Global Packaging Services, LLC v. Global Printing & Packaging

248 F. Supp. 3d 487, 2017 U.S. Dist. LEXIS 50405
CourtDistrict Court, S.D. New York
DecidedMarch 31, 2017
DocketNo. 15-CV-7747 (NSR)
StatusPublished
Cited by15 cases

This text of 248 F. Supp. 3d 487 (Global Packaging Services, LLC v. Global Printing & Packaging) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Global Packaging Services, LLC v. Global Printing & Packaging, 248 F. Supp. 3d 487, 2017 U.S. Dist. LEXIS 50405 (S.D.N.Y. 2017).

Opinion

[490]*490OPINION & ORDER

NELSON S. ROMÁN, United States District Judge

Plaintiff Global Packaging Services, LLC (“Plaintiff”), a packaging company incorporated in Florida, brings claims for breach of contract and tortious interference against Global Printing and Packaging (“Defendant”), a printing solutions company incorporated in Massachusetts, arising out of a breached commission agreements. Defendant now moves to dismiss the Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons stated below, the Defendant’s motion is GRANTED in part and DENIED in part.

BACKGROUND

The following facts, taken from the Amended Complaint and admissible materials submitted in connection with the pending motions, are either undisputed or described in the light most favorable to Plaintiff. See, e.g., Costello v. City of Burlington, 632 F.3d 41, 45 (2d Cir. 2011); Kleinman v. Elan Corp., 706 F.3d 145, 152 (2d Cir. 2013).

Plaintiff Global Packaging is a Florida corporation with its corporate headquarters in Boca Raton, Florida, and with an office in Haverstraw, New York. (Am. Compl. ¶ 2.) Plaintiff is a packaging “broker[],” meaning that it “sells consumer goods packaging to consumer goods manufacturers.” (Id. ¶ 6.) Defendant Global Printing is a Massachusetts corporation that is not authorized to do business in New York. (Id. ¶3.) Defendant runs an international printing company focusing on consumer packaging and commercial printing. (Id. ¶ 7.)1

In mid-2014, Plaintiff allegedly entered into an agreement with Defendant entitling Plaintiff-to a commission for customers that it “placed” with Defendant with regard to “process[ing] orders through China.”. (Id. ¶¶ 1, 8.) The head of Global Packing, Richard Loos, dealt directly with the head of Global Printing, Douglas Dratch. (Id. ¶ 9.) As part of the agreement between Plaintiff and Defendant, Plaintiff would be entitled to a “$100,000 annual draw against any future commissions earned for any and all business” placed with Defendant. (Id. ¶ 10.) Defendant was to provide Plaintiff with a price for the requested work, Plaintiff would “add their desired markup,” and the commission would be based on that total “sale price.” (Id. ¶ 13.) Neither party has provided that agreement: Plaintiff did not attach it to its complaint, Defendant has not attached it to its motion papers, and the nature of the agreement—whether it is oral or written— is unknown.

The agreement commenced on September 1, 2014, and Plaintiff began receiving biweekly payments. (Id. ¶ 11.) During the course of the agreement, Plaintiff placed accounts with Defendant, including Quten Research Group, The Fountainhead Group, and the Advanced Frozen Foods. (Id. ¶ 12.) Plaintiffs efforts in this regard included initiating the relationship with the customer, developing the relationship, and bringing the business to Defendant. (Id. ¶ 15-16.) Plaintiffs commissions during this time ranged from 20% to 45%. (Id. ¶ 14.) The arrangement between the parties continued for “several months” but terminated in April 2015. (Id. ¶ 17.) Thus, despite performing its obligations under the agreement ' by placing customers with Defendant, Defendant has failed to pay Plaintiff the commissions- it is owed. (Id. ¶¶ 28-29.)

[491]*491Unbeknownst to Plaintiff at that time, during the course of the agreement between the parties and after it terminated, Dratch went to each of Plaintiffs customers—interfering with the existing relationships—and indicated that “Defendant would be replacing Plaintiff as their representative” and therefore the ■ customers should “no longer do business with the Plaintiff.” {Id. ¶ 18-19.) Plaintiff alleges this was accomplished using “dishonest, unfair and improper” means and was done for “the sole purpose” of causing harm to Plaintiff. {Id. ¶¶ 35-36.) “[TJhese custom-: ers are no longer placing their orders through [.] Plaintiff, but directly with [] Defendant.” {Id. ¶ 37.)

Using one customer, Quten Research Group, as an example, that interference cost Plaintiff approximately $400,000 that year. {Id. ¶ 20 (assuming a 20% margin and based on Plaintiffs view that it was “on target in 2015 to do business of between $1.7 million and $2 million with Quten”).) As for the Advance Frozen Foods account, it is apparent that orders had been placed with Defendant before Plaintiff learned of the circumvention, given the lead time that the customer required for its orders. {Id. ¶ 21.) By the time Plaintiff realized what had occurred, enough orders had been placed to provide Advance with inventory for nearly four months, representing a loss to Plaintiff of more than $100,000. {Id. ¶ 22.)

Plaintiff additionally alleges that Defendant provided these customers with “inferior products” and, despite “promising] [ ] that any materials that were substandard or defective would be replaced," refused to replace them. {Id. ¶23.) This has put Plaintiff at a severe disadvantage because these customers will no longer place orders through Plaintiff with any vendors based in China, where pricing is “considerably more competitive” as compared to the United States. {Id.)

Plaintiff filed its initial Complaint 'on October 5, 2015 (ECF No. 1), and the filed the Amended Complaint on February 26, 2016. (ECF No. 15.) The Amended Complaint asserts breach of contract, tortious interference with business relations and prospective economic advantage, unjust enrichment, and conversion. {Id. at 6, 8-9.) Defendant filed its motion to dismiss on May 5, 2016. (ECF No. 16.)

DISCUSSION

In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept the factual allegations set forth in the complaint as true and draw all reasonable inferences in favor of the plaintiff. See, e.g., Holmes v. Grubman, 568 F.3d 329, 335 (2d Cir. 2009). To survive a Rule 12(b)(6) motion, however, the plaintiff must plead sufficient facts “to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is facially plausible “when the plaintiff pleads factual content that'allows the court to draw the reasonable inference 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) (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). More specifically, the plaintiff must allege sufficient facts to show “more than a sheer possibility that a defendant acted unlawfully.” Id. A complaint that offers only “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Further, if the plaintiff has not “nudged [his or her] claims across the line from conceivable to plausible, [the] complaint must be dismissed.” Id.

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248 F. Supp. 3d 487, 2017 U.S. Dist. LEXIS 50405, Counsel Stack Legal Research, https://law.counselstack.com/opinion/global-packaging-services-llc-v-global-printing-packaging-nysd-2017.