Court Opinion

ID: 821303
Source: CourtListenerOpinion
Date Created: 2013-02-26 15:25:30.040492+00
Date Added: 2024-06-11T09:03:12.573077
License: Public Domain

12-3648-cv
High Falls Brewing Co. v. Boston Beer Corp.

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT
                                       SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY FEDERAL
RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION "SUMMARY
ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT
REPRESENTED BY COUNSEL.

          At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Thurgood Marshall United
States Courthouse, 40 Foley Square, in the City of New York, on
the 26th day of February, two thousand thirteen.
PRESENT:       RALPH K. WINTER,
               DENNY CHIN,
               CHRISTOPHER F. DRONEY,
                         Circuit Judges,
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HIGH FALLS BREWING COMPANY, LLC,
NORTH AMERICAN BREWERIES, INC.,
                    Plaintiffs-Counterclaim-
                    Defendants,
HIGH FALLS OPERATING CO., LLC, KPS
CAPITAL PARTNERS LP,
                     Plaintiffs-Counterclaim-
                     Defendants-Appellees,

                      -v-                                         12-3648-cv

BOSTON BEER CORPORATION,
                    Defendant-Counterclaim-
                    Plaintiff-Appellant.*

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FOR PLAINTIFFS-COUNTER-                       GREGORY M. BOYLE (Jason F. Krigel,
    DEFENDANTS-APPELLEES:                     on the brief), Jenner & Block LLP,
                                              Chicago, Illinois.

FOR DEFENDANT-COUNTER-                        GEORGE J. SKELLY (J. Christopher
    CLAIMANT-APPELLANT:                       Allen, Jr., Troy K. Lieberman, on
                                              the brief), Nixon Peabody LLP,
                                              Boston, Massachusetts.

*
       The Clerk of the Court is directed to amend the official caption to conform to
the above.
           Appeal from the United States District Court for the

Western District of New York (Siragusa, J.).
           UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment of the district court is AFFIRMED.

           Defendant-counterclaim-plaintiff-appellant Boston Beer

Corporation ("Boston Beer") appeals from the judgment entered

September 10, 2012, denying plaintiffs' requests for declaratory

and injunctive relief, enforcing the arbitration award between

Boston Beer and plaintiff-counterclaim-defendant High Falls

Brewing Company, LLC ("High Falls"), and dismissing Boston Beer's

counterclaims.   On appeal, Boston Beer challenges only the

district court's decision and order filed June 26, 2012, denying

leave to amend its counterclaim against plaintiffs-counterclaim-

defendants-appellees High Falls Operating Co., LLC and KPS

Capital Partners LP for tortious interference with contract

because the amendment would have been futile.   We assume the

parties' familiarity with the facts, procedural history, and

specification of issues for review.

           Boston Beer argues that amending the counterclaim would

not be futile because its new proposed allegations, if properly

credited, state a claim of tortious interference with contract.

We review the denial of leave to amend for abuse of discretion,

but the legal determination that a proposed amendment is futile

de novo.   Hutchison v. Deutsche Bank Secs. Inc., 647 F.3d 479,
490 (2d Cir. 2011).

           To establish tortious interference with a contract

under New York law, "the plaintiff must show the existence of its
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valid contract with a third party, defendant's knowledge of that

contract, defendant's intentional and improper procuring of a

breach, and damages."   White Plains Coat & Apron Co. v. Cintas

Corp., 8 N.Y.3d 422, 426 (2007).   The parties only dispute

whether the proposed pleading adequately alleges that appellees

intentionally and improperly procured a breach of the contract

between Boston Beer and High Falls.

            Even accepting as true those allegations that Boston

Beer claims the district court erroneously discarded as

conclusory, the proposed pleading still fails to allege that

appellees intentionally and improperly procured a breach of the

contract.   The proposed amended pleading merely alleges that

appellees -- a private equity firm and its investment vehicle --

intended to acquire High Falls's assets without assuming the

"economically disadvantageous" contract with Boston Beer.

[Proposed] Second Am. Answer & Countercls. ¶¶ 12-17, 22.      Even if

appellees promised High Falls's CFO additional benefits in

exchange for dropping his demand that they assume the contract

with Boston Beer, that does not show appellees intended anything

other than obtaining High Falls's assets on their terms.    It does

not show that "the target of appellees' conduct was [High

Falls's] contractual arrangements with appellants, any more than

[it shows] the target was [High Falls's] contracts with phone or

electric companies."    G.K.A. Beverage Corp. v. Honickman, 55 F.3d
762, 767-68 (2d Cir. 1995) (holding that allegations that

defendant bankrupted a corporation, purchased its assets in

bankruptcy without assuming its contracts, and threatened

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litigation against other bidders in bankruptcy who would have

assumed the contracts did not show an intent to interfere with

those contracts); see also Health-Chem Corp. v. Baker, 915 F.2d

805, 809 (2d Cir. 1990) ("[T]o be actionable, the interference

must be intentional and not incidental to some other lawful

purpose."); Restatement (Second) of Torts § 766 cmt. j

(explaining that acting without intent to cause the breach, but

with substantial certainty that it will occur, is generally not

improper if the interfering party is advancing its own interest

and does not use wrongful means).

          The only allegation that gives rise to a possible
inference that appellees intended to interfere with their future

rival's contract is the allegation that appellees intended to

compete with Boston Beer.   That inference, however, is

implausible in light of the allegations that after the

acquisition, appellees retained High Falls's contracts with

several other brewers and attempted to negotiate a new contract

with Boston Beer.   See Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009).   Thus, the district court correctly concluded that the

amendment was futile and did not abuse its discretion by denying

leave to amend.

           We have considered Boston Beer's remaining arguments
and find them to be without merit.     Accordingly, we AFFIRM the

judgment of the district court.

                               FOR THE COURT:
                               Catherine O'Hagan Wolfe, Clerk

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