ROBERT F. KELLY, Senior District Judge.
Presently before the Court is TruePosition, Inc.'s ("TruePosition") Motion for Judgment on the Pleadings Concerning Counterclaims and Certain Affirmative Defenses of Defendant Third Generation Partnership Project ("3GPP"), and 3GPP's Opposition to Plaintiff TruePosition, Inc.'s Motion for Judgment on the Pleadings, as well as TruePosition's Reply thereto. For the reasons provided below, the Motion for Judgment on the Pleadings will be granted.
This action stems from the alleged anticompetitive conduct of major players in the international telecommunications market within the context of a Standard-Setting
TruePosition filed an action against all of the Defendants alleging violations of federal antitrust law, specifically Section 1 of the Sherman Act, 15 U.S.C. § 1.
Pursuant to Federal Rule of Civil Procedure 12(c), "[a]fter the pleadings are closed — but early enough not to delay trial — a party may move for judgment on the pleadings." Under Rule 12(c), judgment on the pleadings may be granted "only if, viewing all the facts in the light most favorable to the nonmoving party, no material issue of fact remains and the moving party is entitled to judgment as a matter of law." Knepper v. Rite Aid Corp., 675 F.3d 249, 257 (3d Cir.2012) (citing Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir.2008)); see also Sikirica v. Nationwide Ins. Co., 416 F.3d 214, 220 (3d Cir.2005). When a motion for judgment on the pleadings is based upon the defense that a party has failed to state a claim, it is analyzed under the same standards applied to a Rule 12(b)(6) motion. See Revell v. Port
A complaint may be dismissed for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). When reviewing a motion to dismiss pursuant to Rule 12(b)(6), the complaint must be construed in the light most favorable to the plaintiff. Burtch v. Milberg Factors, Inc., 662 F.3d 212, 220 (3d Cir.2011) (citing In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 314 (3d Cir.2010)). Federal Rule of Civil Procedure 8(a)(2) requires "only `a short and plain statement of the claim showing 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 555, 127 S.Ct. 1955 (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).
"[A] plaintiff's obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of the cause of action will not do." Twombly, 550 U.S. at 555, 127 S.Ct. 1955. In Twombly, the United States Supreme Court "set forth the `plausibility' standard for overcoming a motion to dismiss and refined the approach in Iqbal." Burtch, 662 F.3d at 220 (citing Twombly, 550 U.S. at 557, 127 S.Ct. 1955; Ashcroft v. Iqbal, 556 U.S. 662, 680, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). In other words, Rule 8 requires that a complaint contain factual allegations that, taken as a whole, render the plaintiff's entitlement to relief plausible. W. Penn Alleg. Health Sys., Inc. v. UPMC, 627 F.3d 85, 98 (3d Cir.2010). "This `does not impose a probability requirement at the pleading stage,' but instead `simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element.'" Id. (quoting Phillips v. Cnty. of Alleg., 515 F.3d 224, 234 (3d Cir.2008); Twombly, 550 U.S. at 556, 127 S.Ct. 1955).
When deciding the sufficiency of a complaint "courts should disregard the complaint's legal conclusions and determine whether the remaining factual allegations suggest that the plaintiff has a plausible — as opposed to merely conceivable — claim for relief." Id. (citing Iqbal, 129 S.Ct. at 1949-50; Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir.2009)). Under both Twombly and Iqbal, a court must take the following three steps in order to determine the sufficiency of a complaint:
Burtch, 662 F.3d at 221 (quoting Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir.2010)). "It is, of course, true that judging the sufficiency of a pleading is a context-dependent exercise." W. Penn, 627 F.3d at 98 (citing Iqbal, 129 S.Ct. at 1950; Twombly, 550 U.S. at 567-68, 127 S.Ct. 1955; Phillips, 515 F.3d at 232).
3GPP's Counterclaims against TruePosition are as follows: Count I — Breach of
Under Pennsylvania law, the formation of a contract requires (1) the parties' manifestation of a mutual intention to be bound by an agreement; (2) terms that are sufficiently definite so as to be enforceable; and (3) consideration. Century Indem. Co. v. Certain Underwriters at Lloyd's, London, 584 F.3d 513, 533 (3d Cir.2009) (citations omitted). "`[I]n order for there to be an enforceable contract, the nature and extent of its obligation must be certain; the parties themselves must agree upon the material and necessary details of the bargain.'" Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 585-87 (3d Cir.2009) (quoting Lombardo v. Gasparini Excavating Co., 385 Pa. 388, 123 A.2d 663, 666 (1956)). "In other words, we look to see whether `the terms are sufficiently definite to be specifically enforced.'" (Id.) (quoting Channel Home Ctrs. v. Grossman, 795 F.2d 291, 298-99 (3d Cir.1986)). "Whether the terms are sufficiently definite is a question of law." Id. (citations omitted). "`The burden of proving the existence of a contract lies with the party relying on its existence.'" Guzzi v. Morano, No. 10-1112, 2013 WL 4042511, at *10 (E.D.Pa. Aug. 8, 2013) (quoting Edmondson v. Zetusky, 674 A.2d 760, 764 (Pa.Commw.Ct.1996)).
