Albrosco Ltd. v. Prince Agri Prods., Inc.
| Decision Date | 24 June 2021 |
| Docket Number | No. 20-cv-3221,20-cv-3221 |
| Citation | 545 F.Supp.3d 656 |
| Parties | ALBROSCO LIMITED, Plaintiff, v. PRINCE AGRI PRODUCTS, INC., Defendant. |
| Court | U.S. District Court — Central District of Illinois |
Adam Russell Foresman, Faegre Drinker Biddle & Reath LLP, Des Moines, IA, for Plaintiff.
Joseph Carey, DLA Piper US LLP, Chicago, IL, for Defendant.
This cause is before the Court on the Motion to Dismiss (d/e 8) filed by Defendant Prince Agri Products, Inc. Defendant requests oral argument on the motion. The Court finds oral argument is unnecessary and denies the request. For the reasons stated below, the Motion to Dismiss is GRANTED IN PART and DENIED IN PART. Plaintiff Albrosco Limited states a claim in Counts I, III, and IV. Count II is dismissed without prejudice and with leave to replead.
The Court requested further briefing on jurisdiction. Having received that briefing (Pl. Brief, d/e 13), the Court concludes there is subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a).
The amount in controversy exceeds $75,000 exclusive of interest and costs. Compl. ¶ 5. The parties are also completely diverse.
Defendant is a Delaware corporation with its principal place of business in Quincy, Illinois. Compl. ¶ 3. Plaintiff has presented evidence that it is a foreign entity equivalent to a corporation under state law. See Pl. Brief (d/e 13), Aff. of Cherisse Huggins (Ex. 1); Aff. of Magnus Wilson (Ex. 2). Specifically, Plaintiff is an entity with perpetual existence, governed by a board of directors, with shares that are transferrable, and is treated as independent of its equity investors, who are neither taxable on its profits nor liable for its debts. See Ex. 2, ¶ 6; Lear Corp. v. Johnson Elec. Holdings Ltd., 353 F.3d 580, 583 (7th Cir. 2003) ().
A corporation is a citizen of each state or foreign country in which it is incorporated and the state or foreign country in which it has its principal place of business. 28 U.S.C. § 1332(c)(1). Plaintiff is a Trinidad and Tobago corporation with its principal place of business in Port-of-Spain, Trinidad and Tobago. Compl. ¶ 1. As such, complete diversity exists.
Even if Plaintiff were not a corporation but would be more properly characterized as an unincorporated entity, diversity still exists. Collective entities other than corporations have the citizenship of each member or equity investor. Fellowes, Inc. v. Changzhou Xinrui Fellowes Office Equip. Co. Ltd., 759 F.3d 787, 788 (7th Cir. 2014). Plaintiff is a wholly owned subsidiary of Albrosco Holdings Limited. Pl. Brief (d/e 13), Ex. 2, ¶ 3. Albrosco Holdings Limited holds the same business entity form as Plaintiff. Pl. Brief, Ex. 2, ¶¶ 4-6 (). Albrosco Holdings Limited is owned by two equity investors/shareholders, Christopher Louis Aleong and Andrew Aleong, who are citizens of Trinidad and Tobago. Pl. Brief, Ex. 2, ¶¶ 7-9 (). As such, complete diversity exists even if Plaintiff is not a corporation.
The following facts come from Plaintiff's Complaint. The Court accepts them as true in ruling on Defendant's motion to dismiss. See Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008).
Defendant "manufactures and sells trace minerals and nutritional specialty products that support nutrition for dairy and beef cattle, swine, poultry[,] and companion animals." Compl. ¶ 4 (). For many years, Plaintiff purchased swine nutrition products (premix products) manufactured and sold by Defendant for use in Plaintiff's swine feed rations. Compl. ¶ 4.
On or about August 1, 2017, Plaintiff took delivery of a shipment of premix products manufactured and sold by Defendant. The Certificate of Analysis provided by Defendant to Plaintiff listed the vitamin content under the heading: "We guarantee our products will meet or exceed the following specifications." Compl. Ex. A at 5 (d/e 1-1) (listing, among other things, the levels of Vitamins A and E in the premix products).
Defendant's premix products were the sole source of Vitamins A and E for Plaintiff's swine herd over the relevant time period. Plaintiff alleges, on information and belief, there was a known shortage of Vitamins A and E globally during this time and there were documented cases where Vitamin A and E manufactured and sold commercially had compromised integrity.
