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Frank B. Fuhrer Wholesale Co. v. Millercoors LLC

United States District Court, Third Circuit

October 30, 2013

FRANK B. FUHRER WHOLESALE COMPANY, Plaintiff,
v.
MILLERCOORS LLC, COORS BREWING COMPANY and MOLSON COORS BREWING COMPANY, Defendants.

MEMORANDUM OPINION

ROBERT C. MITCHELL, Magistrate Judge.

I. INTRODUCTION

Presently before the court is Defendants' MillerCoors LLC, Coors Brewing Company and Molson Coors Brewing Company (collectively "Defendants") motion to dismiss Plaintiff's, Frank B. Fuhrer Wholesale Company's ("Fuhrer"), amended complaint. For the following reasons, Defendants' motion is granted.

II. BACKGROUND

Plaintiff is a western Pennsylvania beer wholesaler who distributes the Defendants' products, as well as beer products from Defendants' competitor, Anheuser-Busch. On or about January 1, 1997, Plaintiff and Defendant, Coors Brewing Company, executed a distributorship agreement that is currently still in effect. Compl. [ECF No. 22] at ¶ 23. Under the Agreement, Plaintiff is the exclusive distributer of certain Coors products in a nine-county area including the Pittsburgh metropolitan area.[1] Id. at ¶ 24. The Agreement allows Coors to add products to the list of those which Plaintiff already has exclusive distributorship rights. This provision states:

This Agreement sets forth the respective obligations of Coors and Distributor [Plaintiff] regarding the sale by Coors to Distributor of only those Coors products listed on Exhibit A (the "Products") and Distributor's resale of the Products to retailers. Coors may amend Exhibit A from time to time to add new products.

Distributorship Agreement [ECF No. 22-1] at § 1.1. Since the Agreement was entered into, Defendants have given Plaintiff the rights to new Coors products. Compl. [ECF No. 1] at ¶ 26. The Agreement also grants Plaintiff the right to sell other beer manufacturer's products. It states:

Distributor may, without Coors' consent, acquire the rights to sell other brands of beer or other beverages in the Market Area or elsewhere, provided the transaction by which such brands are acquired does not involve a transaction requiring Coors' consent or review under [subsequent sections of the Agreement]. The acquisition of such other brands shall not reduce Distributor's obligations to Coors.

Distributorship Agreement [ECF No. 22-1] at § 8.4. The Agreement also imposes a duty of good faith and fair dealing for the "implementation, performance and enforcement of the terms of" the Agreement. Id. at § 1.2.

In or about 2008, Coors Brewing Company and Miller Brewing Company created MillerCoors as a joint venture. Compl. [ECF No. 1] at ¶ 2. Coors Brewing Company then transferred all of its existing distributorship agreements to the new MillerCoors, including the Agreement with Plaintiff. Id. at ¶ 54.

In the fall of 2012, MillerCoors introduced a new craft/specialty beer called Batch 19. Id. at ¶ 29. MillerCoors did not give distributorship rights to Plaintiff for Batch 19, but instead gave it to other wholesaler/distributors in Plaintiff's territory. Id. at ¶ 30. In 2013, MillerCoors introduced two more craft/specialty beers, Third Shift and Redd's Apple Ale. Id. at ¶ 31. MillerCoors did not give Plaintiff distributorship rights for these brands, but again awarded the exclusive right to sell both of these new products to other wholesaler/distributors in Plaintiff's territory. Id.

Plaintiff confronted MillerCoors about not receiving the distributorship rights to these new products and was told by Defendants that they would not assign any new specialty or craft beers to Plaintiff because it sells products of its competitor, Anheuser-Busch. Id. at ¶ 32. On or about May 10, 2013, the parties had a meeting concerning the distribution rights of the new beer brands. Id. at ¶¶ 35-40. At this meeting, MillerCoors indicated that Plaintiff would be given the opportunity to receive new craft/specialty beers if it created a sales director position dedicated exclusively to all MillerCoors products. Id. at ¶ 38. Also during the meeting, MillerCoors admitted that Plaintiff should have received the distribution rights for Batch 19, but it had already given exclusive distribution rights to other wholesalers. Id. at ¶ 40. MillerCoors indicated it would not object to Plaintiff attempting to purchase those rights from the respective wholesalers. Id.

