Lead-Off Management, Inc. v. Congo Brands Holding Company, LLC

CourtDistrict Court, D. Maryland
DecidedMarch 31, 2025
Docket1:24-cv-02060
StatusUnknown

This text of Lead-Off Management, Inc. v. Congo Brands Holding Company, LLC (Lead-Off Management, Inc. v. Congo Brands Holding Company, LLC) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lead-Off Management, Inc. v. Congo Brands Holding Company, LLC, (D. Md. 2025).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

LEAD-OFF MANAGEMENT, INC., *

Plaintiff, *

v. * Civil Action No. RDB-24-2060

CONGO BRANDS HOLDING CO., INC., *

Defendant. *

* * * * * * * * * * * * * MEMORANDUM OPINION The instant dispute concerns Plaintiff Lead-Off Management, Inc. (“Lead-Off”), a beverage distributor, and Defendant Congo Brands Holding Co., Inc. (“Congo”), a producer and supplier of energy drinks and other beverages. (ECF No. 3 ¶¶ 7–8.)1 In brief, Lead-Off alleges one count of promissory estoppel (“Count I”) (id. ¶¶ 27–31), related to Congo’s alleged repeated promises to Plaintiff that Congo would sign Lead-Off’s standard distribution agreement (the “Distribution Agreement”); and one count of fraud (“Count II”) (id. ¶¶ 32– 37), related to Congo’s alleged misrepresentations regarding the same. Instantly before the Court is Congo’s Motion to Dismiss (ECF No. 7) pursuant to Fed. R. Civ. P. 12(b)(6). Lead-Off responded in opposition (ECF No. 8), and Congo replied (ECF No. 11). The Court has reviewed the parties’ submissions and finds that no hearing is

1 For clarity, this Memorandum Opinion cites to the ECF generated page number, rather than the page number at the bottom of the parties’ various submissions, unless otherwise indicated. Likewise, this Memorandum Opinion cites to the ECF generated document number, rather than the exhibit number provided by the parties’ various submissions. necessary. See Local Rule 105.6 (D. Md. 2023). For the reasons that follow, Congo’s Motion to Dismiss (ECF No. 7) is GRANTED. BACKGROUND In ruling on a motion to dismiss, this Court “accept[s] as true all well-pleaded facts in

a complaint and construe[s] them in the light most favorable to the plaintiff.” Wikimedia Found. v. Nat’l Sec. Agency, 857 F.3d 193, 208 (4th Cir. 2017) (citing SD3, LLC v. Black & Decker (U.S.) Inc., 801 F.3d 412, 422 (4th Cir. 2015)). Except where otherwise indicated, the following facts are derived from Plaintiff’s Complaint (ECF No. 3), and accepted as true for the purpose of the Defendant’s Motion to Dismiss (ECF No. 7). I. Background on Parties

Plaintiff Lead-Off Management, Inc. is a Maryland corporation with its principal place of business in Glenwood, Maryland. (ECF No. 3 ¶ 5.) “Lead-Off is an independent beverage distributor focused on growing and expanding the reach of new beverage brands.” (Id. ¶ 7.) “As a distributor, Lead-Off maintains several relationships with local retailers, including Giant Supermarkets” in Maryland. (Id. ¶ 8.) Defendant Congo Brands Holding Co., Inc. is a Delaware limited liability company

with its principal place of business in Louisville, Kentucky. (Id. ¶ 6.) “Congo is a producer and supplier of energy drinks and other beverages.” (Id. ¶ 8.) II. Factual Background According to Plaintiff, sometime in late 2020, Congo approached Lead-Off related to efforts to “expand Congo’s brand presence in the region and gain access to Giant supermarkets in its Carlisle Division, which represented approximately 150 stores.” (Id. ¶ 10.) Lead-Off alleges that its “standard practice is to enter a distribution agreement with suppliers” under such circumstances. (Id. ¶ 11.) Accordingly, Lead-Off allegedly requested that Congo sign such an agreement, and “[r]epresentatives of Congo promised Lead-Off that it would

