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United States District Court, Southern District of New York

April 2, 2003


The opinion of the court was delivered by: Theodore H. Katz, United States Magistrate Judge


This action for breach of contract and antitrust violations was referred to this Court for general pretrial supervision. Presently before the Court is Plaintiff Aventis Environmental Science USA LP's ("Aventis") motion to strike portions of the Supplemental Counterclaim recently pled by Defendants Scotts Company, Scotts' Miracle-Gro Products, Inc. and OMS Investments, Inc. ("Scotts")


In the fall of 2002, Defendant Scotts sought leave to file a supplemental counterclaim against Aventis alleging claims of breach of contract and fraud. The following events gave rise to these claims. Pursuant to a Purchase Agreement, Scotts agreed to purchase a certain amount of glufosinate ammonium ("GA") from Aventis, and Scotts was made the exclusive United States distributor of GA. GA is the active ingredient in Finale, a nonselective herbicide. Finale was an asset of Aventis's home and garden consumer products business that was sold to Scotts. The Supply Agreement contained a provision (the "take-or-pay" provision) obligating Scotts to purchase at least $12.6 million of GA over the first three years of the contract. In the event that Scotts failed to purchase that amount of GA, Scotts was required to pay 50% of the shortfall. After owning the Finale business for less than a year, Scotts sold it Farnam Companies, Inc. ("Farnam") In connection with the sale, Scotts contends that Aventis agreed that purchases of GA by Farnam would be credited toward Scotts' take-or-pay obligation under the Supply Agreement. Scotts contends that subsequently it was told by agents of Aventis that Farnam had not purchased any GA. Moreover, when Aventis invoiced Scotts for 50% of the shortfall under the take-or-pay provision, the invoice failed to credit any amounts of GA purchased by Farnam. Scotts paid the invoice, which it now contends was inaccurate and inconsistent with the agreement of the parties.

Plaintiff objected to the proposed amendment on the grounds of futility. The matter was addressed at a hearing on December 12, 2002, at which time Plaintiff indicated that it would consent to an amendment premised on a theory of breach of contract, but was unwilling to consent to an amendment alleging fraud. At a subsequent conference on January 7, 2003, Scotts agreed to limit its supplemental counterclaim to assert a breach of contract, and after some wrangling over the scope of discovery relevant to the counterclaim, Aventis consented to the amendment.

Scotts then filed its Supplemental Counterclaim. It asserted claims of breach of contract, estoppel, waiver, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. Although it did not explicitly plead a claim of fraud, throughout the pleading there were factual assertions of knowing, false statements by agents of Aventis.

In response to Aventis's motion to strike and the Court's preliminary view that the Supplemental Counterclaim was inconsistent with the understanding reached before the Court, Scotts agreed to amend the Supplemental Counterclaim. Its proposed amendment goes a significant way toward addressing the concerns raised about its initial pleading. The amended pleading only contains claims of breach of contract, promissory estoppel, and unjust enrichment, and it does not contain explicit assertions that Scotts suffered injury because of fraudulent statements made by Scotts. Nevertheless, Plaintiff still seeks to strike the promissory estoppel and unjust enrichment claims, as well as certain factual assertions which suggest that agents of Aventis made a false representations about the amount of GA sold to Farnam.


Rule 12(f), Fed.R. Civ. P., provides that "the court may order stricken from any pleading any . . . redundant, immaterial, impertinent, or scandalous matter." However, "the courts should not tamper with pleadings unless there is a strong reason for so doing." Lipsky v. Commonwealth United Corp., 551 F.2d 887, 893 (2d Cir. 1976). Allegations may be stricken where they have no bearing on the parties' claims or defenses, will likely be prejudicial, or where they have criminal overtones. See G-I Holdings, Inc. v. Baron & Budd, 238 F. Supp.2d 521, 555 (S.D.N.Y. 2002); Ulla-Maija, Inc. v. Kivimaki, No. 02 Civ. 3604, 2003 WL 169777, at *4 (S.D.N.Y. Jan. 23, 2003) ("motions to strike are not favored and will not be granted unless it is clear that the allegations in question can have no possible bearing on the subject matter of the litigation") (internal quotations omitted); Connell v. City of New York, 230 F. Supp.2d 432, 438 (S.D.N.Y. 2002) (same).

