i'd like to reserve two minutes for a bottle this is a dispute between chrysler which i refer to as f c a and its long time and golan vehicle distributor union commercial services for many years my client union was the only authorized distributor of chrysler jeep and dodge vehicles in the african country of angola union has alleged that this relationship went sour and that f d a stopped working with union because union or for refused to engage in bribery out of the end goal in market it's lost the business it spent almost twenty five years developing and it's also out of court at the pleading stage this court should reverse and allow the if the proposal and a complaint to be filed because the district court committed at least three errors st in refusing and dismissing and refusing to allow amendment of the breach of contract claims on the theory of implied covenant of good faith and fair dealing inheritance every michigan contract the district court failed to recognize that the distributorship agreement at the heart of this dispute authorizes f c a to to have all manners of discretion in the way that it performs pursuant to the contract and in particular in the three provisions that we have cited as the basis of our contract claims nd the district court erred by dismissing and for using to allow amendment honor to reach a tortious interference claim because union pleaded all of the elements of this claim under michigan law as well as possible facts showing that f d a had in fact committed this tort and rd and finally the district court applied the wrong legal standard at the pleading stage the court did not appl the possibility standard instead the court dismissed the complaint using language like the court could not conclude that engaged and bribery and that union had not established that there was intentional interference portions the the whole point of the contract is of course for union tool to buy goods buy cars from union must do this that and the other f c a your honor no i'm sorry well so one of the particular claims is under eight dollars relating to orders so eight dollars says that union has to place orders according to the terms and talks about numerous obligations they are discretionary which is why are implied having a claim so this is that page idea for fifteen is worth discretionary do we equate that with an obligation obliged to do does not deprive my client of the fruits and benefits of the contract so just to turn back briefly to that sales and conditions there's there's language in there about chrysler using its best efforts to fill orders if there's if the demand outweighs supply the chrysler has to three point one as i understand and maybe i'm reading from the wrong place distributors will place orders for country goods through any systems in accordance with any procedures that chrysler may require implement from time to time so where's the duty for chrysler the journey is in so that that provision goes to the next page so reference says basically it says union has to order subject to the purchasing or the ordering terms and conditions the sales terms and conditions and then reference that and a corporate sit and that's what i was just reading from the talks about right talks about chrysler having an obligation to make its best efforts to fill orders and to act reasonably if for instance the demand outweighs the supply so those those are just some examples i'd like to talk of though about thirteen point six which is one of the or any verb shall in this contract that says chrysler shall do anything it does repeatedly it says union share but i looking for a place where it says chrysler whatever you want to call it ca shall i think that's the point exactly your honor as to why this contract is mandatory terms on that union commercial st of all the answer is i don't have a shell well i think i was going to look at it's the claim i think we've just messed of the repayment i think that there was some shall in the obligations to repurchase rather not repayment of repurchase obligations i think that can argue i just would help us a lot of he would be able to point to the provision that includes a shell as to how it performs and that is why there is not unlike f d a argues and the district court found that we're trying to use it to override express terms it's not that's not what we're doing with that claim what we're saying is a wrote a contract that allows that wide discretion and how it performs but it's in the context of michigan law that says when it has those discretionary choices it has to act in good faith and not act in a way that events such as they did to deprive union of the did take upon itself some specific obligations contractually in addition to did imply coming of good faith that's just at the heart of all the contracts i think that i actually had not  seen it but yeah point one yes yeah i think in the our opening brief we excerpted eight point one and we did not include the full provision and we didn't believe it didn't include you know we did like an a complaint i don't i honestly don't know the answer to that i i think it just maybe wasn't a focus of the analysis at that time but there was no you know that time the amendment was timely sought there was no argument that you know there was any dilatory action and the reason that the district gave for denying it was frankly respectively a flawed reading of the provisions that survived that continue to impose duties beyond the life of the contract and that's cents those claims are about the duration of the contract i really want to say a few more words i haven't said much about thirteen six which is what was the if there was an obligation on chrysler to use the best effort to fill accepted orders ye conduct here was to negotiate a distribution agreement with another entity that would be competitor well i was in conflict with filling orders that have been accepted well it's not just that it was a competitor it's that it was an entity that f d a knew violated its obligations under the federal court for improper practices act but also its obligations under thirteen dollars of the agreement to operate exclusive does not relieve them of their obligation to perform under the contract and good faith and it does not relieve them of their obligation that they contracted to to operate in a corruption free environment and so the fact that they were turning away our clients orders and filling them instead with this entity that was bribing the angle of government by and rich ing officials and people with close relationships that violated the implied covenant of the face and fair dealing in thirteen  comply with the laws like the u s foreign corrupt practices act or does it require union to comply with the law so it like the discussion we had with eight dollars it imposes a mandatory duty upon union and a discretionary duty as a contractual matter not as a statutory matter as a contractual matter it says that distributor will cooperate with chrysler in diameters efforts to comply so it doesn't mandate that they're going to comply it says whatever efforts they take to comply with their anti corruption provisions union's going to help them and do it to