MillerCoors LLC v. HCL Technologies Limited et al
Filing
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ORDER Signed by the Honorable Amy J. St. Eve on 10/3/2017: The Court denies Counter-Defendant Molson Coors' motion to dismiss Count III of the Amended Counterclaim brought pursuant to Federal Rule of Civil Procedure 12(b)(6). 24 . [For further details, see Order.] Mailed notice(kef, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
MILLERCOORS LLC,
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Plaintiff,
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v.
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HCL TECHNOLOGIES LIMITED, and
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HCL AMERICA, INC.,
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Defendants.
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____________________________________)
HCL TECHNOLOGIES LIMITED, and
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HCL AMERICA, INC.,
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Counter-Plaintiffs,
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v.
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MILLERCOORS LLC and MOLSON
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COORS BREWING COMPANY,
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Counter-Defendants. )
Case No. 17 C 1955
Judge Amy J. St. Eve
ORDER
The Court denies Counter-Defendant Molson Coors’ motion to dismiss Count III of the
Amended Counterclaim brought pursuant to Federal Rule of Civil Procedure 12(b)(6). [24].
STATEMENT
On March 13, 2017, Plaintiff MillerCoors LLC (“MillerCoors”) filed a Complaint against
Defendants HCL Technologies Limited and HCL America, Inc. (collectively “HCL”) alleging a
breach of contract claim in relation to the parties’ Master Services Agreement (“MSA”) based on
the Court’s diversity jurisdiction. See 28 U.S.C. § 1332(a). On August 3, 2017, HCL filed an
Amended Answer, Affirmative Defenses, and Counterclaim against Counter-Defendants
MillerCoors and Molson Coors Brewing Company (“Molson Coors”). Before the Court is
Counter-Defendant Molson Coors’ motion to dismiss Count III of HCL’s Counterclaim brought
pursuant to Rule 12(b)(6). For the following reasons, the Court denies Molson Coors’ motion.
LEGAL STANDARD
“A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the
viability of a complaint by arguing that it fails to state a claim upon which relief may be
granted.” Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014); see also
Hill v. Serv. Emp. Int’l Union, 850 F.3d 861, 863 (7th Cir. 2017). Under Rule 8(a)(2), a
complaint must include “a short and plain statement of the claim showing that the pleader is
entitled to relief.” Fed. R. Civ. P. 8(a)(2). Pursuant to the federal pleading standards, a
plaintiff’s “factual allegations must be enough to raise a right to relief above the speculative
level.” Bell Atlantic v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007).
Put differently, 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, 129 S. Ct.
1937, 1949, 173 L. Ed. 2d 868 (2009) (quoting Twombly, 550 U.S. at 570). When determining
the sufficiency of a complaint under the plausibility standard, courts must “accept all wellpleaded facts as true and draw reasonable inferences in the plaintiffs’ favor.” Roberts v. City of
Chicago, 817 F.3d 561, 564 (7th Cir. 2016).
BACKGROUND
On September 18, 2013, MillerCoors issued a Request for Proposal (“RFP”) for a
Business Process and System Transformation (“BP&S”) Realization project. (R. 1, Compl. ¶ 8.)
MillerCoors alleges that the project was aimed at driving efficiencies, innovation, and growth
across MillerCoors’ various breweries by adopting a common set of best practice business
processes and implementing them in a new enterprise SAP software solution. (Id.) Customizing
the various modules of the SAP software to address a particular business’ needs and writing new
reports, programs, and tools is a complex undertaking and MillerCoors was looking for an
experienced SAP consulting firm to manage and implement SAP for MillerCoors. (Id. ¶ 9.)
HCL was the successful bidder on the BP&S project. (Id. ¶ 12.)
Prior to engaging HCL, MillerCoors created “blueprints” to document the various
business processes that would be implemented in SAP. (Id. ¶ 13.) According to MillerCoors,
HCL’s initial task was to engage in a knowledge transfer process to learn and understand the
blueprints that had been created, after which HCL would document and fill any gaps in the
blueprints for processes that were not adequately documented. (Id.) The knowledge transfer
project was memorialized in an interim Work Order No. 1 BP&S Program Knowledge Transfer
– SAP Realization Services executed on or about December 3, 2013 (“KT Work Order”). (Id.)
