United States District Court, D. Massachusetts
ORDER ON MOTION TO DISMISS (DOC. NO. 12)
Sorokin United States District Judge
Ryan Quinn ("Mr. Quinn") and Yizhang Quinn
("Mrs. Quinn") allege that Defendants HP, Inc.
("HPI"), Hewlett Packard Enterprise Company
("HPE"), Hewlett-Packard Financial Services Company
("HPFS"), Hewlett-Packard Financial Services
(India) Private Limited ("HPFS India"), and David
Gill caused the imprisonment of three of Mr. Quinn's
colleagues in December 2012 and then failed to assist in
securing their release. The plaintiffs seek damages for
injuries they allegedly sustained during the
imprisonment. The defendants have filed a motion to
dismiss for failure to state a claim under Rule 12(b)(6) of
the Federal Rules of Civil Procedure. Doc. No. 12. The
plaintiffs opposed. Doc. No. 26. For the reasons set forth
below, this Court ALLOWS the defendants' motion to
HP, Inc. ("HPI") and Hewlett Packard Enterprise
Company ("HPE") are two corporations resulting from
the split of Hewlett-Packard Company ("HP"). Doc.
No. 10 ¶ 5. Defendant Hewlett-Packard Financial Services
Company ("HPFS") was a wholly-owned subsidiary of
HP and is now a wholly-owned subsidiary of HPE. Id.
¶ 3. Defendant Hewlett-Packard Financial Services
(India) Private Limited ("HPFS India") is a
wholly-owned subsidiary of HPFS. Id. ¶ 4.
Defendant David Gill is the Assistant General Counsel and
Assistant Secretary of HPFS. Id¶7.
relevant times, Mr. Quinn worked for Integrated
Communications & Technologies, Inc. ("ICT"), an
asset recovery business that re-markets used IT equipment.
Id. ¶¶ 16-18. As ICT's "Asia
Director," Mr. Quinn was responsible for overseeing the
company's sales operations in China and managing a
three-member sales team. Id. ¶ 17.
2011, the defendants offered to sell ICT a batch of IT
equipment that they had previously leased to another company
(the "Equipment"). Id. ¶¶ 21-23.
The defendants and ICT executed two contractual documents
referred to as the Referral and Revenue Share Agreement
("RRSA") and the Whole Sale Agreement
("WSA"). Id. ¶ 31. Pursuant to these
agreements, the defendants contracted to sell the Equipment
to a third-party broker, and ICT promised to purchase the
Equipment from the broker, re-market the Equipment for a
profit, and share the net proceeds with the defendants.
Id. ¶¶ 31-32. At all relevant times, the
defendants represented to ICT that the Equipment was
manufactured by H3C Technologies Co., Ltd. ("H3C"),
an HP affiliate in China. Id. ¶¶ 30-35. In
anticipation of this arrangement, ICT pursued prospective
customers to purchase the first installment of the Equipment.
Id. ¶ 39.
December 2011, ICT paid for and received the first
installment of the Equipment. Id. ¶ 38. Shortly
thereafter, Mr. Quinn's sales team discovered that the
Equipment was in substandard condition and was forced to
re-sell it to different customers at a lower price.
Id. ¶¶ 40-41. As Mr. Quinn and his sales
team continued their efforts to re-sell the Equipment, H3C
reported to Chinese authorities that ICT was selling
counterfeit H3C products. Id. ¶ 44. H3C asked
the police in China to "confiscate and destroy" the
Equipment as well as "seriously punish" the
individuals responsible for selling it. Id. ¶
December 7, 2012, the local Chinese police raided ICT's
offices in China, seized the allegedly counterfeit Equipment,
and arrested two members of Quinn's sales team.
Id. ¶ 46. The police arrested the third member
of the sales team on December 21, 2012. Id. At that
time, the plaintiffs and ICT first learned that the Equipment
was counterfeit. Id. Mr. Quinn alleges that, after
learning of the allegations and the arrests, he "feared
for his family's safety and was forced to flee China with
his wife and son." Id. ¶ 51. In an attempt
to exonerate his sales team members, Mr. Quinn tried to
explain to the Chinese police that the defendants sold the
counterfeit Equipment to ICT "as genuine H3C
Equipment." Id. ¶ 54.
January 2013, ICT sought assistance from the defendants in
securing the release of the sales team members. Id.
¶ 56. At that time, Mr. Quinn emailed an HPFS
representative asking the defendants to "straighten out
[the] issue internally with HP China & H3C China, and
have it clarified with Police." Id. ¶ 57.
He also asked them to submit a "formal letter from HP .
. . explaining the situation [and] stating that ICT did in
fact buy this batch of H3C material from HP."
Id. ¶ 57. When the defendants did not respond
after ten days, Mr. Quinn reiterated this request in another
email. Id. ¶ 59.
defendants' legal team responded to these requests and
indicated to the CEO of ICT, Alexander Styller, that the
defendants intended to provide a letter confirming that HPFS
sold counterfeit products to ICT. Id. ¶ 60. The
defendants also represented that they planned to conduct an
internal audit of the Equipment, but were experiencing issues
with "custom clearance." Id. ¶¶
67-68. In the following weeks, Mr. Styller exchanged several
emails with the defendants inquiring as to the status of the
inspections and continuously requesting the promised letter.
Id. ¶¶ 68-70.
plaintiffs allege that "[t]hroughout the course of the
back and forth correspondence between [the defendants] and
ICT, [Mr. Quinn] worked tirelessly every day to maintain the
channels of communication among [Mr. Styller], the Chinese
lawyers and the families of [the sales team members] who
remained incarcerated" Id. ¶ 79. They
further claim that the defendants' "evasiveness and
failure to answer basic questions regarding the authenticity
of the Equipment, and refusal to provide ICT and the Chinese
authorities with exculpatory information and
documentation" caused Mr. Quinn to suffer "from
stress, insomnia and anxiety" as he worked to secure the
release of his colleagues. Id. ¶ 80.
March 12, 2013, Mr. Quinn wrote to Mr. Styller regarding the
defendants' "motives for refusing to answer Mr.
Styller's basic questions concerning the outcome of the
inspections." Id. ¶ 71. In an email to Mr.
Styller, Mr. Quinn stated that the defendants "are
hesitant to answer this as they can smell a lawsuit. . .
[and] are bringing up the customs issue & incorporation
as a defense strategy." Id. The defendants sent
ICT a draft of the requested letter on March 27, 2013, but
delayed submitting the letter to the Chinese authorities for
several weeks. Id. ¶ 82.
April 9, 2013, Mr. Quinn again wrote to Mr. Styller regarding
the status of the defendants' letter, stating that
"[i]t was promised early this week. Lots more upset
calls and emails from families these two days."
Id. ¶ 83.
April 22, 2013, the defendants submitted the requested letter
to the Chinese police. Id. ¶ 84. The defendants
claimed that the letter was "substantially the
same" as the initial copy, but the plaintiffs allege
that it included "misleading statements, which omitted
or mischaracterized key facts." Id.
¶¶ 84-85. The submission of this letter did not
result in the immediate release of the sales team members.
Id. ¶ 86. As such, the plaintiffs assert that
"a complete, honest and timely disclosure to the Chinese
authorities . . . could have effectively led to the release
of [the ...