Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

NUCAP Industries Inc. v. Robert Bosch LLC

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

March 31, 2017

NUCAP INDUSTRIES, INC., and NUCAP US, INC., Plaintiffs,
v.
ROBERT BOSCH LLC; BOSCH BRAKE COMPONENTS LLC; and ROBERT BOSCH GMBH, Defendants.

          MEMORANDUM OPINION AND ORDER

          Joan B. Gottschall United States District Judge.

         Before the court are cross motions for partial summary judgment and a motion to dismiss two antitrust counterclaims pleaded in the defendants' amended answer. The motions for summary judgment primarily involve a contract formation dispute with an antecedent choice-of-law question. Finding that the United Nations Convention on Contracts for the International Sale of Goods (“CISG”), United Nations Convention on Contracts for the International Sale of Goods, Mar. 2, 1987, 52 Fed. Reg. 6262, 1489 U.N.T.S. 3, governs the formation dispute, the court denies the cross motions for summary judgment because the evidence of the parties' extensive negotiations and dealings raises genuine factual disputes material to the formation analysis under the CISG. Notably, the CISG allows consideration of one party's subjective intent when forming a contract “where the other party knew or could not have been unaware what that intent was.” Id. art. 8(1). The court grants the motion to dismiss the counterclaims because they fail to allege adequately the basis for defining the relevant markets.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Except where otherwise noted, the court draws the following undisputed facts from Nucap and Bosch's cross motions for summary judgment.[1] Nucap objects to some of the assertions made in Bosch's Local Rule 56.1 statement on two general grounds. (See Nuca p 's Resp. to Bosch's SOF 1-2, ECF No. 468.)

         First, the depositions, affidavits, and evidence cited in certain paragraphs of Bosch's Local Rule 56.1 statement do not support the factual proposition for which they are cited, according to Nucap, and those paragraphs must therefore be disregarded. See N.D. Ill. L.R. 56.1(a) (“The statement referred to in (3) shall consist of short numbered paragraphs, including within each paragraph specific references to the affidavits, parts of the record, and other supporting materials relied upon to support the facts set forth in that paragraph.”). Specifically, Nucap objects to paragraphs 5, 8-9, 13, 25-27, 29, 52, 65, 68, 69, and 71 on this ground. Nucap's response to paragraph 5, however, includes no citation to factual material disputing it, and despite Nucap's general objection on pages 1-2, Nucap lists paragraphs 25 and 26 as undisputed. (ECF No. 468 at 10.) Paragraphs 65 and 68 characterize the claims asserted in Nucap's original complaint. (ECF No. 468 at 22, 23.) The court can determine the complaint's scope for itself. Finally, Nucap cites its entire amended complaint, motion for preliminary injunction, and reply to that motion in responding to paragraph 71 as well as two depositions in their entirety. (ECF No. 468 at 24.) As explained in the next paragraph, the court disregards legal conclusions. Nucap's citations to depositions in their entirety also fail to comply with Local Rule 56.1. See Bolden v. Dart, No. 11 C 8661, 2013 WL 3819638, at *2 (N.D. Ill. July 23, 2013) (quoting Ammons v. Aramark Uniform Servs., Inc., 368 F.3d 809, 817-18 (7th Cir. 2004)) (disregarding inadequately supported response because Rule 56.1 responses must include “proper . . . citations to exact pieces of the record that support the factual contention contained in the paragraph” (quoting Malec v. Sanford, 191 F.R.D. 581, 583 (N.D. Ill. 2000)) (ellipsis in original; other citations omitted)). To the extent those facts are material, the court considers the objections to paragraphs 8-9, 13, 29, 52, and 69 below.[2]

         Second, Nucap argues several paragraphs of Bosch's Rule 56.1 statement improperly state legal conclusions rather than facts. (ECF No. 468 at 2.) Those objections are well-taken.[3]The court has sifted the undisputed facts from the legal conclusions in the parties' Rule 56.1 statements; the latter receive no deference. See Kenall Mfg. Co. v. Genlyte Thomas Grp. LLC, 439 F.Supp.2d 854, 860 (N.D. Ill. 2006) (citing Greer v. Bd. of Educ. of City of Chi., 267 F.3d 723, 727 (7th Cir. 2001)) (ignoring conclusions of law in Rule 56.1 statements and “pars[ing] out the parties' conclusions of law from their allegations of fact”).