do that and that that's why union thought it was agreeing to to contract in a corruption free environment that's also the way they've performed their business for twenty five simply because a judge doesn't believe the plaintiff's factual allegations but that's exactly what happened here and why you should reverse thank you clues not exclusively realize it's not exclusive but by the same token she opened her argument by saying we were the only authorized distributor for years and if you look at the damages that are sought in the remaining claims that they seek to resuscitate and or add every single one seeks the exact same damages the lost profits union would have earned based on the sale and distribution of chrysler motor vehicles and parts in the territory so they're trying to make this an exclusive agreement when it isn't and they're trying to do that through all sorts of frankly twisting themselves and depressed souls and talking about implied covenants and now today we learned well i know we pointed at eight point one which had an implied covenant then clive covenant is really in article eight point one the bottom line is you need to look at the provisions for what they say not what counsel is saying they should say not what counsel is saying you should interpret them not what counsel is saying you should add to them  by definition it's doctrine is implied covenant of good correct and it's implied in certain circumstances and not others it's implied in circumstances where for example the contract makes performance a matter of one party use discretion and that's from a lot of cases including stevenson from this court you can't impose an implied covenant to override the expressed terms of a contract which is what they're trying to do here i think they realize that and when you look at the implied covenant cases normally they're the kinds of cases where for example a commission or a bonus is going to be paid i'm going to get a bonus if you the pharmacy for example in the don't case sell a certain amount of prescriptions  pharmacy doesn't want to pay their bonus if they sits by close their doors and say i'm out of business for six months that's the kind of thing where my discretion and what i do completely depends or dictates what you get there it's not the circumstance here at all because this judge really are pointed out this agreement since day one article one point one of the agreement says union i agree that i'm not the exclusive distributor and i agree that chrysler can h other people sell these goods well guess what chrysler had other people sell these goods and union got a little upset by that but what about anorexics statement that i just pulled out there maybe others in the chrysler will use its best to who accepted orders yup that's what it says but that's not what this case is about at all if you look at the amended complaint it deals with everything judge read or talked about it deals with you did business with star and auto star has people in connections with the government and therefore it must be corruption i mean the leaps are humongous there are obligations on f c a throughout the contract there are some obligations in article eight point one but this case is not we had these three orders which you f c a failed to fill and therefore you violated eight point one instead their argument is eight dollars requires good faith violating the bribery laws i good faith you violated eight dollars it's an awful lot of leaps they did have frankly kind of a legitimate claim in the beginning of this case under fourteen dollars which has all sorts of obligations on the part of that ca when the dealership agreement is terminated one of them is buying back parts we did not seek to dismiss that claim they continued to prosecuted and then they threw in the towel partway through those are the kinds of claims that they could bring but this eight  what happened before the termination that's what they are claiming now honestly the amended complaint and the complaint are pretty unclear about that if you look at the complaint and the many complaint they say they went there they got in business without a star and then they terminated the contract and therefore it's a violation of these provisions and we're entitled to our last profits but there's no discussion in there that i recall about as i said before here are certain deals that we weren't able to do and frankly even then that's not a violation of the contract either because article one point one from day one said we could have other people sell goods i understand it's a non exclusive what about eight point one  contract goods through any systems and in accordance with any procedures that chrysler may require implement from time to time so why isn't that giving chrysler a discretionary duty to implement procedures that imply only must comply with good faith and fair dealing it does but frankly the facts as alleged in the complaint don't say for example chrysler you are well  st of all i don't think it does i think i spoke too fast i think it says that distributor you have to follow our rules and our rules are going to be the terms and conditions which may change and frankly that is pretty standard in a in a dealership agreement to the extent there is just don't mean that the implied covenant of good faith doesn't apply i don't think it does that there i mean there's the overall implied coming of the good faith and fair dealing that we talked about and i didn't get to that says that you can't take any action that would deprive the other party of the benefit of the bargain and so a lot was said in the plaintiffs especially reply brief about the benefit of the bargain and again here the benefit of the bargain was that they could sell chrysler have decided before the termination date actually happened could be that chrysler had decided to sell only through some other entity like auto sales and essentially utilize the provision allows them to use other people as well believe so so this is really a very one sided contract with not really any benefit to union one decides hey we prefer somebody else the one you're termination  meaning possibly but arguably that doesn't seem to be consistent with any implied covenant of good faith and doing but your honor you would then make every contract an exclusive agreement by saying to use my hypo was making it totally dealing with other entities and not at all with unions i honestly don't know because nobody has alleged that that was the case here as there is there any were applying michigan law right right there any michigan case law on the medical that i'm giving you i didn't research that because i didn't think i had to be honest the allegations here are that we did business with someone else at the same time we were doing business with them and the other company got some you know cars that maybe they thought they'd won and another car most in a couple of the argument is in good faith he wanted i think the argument must be there was some  kind of corrupt bribery that went on that that's the argument so you don't get dismissed i mean if there is any grounds for that argument then the court ought not to have dismisses that is the argument