Ab v. Gen. Motors Co.

• Decision Date: 18 June 2013
• Docket Number: Case No. 12–cv–13432.
• Citation: 953 F.Supp.2d 782
• Parties: SAAB AUTOMOBILE AB, et al., Plaintiffs, v. GENERAL MOTORS COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

953 F.Supp.2d 782

SAAB AUTOMOBILE AB, et al., Plaintiffs,

v.GENERAL MOTORS COMPANY, Defendant.

Case No. 12–cv–13432.

United States District Court,

E.D. Michigan,

Southern Division.

June 18, 2013.

Andrew Zimmitti, Benjamin Chew, Nigel L. Wilkinson, Patton Boggs LLP, Washington, DC, Scott T. Seabolt, Foley & Lardner, Detroit, MI, for Plaintiffs.

Mark A. Stern, Honigman, Miller, Detroit, MI, Michael J. Songer, Crowell and Moring, Washington, DC, for Defendant.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS [# 9]

GERSHWIN A. DRAIN, District Judge.

I. INTRODUCTION

Presently before the Court is Defendant's Motion to Dismiss. The parties had oral arguments on June 10, 2013. For the reasons that follow, Defendant's Motion to Dismiss is GRANTED.

II. PROCEDURAL AND FACTUAL HISTORY

Plaintiffs filed this action on August 6, 2012. This case arises from a state-law claim of alleged Tortious Interference with Economic Expectancy. Plaintiff Saab Automobile AB (“Saab”) is a company, currently in receivership, organized under the laws of Sweden with its principal place of business in Trollhättan, Sweden. Plaintiff Spyker (“Spyker”) is a limited liability company organized under the laws of the Netherlands with its principal place of business in Zeewolde, Netherlands. Spyker is the current parent company to Saab. Defendant, General Motors Company (“GM”) is organized under the laws of Delaware with its principal place of business in Detroit, Michigan.

GM and Saab have a business relationship that goes back to January of 1990 when GM purchased a fifty percent interest in Saab–Scania AB to form Saab Automobile AB. In January of 2000, GM exercised an option to purchase the remaining fifty percent and Saab became a wholly owned subsidiary of GM until February 2010. See Compl., Dkt. No. 1, pg. 3; Mot., Dkt. No. 9–1, pg. 7. On February 23, 2010, Spyker purchased Saab from GM and acquired a majority interest in Saab, while GM maintained a minority interest through preferred shares. Id.

It is important to note, that the sale—whereby GM transferred ownership and control of the Saab brand to Saab—there were several important agreements made between the parties. Id. at 10. One of the agreements, the Automotive Technology License Agreement (“ATLA”), granted Saab a non-exclusive, non-transferable, royalty-free license to make and assemble certain Saab models. The ATLA consisted of GM intellectual property and provided that Saab could not assign, transfer, or delegate any of the rights granted to Saab by GM. See Compl., Dkt. No. 1–3, ATLA, ¶¶ 4.2(a), 14.9(a).

More specifically, the ATLA provided that GM was able to terminate the agreement upon written notice to Saab:

a) if SAAB initiates a sale or transfer of all or substantially all of its assets including to an Affiliate without the prior written consent of [GM];

b) upon a SAAB corporate decision to liquidate;

c) if SAAB initiates a direct or indirect Change of Control to an OEM or OEM related entity without the prior written consent of [GM].

Id., ATLA, ¶ 12.3.

A second agreement, in addition to the ATLA between Saab and GM, was the Vehicle Supply Agreement (“VSA”). The VSA provided that GM would continue to supply Saab with certain vehicles and parts. GM was also entitled to cancel the VSA if Saab “voluntarily enter[ed] bankruptcy, receivership, liquidation, composition of creditors, dissolution or similar proceeding.” See Compl., Dkt. No. 1–5, VSA, ¶ 9.2(b). Additionally, GM could terminate the VSA “in the event twenty percent (20%) or more of SAAB becomes owned or controlled, directly or indirectly, by another [OEM] without prior written consent of the GM Parties.” Id. at ¶ 9.3(a).

Towards the end of 2010, Saab's financial position “became increasingly precarious.” See Compl., Dkt. No. 1, pg. 12. From May of 2011 until early-December of 2011, in an effort to obtain financial stability, Saab attempted to enter into multiple investment arrangements with Zhejiang Youngman Lotus Automobile Co., Ltd. (“Youngman”), a Chinese manufacturer that produces commercial vehicles, busses, passenger cars, and automobile components. See Mot., Dkt. No. 9–1, pg. 3. GM ultimately refused to approve of any agreements that Saab proposed that involved Chinese ownership or control of GM licensed technology. See Id.; Compl. Dkt. No. 1, pgs. 17–19.