         A. The Parties and Their Contentions

         Nucap Industries Inc. (“Nucap Industries”) “is a corporation organized and existing under the laws of Ontario, Canada, ” with a principal place of business in Toronto. (Id. ¶ 3.) Nucap U.S. Inc., an indirectly wholly-owned subsidiary of Nucap Industries, is incorporated under the laws of Connecticut and keeps its principal place of business in that state. (Id. ¶ 4.) Nucap “invested money, engineering hours, and years of research and development to create a database of over 12, 000 drawings of aftermarket brake components.” (Bosch Resp. to Nucap SOF ¶ 2, ECF No. 556.) Nucap asserts that it considers those drawings its “crown jewel” and “core competitive asset.” (Id. (disputed as statement of opinion and to qualitative characterization).)

         Robert Bosch LLC and Bosch Brake Components LLC are incorporated in Delaware; they keep their principal places of business in Broadview, Illinois. (Nucap Resp. to Bosch SOF ¶¶ 1, 2, ECF No. 468.) Bosch has “affiliates in the United States, China, and Germany.” (Nucap's SOF ¶ 14, ECF No. 474.) Bosch's affiliate in China, referred to by the parties as “Bosch China, ” has not been joined as a party to this litigation.[4] (Marschall Decl. ¶ 20, Bosch Tab 1; ECF No. 556 ¶ 14.)

         Bosch assembles and sells aftermarket brake pads. (Nucap Resp. to Bosch SOF ¶ 5.) Ordinarily, aftermarket and original equipment brake pads “consist[ ] of a backing plate, friction material, a shim, and hardware (such as a wear sensor).” (Id. ¶ 7.) Bosch sources some of these components and assembles them into finished brake pads. (Id. ¶ 6.) Nucap sells brake components to finished-good suppliers throughout the world. (Id. ¶ 11.)

         Bosch started buying brake components from Nucap in September 2008. (Bosch Resp. to Nucap's SOF ¶ 4, ECF No. 556.) Between 2008 and 2014, Nucap shipped backing plates to Bosch from its Toronto headquarters; those backing plates had been manufactured in Toronto. (Bosc Resp. to Nucap SOF ¶ 5.) “[T]here was and is no global supply agreement between Bosch and Nucap or other general agreement governing the relationship between Bosch and Nucap . . . .” (Nucap Resp. to Bosch SOF ¶ 14.)

         The relationship between Bosch and Nucap came to a halt in November 2014. As described in the parties' Local Rule 56.1 statements, the summary judgment record contains less information about what happened after November 2014 than the court heard at the preliminary injunction phase. (See Slip Op. at 4-6, Aug. 29, 2016, ECF No. 609.) Among other things, Nucap claims Bosch misused its proprietary drawings after the relationship's collapse; it brings claims for trade secret misappropriation and tortious interference with contract and prospective economic advantage. Nucap alleges that “in response to Bosch's demands, [Nucap] allowed select pre-approved Bosch and Bosch China employees to access Nucap's extensive library of proprietary drawings . . . which Bosch claimed was necessary to satisfy Bosch's internal quality control requirements for Nucap-supplied components.” (1st Am. Compl. ¶ 16, ECF No. 239; see also Id. ¶¶ 70-72.) Nucap alleges that Bosch distributed Nucap's drawings to third-party suppliers of brake components and misused them to qualify and approve replacement suppliers' brake components. (See Id. ¶¶ 75-85.)

         The pending summary judgment motions ask the court to determine what agreement or agreements governed Nucap and Bosch's relationship. Bosch relies on its Purchase Order Te r m s and Conditions bearing a last revision date of September 1, 2010, (“the POTCs”) to argue that its alleged use of Nucap's drawings was proper. Nucap maintains that it rejected some or all of the terms of the POTCs and that Bosch and Nucap formed one or more confidentiality agreements.

         Bosch brings seven counterclaims against Nucap. (See Defs.' Ans., Affirmative Defenses, & Countercls. to Nucap's 1st Am. Compl. [hereinafter “Countercl.”] at 45-73, ECF No. 328.)[5] Nucap moves to dismiss the first two-a claim for attempted monopolization in violation of § 2 of the Sherman Act, 15 U.S.C. § 2, and the same theory pleaded as a violation of § 3 of the Illinois Antitrust Act, 740 ILCS 10/3 (collectively “antitrust counterclaims”). Bosch also alleges that Nucap breached outstanding purchase orders when it, among other things, refused to ship outstanding orders to Bosch in November 2014 and that by pursuing this lawsuit based on Bosch's use of its drawings, Nucap violated the terms of the POTCs. (See Countercl. ¶¶ 111-24.) Bosch also claims that Nucap violated the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq.; unjustly enriched itself; tortiously interfered with Bosch's business expectancy; and breached a contract implied in fact.

         Bosch's antitrust counterclaims stem from the collapse of the Nucap-Bosch relationship. For purposes of deciding Nucap's motion to dismiss, the court takes Bosch's allegations in its counterclaims as true and views them in the light most favorable to Bosch.

