Collision Commc'ns, Inc. v. Nokia Solutions & Networks OY
| Decision Date | 02 September 2020 |
| Docket Number | Civil Action No. 19-cv-12251-ADB |
| Parties | COLLISION COMMUNICATIONS, INC., Plaintiff, v. NOKIA SOLUTIONS AND NETWORKS OY, Defendant. |
| Court | U.S. District Court — District of Massachusetts |
Maria T. Davis, Tara D. Dunn, Tyler E. Chapman, Todd & Weld LLP, Boston, MA, for Plaintiff.
David Himelfarb, McCarter & English, LLP, Boston, MA, for Defendant.
MEMORANDUM AND ORDER ON DEFENDANT'S MOTIONS TO DISMISS
Plaintiff Collision Communications, Inc. ("Plaintiff") brings this action against Nokia Solutions and Networks Oy ("Defendant"), alleging breach of an agreement for Plaintiff to perform work to integrate its technology with Defendant's and for Plaintiff to grant Defendant a license to use Plaintiff's technology. [ECF No. 6 ¶¶ 2–3 ("Am. Compl.")]. Plaintiff asserts breach of contract, breach of the covenant of good faith and fair dealing, detrimental reliance, negligent and intentional misrepresentation, quantum meruit, and a violation of Massachusetts General Laws Chapter 93A. [Id. ¶¶ 84–109].
Currently before the Court are Defendant's motions to dismiss for lack of personal jurisdiction, [ECF No. 12], and to dismiss for failure to state a claim, [ECF No. 16]. For the reasons set forth below, Defendant's motion to dismiss for lack of personal jurisdiction, [ECF No. 12], is GRANTED in part and DENIED in part, and Defendant's motion to dismiss for failure to state a claim, [ECF No. 16], is DENIED with leave to renew.
The following facts are taken from the amended complaint, [Am. Compl.], the factual allegations of which are assumed to be true when considering a motion to dismiss, Ruivo v. Wells Fargo Bank, N.A., 766 F.3d 87, 90 (1st Cir. 2014). In addition, in assessing whether personal jurisdiction exists, the Court may consider "the facts from the pleadings and whatever supplemental filings (such as affidavits) are contained in the record, giving credence to the plaintiff's version of genuinely contested facts." Baskin-Robbins Franchising LLC v. Alpenrose Dairy, Inc., 825 F.3d 28, 34 (1st Cir. 2016).
Plaintiff is a Delaware corporation with its principal place of business in Peterborough, New Hampshire. [Am. Compl. ¶ 11]. It is a technology company focused on creating software that runs on cellular basestations which are owned by original equipment manufacturers ("OEMs"). [Id. ¶ 19]. The software Plaintiff creates is unique and proprietary as it is designed to integrated into an OEM's cellular basestation. [Id. ¶¶ 19–21]. Defendant is a Finnish corporation with its principal place of business in Espoo, Finland. [Id. ¶ 12].
In 2015, Defendant asked Plaintiff to conduct testing in order to analyze Plaintiff's technology and determine whether it could be integrated with Defendant's. [Am. Compl. ¶ 22]. Based on Plaintiff's performance during this period, Defendant initially considered acquiring Plaintiff, but later asked Plaintiff to further demonstrate its technology through a "proof of concept" ("PoC") project. [Id. ¶¶ 24–25]. The parties agreed, in writing, that Defendant would pay Plaintiff $600,000.00 for the PoC project. [Id. ¶ 26].
In early 2017, the parties met in New Hampshire to discuss the results of the PoC project and ways to commercialize Plaintiff's technology with Defendant's hardware. [Am. Compl. ¶ 28]. During that meeting, Defendant expressed enthusiasm about the PoC results and the parties made plans to continue working together. [Id. ¶¶ 29–30]. Those plans detailed additional work to be completed in multiple phases, with milestones throughout 2017 to line up with Defendant's planned release schedule and a demonstration of Plaintiff's technology at an event in February 2018. [Id. ¶¶ 31–32]. Given the need to adhere to these deadlines, the parties began discussing the agreement's terms, including exclusivity, ownership, deal structure, and fees. [Id. ¶¶ 33–34]. Plaintiff suggested that they continue to operate under the written agreement for the PoC until a new agreement could be finalized, and Defendant began arranging to provide Plaintiff with materials and support as Plaintiff commenced work on the new assignment. [Id. ¶¶ 35–36].
