Sogefi USA, Inc. v. Interplex Sunbelt, Inc.

538 F.Supp.3d 620

SOGEFI USA, INC., Plaintiff,

v.INTERPLEX SUNBELT, INC., a Florida corporation, Interplexico Manufacturing Company, S.A. de C.V., a Mexico corporation, Defendants.

CIVIL ACTION NO. 3:21-0262

United States District Court, S.D. West Virginia, Huntington Division.

Signed May 7, 2021

Joseph G. Bunn, Jones & Associates, Charleston, WV, Megan Farrell Woodyard, Steptoe & Johnson, Huntington, WV, for Plaintiff.

MEMORANDUM OPINION AND ORDER

ROBERT C. CHAMBERS, UNITED STATES DISTRICT JUDGE

Pending before the Court is Plaintiff Sogefi USA, Inc.’s ("Sogefi") Motion for Temporary Restraining Order and Preliminary Injunction. ECF No. 2. On April 23, 2021, the Court granted the Motion in part and entered a Temporary Restraining Order. TRO, ECF No. 9. Defendant Interplexico Manufacturing Company, S.A. de C.V. ("Interplex Mexico") responded to the Motion on April 29, 2021. Resp., ECF No. 15 ; Mem. of Law, ECF No. 16. Sogefi filed its Reply on April 30, 2021. Reply, ECF No. 17. The Court held a hearing on the Motion on May 4, 2021. At the hearing, the Court GRANTED Sogefi's Motion. This Memorandum Opinion follows.

I. FACTS¹

Sogefi filed its complaint and motion for injunctive relief claiming that Sogefi and Interplex Mexico are party to a requirements contract under which Interplex Mexico supplies Sogefi with actuator covers ("parts"). Sogefi then incorporates the parts into products it ships to its customer, General Motors ("GM"). According to Sogefi, the parties first entered into the "Contract of Supply" ("Contract") on June 28, 2018. See Contract of Supply, ECF No. 23-1. The Contract of Supply expressly incorporates Sogefi's "North American General Purchasing Terms and Conditions" ("GTC"). The GTC provides that the Contract is a requirements agreement that is to last for the "life-of-the-program" and that Interplex Mexico is prohibited from terminating the agreement.

Since the original Contract of Supply was executed on June 28, 2018, Sogefi submits that two additional revisions have been issued. See First Revision, ECF No. 23-2 ; Second Revision, ECF No. 23-3.² The first revision is dated October 15, 2018 and it amended the Contract of Supply in Interplex Mexico's favor, increasing the item price per actuator from $1.62 to $1.98. The second revision is dated September 25, 2019, and it retained the same item price listed in the second revision but amended the start of production date for the "GM 50V" program. All three versions of the Contract of Supply incorporate the GTC.

At the hearing, Sogefi's Plant Buyer Todd Gregory testified that the month after the first Contract of Supply was executed, Interplex Mexico began supplying the parts to Sogefi. Interplex Mexico continued to make deliveries of the parts as ordered by Sogefi, apparently without issue, over the next two and a half years.

In filing this lawsuit, Sogefi asserts that Interplex Mexico breached the Contract by failing to make on time and complete delivery of parts in April 2021. The parts were to be delivered by April 21, 2021. By the early morning hours of April 22, 2021, Sogefi received confirmation that Interplex Mexico had shipped Parts, but at a quantity significantly below the ordered amount. As of April 22, 2021, Interplex Mexico was approximately 14,000 parts behind schedule.

On April 23, 2021, this Court entered a TRO requiring Interplex Mexico to comply with the Contract of Supply.³ See TRO, ECF No. 9.

Sogefi also claims that Interplex Mexico has committed an anticipatory breach of its June order. Sogefi submitted into evidence a chain of emails between Sogefi and Interplex Mexico representatives. Email Chain, ECF No. 23-4. One email, dated April 22, 2021, from Interplex Mexico's Customer Service Coordinator David Torres provided Interplex Mexico's delivery dates for April through September 2021. Id. at 2. That emails shows that Interplex Mexico was to deliver 15,000 parts on June 7, 2021. Id.⁴ Five days later, on April 27, 2021, Davis Torres sent another email in which the words "Not accepted, out of lead time," were added below the June 7th delivery date. Id. at 1. At the hearing, Interplex Mexico confirmed that it did not intend to make the June delivery.⁵

Interplex Mexico disputes the facts as alleged by Sogefi. It maintains that the written contract upon which Sogefi has based this case and its motion for injunctive relief is unsigned and therefore not enforceable. As additional support for its claim that no contract was formed, Interplex Mexico points to emails that were sent in December 2019 in which an Interplex Mexico representative purportedly objected to the terms and conditions contained in the second revision of the Contract of Supply. See Alcantar Email, ECF No. 23-10. In the email, Interplex Mexico objected to the Contract of Supply's language stating that the contract could be accepted by tacit agreement, and the email further stated:

we haven't formally accept the contracts terms in writing, we are still reviewing the contract documents and to put on record that we have not agreed to or accepted the terms of the Contract, the SOGEFI General Purchasing Conditions and/or the specific conditions set out in the Contract of Supply.

