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Weyerhaeuser Co. v. Domtar Corp.

United States District Court, D. Delaware

July 30, 2014

WEYERHAEUSER COMPANY, Plaintiff,
v.
DOMTAR CORPORATION and DOMTAR PAPER COMPANY, LLC, Defendants

Page 446

Stephen B. Brauerman, Esquire and Evan T. Miller, Esquire of Bayard, P.A., Wilmington, Delaware, Counsel for Plaintiff. Of Laurie L. Chyz, Esquire, and Michael J. Ewart, Esquire of Hillis Clark Martin & Peterson P.S.

Gregory P. Williams, Esquire, Chad M. Shandler, Esquire, and Katharine C. Lester, Esquire of Richards, Layton & Finger, P.A., Wilmington, Delaware, Counsel for Defendants. Of Gary W. Kubek, Esquire and Courtney M. Dankworth, Esquire of Debevoise & Plimpton LLP.

Page 447

MEMORANDUM OPINION

Sue L. Robinson, District Judge.

I. INTRODUCTION

On January 13, 2014, plaintiff Weyerhaeuser Company (" Weyerhaeuser" ) filed a complaint against defendants Domtar Corporation and Domtar Paper Company, LLC (collectively, " Domtar" ) alleging breach of contract with respect to liability for workers compensation claims. (D.I. 1) On February 21, 2014, Domtar filed a motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6).

Page 448

(D.I. 12) The court has jurisdiction pursuant to 28 U.S.C. § 1332.

II. BACKGROUND

Weyerhaeuser sold its fine paper business to Domtar (the " Sale" ) on March 7, 2007. (D.I. 1 at ¶ 8) The Sale was governed by an Amended and Restated Contribution Agreement (the " Contribution Agreement" ) and an Amended and Restated Transaction Agreement (the " Transaction Agreement" ) (collectively, " the Agreements" ).[1] (D.I. 14, exs. A-B) The Agreements are dated January 25, 2007 and are governed by Delaware law. ( Id. ) Since the Sale, the parties have on multiple occasions reached settlement agreements relating to post-Sale disputes. (D.I. 1 at ¶ ¶ 43-44) However, the parties have been unable to resolve the contested issue of workers compensation liability. ( Id. at ¶ 45)

There are three categories of current and former fine paper employees relevant to the action at bar. ( Id. at ¶ 24) The first category consists of fine paper employees who worked for Weyerhaeuser before the Sale and continued to work for Domtar after the Sale (the " Transferred Employees" ). ( Id. ) The second category consists of fine paper employees who were still employed at Weyerhaeuser at the time of the Sale but who were receiving workers compensation benefits and, therefore, not working at the time of the Sale (the " U.S. WC Newco Employees" ). ( Id. at ¶ 26) The third category consists of the remainder of Weyerhaeuser's pre-Sale employees, including those who were retired or otherwise terminated before the time of the Sale and, therefore, never became Transferred Employees (the " Retired Employees" ). ( Id. at ¶ 30) The parties dispute liability for workers compensation claims regarding the third category of employees, the Retired Employees, as well as liability for administration costs of workers compensation claims regarding the first category of employees, the Transferred Employees.[2]

III. STANDARD OF REVIEW

A motion filed under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of a complaint's factual allegations. Bell A. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). A complaint must contain " a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Twombly, 550 U.S. at ...


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