Troya International, Ltd. Sti. et al v. Bird-X, Inc.
Filing
68
MEMORANDUM OPINION AND ORDER Signed by the Honorable Harry D. Leinenweber on 12/7/2017:Mailed notice(wp, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
TROYA INTERNATIONAL, LTD.
STI and HIKMET HEPBAYTAS,
Case No. 15 C 9785
Plaintiffs,
v.
Judge Harry D. Leinenweber
BIRD-X, INC.,
Defendant.
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant’s Combined Motion to Dismiss
Plaintiffs’ Amended Complaint under Rule 12(b)(6) and Limited
Motion for Summary Judgment [ECF No. 49].
these
Motions
concurrently,
and
so
the
The parties briefed
Court
issues
the
following single Opinion granting in part and denying in part
Defendant’s Combined Motion.
I.
BACKGROUND
“To see me does not necessarily mean to see my face.
To understand my thoughts is to have seen me.”
Mustafa Kemal Atatürk.
“At the sight of blackbirds
Flying in a green light,
Even the bawds of euphony
Would cry out sharply.”
Wallace Stevens, Thirteen Ways of Looking at a Blackbird, X.
A.
The Parties’ Commercial Relationship
This dispute took flight after dealings broke down between
Plaintiff Troya International, Ltd. Sti. (“Troya”) - a Turkish
company owned by Plaintiff Hikmet Hepbaytas (“Hikmet”) and his
wife - and Defendant Bird-X, Inc. (“Bird-X”), an Illinois-based
manufacturer
of
pest
control
products.
As
relevant,
Bird-X
develops and sells products designed to steer birds clear of
airports, transit facilities, wind farms, power stations, and
the like.
Hikmet and his wife purchased Troya for the purpose
of marketing and distributing Bird-X’s bird control products in
Turkey and Cyprus.
The following factual background is drawn
from the allegations in Plaintiffs’ First Amended Complaint as
well
as
the
undisputed
facts
introduced
on
Bird-X’s
Limited
Motion for Summary Judgment.
On August 10, 2001, Hikmet and Stephen Boyle (“Boyle”), an
agent in Bird-X’s export department, allegedly entered into an
oral agreement whereby Bird-X granted Troya the exclusive right
to market, sell, and otherwise distribute its products in Turkey
and Cyprus for twenty years.
61.)
do
(See, ECF No. 40 (“FAC”) ¶¶ 18-20,
The parties never reduced this agreement to writing, nor
any
of
their
subsequent
writings
accord.
- 2 -
refer
to
this
putative
On October 28, 2002, Hikmet expressed to Boyle an interest
in Troya’s testing certain Bird-X products.
Ex. A (“Pls.’ Resp. to Def.’s SOF”) ¶ 3.)
forth,
Boyle
sent
Hikmet
a
signed
(ECF No. 60 at
After some back and
statement
on
December
27,
2002, on behalf of Bird-X, “authoriz[ing] Troya International
Ltd. Sti. as the dealer of Bird-X, Inc. in Turkey, The Cyprus
and Turki [sic] Republic, to distribute our products in these
regions
on
a
non-exclusive
basis.”
(FAC
at
Ex.
A.)
Boyle
represented that Bird-X would “refer appropriate leads from your
area” in the following manner:
When a customer from Turkey or the surrounding area
contacts us, we can advise them to contact you
directly.
We will offer protection to you for your
customers. We will not contact any of your customers
directly without your consent.
In order to achieve
this, we will need you to provide us with a list of
customers and prospects that you are working with so
that we can re-direct them to you should they try to
contact us directly.
(Ibid.)
Plaintiffs proceeded under this business relationship
with Bird-X, with Hikmet even turning over Troya’s customer list
–
one
of
its
“confidential”
(FAC ¶ 37.)
Bird-X:
¶ 5.)
“most
valuable
information
that
trade
was
secrets”
otherwise
replete
“kept
with
secret.”
In January 2003, Troya made its first purchase from
three units totaling $950.00 (Pls.’ Resp. to Def.’s SOF
Around that time, Hikmet also wrote to Bird-X indicating
that Troya wanted an “exclusive distributorship.” (Id. ¶ 6.)
- 3 -
In
response, Bird-X stated that Troya’s securing such rights would
depend on the extent of its future sales. (Ibid.)
In April 2003, Hikmet complained to Bird-X that another
Turkish company was selling Bird-X products; about a year later,
he expressed concern that Bird-X had sold products directly to
other distributors in Turkey and indirectly to a Troya customer,
Ataturk Airport.
(Pls.’ Resp. to Def.’s SOF ¶ 10.)
On July 15,
2004, Hikmet again requested that Troya be recognized as BirdX’s exclusive distributor in Turkey and Cyprus.
From Bird-X’s
response, Hikmet understood that Troya would need sales volume
of
$7,000-10,000
per
month
for
exclusivity rights. (Id. ¶ 11.)
exclusivity
on
would
greater
need
October
5,
sales
2004,
volume
Bird-X
to
consider
granting
When Hikmet again requested
Boyle
and
reiterated
also
noted
that
that
Troya
Bird-X
generally required exclusive distributors to stock products –
something Troya did not do. (Id. ¶ 12.)
On February 9, 2006,
Hikmet
concern
emailed
Bird-X
again
to
express
direct sales to Aygaz, a Turkish company.
at
Bird-X’s
(Id. ¶ 13.)
At Hikmet’s request, Boyle signed and transmitted to Troya
another written statement on November 2, 2007, authorizing Troya
to distribute Bird-X’s “products as our representative in Turkey
and
Cyprus”
but
omitting
the
“on
a
non-exclusive
language. (FAC at Ex. B; Pls.’ Resp. to Def.’s SOF ¶ 15.)
- 4 -
basis”
Like
the first, this signed letter promised “protection to you for
your
customers”
and
“not
[to]
contact
any
of
your
directly without your consent.” (FAC at Ex. B.)
customers
The statement
concluded by expressing excitement “to have Troya International
as
an
official
Bird-X
agent
in
Turkey.”
(Ibid.)
Hikmet
understood this signed statement to grant exclusivity rights to
Troya at long last. (Id. ¶ 27.)
Throughout 2008, Hikmet again realized “that other entities
were selling Defendant’s products in Turkey and Cyprus.”
¶ 42.)
(FAC
In response to an inquiry from Hikmet, Bird-X personnel
indicated
that
these
other
entities
must
have
purchased
the
products online but reassured Hikmet that Bird-X “would continue
to forward leads only to him, and would try to monitor further
internet sales.” (Id. ¶ 44; see also, id. at Ex. C.)
Similarly,
in September 2009, Hikmet emailed Bird-X complaining that other
Turkish companies were presenting and selling Bird-X products on
their
websites,
which
“constituted
a
great
problem
for
us.”
(Pls.’ Resp. to Def.’s SOF ¶ 17.)
Troya placed its last order for Bird-X products in August
2010. (Pls.’ Resp. to Def.’s SOF ¶ 30.)
On March 2, 2011, Tammy
Stone (“Stone”), Bird-X’s international sales manager, informed
Hikmet that Bird-X had entered into a master distributorship
agreement with an Istanbul-based company, MG Gida.
- 5 -
According to
Stone, that agreement granted MG Gida the exclusive rights to
provide Bird-X products to all “existing distributors, dealers,
retail customers and of course end users” in the region.
at Ex. D.)
(FAC
Although Stone informed Hikmet that Troya could
purchase Bird-X products from MG Gida at prices comparable to
those it had directly paid Bird-X in the past, Plaintiffs claim
that MG Gida’s prices were actually 60 percent higher such that
Troya was unable to sell Bird-X products for a profit. (Id.
¶¶ 47-49.)
According
to
Plaintiffs,
Bird-X
gave
Troya’s
customer list to MG Gida, which cost Troya “at least one major
contract.” (FAC ¶ 52.)
benefit
from
the
Because they “are no longer able to
market
now
that
only
they
created
distribute
for
local
Bird-X’s
products,”
Plaintiffs
Turkish-made
products.
(ECF No. 63 at Ex. 2 (“Def.’s Resp. to Pls.’ SAUF”)
¶ 12.)
B.
As
part
Plaintiffs
of
their
created
numerous
videos
products,
and
TV
Video Demonstration
efforts
and
internet
demonstrating
Hikmet
to
traveled
the
market
Bird-X
products,
advertisements,
including
efficacy
considerably
products to market and have them tested.
of
to
certain
Bird-X
introduce
the
Specifically, in 2006,
Hikmet created a video in which he narrates and demonstrates the
efficacy of the “BirdXPeller Sonic Device.”
- 6 -
Hikmet uploaded
this video to Troya’s website, and Bird-X eventually uploaded
the video to its own website.
On September 4, 2009, Hikmet
notified Bird-X via email that he and Troya “are glad that you
shared
pointed
our
successful
Bird-X
to
controlling
other
dangerous
Troya-created
pigeon
content
potentially help Bird-X market its products.
Def.’s SOF ¶¶ 22-24.)
test”
that
and
could
(Pls.’ Resp. to
Plaintiffs admit that Hikmet was aware of
Bird-X’s use of the video on its own website in 2009. (Id.
¶ 22.)
Sometime later, Bird-X uploaded the video to vimeo.com,
metacafe.com,
and
youtube.com.
(FAC
¶
35.)
Bird-X
has
also
furnished the video to some of its other distributors for them
to use in marketing Bird-X products.
Hikmet
registered
the
video
(Id. ¶ 34.)
in
his
name
with
the
U.S.