3GPP argues that TruePosition breached its obligations under its Working Procedures. 3GPP states that it is "an association of regional standard setting organizations (`SSOs') known as 3GPP's Organizational Partners, and their members, formed to develop globally applicable telecommunications specifications." (3GPP's Resp. Opp'n Pl.'s Mot. for Judgment on Pleadings at 3) (citing Counterclaim ¶ 5.) "3GPP's technical specifications are developed collaboratively by 3GPP's members — and not by 3GPP itself — based on technical merit as determined through the consensus of 3GPP's members in accordance with 3GPP's Working Procedures."
3GPP argues that the Working Procedures "impose specific responsibilities and expectations on 3GPP members as a condition for participation in 3GPP." (Id.) (citing Counterclaim ¶ 19.) 3GPP states that the responsibilities and expectations include obligations under Article 8
3GPP stresses that "[c]ompliance with these Articles is critical to ensuring that 3GPP technical specifications are developed in a fair and impartial manner based on objective technical merit and in accordance with 3GPP's Working Procedures." (Id.) (citing Counterclaim ¶ 23.) 3GPP states that "[t]he objection and appeals measures set forth in Articles 29 and 40 of [its] Working Procedures are particularly important because 3GPP lacks the capacity sua sponte to review, reverse or modify decisions by the TSGs or Working Groups absent timely and procedurally proper appeals by members pursuant to those Articles." (Id.) (citing Counterclaim ¶ 23.)
3GPP argues that "[b]eginning in 2008 and continuing through the present, TruePosition knowingly and repeatedly failed to comply with its obligations under Articles 8, 29, 39 and 40 of the Working Procedures relating to the consideration of
TruePosition counters 3GPP's breach of contract claim by arguing that Articles 8, 29, 39 and 40 of 3GPP's Working Procedures are not a contract, but are rules of procedure.
We find that even if the parties did intend to form a contract, the terms of Working Procedures Articles 8, 29, 39 and 40 are too indefinite to be enforced. The lack of specificity regarding a 3GPP members' obligations makes the Articles too indefinite to support the formation of a contract. "To be enforceable, an agreement must be certain about `the nature and extent of its obligation[s].'" Shell's Disposal & Recycling, Inc. v. City of Lancaster, 504 Fed.Appx. 194, 202 (3d Cir. 2012) (quoting Am. Eagle Outfitters, 584 F.3d at 585). "That requirement does not mean that the presence of any interpretive ambiguity renders an agreement unenforceable." Id. (citing Am. Eagle Outfitters, 584 F.3d at 585). "Rather, a contract fails for indefiniteness when it is `impossible to understand' what the parties agreed to because the essential terms are ambiguous or poorly defined." Id. (Am. Eagle Outfitters, 584 F.3d at 585).
"Pennsylvania has adopted the Restatement (Second) of Contracts regarding whether terms are sufficiently definite to form a contract." Guzzi, 2013 WL 4042511, at *11 (citing Reed v. Pitts. Bd. of Pub. Educ., 862 A.2d 131, 135 (Pa. Commw.Ct.2004)). The Restatement provides as follows:
Id. (quoting Restatement (Second) of Contracts § 33 (1981)). "`The essential terms must be definite enough to provide a basis for enforcing the agreement.'" Id. (quoting Waterford Mortg. Co. v. Integrated Alarm Servs. Grp., Inc., No. 06-3967, 2008 WL 4589630, at *3 (E.D.Pa. Oct. 14, 2008)). "`If a court, due to indefiniteness or incompleteness, is unable to determine if a contract was performed, the court must find no contract existed in the first place.'" Id. (quoting Reed, 862 A.2d at 135 (citing Restatement (Second) of Contracts § 33 cmt. c (1979))); see also Sloan v. Frascella, No. 12-3609, 2013 WL 4433366, at *3-4 (E.D.Pa. Aug. 16, 2013) (finding the lack of specificity regarding a term of an alleged oral employment agreement did not support the creation of a contract) (citing Caisson Corp. v. Ingersoll-Rand Co., 622 F.2d 672, 678 (3d Cir.1980) (noting where certain essential elements are missing from a contract, "the lack of specificity may make enforcement so difficult that the courts will hold there was no enforceable contract")); Mazzella v. Koken, 559 Pa. 216, 739 A.2d 531, 537 (1999) ("If, however, there exist ambiguities and undetermined matters which render a settlement agreement impossible to understand and enforce[,] such an agreement must be set aside."); Lombardo, 123 A.2d at 665 (the Pennsylvania Supreme Court found that a specific contract failed for indefiniteness, noting that the enforceability of a contract depends upon certainty of the parties' obligations
Articles 8, 29, 39 and 40 are material and essential given the fact that 3GPP specifically relies upon them as the alleged contract provisions that speak directly about the parties' obligations and entitlements, and they are the Articles upon which it rests its breach of contract Counterclaim. Although material and essential, the parties obligations are unclear under the Articles. For instance, the Articles are ambiguous as to the following matters:
It is telling that the Articles do not discuss what actions constitute a breach and what would occur if a Member fails to abide by their terms. See Restatement (Second) of Contracts § 33(2) ("The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy."); see also Sloan, 2013 WL 4433366, at *3-4 ("Because it is unclear what actions of the Defendants would constitute a breach of the alleged agreement, there is no way for a factfinder to determine if Defendants actually breached Sloan's contract."). As a result, the factfinder, as well as this Court, are left in the untenable position of determining what actions actually constitute a breach without being able to rely upon the requisite certainty of the Articles' terms.
