8:20-cv-02221
M.D. Fla.Dec 2, 2020Background:
- Benzer Pharmacy Holding LLC and North Saginaw Pharmacy LLC (the Benzer Parties) had a supply agreement with McKesson since 2010 that reserved McKesson’s unilateral right to change payment terms, limit credit, or suspend shipments in certain circumstances.
- In 2019 McKesson allegedly changed long-standing payment practices (shortened/payment-date change), limited credit to $12 million, held affiliate accounts when one affiliate missed payment, charged late fees, and reportedly demanded premature loan repayment and refused subordination—conduct the Benzer Parties say disrupted their cash flow and operations.
- Benzer also alleges McKesson disparaged them to a potential acquirer and a supplier, causing lost acquisition talks and supplier interference.
- McKesson sued Benzer for breach of contract; Benzer answered and filed counterclaims including: breach of contract, breach of implied covenant of good faith and fair dealing (Count II), FDUTPA (Count III), declaratory judgment (Count V), tortious interference with business relationships (Count VI) and business expectancies (Count VII).
- McKesson moved to partially dismiss Benzer’s counterclaims (targeting Counts II, III, V, VI and portions of VII); the Court adjudicated those challenges in this order.
Issues:
| Issue | Plaintiff's Argument (McKesson) | Defendant's Argument (Benzer) | Held |
|---|---|---|---|
| Breach of implied covenant of good faith and fair dealing (Count II) | Claim is duplicative of breach-of-contract allegations and merely repeats them | Claim fills gaps where McKesson abused contractual discretion and harmed Benzer’s expectations | Dismissed with prejudice — duplicative and fails to identify a specific contract term giving rise to the implied duty |
| FDUTPA (Count III) | FDUTPA fails because Benzer relies solely on alleged contract violations, not unfair/deceptive conduct outside the contract | Benzer says acts (changing terms, misapplying payments, wrongful fees, demanding loans) are independently unfair or deceptive | Dismissed without prejudice — pleadings are conclusory and mirror the breach claim, lacking significant factual allegations of unfair/deceptive conduct |
| Declaratory judgment (Count V) | Redundant because underlying breach action will resolve whether McKesson had basis to change terms | Benzer says declaratory relief is useful and harms will result if denied | Motion denied — Court declines to dismiss as potentially useful and not clearly redundant at this stage |
| Tortious interference with business relationships (Count VI) | Insufficient because Benzer pleads only relations with the general public and fails to identify particular customers or contractual/prospective rights | Benzer contends interference with existing customers was caused by McKesson’s limits on purchases | Dismissed without prejudice — Benzer failed to allege identifiable customers or contractual/prospective legal rights |
| Tortious interference with business expectancy (Count VII, as to potential customers) | Challenge to claims premised on undefined potential customers | Benzer alleges interference with potential customers, lenders, suppliers, purchasers (but provides no facts as to potential customers) | Dismissed without prejudice as to claims premised on potential customers (potential customers are not sufficiently identifiable) |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleading; more than labels and conclusions required)
- Papasan v. Allain, 478 U.S. 265 (1986) (court need not accept legal conclusions as facts)
- Jackson v. BellSouth Telecomms., 372 F.3d 1250 (11th Cir. 2004) (accept well-pleaded allegations on a 12(b)(6) motion)
- La Grasta v. First Union Sec., Inc., 358 F.3d 840 (11th Cir. 2004) (limit consideration to well-pleaded facts and central documents)
- Burger King Corp. v. Weaver, 169 F.3d 1310 (11th Cir. 1999) (failure to identify an express contractual provision defeats implied covenant claim)
- PNR, Inc. v. Beacon Prop. Mgmt., Inc., 842 So.2d 773 (Fla. 2003) (FDUTPA claim requires allegations beyond a mere breach of contract)
- Ethan Allen, Inc. v. Georgetown Manor, Inc., 647 So.2d 812 (Fla. 1994) (elements of tortious interference with business relationships)
- Duty Free Ams., Inc. v. Estée Lauder Cos., 797 F.3d 1248 (11th Cir. 2015) (elements for tortious interference under Florida law)