the same building at 3333 Mt. Prospect Road, in Franklin Park.  Both corporations also had the same marketing organization, the same research and development group, the same formulas, the same trademarks, and the same bottles and labels. See discussion in Grove Fresh's Brief in Support of its Motion to Overrule Certain Objections to the Definition of Everfresh, pp. 4-7, 11-14, in Grove Fresh v John Labatt. Ltd., No. 90 C 5009 (filed January 31, 1992).

To cement the public perception that the two corporations functioned as a single enterprise, both Everfresh entities conducted their operations under the same fictional name—Everfresh Juice Co.  This was the name that appeared on the labels of each corporation’s products.  Labatt described this fictional company as “the North American fruit and beverage subsidiary of John Labatt Ltd.” June 1990 Press Kit, p. 2.

A. Everfresh’s cryptic corporate history.

A plaintiff who wanted to sue Everfresh Juice Co. in February 1989, as Grove Fresh did, would have a tough time figuring out that company’s true corporate identity.  A call to the Illinois Secretary of State would not yield a clear picture:  At various times, three different entities had registered to do business in Illinois under that name, including a predecessor of the Michigan Everfresh Inc., but all three of those registrations had expired.[1]  The call would reveal the presence in Illinois of the Michigan Everfresh Inc., but not of the Canadian Everfresh Inc. 

Digging deeper into government records in various jurisdictions, one would find at least four different variants of the Everfresh name[2] and nine different entities that either used one of those variants or had been merged into an entity that did.[3]

Hines finessed the issue in the 89c1113 complaint.  He did so in a way that put the burden on the defense to clear up Everfresh Juice Co.’s ambiguous corporate status. See §C.  They never did. See §F.

B. The scope of the 89c1113 complaint against the fictional Everfresh Juice Co.

On February 7, 1989, Labatt hired McDermott Will & Emery for advice on Everfresh’s illegal practices. See Introduction, §B-1, above.  Three days later, Grove Fresh filed suits against five “dirty” competitors, including the fictional Everfresh Juice Co., a defendant in 89c1113.

The fictional company was named as a defendant in 89c1113 because “Everfresh Juice Co.” is the name that appeared on the labels of the orange juice packages that Grove Fresh’s expert, Dr. Alan Brause, tested for that case.  Unlike the other four complaints that Hines filed that same day, which named corporations as defendants and specified where they were domiciled, the 89c1113 complaint did not specify whether Everfresh Juice Co. was a corporation; it merely alleged, accurately, that Everfresh Juice Co. was “a business operating in the State of Illinois” with “its principal place of business at 3333 Mt. Prospect Road, Franklin Park, Illinois.” 

Since Everfresh Juice Co. was a fictional name used by two different corporations with the identical, formal name (Everfresh Inc.), and since both of the corporations using that fictional name had the same corporate staff and occupied the same headquarters,[4] the 89c1113 complaint, fairly construed, alleged claims against both corporate entities.

C. The Everfresh entities’ burden to either correct the misnomer in the complaint or be concluded by the judgment ultimately entered. 

In Illinois, “[m]isnomer of a party is not a ground for dismissal but the name of the party may be corrected at any time.”[5]  A complaint that mistakenly identifies the wrong defendant, on the other hand, is subject to dismissal.  The Seventh Circuit has explained the difference between the two concepts thusly:

“A misnomer occurs where the plaintiff brings an action and serves summons upon the party intended to be made the defendant, thus giving actual notice of the lawsuit to the real party in interest, but the process and the complaint do not refer to the person by his correct name.  Mistaken identity, on the other hand, occurs when the wrong person is named and served.”  [citations omitted]  In other words, the misnomer provision applies only when the right defendant has been sued by the wrong name, not when the wrong defendant has been sued.