         In or around October 2012, Bosch began making inquiries about purchasing backing plates from Nucap's supplier in China. (Countercl. ¶ 65.) “Nucap refused and demanded that Bosch purchase backing plates from Nucap Canada or North America, requiring Bosch to pay more for parts that Bosch could have purchased from alternative suppliers at a lower cost.” (Id.) Bosch was buying “all of its shims and the majority of its backing plates from Nucap” by late 2013. (Id. ¶ 66.) Bosch pleads that there were fluctuations in Bosch's orders and Nucap's timely fulfillment in the first three quarters of 2014, leading, according to Bosch, to Nucap's not timely filling orders for shims under existing purchase orders in the third quarter of 2014. (See Id. ¶¶ 67-70.) Bosch began shifting its orders of backing plates to other suppliers but kept buying “virtually all” of its shims from Nucap. (Id. ¶ 70.) In October 2014, Nucap changed its payment terms from “Net 60 Days” to “cash in advance.” (Id. ¶ 71.) Bosch describes what happened next this way:

72. Then, on November 10, 2014, Nucap unilaterally, without justification and with no advance warning, placed Bosch on a “complete business pause” and stopped shipping components to Bosch - even those components subject to a previously accepted purchase order and for which Bosch had submitted pre-payment. On information and belief, Nucap instituted this “complete business pause” in order to cause Bosch financial and reputational distress so as to force Bosch to negotiate a long-term agreement with Nucap under terms that Nucap desired.
73. Eight days later, on November 18, 2014, Lutz Marschall, President of Bosch Brake Components, met Ray Arbesman, Chairman and Owner of Nucap Industries, at Mr. Arbesman's home in or around Toronto, Canada. During that meeting, Mr. Arbesman told Mr. Marschall that Nucap would not sell its shims to Bosch unless Bosch bought Nucap's backing plates.

         (Countercl. ¶¶ 72-73.)

         B. Purchase Orders

         Bosch and Nucap followed a “uniform procedure” until their relationship broke down in 2014. (Nucap Resp. to Bosch SOF ¶ 15.) Bosch issued a purchase order to Nucap specifying material terms, including price, quantity, and part number. (Id. ¶ 15(a).) Nucap delivered the parts Bosch ordered with a packing slip and then invoiced Bosch for the items supplied pursuant to the specific purchase order. (Id. ¶¶ 15(c), (d); Bosch Resp. to Nucap SOF ¶ 6.) Nucap contends that its clerks did not review each purchase order's terms, but only the price, quantity, and shipping address. (Nucap Resp. to Bosch SOF ¶ 15.)

         Beginning on September 1, 2010, each purchase order sent to Nucap included the following language: “THE TERMS AND CONDITIONS OF PURCHASE ARE AVAILABLE AT WWW.BOSCHNASUPPLIERS.COM AND INCORPORATED HEREIN BY REFERENCE, SHALL BECOME A BINDING AGREEMENT UPON SELLER COMMENCING PERFORMANCE OF THIS PURCHASE ORDER, OR UPON SELLER OTHERWISE ACKNOWLEDGING ACCEPTANCE, WHICHEVER OCCURS FIRST.” (Id. ¶ 17.) Bosch did not tell Nucap when it began including that text at the bottom of its purchase orders. (Bosch Resp. to Nucap SOF ¶ 43.)

         Bosch sent Nucap over 8, 000 purchase orders containing that language between September 1, 2010, and November 10, 2014. (Nucap Resp. to Bosch SOF ¶¶ 20, 32.) “Nucap shipped to Bosch the quantities of components, at the prices, specified in each purchase order that specified the proper agreed prices, and followed the delivery terms instructions agreed upon.” (Nucap Resp. to Bosch SOF ¶ 21.) Bosch paid Nucap a total of more than $170 million under those purchase orders. (Id. ¶ 51.) “At no time did Nucap ever state to Bosch that Nucap could not locate and/or were [sic] unable to review a copy of the POTCs.” (Nucap Resp. to Bosch SOF ¶ 55, ECF No. 486.)

         Bosch contends several provisions of the POTCs, which the court assumes for summary judgment purposes were available on the website referenced on the purchase order, [6] allow it to use Nucap's drawings and preclude many of Nucap's claims. (See Nucap Resp. to Bosch SOF ¶¶ 34-50 (conceding that exhibit accurately sets forth POTCs' text but disputing whether it is legally binding).) Sections 23.3-23.4 of the POTCs, read as follows:

Section 23.3. All documents containing proprietary information relating to the Supplies produced or acquired by Seller in connection with this Agreement shall belong to Buyer. All drawings, know-how, and confidential information supplied to Seller by Buyer and all rights therein shall remain the property of Buyer and shall be kept confidential by Seller in accordance with Section 23.1 above.
Section 23.4 Seller agrees not to assert any claim against Buyer or its suppliers with respect to any technical information that Seller has disclosed or may disclose to buyer in connection with the Supplies covered by the Order, except to the extent expressly covered by a separate written confidentiality and/or license agreement signed by Buyer or by a valid patent expressly disclosed to Buyer prior to or at the time of the Order.