enter into Lead-Off’s standard distribution agreement” (the “Distribution Agreement”). (Id. ¶ 11–12.) Thereafter, Lead-Off allegedly repeatedly inquired as to the status of the Distribution Agreement and was repeatedly assured that an executed agreement would be forthcoming. (Id. ¶ 12.) Lead-Off further alleges that “[b]ased upon [Congo’s] representations, Lead-Off continued to work to ensure that Congo’s brands would expand into Giant stores in the region

and expended considerable resources and capital to do so.” (Id. ¶ 13.) Sometime in March 2021, “after much insistence,” Lead-Off signed Congo’s “Brokerage Agreement.”2 (Id. ¶ 14.) In its Complaint (ECF No. 3), Lead-Off emphasizes that it is a “distributor,” “not a broker,” (id. ¶ 14), and further states that the Brokerage Agreement “fails to establish compensation terms relevant to the relationship between the parties” and “does not contain any salient terms.” (Id. ¶¶ 15.)

In early April 2021, Congo products were delivered to Giant stores’ Carlisle Division. (Id. ¶¶ 10, 16, 22.) According to Plaintiff, after working with and using Lead-Off’s resources “for several months,” “Congo severed the relationship [with] Lead-Off.” (Id. ¶ 17.) Lead-Off alleges that the parties “agreed” the Brokerage Agreement between them “was terminated on March 17, 2022.” (Id. ¶ 18.)

2 The Complaint indicates that the Brokerage Agreement was “attached as Exhibit A.” (ECF No. 1-1 ¶ 14.) However, the Brokerage Agreement does not appear on this Court’s docket. Lead-Off alleges that, sometime thereafter, “Congo encountered complications with Giant’s management team and reapproached Lead-Off for guidance on how to navigate the situation.” (Id. ¶ 19.) Lead-Off allegedly “again asked that Congo enter into the Distribution

Agreement,” and Congo again “promised” it would do so. (Id. ¶ 20.) Lead-Off further alleges that it “relied on Congo’s representations and devoted substantial time and energy to aid Congo achieve its distribution goals,” including getting Congo’s brands into Giant stores’ Landover Division, which accounted for an additional 150 stores. (Id. ¶¶ 21–22.) “Based on Congo’s representations that it would enter the Distribution Agreement, Lead-Off continued purchasing and delivering products to Giant until October 2, 2023, when it became clear

Congo would never enter [the] agreement.” (Id. ¶ 23.) Lead-Off complains that it forewent the opportunity to provide distribution services for other brands in order to service the volume generated by Congo, and alleges that it “took this step in reliance on the promises made by Congo that it would enter into a Distribution Agreement.” (Id. ¶ 24.) According to Lead-Off, “Congo’s former executives have acknowledged that Congo made promise after promise to enter into the Distribution Agreement, convinced Lead-Off to take certain actions in reliance

on this promise and then never had any intention to enter into such an agreement.” (Id. ¶ 25.) Lead-Off further claims to have spent $1,499,700.00 on product and distribution based on Congo’s alleged misrepresentations. (Id. ¶ 26.) III. Procedural History On June 24, 2024, Plaintiff filed the instant action in the Circuit Court for Howard County, Maryland. (ECF No. 3.) On July 17, 2024, Defendant removed the case to this Court,

invoking the Court’s diversity jurisdiction 28 U.S.C. § 1332. (ECF No. 1.) Defendant subsequently filed the instant Motion to Dismiss (ECF No. 7). Lead-Off responded in opposition (ECF No. 8), and Congo replied (ECF No. 11). The motion is ripe for review. STANDARD OF REVIEW I. Motion to Dismiss Pursuant to Rule 12(b)(6)

Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a Complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” FED. R. CIV. P 8(a)(2). The purpose of Rule 12(b)(6) is “to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006) (internal quotations omitted).

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Lead-Off Management, Inc. v. Congo Brands Holding Company, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lead-off-management-inc-v-congo-brands-holding-company-llc-mdd-2025.