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LLC v. Global Cellular, Inc.

United States District Court, D. Columbia.

August 11, 2015

3E Mobile, LLC, Plaintiff,
v.
Global Cellular, Inc., Defendant

          For 3E MOBILE, LLC, Plaintiff: David J. Morgan, Richard T. Victoria, Sanjeev Manoj Jegasothy, PRO HAC VICE, GORDON & REES, LLP, Pittsburgh, Pa; Julia Kim Whitelock, GORDON & REES, LLP, Washington, DC.

         For GLOBAL CELLULAR, INC., Defendant: John P. Jett, Joshua C. Hess, Stephen E. Hudson, KILPATRICK TOWNSEND & STOCKTON LLP, Atlanta, Ga; Peter M. Boyle, KILPATRICK TOWNSEND & STOCKTON LLP, Washington, DC.

         For GLOBAL CELLULAR, INC., Counter Claimant: Peter M. Boyle, KILPATRICK TOWNSEND & STOCKTON LLP, Washington, DC.

         For 3E MOBILE, LLC, Counter Defendant: Julia Kim Whitelock, GORDON & REES, LLP, Washington, DC.

Page 107

         MEMORANDUM OPINION

         Emmet G. Sullivan, United States District Judge.

         3E Mobile, LLC, (" 3E" ) commenced this lawsuit in November 2014 based on Global Cellular, Inc.'s (" Global" ) alleged breach of the parties' 2013 Manufacturing Agreement (" Agreement" ). Compl., ECF No. 1. In January 2015, Global asserted counterclaims against 3E for breach of contract, breach of implied covenant of good faith, unjust enrichment, and attorneys' fees. Answer and Countercl. (" Countercl." ), ECF No. 5. 3E moves to dismiss Global's counterclaims for failure to state a claim and to strike Global's demand for attorneys' fees. Pl.'s Mot. Dismiss, ECF No. 11. Upon consideration of the motion, the response and reply thereto, the applicable law, and the entire record, 3E's motion is DENIED.

         I. Background

         3E is a manufacturer of cell phone protective cases. Countercl. at 9-10. Global is a provider of cell phone accessories, including protective cases. Id. In 2013, 3E and Global settled an intellectual property lawsuit in which 3E's predecessor Crystal Icing, Inc. (" Crystal" ) alleged that Global infringed on several registered copyrights by marketing, manufacturing, copying, and selling certain items, including cellphone accessories.[1] Compl. at ¶ 7. The intellectual property lawsuit settlement resulted in a multi-million dollar Agreement, the terms and obligations of which give rise to the parties' current dispute.

         A. The Agreement

         Pursuant to the Agreement, 3E agreed to manufacture certain items at Global's request, and Global agreed to sell those items to designated retailers at a specified price. Agreement, See Compl., Ex. A. The Agreement states that 3E " shall" provide the products ordered by Global within a specified amount of time, but that if 3E cannot provide the Product requested by Global for " any reason," 3E " may arrange

Page 108

to have the Product produced by one of Global's current manufacturers." Agreement at Section 2.C. The Agreement anticipates Global purchasing at least $3.9 million worth of product from 3E. Id. at Section 4.A. Under the Agreement, Global is obligated to make monthly advance payments of $25,000 per month to 3E for thirty-six (36) months. Id. at Sections 4.B and 4.C. The advance payments were to be applied as credit to orders placed by Global. Id. at Section 4.D. Any unused credit at the end of the Agreement's term would become " the sole and exclusive property" of 3E. Id. Section 4.F.

         During the first six months of the Agreement's term, Global allegedly made more than 250 manufacturing requests and paid more than $150,000.00 in monthly advance payments. 3E did not produce any of the products ordered by Global. Def.'s Mem. Opp., ECF No. 12 at 1. After Global expressed concern about 3E's failure to source its orders, 3E executives advised Global to stop making the monthly payments. Id. [2] When Global stopped making payments, 3E filed this lawsuit, alleging breach of contract. Compl. at 2.

         II. Discussion[3]

         A. ...


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