-4-
2003.1 Given that PPAI was a competitor, ASI repeatedly requested
Hall-Erickson to inform the Chicago Convention and Tourism Board
(“CCTB”) that. the PPAI show and the Motivation Show were
competitive events.? Notwithstanding these requests, Hall-
Erickson, on September 25, 2002, sent a letter to the CCTB advising
it that the PPAI show and the Motivation Show were not competitive
events.

Then, on or around December 19, 2002, following several
communications with ASI regarding ASI’s dissatisfaction with Hall-
Erickson’s plans to “co-locate” with PPAI, Hall-Erickson sent a
letter to ASI. in which it stated it was cancelling the Agreement.
In the same letter, Hall-Erickson proposed a new contract between
the two parties that was materially indistinguishable from the
Agreement, except it changed the term of the agreement from 2000
though 2003 to 2002 through 2005, and it omitted the clauses
granting ASI a “right of first refusal” and forbidding Hall-
Erickson from entering into “similar agreements” within twelve
months of the agreement’s termination. Despite its purported
termination of the Agreement, Hall-Erickson continued to solicit

ASI'’s participation in the 2003 Motivation Show. ASI responded

TMCo-locate” is a term of art within the trade show industry
and denotes an agreement by two or more entities to run trade
shows concurrently in the same or adjacent facilities. (See

Compl., @ 16.)

*Ppresumably, the CCTB has the authority to prevent
competitors. from “co-locating” their trade shows.



-9-
competitive events, and at least at this juncture, we take that
assertion at face value. Hall-Erickson will have ample opportunity
to present evidence to contradict ASI’s allegations; its job ona
motion to dismiss is to demonstrate that even if those allegations
are true, they do not make out a claim for relief. See Hishon, 467
U.S. at 73.

Hall-Erickson’s remaining arguments do not warrant
discussion. Suffice it to say, Hall-Erickson has not shown that
ASI will not be able to prove any set of facts consistent with the
complaint’s allegations that would constitute a breach of the
Agreement. If ASI and PPAI are competitors, and Hall-Erickson and
PPAI entered into a business relationship prior to the September
2003 Motivation Show, all of which ASI alleges, it is certainly
possible that such relationship violated one or more of the
Agreement’s provisions. ASI has stated a claim for breach of the
Agreement.

Count III - Equitable Estoppel

Count III is labeled as an “equitable estoppel” claim and

seeks a judgment that Hall-Erickson was estopped from cancelling

®In response to Hall-Erickson’s submission of the August 21,
2002 CCTB letter, ASI has filed a motion to convert Hall~
Exrickson’s motion to dismiss into a motion for summary judgment.
Because we find the letter to be beyond the scope of the
pleadings, we have not considered it and ASI’s motion is denied.
See Fed.R.Civ.P. 12(b) (Requiring a court to convert a motion to
dismiss to a motion for summary judgment only when “matters
outside the pleadings are presented to and not excluded by the
court.”) (emphasis added.)



-6-
the PPAI show.and the Motivation Show were not competitive events.
Count III, titled “equitable estoppel,” alleges that Hall-Erickson
represented to ASI that it would not cancel the Agreement prior to
the September 2003 show, and therefore it was estopped from doing
so. Hall-Erickson has moved to dismiss for failure to state a
claim,
DISCUSSION
The purpose of a 12(b)(6) motion to dismiss is to test the

sufficiency of the complaint, not to resolve the case on the
merits. See 5B Charles Alan Wright & Arthur R. Miller, Federal

Practice and Procedure § 1356, at 354 (3d ed. 2004). When

evaluating such a motion, the court must accept as true all factual
allegations in the complaint and draw all reasonable inferences in

the plaintiff’s favor. See Hentosh v. Herman M, Finch Univ. of

Health Sciences, 167 F.3d 1170, 1173 (7th Cir. 1999); Jang v. A.M.
Miller & Assocgs., 122 F.3d 480, 483 (7th Cir. 1997). Dismissal is
appropriate only if “‘it is clear that no relief could be granted
under any set of facts that could be proved consistent with the
allegations.’” Ledford v. Sullivan, 105 F.3d 354, 356 (7th Cir.

