J. William Ditter, Jr. March 26, 2012 In this case, the plaintiff, ITP, Inc., contends it had an exclusive distributorship agreement that was breached. It seeks relief through a variety of legal theories. The matter is before me on a motion by defendant OCI International, Inc. ("OCI USA") to dismiss ITP's amended complaint for failure to state a claim pursuant to Fed. R. Civ. P. 12(b) and 9(b). (Doc. # 32).
For the reasons that follow this motion is GRANTED in part, and DENIED in part.
I. FACTUAL BACKGROUND *fn1
ITP's amended complaint against OCI USA alleges breach of contract, promissory estoppel/detrimental reliance, common law fraud, negligent misrepresentation, breach of fiduciary duty, tortious interference, violation of Pennsylvania's Uniform Trade Secrets Act, unjust enrichment, unfair competition, violation of the Robinson-Patman Act, vicarious liability, and an action to pierce the corporate veil between OCI USA and OCI Company, Ltd. (OCI Korea). *fn2
ITP is a domestic distributor of chemical products, including a chemical known as fumed silica. It has sold fumed silica to other United States "sub-distributors" for sale to end-users in the United States. Prior to its dealing with the defendants, ITP primarily distributed a fumed silica product produced by a Ukrainian company and sold under the brand name Orisil.
In September 2008, when ITP experienced difficulty obtaining Orisil, it looked for alternative supplies of fumed silica and contacted OCI Korea. OCI Korea is a manufacturer of chemical products, including a fumed silica product marketed under the name Konasil. In response to this inquiry, OCI Korea introduced ITP to OCI USA. ITP claims OCI USA held itself out as having actual and apparent authority to transact business in the United States on behalf of OCI Korea as its agent. ITP issued a purchase order in October, 2008 that: (a) identified the goods purchased; (b) the desired quantity; (c) the price; (d) delivery terms; and (e) payment terms. The goods were ordered and paid for by ITP on October 14, 2008.
Representatives of ITP and OCI USA met later in October to discuss
a more permanent business arrangement. Prior to this meeting, ITP
submitted a proposal for a distributorship arrangement. See
Am. Compl ., Exh. A. Although there is no specific mention of
exclusivity in this proposal, ITP claims that it "articulated its
desire to forge a more permanent business relationship subject to the
terms outlined in the Proposal and that ITP was only
interested in a relationship that
did not include self-competition." Id . at ¶¶
39-40 [emphasis in original]. In response, OCI USA and OCI Korea
informed ITP that they were already supplying Konasil to defendant
Univar, a global chemical distributor. After the meeting, ITP sent an
amended proposal to OCI USA that offered to bring Univar into the "ITP
network to prevent detrimental self-competition." Id.
at ¶ 44. Again, there was no specific mention of exclusivity --
only the desire to avoid detrimental self-competition.
*fn3 Id ., Exh. B.
The parties next met on November 10, 2008, in Philadelphia,
Pennsylvania. At this meeting, "ITP stressed that any business
relationship between ITP and the OCI defendants *fn4
had to be structured in a manner that (a) preserved the
integrity of the ITP Network; and (b) was consistent with the ethical
distributorship practices established by ITP within its network."
Id . at ¶ 49. ITP contends that at the conclusion
of this meeting, "the OCI Defendants orally agreed to appoint ITP as
the exclusive importer and master distributor of Konasil brand [fumed
silica] in the United States," and that a written announcement of this
relationship would be prepared to inform Univar of the exclusive
distribution agreement. Id. at ¶ 51-52.
In an e-mail following this meeting, David Ahn, of OCI USA, commented "I will do everything to support your company." Id., Exh. C. Thereafter, ITP began securing additional sales of Konasil. E-mails dated November 25, 2008, reveal that ITP had received its first seven containers of Konasil, it was pleased with the transaction, and it would be placing additional orders. In response, Ahn discussed additional shipments and indicated that he would be discussing the "Univar situation" with "our HQ and DCC, *fn5 and also with Univar." Id. ¶ 55; Exh. D. As of this time, exclusivity had not been accomplished, but ITP asserts that this comment led it "to believe that Univar would be informed shortly that an exclusive distribution agreement had been reached with ITP and that all future sales of Konasil to Univar would be coordinated through ITP." Id. ¶ 56.
