Mm Global Services, Inc. v. Dow Chemical Co.
| Decision Date | 12 September 2003 |
| Docket Number | No. CIV.3:02cv1107(AVC).,CIV.3:02cv1107(AVC). |
| Citation | 283 F.Supp.2d 689 |
| Court | U.S. District Court — District of Connecticut |
| Parties | MM GLOBAL SERVICES, INC.; MM Global Services Pte., Ltd., Mega Vista Solutions (S) Pte., Ltd., and Mega Visa Marketing Solutions Ltd.; Plaintiffs, v. THE DOW CHEMICAL COMPANY; Union Carbide Corporation, Union Carbide Asia Pacific, Inc., Union Carbide Customer Services Ptd., Ltd., and Dow Chemical Pacific (Singapore) Pte., Ltd., Defendants. |
Michael S. Elkin, Richard S. Taffet, Susan B. McInerney, Thelen, Reid & Priest, New York City, Robert M. Langer, Wiggin & Dana, Hartford, CT, Stephen B. Harris, Wiggin & Dana, New Haven, CT, Suzanne Ellen Wachsstock, Wiggin & Dana, Stamford, CT, William L. Webber, Morgan, Lewis & Bockius, Washington, DC, for Plaintiffs.
Craig A. Raabe, Edward J. Heath, Elizabeth A. Fowler, Robinson & Cole, Hartford, CT, Mark P. Edwards, Morgan, Lewis & Bockius LLP, Philadelphia, PA, William L. Webber, Morgan, Lewis & Bockius, Washington, DC, for Defendants.
RULING ON THE DEFENDANTS' MOTIONS TO DISMISS
This is an action for damages arising out of a business arrangement pursuant to which the plaintiffs purchased chemicals, polymers, and other products from the defendants and resold them to customers located in India. The amended complaint alleges violations of the Sherman Antitrust Act, 15 U.S.C. § 1, the Connecticut Antitrust Act, Conn. Gen.Stat. §§ 35-26 and 28(a), the Connecticut Unfair Trade Practices Act ("CUTPA"), Conn. Gen.Stat. § 42-110b, and common law tenets concerning breach of contract, breach of the implied covenant of good faith and fair dealing, fraudulent misrepresentation and non-disclosure, negligent misrepresentation, tortious interference with business expectancies, tortious interference with contractual relationships, and unfair competition.
The defendants, Dow Chemical Company and Union Carbide Corporation, now move pursuant to Federal Rule of Civil Procedure 12(b)(1) to dismiss the federal antitrust claim for want of subject matter jurisdiction. The defendants also move pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss the amended complaint in its entirety for failure to state a claim upon which relief can be granted.
The issues presented are: 1) whether the court has subject matter jurisdiction to adjudicate the claimed violation of the Sherman Antitrust Act, 15 U.S.C. § 1; 2) the choice of law to be applied to the claim of breach of contract and the claim of breach of the implied covenant of good faith and fair dealing; 3) whether the amended complaint states a cause of action for breach of contract; 4) the choice of law to be applied to the claim of tortious interference with business expectancies, tortious interference with contractual relationships, unfair competition, fraudulent misrepresentation, negligent misrepresentation, violations of the Connecticut Unfair Trade Practices Act, and violations of the Connecticut Antitrust Act; and 5) whether the amended complaint states a cause of action for fraudulent misrepresentation and negligent misrepresentation.
For the reasons hereinafter set forth, the court concludes: 1) the court has subject matter jurisdiction to adjudicate the claimed violation of the Sherman Antitrust Act, 15 U.S.C. § 1; 2) the law of Singapore governs the breach of contract claims and, because Singapore does not recognize a cause of action for breach of the implied covenant of good faith and fair dealing, that claim is dismissed; 3) the amended complaint alleges with adequate particularity a cause of action for breach of contract; 4) the law of India governs the tort claims and, because that country does not recognize a cause of action for tortious interference with business expectancies, tortious interference with contractual relationships or unfair competition, those claims are also dismissed. Further, because the claimed violations of the Connecticut Unfair Trade Practices Act and the Connecticut Antitrust Act are also governed by the law of India, and India does not have a similar basis for relief, those claims are dismissed as well. Finally, the court concludes that: 5) the amended complaint fails to state a claim for fraudulent misrepresentation, but sets forth with adequate particularity a claim for negligent misrepresentation. The motion to dismiss the antitrust claim for want of subject matter jurisdiction is therefore DENIED. The motion to dismiss the amended complaint for failure to state a claim is GRANTED in part and DENIED in part.