Copyright Office on August 6, 2015, as U.S. Copyright No. PAu 3773-067
entitled
“Bird
Repellant
Demonstration
Effectiveness.” (See, FAC ¶¶ 133-34; id. at Ex. E.)
upon
filing
this
lawsuit
that
Hikmet
requested
of
Product
It was only
that
Bird-X
remove the video from its website and otherwise cease using it
in its marketing efforts. (Pls.’ Resp. to Def.’s SOF ¶ 25.)
C.
The Turkish Lawsuits
Between 2004 and 2011, Troya was named as a defendant in
five separate lawsuits relating to its sale of “faulty” Bird-X
products in Turkey. (Pls.’ Resp. to Def.’s SOF ¶ 26.)
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Troya
answered
and
sought
to
defend
against
the
lawsuits,
but
judgments were ultimately entered against Troya in an amount
exceeding $100,000. (Id. ¶ 27; FAC ¶¶ 55-56.)
At no time prior
to filing the instant lawsuit did Troya notify Bird-X of the
Turkish lawsuits or of any of the judgments entered against it.
(Pls.’ Resp. to Def.’s SOF ¶¶ 28-29.)
*
*
*
Plaintiffs filed their original Complaint in this case on
November 2, 2015, claiming that Bird-X fraudulently induced them
to spend their own time and money to distribute and market its
products throughout Turkey and Cyprus.
On January 31, 2017,
Plaintiffs amended to assert the following:
(Count
I),
breach
of
fiduciary
duty
common law fraud
(Count
II),
tortious
interference with contract (Count III), contribution (Count IV),
breach
of
contract
(Count
VI),
(Count
violation
of
V),
trade
Hikmet’s
secret
right
of
misappropriation
publicity
(Count
VII), copyright infringement (Count VIII), and two counts pled
in
the
alternative:
enrichment
(Count
quantum
X).
After
meruit
taking
(Count
IX)
limited
and
unjust
discovery
on
statute-of-limitations issues, Bird-X filed its Combined Motion
to Dismiss and Motion for Limited Summary Judgment, arguing that
certain
of
Plaintiffs’
counts
are
time-barred
dismissed for various other pleading deficiencies.
- 8 -
or
should
be
II.
LEGAL STANDARDS
To survive a motion to dismiss under Federal Rule of Civil
Procedure
12(b)(6),
a
complaint
plausible on its face.”
“must
state
a
claim
that
is
Adams v. City of Indianapolis, 742 F.3d
720, 728 (7th Cir. 2015) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)).
When considering motions to dismiss
under Rule 12(b)(6), a district court accepts as true all wellpleaded
factual
allegations
therefrom
in
favor
Jakupovic
v.
Curran,
of
the
850
and
draws
non-moving
F.3d
898,
reasonable
party.
902
(7th
inferences
See,
Cir.
e.g.,
2017).
Documents attached to the Complaint are considered part of it.
See, e.g., Moranski v. Gen. Motors Corp., 433 F.3d 537, 539 (7th
Cir. 2005) (citing FED. R. CIV. P. 10(c)).
Rule 56 of the Federal Rules of Civil Procedure provides
for the entry of summary judgment against a plaintiff who fails
to make a sufficient showing of the existence of an element
essential to its case and on which it will bear the burden at
trial.
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
To
obtain summary judgment on an affirmative defense, a defendant
must establish the defense’s essential elements.
See, e.g.,
Wilson v. Epps, 776 F.3d 296, 299 (5th Cir. 2015).
Summary
judgment “should be rendered if the pleadings, the discovery and
disclosure materials on file, and any affidavits show that there
- 9 -
is no genuine issue as to any material fact and that the movant
is
entitled
P. 56(a);
to
judgment
Celotex,
477
as
a
U.S.
matter
at
of
law.”
322-23.
A
FED. R. CIV.
genuine
issue
of
material fact exists when the evidence, viewed in the light most
favorable
to
the
non-movant,
is
such
that
could return a verdict for the non-movant.
a
reasonable
jury
Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986).
III.
Because
the
Court
granted
Court
will
DISCUSSION
statute-of-limitations
limited
consider
discovery
Bird-X’s
will
issues
dispose
arguments
on
of
which
the
claims,
the
concerning
pleading
inadequacies only once and after it determines that a particular
claim is not time-barred.
A.
Count I: Common Law Fraud
Count I alleges common law fraud based upon Bird-X agents’
alleged statements “through at least 2008” that Troya had or
would secure exclusive rights to distribute Bird-X products in
the region and assurances “through at least November 2, 2007”
that Bird-X would not sell to Troya’s customers. (FAC ¶¶ 58-73.)
Plaintiffs allege that Bird-X’s non-solicitation assurances were
designed “to induce Plaintiffs to give them Troya’s valuable
customer list,” and that Plaintiffs relied on them in so doing.
(Id.
¶
71.)
Plaintiffs
allege
- 10 -
damages
“well
in
excess
of
$1,500,000”
as
a
result
of
Bird-X’s
conduct
and
ultimate
establishment of an exclusive distributorship arrangement with
MG Gida. (Id. ¶¶ 78-79.)
The parties agree that Count I is governed by Illinois’s
five-year
residual
statute
of
limitations
for
actions
“not
otherwise provided for.” 735 Ill. Comp. Stat. 5/13-205.
limitations
period
begins
to
run
when
Plaintiffs
This
knew
or
reasonably should have known that an injury had occurred and
that it was wrongfully caused.
Compare, In re marchFIRST Inc.,
589 F.3d 901, 904 (7th Cir. 2009) (“The cause of action accrues
and
the
person
limitations
becomes
period
possessed
of
begins
to
sufficient
run
when
‘the
information
injured
concerning
his injury and its cause to put a reasonable person on inquiry
to determine whether actionable conduct is involved.’” (quoting
Knox
College
v.
Celotex
Corp.,
430
N.E.2d
976,
980-81
(Ill.
1981)), with, Chicago Bldg. Design, P.C. v. Mongolian House, 770
F.3d 610 (7th Cir. 2014) (“The concept of inquiry notice may
help to identify the time at which a reasonable plaintiff can be
expected
to
start
rights,
but
it
investigating
does
not
a
itself
possible
trigger
violation
the
of
his
statute
of
limitations.”).
On a regular basis between 2003 and 2009, Hikmet was made
aware that Troya was not an exclusive distributor and that Bird- 11 -
X was selling to other parties in Turkey.
For example, Troya
discovered on April 16, 2004, that Bird-X was selling to other
companies in Turkey, including Troya customer Ataturk Airport.
What
is
more,
on
February
9,
2006,
Troya
emailed
Bird-X
expressing concern that it had directly sold products to another
Turkish company, Aygaz, and at that time was also aware “of
several such instances of direct sales by Bird-X.”
to Def.’s SOF ¶ 13.)
(Pls.’ Resp.
Although Boyle’s November 11, 2007 signed
letter to Troya omitted the “on a non-exclusive basis” caveat
that characterized his prior signed statement, nothing therein
can be construed to suggest that Bird-X told Troya it had or
would
soon
be
entitled
to
exclusivity
rights.
As
stated
previously, Bird-X had repeatedly told Hikmet that Troya would
need to both increase its sales volume by several orders of
magnitude and stock Bird-X products for exclusivity even to be
on
the
table;
it
is
undisputed
that
Troya
never
benchmark prior to the November 11, 2007 letter.
met
either
And, in any
event, on September 4, 2009, Troya notified Bird-X that other
Turkish companies were presenting and selling Bird-X products on
their
websites,
meaning
that
Plaintiffs
knew
or
reasonably
should have known in 2009 that whatever exclusivity promises
they derived from the November letter were not being honored.
- 12 -
In sum, Bird-X’s consistent course of conduct contradicted
the
very
representations
on
which
Plaintiffs
claim
to
have
reasonably relied when they earlier chose to market Bird-X’s
products and turn over Troya’s customer list.
Bird-X’s only
potential deviation – an ambivalent November 2007 letter – flew
in the face of Bird-X’s repeated insistence that Troya would not
even be eligible for exclusivity rights unless it met benchmarks
that
it
indisputably
never
did.
And,
in
any
event,
Troya
learned in 2009 that the non-exclusivity status quo persisted
insofar as other Turkish companies were peddling Bird-X products
on
their
websites.
Plaintiffs
therefore
knew
or
reasonably
should have known that Troya was not an exclusive distributor of
Bird-X products in the region and that Bird-X was selling its
products to other companies in Turkey (as well as Troya’s own
customers) long before November 2, 2010 – that is, long before
five years prior to initiating this lawsuit.
As such, Count I
is time-barred, and Bird-X’s Motion is granted in relevant part.
Finally, to the extent Plaintiffs premise Count I on BirdX’s alleged misappropriation of Troya’s customer list – which
Plaintiffs
seem
to
allege
occurred
in
2011
upon
Bird-X’s
establishment of an exclusivity arrangement with MG Gida – such
a claim for relief would be preempted.
As set forth more fully
below, Troya states an actionable state law claim based on Bird- 13 -
X’s alleged misappropriation of Troya’s customer list.
Section III.F, infra.)
(See,
The Illinois Trade Secrets Act (“ITSA”)
is the exclusive remedy under Illinois law for misappropriation
of trade secrets and “explicitly abolishes all common law causes
of
action,
except
secret theory.”
breach
of
contract,
predicated
on
a
trade
Composite Marine Propellers, Inc. v. Van Der
Woude, 962 F.2d 1263, 1265 (7th Cir. 1992).
As such, to the
extent it invokes Bird-X’s alleged trade secret misappropriation
within the limitations period, Count I alleging common law fraud
is preempted.
B.
Count II: Breach of Fiduciary Duty
Next, Plaintiffs claim that Bird-X stood in the position of
a fiduciary by virtue of “a significant disparity in business
experience between the parties.” (FAC ¶¶ 82-84.)
