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Hellenic Petroleum LLC v. Elbow River Marketing Ltd.

United States District Court, E.D. California

November 18, 2019

HELLENIC PETROLEUM LLC, a Florida limited liability company, Plaintiff,
v.
ELBOW RIVER MARKETING LTD., a Corporation of the Province of Alberta, Canada, and DOES 1 through 20, Defendants.

          MEMORANDUM DECISION AND ORDER ON DEFENDANT'S MOTION TO DISMISS ON THE BASES OF FORUM NON CONVENIENS AND RULE 12(B)(6). (ECF NO. 15)

          LAWRENCE J. O'NEILL UNITED STATES CHIEF DISTRICT JUDGE

         I. INTRODUCTION

         This case arises out of a transaction in which Plaintiff Hellenic Petroleum LLC (“Hellenic Petroleum” or “Plaintiff”), a U.S. company whose principal place of business is in Florida, purchased propane from Elbow River Marketing LTD (“Elbow River”), a Canadian company whose principal place of business is in Alberta, Canada. ECF No. 1 ¶¶ 1-2. After this action was filed in April 2019, Elbow River filed its first motion to dismiss under Federal Rule of Civil Procedure 12(b)(3), arguing that the Alberta courts in Canada had exclusive jurisdiction over this case based on a forum-selection clause. Doubting that the motion to dismiss was brought under the correct principles of law given that an international sales contract was at issue in this case, the Court, on July 11, 2019, denied the motion without prejudice and instructed Elbow River to brief the Court further on the applicability of the United Nations Convention on Contracts for the Internal Sale of Goods (“CISG”) and Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 571 U.S. 49 (2013) in a subsequent motion to dismiss. ECF No. 1 at 1-3.

         Accordingly, Elbow River filed a second Motion to Dismiss on July 25, 2019 to address those issues raised by the Court. ECF No. 15. Elbow River now asks the Court to dismiss this action under the doctrine of forum non conveniens pursuant to the forum-selection clause in the parties' agreements or, in the alternative, to dismiss all five causes of action for failure to allege sufficient facts under Federal Rule of Civil Procedure 12(b)(6). Hellenic Petroleum then filed its Opposition on August 29, 2019, followed by Elbow River's Reply on September 5, 2019. ECF Nos. 17-19.

         Pursuant to Local Rule 230(g), the Court finds this matter suitable for a decision on the papers. For the reasons stated below, the Court needs further briefing from the parties before it can determine whether to grant Hellenic Petroleum leave to amend its first cause of action for breach of oral contract.

         II. BACKGROUND

         The following facts are drawn from the Complaint, and are accepted as true only for the purposes of this Motion to Dismiss. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). The parties made an oral agreement in or around October 2018 to limit Elbow River's delivery of propane on Hellenic Petroleum's account to a monetary value not exceeding $1 million. ECF No. 1 ¶¶ 10, 14. Elbow River breached this oral agreement by delivering $2.2 million in propane to Hellenic Petroleum without its consent or knowledge. Id. ¶ 11. As a result, Hellenic Petroleum asserts the first cause of action for breach of oral contract against Elbow River and the second cause of action for declaratory relief asking the Court to adjudicate the parties' rights and obligations under the oral agreement. Id. ¶¶ 8-15.

         Hellenic Petroleum also asserts a third, fourth, and fifth causes of action for trade libel, negligent interference with the prospective economic relations, and violation of the California Business & Professions Code §§ 17200, et seq.

         III. LEGAL STANDARD

         A motion to dismiss under Rule 12(b)(6) challenges the legal sufficiency of the opposing party's pleadings. Dismissal of an action under Rule 12(b)(6) is proper where there is either a “lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). When considering a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the pleading party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). The inquiry is generally limited to the allegations made in the complaint. Lazy Y Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008).

         To overcome a Rule 12(b)(6) challenge, the complaint must allege “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. A claim is plausible on its face when “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A plausible claim is one which provides more than “a sheer possibility that a defendant has acted unlawfully.” Id. A claim which is possible, but which is not supported by enough facts to “nudge [it] across the line from conceivable to plausible . . . must be dismissed.” Twombly, 550 U.S. at 570.

         IV. ANALYSIS

         “In Atlantic Marine, the Supreme Court addressed the procedures available to a civil defendant seeking to enforce a valid forum-selection clause. The Supreme Court held that ‘the appropriate way to enforce a forum-selection clause pointing to a state or foreign forum is through the doctrine of forum non conveniens.'” Gemini Techs., Inc. v. Smith & Wesson Corp., 931 F.3d 911, 913 (9th Cir. 2019) (citing to Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 571 U.S. 49, 61, 134 S.Ct. 568 (2013)). Pursuant to Atlantic Marine, Elbow River now invokes the forum non conveniens doctrine and submits evidence of the parties' written agreements concerning the sales of the propane to show that there is a forum-selection clause in the agreements requiring Hellenic Petroleum to submit to the jurisdiction and law of Alberta, Canada. ECF No. 15 at 10-17; ECF No. 16 ¶¶ 11-13 (citing to Exhs. 1-5). Elbow River thus asks the Court to dismiss this action pursuant to the forum-selection clause. ECF No. 15 at 10-17. In opposition, Hellenic Petroleum contends that it is not pleading a breach of contract based on the written agreements; rather, its first cause of action is based on a breach of an independent oral agreement, which does not contain a forum-selection clause. ECF No. 17 at 1. Given Hellenic Petroleum's argument, the Court must first consider the sufficiency of Hellenic Petroleum's allegations under Rule 12(b)(6) as to the existence of an independent oral contract. If Hellenic Petroleum sufficiently alleges a breach of an independent oral agreement, then the forum-selection clause in the written agreements does not apply here. The Court begins its analysis of the oral contract under the CISG.

         “‘The CISG is an international treaty that governs the formation of international sales contracts as well as the rights and obligations of the parties.' The CISG applies to ‘contracts of sale of goods between parties whose places of business are in different States . . . when the States are Contracting States.'” Martini E Ricci Iamino S.P.A.--Consortile Societa Agricola v. Trinity Fruit Sales Co., 30 F.Supp.3d 954, 965 (E.D. Cal. 2014) (citations omitted). Hellenic Petroleum and Elbow River are incorporated in the United States and Canada, respectively, ECF No. 1 ¶¶ 1-2, and both nations are signatories to the CISG, Chateau des Charmes Wines Ltd. v. Sabate USA Inc., 328 F.3d 528, 530 (9th Cir. 2003) (citing to 15 U.S.C. App.). Thus, the ...


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