Chartwell RX, LLC v. Inmar, Inc.

Background

Chartwell RX, LLC manufactures pharmaceutical products and sells them to distributors. Amerisource Bergen Corp., Cardinal Health, Inc., and McKesson Corp. had contracts with Chartwell covering the return of pharmaceutical products. Inmar, Inc. and its indirect subsidiary, Inmar Rx Solutions, Inc., provide reverse-distribution services by processing expired or nearly expired pharmaceutical products for distributors and dispensers and returning them to manufacturers.

Chartwell alleged that Inmar repeatedly violated Chartwell’s return policies by shipping unauthorized or improperly prepared returns, sending returns directly from dispensers even though Chartwell accepted returns only from its direct distributor customers, and notifying distributors and dispensers that they could claim credits for faulty returns. Chartwell alleged that these practices caused improper debits, processing and disposal costs, and damage to its business relationships.

Chartwell asserted seven state-law claims: fraud, unjust enrichment, three claims for tortious interference with its contracts with Amerisource Bergen, Cardinal Health, and McKesson, unfair competition, and breach of contract based on third-party-beneficiary status. Inmar moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint adequately alleges a legally plausible claim.

Choice of Law

The court applied New York law to the fraud, unjust-enrichment, contract-interference, and unfair-competition claims because the parties did not dispute that New York law governed those claims. For the third-party-beneficiary contract claim, the court concluded that Delaware law governed Inmar Rx’s contracts with Amerisource Bergen and McKesson, while Texas law governed its contract with Cardinal, based on the contracts’ choice-of-law provisions.

Fraud

The court granted the motion to dismiss the fraud claim. Chartwell’s theory was that Inmar said it had corrected its database and logistical problems but failed to disclose an alleged intention to continue violating Chartwell’s return policies. The court treated this as a claim based on an omission rather than an affirmative false statement.

Under New York law, fraud by omission requires a duty to disclose. The court concluded that Chartwell did not plausibly allege such a duty because the parties were not in a fiduciary relationship, Inmar’s statements were not partial or ambiguous, and the special-facts doctrine did not apply. The court also concluded that Chartwell had not alleged facts creating a strong inference that Inmar intended to fraudulently induce Chartwell’s reliance. The motion was therefore granted as to fraud.

Unjust Enrichment

The court granted the motion as to Chartwell’s unjust-enrichment claim concerning returns processed for distributors that had contracts with Chartwell governing reverse distribution. Those contracts covered the same subject matter as the unjust-enrichment claim, so the court held that they precluded recovery on a quasi-contract theory for those returns.

The court denied the motion as to returns processed for distributors and dispensers that had no contracts with Chartwell governing reverse distribution. Because no contract covered that subject matter, Chartwell plausibly alleged that Inmar was enriched at Chartwell’s expense and that it would be unfair for Inmar to retain the benefit of shipping unusable products to Chartwell and seeking credits for products returned to a company from which its clients had not purchased the products. The order therefore granted in part and denied in part the motion as to unjust enrichment.

Tortious Interference with Contract

The court denied the motion as to Chartwell’s three tortious-interference claims. Chartwell plausibly alleged that valid contracts existed with Amerisource Bergen, Cardinal Health, and McKesson; that Inmar knew about those contracts; that Inmar intentionally caused the distributors to breach them by issuing unauthorized credit notifications; and that Chartwell suffered resulting damages.

The court rejected Inmar’s argument that it would not rationally risk losing its business relationships with the distributors. At the pleading stage, the court concluded that Inmar could have decided that the potential revenue outweighed the risk that the distributors’ contracts with Chartwell would be terminated.

Unfair Competition

The court granted the motion as to unfair competition. Under New York law, the relevant theories were “palming off” and misappropriation. The court held that the alleged conduct did not involve selling one manufacturer’s goods as those of another, so Chartwell did not plausibly plead palming off. The court also held that Inmar did not compete with Chartwell, which manufactures pharmaceuticals, so Chartwell did not plausibly plead misappropriation of a competitor’s work or investment.

Third-Party-Beneficiary Contract Claim

The court granted the motion as to Chartwell’s claim that it was an intended third-party beneficiary of Inmar Rx’s contracts with the distributors. Under Delaware and Texas law, a third-party beneficiary must show that the contracting parties intended to benefit that third party in the legally required manner. Chartwell alleged that the contracts covered reverse-distribution services for the distributors and their customers, and that their purpose was to process returns to manufacturers generally.

The court concluded that these allegations showed, at most, that Chartwell might benefit from the contracts. Chartwell did not allege that the contracts specifically identified it as a creditor or gift beneficiary under Delaware law or clearly identified it as an intended beneficiary under Texas law. The court therefore held that the third-party-beneficiary contract claim was not plausibly pleaded.

Disposition

Judge Castel ordered that Inmar’s motion to dismiss was (1) granted as to the claims for fraud, unfair competition, and third-party beneficiary of contract; (2) granted in part and denied in part as to unjust enrichment; and (3) denied as to the claims for tortious interference with a contract. The Clerk was directed to terminate the motion.