Accordingly,
“Troya entrusted Defendant with its confidential customer list,
and
with
handling
its
customer
related
business
affairs
and
questions” and credited Bird-X’s representations that it would
“direct all potential leads from Turkey and Cyprus to Troya.”
(Id. ¶ 85.)
And because Plaintiffs allege that they played an
integral role in making a market in Turkey and Cyprus for BirdX’s
products,
“Plaintiffs
were
entirely
at
the
mercy
of
Defendant, who at any time could terminate their relationship
and
take
advance
of
this
market
- 14 -
for
its
own
benefit.”
(Id.
¶ 86.)
“duty
Plaintiffs posit three breaches of Bird-X’s fiduciary
of
good
faith
and
fair
dealing
and
duty
of
loyalty”:
“intentionally sabotaging Troya’s exclusive distributorship, and
forcing
them
to
buy
a
product
at
a
markup
from
MG
Gida”;
“disclosing Troya’s confidential customer list”; and “failing to
reimburse Troya” for the five lawsuits in which judgment was
entered against Troya.
(Id. ¶¶ 88-90.)
As with claims of common law fraud, claims for breach of
fiduciary duty under Illinois law are subject to the residual
five-year statute of limitations specified in 735 Ill. Comp.
Stat. 5/13-205.
See, Havoco of Am., Ltd. v. Sumitomo Corp. of
Am., 971 F.2d 1332, 1337 (7th Cir. 1992); Armstrong v. Guigler,
673 N.E.2d 290, 296 (Ill. 1996) (holding that “only the fiveyear statute of limitations for all civil actions not otherwise
provided
for
characteristics
action”).
is
of
truly
[the
consonant
breach
of
with
fiduciary
the
distinctive
duty]
cause
of
The limitations period for such actions is “measured
from the accrual of the cause of action,” Clark v. Robert W.
Barid Co., 142 F.Supp.2d 1065, 1074-75 (N.D. Ill. 2001), meaning
that the limitations period begins to run when “‘the injured
person
becomes
possessed
of
sufficient
information
concerning
his injury and its cause to put a reasonable person on inquiry
to determine whether actionable conduct is involved.’”
- 15 -
Uppal v.
Rosalind Franklin Univ. of Med. and Sci., No. 15 C 3806, 2015 WL
5062823, at *2 (N.D. Ill. Aug. 26, 2015) (quoting Knox College,
430 N.E.2d at 980-81).
The Court need not reach the question whether Bird-X owed
any fiduciary duties because, to the extent Plaintiffs had any
claim
for
November
breach
2010
-
of
fiduciary
that
is,
duty,
long
it
before
accrued
five
long
years
before
prior
to
initiation of this lawsuit.
First, Plaintiffs try to link the other features of their
breach of fiduciary duty claim to their discovery that Bird-X
had entered into a master distributorship agreement with MG Gida
in
March
statute
2011
of
–
the
only
relevant
limitations.
But
event
falling
Plaintiffs
have
within
the
alleged
the
breaches in such a way that, at best, the MG Gida arrangement
merely
Hikmet
culminated
was
Bird-X’s
aware,
distributorship
of
arrangement”
prior
consistent
“sabotaging
and
acts,
Troya’s
“disclosing
Troya
of
which
exclusive
customer
information.”
In other words, Bird-X is not alleged to have
done
with
anything
respect
to
MG
Gida
concerning
Troya’s
customers that Plaintiffs were not already aware of with respect
to
Bird-X’s
supplying
other
Turkish
selling to other Troya customers.
product
distributors
and
Because breach of fiduciary
duty is not a tort in Illinois, but instead is governed by the
- 16 -
law of contract and agency, see, In re marchFIRST, 589 F.3d at
904-05; Kinzer on behalf of City of Chi. v. City of Chi., 539
N.E.2d 1216, 1220 (Ill. 1989), Bird-X’s conduct with respect to
MG Gida is not a continuing violation that re-starts the clock
on Plaintiffs’ claim that Bird-X breached its fiduciary duty to
protect
Troya’s
“exclusive
distributorship”
or
“customers.”
See, e.g., In re marchFIRST, 589 F.3d at 904; Uppal, 2015 WL
5062823, at *3; In re Nat’l Jockey Club, 451 B.R. 825, 832
(Bankr. N.D. Ill. 2001) (“The continuing violation doctrine does
not
apply
to
Plaintiff’s
breach
of
fiduciary
duty
claim.”);
Hassebrock v. Ceja Corp., 29 N.E.3d 412, 421 (Ill. App. 2015).
Independently,
Plaintiffs’
claim
for
breach
of
fiduciary
duty insofar as it relates to disclosure of Troya’s customer
list is preempted by their actionable ITSA claim.
Section III.A, supra.)
(See also,
Where a claim for breach of fiduciary
duty cannot conceivably “state a claim for disloyalty without
implicating
trade
secrets,”
it
is
preempted
by
the
ITSA.
AutoMed Techs., Inc. v. Eller, 160 F.Supp.2d 915, 921-22 (N.D.
Ill. 2001) (“Breaching a duty of loyalty by using confidential
information
is
still
misappropriation
of
a
trade
secret.”);
accord, Montel Aetnastak, Inc. v. Miessen, 998 F.Supp.2d 694,
719 (N.D. Ill. 2014) (“The ITSA preempts civil claims that are
based on the misappropriation of trade secrets.
- 17 -
Valid claims
involving the misuse of non-confidential information, such as
theft,
fraud
and
breach
of
the
duty
of
loyalty,
are
not
preempted.”) (internal citation omitted).
Second, it is clearly too late for a fiduciary duty claim
based on Bird-X’s failure to reimburse Troya for its liability
to
dissatisfied
customers.
Plaintiffs
admit
that
the
five
Turkish lawsuits in which judgments were entered against Troya
based on defective Bird-X products were filed beginning in 2004.
Only the 2011 lawsuit falls within the limitations period, and
by all accounts it was identical to the other previous suits –
making
it
also
a
mere
continuing
violation
insufficient
to
restart the clock.
As such, Count II for breach of fiduciary duty is timebarred, and the Court grants Bird-X’s Motion in relevant part.
C.
Count III: Tortious Interference with Contract
Next, Plaintiffs allege that, from 2001 through March 2011,
Troya had contracts with third parties throughout Turkey and
Cyprus
to
agreements
sell
and
ceased
install
and
Bird-X
Troya’s
products
business
Defendant’s breach.” (FAC ¶¶ 93, 95, 97.)
and
that
stopped”
“these
“after
By forcing Troya to
purchase Bird-X products at a markup from MG Gida and “by giving
Troya’s
confidential
Troya’s
former
client
customers
list
to
be
- 18 -
to
MG
Gida,”
“serviced
by
Bird-X
MG
forced
Gida
and
Defendant’s other distributors.” (Id. ¶ 96.)
Plaintiffs aver
Bird-X’s knowledge of Troya’s contracts by pointing to Bird-X’s
possession of Troya’s customer list, filling Troya’s orders for
these
clients,
and
repeatedly
communicating
with
Hikmet
regarding sales and marketing. (Id. ¶ 98.)
In
Illinois,
actions
for
tortious
interference
with
contract are also “not otherwise provided for” and thus subject
to
the
five-year
residual
Comp. Stat. 5/13-205.
statute
of
limitations.
735
Ill.
A claim for tortious interference with
contract accrues when the interfered-with contract is breached.
Hi-Lite Prods. Co. v. Am. Home Prods. Corp., 11 F.3d 1402, 1410
(7th Cir. 1993) (citing Howard T. Fisher & Assocs., Inc. v.
Shinner Realty Co., 164 N.E.2d 266, 272 (Ill. App. 1960)).
This
is so even if the tortious conduct prompting the third party’s
breach continues beyond it, as “there can be [no] continuing
procuring
of
a
breach
of
a
contract
after
the
breach
has
actually occurred.” Ibid.
Even
if
their
allegations
indicate
that
Plaintiffs
were
aware of Bird-X’s propensity to sell to Troya’s customers long
before November 2, 2010 – that is, long before five years prior
to the filing of this action - Plaintiffs also allege that BirdX tortiously interfered with Troya’s contracts by establishing
an
exclusivity
arrangement
with
- 19 -
MG
Gida,
forcing
Troya
to
purchase products from MG Gida at a markup, and turning over
Troya’s customer list to that company.
Bird-X informed Hikmet
of its arrangement with MG Gida on March 2, 2011 – well within
the limitations period – suggesting that Troya’s customers did
not
breach
contracts
allege
Plaintiffs
their
tortious
until
sometime
interference
later.
falling
As
such,
within
the
limitations period, and Count III is actionable on that basis
even though some interference with its customer relationships
may have occurred outside the limitations period.
11 F.3d at 1410-11.
See, Hi-Lite,
However, Count III is time-barred to the
extent it seeks to recover for third-party breaches prior to
November
2,
2010,
conduct.
(Per the Court’s earlier analysis, Count III is also
preempted
by
the
induced
ITSA
by
insofar
Bird-X’s
as
it
is
allegedly
bottomed
on
tortious
alleged
misappropriation of Troya’s customer list.)
There
still
remains
the
issue
of
various
pleading
deficiencies Bird-X has asserted under Rule 12(b)(6), the most
well-taken of which is its assertion, consonant with Illinois
law,
that
liability
for
tortious
interference
“may
only
be
premised on acts immediately directed at a third party which
cause that party to breach its contract with the plaintiff.”
George A. Fuller Co. v. Chi. Coll. of Osteopathic Med., 719 F.2d
1326,
1330
(7th
Cir.
1983)
(citing
- 20 -
Mitchell
v.
Weiger,
409
N.E.2d
38
alleged
(Ill.