In April 2018, Plaintiff began experiencing production challenges caused by declining swine herd health, which persisted into the first two quarters of 2019. The number of pigs born dead or stillborn tripled and deformities and genetic abnormalities
steadily increased. The health issues included: "born dead/stillborn pigs; reduced litter size; lactation failure; extended farrowing time; weak pigs at birth; arthrogryposis, incoordination[,] and paralysis of rear limbs; micro-ophthalmia/anophthalmia (incomplete or abnormal eye development); vestigial development of lungs, cleft palate, (development anomalies); liver necrosis ; ascites; skeletal muscle hemorrhage and degeneration; and reduction in time to market." Compl. ¶ 17. Plaintiff alleges the health issues presented by its swine herd "are classically related to Vitamin A and Vitamin E deficiencies." Compl. ¶ 18.
On October 15, 2018, Plaintiff took delivery of a subsequent shipment of premix products manufactured and sold by Defendant. Compl. ¶ 19; Ex. B at 5 (d/e 1-2) (, "We guarantee our products will meet or exceed the following specifications" and listing, among other things, the levels of Vitamins A and E in the premix). This shipment was again not consistent with Defendant's product specifications, including being deficient in Vitamin A, Vitamin E
, and/or Selenium. In May 2019, Plaintiff discovered that the health issues presenting and increasing in its swine herd were caused by vitamin deficiencies attributable to defects in Defendant's products.
In August 2020, Plaintiff filed a Complaint (d/e 1) against Defendant alleging (1) breach of express warranty; (2) breach of implied warranty of fitness for a particular purpose; (3) breach of implied warranty of merchantability; and (4) negligence. Plaintiff seeks damages, including incidental and consequential damages on the warranty claims and property damage to its swine herd on the negligence claim.
A motion under Rule 12(b)(6) challenges the sufficiency of the complaint. Christensen v. Cty. of Boone, Ill., 483 F.3d 454, 458 (7th Cir. 2007). To survive dismissal, the complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2) ; Tamayo, 526 F.3d at 1081 ()(quoting Fed. R. Civ. P. 8(a)(2) ). "Factual allegations are accepted as true at the pleading stage, but allegations in the form of legal conclusions are insufficient to survive a Rule 12(b)(6) motion." Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2014) (internal quotation omitted). A plausible claim is one that alleges factual content from which the Court can reasonably infer that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Merely reciting the elements of a cause of action or supporting claims with conclusory statements is insufficient to state a cause of action. Id. The court must draw all inferences in favor of the non-moving party. In re marchFIRST Inc., 589 F.3d 901, 904 (7th Cir. 2009).
Defendant filed the instant motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing the Complaint fails to state a claim.
To state a claim of breach of express warranty under Illinois law, a plaintiff must allege: "(1) the seller made an affirmation of fact or promise; (2) relating to the goods; (3) which was part of the basis for the bargain; and (4) the seller guaranteed that the goods would conform to the affirmation or promise." Indus. Hard Chrome, Ltd. v. Hetran, Inc., 64 F. Supp. 2d 741, 747 (N.D. Ill. 1999).
Defendant argues Plaintiff has failed to state a claim because, other than stating that the products were deficient, Plaintiff has not alleged that the premix products did not contain the Vitamin A and Vitamin E
concentrations that Defendant allegedly warranted. Defendant asserts the pleading suggests the premix products were deficient in some way other than the levels stated. Defendant also argues Plaintiff has not alleged that it tested the Vitamin A and Vitamin E levels in the premix products or has any knowledge that the levels were not as warranted. According to Defendant, Plaintiff relies on speculation that, because there was a known shortage of Vitamin A and Vitamin E, and because its swine herd allegedly encountered health issues, the products must have failed to comply with the allegedly warranted Vitamin A and Vitamin E levels. Defendant asserts this is insufficient to state a claim for breach of warranty.
The Court disagrees. Plaintiff has plausibly alleged that Defendant's products did not contain the Vitamin A and Vitamin E
concentrations that Defendant allegedly warranted. Plaintiff alleges that it purchased Defendant's premix products for years and the products were the sole source of Vitamins A and E for Plaintiff's swine herd. Compl. ¶¶ 8, 10. Beginning in April 2018, Plaintiff...
To continue reading
Request your trial