         (Bosch POTC, Bosch Ex. 23 at BBCNU00199875, ECF No. 343-2; see also Id. § 23.1 (“Seller further agrees not to assert any claims with respect to any technical information which Seller shall have disclosed or may hereafter disclose to Buyer in connection with the Supplies.”).) Indeed, the POTCs make “prints and specifications for the Supplies” made part of “the order.” (Id. § 2.2; see also Id. §§ 22.1, 22.4, 22.5 (providing, among other things, that intellectual property “needed to manufacture, sell, or use the supplies” is the buyer's property).) Those obligations survive the order's termination, according to the POTCs. (See Id. §§ 23.6, 35.) Finally, in § 32.4, the POTCs state that: “Neither course of performance, course of dealing or usage of trade may be used to vary the terms of the Order.”

         C. Negotiations and Course of Dealings

         At its request, Bosch received access to Nucap's drawings and its engineering database beginning in October 2008. (Bosch Resp. to Nucap Counter SOF ¶¶ 4-5, ECF No. 495.) Nucap provided access to the electronic database on an “as needed basis” in response to requests made “by email or telephone.”[7] (Id. ¶ 15.)

         In March 2011, Bosch and Nucap discussed entering into a possible corporate agreement and purchase and sale agreement referencing the POTCs, but they did not execute either agreement. (Nucap Resp. to Bosch Counter SOF ¶ 33-34, ECF No. 580.) Bosch and Nucap representatives discussed the terms of the POTCs at a meeting held May 17, 2011. (Nucap Resp. to Bosch SOF ¶ 25, ECF No. 468.) Bosch's representatives asked Nucap's representatives to identify any issues Nucap had with the POTCs. (Id. ¶ 27.) That same day, a Nucap employee wrote an e-mail message to Bosch employees containing a list of “talking points, ” including an assertion that Nucap “cannot have any blind acceptance of Bosch standard terms and conditions.” (Bosch Resp. to Nucap SOF ¶ 47 (quoting Nucap Ex. 45 at NUCAP-0175871).)

         On January 21, 2013 Wilkes e-mailed Khokhar and another Nucap employee about continuing access to Nucap 's online database of drawings, stating that he could not form agreements without the approval of Bosch's legal department. (Wilkes Decl. Ex. 2, Bosch. Ex. 2.)

         In June 2013, Bosch and Nucap circulated a proposed nondisclosure agreement governing the use of Nucap's drawings, but Bosch and Nucap never executed it. (Bosch Resp. to Nucap's SOF ¶¶ 12-14, ECF No. 556.) Nucap characterizes those communications as a confidentiality agreement. A pair of e-mail messages exchanged by Montu Khokhar (“Khokhar”), who held the title of Chief Executive Officer of Nucap Industries Inc., on June 27, 2013, and Nucap employees and copying Robert Wilkes (“Wilkes”) at Bosch states that “Bosch will not be able to sign the confidentiality contract.” (Nucap Ex. 17 at NUCAP-0231802.) The messages nevertheless specified that certain personnel would receive access to the drawings and that Bosch would take steps to control print distribution internally [of the drawings].” (Id.) In internal e-mails, Wilkes referred to this as a “major breakthrough in cooperation between Nucap and Bosch.” (Bosch Resp. to Nucap SOF ¶ 18.) At that time, Wilkes, who held the title of “Director Product Development” at Bosch, communicated his understanding-an understanding Bosch now disputes both as nonbinding and not adequately informed-that the drawings were Nucap's intellectual property. (See Bosch Resp. to Nucap SOF at 10; see also Prelim. Inj. Hr'g Tr., Bosch Ex 45 at 334:12-19 (Wilkes' testimony that he was unaware of the POTCs in June 2013).) Wilkes sent an e-mail message to another Bosch employee and a Bosch China employee on August 29, 2013, including the assertion that: “As I have put out a memo stating not to sent [sic] supplier drawings to competitors, as they are IP, this practice should have stopped. If not, I may have no other choice but to notify legal.” (Bosch Resp. to Nucap SOF ¶ 27 (alteration in original).)

         As that e-mail demonstrates, Bosch employees continued to receive access to Nucap's engineering database until at least that date, and with an inference favorable to Nucap, until the relationship fell apart in November 2014. (See Bosch Resp. to Nucap Counter SOF ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.