Examination of the amended complaint and supplemental documents, including affidavits and exhibits submitted in connection with the instant motion, set forth the following material facts. The defendant, Union Carbide Corporation ("Union Carbide") is engaged in the manufacture and sale of chemicals, polymers, and other specialty products to customers located in the United States and throughout the world. It is incorporated in New York with its corporate headquarters and principal place of business located in Danbury, Connecticut.
In December 1984, lethal gas escaped from Union Carbide's plant in Bhopal, India. The leak caused the death of 3,800 persons and injuries to an additional 200,000. In February 1989, Union Carbide and its Indian affiliate were ordered to pay a total of $470 million for all civil claims arising from the tragedy.
In the aftermath of this tragedy, Union Carbide ceased selling products directly to customers in India and, in 1987, Union Carbide, through its subsidiary, Union Carbide Eastern, Inc. ("UCE"), appointed the plaintiff, Mega Vista Marketing Solutions Ltd. ("MVMS") as a non-exclusive distributor to maintain Union Carbide's access to the Indian marketplace. MVMS1 is an Indian corporation, having its principal place of business in Mumbai, India.
The relationship between Union Carbide and MVMS was memorialized in a letter agreement dated November 16, 1987 ("the 1987 letter agreement"). As stated therein, Union Carbide appointed MVMS as a "non-exclusive distributor/indentor in India" for Union Carbide products. MVMS agreed to "canvas and promote" the products, and to establish contact with potential customers in India on behalf of Union Carbide. UCE did not grant MVMS authority to accept any order from any prospective customer or to undertake any act that would bind Union Carbide under a contract of sale or otherwise. Further, under the 1987 letter agreement, Union Carbide agreed to pay MVMS a commission on all sales arranged by MVMS in India. Union Carbide had the right to terminate the 1987 letter agreement in its sole discretion on ninety days written notice.
In 1993, Union Carbide requested that MVMS form separate corporate affiliates and open offices outside India that would buy Union Carbide products in the United States and resell them to end-users in India. MVMS complied with the request, and formed the plaintiff, Mega Global Services, Inc. ("MMGS") a Texas corporation with a principal place of business in Houston. MVMS also formed the plaintiff, Mega Global Services, Inc.—Singapore ("MMGS-S"), a business entity organized under the laws of Singapore with a principal places of business in that country. In addition, Union Carbide formed the defendant, Union Carbide Asia Pacific, Inc. ("UCAP") and the defendant, Union Carbide Customer Services Pte. Ltd. ("UCCS") to assist product sales in India. UCAP is a corporation organized under the laws of Delaware with a principal place of business in Singapore. UCCS is a corporation organized under the laws of Singapore with a principal place of business in that country.
Thereafter, on April 5, 1993, Union Carbide, acting through UCAP, terminated the 1987 letter agreement with MVMS and, on the same day, UCAP confirmed its agreement to sell products to MMGS by way of another letter agreement ("the 1993 letter agreement"). Under the 1993 letter agreement, MMGS succeeded MVMS as the non-exclusive distributor of Union Carbide products in India. As with MVMS, MMGS purchased products from UCAP, with title and risk of loss passing to MMGS in the United States, and MMGS then resold the products from the United States to end-users in India. Terms relating to volume, specifications, price, payment and delivery were set forth in transactional documents relating to specific orders, including purchase orders, invoices, order acknowledgments and shipping receipts.
During the period of 1993 through 2000, MMGS-S intermittently purchased products from Union Carbide in the United States under the same terms and conditions as established between UCAP and MMGS. The orders were processed in the United States and MMGS-S made payments for and took title to the products in the United States through banking channels set up with Union Carbide.2
On September 8, 1995, UCAP and MMGS reaffirmed their relationship by way of a new letter agreement ("the 1995 letter agreement") with UCAP sending the letter from Singapore to MMGS's offices in Texas. The letter stated:
This is to confirm Union Carbide's interest in selling to MM Global Services Inc. (MMGS) from time to time effective as of 8th September, 1995, certain of Union Carbide's products for resale by MMGS to customers located in India.
Each such sale, of course, would be contingent upon the continuing interest of MMGS and Union Carbide and a mutual agreement on specific terms including volume, specifications, price, payment and delivery. However, certain aspects of our dealings should be consistent such as the following:
— Unless otherwise specified by the parties, all shipments under this contract shall be made on MMGS's behalf and in MMGS's name as shipper. MMGS shall have title to product and shall bear all risks associated with product from the time when product has effectively passed the ship's rail at the point of shipment.
— Unless otherwise requested by MMGS, Union Carbide will arrange ocean...
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