now you have to look at it on twamley have to say and i've got to tell you i cringe every time i hear and read f c a corruption bribery because those are very serious allegations and they aren't ones that you should just throw  either those individuals or sales in violation of foreign corrupt practices act it's over well again those are allegations i understand right exactly in the st two you said yeah you have to assume for true these people requires more than labels and conclusions that's definitely what the out it is your position that argument today that there are only conclusions in this complaint yes well you know some of the facts are true did leading to that what are right there are facts that you acknowledge are true but you say the shortcoming is that i take it that those facts are not followed by a conclusion to be drawn there from that the court could have used correctly is ok right but this is where it comes in that there's a proposed d amended complaint attempting to add question judge more they did add some more they added some more names of people may have had some more charts about corruption and angola and all that but again that still doesn't get to the question of whether there was an f c p violation and frankly they're trying to turn this case really what your what your exact argument for upholding the denial of admission amendment amendment well because amendment would be futile and what the district court did was she rea wildly because again adding more facts about who owns auto star it cetera does not mean that i mean again this is what you have to does not mean that f c p a knew which is according to them a corrupt and golan and that is their claim and frankly that's what i was going before is they're trying to make this an f c p a case and there is no private right of action under the f c there they're trying to make this an implied good faith breach right contract by your client not they're not trying to recovered as i understand it maybe maybe you can point me  good faith and fair dealing is the as what was called earlier today the corruption that we apparently engage in but there my understanding of their position is that the contract explicitly requires them to comply with the law  and to help comply with the law and isn't there an implied covenant that comply with the law yes are there it's ok well i take that back i think there a larger imply covenant in the world that everyone's going to comply with the law that's more than implied covenant frankly that's and i had a vision contract if the contract says union will comply with the law and union will try to help  comply with the law doesn't that imply that it will comply with the law but it doesn't make noncompliance a breach of contract claim the idea behind this is you're our distributor and if we for example get a  street so in our opinion if epsy it doesn't comply with the law it will answer to whoever it needs to answer to in the larger world of the government but that doesn't mean they have to answer to union in the form of a breach of contract claim is there or is there a difference between violating the law with respect to referee to its relationship with union so work within the contours of their relationship versus if ca violating the law in another way with another party some some nature of their relationship you could violate the law you could be sent to you could be shipping them cars that are illegal under angle or something like that is that different than a violation of law that he may or may not have engaged in with a rd party with someone else which is the real nub of all this is not a breach of anything it's certainly not tortious interference it's actually or complying with provision one point one that says we can do it so the fact that you then had a twist and say hey this other person you're doing business with is corrupt because it's the government it's angola and therefore we can assume it's corrupt which is ridiculous leaps of faith that allows us to bring a claim for something we otherwise couldn't if you were doing business with act to me for example doesn't make any sense thank you right that we haven't spoken much about the tortious interference claim and i want to make one point on that before touching on a few other points so that f c p a related allegations about the relationship that grew over time between  sorry i should say if c p a the corruption allegations in order to plead and ultimately prove it's worse than appearance claim we can allege that the intentional interference prong was met by showing allegations of illegal or unethical behavior and so i just wanted to make the point that it's not just those allegations don't just relate to thirteen dollars and the implied gov claim they also relate to tortious interference for the contract claim would you agree that there's a difference between a violation of to perform under the contract in a corruption free environment by saying it would take efforts to comply with the f c p a so i don't think that that doesn't make a difference in terms of the implied covenant claim i want to point out in the propos doing what in attempting to fulfill the orders in good faith but they don't they're not obliged to appeal the orders it's my it continues to be my question be we know it's non exclusive so it's also union must union must and then so you say well we know we're number one not exclusive and union didn't their what duty in good shape what were they obliged to do that they didn't do in good pick take take best efforts to fulfill the orders and i we haven't talked about thirteen point one one three point one also speaks your question judge cook thirteen point one says if union can't can't go through and that's for sale they have to they have an obligation to tell f c a that they can't complete a sale because f c is going to and then gives them options to try to complete the sale so that also suggest dollars is additional support for the understanding that f d a would all of which in an environment where it's non exclusive but we no matter what we have this continually keep that in mind when we're trying to you weight other specific provisions that impose obligations nor do they render illusory be implied covenant that's present in the in the complaint i also wanted to see me in the law i also wanted to make the point that the many paragraphs it's we have not alleged that because this business relationship occurred in angola somehow corruption was inherent my client has done business in angola refusing to engage in that behavior for twenty five years so that is not our allegation we have detailed detailed allegations about these particular parties about auto star and these are in paragraphs forty seven through sixty four of the proposal man a complaint and we have then put forth with that some exhibits that can be looked at to make those even more plausible but shows that corruption is widespread in angola from the heritage foundation from the secretary of state and that this is exactly the type of thing that is commonplace so it's simply untrue that we've made conclusory allegations we've given detail out the actions that to answer your question judge cook