Data

Date:: 21-08-2002
Country:: USA
Number:: 98 CIV 961 RWS
Court:: U. S. District Court, S. D., New York
Parties:: Geneva Pharmaceuticals Technology Corp. v. Barr Laboratories, Inc. et al

Keywords

INDICATION OF "COMMERCIAL AMOUNT" - OFFER SUFFICIENTLY DEFINITE AS TO QUANTITY AND PRICE (ART. 14 CISG)

Abstract

A Canadian manufacturer entered into an agreement with a U.S. buyer for the supply of a chemical ingredient (clathrate) to be used in the production of an anticoagulant medication. The U.S. asked the Food and Drug Administration (FDA) for the approval of the medication; meanwhile, the Canadian manufacturer executed an exclusive supplier agreement with a third company. A dispute arose when the manufacturer refused to supply the chemical ingredient to the U.S. buyer. The Court granted the buyer's claims in part (see Abstract and Full Text in UNILEX, U.S. District Court, 10-5-2002, D.2002-7). The Canadian manufacturer asked for a reconsideration of the decision.

In reconsidering the merits of the dispute, the Court stated that the offer in question had been correctly deemed definite under Art. 14 CISG. In fact, not only were the goods involved clearly identified, but also the indication of a "commercial amount" was an appropriate criterion for determining the quantity and price, taking into account the industry usages automatically incorporated into the agreement.

Fulltext

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OPINION

Sweet, District Judge

Defendants Barr Laboratories Inc. ("Barr") and Brantford Chemicals Inc. ("Brantford") have moved for reconsideration of portions of this Court's May 10 Opinion, Geneva Pharmaceuticals Tech. Corp. v. Barr Labs. Inc., 201 F.Supp.2d 236 (S.D.N.Y.2002), in which their motion to dismiss the complaint of plaintiff Geneva Pharmaceuticals Inc. ("Geneva"), as successor in interest to Invamed Inc. ("Invamed") pursuant to Rule 56 of the Federal Rules of Civil Procedure was granted in part and denied in part.

For the following reasons, their motions are denied.

FACTS

The parties and facts discussed herein have been described in greater detail in Geneva, 201 F.Supp.2d 236, familiarity with which is presumed.

DISCUSSION

I. STANDARDS UNDER LOCAL RULE 6.3

"To succeed on a motion for reargument, the moving party must demonstrate that the court overlooked the controlling decisions or factual matters that were placed before the court in the underlying motion." Lopez v. Comm'r of Soc. Sec., 2002 U.S. Dist. LEXIS 5091, *1-*2 (S.D.N.Y. March 27, 2002) (quotations and citations omitted); see also Shrader v. CSX Transp., 70 F.3d 255, 257 (2d Cir.1995) (motion for reargument "will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked -- matters, in other words, that might reasonably be expected to alter the conclusion reached by the court").

Rule 6.3 is intended to "ensure the finality of decisions and to prevent the practice of a losing party examining a decision and then plugging the gaps of a lost motion with additional matters." Carolco Pictures, Inc. v. Sirota, 700 F.Supp. 169, 170 (S.D.N.Y.1988) (citation omitted). The parties may not present new facts or theories at this stage. Ralph Oldsmobile Inc. v. General Motors Corp., 2001 WL 55729, at *2 (S.D.N.Y. Jan. 23, 2001) (striking affidavit that was filed in support of motion to reconsider without court's permission); Primavera Familienstifung v. Askin, 137 F.Supp.2d 438, 442 (S.D.N.Y.2001) (party may not "advance new facts, issues or arguments not previously presented to the Court") (quoting Morse/Diesel Inc. v. Fidelity & Deposit Co. of Md., 768 F.Supp. 115, 116 (S.D.N.Y.1991)).

Rule 6.3 must be narrowly construed and strictly applied so as to avoid duplicative rulings on previously considered issues, and may not be employed as a substitute for appealing a final judgment. Lopez, 2002 U.S. Dist. LEXIS 5091, at *3; Shamis v. Ambassador Factors, 187 F.R.D. 148, 151 (S.D.N.Y.1999). The decision to grant or deny the motion rests in the discretion of the district court. AT & T Corp. v. Community Network Servs. Inc., 2000 WL 1174992, at *1 (S.D.N.Y. Aug. 18, 2000).

II. BARR'S MOTION IS DENIED

In the May 10 Opinion, the Court granted Barr summary judgment on all claims against it, with the exception of Geneva's tortious interference claims (Counts VIII and IX). Id. at 289-90. Geneva asserted these claims against Barr due to ACIC/Brantford's refusal to supply clathrate to Invamed.[1] In the opinion, Barr's assertion of a privilege defense was rejected because there existed a factual issue with regard to whether the interference constituted an unlawful restraint of trade and thus was not privileged. Id. at 290. Barr now seeks reconsideration, claiming that the Court overlooked controlling authority that equates "restraint of trade" in the tortious interference context with "restraint of trade" under federal and state antitrust laws. Barr argues that because the Court had already concluded that Invamed failed to prove its antitrust allegations against Barr, Barr's actions were privileged.

