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Bapasn, Inc. v. Equilon Enterprises

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

August 19, 2014

BAPASN, INC. and GLEN R. GORMAN, individually, Plaintiffs,
v.
EQUILON ENTERPRISES d/b/a SHELL OIL PRODUCTS U.S. and TRUE NORTH ENERGY, LLC, Defendants.

MEMORANDUM OPINION AND ORDER

MANISH S. SHAH, District Judge.

Plaintiffs Bapasn, Inc. and Glen R. Gorman each operate a gas station in the Chicago area. They each contracted to buy gas from defendant Equilon Enterprises, and did so for some time. Equilon then assigned the contracts to defendant True North Energy. Plaintiffs subsequently received gas from, and made payments to, True North, rather than Equilon.

In this lawsuit, plaintiffs allege that True North charged more for gas than the contracts permitted. Plaintiffs also allege that Equilon knew that would happen, and so acted in bad faith when it assigned the contracts to True North. Finally, Bapasn seeks a declaration that the bad faith assignment and higher prices render void a subsequent contract that it entered into directly with True North.

Defendants moved to dismiss the complaint. For the reasons discussed below, that motion is granted in part and denied in part.

I. Legal Standards

Defendants' motion is brought under Rule 12(b)(6) of the Federal Rules of Civil Procedure. I therefore construe the complaint in the light most favorable to the plaintiffs, accept as true all well-pleaded facts, and draw reasonable inferences in the plaintiffs' favor. Yeftich v. Navistar, Inc. , 722 F.3d 911, 915 (7th Cir. 2013). Statements of law, however, need not be accepted as true. Id .

To survive defendants' motion, the complaint must "state a claim to relief that is plausible on its face." Id . (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id . (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009)).

II. The Facts[1]

The plaintiffs each contracted to buy gas from defendant Equilon Enterprises, and did so for some time. SAC ¶¶ 8-13. In March 2010, Equilon assigned the contracts to defendant True North Energy, and plaintiffs began buying gas from True North. SAC ¶ 15. Bapasn's contract expired on February 28, 2011, and Gorman's expired on October 31, 2012. SAC ¶¶ 11, 13. Bapasn and True North entered a new contract, which became effective on March 1, 2011. SAC ¶ 16. The complaint does not state whether Gorman and True North entered a new contract.

In each contract, instead of a fixed price (in dollars per gallon, for example), the particular plaintiff agreed to pay "the price in effect at the time loading commences at the Plant for the place of delivery." SAC ¶ 38; SAC Ex. A ¶ 3(a).[2] The "Plant" is defined as the distribution plant from which gas is delivered to the particular plaintiff. SAC Ex. A ¶ 1(f). True North has other buyers, besides the plaintiffs here, and its contracts with those buyers contain identical price provisions. SAC ¶¶ 20, 24.

According to the complaint, True North charged plaintiffs more for gas than both (1) Equilon's price in effect at a particular plant (SAC ¶¶ 21-22); and (2) what True North charged some of its other buyers (SAC ¶¶ 23-24).[3] Plaintiffs contend that True North therefore charged more than the contracts permitted. SAC ¶¶ 39-40.

Plaintiffs allege that Equilon owns 49% of the shares of True North. SAC ¶ 25. Equilon allegedly knew, when it assigned the contracts to True North, that True North would overcharge plaintiffs. SAC ¶¶ 25, 32. Plaintiffs allege that Equilon assigned the contracts for the specific purpose of charging plaintiffs more than the contracts permitted. SAC ¶ 33-34.

III. Analysis

A. Counts I ...


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