Id. at 1.

Additionally, Interplex Mexico argues that this Court lacks jurisdiction over it because it is a foreign corporation that has not been served in accordance with the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters ("Hague Service Convention") and because it does not have sufficient minimum contacts with West Virginia to be haled into Court here.

Moreover, Interplex Mexico submits that even if there were a contract—which it vehemently denies—that it has not breached any obligations, because Sogefi has failed to provide sufficient "lead time" for its orders. It is Interplex Mexico's position that Sogefi has caused all the problems at issue in this case. Interplex Mexico maintains that it has repeatedly conveyed to Sogefi that it needs 20 weeks of lead time to deliver an order of parts. Its need for 20 weeks of lead time was included in Interplex Mexico's original quote to Sogefi and, in Interplex Mexico's view, is noted on the face of the Contract of Supply.⁶ Interplex Mexico insists that both the April delay and its rejection of the June 2021 order were caused by Sogefi's failure to provide Interplex Mexico with adequate lead time for the deliveries.

Interplex Mexico also argues that the issued TRO and requested preliminary injunction are not prohibitory injunctions designed to maintain the status quo, but are in fact mandatory injunctions, which require Interplex Mexico "to manufacture and deliver certain parts on a set schedule that it has not agreed to."

Finally, Interplex Mexico argued at the hearing that Sogefi could not show a sufficient likelihood of irreparable harm, and briefly raised the issue that a preliminary injunction is inappropriate because Sogefi has an adequate remedy at law—a breach of contract cause of action for damages.

II. STANDARD FOR INJUNCTIVE RELIEF

In deciding whether to issue a preliminary injunction, the Court recognizes that it "is an extraordinary remedy afforded prior to trial at the discretion of the district court that grants relief pendente lite of the type available after the trial." Real Truth About Obama, Inc. v. FEC, 575 F.3d 342, 345 (4th Cir. 2009), vacated , 559 U.S. 1089, 130 S. Ct. 2371, 176 L.Ed.2d 764 (2010), reinstated in part , 607 F.3d 355 (4th Cir. 2010) (citations omitted). "Granting the ultimate relief requested, even temporarily, at an early point in the case, often prior to the issues even being joined in the pleadings, seems rightly reserved for only the most compelling of cases." Dewhurst v. Century Aluminum Co. , 731 F. Supp. 2d 506, 514 (S.D. W. Va. 2010), aff'd , 649 F.3d 287 (4th Cir. 2011).

In order to obtain a preliminary injunction, a party must establish four elements: "[1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest." Winter v. Nat. Res. Def. Council, Inc. , 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) (citation omitted). As such, the party seeking to obtain a "preliminary injunction must demonstrate by a clear showing that, among other things, it is likely to succeed on the merits at trial." Dewhurst , 731 F. Supp. 2d at 515 (internal quotation marks and citations omitted).

III. DISCUSSION

A. Interplex Mexico Has Received Sufficient Notice of the Motion for Preliminary Injunction

Interplex Mexico has argued that the Court lacks the ability to issue a preliminary injunction because it has not yet been formally served with the summons and complaint. The Court disagrees. Rule 65 does not by its terms require service of process prior to the court's issuance of a preliminary injunction. See Fed. R. Civ. P. 65(a) ("The court may issue a preliminary injunction only on notice to the adverse party.").⁷

Because Interplex Mexico's argument is not founded in the text of the Rule, it relies on a case from the Eastern District of Virginia and two Fourth Circuit cases addressing a court's power to enter orders enjoining non-parties. See 3M Co. v. Christian Invs. LLC , No. 1:11CV627, 2011 WL 3678144, at *3–5 (E.D. Va. Aug. 19, 2011) ; Gilchrist v. Gen. Elec. Capital Corp. , 262 F.3d 295, 301 (4th Cir. 2001) ; R.M.S. Titanic, Inc. v. Haver , 171 F.3d 943, 958 (4th Cir. 1999).

In 3M Company , Judge Ellis of the Eastern District of Virginia acknowledges that the case law on this issue is "somewhat sparse and neither clear not entirely unform." 3M Co. , 2011 WL 3678144, at *3 ; see Corrigan Dispatch Co. v. Casa Guzman, S. A. , 569 F.2d 300 (5th Cir. 1978) (" Rule 65(a) does not require service of process."); Areal Plus Grp. v. Fisher Island Invs., Inc. , No. 1:14-CV-20310-KMM, 2014 WL 12535947, at...