While guided by these principles, the Court has somewhat greater latitude in addressing the allegations of the Supplemental Counterclaim inasmuch as an on-the-record understanding was reached as to its general parameters. Scotts's counsel was agreeable to "limiting [himself] to a breach of contract claim rather than adding a fraud claim" (Jan. 7, 2003 Tr. at 2), although he also asserted, without opposition, "that there are [also] issues of waiver and estoppel." Id. at 4. It is in this context that the Court addresses Plaintiff's objections.

As noted, Scotts has gone a long way in deleting allegations of fraud and other superfluous factual assertions that might be damaging to the business reputation of Aventis executives. The only remaining factual contention that conceivably falls within Aventis's objection to purportedly "scandalous" or "prejudicial" matters, is the statement in paragraph 12 of the amended pleading, which refers to alleged representations by Aventis representatives that "sales to Farnam have been non-existent or negligible." Although this assertion contains no allegation of fraud, and on its face it does not suggest immoral or illegal conduct, placed in the context of the subsequent allegations in the counterclaim, it suggests a false statement. This is the type of allegation to which Aventis originally objected, and the deletion of such allegations from the Supplemental Counterclaim was the condition on which Aventis gave its consent to the filing of a supplemental counterclaim. The contention is not necessary to establish any element of the claims pled by Scotts. Accordingly, paragraph 12 of the Supplemental Counterclaim is stricken.*fn1

The remainder of Plaintiff's objections relate to the fact that Scotts has pled causes of action for promissory estoppel and unjust enrichment, in addition to breach of contract. While Plaintiff correctly asserts that "a party may plead a quasi-contract claim in the alternative to a contract claim, but only where there is a question of fact as to whether there was any contract governing the relation between the parties," Pl.'s Reply Mem. at 3, Plaintiff contends that in this case "there is no doubt that a valid contract existed between Plaintiff and Scotts." Id. Without question, there was a written contract between Aventis and Scotts. Nevertheless, that contract did not specifically address the purported subsequent agreement, placed at issue in the Supplemental Counterclaim, to credit Farnam's purchases of GA to Scotts' take-or-pay obligation. Whether or not Aventis actually agreed to credit sales to Farnam against Scotts' take-or-pay obligation is in issue. Scotts may not succeed in establishing that crediting Farnam purchases was contractually required. It is therefore appropriate to allow it to plead a quasi-contractual claim in the alternative. See Nielsen Media Research, Inc. v. Microsystems Software, Inc., No. 99 Civ. 10876 (LAP), 2002 WL 31175223, at *7 n. 2 (S.D.N.Y. Sept. 30, 2002) ("It is axiomatic that . . . a plaintiff may plead quasi-contract claims in the alternative to a contract claim."). Moreover, Plaintiff will suffer no prejudice from such an amendment. Accordingly, the motion to strike the claim of unjust enrichment is denied.

The same reasoning and conclusion apply to the claim of promissory estoppel. Prior to filing the amendment, Scotts made known its position that, in addition to issues of contract formation, issues of waiver and estoppel were raised by Plaintiff's alleged agreement to credit sales to Farnam against Scotts' take-or-pay obligation. See Jan. 7, 2003 Tr. at 4. Plaintiff did not take issue with this assertion. Promissory estoppel is simply a claim made in the alternative, in the event that Scotts cannot establish a contractual agreement to credit Farnam sales to Scotts' take-or-pay obligation. It will not require discovery separate from the discovery relevant to the breach of contract claim, or prejudice Plaintiff in any other way.

Accordingly, the motion to strike the claim of promissory estoppel is denied.


The Supplemental Counterclaim, amended to reflect the Court's rulings set forth above, may be filed.

So ordered.

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