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Andrewjeski v. Bimbo Foods Bakeries Distribution, LLC

United States District Court, D. Kansas

May 23, 2019

JASON ANDREWJESKI, Plaintiff,
v.
BIMBO FOODS BAKERIES DISTRIBUTION, LLC, et al., Defendants.

          MEMORANDUM AND ORDER

          KATHRYN H. VRATIL UNITED STATES DISTRICT JUDGE.

         Jason Andrewjeski brings suit against Bimbo Foods Bakeries Distribution, LLC (“Bimbo Foods”), Bimbo Bakeries USA, Inc. (“Bimbo Bakeries”), Teamsters Local 955 (“Teamsters” or “Union”) and John Does 1-5, asserting various state law claims arising from the alleged conversion and interference with his exclusive right to sell and distribute certain fresh-baked products in the Greater Kansas City Metropolitan Area. This matter comes before the Court on Defendant International Brotherhood Of Teamsters Local Union No. 955 Motion To Dismiss (Doc. #7) filed September 13, 2018 and Defendant Bimbo Bakeries U.S.A., Inc. And Bimbo Foods Bakeries Distribution LLC's Motion To Compel Arbitration And Dismiss Or Stay Proceedings Pending Arbitration, Or In The Alternative To Dismiss Plaintiff's Complaint (Doc. #15) filed November 29, 2018.[1] For reasons stated below, the Court overrules both motions.

         Legal Standards

         In ruling on a motion to dismiss under Rule 12(b)(6), Fed. R. Civ. P., the Court assumes as true all well-pleaded factual allegations and determines whether they plausibly give rise to an entitlement of relief. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). To survive a motion to dismiss, a complaint must contain sufficient factual matter to state a claim which is plausible - and not merely conceivable - on its face. Id. at 679-80; Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). To determine whether a complaint states a plausible claim for relief, the Court draws on its judicial experience and common sense. Iqbal, 556 U.S. at 679.

         The Court need not accept as true those allegations which state only legal conclusions. See id.; Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). Plaintiff bears the burden of framing his complaint with enough factual matter to suggest that he is entitled to relief; it is not enough to make threadbare recitals of a cause of action accompanied by conclusory statements. Twombly, 550 U.S. at 556. Plaintiff makes a facially plausible claim when he pleads factual content from which the Court can reasonably infer that defendant is liable for the misconduct alleged. Iqbal, 556 U.S. at 678. Plaintiff must show more than a sheer possibility that defendant has acted unlawfully - it is not enough to plead facts that are “merely consistent with” defendant's liability. Id. (quoting Twombly, 550 U.S. at 557). A pleading that offers labels and conclusions, a formulaic recitation of the elements of a cause of action or naked assertions devoid of further factual enhancement will not stand. Iqbal, 556 U.S. at 678. Similarly, where the well-pleaded facts do not permit the Court to infer more than the mere possibility of misconduct, the complaint has alleged - but has not “shown” - that the pleader is entitled to relief. Id. at 679. The degree of specificity necessary to establish plausibility and fair notice depends on context; what constitutes fair notice under Fed.R.Civ.P. 8(a)(2) depends on the type of case. Robbins v. Okla., 519 F.3d 1242, 1248 (10th Cir. 2008) (citing Phillips v. Cty. of Allegheny, 515 F.3d 225, 232-33 (3d Cir. 2008)).

         Factual Assertions

         Highly summarized, plaintiff alleges the following facts.

         Bimbo Foods is a Delaware limited liability company with its principal place of business located at 255 Business Center Dr., Horsham, Pennsylvania, 19044. At all relevant times, it did and continues to do substantial business activity in the State of Kansas. Complaint (Doc. #2) filed August 16, 2018 ¶ 2.

         Bimbo Bakeries is a Delaware limited liability company with its principal place of business located at 255 Business Center Dr., Horsham, Pennsylvania, 19044. At all relevant times, it did and continues to do substantial business activity in the State of Missouri. Id. ¶ 4.

         Teamsters is a Missouri labor organization with its principal place of business in Jackson County, Missouri. Id. ¶ 5.

         Bimbo Foods, Bimbo Bakeries and their predecessors (collectively, “BIMBO”) sold individuals and small businesses the exclusive right to sell and distribute certain bakery products throughout the United States, including the Greater Kansas City Area. Id. ¶¶ 10-11. Specifically, BIMBO's business model for product distribution involved the formation and operation of an “Independent Operator (IO) Distribution Network” in which BIMBO sold independent distributors the exclusive right to purchase, resell and distribute its bakery products. Id. ¶ 12. BIMBO facilitated this paradigm by establishing a network of independent distributors who each executed an individual “Bill of Sale” to purchase, in fee simple, distribution rights and other assets. Id. ¶ 13. This sale included (1) the route, complete with customer lists, customer data, networked computer equipment and advertising and marketing rights, and (2) bakery products for resale. Id.

