Subaru Distributors v. Subaru of America

• Citation: 425 F.3d 119
• Decision Date: 21 September 2005
• Docket Number: Docket No. 04-3598-CV.
• Parties: SUBARU DISTRIBUTORS CORP., Plaintiff-Appellant, v. SUBARU OF AMERICA, INC., Fuji Heavy Industries Ltd., General Motors Corp., Saab Automobile AB and Saab Cars USA, Inc., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

425 F.3d 119

SUBARU DISTRIBUTORS CORP., Plaintiff-Appellant, v. SUBARU OF AMERICA, INC., Fuji Heavy Industries Ltd., General Motors Corp., Saab Automobile AB and Saab Cars USA, Inc., Defendants-Appellees.

Docket No. 04-3598-CV.

United States Court of Appeals, Second Circuit.

Argued: February 3, 2005.

Decided: September 21, 2005.

Dale A. Schreiber, Proskauer Rose LLP (David N. Ellenhorn and Steven H. Holinstat, on the brief), New York, New York, for Subaru Distributors Corp., Plaintiff-Appellant.

Jeffrey D. Herschman, Piper Rudnick LLP, (Douglas A. Rappaport, New York, New York; Lewis A. Noonberg and F. Martin Dajani, Washington, DC; and Deana L. Cairo, Baltimore, Maryland, on the brief), Baltimore, Maryland, for Subaru of America, Inc., Defendant-Appellee.

Dwight J. Davis, King & Spalding, LLP, New York, New York, for General Motors Corp., Saab Automobile AB, and Saab Cars USA, Inc., Defendants-Appellees.

Daniel L. Goldberg, Bingham McCutchen LLP (Mark M. Elliott and William F. Benson, on the brief), Boston, MA, for Fuji Heavy Industries Ltd., Defendant-Appellee.

John J. Sullivan, Carl J. Chiappa, and Colm A. Moran, Kirkpatrick & Lockhart LLP, New York, New York and Los Angeles, California, for amici curiae Association of International Automobile Manufacturers, Inc. and the Alliance of Automobile Manufacturers, Inc.

Before: WALKER, Chief Judge, HALL, and JOHN R. GIBSON,^* Circuit Judges.

GIBSON, Circuit Judge.

Subaru Distributors Corp. appeals from the dismissal by the United States District Court for the Southern District of New York (Stephen C. Robinson, District Judge) of its action against Subaru of America, Inc., Fuji Heavy Industries Ltd., General Motors Corp., Saab Automobile AB, and Saab Cars USA, Inc. Subaru Distributors brought the suit to prevent the defendants from selling "rebadged" cars, that is, cars manufactured from designs also used for Subaru models, but which defendants allegedly propose to sell under the Saab trademark. The district court dismissed the complaint for failure to state a claim. We affirm the district court's dismissal of the complaint.

The complaint alleged that since 1969, Subaru of America has had a contract with Fuji, the manufacturer of the Subaru vehicles, granting Subaru of America the exclusive right to distribute certain Subaru products in the United States. In 1975 Subaru of America entered a Distribution Agreement with Subaru Distributors, granting Subaru Distributors the exclusive right to distribute Subaru vehicles, parts, and accessories in New York state and northern New Jersey. Since those early days, the relationship between these three parties has grown complicated and vexed as Fuji acquired part, then all, of the stock of Subaru of America; a rival manufacturer, General Motors, acquired approximately 20% of Fuji's stock; and GM acquired 100% of the stock of Saab, the Swedish vehicle manufacturer. After GM acquired its stake in Fuji, GM and Fuji announced in 2000 that they had entered a "technical alliance." In 2003, GM and Saab announced what the complaint describes as a "Re-Badging Plan," under which Fuji would manufacture vehicles to be sold as the Saab 9-2. Subaru Distributors objects to the rebadging plan because the new Saab 9-2 is to be based on the same design as the Subaru Impreza WRX Wagon and Sport Wagon, which Fuji manufactures in the same plant where the Saab 9-2 will be built. According to the complaint, under the rebadging plan, the Saab 9-2s and their related parts and accessories are to be sold through the existing Saab distribution network in Subaru Distributors' geographic territory. In short, Fuji agreed to sell Saab an automobile substantially similar to the Subaru wagons that would allow Saab to compete against Subaru in Subaru Distributors' geographic territory. Subaru Distributors alleges that Subaru of America "acquiesced" in the plan.

Subaru Distributors brought this suit seeking to enjoin the defendants from selling or taking any action to implement the sale of rebadged Subaru vehicles, parts, and accessories in Subaru Distributors' territory. The complaint also sought compensatory and punitive damages. The complaint set forth claims for breach of contract against Subaru of America; veil-piercing breach of contract against Fuji; tortious interference with contract against Fuji; breach of contract on a third-party-beneficiary theory against Fuji; tortious interference with contract against GM and the Saab defendants; and conspiracy to tortiously interfere with contract against all defendants except Subaru of America. The defendants moved to dismiss the complaint for failure to state a claim.

