United States District Court, W.D. Virginia, Danville Division
JACKSON L. KISER SENIOR UNITED STATES DISTRICT JUDGE
matter is before the Court on Defendants Commonwealth
Laminating and Coating, Inc., and Eastman Chemical
Corp.'s Motion to Dismiss [ECF No. 21]. Defendants filed
their Motion on January 4, 2019, Plaintiff Sae Han Sheet Co.,
Ltd., responded on January 23, and Defendants replied on
January 30. I heard oral arguments on the Motion on February
28. I have reviewed the pleadings, arguments of counsel, and
relevant law, making the matter ripe for disposition. For the
reasons stated herein, I will grant Defendants' Motion
and grant Plaintiff fourteen (14) days to file an amended
complaint, if it so chooses.
STATEMENT OF FACTS AND PROCEDURAL
Sae Han Sheet Co., Ltd. (“Plaintiff”) is a South
Korean company engaged in international trade. Defendant
Eastman Chemical (“Eastman”) is a business entity
with its corporate headquarters in Tennessee and its
corporate offices in New Jersey. Defendant Commonwealth
Laminating and Coating (“CLC”) is a Virginia
company which may have manufactured some or all the goods at
issue in this case. Eastman purchased CLC in December 2014.
2008-2013, Plaintiff and CLC were parties to a contract for
the sale of Suntek brand glass-tinting film. In December
2013, CLC cancelled the contract because of Plaintiff's
“inability to meet the purchase requirements” of
the contract. CLC did, however, permit Plaintiff to continue
to purchase its products and hold itself out as an
“authorized dealer” of Suntek
2014 or early 2015, CLC (now owned by Eastman) reconfigured
the chemical composition of its product as a cost-saving
measure, but it marketed the new product as “the
same” as its old product. The new version of the
glass-tinting film was, according to Plaintiff, markedly
inferior, and resulted in numerous complaints about the
product. Customers complained of “lunar-crater type
mold” on the film which rendered the product
“unsuitable and unmerchantable for sale and application
to consumers.” (Compl. ¶ 15.) Instead of
correcting to flawed design, Eastman's “officers
and managers kept silent about the defects created by their
own re-mixing of ingredients; and attempted to avoid adverse
publicity by seeking General Releases as a flagrantly
unconscionable ‘condition' of replacing obviously
defective products with non-defective products and wasted
precious time, while [P]laintiff's business became
associated with the functional, commercial equivalency of
selling ‘leprosy' ridden products in South
Korea.” (Id. ¶ 16.)
November 2016, Plaintiff's “handful of
customers” began disserting it en masse in
favor of “suppliers who provided reliable, defect-free
lines of products.” (Id. ¶ 19.) At that
time, Plaintiff contends Eastman's officers were
“falsely” claiming to Plaintiff that it had only
“recently discovered” the defects, even though
other Eastman employees confided to Plaintiff that Eastman
was aware as early as August 2016.
filed the present action in the United States District Court
for the Eastern District of Virginia on September 26, 2018.
By order of that court, the case was transferred to this
court on December 21, 2018. (Order, Dec. 21, 2018 [ECF No.
19].) On January 4, 2019, Defendants filed the present Motion
to Dismiss. [ECF No. 21.] Plaintiff responded on January 23
[ECF No. 31], and Defendants replied on January 30 [ECF No.
32]. I heard oral arguments on the Motion on February 28, and
the matter is now ripe for disposition.
STANDARD OF REVIEW
survive a Rule 12(b)(6) 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)). “A claim has facial plausibility
when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Iqbal, 556
U.S. at 678. In determining facial plausibility, the court
must accept all factual allegations in the complaint as true.
Id. The complaint must contain “a short and
plain statement of the claim showing that the pleader is
entitled to relief” and sufficient “[f]actual
allegations . . . to raise a right to relief above the
speculative level . . . .” Twombly, 550 U.S.
at 555 (internal quotation marks omitted). Therefore, the
complaint must “allege facts sufficient to state all
the elements of [the] claim.” Bass v. E.I. Dupont
de Nemours & Co., 324 F.3d 761, 765 (4th Cir. 2003).
Although “a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual allegations,
” a pleading that merely offers “labels and
conclusions” or “a formulaic recitation of the
elements of a cause of action will not do.”
Twombly, 550 U.S. at 555.
has brought six counts against Defendants: breach of contract
under the U.N. Convention for the International Sale of Goods
(“UNCISG”) (Count 1); breach of the covenant of
good faith and fair dealing (Count 2); unjust enrichment
(Count 3); tortious interference with a prospective advantage
(Count 4); tortious interference with business relations
(Count 5); and tortious interference with a contract (Count
Choice of Law
parties have made no effort to determine what law applies:
Virginia, South Korea, or Delaware. A federal court, sitting in
diversity jurisdiction, applies the choice-of-law provisions
of the state in which it sits. See Seabulk Offshore, Ltd.
v. Am. Home Assurance Co., 377 F.3d 408, 418-19 (4th
Cir. 2004) (citing Erie R. Co. v. Tompkins, 304 U.S.
64, 78 (1938)). Defendants have submitted a presumably valid
“Conditions of Sale” that Plaintiff does not
appear to contest. That document, which purportedly covers
all sales, states that the contract will be “governed
by and construed under the laws of the State of Delaware . .
. .” [ECF No. 22-1.] As to the contract claims, then,
Delaware law controls. See Hitachi Credit Am. Corp. v.
Signet Bank, 166 F.3d 614, 624 (4th Cir 1999)
(“Virginia law looks favorably upon choice-of-law
provisions in a contract, giving them full effect except in
unusual circumstances.” (citing Tate v. Hain,
25 S.E.2d 321, 324 (Va. 1943)), As to the non-contract
claims, the question arises of what law should apply. In
2016, Judge Ellis in the Eastern District of Virginia faced a
virtually identical question. See Run Them Sweet, LLC v.
CPA Global Limited, 224 F.Supp.3d 462 (E.D. Va. 2016).
He held that contract language that the parties'
relationship would be “governed by and construed in
accordance with the laws of the Commonwealth of
Virginia” was sufficiently broad to ...