"Under New Jersey law ... [w]hen a restraint of trade is neither intrinsically unlawful, nor violative of any other law under the circumstances, it must be shown to be wrongful (e.g. violent, fraudulent, deceitful, or threatening) in order to amount to tortious interference." In re Kentile Floors, Inc., 30 F.Supp.2d 427 (S.D.N.Y.1998) (citing EZ Sockets, Inc. v. Brighton-Best Socket Crew Mgf. Inc., 307 N.J.Super. 546, 559 (1996)). Thus, under New Jersey law, interference need not violate the federal or state antitrust laws to be an unlawful restraint of trade; if the actions are "intrinsically unlawful"[2] the interference is not privileged.

As discussed in the opinion:

"Invamed alleges that Barr arranged for the exclusive supply contract in order to thwart the development of other generic warfarin sodium. Moreover, it alleges that Barr demanded the confidentiality provisions as a means of further delaying Invamed's entry into the generic warfarin sodium market."

Geneva, 201 F.Supp.2d at 290. While these actions may not constitute violations of the federal and state antitrust laws, there is an issue of material fact as to whether those means were "intrinsically unlawful."

Barr cites New York case law [3] for the proposition that interference is not unlawful restraint of trade unless the interference violates the federal or state antitrust actions. It is true that New York and New Jersey have cited to the Restatement (Second) of Torts § 768, which provides, in pertinent part:

"Competition as Proper or Improper Interference

(1) One who intentionally causes a third person not to enter into a prospective contractual relation with another who is his competitor ... does not interfere improperly with the other's relation if

(a) the relation concerns a matter involved in the competition between the actor and the other and
(b) the actor does not employ wrongful means and
(c) his action does not create or continue unlawful restraint of trade and
(d) his purpose is at least in part to advance his interest in competing with the other."

Rest. (Second) Torts § 768; see also Guard-Life Corp. v. S. Parker Hardware Mfg. Corp., 50 N.Y.2d 183, 191, 428 N.Y.S.2d 628, 406 N.E.2d 445 (1980) (quoting Restatement); EZ Sockets, 307 N.J.Super. at 559 (quoting Restatement).

However, Comment (f) to Section 768 does not stretch as far as Barr would wish. Barr asserts that Comment (f) "makes clear the reference to 'unlawful restraint of trade' ... means a violation of state or federal antitrust law." Mem. at 4. Yet, the comment no where explicitly asserts that the only means of proving unlawful restraint of trade is to have a federal or state antitrust law violation. It states: "All of this legislation [the federal antitrust laws] ... [is] pertinent to a great number of the cases in which this Section may be applicable." The comment does not say that the legislation is pertinent to all of the cases in which Section 768 is applicable -- a phrase that would implicitly support Barr's arguments. Finally, Barr has failed to cite any New York or New Jersey case law that adopts Comment (f), even if it had the import that Barr claims.

The New York case law is no more helpful. As Geneva points out, the two cases that are cited in support of the proposition prove too little. In both Martin Ice Cream Co. v. Chipwich, 554 F.Supp. 993, 935 (S.D.N.Y.1983) and Six West Retail Acquisition Inc. v. Sony Theatre Mgmt. Corp., 2000 WL 264295, at *32 (S.D.N.Y. March 9, 2000), the courts held that a violation of federal antitrust laws constituted an unlawful restraint of trade and thus were an improper means of interference. The cases did not stand for the proposition that the only means of proving an unlawful restraint of trade was by showing a violation of federal or state antitrust laws.

Barr has failed to present controlling authority that the Court overlooked that would have altered the finding that a question of fact remains as to whether Barr's purported interference was privileged.

Barr's motion to reconsider is denied.

III. BRANFORD'S MOTION IS DENIED

Brantford urges reconsideration of the denial of summary judgment with regard to Geneva's breach of contract and promissory estoppel claims against Brantford, claiming that the Court overlooked controlling decisions and material facts.

A. Breach of Contract Claim

Brantford asserts that the Court neglected to discuss the issue of whether Invamed had made a sufficiently definite proposal and that there is no evidence that Brantford breached the purported contract.

1. Sufficiently Definite Proposal

Brantford asserts that its motion for reconsideration is appropriate in this instance as the Court failed to consider the element of a sufficiently definite proposal.[4] E.g., Shamis v. Ambassador Factors Corp., 187 F.R.D. 148, 151-52 (S.D.N.Y.1999); see also Building Serv. 32B-J Pension Fund v. Vanderveer Estates Hldg. LLC, 127 F.Supp.2d 490, 494 (S.D.N.Y.2001) (motion to reconsider granted because court noted fact but did not address its legal significance).

