Energy Consumption Auditing Services, LLC v. Brightergy, LLC
2:13-cv-02588
D. Kan.Sep 10, 2014Background
- Brightergy (Missouri solar contractor) alleges ECAS and its CEO Kristene Canady interfered with Brightergy’s prospective business with the City of North Kansas City by soliciting the city and making false statements about Brightergy’s products.
- Brightergy alleges prior discussions (March 2012) and follow-up negotiations (June 2013) with North Kansas City establishing a reasonable business expectancy for solar projects.
- At an October 31, 2013 meeting, Canady allegedly disparaged Brightergy’s panels (overpriced, inferior, “essentially junk” because made outside the U.S.). North Kansas City ultimately declined to contract with Brightergy.
- Brightergy pleaded four counterclaims against ECAS and Canady: tortious interference with prospective business advantage, common-law unfair competition, defamation, and injurious falsehood.
- ECAS and Canady moved to dismiss under Rule 12(b)(6). The court applied Missouri law (choice-of-law) and denied the motion, finding Brightergy’s pleadings sufficient to survive dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Canady may be sued individually for torts committed as a corporate officer | Canady participated and had knowledge, so individual liability is proper | Corporate-office status shields Canady from individual liability | Court: Missouri law permits individual liability where officer had knowledge/participation; claim survives |
| Whether Brightergy pleaded a valid business expectancy for tortious interference | Alleged prior negotiations, plans, 20+ opportunities, and city interest constitute reasonable expectancy | Alleged facts do not show a reasonable expectancy or existing contract | Court: Allegations plausibly show a probable future business relationship; element satisfied |
| Whether Brightergy pleaded absence of justification / improper means | Defendants used fraudulent misrepresentations to divert city business | Statements were competitive marketing of a superior product (justified) | Court: Allegations of false/misleading representations are improper means; absence of justification pleaded |
| Whether unfair competition, defamation, and injurious falsehood were pleaded adequately | False representations to the city constitute deceptive marketing, product disparagement that injured business and reputation; alleged lost profits | Unfair competition requires misappropriation; statements are nonactionable opinion or mere product criticism; special damages not pled | Court: Under Restatement (Third) and Missouri precedent, deceptive marketing supports unfair competition; statements are actionable (not mere hyperbole); special damages (lost profits) were sufficiently alleged |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for Rule 8 pleading)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (Twombly pleading standard explained)
- Nazeri v. Missouri Valley College, 860 S.W.2d 303 (Mo. banc 1993) (defamation requires words imputing lack of skill, capacity, or integrity)
- State ex rel. Doe Run Resources Corp. v. Neill, 128 S.W.3d 502 (Mo. banc 2004) (corporate officers may be individually liable when they participate/know of tortious acts)
- Stehno v. Sprint Spectrum, L.P., 186 S.W.3d 247 (Mo. banc 2006) (valid business expectancy requires a reasonable expectancy)
- W. Blue Print Co., LLC v. Roberts, 367 S.W.3d 7 (Mo. banc 2012) (absence of justification and legitimate economic interest; improper means defined)
- Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990) (opinion may imply assertion of objective fact and be actionable)