FuelCell Energy Inc (FCEL)

[Russian-Trader]

INTRODUCTION
This is the latest in a series of meritless and harassing lawsuits that POSCO Energy Co.,
Ltd. (“POSCO”) has brought against FuelCell Energy, Inc. (“FuelCell”) in retaliation for referring
the parties’ true dispute to arbitration (the “breach-of-contract arbitration”). Notwithstanding
POSCO’s irrelevant and false allegations regarding the nature of the parties’ communications, this
is a straightforward matter subject to straightforward grounds for dismissal. POSCO’s allegations
— which are simply one claim repackaged four ways — amount to a complaint that FuelCell did
not act quickly enough in removing a restrictive legend from POSCO’s unregistered stock
certificates, causing POSCO to lose out on the opportunity to sell its shares while stock prices were
relatively higher. But the Complaint, which is premised on FuelCell’s alleged delay in acceding
to POSCO’s request, cannot support POSCO’s claims because it omits when POSCO “met all of
the statutory prerequisites for removal of the restrictive legend, triggering FuelCell’s duty to
remove [it].”1
See Compl. ¶¶ 67–68, ECF No. 8.
Careful to plead around the relevant timeline, the Complaint alleges that (i) POSCO asked
FuelCell on June 4, 2018 to remove the restrictive legend from POSCO’s stock certificates, and
(ii) on some unspecified date in the future, POSCO satisfied the statutory prerequisites for its
removal — namely, presenting FuelCell with the stock certificates, themselves, and providing a
letter representing that FuelCell could lawfully remove the restrictive legend because POSCO was
exempt from registration under the securities laws. See id. ¶¶ 38, 45, 67–68. That is insufficient
to demonstrate POSCO’s plausible entitlement to relief.
To begin with, the Complaint makes clear that POSCO did not satisfy the contractual or
statutory prerequisites for removal of the restrictive legend from its shares as of its June 4, 2018
1 For clarity, this Brief has substituted “FuelCell” for “FCE” and “POSCO” for “PE” when
quoting the allegations in the Complaint.
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request, which forecloses POSCO’s demands for relief as of that date. Furthermore, because the
Complaint conspicuously omits when POSCO allegedly satisfied those prerequisites, the
Complaint cannot demonstrate that FuelCell “unreasonably delayed” in fulfilling POSCO’s
request. A plaintiff does not adequately plead a plausible claim for “unreasonable delay” when it
fails to plead the dates of the critical events to establish liability. Finally, there is a reason that
POSCO attempts to plead around the critical dates. As documents integral to the Complaint and
referenced therein demonstrate,
2 POSCO, in fact, did not satisfy either prerequisite until late
August 2018, with the issuance of new, unrestricted shares following just four days later.
Because the Complaint does not allege sufficient facts to support the conclusion that
FuelCell “unreasonably delayed” in reissuing POSCO’s stock certificates — the basis for all four
counts — POSCO’s Complaint must be dismissed.
BACKGROUND
A. The POSCO-FuelCell Relationship and Breach-of-Contract Arbitration
FuelCell is an industry leader in providing clean, efficient, and affordable energy through
fuel cell solutions. Fuel cells are sources of energy that resemble batteries — except that, unlike
batteries, a fuel cell will continue to generate electricity as long as fuel is supplied (subject to
2
“In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a
district court may consider the facts alleged in the complaint, documents attached to the complaint
as exhibits, and documents incorporated by reference in the complaint.” DiFolco v. MSNBC Cable
LLC, 622 F.3d 104, 111 (2d Cir. 2010). Furthermore, “matters judicially noticed by the District
Court are not considered matters outside the pleadings.” Staehr v. Hartford Fin. Servs. Grp., Inc.,
547 F.3d 406, 426 (2d Cir. 2008). “Where a document is not incorporated by reference, the court
may nevertheless consider it where the complaint relies heavily upon its terms and effect, thereby
rendering the document integral to the complaint.” DiFolco, 622 F.3d at 111 (internal quotation
omitted). “If a plaintiff chooses not to attach to the complaint or incorporate by reference a
document upon which it implicitly relies and which is integral to the complaint, the defendant may
proffer that document when attacking the complaint for its failure to state a claim.” Baraliu v.
Vinya Capital, L.P., No. 07-4626, 2009 WL 959578, at *4 (S.D.N.Y. Mar. 31, 2009).
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degradation over time). Fuel cells create almost no pollutants, are vastly more efficient than
similarly sized combustion engines, provide continuous energy (unlike intermittent solar and wind
power), and have a very small footprint compared with other clean energy technologies.
In 2005, POSCO approached FuelCell to facilitate the sale of FuelCell’s first three power
plants in the Republic of South Korea (“Korea”). Two years later, POSCO proposed a strategic
partnership to market FuelCell’s power plants directly. The basis of the partnership was for
FuelCell to license its technology and know-how to POSCO and for POSCO, in turn, to receive
the exclusive right to sell, service, and eventually manufacture FuelCell’s technology and products
throughout all of Asia. In exchange for these grants and licenses and for the tens of thousands of
hours that FuelCell spent training POSCO to use, build, and sell FuelCell’s proprietary power
plants, the parties agreed that FuelCell would receive royalties on POSCO’s resulting sales.3

