Nucap Indus., Inc. v. Robert Bosch LLC

• Citation: 273 F.Supp.3d 986
• Decision Date: 31 March 2017
• Docket Number: Case No. 15 C 2207
• Parties: NUCAP INDUSTRIES, INC., and Nucap US, Inc., Plaintiffs, v. ROBERT BOSCH LLC; Bosch Brake Components LLC; and Robert Bosch GmbH, Defendants.
• Court: U.S. District Court — Northern District of Illinois

273 F.Supp.3d 986

NUCAP INDUSTRIES, INC., and Nucap US, Inc., Plaintiffs,

v.ROBERT BOSCH LLC; Bosch Brake Components LLC; and Robert Bosch GmbH, Defendants.

Case No. 15 C 2207

United States District Court, N.D. Illinois, Eastern Division.

Signed March 31, 2017

Dinah X. Ortiz, Pro Hac Vice, Kenneth A. Kuwayti, Pro Hac Vice, Morrison & Foerster LLP, Palo Alto, CA, Michael A. Jacobs, Pro Hac Vice, Morrison & Foerster LLP, San Francisco, CA, Todd H. Flaming, Kenneth E. Kraus, KrausFlaming LLC, Chicago, IL, Chanwoo Park, Pro Hac Vice, Kyle W.k. Mooney, Pro Hac Vice, Sarah L. Prutzman, Pro Hac Vice, Morrison & Foerster LLP, New York, NY, Joshua Alan Hartman, Pro Hac Vice, Michelle Yang, Pro Hac Vice, Morrison & Foerster LLP, Washington, DC, for Plaintiffs.

Alan Norris Salpeter, Robert W. Unikel, Dina Marie Hayes, Emily Newhouse Dillingham, Michelle Kristina Marek, Arnold & Porter Kaye Scholer LLP, Chicago, IL, Philip A. Giordano, Kaye Scholer LLP, Pro Hac Vice, Washington, DC, Stephen Christopher Holmes, Pro Hac Vice, Kaye Scholer LLP, Palo Alto, CA, for Defendants.

MEMORANDUM OPINION AND ORDER

Joan B. Gottschall, United States District JudgeBefore the court are cross motions for partial summary judgment and a motion to dismiss two antitrust counterclaims pleaded in the defendants' amended answer. The motions for summary judgment primarily involve a contract formation dispute with an antecedent choice-of-law question. Finding that the United Nations Convention on Contracts for the International Sale of Goods ("CISG"), United Nations Convention on Contracts for the International Sale of Goods, Mar. 2, 1987, 52 Fed. Reg. 6262, 1489 U.N.T.S. 3, governs the formation dispute, the court denies the cross motions for summary judgment because the evidence of the parties' extensive negotiations and dealings raises genuine factual disputes material to the formation analysis under the CISG. Notably, the CISG allows consideration of one party's subjective intent when forming a contract "where the other party knew or could not have been unaware what that intent was." Id. art. 8(1). The court grants the motion to dismiss the counterclaims because they fail to allege adequately the basis for defining the relevant markets.

I. FACTUAL AND PROCEDURAL BACKGROUND

Except where otherwise noted, the court draws the following undisputed facts from Nucap and Bosch's cross motions for summary judgment.¹ Nucap objects to some of the assertions made in Bosch's Local Rule 56.1 statement on two general grounds. (See Nucap's Resp. to Bosch's SOF 1–2, ECF No. 468.)

First, the depositions, affidavits, and evidence cited in certain paragraphs of Bosch's Local Rule 56.1 statement do not support the factual proposition for which they are cited, according to Nucap, and those paragraphs must therefore be disregarded. See N.D. Ill. L.R. 56.1(a) ("The statement referred to in (3) shall consist of short numbered paragraphs, including within each paragraph specific references to the affidavits, parts of the record, and other supporting materials relied upon to support the facts set forth in that paragraph.").

Specifically, Nucap objects to paragraphs 5, 8–9, 13, 25–27, 29, 52, 65, 68, 69, and 71 on this ground. Nucap's response to paragraph 5, however, includes no citation to factual material disputing it, and despite Nucap's general objection on pages 1–2, Nucap lists paragraphs 25 and 26 as undisputed. (ECF No. 468 at 10.) Paragraphs 65 and 68 characterize the claims asserted in Nucap's original complaint. (ECF No. 468 at 22, 23.) The court can determine the complaint's scope for itself. Finally, Nucap cites its entire amended complaint, motion for preliminary injunction, and reply to that motion in responding to paragraph 71 as well as two depositions in their entirety. (ECF No. 468 at 24.) As explained in the next paragraph, the court disregards legal conclusions. Nucap's citations to depositions in their entirety also fail to comply with Local Rule 56.1. See Bolden v. Dart , No. 11 C 8661, 2013 WL 3819638, at *2 (N.D. Ill. July 23, 2013) (quoting Ammons v. Aramark Uniform Servs., Inc. , 368 F.3d 809, 817–18 (7th Cir. 2004) ) (disregarding inadequately supported response because Rule 56.1 responses must include "proper ... citations to exact pieces of the record that support the factual contention contained in the paragraph" (quoting Malec v. Sanford , 191 F.R.D. 581, 583 (N.D. Ill. 2000) ) (ellipsis in original; other citations omitted)). To the extent those facts are material, the court considers the objections to paragraphs 8–9, 13, 29, 52, and 69 below.²

Second, Nucap argues several paragraphs of Bosch's Rule 56.1 statement improperly state legal conclusions rather than facts. (ECF No. 468 at 2.) Those objections are well-taken.³ The court has sifted the undisputed facts from the legal conclusions in the parties' Rule 56.1 statements; the latter receive no deference. See Kenall Mfg. Co. v. Genlyte Thomas Grp. LLC , 439 F.Supp.2d 854, 860 (N.D. Ill. 2006) (citing Greer v. Bd. of Educ. of City of Chi. , 267 F.3d 723, 727 (7th Cir. 2001) ) (ignoring conclusions of law in Rule 56.1 statements and "pars[ing] out the parties' conclusions of law from their allegations of fact").