1997) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73 (1984));

Jones _v. General Elec. Co., 87 F.3d 209, 211 (7th Cir.), cert.

denied, 519 U.S. 1008 (1996) .°

SWe may also consider materials attached to the complaint ~
here, the Agreement - without converting Hall~Brickson’s motion
to dismiss into one for summary judgment. See Doe v. First Nat’l
Bank of Chicago, 865 F.2d 864, 873 (7th Cir. 1989).



5-
that it would participate in the show and that it intended to
comply with its obligations under the Agreement.*

ASI has brought a three-count complaint, the gravamen of
which is that Hall-Erickson breached various provisions of the
Agreement by entering into a business relationship with PPAI.‘
Count I seeks a declaratory judgment that Hall-Erickson breached
the Agreement when it failed to notify the CCTB that the PPAI show
and the Motivation Show were competitive events. Count IT, alsoa
breach of contract claim, alleges that Hall~Erickson breached the
Agreement by: (i) allowing PPAI to exhibit contemporaneously with
the Motivation Show; (ii) failing to grant ASI the right of first
refusal “concerning any activity, alliance or opportunity
concerning the promotional product/advertising specialty industry”;
(iii) failing to grant ASI the ability to approve exhibitors “to
ensure that no exhibitor competes with ASI”; (iv) failing to
preclude PPAI from co-locating its show with the Motivation Show;
(v) failing to advise the CCTB that the PPAI show and the

Motivation Show were competitors; and (vi) advising the CCTB that

3Wwe infer from the complaint and the motion papers that the
PPAI show and the Motivation Show did in fact run concurrently,
with ASI’s participation in the latter, from September 16 through
September 18, 2003.

‘ASI originally filed its complaint in Pennsylvania state
court. Hall-Erickson removed the case to a federal district
court in Pennsylvania which then, on Hall-Erickson’s motion,
transferred the case to this court pursuant to 28 U.S.C. §
1404 (a).



-8-
relieved Hall-Erickson of some of its obligations under the
Agreement. For example, it would not have been bound by the

Agreement’s provisions related to show logistics (see, e¢.qg.,

Agreement, p. 1-2, “[Hall-Erickson] will provide . . . 600 sq. ft.
complimentary booth space... .”) because those duties would not

have accrued until shortly before the show. Other duties, however,
were enforceable, and therefore could be breached, from the date of
the Agreement’s inception, November 1, 2000. These include, for
example, the duties to provide “ASI with the right of first refusal
concerning any activity, alliance, or opportunity concerning the
promotional product/advertising specialty industry,” and to not

extend the Agreement “to any other promotional products

association, trade show, or conference (i.e.: PPAI).” (See
Agreement, p. 2, (i 8,9). And it is these on-going obligations

that ASI alleges were breached in Summer 2002, months before the
alleged cancellation, when Hall-Erickson engaged PPAI regarding the
“co-locating” of the Motivation Show and the PPAI show. Therefore,
Hall-Erickson’s cancellation does not foreclose ASI’s claim for
breach of contract.

Next, Hall-Erickson argues that ASI fails to state a claim
because the Motivation Show and the PPAI show were not competitive
events. In support, Hall-Erickson submits an August 21, 2002
letter it sent to the CCTB saying just that. Hall-Erickson
misapprehends the court’s role in deciding a motion to dismiss.

ASI alleges that the Motivation Show and the PPAI show are



Minute Order Form (06/97)

United States District Court, Northern District of Ilinois

N: ed Jur Sitting Judge if Oth
ange Magistrate Judge John F. Grady than Assigned Judge
CASE NUMBER 03 C 8780 DATE September 21, 2004
CASE Advertising Specialty Inst. v. Hall-Erickson, Inc.
TITLE

[In the following box (a) indicate the party filing the motion, ¢.g,, plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented.]

prejudice.

December 1,

ay x

in part and denied in part.

MOTION:

DOCKET ENTRY:

(ly a Filed motion of [ use listing in “Motion” box above.]

(2) im Brief in support of motion due

@G) a Answer brief to motion due___. Reply to answer briefdue___.