The KT Work Order was issued under an existing Master Services Agreement by and between
MillerCoors and HCL effective December 1, 2012 (the “MSA”). (Id.) Other Work Orders
followed, and the final Work Order No. 1-3 was executed on December 10, 2015. (Id. ¶ 23.)
MillerCoors asserts that due to the multiple failures on the project and the risk that these
failures created, on June 20, 2016, it sent HCL a notice of termination of Work Order No. 1-3
exercising its right to terminate HCL from the project and to secure a new supplier to remediate
HCL’s work and complete the project going forward. (Id. ¶ 41.) MillerCoors then filed the
present lawsuit seeking damages in relation to the termination of Work Order No. 1-3.
In Count III of the Amended Counterclaim, HCL alleges that Molson Coors tortiously
interfered with the MSA and Work Order No. 1-3. (R. 28, Am. Counterclaim ¶ 127.) In
particular, HCL explains that in the months preceding the closing of Molson Coors’ acquisition
of MillerCoors, Molson Coors decided that it did not want to proceed with or pay for parts of the
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BP&S project that HCL was performing. (Id. ¶ 128.) Further, HCL alleges that although
MillerCoors could have terminated for convenience Work Order No. 1-3 at any time with notice,
a termination for convenience would have required MillerCoors to pay “Wind Down Expenses”
and “Unamortized Investments” as defined by the MSA. (Id. ¶ 129.) According to HCL,
Molson Coors intended to induce and did induce MillerCoors’ breach of the MSA by directing
MillerCoors to wrongfully terminate the People Processes & Systems (“PP&S”) implementation.
(Id. ¶ 130.) Further, HCL contends that after being directed by Molson Coors to terminate the
PP&S implementation, MillerCoors wrongfully terminated the PP&S implementation by giving
oral notice and failing to pay Wind Down Expenses and Unamortized Investments. (Id. ¶ 131.)
HCL also states that it “is informed and believes that Molson directed MillerCoors to
immediately terminate the PP&S application in contravention of the MSA in order to wrongfully
place the financial burden of all work performed to date on HCL.” (Id. ¶ 132.) HCL specifically
alleges that MillerCoors’ wrongful termination of the PP&S implementation meant that HCL
completed work worth $1 million without any compensation. (Id. ¶ 102.) In short, HCL
contends that Molson Coors directed and induced MillerCoors to advance pretextual grounds for
termination that were lacking any good faith factual basis. (Id. ¶ 134.)
ANALYSIS
In Count III of the Amended Counterclaim, HCL brings a tortious interference of contract
claim against Molson Coors pursuant to Illinois law. See Auto–Owners Ins. Co., v. Webslov
Computing, Inc., 580 F.3d 543, 547 (7th Cir. 2009) (“Courts do not worry about conflicts of laws
unless the parties disagree on which state’s law applies.”). Tortious inference with contract
under Illinois law includes the following elements: “(1) the existence of a valid and enforceable
contract between the plaintiff and another; (2) the defendant’s awareness of this contractual
relation; (3) the defendant’s intentional and unjustified inducement of a breach of the contract;
(4) a subsequent breach by the other, caused by the defendant’s wrongful conduct; and (5)
damages.” Healy v. Metro. Pier & Exposition Auth., 804 F.3d 836, 842 (7th Cir. 2015) (quoting
HPI Health Care Servs., Inc. v. Mt. Vernon Hosp., Inc., 131 Ill.2d 145, 154-55, 137 Ill.Dec. 19,
545 N.E.2d 672, 676 (1989)).
In the present motion, Molson Coors argues that HCL’s claim lacks merit because
Molson Coors “was privileged to seek to have a company it owned terminate a contract that was
concededly overdue and over-budget,” although the Amended Counterclaim alleges that Molson
Coors did not “own” MillerCoors outright until the acquisition closed in the fall of 2016. In any
event, “Illinois recognizes a conditional privilege to interfere with contracts ‘where the defendant
was acting to protect an interest which the law deems to be of equal or greater value than the
plaintiff’s contractual rights.’” Nation v. American Capital, Ltd., 682 F.3d 648, 651 (7th Cir.
