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Quinn v. Hewlett-Packard Financial Services Co.

United States District Court, D. Massachusetts

November 21, 2018



          Leo T. Sorokin United States District Judge

         Plaintiffs 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.[1] 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 dismiss.[2]

         I. BACKGROUND

         Defendants 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.

         At all 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.

         In June 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.

         In 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. ¶ 45.

         On 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.

         In 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.

         The 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.

         The 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.

         On 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.

         On 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.

         On 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. ΒΆ 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 ...

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