A. The Parties and Their Contentions

Nucap Industries Inc. ("Nucap Industries") "is a corporation organized and existing under the laws of Ontario, Canada," with a principal place of business in Toronto. (Id. ¶ 3.) Nucap US Inc., an indirectly wholly-owned subsidiary of Nucap Industries, is incorporated under the laws of Connecticut and keeps its principal place of business in that state. (Id. ¶ 4.) Nucap "invested money, engineering hours, and years of research and development to create a database of over 12,000 drawings of aftermarket brake components." (Bosch Resp. to Nucap SOF ¶ 2, ECF No. 556.) Nucap asserts that it considers those drawings its "crown jewel" and "core competitive asset." (Id. (disputed as statement of opinion and to qualitative characterization).)

Robert Bosch LLC and Bosch Brake Components LLC are incorporated in Delaware; they keep their principal places of business in Broadview, Illinois. (Nucap Resp. to Bosch SOF ¶¶ 1, 2, ECF No. 468.) Bosch has "affiliates in the United States, China, and Germany." (Nucap's SOF ¶ 14, ECF No. 474.) Bosch's affiliate in China, referred to by the parties as "Bosch China," has not been joined as a party to this litigation.⁴ (Marschall Decl. ¶ 20, Bosch Tab 1; ECF No. 556 ¶ 14.)

Bosch assembles and sells aftermarket brake pads. (Nucap Resp. to Bosch SOF ¶ 5.) Ordinarily, aftermarket and original equipment brake pads "consist[ ] of a backing plate, friction material, a shim, and hardware (such as a wear sensor)." (Id. ¶ 7.) Bosch sources some of these components and assembles them into finished brake pads. (Id. ¶ 6.) Nucap sells brake components to finished-good suppliers throughout the world. (Id. ¶ 11.)

Bosch started buying brake components from Nucap in September 2008. (Bosch Resp. to Nucap's SOF ¶ 4, ECF No. 556.) Between 2008 and 2014, Nucap shipped backing plates to Bosch from its Toronto headquarters; those backing plates had been manufactured in Toronto. (Bosc Resp. to Nucap SOF ¶ 5.) "[T]here was and is no global supply agreement between Bosch and Nucap or other general agreement governing the relationship between Bosch and Nucap...." (Nucap Resp. to Bosch SOF ¶ 14.)

The relationship between Bosch and Nucap came to a halt in November 2014. As described in the parties' Local Rule 56.1 statements, the summary judgment record contains less information about what happened after November 2014 than the court heard at the preliminary injunction phase. (See Slip Op. at 4–6, Aug. 29, 2016, ECF No. 609.) Among other things, Nucap claims Bosch misused its proprietary drawings after the relationship's collapse; it brings claims for trade secret misappropriation and tortious interference with contract and prospective economic advantage. Nucap alleges that "in response to Bosch's demands, [Nucap] allowed select pre-approved Bosch and Bosch China employees to access Nucap's extensive library of proprietary drawings ... which Bosch claimed was necessary to satisfy Bosch's internal quality control requirements for Nucap-supplied components." (1st Am. Compl. ¶ 16, ECF No. 239; see also id. ¶¶ 70–72.) Nucap alleges that Bosch distributed Nucap's drawings to third-party suppliers of brake components and misused them to qualify and approve replacement suppliers' brake components. (See id. ¶¶ 75–85.)

The pending summary judgment motions ask the court to determine what agreement or agreements governed Nucap and Bosch's relationship. Bosch relies on its Purchase Order Terms and Conditions bearing a last revision date of September 1, 2010, ("the POTCs") to argue that its alleged use of Nucap's drawings was proper. Nucap maintains that it rejected some or all of the terms of the POTCs and that Bosch and Nucap formed one or more confidentiality agreements.

Bosch brings seven counterclaims against Nucap. (See Defs.' Ans., Affirmative Defenses, & Countercls. to Nucap's 1st Am. Compl. [hereinafter "Countercl."] at 45–73, ECF No. 328.)⁵ Nucap moves to dismiss the first two—a claim for attempted monopolization in violation of § 2 of the Sherman Act, 15 U.S.C. § 2, and the same theory pleaded as a violation of § 3 of the Illinois Antitrust Act, 740 ILCS 10/3 (collectively "antitrust counterclaims"). Bosch also alleges that Nucap breached outstanding purchase orders when it, among other things, refused to ship outstanding orders to Bosch in November 2014 and that by pursuing this lawsuit based on Bosch's use of its drawings, Nucap violated the terms of the POTCs. (See Countercl. ¶¶ 111–24.) Bosch also claims that Nucap violated the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. ; unjustly enriched itself; tortiously interfered with Bosch's business expectancy; and breached a contract implied in fact.

Bosch's antitrust...