2012) (citation omitted); see also TABFG, LLC v. Pfeil, 746 F.3d 820, 825 (7th Cir. 2014) (“The
privilege is necessary because a corporation acts through its agents, and the duty that those
agents owe to the corporation’s shareholders outweighs their duty to the corporation’s contract
creditors.”). This conditional privilege is based on the business judgment rule. See TABFG, 746
F.3d at 825. “The privilege extends only to acts undertaken on behalf of the corporation, and
corporate officers ‘are not justified in acting solely for their own benefit or solely in order to
injure the plaintiff because such conduct is contrary to the best interests of the corporation.’” Id.
The “conditional privilege can be overcome” if Molson Coors “‘induced the breach to further
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[its] personal goals or to injure the other party to the contract, and acted contrary to the best
interest of the corporation.’” Nation, 682 F.3d at 653 (citation omitted); see also Koehler v.
Packer Grp., Inc., 53 N.E.3d 218, 238 (1st Dist. 2016) (“[a] defendant who is otherwise
protected by the privilege, however, ‘is not justified in engaging in conduct which is totally
unrelated or even antagonistic to the interest which gave rise to [the] privilege.’”) (citation
omitted). In such cases, “it is the plaintiff’s burden to plead and prove that the defendant’s
conduct was unjustified or malicious.’” Koehler, Inc., 53 N.E.3d at 238 (citation omitted); see
also HPI Care Servs., 131 Ill.2d at 158 (“plaintiff must set forth factual allegations from which it
can be reasonably inferred that the defendant’s conduct was unjustified.”).
Here, HCL has plausibly alleged that Molson Coors’ conduct was unjustified and
contrary to the best interests of MillerCoors. See Service By Air, Inc. v. Phoenix Cartage & Air
Freight, LLC, 78 F. Supp. 3d 852, 864 (N.D. Ill. 2015) (“To overcome the corporate officer
privilege, a plaintiff must allege that the officer’s conduct was unjustified or malicious.”)
Viewing the well-pleaded facts and all reasonable inferences as true, HCL alleges that Molson
Coors purposely induced MillerCoors to wrongfully terminate the PP&S implementation to
avoid paying Wind Down Expenses and Unamortized Investments. Further, HCL maintains that
after it successfully completed the implementation of Work Order No. 1-3 and turned over a
fully functioning SAP platform, MillerCoors terminated Work Order No. 1-3 without prior
notice. Also, HCL alleges that it “is informed and believes that Molson directed MillerCoors to
immediately terminate the PP&S application in contravention of the MSA in order to wrongfully
place the financial burden of all work performed to date on HCL.” HCL contends that Molson
Coors directed and induced MillerCoors to advance pretextual grounds for termination that were
lacking any good faith factual basis. Specifically, HCL alleges that Molson Coors’ conduct was
motivated by its need to justify its acquisition of MillerCoors to its shareholders. (Am.
Counterclaim, ¶¶ 107-11.) In sum, HCL has plausibly alleged that by directing MillerCoors to
terminate certain aspects of the SAP implementation contract – without a good faith basis and
without justification – Molson Coors exposed MillerCoors to liability based on the parties’
contract, as well as the costs associated with replacing HCL during the SAP implementation.
See Iqbal, 556 U.S. at 678 (claim is plausible on its face when plaintiff alleges “factual content
that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.”).
On a final note, despite Molson Coors’ arguments to the contrary, although a plaintiff’s
ability to state allegations based on “information and belief” is restricted in the context of fraud
allegations pursuant to Rule 9(b), under Rule 8(a), “[w]here pleadings concern matters peculiarly
within the knowledge of the defendants, conclusory pleading on ‘information and belief’ should
be liberally viewed.” Brown v. Budz, 398 F.3d 904, 914 (7th Cir. 2005) (citation omitted); see,
e.g., Huon v. Denton, 841 F.3d 733, 743 (7th Cir. 2016). Accordingly, the Court denies Molson
Coors’ Rule 12(b)(6) motion to dismiss Count III of HCL’s Counterclaim.
Dated: October 3, 2017
______________________________
AMY J. ST. EVE
United States District Court Judge
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