(4) Qo Ruling/Hearing on ___set for

(5) im Status hearing[held/continued to] [set for/re-set for] on set for at

(6) im Pretrial conferencefheld/continued to] [set for/re-set for] on setfor_ ss at_

(7) ag Trial[set for/re-set for]on at

(8) a [Bench/Jury trial] [Hearing] held/continued to at

(9) a This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
COFRCP4(m) Ol General Rule21 OFRCP41(a\(1) OO FRCP41(a)(2).

qo) «= [Other docket entry] Hall-Erickson’s motion to dismiss [17-1] is granted

Count III is hereby dismissed with
ASI’s motion to convert Hall-Erickson’s motion to dismiss
into one for summary judgment [24-1] is denied.
I and II shall proceed forthwith.
2004 at 10:30,
discovery cut-off. ENTER MEMORANDUM OPINION.

Discovery on Counts

A status hearing is set for
at which time the court will set a

[For further detail see order (on reverse side offattached to) the original minute order.]

No notices required,

X_ | Notices MAILED by judge’s staff.

Notified counsel by telephone

Docketing to mail notices,

Mail AO 450 form.

Copy to
courtroom
KAM deputy’s
initials

No notices required, advised in open court.

umber of notices

Date/time secgived in
~+ central Clerks Office

date dockoted

dockering deputy initials

date mailed notice

KAM

mailing deputy initials

‘(Reserved for use by the Cour)


-ll-

10:30, at which time the court will set a discovery cut-off.

DATE: September 21, 2004

ENTER:

John Grady, United States Distr} Judge



-10-
the Agreement. Equitable estoppel is defined by the Pennsylvania
Supreme Court as a doctrine sounding in equity “that prevents one
from doing an act differently than the manner in which another was

induced by word or deed to expect.” Novelty Knitting Mills, Inc.

vw. Siskind, 457 A.2d 502, 503 (Pa. 1983). However, under
Pennsylvania law, equitable estoppel is not recognized as a

separate cause of action. See, ¢.g., Carlson v. Arnot-Ogden Mem.

Hosp., 918 F.2d 411, 416 (3d Cir. 1990) (noting that under
Pennsylvania law, “[e]quitable estoppel is not a separate cause of

action.”); Graham v. Pennsylvania State Police, 634 A.2d 849, 850

(Pa. Commw. Ct. 1993) (“[E]quitable estoppel . . . has only been
recognized as a defense and not as a cause of action in itself.”);

Weiland v. DeFrancisis, 28 Pa. D &C 4 129, 133 (Pa. Com. Pl. 1996)

(“{E]quitable estoppel is not an independent cause of action.
ye That is not to say that ASI may not pursue an equitable
estoppel argument, but only that it must be raised, if at
all,“either as an affirmative defense” or here, “as grounds to
prevent the defendant from raising a particular defense.” See
Carlson, 918 F.2d at 416. Count III is therefore dismissed for
failure to state a claim.
CONCLUSION

For the foregoing reasons, Hall-Erickson’s motion to dismiss

is granted in part and denied in part. Count III is hereby

dismissed with prejudice. Discovery on Counts I and II shall

proceed forthwith. A status hearing is set for December 1, 2004 at



-7-

Our first task, as in all diversity cases, is to determine
which state’s substantive applies to the dispute. Both parties
submit that Pennsylvania law governs pursuant to a choice-of-law
provision in the Agreement. (See Agreement, p. 4 (“This Agreement
shall be governed and interpreted in accordance with the laws of
the Commonwealth of Pennsylvania without regard to principles of

conflict of laws.”).) We agree. See Kohler v. Leslie Hindman,

Inc., 80 F.3d 1181, 1184-85 (7th Cir. 1996) (In a dispute arising
from a contract, a choice-of-law provision controls as long as the
contract is valid).

Counts I and II - Breach of Contract

In Counts I and II, ASI alleges that Hall-Erickson breached
various provisions of the Agreement by entering into a business
relationship with PPAI. The elements of a breach of contract claim
under Pennsylvania law are: (i) the existence of a contract,
including its essential terms, (ii) a breach of a duty imposed by

the contract, and (iii) resultant damages. See J.F. Walker Co.,

Inc. v. Excalibur Qil Group, Inc., 792 A.2d 1269, 1272 (Pa. Super.

