Konica Minolta Business Solutions, U.S.A., Inc. v. Applied Imaging Systems, Inc. et al

Filing 338

ORDER denying 299 Motion for Partial Summary Judgment; Deeming Moot Plaintiff's Objections 296 . Signed by District Judge Victoria A. Roberts. (CPin)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
KONICA MINOLTA BUSINESS
SOLUTIONS U.S.A., INC.,
Plaintiff,

Case No. 15-11254
Honorable Victoria A. Roberts

v.
LOWERY CORPORATION d/b/a
APPLIED IMAGING SYSTEMS, INC., et al.,
Defendants.
____________________________________/
ORDER DENYING DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT
[ECF No. 299] AND DEEMING MOOT PLAINTIFF’S OBJECTIONS [ECF No. 296]
This matter is before the Court on Defendants’ Motion for Partial Summary
Judgment. The Court reviewed the motion, related briefs, and the cited authorities.
Because discovery is stayed pending the outcome of Defendants’ motion, the Court
addresses the merits, without including a recitation of the facts.
Defendants move to dismiss Plaintiff’s claims to the extent they relate to the
“public-entity customers.” Defendants rely on Cedroni Ass’n, Inc. v. Tomblinson,
Harburn Assocs., Architects & Planners Inc., 492 Mich. 40, 46 (2012) (“Cedroni”), which
held that “the lowest bidder on a public contract ha[s] no valid business expectancy” for
purposes of a tortious interference with a business expectancy claim.
Although Cedroni applied only to a claim for tortious interference with a business
expectancy, Defendants attempt to expand its holding to Plaintiff’s claims for breach of
contract, tortious interference with contractual relations, civil conspiracy, and violation of
the Michigan Uniform Trade Secrets Act. The Court finds this inappropriate.

The Cedroni court explicitly limited its holding:
[W]e are not immunizing from liability a private entity that ‘acts with
dishonesty and bad faith to interfere with the governmental entity’s
efforts[]” . . .; instead, we are simply holding that when the ultimate
decision to enter into a business relationship is a highly discretionary
decision reposed by law within a governmental entity, a disappointed low
bidder does not have a valid business expectancy for the purpose of
sustaining a claim of tortious interference with a business
expectancy.
Cedroni, 492 Mich. at 47 n. 3 (emphasis added); see also id. at 54 n. 8 (“[W]e simply
hold that when the ultimate decision to enter into a business relationship is a highly
discretionary decision reposed by law within a public entity, a disappointed low bidder
does not have a valid business expectancy for the purpose of sustaining a claim of
tortious interference with a business expectancy.”). The Court find that Cedroni’s
limited holding does not apply to all of Plaintiff’s claims – especially because Plaintiff’s
allegations would likely allow it to recover alternative damages to lost profits, such as
unjust enrichment or reasonable royalties.
Moreover, the Cedroni holding was further limited: “Because plaintiff had no valid
business expectancy, and because there is no evidence that this Court’s involvement is
‘necessary to prevent fraud, injustice or the violation of a trust,’ plaintiff’s claim of
tortious interference with a business expectancy must fail as a matter of law.” Id. at 54
(emphasis added). This further distinguishes Cedroni from Plaintiff’s claims. Unlike in
Cedroni, Plaintiff points to misconduct on behalf of Defendants which may make “this
Court’s involvement . . . ‘necessary to prevent fraud, injustice or the violation of a trust.’”
See id.
The other cases Defendants rely upon do not change this conclusion. Those
cases are non-binding and/or do not relate to trade secrets cases. Furthermore, those
2

cases have little relevance; they were based on the specific facts presented – such as,
the plaintiff’s failure to bid on a contract in Washington Consulting Grp., Inc. v. Raytheon
Tech. Servs. Co., LLC, 2013 WL 1562128 (D.C. Super. Ct. Mar, 7, 2013), and the fact
that the defendant’s alleged wrongful conduct had no bearing on the public entity’s
decision in Mago Const. Co. v. Anderson, Eckstein & Westrick, Inc., 1996 WL
33348794, at *3 (Mich. Ct. App. Nov. 8, 1996). Because those cases are non-binding
and their holding are fact-specific, the Court finds they have little relevance.
Defendants’ Motion for Partial Summary Judgment [ECF No. 299] is DENIED,
and the Court will not preclude Plaintiff from conducting discovery related to the publicentity customers.
Finally, Plaintiff’s Objections to the Magistrate Judge’s Order Granting
Defendants’ Motion for Leave to File a Motion for Partial Summary Judgment [ECF No.
296] are MOOT.
IT IS ORDERED.
S/Victoria A. Roberts
Victoria A. Roberts
United States District Judge
Dated: October 30, 2018

3