Arendt v. Vetta Sports Inc., 99 F.3d 231, 234 (7th Cir. 1996), quoting Shaifer v. Folino, 272 Ill. App. 3d 709, 650 N.E.2d 594, 597 (1995) (emphasis added).  In distinguishing misnomer from mistaken identity, “Illinois courts have consistently held that whom the plaintiff intended to sue is the pivotal inquiry.”[6] 

“[W]here the real party in interest and the one intended to be sued is actually served with process in the cause, even though under a wrong name, such person must take advantage of the misnomer in such action, and if he or she fails to do so, he or she is concluded by the judgment rendered the same as though he or she were described by his or her true name.”[7]

Here, Grove Fresh served the 89c1113 complaint on Hugo Powell, in his capacity as president of the fictional Everfresh Juice Co.; he was also president of both the Canadian Everfresh Inc. and the Michigan Everfresh Inc.  Thus, the parties Grove Fresh intended to sue were actually served with process. 

D. Illinois’ jurisdiction over both Everfresh entities. 

Illinois federal courts had personal jurisdiction over both of the entities that operated under the fictional name of Everfresh Juice Co.

The Michigan Everfresh Inc.:  The Everfresh Inc. entity domiciled in Michigan submitted itself to the jurisdiction of Illinois courts when it registered with the Illinois Secretary of State.[8] 

The Canadian Everfresh Inc.: Holiday Juice and the Canadian Everfresh Inc., its successor-in-interest, were, as we have already noted, foreign corporations domiciled in Canada.  Nevertheless, under §2-209 of the Illinois Code of Civil Procedure (the long-arm statute)[9] and FRCP 4(e), [10] Illinois courts had at least three grounds for exercising personal jurisdiction over the Canadian Everfresh Inc. for claims arising out of Holiday Juice’s co-packing contract with Flavor Fresh:

E. February 21-22: Labatt’s written report to McDermott Will & Emery implicating Bruno Moser in the Oleum 320/IDEA scheme.

Labatt learned about the 89c1113 complaint around February 16.[11]  By then, McDermott Will & Emery had already asked Labatt for “a detailed report” regarding Everfresh’s use of Oleum 320/IDEA and other adulterants.  McDermott Will & Emery received such a report on February 21-22, 1989. 

Attached to the report were the Bio Trade Documents linking Everfresh to the illegal scheme to import Oleum 320/IDEA into the United States.[12]  The Bio Trade Documents included invoices directed to the attention of Bruno Moser, a quality control supervisor who worked at Everfresh for 37+ years—from 1955 to 1992 or 1993.

Moser was a knowledgeable witness.  During the 1960s he “talked about adulteration and formulations” with James Marshall.[13]  During the 1970s and 1980s he received instructions from Kohlbach on how to mix Oleum 320/IDEA into Everfresh’s orange juice.[14]  He knew so much about Kohlbach and Oleum 320/IDEA that in 1993, the Justice Department would use an affidavit from him in its criminal case against Kohlbach.

F. March 1989:  The follow-up meeting with Moser.

In March 1989 McDermott lawyers made several visits to Everfresh’s Warren plant, reviewing documents and meeting with employees.  On one of those visits Lazar Raynal, an associate at McDermott Will & Emery, met with Moser.[15]  

G. March 9-September 14, 1989: McDermott Will & Emery’s unconditional appearances for the fictional “Everfresh Juice Co.”

On March 9, 1989, Bruce Weitzman and Linda Chiron, lawyers at McDermott Will & Emery, filed their appearances for the 89c1113 defendants.  Following the complaint’s nomenclature, the forms they filed identified their client as “Everfresh Juice Company.” 

In all, between March 9 and September 14, 1989, McDermott Will & Emery filed seven sets of papers in which the firm listed “Everfresh Juice Company” as the client.  These papers did not disclose that this was a fictional name used by two different corporate entities named Everfresh Inc., much less did the papers purport to limit the lawyers’ appearances to only one of those entities. 

H. The potential (but waivable) grounds for excluding the Canadian Everfresh from the reach of the 89c1113 complaint. 

McDermott Will & Emery had five dilatory[16] grounds for moving to dismiss the Everfresh entity domiciled in Canada from the 89c1113 case: 

  1. Lack of personal jurisdiction.  (FRCP 12(b)(2))
  2. Lack of proper venue.  (FRCP 12(b)(3))
  3. Insufficient process.  (FRCP 12(b)(4))
  4. Insufficient service of process.  (FRCP 12(b)(5))
  5. Lack of capacity to be sued.  (FRCP 9(a)).

