The opinion of the court was delivered by: Norma L. Shapiro, J.
Plaintiffs, former stockholders of Keating Technologies, Inc. ("KTI"), filed this action against Applus Technologies, Inc. ("Applus") for breach of the duty of good faith and fair dealing, unjust enrichment and attorney's fees. Applus filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). The motion will be granted in part and denied in part.
The following facts are taken from the Amended Complaint (paper no. 19). Plaintiffs are former shareholders of KTI. Prior to its sale, KTI was "in the business of developing technology and methodologies to improve the testing of vehicle emissions." Am. Compl. ¶¶ 17 - 18. Plaintiffs sold their shares in KTI to Applus under the terms of a Stock Purchase Agreement ("SPA") dated December 19, 2000.*fn1 Am. Compl. ¶¶ 17 - 20. Under the SPA, plaintiffs are entitled to a share of revenue from contracts "for the design, implementation, management and/or operation of vehicle inspection programs in the United States," entered into by Applus between December 19, 2000 and December 19, 2006. Am. Compl. ¶¶ 21 - 25.
In February 2006, Applus received a request from the Illinois Environmental Protection Agency ("IEPA") "to submit a bid to implement and operate the Illinois Vehicle Inspection and Maintenance Program." Am. Compl. ¶ 3. Had Applus secured a contract to operate the IEPA program during the term of the SPA, plaintiffs would have been entitled to compensation. Am. Compl. ¶ 4. Plaintiffs allege Applus attempted to prolong the IEPA bidding process and avoid winning the contract prior to the SPA's expiration on December 19, 2006. Am. Compl. ¶ 29. Under the schedule established by the IEPA, proposals were due by April 25, 2006; the winning bid was to be announced on June 27, 2006. Am. Compl. ¶ 30. Plaintiffs claim Applus delayed submitting its initial bid until September 14, 2006. Am. Compl. ¶¶ 31- 32.
On December 11, 2006, the IEPA asked Applus to submit its "best and final offer" by December 18, 2006. Am. Compl. ¶ 31. On December 12, 2006, Applus sought and received a ten-day extension until December 28, 2006. Am. Compl. ¶¶ 33 - 35. Plaintiffs claim, "Applus deliberately delayed submitting its final bid to avoid the possibility that the contract would be awarded on or before December 19, 2006 and thus to avoid [its obligation under the SPA]." Am. Compl. ¶ 36. After the SPA provision expired, Applus lowered its final bid to exclude the cost of its obligation under the SPA; Applus had included the cost of its SPA obligation in prior versions of the bid. Am. Compl. ¶ 37. On or around June 15, 2007, Applus issued a press release announcing that it had entered into a contract with the IEPA. Am. Compl. ¶ 38.
Plaintiffs claim that, but for the alleged misconduct, they would have received more than $10 million from Applus' contract with the IEPA. Am. Compl. ¶¶ 7, 42. Count I alleges breach of contract and breach of the duty of good faith and fair dealing; Count II alleges unjust enrichment; Count III asserts a claim for attorney's fees under the SPA.
The court has subject matter jurisdiction over civil actions between citizens of different states where the amount in controversy, exclusive of interest and costs, exceeds $75,000. 28 U.S.C. § 1332(a). Plaintiffs allege complete diversity between the parties*fn2 and the amount in controversy exceeds $75,000.*fn3 The court has diversity jurisdiction over this action.
A federal court sitting in diversity must apply the substantive law of the forum state, including that state's choice-of-law rules. Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941); Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938); Thabault v. Chait, 541 F.3d 512, 521 (3d Cir. 2008); Hammersmith v. TIG Ins. Co., 480 F.3d 220, 226 (3d Cir. 2007).
The SPA contains a choice-of-law provision that provides for the application of Delaware law.*fn4 The court will apply the law of Pennsylvania, the forum state, to determine whether the SPA's choice-of-law provision should be given effect. Under Pennsylvania law, "when a transaction bears a reasonable relation to this Commonwealth and also to another state or nation, the parties may agree that the law either of this Commonwealth or of such other state or nation shall govern their rights and duties." 13 Pa.C.S. § 1301. See Gay v. CreditInform, 511 F.3d 369, 390 (3d Cir. 2007) ("Pennsylvania courts will uphold choice-of-law provisions in contracts to the extent that the transaction bears a reasonable relation to the chosen forum."). The SPA's choice-of-law provision is enforceable under Pennsylvania law; the SPA is reasonably related to Delaware because it governs plaintiffs' contractual relationship with Applus, a Delaware corporation. The court, with the parties' agreement, will apply Delaware contract law.
On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (internal citations and quotations omitted). The court may not grant a motion to dismiss based on its disbelief of the complaint's factual allegations, even if it appears that recovery is remote and unlikely. Id. "The Supreme Court's Twombly formulation of the pleading standard can be summed up thus: stating a claim requires a complaint with enough factual matter (taken as true) to suggest the required element. This does not impose a probability requirement at the pleading stage, but instead simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element." Phillips, 515 F.3d at 234 (internal quotations omitted).
A. Count I: Breach of Contract; Breach of the Duty of Good Faith and Fair Dealing
Applus argues that Count I should be dismissed on two grounds: (1) plaintiffs failed to allege a material breach of the SPA; and (2) plaintiffs suffered no injury ...