On or about June 4, 2013, MillerCoors' general counsel sent Plaintiff an email memorializing and expounding upon the proposal discussed at the meeting regarding Plaintiff's acquisition of Defendants' new specialty/craft beer brands. Id. at ¶¶ 41-42. The conditions required Plaintiff to create a new corporate entity dedicated exclusively to MillerCoors products in which a voting stock holder of Fuhrer could hold no more than 49.9% of the new entities' voting stock, the majority of the directors on the new entities' board could not be members of Plaintiff's board of directors and the new entity must have a chief financial officer or controller dedicated exclusively to the new entity. Id. at ¶¶ 42-44.

The instant action was removed to this court on August 9, 2013. In responding to Defendants' first motion to dismiss, Plaintiff filed an amended complaint on September 16, 2013 bringing five causes of action against Defendants. First, Plaintiff seeks a declaratory judgment under 28 U.S.C. § 2201, et seq., to have this Court declare that

Defendants may not require [Plaintiff] to assent to a condition limiting [Plaintiff's] right to sell the product of other beer manufacturers in order to receive the right to sell craft/specialty beers, including but not limited to a condition requiring [Plaintiff] to create a separate corporate entity devoted exclusively to MillerCoors products.

Compl. [ECF No. 1] at ¶ 51. Second, Plaintiff brings a breach of contract claim alleging that the Agreement granted Plaintiff the right to sell other beer manufacturers' products and the Agreement was subject to the duty of good faith and fair dealing. Id. at ¶ 56-57. Plaintiff claims that

Defendants have materially breached the Distributorship Agreement by (a) requiring [Plaintiff] to create an identity devoted exclusively to selling the products of MillerCoors in order to receive the right to sell new craft/specialty beers; and (b) refusing to grant Fuhrer the right to sell new craft/specialty beer because [Plaintiffs] sells the products of other manufacturers.

Id. at ¶ 59. Third, Plaintiff alleges a violation of the Pennsylvania Liquor Code ("Liquor Code") under 47 P.S. § 4-492(21). Plaintiff claims that by Defendants not giving Plaintiff the distribution rights for specialty/craft beers unless it creates a separate corporate entity to distribute these products due to the fact that Plaintiff also sells Anheuser-Busch products, is a violation of the Liquor Code. Id. at ¶ 62-63. Specifically, Plaintiff claims that under the Liquor Code because "no brewer may require a distributor or importing distributor to assent to any condition, stipulation or provision limiting the distributor or importing distributor in his right to sell the products of any other manufacturer[, ]" Defendants have violated 47 P.S. § 4-492(21). Id. (quoting 47 P.S. § 4-492(21)). Fourth, Plaintiff brings a claim for unreasonable restraint of trade and alleges that Defendants' demand to create a new corporate entity imposes illegal and unreasonable conditions on Plaintiff and are greater than what is necessary to protect Defendants' interests, impose undue hardship on Plaintiff and artificially restrict market competition in Pennsylvania. Id. at ¶¶ 70-71. Lastly, Plaintiff brings a claim against Defendants for the tortious interference with existing contract. Plaintiff claims that because MillerCoors stated that Anheuser-Busch was its main competitor and that to be considered for distribution rights, Plaintiff would have to create a separate entity that did not distribute or sell Anheuser-Busch products, and because Plaintiff maintains a contractual relationship with Anheuser-Busch, MillerCoors has tortuously interfered with their existing contract. Id. at ¶78. Plaintiff also seeks a preliminary injunction prohibiting MillerCoors from using its sale of Anheuser-Busch products as a reason for denying Plaintiff distributorship rights over new specialty/craft beers. Id. at ¶¶ 66, 75, 81. Defendants move to dismiss all of Plaintiffs claims and each of Defendants' argument will be addressed herein.

III. JURISDICTION

This court has jurisdiction pursuant to 28 U.S.C. § 1332(a)(1) as the parties to the claim are diverse and the amount in controversy exceeds the jurisdictional amount. Additionally, all parties have consented to proceed before a United States Magistrate Judge and this court has the authority to decide dispositive motions and to enter final judgment. See 28 U.S.C. § 636, et seq.

IV. STANDARD OF REVIEW

Defendants move to dismiss Plaintiff's amended complaint pursuant to Federal Rules of Civil Procedure 12(b)(1), arguing that this court does not have jurisdiction over the claim for declaratory relief, and Federal Rule of Civil Procedure 12(b)(6), arguing that Plaintiff has otherwise failed to state a claim upon which relief can be granted. Because Plaintiff's claims fail under Rule 12(b)(6), the court dismisses Plaintiff's ...


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