Ground #1 was not likely to succeed; as explained above in §D, there were at least three solid predicates for exercising long-arm jurisdiction over the Canadian Everfresh. 

If ground #1 were to fail, so, too, would ground #2: when a defendant is a corporation, venue is proper “in any judicial district in which [the corporation] is subject to personal jurisdiction at the time the action is commenced.” 28 U.S.C. §1391.

Process was served months before I got into the case, so I don’t know if there were ever any facts that would have supported grounds ##3 and 4.  If there were, the defects were most likely curable.  Since the running of the statute of limitations was not imminent, a challenge to the process served on the Canadian Everfresh Inc., even if successful, would only have delayed the litigation, not ended it. 

Finally, if McDermott Will & Emery were to invoke FRCP 9(a) and challenge the capacity of the fictional Canadian company to be sued, it would have to do so “by specific negative averment,” and it would have to include in its averments “supporting particulars as are peculiarly within the pleader’s knowledge.” (emphasis added).  Here, alleging such particulars would require the defense to disclose that there were two different corporations using the same fictional name to conduct business as a single enterprise.

If the 89c1113 defense were to spread the true corporate facts on the record, Grove Fresh would have been afforded an opportunity to substitute the true corporate entity domiciled in Canada for the fictional one.  See discussion above in §C.  Since the running of the statute of limitations was not imminent, challenging the capacity of the fictional company to be sued, even if successful, would only have delayed the litigation, not ended it.

A final note on waiver: Under FRCP 12(h), objections to personal jurisdiction, venue, and sufficiency of process or service of process (grounds ##1-4, above) are waived unless they are raised in the initial responsive pleading.  Likewise, objections to a party’s capacity to sue or be sued are waived unless they are raised at the outset of the case. Wagner Furniture Interiors, Inc. v. Kemner’s Georgetown Manor, Inc., 929 F.2d 609 (7th Cir. 1991). 

I. March 30, 1989: The waiver of grounds for excluding the Canadian Everfresh Inc. from the reach of the 89c1113 complaint.

On March 30, 1989, McDermott Will & Emery filed a Rule 12(b)(6) motion to dismiss the complaint for failure to state a cause of action.  The motion did not raise any of the five grounds identified above in §H for excluding the Canadian Everfresh Inc. from the reach of the 89c1113 complaint. 

Accordingly, the 89c1113 defense waived all five grounds for excluding the Canadian Everfresh from the reach of the 89c1113 complaint by failing to include them in the motion to dismiss the complaint. 

J. The covenant restricting Hines’s right to litigate against the Everfresh entities. 

Fairly construed, the open-ended allegations in the 89c1113 complaint stated claims for the entire period that Everfresh made and sold adulterated products—a period of 15 years (or more).  Jeffrey Hines, Grove Fresh’s lawyer, was subject to a covenant that, if enforced, would dramatically reduce the scope of the 89c1113 complaint to a mere six-months.  That covenant stated:

Jeffrey C. Hines, and all attorneys, paralegals and others who have worked on the case brought by Purity against Holiday Juice, or who have had access to the documents and information concerning that case, shall not in the future represent or provide any information or assistance to any party concerning or on account of acts, statements or omissions alleged to have been committed by Holiday Juice, John Labatt, Limited, John Labatt, Inc., Everfresh, Inc., and/or JZ Juice Co. prior to [August 10, 1988].... (emphasis added)

If this covenant were applied to Hines’s efforts in 89c1113, he would be barred from seeking discovery of the Everfresh entities’ acts or omissions prior to August 10, 1988. 

K. The source for McDermott Will & Emery’s self-serving view that the complaints in 89c1113 and 89c1114 were limited to products packed in Franklin Park by the Michigan Everfresh Inc.

Dr. Brause’s reports listed the product codes stamped on the labels of the bottled beverages he tested.  When deciphered, these codes identified the date and place of manufacture of each bottle. 

With the assistance of their clients, the McDermott lawyers determined that the samples Dr. Brause had tested for both the 89c1113 case and the 89c1114 case had been packed at Everfresh’s Franklin Park plant.  McDermott Will & Emery then constructed the following syllogism regarding 89c1113:

McDermott Will & Emery constructed a similar syllogism regarding 89c1114:

L. Hines’s unauthorized concessions. 

In March 1989 defense counsel had discussions with Hines regarding the restrictions on his right to practice law and the scope of the claims in 89c1113, 89c1114, and 89c1117. 