App.
dealings
Plaintiffs’
tortious
only
1980)).
were
directed
actionable,
interference
Although
at
timely
concerns
certain
of
customers
claim
Bird-X’s
Bird-X’s
of
against
Troya,
Bird-X
post-November
2,
for
2010
conduct (other than trade secret misappropriation) with respect
to MG Gida.
Troya
But Plaintiffs do not allege that MG Gida was a
customer,
nor
that
Bird-X
took
any
action
within
the
limitations period directed at a Troya customer that induced
such a customer to breach its contract with Troya.
As a general
proposition of Illinois tortious interference law, “[i]t is not
enough
rather,
for
the
the
defendant’s
defendant’s
third party.”
action
action
to
must
impact
be
a
directed
third
party;
towards
the
Boffa Surgical Grp. LLC v. Managed Healthcare
Assocs., Ltd., 47 N.E.3d 569, 577 (Ill. App. 2015) (citation
omitted).
interfering
Courts
action
third party.”
have
be
consistently
directed
in
the
“require[ed]
first
that
instance
at
the
the
Schuler v. Abbot Labs., 639 N.E.2d 144, 148 (Ill.
App. 1993).
Perhaps
interference
if
Plaintiffs
based
on
its
had
sued
improperly
MG
Gida
inducing
for
tortious
customers
to
breach their contracts with Troya, then there would be no such
impediment.
Yet they chose to bring this tortious interference
action against Bird-X as the sole defendant.
- 21 -
“Alas, the frailty
is to blame, not we / For such as we are made of, such we be.”
Twelfth Night, Act II, Scene II.
Consequently, Bird-X’s Motion
is granted in relevant part as to Count III.
D.
Count IV: Contribution
Plaintiffs next sue Bird-X under the Illinois Contribution
Among Joint Tortfeasors Act (“the Contribution Act”), 740 Ill.
Comp.
Stat.
100/0.01,
et
seq.,
based
on
the
five
Turkish
lawsuits against Troya arising out of “Defendant’s faulty bird
repellant products.” (FAC ¶¶ 101, 106.)
As a result of these
suits,
were
judgments
in
excess
of
$100,000
entered
against
Troya without any contribution from Bird-X. (Id. ¶¶ 102-04).
Plaintiffs also claim that Troya was forced to refund $10,000 to
one of its customers as a result of a faulty Bird-X product.
(Id. ¶ 105.)
Plaintiffs neither respond to Bird-X’s statute-of-
limitations arguments nor posit any acts or omissions (other
than the initiation of these Turkish suits) that alerted them to
their entitlement to contribution from Bird-X.
The Contribution Act provides for a right of contribution
among two or more persons subject to liability in tort arising
out of the same injury to person or property. 740 Ill. Comp.
Stat.
100/2.
If
“no
underlying
action
seeking
recovery
. . . has been filed by a claimant, no action for contribution
or indemnity may be commenced with respect to any payment made
- 22 -
to that claimant more than 2 years [after the payment].” 735
Ill. Comp. Stat. 5/13-204(a).
Where “an underlying action” has
been filed by a claimant,” under Illinois law no contribution or
indemnity action “may be commenced more than 2 years after the
party seeking contribution or indemnity has been served with
process in the underlying action or more than 2 years from the
time the party . . . knew or should reasonably have known of an
act or omission giving rise to the action for contribution or
indemnity, whichever period expires later.” 735 Ill. Comp. Stat.
5/13-204(b).
The
payment
absent
claim
of
an
a
by
a
Turkish
$10,000
underlying
refund
consumer
resulting
constitutes
action.
And
the
the
in
Troya’s
“payment”
made
lawsuits
that
Turkish
eventuated in judgments against Troya of over $100,000 are the
“underlying
actions”
Regardless
of
for
whether
which
these
Plaintiffs
claims
seek
sounded
contribution.
in
tort
(as
Plaintiffs seem to allege by pleading the cause of action under
the Contribution Act) or contract (as Plaintiffs’ suggest in
their briefs), Count IV is time-barred because Troya brought it
more than two years (indeed, at least four years) after the last
of the five lawsuits was filed against it.
Even the most recent
payment for which Plaintiffs have sued Bird-X – the 2012 refund
– necessitated filing of a contribution action no later than
- 23 -
2014.
As such, the Court grants Bird-X’s Motion in relevant
part with respect to Count IV.
E.
Count V: Breach of Contract
Count V explicitly rests on an alleged contract under which
Bird-X
“offered
customers
customer
in
protection
valuable
list.”
(FAC
for
Plaintiffs’
consideration
¶
109.)
for
business
Troya’s
Plaintiffs
and
confidential
contend
that
this
agreement was reduced to writing on several occasions, including
in the December 27, 2002 signed letter. (Id. ¶ 110; ECF No. 61
at
9
(“The
terms
of
the
parties’
rather
straightforward
agreement are laid out in the December 27, 2002 statement.”).)
In that document, Bird-X promised to Troya to “refer appropriate
leads
from
customers,”
your
and
area,”
“not
“offer
contact
protection
any
of
your
without your consent”. (FAC at Ex. A.)
to
you
for
customers
your
directly
“In order to achieve
this,” Bird-X represented, “we will need you to provide us with
a list of customers and prospects that you are working with so
that we can re-direct them to you should they try to contact us
directly.”
(Ibid.)
Plaintiffs
assert
that
their
“breach
of
contract claim is solely predicated upon Bird-X’s broken promise
to protect Plaintiffs’ customers and forward new customer leads
in Turkey directly to Plaintiffs, which they gave in valuable
consideration for Troya’s customer list and efforts in building
- 24 -
a market for Bird-X’s products.” (ECF No. 61 at 8.)
allege
on
information
agreement
by
¶ 111.)
giving
and
belief
Troya’s
that
customer
Bird-X
list
to
Plaintiffs
breached
MG
Gida.
this
(Id.
Bird-X moves for summary judgment, arguing that the
applicable statute of limitations bars this claim.
Yet Plaintiffs also seem to allege “oral contract terms.”
First, although expressly contradicted by the December 27, 2002
letter, Plaintiffs claim that Bird-X promised “an oral exclusive
distributorship
sole
and
exclusive
distribute
Second,
rights
agreement
its
would
right
products
Plaintiffs
whereby
in
assert
expire
in
to
Defendant
market,
Turkey
that
2020
and
sell,
the
sole
option
Troya
and
Cyprus.”
“Troya’s
with
granted
the
otherwise
(FAC
¶
18.)
distributorship
to
renew
relationship with both parties’ consent.” (FAC ¶¶ 19-20.)
the
The
parties agree that they never exchanged a signed writing that
provides
dismiss
for
any
an
such
exclusivity
claim
for
arrangement.
Bird-X
breach
oral
of
an
moves
to
exclusivity
agreement under Rule 12(b)(6) based on the statue of frauds and
a lack of definiteness as to essential terms.
Illinois law imposes a 10-year statute of limitations on
actions for breach of written contract.
Stat.
5/13-206.
The
statute
of
limitations
contracts, however, is only five years.
- 25 -
See, 735 Ill. Comp.
on
unwritten
735 Ill. Comp. Stat.
5/13-205.
An action for breach of contract accrues when the
breach of contractual duty occurs.
See, e.g., Ind. Ins. Co. v.
Machon & Machon, Inc., 753 N.E.2d 442, 445 (Ill. App. 2001).
Nevertheless,
contracts
requiring
continuing
performance
are
capable of being partially breached on numerous occasions.
See,
Hi-Lite, 11 F.3d at 1408; Luminall Paints, Inc. v. La Salle
Nat’l
Bank,
581
N.E.2d
191,
194-95
(Ill.
App.
1991).
Each
partial breach of a contract requiring continuous performance is
actionable and subject to its own accrual date and limitations
period.
See, Hi-Lite, 11 F.3d at 1408-09; Luminall Paints, 581
N.E.2d at 195; Thread and Gage Co., Inc. v. Kucinski, 451 N.E.2d
1292, 1296-97 (Ill. App. 1983).
Even a continuous contract is
capable of “a single total breach by repudiation or a material
failure of performance.”
Segall v. Hurwitz, 339 N.W.2d 333,
342-43 (Wis. App. 1983).
A breach is material if it is “so
substantial
and
fundamental
as
to
parties in making the agreement.”
LLC
v.
Hallberg,
976
N.E.2d
defeat
the
objects
of
the
Insureone Ind. Ins. Agency,
1014,
1027
(Ill.
App.
2012)
(internal quotation marks omitted).
First, to the extent Count V asserts breach of an oral
contract
based
on
Bird-X
not
treating
Troya
as
an
exclusive
distributor, such a claim is time-barred because Hikmet knew of
Bird-X’s total breach by repudiation of the alleged agreement
- 26 -
long before November 2, 2010 – that is, long before five years
prior to institution of this lawsuit.
signed
letter
arrangement
dealer
contravened
by
endowed
the
alleged
The December 27, 2002
prior
expressly
providing
only
“non-exclusive”
with
that
oral
Troya
exclusivity
was
a
distribution
Bird-X
rights;
Bird-X declined on numerous occasions from 2003 to 2005 to grant
exclusivity rights to Troya, stating that it would only consider
an exclusivity arrangement if Troya attained certain benchmarks
that it indisputably never did; and in 2009, even after the
November 2, 2007 signed letter, Hikmet continued to complain to
Bird-X about the availability of its products through multiple
other Turkish companies.
Thus, even reading the Complaint with
Troya-tinted
glasses
leads
recovery
on
the
barred.
