US Herbs, LLC v. Riverside Partners, LLC
711 F. App'x 321
| 6th Cir. | 2017Background
- US Herbs and Herb Thyme formed an August 2010 contract making Herb Thyme exclusive supplier of US Herbs’ packaged products.
- A May–June 2011 Modification superseded the Contract, defining Earned Margin payments and restricting US Herbs from contacting former customers.
- Herb Thyme’s assets were later sold to Rocket Farms via a December 2012 Asset Purchase Agreement (APA), which did not assume the Modification liabilities.
- US Herbs alleged breach of the Modification, unjust enrichment, tortious interference with a business relationship, and two tortious interference with contract claims after December 2012.
- The APA expressly disclaimed pre-closing liabilities and listed assumed liabilities, excluding any Modification obligations; December 2012 default ended the Modification, allowing US Herbs to pursue other suppliers.
- The district court granted summary judgment to Rocket Farms; Plaintiffs appealed, arguing Rocket Farms impliedly assumed Modification liabilities and that unjust enrichment and tortious interference claims survive.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rocket Farms impliedly assumed the Modification liabilities | US Herbs argues implied assumption via modification/APA language | Rocket Farms did not expressly assume liabilities; lack of privity and explicit assumption controls | No implied assumption; Modification not binding Rocket Farms under Ohio law |
| Whether Rocket Farms’ conduct unjustly enriched US Herbs | US Herbs conferred exclusive customer revenue; Rocket Farms benefited without payment | Revenue post-December 2012 arises from sale of assets; no US Herbs-conferred benefit | Not unjust enrichment; no conferred benefit from US Herbs to Rocket Farms under Modification |
| Whether Rocket Farms tortiously interfered with the Modification or US Herbs’ contracts/relationships | Rocket Farms interfered with Modification and harmed relationships with former customers | No contract with Rocket Farms; no intentional inducement or breach proven | No tortious interference; insufficient evidence of contracts or intent |
| Whether the tortious interference claims against Rocket Farms with customers survive given Modification terms | Modification created exclusive rights and customer relationships | US Herbs terminated its contracts and relationships at termination; customers became Herb Thyme’s, not US Herbs’ | Claims fail due to lack of contracts/relationships at relevant times; no interference shown |
Key Cases Cited
- Welco Indus., Inc. v. Applied Cos., 617 N.E.2d 1129 (Ohio 1993) (implied assumption when buyer seeks to escape liability requires specific theories)
- Georgia-Pac. Consumer Prod. LP v. Four-U- Packaging, Inc., 701 F.3d 1093 (6th Cir. 2012) (tortious interference standards and related contract analysis)
- A & B-Abell Elevator Co. v. Columbus/Central Ohio Bldg. & Constr. Trades Council, 651 N.E.2d 1283 (Ohio 1995) (elements of tortious interference with a contractual relationship)
- Hambleton v. R.G. Barry Corp., 465 N.E.2d 1298 (Ohio 1984) (unjust enrichment requires benefit, knowledge, and unjust retention)
- Samadder v. DMF of Ohio, Inc., 798 N.E.2d 1141 (Ohio Ct. App. 2003) (privity and contract-based limitations on liability)