Simply Snackin, Inc. v. S-L Distribution Company, Inc., 1:17-cv-00381

Background

Simply Snackin, a New York distributor, entered a February 2015 Distributor Agreement with S-L Distribution (S-L) giving Simply Snackin exclusive rights to service certain Westchester County Stop & Shop stores and non‑exclusive rights elsewhere in the territory.
In February 2016 Stop & Shop reported alleged uncredited product at store 501; Stop & Shop barred Simply Snackin from servicing that store and communicated the issue to Snyder’s (parent of S-L).
S-L (via Walsh) emailed that Simply Snackin was admonished and barred; Simply Snackin alleges it continued servicing the route and contacted store managers who did not object, but was later barred from the warehouse, had its handheld deactivated, and could not purchase product.
Simply Snackin alleges S-L breached the Agreement by failing to assist in resolving the Stop & Shop complaint (Article 21) and by effectively removing Simply Snackin from the route (Articles 13(A) and 15(B)(2)); it sued both S-L and Snyder’s for breach, tortious interference, and civil conspiracy.
The district court treated the pleadings as true for a 12(b)(6) review and denied dismissal of breach claims against S-L (Counts I & II) but dismissed all claims against Snyder’s for breach and dismissed tortious interference and conspiracy claims (Counts III & IV) against Snyder’s (some dismissals with prejudice).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether S-L breached the Distributor Agreement by barring Simply Snackin from warehouse, deactivating handheld, and servicing stores itself	Simply Snackin says it cured the alleged breach by continuing to service stores through Feb 28 and S-L’s actions therefore breached the Agreement	S-L says Agreement allowed it, after a 5‑day notice/cure period, to make other arrangements or terminate under Articles 13(A) and 15(B)(2)	Denied dismissal: pleadings suffice to infer cure and possible breach by S-L; Count I survives as to S-L
Whether S-L breached Article 21 by failing to assist in resolving the Stop & Shop complaint	Simply Snackin says Article 21 requires S-L to work jointly to remedy complaints and S-L failed to assist (e.g., to obtain security footage)	S-L argues Article 21 only required it to forward complaints to Distributor if S-L received the complaint directly, not to lobby Stop & Shop	Denied dismissal: plausible reading of Article 21 supports duty to work jointly; Count II survives as to S-L
Whether Snyder’s can be liable for breach of the Distributor Agreement	Simply Snackin named Snyder’s as a defendant for the same breaches	Snyder’s argues there is no contract between Snyder’s and Simply Snackin and a nonparty cannot breach	Granted: breach claims against Snyder’s dismissed with prejudice (no basis to impute contract)
Whether Snyder’s tortiously interfered or conspired with S-L to deprive Simply Snackin of its contract	Simply Snackin alleges Snyder’s (through Walsh) purposely locked out warehouse, terminated Agreement, and acted to recapture stores for business advantage	Snyder’s argues plaintiff fails to allege purposeful, improper (unprivileged) conduct or an agreement; also a party cannot interfere with its own contract; malice is lacking because motive appears commercial	Granted: tortious interference dismissed without prejudice for lack of alleged improper conduct; civil conspiracy dismissed (and against S-L with prejudice because underlying tort claim fails)

Key Cases Cited

Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard: facial plausibility)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility and notice pleading)
In re Burlington Coat Factory Secs. Litig., 114 F.3d 1410 (futility standard for amendment)
Nathanson v. Medical College of Pennsylvania, 926 F.2d 1368 (factors for improper interference under Restatement)
Green v. Interstate United Management Services Corp., 748 F.2d 827 (legitimate business motive can justify interference)