Moll Industries, Inc. v. Oral-B Laboratories, Inc.

13 Mass. L. Rptr. 569
CourtMassachusetts Superior Court
DecidedJuly 17, 2001
DocketNo. 011301BLS
StatusPublished

This text of 13 Mass. L. Rptr. 569 (Moll Industries, Inc. v. Oral-B Laboratories, Inc.) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Moll Industries, Inc. v. Oral-B Laboratories, Inc., 13 Mass. L. Rptr. 569 (Mass. Ct. App. 2001).

Opinion

van Gestel, J.

This matter comes before the Court on a motion to dismiss by the defendants. The defendant The Gillette Company (“Gillette”) stands and answers for all purposes in this matter for the other named defendants: Oral-B Laboratories, Inc. (“Oral-B”) and Gillette Canada, Inc. (“Gillette Canada”). However, because the agreement in issue was executed by Oral-B, for purposes of this memorandum the defendants generally and collectively will be referred to as Oral-B.

The motion, filed pursuant to Mass.R.Civ.P. Rule 12(b)(6), challenges all counts of the plaintiffs complaint. Oral-B argues that Count I fails because the “Cell” contemplated by the agreement does not now exist and never has existed. Count II fails, it says, because there are no allegations of a representation that was either false or went beyond opinion. Count III fails, Oral-B says, because there are no allegations of any actions by it that were designed to frustrate the plaintiffs goals of the agreement. Count IV fails, Oral-B. argues, because the complaint fails to allege any conduct beyond the reach of the agreement, any conduct occurring within Massachusetts, and any conduct that would circumvent the clear choice of law provision of the agreement.

[570]*570 BACKGROUND

The Court, on this motion to dismiss, takes the facts mostly as the plaintiff, Moll Industries, Inc. (“Moll”), pleads and recites them, it being probably the best way to express what the complaint says and what the inferences are that may be drawn from its statement. In that process, however, the Court is quick to observe that this case is principally about a detailed written contract between highly sophisticated parties.

Moll sued all defendants here, complaining that they committed breach of contract, misrepresentation, breach of an implied covenant of good faith and fair dealing, and unfair and deceptive business practices by wrongfully terminating an agreement with Moll regarding the production of “CrossAction” brand toothbrushes.

The complaint alleges that in 1998, Oral-B introduced CrossAction toothbrushes for sale to the general public. At or about the same time, Oral-B entered into discussions with Moll for the purpose of determining whether Moll could employ its injection-molding technology to produce a version of the CrossAction toothbrush that was comparable in quality to the version manufactured in house by Oral-B. As a result of those discussions, Oral-B and Moll entered into a written agreement on July 9, 1998 (the “July 1998 Agreement”), pursuant to which Moll undertook to develop a manufacturing cell for a “bristled, in-molded, tufted, toothbrush” that would be “capable of producing 12.0 (twelve) million units2 annually . . .”

Moll’s in-molding process requires the use of “spool fed” bristle filament. The parties soon discovered that it was not then possible to produce an in-molded version of the CrossAction toothbrush to Oral-B’s specifications due .to the lack of an acceptable spool filament. Consequently, Oral-B terminated the July 1998 Agreement and, according to the terms of that agreement, paid Moll $285,000 for the reasonable project costs that Moll had incurred in attempting to develop a successful in-molding manufacturing process for the CrossAction toothbrushes.

About six months after the July 1998 Agreement was terminated, Oral-B again approached Moll to explore Moll’s continued interest in developing a production line to manufacture in-molded CrossAction toothbrushes, using spooled bristle filament supplied by a Mexican manufacturer with which Gillette had done business. Oral-B represented to Moll that it was confident that the spooled filament supplied by Gillette’s preferred supplier would prove acceptable for use in CrossAction toothbrushes, meeting Oral-B’s specifications. Induced by Oral-B’s representations, Moll entered into a second Supply Agreement with Oral-B on September 1, 1999 (the “September 1999 Agreement”), a copy of which is appended to the complaint as Exhibit B.

The September 1999 Agreement, like the July 1998 Agreement,3 required Moll to develop an “in-molded spool fed toothbrush manufacturing cell (“Cell") capable of producing at a rate defined in Schedule 3” to the September 1999 Agreement. This Agreement established a 12 cents per unit ’’equipment amortization" charge on the first 20,000,000 units produced by Moll, for a total amortization cost of $2,400,000. The September 1999 Agreement also gave Oral-B the right to terminate the parties’ contract in the event that Moll was “unable to bring the Initial Product Samples up to [Oral-B’s] Specifications within a reasonable time ..." Oral-B and Moll further agreed, however, that in the event the “Agreement is terminated before the Cell is fully amortized, the parties shall discuss and implement an equitable return for [Moll] to recover the unamortized cost of the Cell,” which “equitable return,” the parties stated, would be “based upon Schedule 3.”

Pertinent parts of the September 1999 Agreement follow.

In the “WHEREAS” portion it is recited:

A. Oral-B has expertise and information relating to manufacturing, marketing, promoting and distributing toothbrush products, which are particularly those currently marketed in the US under the trademark CrossAction as in Schedule 1 attached hereto and made a part hereof (hereinafter called the “Products”); and
B. Oral-B desires to make an arrangement for the manufacturing, packaging and supply of the Products in accordance with certain methods, formulae, standards and specifications described in Schedule 2 attached hereto and made a part hereof (hereinafter called the “Specifications”); and
C. Anchor has expertise relating to manufacturing, packaging and supplying of toothbrush products, is capable of producing and packaging the Products according to the Specifications and applicable laws including United States Food & Drug Administration Current Good Manufacturing Practices (hereinafter called the “GMP’s”) and is willing to enter into an Agreement with Oral-B to manufacture, package, and supply the Products according to the terms and conditions set out below; . . .

The basic manufacturing, packaging and supply provisions of the September 1999 Agreement are found in Section 3. Portions pertinent to the present motion read as follows:

A. Using its own technology, Anchor shall manufacture an in-mold spool fed toothbrush manufacturing cell (“Cell”) capable of producing at least 12 million units/annum. Said cell to be paid for by Anchor and amortized at a rate defined in Schedule 3, provided that if this Agreement is terminated before the Cell is fully amortized, the parties shall discuss and implement an equitable return for Anchor to recover the unamortized cost of the Cell. [571]*571The equitable return will be based upon Schedule 3.
B. Anchor will guarantee the availability to Oral-B of a minimum capacity of at least 12 million units each year.
C. The Products will be manufactured using equipment approved by Oral-B. Such equipment shall be deemed approved when it produces commercial quantities of Product that are approved in accordance with Paragraph 1. Any modifications to the approved equipment that could alter the Products’ conformance to the Specifications will require Oral-B’s reevaluation and approval in accordance with Paragraph 1, above.

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Bluebook (online)
13 Mass. L. Rptr. 569, Counsel Stack Legal Research, https://law.counselstack.com/opinion/moll-industries-inc-v-oral-b-laboratories-inc-masssuperct-2001.