Although the parties initially discussed extending the PoC agreement, [Am. Compl. ¶ 39], Defendant later informed Plaintiff that it wanted to skip an extension agreement and move directly into a commercial agreement, [id. ¶ 44]. On April 21, 2017, Defendant's employee, Francisco Herrerias ("Herrerias"), told Plaintiff that his goal was to have a commercial agreement in place within a few weeks, which was reiterated in another e-mail sent that same day. [Id. ¶¶ 46–47]. Jared Fry ("Fry"), one of Plaintiff's principals and its Chief Operating Officer ("COO"), wrote to Herrerias several days later, emphasizing the need to finalize an agreement. [Id. ¶ 48]. Fry works for Plaintiff from his home in Boston, Massachusetts. [Id. ¶ 11]. On May 3, 2017, Herrerias responded, saying that he planned to travel to New Hampshire to at least reach a verbal agreement as to costs, fees, and "potential conditions," even though a written agreement was not yet in place. [Id. ¶ 49]. Stan Fry ("Stan"),1 another one of Plaintiff's principals, wrote to Defendant the following day, stating that Plaintiff had been working without an agreement in place for six weeks and that they needed to make progress on a written agreement. [Id. ¶ 51]. Herrerias met with Plaintiff in New Hampshire from May 16–17, 2017, and the parties agreed to several material terms of the commercial agreement, including the use of a lump sum license model rather than a royalty-based license. [Id. ¶¶ 54–55]. Plaintiff proposed a license fee of $30 million and Defendant countered at $20 million, but the fee amount was still under negotiation when Herrerias returned to Finland. [Id. ¶¶ 56–57].
Plaintiff sent Defendant a draft agreement and the parties continued to negotiate its terms. [Am. Compl. ¶¶ 58–59]. Herrerias told Plaintiff that he had received approval for a $20 million license fee and reassured Plaintiff that Defendant was reviewing the draft agreement and planned to move forward. [Id. ¶¶ 61–64]. During a trip to Finland in June 2017, Stan met with Defendant's senior management, one of whom was surprised that the commercial agreement had not yet been executed. [Id. ¶¶ 67–68]. On June 21, 2017, in response to an e-mail from Stan expressing concern about the delays, Herrerias said that an agreement was in place even in the absence of a signed, written contract. [Id. ¶¶ 69–70]. Defendant sent emails to Plaintiff throughout July 2017, asking Plaintiff to continue working and reassuring Plaintiff that an agreement was in place with the material terms unchanged. [Id. ¶¶ 72, 76].
Finally, on November 20, 2017, Defendant sent Plaintiff a draft agreement with significantly different terms, including a reduced license fee of $7 million. [Am. Compl. ¶ 78]. Herrerias told Plaintiff to make edits to the draft, which Plaintiff did, [id. ¶ 80], though Plaintiff also informed Defendant that it was stopping further development efforts on the project, [id. ¶ 79]. Defendant then wrote to demand that Plaintiff agree that there had never been an agreement between the parties. [Id. ¶ 81]. In spite of this, the parties continued to negotiate a written agreement until November 2018, with Defendant making promises that a written agreement would be finalized while Plaintiff continued working on the project. [Id. ¶ 83].
On July 18, 2019, Plaintiff sent Defendant a demand letter asserting claims under Massachusetts law. [ECF No. 28 at 2]. The parties then entered into a standstill agreement to delay any litigation to allow for settlement negotiations. [ECF No. 36-1 at 5]. After mediation in New York on October 24, 2019 proved unsuccessful, the parties agreed to continue negotiating a settlement. [Id. at 6]. On October 30, 2019, Defendant told Plaintiff that negotiations were over and immediately filed a declaratory judgment action against Plaintiff in Delaware Superior Court, Plaintiff's state of incorporation. [Id. ]. Meanwhile, on November 1, 2019, Plaintiff filed this lawsuit against Defendant, unaware of the Delaware suit. [ECF No. 1]. One week later, Plaintiff became aware of the parallel suit in Delaware when Defendant served Plaintiff. [ECF No. 36-1 at 6]. Plaintiff then filed a motion to stay the Delaware action, [id. at 7], and Defendant moved this Court to stay this action pending the Delaware court's decision on that motion, [ECF No. 18]. On April 30, 2020, the Delaware Superior Court granted Plaintiff's motion to stay, finding that "Delaware ha[d] no substantial interest in adjudicating this action." [ECF No. 36-1 at 17].
On January 30, 2020, Defendant filed the two pending motions to dismiss, one for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), [ECF No. 12], and the second for failure to state a claim under Rule 12(b)(6), [ECF No. 16]. Plaintiff opposed the motions, [ECF Nos. 27, 28], and Defendant replied, [ECF Nos. 32, 34]. As the motion under Rule 12(b)(2) is dispositive, the Court begins its analysis with that motion.
Personal jurisdiction refers to a court's "power to require the parties to obey its [orders]." Hannon v. Beard, 524 F.3d 275, 279 (1st Cir. 2008) (quoting Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 50 (1st Cir. 2002) ). "A plaintiff consents to the personal jurisdiction of a court by bringing suit in that court." Roberts v. Jack L. Marcus Co., No. 17-cv-11782, 2018 WL 443445, at *2, 2018 U.S. Dist. LEXIS 6373, at *4 (D. Mass. Jan. 16, 2018) (citing Adam v. Saenger, 303 U.S. 59, 67, 58 S.Ct. 454, 82 L.Ed. 649 (1938) ). As to a defendant, however, the Due Process Clause "protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful ‘contacts, ties, or...
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