         Plaintiff executed a Bill of Sale to purchase from BIMBO a specified route in a certain sales area in the Greater Kansas City Metropolitan Area.[2] Id. ¶ 16. The bill of sale states, in part, as follows:

In consideration of the sum of . . . paid by PURCHASER to SELLER, SELLER hereby sells, transfers, conveys, assigns and delivers to PURCHASER, and PURCHASER hereby purchases, accepts, assumes and receives from SELLER, all of SELLER'S right, title and interest in and to the following assets, properties, rights and interests (collectively the “ASSETS”): (a) the Distribution Rights to sell and distribute Products manufactured and/or distributed by BIMBO FOOD BAKERIES DISTRIBUTION Inc. . . . to Outlets in the geographic territory described on Schedule A . . . to have and to hold the same, with the appurtenances thereof, unto the PURCHASERS, his successors and assigns, forever, to his own proper use and behalf.

Complaint ¶ 15 (emphasis omitted). Under the agreement, plaintiff's exclusive distribution rights were to continue until such time as plaintiff voluntarily sold or transferred such rights. Id. ¶ 56.

         Plaintiff has not sold or transferred his distribution rights. Id. BIMBO can terminate the agreement only “for cause.” Id. ¶ 57.

         Plaintiff financed the purchase through a secured loan from BIMBO or a company affiliated with BIMBO. Id. ¶¶ 17-18. To obtain financing, plaintiff executed a security agreement which stated, in part, as follows:

Distributor hereby mortgages, charges and assigns to the Secured Party and grants to the Secured Party a Security Interest in all his right, title and interest in and to, (i) The Distribution Rights granted to Distributor by the Secured Party pursuant to a certain Bill of Sale . . . [sic] together with the route book, customer data, and other assets used by the Distributor in the operation of his business; (ii) a certain Norand Handheld Computer and a certain Norand Van Mounted Pritner; [sic] (iii) all equipment, inventory, accounts, goods, property, contract rights, chattel paper, accounts receivable and general intangibles relating to or arising from Distributor's business. * * *

Id. ¶ 19.

         BIMBO facilitated its IO Distributor Network distribution model by entering into Distribution Agreements with route owners. Id. ¶ 21. The Distribution Agreements set forth the obligations of BIMBO and the Independent Operators (“IOs”), respectively, to work together and to enhance and benefit the successful operation of the IO businesses to sell and deliver baked goods, including but not limited to BIMBO products. Id. ¶ 23.

         To facilitate sales and distribution of its products, BIMBO retained Distribution Consultants, Inc. (“DCI”) to assist with developing and implementing the IO Distribution Network. Id. ¶ 25. DCI aimed to lower distribution costs and increase profits by replacing employee-based models with independent, owner-operated distribution systems. Id. ¶ 26.

         On September 12, 2005, plaintiff and Bimbo Bakeries Distribution Company, LTD (“BBDC”), a Texas limited partnership, executed a Distribution Agreement - under which BBDC agreed to assist plaintiff in increasing the number of outlets and products in his sales area. See Id. ¶¶ 75-76 and Exhibit A thereto. The Distribution Agreement has a term of ten years with an automatic renewal for another ten years. Id. ¶ 79. It does not allow BBDC to terminate plaintiff's rights without cause and proper notice. Id.

         Under the Distribution Agreement, the parties agreed to purchase and supply sufficient quantities of products to adequately supply outlets in plaintiff's sales area. See Distribution Agreement § 3.2, Exhibit A to Complaint (Doc. #2). Plaintiff agreed to use his best efforts to develop and maximize sales of products to outlets within the sales area. Id. § 4.1. BBDC agreed to use commercially reasonable efforts to deliver sufficient quantities of products to supply outlets, assist in the development of new supply outlets, preserve the quality and marketability of products, and assist and cooperate with plaintiff's sales efforts. Id. § 5.1. The parties agreed that under the Distribution Agreement, plaintiff may gain access to confidential information, i.e. trade secrets. Specifically, the Distribution Agreement states as follows:

As a result of this Agreement, DISTRIBUTOR may have access to or obtain certain information not available to the general public regarding BBDC's or its affiliates' business (“Confidential Information”). DISTRIBUTOR acknowledges that the Confidential Information constitutes valuable trade secrets to BBDC and DISTRIBUTOR agrees that it must use the Confidential Information solely in accordance with the provisions of this Agreement and will not disclose, or permit to be disclosed, the same directly or indirectly, to any third party without BBDC's prior written consent. * * *

Id. § 6.1.

