In Samsung Electronics America v. Chung, Samsung Electronics America, Inc. (“Samsung”) filed suit against All Pro Distributing, Inc. (“All Pro”) and certain former employees alleging claims for breach of fiduciary duty and aiding and abetting breach of fiduciary duty related to an alleged scheme involving the distribution of service parts for Samsung devices. No. 3:15-CV-4108-D, 2017 U.S. Dist. LEXIS 21700 (N.D. Tex. February 16, 2017). All Pro moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss Samsung’s complaint for failure to state a claim.
The court first addressed the breach of fiduciary duty claim. Samsung asserted an informal fiduciary relationship existed because the two companies had a long standing business relationship of trust and confidence that went beyond any specific contracts. The court noted that an informal fiduciary relationship “may arise from a variety of relationships where the parties are ‘under a duty to act for or give advice for the benefit of another upon matters within the scope of their relation.’” Id. (citing ARA Auto. Grp. v. Cent. Garage, Inc., 124 F.3d 720, 723 (5th Cir. 1997)). “The existence of a fiduciary relationship, outside of formal relationships that automatically give rise to fiduciary duties, is usually a fact intensive inquiry.” Id. “Under Texas law, ‘a fiduciary duty will not be lightly created’ since ‘it imposes extraordinary duties’ and requires the fiduciary to ‘put the interests of the beneficiary ahead of its own if the need arises.’” Id. Samsung cited ARA for the proposition that early Texas cases recognized an informal fiduciary duty existed where parties “were looking to profit from a shared risk, e.g., an oil and gas well, or the sale of a particular property and not where the parties’ positions, harmonized for purposes of self-interest, were yet naturally antagonistic.” Id. The court, however, stated that ARA also noted that “[n]o Texas [or federal] case cited by [plaintiff] or uncovered in our research has affirmed a fiduciary obligation in the context of a . . . manufacturer-distributor relationship, or other transactional setting involving experienced managers . . . . We decline to be the first.” Id. The court was similarly unaware of any authority that would support Samsung’s claim and concluded that Samsung had failed to plead a plausible claim for breach of fiduciary duties.
The court then moved to the aiding and abetting breach of fiduciary duty claim. The court held: “It is settled as the law of this State that where a third party knowingly participates in the breach of duty of a fiduciary, such third party becomes a joint tortfeasor with the fiduciary and is liable as such.” Id. (citing Kinzbach Tool Co. v. Corbett-Wallace Corp., 160 S.W.2d 509, 514 (Tex. 1942)). “For Samsung to state a claim for aiding and abetting breach of fiduciary duties, it must plead facts that enable the court to draw the reasonable inference that there was “(1) the existence of a fiduciary relationship; (2) that the third party knew of the fiduciary relationship; and (3) that the third party was aware that it was participating in the breach of that fiduciary relationship.” Id. (citing Meadows v. Hartford Life Ins. Co., 492 F.3d 634, 639 (5th Cir. 2007)). Samsung alleged (1) that the employee defendants owed them fiduciary duties; (2) that All Pro knew the employees owed Samsung fiduciary duties; and (3) that All Pro knowingly participated in the employees’ breach by paying bribes to obtain discounted or free parts for Samsung devices. The court held that Samsung went beyond mere recital of the standard and alleged facts that, if true, enabled the court to draw the reasonable inference that All Pro is liable for the misconduct alleged. The court denied All Pro’s motion to dismiss this claim.