  1. 1. The 89c1113 and 89c1114 cases. 

  2. According to McDermott Will & Emery, Hines agreed to limit the 89c1113 case and the 89c1114 case to products packed at the Franklin Park plant after August 10, 1989.[17]  His agreement was not memorialized in any writing, however. 

    McDermott Will & Emery treated Hine’s alleged concession as limiting the 89c1113 and 89c1114 cases to claims against the Michigan Everfresh Inc., which was the titular owner of the Franklin Park plant. 

  3. 2. The 89c1117 case.

  4. According to Kowal, the attorney for the 89c1117 defendants, Hines agreed to abide by the restrictive covenant that applied to the claims alleged in 89c1117.  Hines confirmed this agreement in a letter to Kowal dated March 30, 1989:

    As to the matter of the [Settlement] Agreement [in the 1988 suit by Purity Products], I promised not to disclose any prior bad acts of the Defendant and I have not, thereby upholding my end of the Settlement Agreement. (emphasis added)

    On April 4, 1989, Kowal served Hines with a FRCP 36 request to admit that Grove Fresh’s claims in 89c1117 were limited to acts or omissions occurring after July 14, 1989.  On May 5, 1989, Hines signed a response admitting the request and mailed it to Kowal. 

    Hines did not send Mr. Troy (Grove Fresh’s president) a copy of the admission,[18] nor did he tell me about the admission later on, when he recruited me to work on Grove Fresh’s cases. 

[1] Memorandum from William Goldbeck (November 28, 1989).

[2] The four forms of the name were: (1) Everfresh Juice Co.; (2) Ever Fresh Juice Co.; (3) Everfresh Inc.; and (4) Ever-fresh Juice Co. 

[3] These corporations were organized in five different jurisdictions—Michigan (five), Illinois (one), Florida (one), Delaware (one), Canada Federal (one).  See Memorandum from William Goldbeck (March 19, 1990).

[4] See Memorandum 3-B, §VI-A.

[5] 735 ILCS 5/2-401(b).

[6] 99 F.3d at 234.

[7] Parties §5, Illinois Law and Practice.

[8] 805 ILCS 5/3.10(b) (authorizing domestic corporations to sue and be sued); 805 ILCS 5/13.10 (granting foreign corporations who register with the Secretary of State the same rights, duties, and liabilities as a domestic corporation.)

[9] Section 2-209 provides in pertinent part: 
(a) Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person, and, if an individual, his or her personal representative, to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any of such acts:
(1) The transaction of any business within this State;
(2) The commission of a tortious act within this State;
* * * *
(7) The making or performance of any contract or promise substantially connected with this State; ….

[10] FRCP 4(e) provides that a federal court’s long-arm jurisdiction over foreign corporations reaches as far as the long-arm jurisdiction of the forum state. 

[12] Murray Dep. 69-72 (1992).  See also Memorandum 3-B, §X-D.  Copies of the Bio Trade Documents are in Appendix Q.

[13] At the time, Marshall worked at Home Juice and Everfresh was a Home Juice subsidiary.  Marshall Proffer, p. 2 (Appendix D).

[14] Moser Affidavit ¶¶6-10 (Appendix E).

[15] Moser Dep. 83-84 (1990).

[16] In the vernacular of common law pleading, a dilatory motion is one “grounded on principles of Remedial Law as opposed to Substantive Law.”  J. Koffler & A. Reppy, Handbook of Common Law Pleading 411 (1969).  A dilatory motion has the effect of suspending or terminating a lawsuit without adjudicating the merits. Id.

[17] See Defendants’ Response in Opposition to Plaintiff’s Motion to Strike the Defense that the Time Period Covered by the Complaint is Post-August 10, 1988, p. 2 (filed 3/7/90 in 89c1114).

[18] Affidavit of Cecil Troy ¶12 (January 3, 1990), a copy of which is posted on the website as an attachment to Grove Fresh's Motion to Strike Hines Appearance.