2002).

Hall-Erickson presents several arguments as to why Counts I
and II fail to state a claim. First, it contends that its December
2002 cancellation of the Agreement extinguished all of its
contractual duties owed to ASI. Assuming for present purposes the

validity of the cancellation, it is true that it would have



-3-
products association, trade show, or conference (i.e.: PPAI).”

(Compl., § 13; Agreement, p. 2, { 8, attached to Compl. as Ex. A.)

Hall-Erickson also agreed to grant ASI the “right of first refusal
concerning any activity, alliance, or opportunity concerning the
promotional product/advertising specialty industry.” (Compl., { 13;
Agreement, p. 2, @ 9.) Finally, the Agreement provided the
following cancellation provision:

This Agreement may be cancelled by either
party, upon written notice to the other
party, within the first 60 days of each
program year (program year, for the
purposes of this Agreement, will be
defined as November 1 to October 31).
{Hall-Erickson] agrees that it shall not
enter into similar agreements with any
other entity, for example, national

trade associations such as the Promotional
Products Association International,
regional trade associations, trade shows
or conferences that are involved in the
promotional products/advertising specialty
industry during the term of this Agreement
and for a period of twelve (12) months
following any termination.

(Compl., 14; Agreement, p. 3.)

In the summer of 2002, ASI learned that Hall-Erickson was
coordinating with Promotional Products Association International
(“PPAI”), an ASI competitor, to “co-locate” PPAI’s annual trade
show with the Motivation Show at the same exhibition venue in

Chicago, and at the same time, September 16 through September 18,



-2-
and is dubbed by Hall-Erickson as “The World’s Largest Collection
of Incentive Merchandise, Travel and Meeting Destinations

Recognition Awards, Promotional Products and Business Gifts.”

(Compl., I 6.)

On February 6, 2001, ASI and Hall-Erickson entered into a
written contract (“the Agreement”) concerning ASI’s participation
in the Motivation Show over a three-year period from November 1,
2000 through October 31, 2003. According to the complaint, both
parties stood to benefit from the arrangement:

ASI would be better able to serve its
distributor members by exposing them

to Motivation Show exhibitors, and its
supplier members by exposing them to
Motivation Show attendees, who then
would purchase their incentives through
ASI-listed distributors. ASI‘s
participation in the Motivation Show
also would assist in creating a positive
reputation for ASI in the incentive
market. The Motivation Show would gain
additional exhibitors and booths
representing distributors and suppliers
that were dedicated to using the ASI
network and provide the Motivation Show
with exposure to the ASI network. This
would help the Motivation Show
distinguish itself as one of the few
sanctioned end-buyer shows dedicated

to involving the ASI distributors as
exhibitors or as representatives of the
ASI network suppliers.

(Compl., FT 9.)
In exchange for ASI’s endorsement of and participation in
the Motivation Show, Hall-Erickson agreed, among other things, that

the Agreement would “not be extended to any other promotional



03-8780.041-TCM September 21, 2004

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS ;
EASTERN DIVISION yar
ADVERTISING SPECIALTY INSTITUTE,
Plaintiff,
No. 03 ¢ 8780

Vv.

HALL-ERICKSON, INC., d/b/a THE
MOTIVATION SHOW,

Defendant.

MEMORANDUM OPINION
Before the court is defendant’s motion to dismiss for
failure to state a claim. For the reasons that follow, the motion
is granted in part and denied in part.
BACKGROUND
The following facts are drawn from the complaint and taken
as true for purposes of this motion. Advertising Specialty
Institute (“ASI”), the plaintiff, is a Pennsylvania corporation
that is involved in the promotional products industry. ASI, in its
own words, “acts as a meeting place where suppliers of promotional
products can interact with distributors of promotional products.”
(Compl., I 4.) Promotional products are articles of merchandise
that are marked with a company’s name or logo and used in corporate
marketing and communications programs. Defendant Hall-Erickson is
in the business of producing and managing trade shows. One of its

shows, the “Motivation Show,” is held annually in Chicago, Illinois