         In 2011, BIMBO's parent company, Mexico-based “Grupo Bimbo, S.A.B. de C.V., ” purchased Sara Lee Corporation's North American fresh bakery business, which resulted in overlapping distribution routes with BIMBO's existing IO distribution network. Id. ¶ 28. The Sara Lee distribution model relied on union employee drivers. Id. ¶ 29.

         On December 31, 2014, Bimbo Foods acquired all of the rights and liabilities of Bimbo Bakeries Distribution Company, LLC, a Texas limited liability company which had previously operated as BBDC. Id. ¶ 3.

         In 2017, BIMBO negotiated for the drivers of Teamsters to take over the routes owned by plaintiff and other independent route owners in the Kansas City Area. Id. ¶ 31. Teamsters knew that BIMBO had not properly acquired the distribution rights from the independent distributors. Id. ¶ 32. On October 23, 2017, counsel for plaintiff informed Teamsters that plaintiff owned the exclusive right to distribute BIMBO products in certain geographic areas and that any action by the union to service the routes owned by plaintiff would interfere with his business expectancy. Id. ¶ 33. Although BIMBO has not acquired plaintiff's exclusive right to distribute BIMBO products, BIMBO and Teamsters have nevertheless taken over operation of plaintiff's route. Id. ¶ 39. BIMBO has disclosed to Teamsters confidential information regarding customer data and customer lists for the sale of baked goods to outlets in plaintiff's exclusive sales area. Id. ¶ 99.

         Analysis

         Against all defendants, plaintiff asserts claims for conversion (Count I), tortious interference with a business expectancy (Count IV), tortious interference with business relations (Count V), and civil conspiracy (Count XI). Against Teamsters, plaintiff asserts additional claims for tortious interference with a business expectancy (Count VI) and tortious interference with business relations (Count VII). Against Bimbo Foods, Bimbo Bakeries and Does 1-5, plaintiff also asserts claims for constructive trust (Count II), unjust enrichment (Count III), and violation of the Kansas Uniform Trade Secrets Act (“KUTSA”), K.S.A. § 60-3320 et seq. (Count VIII). Against Bimbo Foods and Bimbo Bakeries, plaintiff also asserts claims for specific performance (Count IX) and breach of distribution agreement (Count X). Teamsters and BIMBO seek to dismiss the claims against them.

         I. Teamsters' Motion To Dismiss

         Against Teamsters, plaintiff asserts claims for conversion (Count I), tortious interference with a business expectancy (Counts IV and VI), and tortious interference with business relations (Counts V and VII). Teamsters seeks to dismiss on grounds that (1) federal law preempts the claims; and (2) plaintiff has failed to state plausible claims for relief.

         A. Federal Preemption

         Teamsters asserts that federal law preempts the claims. Teamsters asserts that in essence, plaintiff claims that the collective bargaining agreement between it and BIMBO constitutes an unfair labor practice under Section 8(e) of the National Labor Relations Act (“NLRA”), 29 U.S.C. § 158(e).[3] See Defendant International Brotherhood Of Teamsters Local Union No. 955 Memorandum In Support Of Motion To Dismiss For Failure To State A Claim Upon Which Relief Can Be Granted (Doc. #8) filed September 13, 2018 at 6-7. In a case involving similar claims against the same defendant in this Court, Chief Judge Julie A. Robinson rejected this argument. See Butcher v. Teamsters Local 955, No. 18-2424-JAR-KGG, 2018 WL 6200027, at *5-8 (D. Kan. Nov. 11, 2018). Specifically, Judge Robinson found that adjudicating plaintiff's claims would not interfere with the “integrated scheme of regulation” established by the NLRA or the underlying purpose of federal preemption in the labor context, i.e. limiting state authority over labor disputes. See id. at *8 (quoting Chamber of Commerce of U.S. v. Brown, 554 U.S. 60, 65 (2008) (quoting Golden State Transit Corp. v. City of Los Angeles, 475 U.S. 608, 613 (1986)). The Court agrees with Judge Robinson's analysis and will not dismiss plaintiff's claims on this ground.

         B. Claims For Relief

         Teamsters asserts that plaintiff has failed to state plausible claims for relief. Specifically, Teamsters asserts that plaintiff has failed to allege facts sufficient to support claims of conversion (Count I), tortious interference with a business expectancy (Counts IV and VI), tortious interference with business relations (Counts V and VII), and civil conspiracy (Count XI).[4] See Teamsters Memorandum (Doc. #8) at 7-13.

         1. ...


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