The district court held that the contracts pleaded between Subaru of America and Subaru Distributors did not grant Subaru Distributors exclusive distribution rights to non-Subaru brand vehicles that were not distributed through Subaru of America; inasmuch as the "rebadged" cars were neither branded as Subarus nor distributed through Subaru of America, Subaru Distributors did not plead a breach of the contracts. Subaru Dist. Corp. v. Subaru of Am., Inc., 2004 WL 3220120, at *5-8 (S.D.N.Y. June 1, 2004), amended (June 29, 2004). The district court further held that Subaru Distributors' claim to be a third-party beneficiary of the contract between Subaru of America and Fuji was inconsistent with that contract. Id. at *9-11 ("[Subaru Distributors] is not an intended beneficiary of the Fuji-[Subaru of America] Agreement and therefore lacks standing to make this claim."). Finally, the district court held that Subaru Distributors' tortious-interference-with-contract claims against all the defendants, and other related claims, necessarily failed because the court had already established that the pleaded contracts were not breached by the alleged rebadging. Id. at *9, 11.

I.

We review de novo the district court's dismissal of the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Yak v. Bank Brussels Lambert, 252 F.3d 127, 130 (2d Cir.2001). "In order to survive dismissal, a plaintiff must assert a cognizable claim and allege facts that, if true, would support such a claim." Boddie v. Schnieder, 105 F.3d 857, 860 (2d Cir.1997). In determining the adequacy of the complaint, the court may consider any written instrument attached to the complaint as an exhibit or incorporated in the complaint by reference, as well as documents upon which the complaint relies and which are integral to the complaint. Internat'l Audiotext Network, Inc. v. AT & T Co., 62 F.3d 69, 72 (2d Cir.1995) (per curiam). We are not obliged to accept the allegations of the complaint as to how to construe such documents, but at this procedural stage, we should resolve any contractual ambiguities in favor of the plaintiff. Id.

Although the district court dismissed the breach-of-contract claim against Subaru of America on the ground that the Distribution Agreement and a later Memorandum of Understanding did not cover the sale of non-Subaru-brand vehicles, parts, and accessories that were not distributed through Subaru of America, we do not reach that issue. Instead, we see no reason to go further than the threshold issue of whether Subaru Distributors has alleged that Subaru of America took or will take any action in the sale of the Saab 9-2s, their parts, or accessories that could breach any contractual duty to Subaru Distributors.

The complaint does not allege that Subaru of America has taken or will take any part in the distribution of the Saab 9-2s or their parts or accessories. Rather, it alleges only that Fuji will sell these items to GM or the Saab defendants:

Under the Re-Badging Plan, Fuji will sell the Re-Badged Impreza Wagons and their related parts and accessories to GM or one or both of the Saab Defendants for resale to authorized Saab dealers in the United States, including those Saab dealers in [Subaru Distributors'] exclusive Territory.

The complaint alleges that Subaru of America "acquiesced" in this plan and that it failed to enforce its own contract with Fuji, which the complaint alleges gave Subaru of America the exclusive right to sell Fuji vehicles in the United States.¹

The threshold question is whether anything in the contracts between Subaru of America and Subaru Distributors gave Subaru of America a duty to police Fuji's compliance with the Fuji-Subaru of America contract. Subaru Distributors contends that this duty inheres in Article 2 of the original 1975 Distribution Agreement between Subaru of America and Subaru Distributors. Article 2 states:

[Subaru of America] will not grant any wholesale distributorship to any other party nor will it sell directly to any retail dealer who is located in the Territory without [Subaru Distributors'] consent unless or until this Agreement shall have been terminated except as provided in Article 3 hereof.

Subaru Distributors does not allege that Subaru of America has granted a distributorship in the protected territory or sold Saab 9-2s to anyone; therefore, the complaint does not allege that Subaru of America has violated Article 2 of the Distribution Agreement.

Subaru Distributors relies on Greenwich Village Assocs. v. Salle, 110 A.D.2d 111, 493 N.Y.S.2d 461 (1985),² in which the court refused to allow a sublessor to take advantage of a contractual excuse for nonperformance predicated on a contingency the sublessor itself brought about; the court held that a proper reading of the sublease only excused the sublessor for nonperformance in the event of a contingency outside its control. Id. at 462-63. Here, the complaint does not allege that Subaru of America brought about Fuji's sale of the Saab 9-2s to GM or Saab, and so Salle is not controlling here.

Subaru Distributors points to nothing that Subaru of America has affirmatively done; instead, it pleads an omission—that Subaru of America has failed to prevent Fuji from selling cars and parts to Saab. Subaru...