In an effort to avoid liquidation, Saab attempted to “secure immediate liquidity in advance of a court hearing on Monday, December 19, 2011, by entering into a ‘Framework Agreement’ with Spyker and Youngman. Id. at 20. Saab stated its ultimate goal was to structure the Framework Agreement in a way as to “avoid any implication of the ATLA or any other agreement between GM and Saab; [the Framework Agreement] did not require any consent or approval from GM.” Id. (emphasis in original).

The unexecuted Framework Agreement was structured where Youngman would have no immediate participation in Saab or Spyker. In fact, Youngman's loan would not be converted into an equity interest in Saab until after Saab discontinued its use of GM's proprietary technology in all Saab vehicles. See Id. at 20–21; see also Mot., Dkt. No. 9–1, pg. 9. The Framework Agreement provided for Youngman and Saab to enter into further agreements and commitments as needed with the intent to execute the Framework Agreement by December 19, 2011, or no later than December 31, 2011. See Compl., Dkt. No. 1–4, Framework Agreement, pgs. 2–3. There were no fewer than ten separate agreements that were required to be negotiated and entered into in order to successfully close on the Framework Agreement. For example, some of the agreements included: transfer of Saab shares and assets to an entity created by Saab and Youngman called (“JVB”) where each own 50% shares, a JVB technology license agreement, a technology services agreement, and a series of China joint venture agreements. See generally, Compl., Dkt. No. 1–4, Framework Agreement.

On December 17, 2011, GM spokesperson, James Cain (“Cain”) issued a public statement that:

Saab's various new alternative proposals are not meaningfully different from what was originally proposed to General Motors and rejected. Each proposal results either directly or indirectly in the transfer of control and/or ownership of the company in a manner that would be detrimental to GM and its shareholders. As such, GM cannot support any of these proposed alternatives.

See Compl., Dkt. No. 1, pg. 21–22; Mot., Dkt. No. 9–1, pg. 10.

On the same day, Cain was further quoted in a Swedish newspaper stating:

“[I]t is wrong that Saab claims that they can do this deal without consulting us. We cannot continue to provide Saab with components and manufacture the 9–4x if this proposal remains. This proposal is similar to other proposals submitted in recent weeks.”

See Compl., Dkt. No. 1 pg. 22; Mot., Dkt. No. 9–1, pg. 10.

It is these statements that Plaintiffs claim were the direct and proximate cause of GM's wrongful and tortious interference with Saab's and Spyker's economic expectancies in the Framework Agreement. Plaintiffs claim that they have been damaged in the amount of $3,000,000,000, representative of the company's projected value through 2016 under the Framework Agreement.

III. LAW AND ANALYSIS

A. STANDARD OF REVIEW Fed R. Civ. P. 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6) allows the court to make an assessment as to whether the plaintiff has stated a claim upon which relief may be granted. SeeFed.R.Civ.P. 12(b)(6). “Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.’ ” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citing Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). Even though the complaint need not contain “detailed” factual allegations, its “factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the allegations in the complaint are true.” Ass'n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir.2007) (quoting Bell Atlantic, 550 U.S. at 555, 127 S.Ct. 1955).

The court must construe the complaint in favor of the plaintiff, accept the allegations of the complaint as true, and determine whether plaintiff's factual allegations present plausible claims. To survive a Rule 12(b)(6) motion to dismiss, plaintiff's pleading for relief must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. (citations and quotations omitted). “[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ ” Id. “[A] complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Id. The plausibility standard requires “more than a sheer possibility that a defendant has acted unlawfully.” Id. “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]’—‘that the pleader is entitled to relief.’ ” Id. at 679, 129 S.Ct. 1937.

B. Governing Law

GM argues that Saab has styled its complaint as a tort in an effort to avoid choice of law and venue selection clauses that exist in favor of New York in the alleged contracts Saab references in its complaint. See Mot., Dkt. No. 9–1, pg. 12. It subsequently concedes to venue in Michigan with the caveat that Michigan's choice-of-law rules are applicable to the facts in this case. Id. The Court will now turn to Michigan's...