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Glaxosmithkline Biologicals, S.A. v. Hospira Worldwide, Inc.

United States District Court, N.D. Illinois, Eastern Division

March 31, 2014



JOHN W. DARRAH, District Judge.

Plaintiff GlaxoSmithKline ("GSK") filed an Amended Complaint against Defendants Hospira Worldwide, Inc. and Hospira, Inc. (collectively, "Hospira"), alleging three causes of action: (I) breach of contract; (II) promissory estoppel; and (III) quantum meruit and unjust enrichment. Hospira moves to dismiss all counts, pursuant to Fed.R.Civ.P. 12(b)(6). For the reasons provided below, this Motion is denied.


GSK is a healthcare company that researches and develops vaccines for worldwide distribution, with its principal place of business in Belgium. (Am. Compl. ¶ 12.) Hospira Worldwide, Inc. and Hospira, Inc. are corporations that provide injectable drugs, infusion technologies, and other pharmaceutical products, with their principal place of business in Lake Forest, Illinois. ( Id. ¶¶ 13-14.) GSK and Hospira entered into an agreement ("the Agreement"), dated December 13, 2010, providing Hospira would produce an influenza vaccine product for distribution throughout the United States. ( Id. ¶ 18.)

The Agreement comprised various schedules, describing the product, work to be performed, price and payment terms, and duration, all of which were necessary to the overall Agreement. ( Id. ¶¶ 18-19.) Schedules 5 and 7 were individually executed by Hospira, Inc., a provider of injectable drugs and other pharmaceutical products, based in Lake Forest Illinois. ( Id. ¶ 14.) The remainder of the Agreement was executed by Hospira Worldwide, Inc., a wholly-owned subsidiary of Hospira, Inc. ( Id. ¶ 13.) Pursuant to the Agreement, GSK supplied the raw materials to Hospira, which would, in turn, produce batches of Vaccine Product in compliance with the Agreement and "otherwise acceptable to GSK at its sole discretion." ( Id. ¶¶ 20-21.) Vaccine Product "means the GSK influenza vaccine product which includes the Bulk [ i.e, raw materials] filled and finished by Hospira." ( Id. ¶ 23.)

The parties initially contemplated a Trivalent influenza vaccine ("TIV"). ( Id. ¶ 4.) However, after Hospira failed to produce an acceptable validation batch, GSK agreed to work with Hospira to produce a Quadrivalent influenza vaccine ("QIV"). ( Id. ) The definition of Vaccine Product draws no distinction between the two versions, and allows for the version to change over the life of the Agreement. ( Id. ¶ 5.) All production was to be in accordance with current good manufacturing practices ("cGMP"). ( Id. ¶ 2.) The parties agreed to a timetable that required Hospira to produce all Validation Batches for regulatory filing in 2011. ( Id. ¶ 25.)

Hospira failed to maintain its production facilities in accordance with cGMP and produced Validation Batches that generally failed to satisfy the quality requirements of the Agreement. ( Id. ¶¶ 28, 30.) As a result, Hospira failed to submit to GSK a product appropriate for regulatory filing. ( Id. ¶ 29.) On at least three dates, Hospira acknowledged that its batches were "invalid" and "unacceptable for GSK." ( Id. ¶ 31.) GSK consistently notified Hospira that Hospira was in breach of the Agreement. ( Id. ¶¶ 32-33.)

In addition to notifying Hospira of its breaches, GSK worked with Hospira to achieve an acceptable vaccine. ( Id. ¶ 34.) GSK proposed a plan to develop a vaccine for regulatory filing by October 2012. ( Id. ) The new proposal called for development of a quadrivalent influenza vaccine ("QIV"). ( Id. ¶ 4.) Hospira again failed to produce a Validation Batch in accordance with the Agreement. ( Id. ¶ 35.)

On March 22, 2012, Hospira informed GSK that Hospira intended to terminate the Agreement more than three years before the scheduled term end of December 2015, and confirmed its decision to terminate in an email that same day. ( Id. ¶ 36.) On March 30, 2012, Hospira again confirmed its decision to terminate in a conversation with GSK. ( Id. ) On April 2, 2012, GSK informed Hospira that a termination would constitute material breach of the Agreement, and Hospira responded that Hospira considered the agreement terminated. ( Id. ¶¶ 37-38.) Hospira has failed to perform and materially breached its obligations under the Agreement as Hospira: (a) failed to produce Vaccine Batches and Product in compliance with the Agreements quality requirements; (b) failed to produce Vaccine Batches and Product in accordance with cGMP; (c) failed to produce Vaccine Batches and Product appropriate for regulatory submission by the end of 2011; (d) failed to produce Vaccine Batches and Product otherwise acceptable to GSK; (e) failed to maintain its Kansas facility; (f) failed to cure or remedy its breaches; and (g) unilaterally terminated the Agreement on March 22, 2012. ( Id. ¶ 43.) The breach resulted in GSK sustaining damages in excess of $25 million. ( Id. ¶ 45.)

GSK brought an action in the Southern District of New York, alleging claims for breach of contract, promissory estoppel, and quantum meruit and unjust enrichment.[1] Hospira then successfully moved to transfer the case to the Northern District of Illinois. GSK filed the Amended Complaint on November 27, 2013. Hospira now moves to dismiss the Amended Complaint.


When considering motions brought pursuant to Rule 12(b)(6), all well-pleaded allegations within the complaint are read in the light most favorable to the plaintiff and presumed true. Lavalais v. Village of Melrose Park, 734 F.3d 629, 632 (7th Cir. 2013). This presumption is not extended to "legal conclusions, or threadbare recitals of the elements of a cause of action, supported by mere conclusory statements." Alam v. Miller Brewing Co., 709 F.3d 662, 666 (7th Cir. 2013) (quoting Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009)). A proper claim requires only short and plain statements of jurisdiction and entitlement to relief, as well as a demand for the relief sought. Fed.R.Civ.P. 8(a). However, the pleading "demands more than an unadorned, the-defendant-unlawfully-harmed-me-accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

A defendant may move to dismiss, pursuant to Rule 12(b)(6), if the plaintiff has failed to state a claim upon which relief can be granted. Withstanding such a motion requires alleging enough facts to support a claim that is "plausible on its face." Chasensky v. Walker, 740 F.3d 1088, 1095 (7th Cir. 2014) (quoting Iqbal, 556 U.S. at 678)). Facial plausibility exists when the court can "draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 663. The court must consider context, but if it still must speculate, plausibility is lacking. Id.

In most cases, a motion to dismiss should be decided on the complaint alone. Burke v. 401 N. Wabash Venture, LLC, 714 F.3d 501, 505 (7th Cir. 2013). Yet, a document "that is an exhibit to a pleading is a part of the pleading for all purposes." Fed. R. Civ. Pro. 10(c). "The court is not bound to accept the pleader's allegations as to the effect of the exhibit, but can independently examine the document and form its own conclusions as to the proper construction and ...

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