The ambiguity of the language flowing from the Articles negatively impacts their ability to be enforced. The terms of the Articles are insufficiently indefinite to warrant enforcement. Key matters, and material terms, have been left undetermined requiring us to set aside the Articles for indefiniteness. See Am. Eagle Outfitters, 584 F.3d at 585-87. In sum, we find that even if the parties intended to form an agreement as to Articles 8, 29, 39, and 40, the terms of that alleged agreement fail for indefiniteness.
Counterclaim Count II alleges a claim for specific performance. "We note that specific performance is an equitable remedy for breach of contract permitting the court `to compel performance of a contract when there exists in the contract an agreement between the parties as to the nature of the performance.'" Giordano v. Claudio, 714 F.Supp.2d 508, 532 (E.D.Pa. 2010) (quoting Lackner v. Glosser, 892 A.2d 21, 31 (Pa.Super.Ct.2006); Geisinger Clinic v. Di Cuccio, 414 Pa.Super. 85, 606 A.2d 509, 521 (1992)). As previously discussed, we concluded that Articles 8, 29, 39, and 40 are too indefinite to create an enforceable contract between TruePosition and 3GPP. Therefore, we find that Counterclaim Count II fails to state a claim for specific performance. Accordingly, we grant the Motion for Judgment on the Pleadings with respect to Counterclaim Count II-Specific Performance.
Counterclaim Count III seeks a declaratory judgment that TruePosition be estopped from challenging the development of the 3GPP LTE technical specification and from seeking to have its UTDOA incorporated into the 3GPP LTE technical specification other than pursuant to and in accordance with the Working Procedures. (See Counterclaim III.) In Counterclaim Count IV, 3GPP seeks a declaration that TruePosition, as a result of its alleged violation of 3GPP's Working Procedures Articles 8, 29, 39 and 40, voluntarily and intentionally waived its right to object to prior decisions or conduct by 3GPP working committees, Chairmen or members relating to development of the 3GPP LTE technical specification. (See Counterclaim IV.)
TruePosition argues that there is no case or controversy warranting a declaratory judgment because it is not asking for the Court to intervene in UTDOA's standardization. (TruePosition's Mem. Law Support Mot. for Judgment on Pleadings at 11.) Pointing to its Prayer For Relief, TruePosition argues, and we agree, that it does not seek our intervention in the standardization of UTDOA. (Id. at 12.) TruePosition asserts that it seeks damages from 3GPP regarding alleged violations of the Sherman Act, and injunctive relief against future violations of the Sherman Act. (Id.) TruePosition states that it has never sought to attain standardization other than through 3GPP's Working Procedures. (Id.)
3GPP points out, and TruePosition agrees, that TruePosition has made progress towards standardization of UTDOA through means of the Working Procedures.
We find that 3GPP's Counterclaim Counts III and IV fail as a matter of law. The Declaratory Judgment Act provides: In the case of actual controversy within its jurisdiction ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." 28 U.S.C. § 2201(a). Courts have interpreted the remedy to be "limited to cases and controversies in the constitutional sense." Wyatt, V.I., Inc. v. Gov't of the V.I., 385 F.3d 801, 805 (3d Cir.2004) (citations omitted). "A plaintiff seeking a declaratory judgment must possess constitutional standing but need not have suffered `the full harm expected.'" Constitution Party of Penn. v. Cortes, 712 F.Supp.2d 387, 398 (E.D.Pa.2010) (quoting Khodara Envtl., Inc. v. Blakey, 376 F.3d 187, 193 (3d Cir.2004)). "A plaintiff seeking a declaratory judgment has Article III standing if there is substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Id. (quoting Khodara Envtl., Inc., 376 F.3d at 193; The St. Thomas-St. John Hotel & Tourism Ass'n v. V.I., 218 F.3d 232, 240 (3d Cir.2000)).