Prior to November 2, 2010, Bird-X repeatedly expressed
alleged
inexorably
oral
to
exclusivity
the
conclusion
contract
is
that
time-
to Hikmet that exclusivity was off the table and engaged in
conduct to the same effect, thus materially breaching or totally
repudiating any alleged oral exclusivity contract. See, Hi-Lite,
11 F.3d at 1409 (“If a single breach [of a continuous contract]
occurs,
either
by
repudiation
or
material
failure
of
performance, the claim accrues at that time and the statute of
limitations begins to run for all claims on that contract.”);
Hassebrock v. Ceja Corp., 29 N.E.3d 412, 422-23 (Ill. App. 2015)
- 27 -
(“[E]ven
if
we
were
to
construe
the
venture
agreement
as
constituting a continuous-performance contract as the plaintiff
suggests, the statute of limitations began to run when the total
breach occurred.
As previously noted, the plaintiff was fully
aware of the defendant’s total breach. . . .”).
However, as laid out above, the gravamen of Plaintiffs’
currently
styled
breach-of-contract
count
is
that
Bird-X
breached its written promise to protect Troya’s customers, which
served as the consideration for Hikmet giving Troya’s customer
list
to
Bird-X.
The
actions
constituting
Bird-X’s
alleged
breach appear to implicate conduct occurring both before and
after November 2, 2005 – particularly, the alleged sharing of
Troya’s customer list with MG Gida.
The question is whether
such contractual claims are time-barred.
If the written contractual duties Bird-X undertook were not
continuous,
then
the
statute
of
limitations
for
all
such
breaches would begin running on the date of the first breach –
for example, the 2003 sales of Bird-X products by other Turkish
companies to Troya’s customers or Bird-X’s own sales in 2004 to
Troya customer Ataturk Airport.
continuous
repudiation
duties,
or
then
material
-
If, however, Bird-X undertook
absent
failure
of
“a
single
total
performance,”
breach
by
Hi-Lite,
11
F.3d at 1409 - each claimed Bird-X breach has a separate accrual
- 28 -
date such that those alleged to have occurred after November 2,
2005, are actionable.
The
Court
contractual
finds
duties
when
that
it
Bird-X
agreed
in
undertook
writing
continuous
to
“protect”
Troya’s customers, to “refer appropriate leads from your area,”
and to refrain from “contact[ing] any of your customers directly
without your consent.”
Although there is no bright-line rule
for determining when contractual duties are continuous, several
data points in the case law persuade the Court at this early
stage that Bird-X’s duties were indeed continuous.
See, e.g.,
Rexam Beverage Can Co. v. Bolger, No. 06 C 2234, 2008 WL 217114,
at *5 (N.D. Ill. Jan. 22, 2008) (holding that lease agreement
created
continuing
obligations
on
part
of
landlord
to
keep
premises in good condition, order, and repair); Lee v. Allstate
Life
Ins.
Co.,
838
N.E.2d
15,
23
(Ill.
App.
2005)
(finding
insurer’s ongoing duty to abide by terms of its contracts with
customers
continuous,
such
that
plaintiffs’
claims
were
not
barred by 10-year limitations period even though initial breach
was outside period); Hurwitz, 339 N.W.2d at 342-43 (holding that
covenant not to compete imposes continuing duties upon defendant
such that new claim generally accrues for each separate breach);
cf., DNB Fitness, LLC v. Anytime Fitness, LLC, No. 11 C 4892,
2012 WL 1952662, at *3 (N.D. Ill. May 30, 2012) (“Here, the
- 29 -
wrongful conduct alleged is Anytime’s failure to disclose the
Anytime
Health
fee
policy
prior
to
the
execution
of
the
franchise agreements, not the failure to disclose the Anytime
Health fee each month prior to it being charged.
Therefore the
failure to disclose is a one-time breach and does not constitute
conduct
that
Anytime
was
expected
to
perform
on
an
ongoing
basis.”); Terra Eng’g & Const. Corp. v. Camp Dresser & McKee,
Inc., No. 03 C 582, 2010 WL 2901606, at *7 (N.D. Ill. July 21,
2010) (“The contract did not call for [defendant] to maintain ‘a
series
of
contract
performances
to
‘maintain
over
and
a
period
keep
in
of
repair
time,’
roads,
such
as
fences,
a
and
buildings, to give a railway pass for life, to furnish heat, to
refrain from competition in business, and to supply another for
life with ice for his own use.’”) (citing 4 Corbin on Contracts
§ 956 (1951)).
What is more, the Court finds that Bird-X did not commit a
single
total
breach
of
its
continuing
contractual
duties,
materially fail to perform them, or repudiate them when, prior
to November 2, 2005, another company in Turkey apparently sought
to
sell
Istanbul,
Bird-X
nor
products
when
Ataturk Airport.
Co.,
735
F.3d
to
Bird-X
Troya’s
sold
customers
its
products
in
Ankara
and
indirectly
to
See, e.g., Apex Dig., Inc. v. Sears, Roebuck &
962,
966
(7th
Cir.
- 30 -
2013)
(holding
that
each
invoice deduction constitutes a separate breach); B/P Servs.,
Inc. v. Target Corp., No. 16 C 4403, 2017 WL 4180301, at *2
(N.D. Ill. Sept. 21, 2017) (“The Court can find no support for
the proposition that failure to timely pay a single invoice in
an ongoing relationship is a total breach of contract such that
further
breaches
should
be
uncompensated. . . . Like
excess
rents, periodic taxes, or failure to place orders, each failure
to pay an invoice was an independent breach with its own statute
of limitations.”); Teague v. Teague, 847 F.Supp.2d 1120, 1124
(N.D.
Ill.
documents
2012)
on
(“[E]ach
Henry’s
part
refusal
or
constituted
failure
another
to
breach
provide
of
the
Assignment Agreement.”); Int’l Bus. Lists, Ltd. v. Am. Tel. &
Tel.
Co.,
No.
92
C
5844,
1994
WL
285079,
at
*4
(N.D.
Ill.
June 23, 1994) (finding that, if company breached its contract
“every time it failed to order a certain number of leads,” each
of those failures would be separate breach with its own statute
of limitations); Luminall Paints, 581 N.E.2d 191, 194 (failure
to
pay
breach).
excess
rents
Indeed,
due
rather
at
specified
than
intervals
expressly
a
separate
repudiating
its
contractual duties, Bird-X through Boyle sought to explain away
the
two
Troya’s
pre-November
customers,
2,
2005
reassuring
issues
Hikmet
that
that
directly
“I
have
impacted
agreed
to
protect your business based on the efforts that you have made.
- 31 -
Any inquiries that have reached us due to the advertising that
you
have
done
have
been
referred
back
to
you,
and
we
will
continue to do this.” (ECF No. 50 (“Def.’s SOF”) at Ex. 3,
BirdX000021-22.)
Because any prior breaches of Bird-X’s continuous duties
were mere partial breaches, Troya’s breach-of-contract claim is
not time barred insofar as it relates to post-November 2, 2005
instances
of
Bird-X
contacting
Troya
customers
directly,
neglecting to re-direct them to Troya when they contacted BirdX, disclosing Troya’s customer list, and otherwise failing to
“protect” Troya’s customers.
See, Hi-Lite, 11 F.3d at 1409-10.
The only issue remaining is whether Bird-X is entitled to a
Rule
12(b)(6)
dismissal
based
on
pleading
deficiencies.
Specifically, Bird-X argues that Plaintiffs have not set forth
essential
price,
or
terms
of
duration
the
–
written
with
contract
sufficient
–
such
as
quantity,
definiteness.
(Bird-X’s
unenforceability arguments with regard to the alleged 20-year
oral
exclusivity
contract
will
not
be
examined
here,
as
the
Court has determined that any associated contract claim is timebarred.)
The question, then, is whether the December 27, 2002
signed letter and subsequent associated written promises impart
sufficiently definite contract terms at the pleading stage to
- 32 -
state a claim for breach of contract based on Bird-X’s failure
to protect Troya’s customers.
The Court declines Bird-X’s invitation to find the alleged
contract terms too indefinite to state a claim, as the parties
have
only
had
an
opportunity
to
statute-of-limitations defenses.
discover
facts
relevant
to
First, and contrary to Bird-
X’s argument, courts typically find indefiniteness only after
full summary judgment on the merits.
See, e.g., Ryan v. Wersi
Elecs. GmbH & Co., 3 F.3d 174, 181-82 (7th Cir. 1993) (holding
on
summary
substance
judgment
of
that
distribution
letter
did
contract
not
with
adequately
reasonable
express
certainty
inasmuch as it reflected no sales quota or durational terms);
Bell Fuels, Inc. v. Chevron U.S.A., Inc., No. 99 C 2586, 2000 WL
305955, at *5 (N.D. Ill. Mar. 21, 2000) (holding on summary
judgment that alleged exclusive distributorship agreement failed
for
lack
of
information).
necessity
Troya’s
of
essential
terms
by
omitting
sales
quantity
And, in any event, because Plaintiffs concede the
looking
purported
beyond
exclusive
the
signed
distribution
letters
rights,
to
establish
the
written
agreement at issue may not constitute a distribution contract
per se - but instead may be more accurately characterized as an
agency or marketing agreement.
This is a particularly distinct
possibility in light of Troya’s market-making activities and its
- 33 -
persistent wish to retain the customers that had inured to it by
dint of its efforts in the region.
willing
to
enter
into
and
reap
Moreover, both parties were
the
benefits
of
the
written
contract at issue despite Troya’s coming up short on Bird-X’s
standard requirements for exclusive distributors – maintaining a
stock of Bird-X products or delivering on sales quotas.
these
reasons,
the
hallmarks
of
an
enforceable
For
distribution
agreement, even if applicable at the pleading stage, may be a
poor
fit
for
the
contract
here.
Absent
discovery
into
the
substance of the claim and an opportunity for full briefing on
the issue, whether the signed letters and associated written
communications are sufficiently definite to ground Plaintiff’s
timely
breach-of-contract
claim
is
best
left
for
the
merits
stage.
