United States District Court, D. Delaware
CSL Behring, LLC and Defendant Bayer Healthcare, LLC are
parties to a License and Supply Agreement (the "Supply
Agreement") that memorialized Bayer's obligation to
supply CSL with recombinant Factor VIII, a human blood factor
used to treat hemophilia A patients. Previously, CSL moved to
dismiss Counts 2 and 3 of Bayer's counterclaims, which
alleged breach of contract under the Uniform Commercial Code
("U.C.C.") and breach of the implied covenant of
good faith and fair dealing. (D.I. 31). I granted the motion
with leave to amend, and Bayer filed amended counterclaims.
(D.I. 69, D.I. 70, D.I. 75). Currently pending before the
court is CSL's motion to dismiss the same claims in
Bayer's amended counterclaims. (D.I. 77). The court has
jurisdiction over this matter pursuant to 28 U.S.C.
§§ 1331 and 1338(a). For the reasons discussed
below, CSL's motion to dismiss the amended counterclaims
The Parties' Relationship
Supply Agreement is governed by New York law and terminated
by its own terms on December 31, 2017. (D.I. 78-1 at
§§ 7.1, 11.2). Under the Supply Agreement, Bayer
agreed to manufacture and supply CSL with two human
recombinant Factor VIII products that CSL sold under the
trade names "Helixate" and "Iblias."
(D.I. 75 at ¶ 41-44). Bayer concurrently made and sold
the same products for itself under the trade names
"Kogenate" and "Kovaltry."
(Id.). In May 2016, CSL obtained FDA approval of its
own human recombinant Factor VIII product that competes with
Helixate and is sold under the trade name
"Afstyla." (Id. at ¶ 70).
Relevant Terms of the Supply Agreement
provisions in the Supply Agreement govern CSL's
purchasing obligations. First, there is a "minimum
purchase obligation," found in Section 18.104.22.168 of the
Supply Agreement, which states: "For Calendar Year 2011
and beyond, CSL's minimum purchase obligation will be
sixty percent (60%) of the previous Calendar Year's
actual purchase." (D.I. 78-1 at § 22.214.171.124). Second,
there is a mechanism set forth in Section 2.3.1 by which CSL
provides Bayer, on a monthly basis, rolling forecasts that
govern CSL's future orders. (Id. at §
2.3.1). The first three months of each forecast are
considered a "firm order." (Id.). The
second three months (i.e., months four through six) cannot
change by more than 15% when those months become firm orders.
(Id.). Specifically, Section 2.3.1 states, in
CSL shall provide Bayer with a rolling twelve (12) month
forecast of its requirements of Product broken down by
calendar months..... The first three (3) calendar months of
this forecast shall represent a firm order .... The second
three (3) calendar months of this forecast may not change
more than plus or minus fifteen percent (15%) from the
immediately preceding twelve (12) month forecast when the
second three (3) months of the immediately preceding forecast
are upgraded to the status of a firm order.
STANDARD OF REVIEW
Rule 12(b)(6), a party may move to dismiss a complaint for
failure to state a claim upon which relief can be granted.
Fed.R.Civ.P. 12(b)(6). To survive the motion to dismiss, the
complaint must contain sufficient factual matter "to
state a claim to relief that is plausible on its face."
Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009)
(quoting Bell Ail. Corp. v. Twombly, 550 U.S. 544,
570 (2007)). The factual allegations do not have to be
detailed, but they must provide more than labels,
conclusions, or a "formulaic recitation" of the
claim elements. Twombly, 550 U.S. at 555. In
assessing the plausibility of a claim, the court must accept
all well-pleaded factual allegations in the complaint as true
and draw all reasonable inferences in favor of the plaintiff.
In re Rockefeller Ctr. Prop., Inc. Sec. Litig., 311
F.3d 198, 215 (3d Cir. 2002). The court's review is
limited to the allegations in the complaint, exhibits
attached to the complaint, documents incorporated by
reference, items subject to judicial notice, and matters of
the public record. Mayer v. Belichick, 605 F.3d 223,
230 (3d Cir. 2010).
asserts amended counterclaims for breach of contract based on
U.C.C. § 2-306 (Count 2) and breach of the implied
covenant of good faith and fair dealing (Count 3). CSL has
moved to dismiss both counts for failure to state a claim
pursuant to Rule 12(b)(6). Each count is addressed in turn.
Count 2: Breach of Contract - U.C.C. § 2-306
Count 2 of the amended counterclaims, Bayer alleges that the
Supply Agreement is a "requirements contract" under
U.C.C. § 2-306, which CSL breached by failing to order
the amount of Helixate that CSL could have sold in calendar
year 2017. (D.I. 75 at ¶¶ 107-08). An agreement is
not a requirements contract unless it: (1) obligates the
buyer to buy the goods exclusively from the seller, and (2)
obligates the buyer to buy all of its requirements for goods
of a particular kind from the seller. In re Hawker
Beechcraft, Inc., 2013 WL 2663193, at *4 (Bankr.
S.D.N.Y. June 13, 2013).
previously dismissed this counterclaim, because Bayer failed
to show an express or implied promise of exclusivity. (D.I.
69 at 6). With the amended counterclaims, Bayer tries to
establish an express or implied promise primarily through
extrinsic evidence, specifically allegations regarding its
exclusive manufacturing license and the prior course of
dealings between the parties and their predecessors. (D.I.
75, Counterclaims at ¶¶ 12-45). Bayer also tries to
establish a promise of exclusivity through intrinsic
evidence, specifically terms of the Supply Agreement
providing for remedies and ...