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Associated Machine Tool Technologies v. Doosan Infracore America, Inc.

United States District Court, S.D. Texas, Houston Division

April 19, 2017




         Pending before the Court are Defendant Ellison Technologies, Inc.'s (“Ellison's”) Motion for Judgment on the Pleadings (Document No. 54) and Defendant Doosan Infracore America, Inc.'s (“Doosan's”) Motion for Judgment on the Pleadings. (Document No. 55). Plaintiff Associated Machine Tool Technologies (“AmTTech”) has filed responses (Document Nos. 57, 58) and Defendants each filed a Reply. (Document Nos. 59, 60). Having considered these filings, the facts in the record, and the applicable law, the Court concludes that Defendants' Motions for Judgment on the Pleadings (Document Nos. 54, 55) will be granted.


         Plaintiff AmTTech and Defendant Doosan have been in business for the past 25 years, during which AmTTech has been “primarily engaged in the business of selling and servicing machine tools to end users of the equipment.” (Document No. 1-3 at 5). During this time AmTTech has had agreements with Doosan as an authorized dealer of their equipment, the most recent being an agreement dated February 10, 2009 (the “Agreement”). Id. at 6. The Agreement states that “[e]ither party may terminate this Letter of Understanding, at any time for any reason whatsoever, by giving the other party at least 30 days' prior written notice sent electronically or by any delivery service company.” (Document No. 25-1 at 18). On August 21, 2015, “Doosan informed AmTTech that it would terminate the Agreement effective October 20, 2015[1]” and that it would be replacing AmTTech with Ellison as its dealer in Texas, because Doosan chose to “modify[] its business model through a realignment and consolidation of its distributor territories and network . . . accomplishing this by combining multiple smaller territories with several distributors into much larger territories with one distributor.” (Document No. 1-3 at 10-11) (citing Exhibit C of Document No. 1-4).

         Due to this termination, AmTTech filed suit in September 2015, claiming Doosan violated the Texas Fair Practices of Equipment Manufacturers, Distributors, Wholesalers and Dealers Act (the “Act”) of Texas Business and Commerce Code § 57.001, et seq., by terminating its agreement with AmTTech and by substantially changing its agreement with AmTTech. (Document No. 1-3 at 10-15). AmTTech also asserted claims of breach of contract, civil conspiracy, and deceptive trade practices, as well as a claim for declaratory judgment against Doosan. Id. at 15-19.[2] AmTTech asserted civil conspiracy and tortious interference claims against Ellison. Id. In its Answer, Doosan asserted a counterclaim against AmTTech requesting a declaratory judgment that the Act does not apply to the Agreement. (Document No. 9 at 18).[3]

         On October 19, 2015, AmTTech requested this Court grant an emergency preliminary injunction (Document No. 13) preventing Doosan from terminating the Agreement. In their responses, Defendants argued that the claims against them were not likely to succeed, largely because imposing liability under the Act (which became effective in 2012) would be an unconstitutionally retroactive application of the law to the Agreement (entered into in 2009). (Document Nos. 24, 25). On November 24, 2015, this Court issued an Order and Opinion (Document No. 28) denying the preliminary injunction and holding that retroactive application of the Act to the Agreement would be unconstitutional under Texas law. In its Order, the Court also found an insufficient likelihood of success required to issue an injunction based upon AmTTech's remaining claims.

         Following the denial of Plaintiff's request for an injunction, Plaintiff filed a Motion for Certification and Entry of Final Judgment (Document No. 43) regarding its claims under the Act and its declaratory judgment claim, stating that “[a]lthough technically only a ruling on likelihood of success, the Court's legal conclusion is the practical equivalent of a summary judgment on AmTTech's two causes of action under the Act.” Id. at 1-2. The Court denied that motion, finding that judicial administrative interests and equities weighed against certification. (Document No. 51). Now each Defendant has filed a Motion for Judgment on the Pleadings, generally arguing that the Court's ruling on the preliminary injunction bars AmTTech from succeeding on its claims. (Document Nos. 54, 55).

         Standard of Review

         Federal Rule of Civil Procedure 12(c) provides that “after the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). A motion for judgment on the pleadings under Rule 12(c) is subject to the same standard as a motion to dismiss under Rule 12(b)(6). Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir. 2008); Great Plains Trust Co. v. Morgan Stanley Dean Witter, 313 F.3d 305, 313 n.8 (5th Cir. 2002). A Rule 12(c) motion is intended to dispose of cases where the material facts are not in dispute and a judgment on the merits can be rendered by looking at the substance of the pleadings and any judicially noticed facts. Id. at 313. The Court must decide whether, in the light most favorable to the plaintiff, the complaint states a valid claim for relief. Hughes v. Tobacco Inst., Inc., 278 F.3d 417, 420 (5th Cir. 2001) (citing St. Paul Ins. Co. v. AFIA Worldwide Ins. Co., 937 F.2d 274, 279 (5th Cir. 1991)). The pleadings should be construed liberally, and judgment on the pleadings should be granted only if there are no disputed issues of fact and only questions of law. Hughes, 278 F.3d at 420. All well-pleaded facts should be viewed in a light most favorable to the plaintiff. Id.


         Claims against Doosan

         (1) Claims under the Act Plaintiff's causes of action under the Act include “unlawful termination without good cause” and “a substantial change of the dealer agreement.” (Document No. 1-3 at 10-15). Doosan argues that it is entitled to judgment on the pleadings for Plaintiff's claims under the Act, as the Court has already ruled that it would be unconstitutional to retroactively apply the Act to the Agreement. (Document No. 55 at 5-6). The Court agrees; when considering Plaintiff's likelihood of success on these claims in its previous Order and Opinion, the Court unequivocally found that the Act cannot apply retroactively to the Agreement. (Document No. 28 at 11). Plaintiff itself later argued that this was the “practical equivalent of a summary judgment” on its claims under the Act (Document No. 43 at 1-2), yet now makes the contrary argument that judgment on the pleadings should not be granted. (Document No. 58).

         Plaintiff first argues again that the Act applies to Doosan's termination of the Agreement. Id. at 2-4. The Court has already ruled against this argument, and will not reiterate its reasoning. (See Document No. 28). Then Plaintiff argues that the Court must presume that the Act is constitutional, and that Doosan bears the burden of demonstrating otherwise. (Document No. 58 at 4). Neither of these affects the Court's prior decision; the Court still believes that applying the Act would be unconstitutional under the Robinson factors. Plaintiff then cites cases relating to statutes passed by Congress, as well as a case discussing Louisiana law.[4] Id. at 5. None are directly applicable to this case, and do not change the Court's prior decision. Furthermore, under the law of the case doctrine, the Court's decision “should continue to govern the same issues in subsequent stages in the same case.” Arizona v. California, 460 U.S. 605, 618 (1983) (citations omitted).[5] As the Court has found that the Act cannot apply to the Agreement, Doosan is entitled to judgment on the pleadings for Plaintiff's claims under the Act.

         (2) Breach of contract

         In its previous discussion of this ...

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