In its Counterclaim Counts III and IV, 3GPP fails to establish that the parties have adverse interests or a substantial controversy of sufficient immediacy and reality to warrant declaratory relief. Regarding 3GPP's equitable estoppel Counterclaim, TruePosition has clearly stated that it does not seek inclusion of its UTDOA technology into 3GPP's standard other than through the rules of procedure outlined in 3GPP's Working Procedures. TruePosition does not seek this Court's intervention in the standardization process, and we do not seek any involvement in such. It appears that the standardization process is continuing and that progress regarding UTDOA's inclusion in the 4G/LTE technical specification is moving forward. Regarding its waiver Counterclaim, 3GPP says that it is based on TruePosition's abandonment of its contractual right and obligation to timely appeal any conduct within 3GPP that it thought was improper. (3GPP's Mem. Law Opp'n TruePosition's Mot. for Judgment on Pleadings at 23.) Since we have found that Articles 8, 29, 39 and 40 are too indefinite to form an enforceable contract, 3GPP's waiver Counterclaim fails. Accordingly, Counterclaim Counts III and IV do not allege a "case of actual controversy" and must be dismissed for lack of jurisdiction.
TruePosition argues for the dismissal of 3GPP's affirmative defenses thirteen, fourteen and fifteen as legally insufficient since they are based upon the same grounds as Counterclaim Counts I, III and IV respectively. (TruePosition's Mem.
Federal Rule of Civil Procedure 12(f) states that "[t]he court may strike from a pleading an insufficient defense or any redundant... matter." Fed.R.Civ.P. 12(f). Both parties agree that affirmative defenses thirteen, fourteen, and fifteen rest on the same legal grounds as Counterclaim Counts I, III and IV. These Counterclaims have been dismissed as legally insufficient. Consequently, the affirmative defenses are redundant of the legally-insufficient Counterclaims and are hereby stricken. BJ Energy LLC v. PJM Interconnection, LLC, Nos. 08-3649, 09-2864, 2010 WL 1491900, at *2 (E.D.Pa. Apr. 13, 2010) ("An affirmative defense is legally insufficient where it cannot succeed under any set of facts which may be inferred from the allegations of the pleading.")
Since 3GPP fails to demonstrate the existence of sufficiently definite terms of Working Procedures Articles 8, 29, 39 and 40, TruePosition's Motion for Judgment on the Pleadings is granted as to 3GPP's Counterclaim Count I for breach of contract. Based upon the dismissal of Counterclaim Count I, we conclude that Counterclaim Count II fails to state a claim for specific performance. Likewise, Counterclaim Counts III and IV, seeking declaratory judgments of equitable estoppel and waiver respectively, are dismissed for lack of jurisdiction since they do not allege a case of actual controversy. Also, 3GPP's affirmative defenses thirteen, fourteen and fifteen, which are based upon the same grounds as Counterclaim Counts I, III and IV, are stricken as redundant and legally insufficient for the reasons described above.
Leave to amend will not be granted. "Though leave to amend should be freely given in the interest of justice, Fed.R.Civ.P. 15(a), the motion is committed to the district court's sound discretion." Williams v. Phila. Hous. Auth., 826 F.Supp. 952, 953-54 (E.D.Pa.1993) (citing Massarsky v. Gen. Motors Corp., 706 F.2d 111, 125 (3d Cir.1983)). "The court may deny leave to amend, among other reasons, on the basis of the futility of the amendment." Id. (citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962) (other reasons include undue delay, bad faith or dilatory motive, and undue prejudice to opposing party); Averbach v. Rival Mfg. Co., 879 F.2d 1196, 1203 (3d Cir.1989)); see also Shane v. Fauver, 213 F.3d 113, 115 (3d Cir.2000) ("`Futility' means that the complaint, as amended, would fail to state a claim upon which relief could be granted."). "An amendment is futile if the amended complaint cannot withstand a motion to dismiss." Id. at 954; see also Shane, 213 F.3d at 115 ("In assessing `futility,' the District Court applies the same standard of legal sufficiency as applies under Rule 12(b)(6). Accordingly, if a claim is vulnerable to dismissal under Rule 12(b)(6), but the plaintiff moves to amend, leave to amend generally must be granted unless the amendment would not cure the deficiency.") In light of our rulings on all of 3GPP's Counterclaims, we find that any amendment would be futile. Consequently, 3GPP's request for amendment is denied.
An appropriate Order follows.