The Court clearly addressed and considered the issue of a sufficiently definite proposal, however. First, the Court outlined that Article 14 of the Convention for the International Sale of Goods ("CISG") is comprised of two requirements, one of which is that a proposal must "be 'sufficiently definite' meaning that it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and price." Geneva, 201 F.Supp.2d at 281. The opinion then applied this definition of a sufficiently definite proposal. First, it found that the first element was satisfied as the "alleged contract clearly identifies the goods at issue, clathrate." Id. at 282. Next, it determined that a question of fact existed as to whether the contract implicitly fixed the provision for determining quantity and price by its requirement of a "commercial amount." Id. While the opinion concluded that "the contract was sufficiently definite," id. (emphasis supplied), it is apparent from the foregoing discussion that what was intended was a conclusion that the proposal was sufficiently definite.

Because the Court did consider whether the proposal was sufficiently definite, Brantford cannot base its motion for consideration on this claim.

Brantford also argues that industry custom is insufficient to establish a sufficiently definite proposal under the CISG. Brantford cites to no controlling case law concerning this issue and merely rehashes the same statutory interpretation arguments that the Court considered in determining in the summary judgment opinion that industry custom could establish a sufficiently definite proposal. Id. at 281-82. This motion is an inappropriate venue for Brantford's argument.

2. Breach

Brantford further claims that the breach of contract claim should be dismissed because there is no evidence that it breached the purported contract. In the Opinion, the Court determined that the contract at issue was an implied-in-fact contract for Brantford to supply clathrate to Invamed when given commercially reasonable notice or to inform Invamed that it would not be able to supply clathrate in a commercially reasonable time. Geneva, 201 F. Supp .2d at 284. Thus there was no breach in October 1997 when Brantford refused to supply clathrate as it had not been given commercially reasonably notice pursuant to the contract. Id. However, it was held that the fact that it did refuse to supply any clathrate to Invamed in the future did breach the implied-in-fact contract. Id.

Brantford argues that the Court overlooked the undisputed fact that Brantford never breached this agreement because it claims that after the unsuccessful October rejection of Invamed's clathrate order, Invamed never requested clathrate from it again. The Court did not overlook any facts that would have altered this decision. Brantford cites to an October 20, 1997 letter to Invamed in which it rejected the October 1997 purchase order. After rejecting that order, the letter states, "There is no contract or agreement between Brantford Chemicals Inc. and Invamed Inc. that requires BCI to supply this product to Invamed. ..." A jury could reasonably find that this letter constituted a refusal to supply clathrate to Invamed in the future.

The motion to reconsider the denial of Brantford's motion to dismiss Geneva's breach of contract claim is denied.

B. Promissory Estoppel

Finally, Brantford challenges the Court's denial of its motion to dismiss Geneva's promissory estoppel claim because it claims that the court failed to discuss the issue of whether Geneva relied to its detriment on a promise made by Brantford to supply clathrate to Invamed. Brantford is correct that the opinion does not address that issue although it was briefed by both parties, and it will be addressed now.

To survive summary judgment, Geneva must show that it in fact relied to its detriment on a promise made by ACIC/Brantford to supply clathrate to Invamed. Fischer v. Allied Signal Corp., 974 F.Supp. 797, 809 (D.N.J.1997); see The Malaker Corp. Stockholders Protective Comm. v. First New Jersey Nat'l Bank, 395 A.2d 222, 230 (N.J.Super.Ct.App.Div.1978). Geneva presented a material issue of fact with regard to this element of promissory estoppel in that Invamed on its ANDA cited ACIC/Brantford as its source of clathrate and had received a required DMF reference letter from ACIC/Brantford to complete its ANDA application.[5] The fact that Invamed listed ACIC/Brantford as its source of clathrate in the ANDA application presents an issue of material fact as to whether Invamed relied on ACIC/Brantford's promises to supply clathrate. While the ANDA could have been and eventually was amended, such amendment further delayed Invamed's ability to produce and market generic warfarin sodium.

As a result, Geneva has presented an issue of material fact with regard to whether it relied in fact on ACIC/Brantford's purported promise to supply clathrate, and the claim will not be dismissed on these grounds.

CONCLUSION

For the foregoing reasons, Barr's and Brantford's motions to reconsider are denied.

It is so ordered.}}

Source

Available at:
Pace University Website, http:// www.cisg.law.pace.edu

Lower decision:
U.S District Court, S.D., New York, 10 may 2002, UNILEX [2002-7]}}