Thus,
Bird-X’s
Motion
is
granted
as
to
breach
of
the
alleged oral exclusivity contract but denied as to breach of the
written
agreement
Troya’s
action
promising
for
breach
protection
of
contract
for
Troya’s
customers.
may
proceed
along
the
contours described herein.
F.
With
under
765
Count VI: Trade Secret Misappropriation
respect
to
the
Ill.
Comp.
trade
Stat.
secret
1065/1
misappropriation
et
seq.
(“the
claim
ITSA”),
Plaintiffs allege that Troya’s “confidential customer list was a
- 34 -
‘trade
secret’
economic
in
value
distributors
in
that
from
the
it
was
not
sufficiently
being
region,
secret
to
derive
known
to
other
generally
and
because
Plaintiffs
made
reasonable efforts under the circumstances to keep it secret.”
(FAC ¶ 115; see, id. ¶ 37.)
In Plaintiffs’ telling, Bird-X
obtained Troya’s customer list by improper means – namely, by
misrepresenting to Plaintiffs that it needed the list to enable
it to “protect” Troya’s customers – and then misappropriated the
list
by
disclosing
it
“[a]t
some
point”
to
MG
Gida
consent. (Id. ¶¶ 52, 116-17; see, id. ¶¶ 38-41.)
without
Plaintiffs
claim that Troya lost “at least one major contract to MG Gida”
as a result of Bird-X’s misappropriation. (Id. ¶ 52.)
Bird-X
does not argue that Count VI is untimely but instead attacks
various pleading deficiencies via Rule 12(b)(6).
To
prevail
on
a
claim
for
misappropriation
of
a
trade
secret under the ITSA, the plaintiff must demonstrate that the
information
at
issue
was
misappropriated,
and
business.
Learning
See,
that
a
it
Curve
trade
was
secret,
used
Toys,
in
Inc.
v.
that
the
it
was
defendant’s
PlayWood
Toys,
Inc., 342 F.3d 714, 721 (7th Cir. 2003); see also, Alpha Sch.
Bus Co. v. Wagner, 910 N.E.2d 1134, 1152 (Ill. App. 2009).
statute defines a “trade secret” as:
information, including but not limited to, technical
or
non-technical
data,
a
formula,
pattern,
- 35 -
The
compilation,
program,
device,
method,
technique,
drawing, process, financial data, or list of actual or
potential customers or suppliers, that:
(1) is sufficiently secret to derive economic
value, actual or potential, from not being generally
known to other persons who can obtain economic value
from its disclosure or use; and
(2) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy or
confidentiality.
765 Ill. Comp. Stat. 1065/2(d) (emphasis added); see, Triumph
Packaging Grp. v. Ward, 834 F.Supp.2d 796, 806 (N.D. Ill. 2011).
Bird-X argues for dismissal primarily on the grounds that
Count
VI
is
“devoid
of
allegations
bearing
on
plaintiff’s
efforts to maintaining [sic] the confidentiality of the trade
secrets.” (ECF No. 62 at 10.)
Courts in this district, however,
consistently find trade secret “allegations to be adequate in
instances where the information and the efforts to maintain its
confidentiality
are
described
in
general
terms.”
Covenant
Aviation Sec., LLC v. Berry, 15 F.Supp.3d 813, 818 (N.D. Ill.
2014) (collecting cases) (emphasis added); see also, Scan Top
Enter. Co., Ltd. v. Winplus N. Am., Inc., No. 14 C 7505, 2015 WL
4945240,
at
*3
(N.D.
Ill.
Aug.
19,
2015)
(“At
the
pleading
stage, plaintiffs need only describe the information and efforts
to maintain the confidentiality of the information in general
terms.”).
secret
To Bird-X’s related claim that the Complaint’s trade
allegations
are
“intentionally
- 36 -
vague
and
opaque”
in
neglecting to identify customers, the Court responds that Troya
need not identify its customers at this stage “‘for the simple
reason that such a requirement would result in public disclosure
of
the
F.Supp.3d
purported
at
818
trade
secrets.’”
(quoting
Covenant
AutoMed,
160
Aviation,
F.Supp.2d
at
15
921).
Indeed, courts only dismiss a misappropriation claim for lack of
specificity “in the most extreme cases.”
Fire ‘Em Up, Inc. v.
Technocarb Equip. Ltd., 799 F.Supp.2d 846, 850 (N.D. Ill. 2001)
(citation omitted).
No such extreme circumstances are present here, and the
allegations suffice to state a claim.
the
secrecy
fulfills
the
prong,
“[e]xamples
ITSA’s
secrecy
First, with respect to
of
information
requirement
that
include[s]
lists that are not readily ascertainable.’”
often
‘customer
Traffic Tech, Inc.
v. Krieter, No. 14 C 7528, 2015 WL 9259544, at *11 (N.D. Ill.
Dec. 18, 2015) (quotation omitted).
The documents attached to
the Complaint make clear that Troya had taken at least some
steps to preserve the confidentiality of the customer list and
that it was not readily ascertainable; why else would Bird-X
have
expressly
asked
Troya
for
the
list
and
explained
the
necessity of disclosure, as Boyle did in Bird-X’s December 27,
2002 letter?
a
trade
In any event, “whether a customer list constitutes
secret
depends
upon
factual
- 37 -
issues
that
cannot
be
decided at the pleading stage, including the amount of effort
expended to develop the list and the steps taken to keep it
secret.”
Lane v. Brocq, No. 15 C 6177, 2016 WL 1271051, at *13
(N.D. Ill. Mar. 28, 2016) (collecting cases).
Second, any lack of specificity regarding misappropriation
is particularly benign from the perspective of fair notice here,
“especially because the only relationship the parties had was
collaborating” on sales of Bird-X products in Turkey.
Mission
Measurement Corp. v. Blackbaud, Inc., 216 F.Supp.3d 915, 922
(N.D. Ill. 2016).
likely
that
the
through Boyle.
And other allegations make it exceedingly
customer
list
flowed
from
Hikmet
to
Bird-X
After all, Boyle signed the December 27, 2002
letter requesting Troya’s customer list and appears to have been
Hikmet’s primary contact at Bird-X for several ensuing years.
These
facts
governing
the
parties’
relationship
mitigate
the
concerns of fair notice that might in other instances favor more
detailed allegations regarding both Troya’s efforts to maintain
the list’s secrecy and Bird-X’s alleged misappropriation.
Consequently, Bird-X’s Motion is denied in relevant part.
Troya, as the owner of the alleged trade secret, may pursue
Count VI against Bird-X.
- 38 -
G.
Count VII: Violation of Hikmet’s Right of Publicity
In Count VII alleging violation of the Illinois Right of
Publicity Act, 765 Ill. Comp. Stat. 1075/1 et seq. (“IRPA”),
Hikmet claims that Bird-X willfully and for commercial purposes
exploited his likeness in a film that depicts Hikmet using a
Bird-X product to cause multiple flocks of birds to vacate “the
outside of the Piyale Pasta factory building in Izmir, Turkey.”
(FAC ¶¶ 120-21, 130.)
Hikmet asserts that the video shows his
face and body, and contains audio of his narration. (Id. ¶ 122.)
Bird-X uploaded the video to its own website, various YouTube
channels,
and
other
Defendant
refused
websites
to
honor
“without
its
agreement with Troya.” (Id. ¶ 123.)
permission
exclusive
and
after
distributorship
Hikmet alleges that Bird-X
also distributed the video to other Turkish and Cypriot vendors
of its products. (Id. ¶ 124.)
Bird-X now principally uses the
video to reach new markets, according to Hikmet. (Id. ¶¶ 12728.)
Bird-X argues that Hikmet’s claim is time-barred but does
not otherwise identify any deficiencies of Hikmet’s claim.
IRPA grants to each individual the “right to control and to
choose
whether
commercial
identity
and
purposes,”
for
how
and
commercial
to
use
[his
or
her]
prohibits
use
of
purposes
during
“an
the
identity
for
individual’s
individual’s
lifetime without having obtained previous written consent.” 765
- 39 -
Ill. Comp. Stat. 1075/10, 1075/30.
The statute of limitations
on an IRPA claim is one year from the date the cause of action
accrued.
See, Martin v. Wendy’s Int’l, Inc., 183 F.Supp.3d 925,
929-30 (N.D. Ill. 2016); Blair v. Nevada Landing Partnership,
859 N.E.2d 1188, 1192, 1195-96 (Ill. App. 2006) (citing 735 Ill.
Comp.
Stat.
5/13-201);
Benitez
v.
KFC
Nat’l
Mgmt.
Co.,
714
N.E.2d 1002, 1007 (Ill. App. 1999) (explaining that one-year
statute of limitations in 735 Ill. Comp. Stat. 5/13-201 applies
to tort of appropriation of likeness).
A cause of action under
IRPA typically accrues on the date when the allegedly infringing
publication was first published.
Essentials,
LLC,
160
F.Supp.3d
See, e.g., Martin v. Living
1042,
1045
(N.D.
Ill.
2016)
(“IRPA claims . . . begin[] to accrue at the time of the first
publication of the allegedly infringing publication.”) (citing
Blair, 859 N.E.2d at 1192), aff’d, 653 Fed.Appx. 482 (7th Cir.
2016).
Bird-X contends that Hikmet failed to bring his IRPA claim
within the statute of limitations because he admitted to knowing
that Bird-X posted the video on its website in 2009 and thus
long before November 1, 2014 – that is, long before one year
prior to the date on which Plaintiffs brought this action. (See,
Pls.’ Resp. to Def.’s SOF ¶¶ 22.)
