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A & G Coal Corporation v. Elkem Materials, Inc.

United States District Court, W.D. Virginia, Big Stone Gap Division

February 24, 2014

A & G COAL CORPORATION, Plaintiff,
v.
ELKEM MATERIALS, INC., Defendant.

Allen W. Dudley, Jr., and Dustin M. Deane, James C. Justice Companies, Inc. and Affiliates, Roanoke, Virginia, for Plaintiff.

S. Lloyd Smith, Buchanan Ingersoll & Rooney PC, Alexandria, Virginia, for Defendant.

OPINION AND ORDER

JAMES P. JONES, District Judge.

A & G Coal Corporation ("A & G") moves to dismiss the Counterclaim filed by defendant Elkem Materials, Inc. ("Elkem"), pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth, the motion will be denied.

I

A & G has sued Elkem on an alleged coal purchase agreement, claiming that Elkem failed to take the entire quantity of coal that it had agreed to purchase. The contract in question is referred to by A & G as the "2011 Supply Agreement." Elkem denies in its Answer that the parties ever reached mutual agreement on the material terms of that contract, and in its Counterclaim contends that in any event, A & G violated both it and an earlier contract, the so-called "2009 Supply Agreement, " by disclosing in its Complaint and Amended Complaint confidential pricing information set forth in the contracts, causing Elkem monetary damages.[1]

In support of its Motion to Dismiss the Counterclaim, A & G contends that (1) the disclosures were permitted by the contracts in question; (2) Elkem caused its own harm by submitting the redacted contracts itself as exhibits to its Counterclaim; (3) Elkem waived its Counterclaim by not filing it in response to the initial Complaint; and (4) Elkem cannot deny the existence of the 2011 Supply Agreement and also assert a claim based upon its terms.

The Motion to Dismiss has been fully briefed and is ripe for decision.[2]

II

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007)). In ruling on such a motion, the court must regard as true all of the factual allegations contained in the complaint, Erickson v. Pardus , 551 U.S. 89, 94 (2007), and must view those facts in the light most favorable to the plaintiff, Christopher v. Harbury , 536 U.S. 403, 406 (2002). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes , 416 U.S. 232, 236 (1974).

Grounds two, three, and four of the Motion to Dismiss are easily resolved. It cannot be said on this record that Elkem waived its claim of improper disclosure by disclosing other parts of the contracts; it is the disclosure of specific pricing information that Elkem says caused it injury.[3] Whether its competitors would have been able to ascertain the pricing information from other disclosed portions of the contracts is not apparent from the pleadings.

A party is not required to submit a compulsory counterclaim unless and until it has filed a pleading. Fed.R.Civ.P. 13(a). The initial Complaint filed by A & G was subjected to a Motion to Dismiss by Elkem and following the court's granting of that motion, A & G filed an Amended Complaint. Along with its Answer to the Amended Complaint, Elkem filed the present Counterclaim. Because its Motion to Dismiss was not a "pleading" within the meaning of Rule 13(a), the Counterclaim was timely. See Mellon Bank, N.A. v. Ternisky , 999 F.2d 791, 795 (4th Cir. 1993).

The federal rules expressly permit the pleading of inconsistent claims or defenses. Fed.R.Civ.P. 8(d)(3); 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure Civil ยง 1283 (3d ed. 2004 & Supp. 2013). Accordingly, it is not a ground for dismissal ...


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