J.C. TRADING LIMITED, Plaintiff,
WAL-MART STORES, INC. Defendant.
David H. Luce, Esq. (argued), CARMODY MACDONALD P.C., St. Louis, MO; Thomas F. Driscoll III, Esq., BIFFERATO LLC, Wilmington, DE, Attorneys for Plaintiff.
Laura L. Chapman (argued), SHEPPARD, MULLIN, RICHTER & HAMPTON LLC, San Francisco, CA; Gregory B. Williams (argued), FOX ROTHSCHILD LLP, Wilmington, DE, Attorneys for Defendant.
RICHARD G. ANDREWS, District Judge.
J.C. Trading initiated this action in Missouri state court on October 1, 2010, alleging nine causes of action relating to the breach of three purported oral agreements. Walmart removed the case to the U.S. District Court for the Eastern District of Missouri on March 4, 2011. (D.I. 1). On May 12, 2011, Eastern District of Missouri Judge Catherine D. Perry transferred the case to this Court, finding that venue was not proper in Missouri based on the Delaware choice of law provision in the Supplier Agreements. (D.I. 30). Walmart filed the instant motion for summary judgment on January 17, 2013. (D.I. 93). The motion is fully briefed (D.I. 94, 99, 110) and oral argument was held on April 24, 2013. For the reasons that follow, the Court will grant Walmart's motion for summary judgment as to all counts.
Walmart sold a style of athletic footwear called the "Johnny" (for men) and the "Joanie" (for women) before and during 2008. Walmart purchased those shoes from third-party suppliers. In mid-2008, Walmart considered contracting with a new supplier to supply a portion of its "Johnny" inventory and contacted J.C. Trading. J.C. Trading is a corporation that designs and exports a variety of footwear products, including athletic shoes. (D.I. 100, Ex. A at 21:7-25:24); id., Ex. B at ¶ 2). Roy Giliotti, a men's footwear buyer at Walmart, and Gary Gorsuch, the president of J.C. Trading, met in June 2008 to discuss a possible business relationship. (D.I. 96, Ex. 3 at 50:17-51:24). Giliotti asked Gorsuch to design and develop a revamped Johnny shoe and to determine the cost to manufacture. (D.I. 100, Ex. A at 50:17-24; id., Ex. Eat 33:3-15). J.C. Trading started working on a redesign for Walmart's consideration.
J.C. Trading and Walmart entered into a written Supplier Agreement on August 19, 2008 and an identical Supplier Agreement on September 1, 2009, after the first one expired. (D.I. 96, Exs. 1 and 2). J.C. Trading has admitted that it entered into the Supplier Agreements in 2008 and 2009. (D.I. 119 at 4).
The Supplier Agreements govern the terms and conditions of the sale to Walmart of merchandise supplied by J.C. Trading. Four provisions in the Supplier Agreements are particularly relevant: First, the preamble of the Agreements expressly provides that "[t]he execution and submission of this Agreement does not impose upon [Walmart] any obligation to purchase Merchandise." (D.I. 96, Exs. 1-2 at preamble). "Merchandise" is defined in the Supplier Agreements as "all products, goods, materials, equipment, articles, and tangible items supplied by [J.C. Trading] to [Walmart]." ( Id. at ¶ 1(c)).
Second, the Order Clause provides that "[o]nly the issuance of an Order creates an obligation upon [Walmart]." ( Id. at ¶ 2(f)). "Order" is defined in the Supplier Agreements as "any written or electronic purchase order issued by [Walmart]." ( Id. at ¶ 1(e)). The Order Clause further provides that "[p]rejections, past purchasing history and representations about quantities to be purchased are not binding, and [Walmart] shall not be liable for any act or expenditure... by [J.C. Trading] in reliance on them." ( Id. at ¶ 2(f)).
Third, the Design Clause provides that:
Any confidential information, knowledge, designs... by [J.C. Trading] which [J.C. Trading discloses to Walmart]... unless otherwise specifically agreed to in writing by [Walmart]... shall be acquired by Walmart [free] from any restrictions... as part of the consideration for this [agreement]. No cause of action will arise on [J.C. Trading's] behalf for [Walmart's] use of any confidential information disclosed to [Walmart] and no damages whatsoever shall accrue.
( Id at ¶ 16).
Fourth, the Integration Clause provides that:
The parties hereto agree that this Agreement and any Order constitute the full understanding of the parties, a complete allocation of risks between them and a complete and exclusive statement of the terms and conditions of their agreement. All prior agreements, negotiations, dealings and understandings, whether written (including any electronic records) or oral, regarding the subject matter hereof, are superseded by this Agreement. Any changes in this Agreement shall be in writing and executed by both parties.
( Id. at ¶ 34).
II. LEGAL STANDARDS
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). A "material fact" is one that "could affect the outcome" of the proceeding. See Lamont v. New Jersey, 637 F.3d 177, 181 (3d Cir. 2011). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n. 10 (1986). The court will "draw all reasonable inferences in favor of the nonmoving ...