Hikmet responds that Bird-X
engaged in continuing violations of his publicity rights that
- 40 -
re-started the clock every time it republished the video on, for
example, YouTube or disseminated the video to its distributors.
While true that, under the continuing violation doctrine, a
limitations period does not begin to run until the date of the
last injury or the date the tortious acts cease, “where there is
a single overt act from which subsequent damages may flow, the
statute begins to run on the date the defendant invaded the
plaintiff’s
interest
and
inflicted
injury,
despite the continuing nature of the injury.”
at 1193.
and
this
is
so
Blair, 859 N.E.2d
In Blair, the plaintiff consented to participate in a
photo shoot conducted by his employer with knowledge that the
photographs were to be used for promotional purposes.
plaintiff
resigned,
his
former
employer
photograph taken at the shoot.
continued
After the
to
use
a
In the plaintiff’s suit for
violation of his right to publicity, the appeals court held that
republication of the plaintiff’s picture without consent did not
trigger the continuing violation doctrine, but instead “that the
use of the plaintiff’s picture in different means such as on the
billboard in the casino pavilion, in the casino’s restaurant
menu, and on the defendants’ website, constituted a single overt
act.” Ibid.
the
Integral to the court’s analysis was the fact that
plaintiff’s
picture
“was
used
- 41 -
for
a
single
purpose,
to
advertise
the
Buckingham
Steakhouse,
and
targeted
a
single
audience, casino patrons.” Ibid.
The rationale articulated in Blair applies here.
court
noted,
“‘the
first
time
that
an
offending
As that
item
is
published, the one-year statute of limitations . . . begins to
run and the dissemination of that same offending item thereafter
does not give rise to a new cause of action, nor does it refresh
the running of the statute of limitations.’”
Blair, 859 N.E.2d
at 1194 (quoting Zoll v. Jordache Enters., Inc., No. 01 C 1339,
2002
WL
31873461,
omitted));
see
at
also,
*7
(S.D.N.Y.
Founding
Dec.
Church
24,
2002)
(citation
of
Scientology
of
Washington, D.C. v. Am. Med. Ass’n, 377 N.E.2d 158, 160 (Ill.
App. 1978) (holding that privacy actions are “complete at the
time of the first publication, and any subsequent appearances or
distributions of copies of the original publication are of no
consequence to the creation or existence of a cause of action,
but are only relevant in computing damages”).
Regardless of the
different media or websites Bird-X exploited to display Hikmet’s
video, its republication of the video was intended to promote “a
single product” (Bird-X), used for a single purpose (showing
that Bird-X products work), and accompanied by no significant
alterations of the video to reach a new audience.
See, e.g.,
Living Essentials, 160 F.Supp.3d at 1046 n.4 (“[T]he Court notes
- 42 -
that the repeated airing of the Commercial still constitutes a
single
overt
act,
such
that
the
limitations
period
does
not
toll.”) (citing Blair, 859 N.E.2d at 1193); cf., Maremont v.
Susan Fredman Design Grp., Ltd., 772 F.Supp.2d 967, 971-72 (N.D.
Ill.
2011)
violation
(distinguishing
rule
continually
multiple
where
invaded
Posts
and
Blair
the
her
and
plaintiff
interest
Tweets
applying
by
continuing
that
“alleged
the
Defendants
impersonating
discussing
different
her
in
aspects
of
interior design” for over two years) (emphasis added).
Hikmet’s
allegation that Bird-X is now using the video to attempt to
reach new markets does not bear on when his right-to-publicity
claim accrued, because Hikmet knew in 2009 that the video was
hosted
on
Bird-X’s
website
and
thus
prospective customers the world over.
viewable
to
any
of
its
Blair, 859 N.E.2d at 1194
(“[T]he purpose of the use of the photograph on the website was
the same as the purpose of its use in the other mediums around
the
casino:
to
attract
casino
customers
to
dine
at
the
Buckingham Steakhouse.”).
Two facets of this case distinguish Berry v. Ford Modeling
Agency, No. 09 C 8076, 2010 WL 1930154 (N.D. Ill. May 13, 2010),
on which Hikmet relies to argue against a finding that his claim
is time-barred.
See, id. at *4 (“Plaintiff’s complaint alleges
numerous republications of her image, and because she gets the
- 43 -
benefit of reasonable hypotheticals at the motion to dismiss
phase,
she
has
not
citation omitted).
the
attendant
pled
herself
out
of
court.”)
(internal
First, Berry involved a pro se plaintiff and
solicitous
construction
of
pro
se
complaints
required under Erickson v. Pardus, 551 U.S. 89 (2007).
Hikmet
is
represented
by
counsel.
Second,
the
Here,
statute-of-
limitations issue in Berry was raised as an affirmative defense
via a motion to dismiss without the benefit of any discovery on
the issue.
Such is not the case here, and the Court does not
rest its conclusion that Hikmet’s claim is time-barred on the
pleadings
but
instead
on
the
limited
statute-of-limitations
discovery it has allowed.
Hikmet’s
claim
for
violation
of
his
right
to
publicity
accrued in 2009 when (Hikmet contemporaneously knew that) Bird-X
uploaded
his
product
demonstration
video
to
its
website.
Accordingly, Count VII is time-barred by more than four years,
and
Bird-X’s
Motion
is
granted
in
relevant
part.
(This
conclusion is equally true regardless of whether a one-year or a
five-year
statute
of
limitations
applies
to
Hikmet’s
claim,
because Bird-X first published the video at issue in 2009.
See,
Living Essentials, 653 Fed.Appx. at 486 (reiterating the Seventh
Circuit’s
persistent
refusal
“to
decide
if
about the [one-year] statute of limitations”).)
- 44 -
Blair
is
correct
H.
In
Count
Count VIII: Copyright Infringement
VIII,
Hikmet
sues
Bird-X
for
infringing
his
copyright in the same video that is the subject of his right-topublicity claim.
on
various
Hikmet alleges that Bird-X displayed the video
third-party
websites
and
used
the
video
in
its
marketing efforts without his permission or authorization. (Id.
¶¶ 34-36, 137.)
It is undisputed that Hikmet was aware of Bird-
X’s use of the video on its own website in 2009.
Bird-X makes
essentially the same argument here as it did with respect to
Count
VII,
subsequent
limitations
arguing
that
republications
period.
the
of
(Bird-X
claim
the
does
is
video
not
time-barred
did
not
otherwise
because
restart
the
identify
any
pleading deficiencies supporting dismissal under Rule 12(b)(6).)
Under the Copyright Act, “[a]nyone who violates any of the
exclusive rights of the copyright owner . . . is an infringer.”
17 U.S.C. § 501(a).
Among the exclusive rights secured to a
copyright owner are the rights to reproduce the copyrighted work
in copies, to prepare derivative works based on the copyrighted
work, and to distribute copies of the work to the public by sale
or other transfer of ownership. See, id. § 106.
The statute
also provides that “[n]o civil action shall be maintained under
the [Act] unless it is commenced within three years after the
claim
accrued.”
17
U.S.C.
§
507(b).
- 45 -
A
copyright
claim
ordinarily accrues, and the limitations period begins to run,
when the plaintiff learns or should as a reasonable person have
learned that the defendant was violating his rights.
Gaiman v.
McFarlane, 360 F.3d 644, 653 (7th Cir. 2004); see also, Petrella
v. Metro-Goldwyn-Mayer, Inc., 134 S.Ct. 1962, 1969 n.4 (2014)
(“Although we have not passed on the question, nine Courts of
Appeals have adopted . . . a discovery rule, which starts the
limitations period when the plaintiff discovers, or with due
diligence
should
have
discovered,
the
injury
that
forms
the
basis for the claim.”) (citations and internal quotation marks
omitted).
This
three-year
“separate-accrual
starts
a
new
successive
statute
rule”
of
whereby
limitations
violations,
limitations
each
period.
the
distinct
When
statute
separately from each violation.
is
a
of
subject
infringing
defendant
to
a
act
commits
limitations
runs
Petrella, 134 S.Ct. at 1969.
“Each time an infringing work is reproduced or distributed, the
infringer commits a new wrong” that gives rise to a new claim
with
a
separate
infringement
is
limitations
actionable
period.
only
Ibid.
within
However,
three
years
of
each
its
occurrence. Id. at 1969-70 (“Thus, when a defendant has engaged
(or
is
alleged
to
have
engaged)
in
a
series
of
discrete
infringing acts, the copyright holder’s suit ordinarily will be
- 46 -
timely
under
§
infringement
untimely
(i.e.,
with
kind.”).
507(b)
with
acts
respect
to
respect
within
the
prior
acts
to
more
recent
three-year
of
the
acts
window),
same
or
of
but
similar
What is more, “[s]eparately accruing harm” sufficient
under § 507(b) to restart the clock “should not be confused with
harm from past violations that are continuing.” Id. at 1969 n.6
(citations omitted); see also, Mongolian House, 770 F.3d at 61415
(finding
the
continuing-violation
doctrine
inapplicable
to
the Copyright Act’s three-year statute of limitations).
The question, then, is whether Hikmet seeks redress for
continuing harm to his copyright interests based on violations
that may have extended into the limitations period or for a
series of discrete successive harms.
See, Mongolian House, 770
F.3d at 616 (“[I]n light of Petrella, we now know that the right
question
to
ask
in
copyright
cases
is
whether
the
complaint
contains allegations of infringing acts that occurred within the
three-year look-back period from the date on which the suit was
filed.”).
If the harm within the limitations period from Bird-
X’s alleged distribution and display of Troya’s copyrighted work
was
of
a
piece
with
that
occurring
before
November
2,
2012
(three years prior to filing of this action), then Count VIII is
time-barred.
