Wesdem v. Illinois Tool Works, 70 F.4th 285

Wesden (plaintiff) purchased an existing Auto Magic distributor (TAP) for $250,000 after a September 2018 meeting with ITW’s zone manager, Skip Wier, who allegedly promised Wesden could sell Auto Magic products through Amazon and similar online marketplaces indefinitely.
On October 24, 2018 Wier emailed an account approval to Wesden, noting a $10,000 credit limit and net-30 terms; Wesden sold Auto Magic products (including via Amazon) for nearly two years thereafter.
In July 2020 ITW announced an Authorized Distributor Program that prohibited sales on online marketplaces without prior written consent; ITW denied Wesden’s request for an exception.
Wesden sued in 2020 asserting breach of contract and fraud (fraud alleged based on Wier’s 2018 representations); ITW removed to federal court on diversity grounds.
The district court dismissed the fraud claim under Rule 12(b)(6); after discovery the court granted ITW summary judgment on breach of contract, finding the alleged distributorship agreement unenforceable under Texas’s statute of frauds for lack of a written quantity/exclusivity term.
The Fifth Circuit affirmed both rulings: fraud dismissal for failure to plead plausible intent not to perform, and summary judgment because no writing satisfied the UCC/Texas statute of frauds quantity requirement.

Issue	Plaintiff's Argument (Wesden)	Defendant's Argument (ITW)	Held
Whether Wesden plausibly pleaded fraud based on Wier’s 2018 promise to allow sales on Amazon	Wier (as ITW’s agent) promised Wesden could sell on Amazon indefinitely; ITW never intended to honor that promise and later enacted the marketplace ban as part of a scheme to capture online markets	The complaint offers only conclusory allegations and post-hoc nonperformance; no factual allegations show ITW had no intent to perform in 2018	Affirmed dismissal: allegations insufficient to infer false-when-made intent; mere later nonperformance insufficient
Whether the parties formed an enforceable contract for distribution/requirements sales despite lack of written quantity term	The agreement was a requirements or exclusive distributorship; quantity need not be numeric and a $10,000 credit line or price list/attachment reflects sufficient writing	Texas/UCC statute of frauds requires a writing showing quantity or that purchases are buyer’s requirements; email and attachment lack a quantity/exclusivity term and $10K credit is not a quantity	Affirmed summary judgment: statute of frauds bars enforcement because no written quantity or exclusivity term exists

Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must include factual content making claim plausible)
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings)
Aquaplex, Inc. v. Rancho La Valencia, Inc., 297 S.W.3d 768 (Tex. 2009) (promise of future performance actionable as fraud only if made with no intent to perform)
Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432 (Tex. 1986) (failure to perform alone is not evidence of lack of intent to perform when promise made)
Int’l Bus. Machs. Corp. v. Lufkin Indus., LLC, 573 S.W.3d 224 (Tex. 2019) (elements of fraud/fraudulent inducement under Texas law)
Shandong Yinguang Chem. Indus. Joint Stock Co. v. Potter, 607 F.3d 1029 (5th Cir. 2010) (applying Spoljaric and pleading particularity in fraud claims)
Merritt-Campbell, Inc. v. RxP Prods., Inc., 164 F.3d 957 (5th Cir. 1999) (requirements contracts still must satisfy statute of frauds with a writing indicating "requirements")
Propulsion Techs., Inc. v. Attwood Corp., 369 F.3d 896 (5th Cir. 2004) (written specification that buyer will buy its requirements can satisfy quantity formalism)
Lenape Res. Corp. v. Tenn. Gas Pipeline Co., 925 S.W.2d 565 (Tex. 1996) (statute of frauds requires a quantity term)