Relying on this belief, ITP continued to expand its marketing and
promoting of Konasil. It also provided OCI USA with its analysis of
the fumed silica market in the United States and a list of its
targeted accounts -- information ITP contends was a "trade secret."
Id. ¶ 57-58. After receipt of this information,
Ahn notified Univar that OCI USA and OCI Korea had "reached an
agreement with ITP, Inc. to import, market and sell Konasil fumed
silica. . . . and to suspend all new marketing efforts for Konasil."
Id. at ¶60; Exh. E. Univar was also directed to
contact ITP to pursue potential opportunities to participate in the
distribution of Konasil. Finally, Univar was asked to provide a list
of any current accounts it wanted to continue to service to avoid
conflicts with ITP and to protect those accounts. This same notice was
sent to another prospective distributer of Konasil. Univar
acknowledged receipt of this notice and agreed to forward ITP's
contact information to its sales group.
ITP asserts that Univar continued to distribute Konasil but it did not obtain it from ITP.
This conduct was brought to the attention of OCI USA. Ahn responded by e-mail dated March 3, 2009, reassuring ITP as follows:
How are you? Long thoughts and conversation with our HQ, I've made the final decision on Univar situation.
We made clear point that we will deal with you only and Univar has to contact you for further marketing of Konasil. We told them we will use one agent in US which is ITP.
I know Univar won't be happy about this but this is my job to deal with. So, do not worry about Univar b/c we won't supply any more Konasil to them. If they need to purchase, I told them to contact you. We won't be able to provided Konasil directly to them from now on. This decision came from me and our HQ is supporting my decision also. But, our target is 10 FCL per month, so we would like your cooperation although all the market and movement is slow due to currently [sic] market situation.
This is official that we are expanding 3000mt more end of this month, so total capa is now 9,000mt/year. If your distributor has room to store our Konasil, then lets take some order [sic] asap to bring more inventory from Korea.
I really appreciate your effort and cooperation. I'm glad that I made the final decision and our HQ is supporting my decision.
The following day, Tae Chong from Univar contacted Ahn to purchase
an additional container of Konasil. Ahn responded to Chong by e-mail
on March 5, 2009, and informed him that he could not "sell directly to
Univar anymore. Instead, you may contact ITP for new purchasing."
Id. , Exh. H. Yury Kleiner of ITP was copied on
this e-mail. On March 17, 2009, only two weeks later, Ahn contacted
Kleiner to advise him that his decision to have ITP as the exclusive
distributor had been reversed and Univar was going to be able to buy
Konasil directly from OCI USA. This
decision was made by OCI USA's headquarters and OCI Korea. ITP was
asked to work with Univar to "adjust the marketing areas and key
accounts between [the] two companies if you have a meeting tomorrow."
Id. , Exh. I. That same day Univar cancelled its
previously scheduled meeting with ITP.
ITP contends that by this time it had made a complete and irreversible transition to the marketing and distribution of Konasil. ITP expressed its concerns with this reversal on exclusivity to OCI USA. OCI USA indicated the decision was temporary and made for "political reasons because of other business interests between the OCI Defendants and Univar." Id. at ¶81. Thus, ITP asserts Univar abused its market power by refusing to distribute OCI Korea's other chemical products if OCI Korea did not continue to supply it with Konasil for distribution in the United States. Id.
It is well established that a motion to dismiss pursuant to Rule
12(b)(6) for failure to state a claim can be granted if the complaint
does not contains facts to establish a plausible claim. Bell
Atlantic Corp. v. Twombly , 550 U.S. 544, 556 (2007). I will
accept well-pled allegations as true for purposes of a motion to
dismiss, but the complaint must be more than "a formulaic recitation
of the elements of a cause of action" or "naked assertion[s] devoid of
further factual enhancement." Ashcroft v. Iqbal ,
129 S. Ct. 1937, 1949 (2009). If I can only infer the mere possibility
of misconduct, the complaint must be dismissed because it has alleged
-- but failed to show -- that the plaintiff is entitled to relief.
Fowler v. UPMC Shadyside , 578 F.3 203, 210-11 (3d
To satisfy the pleading requirements of Rule 9(b), claims of fraud must be pled with particularity. That is, the complaint must set forth the who, what, when, where, and ...