See, e.g., Wolf v. Travolta, 167 F.Supp.3d 1077,
1099 & n.13 (C.D. Cal. 2016) (“Travolta avers that the main
- 47 -
version of the allegedly infringing program service guide was
published on the Inclusion Films website in or about 2010, where
it remained without substantial revisions until it was removed
in
response
document’s
to
this
continued
litigation.
presence
[T]he
on
allegedly
defendants’
infringing
website
through
2014 at best constitutes harm from a past violation that was
continuing through 2014, and not a new wrong that gave rise to
separately
accruing
harm
within
the
limitations
period.”)
(alterations, brackets, and internal quotation marks omitted);
Alfa Laval Inc. v. Flowtrend, Inc., No. Civ. H-14-2597, 2016 WL
2625068, at *6 (S.D. Tex. May 9, 2016) (“There is no evidence
that Defendant[] engaged in new acts of copyright infringement
after
it
originally
posted
the
Copyrighted
website, which occurred by 2009. . . .
acts
of
copyright
infringement
by
Materials
on
its
Absent later independent
Defendants,
the
‘separate-
accrual’ rule does not extend the limitations period.”) (citing
Petrella, 134 S.Ct. at 1970).
constituted
successive
If, however, Bird-X’s conduct
violations
that
caused
separately
accruing harm to Troya, then Count VIII is timely as to any
infringing
conduct
November 2, 2012.
alleged
to
have
occurred
on
or
after
See, e.g., Fischer v. Forrest, No. 14 C 1304,
2017 WL 128705, at *7 (S.D.N.Y. Jan. 13, 2017) (“Fischer asked
defendants
to
cease
their
infringement
- 48 -
in
April
2011,
but
Defendants
refused,
displaying
and
Fischer’s
continued
copyrighted
their
works
infringement
online.
Fischer
by
has
plausibly alleged that the infringement starting in March 2011
was the beginning of a longer course of action by defendants
that has not ended.”) (internal citations and quotation marks
omitted).
What
Hikmet
alleges
Bird-X
did
on
or
after
November 2, 2012, is integral.
Alas, the Complaint furnishes no detail on what, if any, of
the alleged acts of infringement Bird-X committed within the
three-year look-back period.
Similarly, the Complaint does not
indicate when Hikmet learned of his video’s presence on thirdparty
websites
discernible
or
from
its
the
use
by
other
allegations
and
distributors.
the
limited
What’s
discovery
obtained thus far points to Bird-X uploading the video to its
website in 2009 (with, at the very least, Hikmet’s knowledge of
the
same
in
2009)
and
then,
at
some
point
later
in
time,
disseminating the video to other distributors as well as posting
the video on three third-party websites.
The only potential
inflection point Plaintiffs provide – March 2011, when Hikmet
learned the bad news about MG Gida - still leaves a 20-month
window
(until
committed
all,
November
some,
2012)
or
during
none
infringement.
- 49 -
of
which
the
Bird-X
alleged
may
acts
have
of
As the summary judgment movant, Bird-X bears the initial
burden of establishing that Hikmet’s copyright claim is timebarred based on the undisputed facts.
adduced
nor
the
briefs
speak
to
Because neither the facts
the
relevant
question
after
Petrella, Bird-X has not carried its initial burden to prove its
statute-of-limitations
affirmative
defense.
Discovery
will
ferret out the specific acts of infringement, if any, that BirdX actually committed within the limitations period.
record,
Hikmet
has
alleged
potentially
infringing
On this
acts
that
occurred within the three-year look-back period from the date of
suit, and thus Bird-X’s Motion is denied in relevant part.
I.
Counts IX and X: Quantum Meruit and Unjust Enrichment
Plaintiffs plead their final two counts as alternatives to
their breach-of-contract claim.
prior
and
allegations,
Hikmet
Plaintiffs
performed
Apart from incorporating their
principally
distributing,
complain
marketing,
that
and
Troya
advertising
services for Bird-X from 2001 through 2007 throughout Turkey,
the benefits of which Bird-X accepted without fully compensating
them.
(FAC
enrichment
benefits
wrongful,
¶¶
139-41,
count,
of
Plaintiffs
their
or
representations
144-45.)
services
unlawful
that
they
With
allege
that
“through
conduct”
would
- 50 -
respect
enjoy
to
Bird-X
the
obtained
fraudulent,
–
the
deceptive,
namely,
exclusive
unjust
Bird-X’s
distribution
rights in Turkey and Cyprus. (Id. ¶ 146.)
“After Plaintiffs had
secured a market for Defendant’s products, and after Defendant
obtained
copies
of
Hikmet’s
video
demonstrations,
Defendant
disavowed Plaintiffs [sic] exclusivity and drove them out of
that market.” (Ibid.)
Bird-X contends that these counts are
time-barred and that, even if they are timely, they suffer from
pleading deficiencies fatal under Rule 12(b)(6).
The residual five-year statute of limitations in Illinois
applies to quasi-contractual remedies, such as quantum meruit
and unjust enrichment claims. 735 Ill. Comp. Stat. 5/13-205;
see,
e.g.,
Burns
Philp
Food,
Inc.
v.
Cavalea
Continental
Freight, Inc., 135 F.3d 526, 528 (7th Cir. 1998) (applying fiveyear
residual
statute
of
limitations
to
unjust
enrichment
claim); Gregg v. SR Investors, Ltd., 966 F.Supp. 746, 749 (N.D.
Ill. 1997) (applying five-year residual statute of limitations
to plaintiff’s quantum meruit claim).
There
is
some
tension
between
two
strands
of
case
concerning when a quasi-contractual cause of action accrues.
law
On
the one hand, many Illinois courts hew to the principle that
“[a] cause of action on an oral contract or on a quantum meruit
theory accrues when the services are completed.” Toll Processing
Servs., LLC v. Kastalon, Inc., No. 12 C 10058, 2014 WL 1379676,
at *3 (N.D. Ill. Apr. 8, 2014) (citing P-K Tool & Mfg. Co. v.
- 51 -
Gen. Elec. Co., 612 F.Supp. 276, 278 (N.D. Ill. 1985)); see
also,
Rohter
v.
Passarella,
617
N.E.2d
46,
52-53
(Ill.
App.
1993) (“If no time is fixed as to when such labor and services
were to be paid for, the law would presume that they were to be
paid for at the end of that year.”) (internal quotation marks
and alterations omitted).
On the other, the Seventh Circuit has
applied the discovery rule to the limitations period for quasicontract actions, keying accrual of the cause of action to when
the
injury
could
have
appropriate diligence.
been
discovered
through
exercise
of
Burns Philp, 135 F.3d at 528.
Under either theory of accrual, however, Plaintiffs’ claims
are time-barred.
Applying the first to the allegations renders
Plaintiffs’ final two counts untimely by some three years: if,
as Plaintiffs plead, they performed services “from 2001 through
2007,” then any quasi-contract claims seeking recovery for those
services brought after 2012, such as Counts IX and X in this
suit, are untimely.
Nor
does
Plaintiffs.
claim
for
the
discovery
rule
advance
the
ball
for
As explained earlier in this Opinion, Plaintiffs’
breach
of
an
alleged
oral
exclusivity
contract
is
barred by the same residual five-year statute of limitations
because, at the very least, appropriate diligence on the part of
Plaintiffs would have made clear long before November 2, 2010
- 52 -
that Troya was not an exclusive distributor of Bird-X products
in the region.
At the heart of Counts IX and X is remuneration
for services that Plaintiffs claim was denied them, but that
compensation is formulated in terms of the monetary benefits
Plaintiffs would otherwise have enjoyed by virtue of being an
exclusive
distributor.
(See,
e.g.,
FAC
¶
146
(“Plaintiffs
conferred this benefit based on Defendant’s representations that
Plaintiffs
Turkey.”).)
would
be
an
exclusive
distributor
in
Cyprus
and
Missing are any allegations that Plaintiffs were
promised some sort of fee for services or were compensated for
their services in the form of anything other than revenue on
Bird-X sales to Turkish and Cypriot customers.
Yet, long before
Plaintiffs learned of MG Gida’s ascension to exclusivity in 2011
and well in advance of November 2, 2010 – from the earliest
indications
that
Bird-X
was
selling
products
into
Turkey,
including to one of its own customers, up through its last order
of products in August 2010 – Hikmet was concerned that Bird-X’s
own selling activity was steadily eroding Troya’s revenue on
sales
of
Plaintiffs’
2010,
Bird-X
products,
services.
Plaintiffs
and
thus
Accordingly,
knew,
or
by
the
the
long
remuneration
before
exercise
November
of
for
2,
reasonable
diligence should have known, that they had no exclusivity rights
and
that
they
were
otherwise
- 53 -
suffering
the
same
injury
underlying Counts IX and X.
Burns Philp, 135 F.3d at 528 (“A
firm’s delay in taking such a routine precaution [that would
have discovered the injury] is not a good reason to extend the
period of limitations; the costs of a firm’s carelessness are
not so readily shifted.”).
Bird-X’s Motion is therefore granted in relevant part as to
Counts IX and X.
IV.
CONCLUSION
For the reasons stated herein, Defendant’s Combined Motion
to Dismiss Plaintiffs’ Amended Complaint under Rule 12(b)(6) and
Limited Motion for Summary Judgment [ECF No. 49] is granted in
part and denied in part.
Defendant’s Motion is granted as to
Counts I, II, III, IV, VII, IX, and X.
Defendant’s Motion is
granted in part as to Count V; Plaintiff Troya may only pursue a
claim
for
breach
Troya’s customers.
of
Defendant’s
written
contract
to
protect
Defendant’s Motion is denied as to Troya’s
Count VI and Hikmet’s Count VIII.
IT IS SO ORDERED.
Harry D. Leinenweber, Judge
United States District Court
Dated: December 7, 2017
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