Between 2007 and 2012, FuelCell and POSCO memorialized their relationship in four
licensing and related agreements (collectively, the “Transaction Agreements”). In the same
timeframe, they also executed three Securities Purchase Agreements (“SPAs”), through which
POSCO purchased more than 30 million FuelCell shares. Compl. ¶ 2. Because POSCO purchased
the shares directly from FuelCell, and the shares were not registered with the Securities and
Exchange Commission (“SEC”), the stock certificates representing POSCO’s shares bore a
common restrictive legend that limited the circumstances under which POSCO could transfer
them. See id. ¶¶ 2–3, 20.
Initially, the POSCO-FuelCell partnership was productive. Together, POSCO and
FuelCell opened and expanded the Korean fuel cell market, and POSCO realized hundreds of
3 See FuelCell Energy, Inc., Current Report, Item 8.01 (Form 8-K) (Apr. 7, 2020),
https://sec.report/Document/0001564590-20-015607/.
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millions of dollars in FuelCell sales. But in 2015, POSCO abruptly announced its intention to exit
the fuel cell sector. That year, POSCO completed work on its own manufacturing facility —
meaning that, from that point on, POSCO could apply the knowledge it had received from FuelCell
and manufacture FuelCell’s technology for itself. Although customers continued to contact
POSCO, and POSCO was still under a contractual duty to commercialize FuelCell’s technology,
POSCO refused to make any sales. During the same period, POSCO also attempted to coerce
FuelCell into granting POSCO perpetual, royalty-free rights to all of FuelCell’s intellectual
property, including intellectual property for products not encompassed in the original license.
POSCO was explicit about its strategy: if FuelCell failed to convey an unlimited technology
transfer, POSCO would bring unfounded litigations and arbitrations against FuelCell until
FuelCell gave in to POSCO’s demands.
FuelCell refused to give in. In February 2020, FuelCell formally notified POSCO that it
was in material breach of the Transaction Agreements.4
Because POSCO refused to cure its
material breaches, on June 28, 2020, FuelCell terminated the Transaction Agreements and initiated
parallel arbitration proceedings seated in London and Singapore, pursuant to the parties’ relevant
agreements and the rules of the International Chamber of Commerce.
5
Consistent with its threats,
POSCO immediately initiated two suits in the U.S. Courts against FuelCell in retaliation.
B. POSCO’s Delaware Lawsuit
A little over one month after FuelCell initiated arbitration proceedings and terminated the
parties’ Transaction Agreements, POSCO submitted a baseless demand to inspect FuelCell’s
4 See FuelCell Form 8-K, Item 8.01 (Apr. 7, 2020).
5 See GARRIGUES, International Arbitration Newsletter – July 2020 (July 30, 2020),
https://www.garrigues.com/en_GB/new/international-arbitration-newsletter-july-2020-regionaloverview-asia-pacific.
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books and records under Section 220 of the Delaware General Corporation Law (“DGCL”). See
POSCO Energy Co., Ltd. v. FuelCell Energy, Inc., No. 2020-07-13-MTZ, Dkt. 1 (Del. Ch. Aug.
28, 2020) (“Del. Compl.”).
6 POSCO’s demand focuses primarily on a SEC investigation that
(i) arose out of a self-disclosure by FuelCell regarding certain omissions it discovered in past
securities filings and (ii) resulted in no penalties or fines to the company — largely because the
SEC confirmed that FuelCell had relied on the advice of outside securities counsel to prepare the
at-issue statements. See Del. Compl. Ex. A; In the Matter of FuelCell Energy, Inc., No. 3-19957,
Order Instituting Cease-And-Desist Proceedings Pursuant To Section 8A Of The Securities Act
Of 1933, Making Findings, And Imposing A Cease-And-Desist Order, ¶ 15 (SEC, Sep. 3, 2020),
https://www.sec.gov/litigation/admin/2020/33-10831.pdf. POSCO’s demand also seeks
information about FuelCell’s use of Paycheck Protection Program loans, its debts, and inquiries
by any government or regulatory agency, in an obvious fishing expedition to identify “potential
breaches of fiduciary duty.” Del. Compl. Ex. A.
While FuelCell considered POSCO’s request — in particular, how POSCO could make
such a request when FuelCell’s records and POSCO’s public statements indicated that POSCO
had sold all of its shares7 — POSCO filed a complaint with the Delaware Court of Chancery to
compel the requested inspection under DGCL 220. Having sold virtually all of its shares,
announced its intention to exit the fuel cell industry, and sought information that could not possibly
support a breach of fiduciary duty claim — weeks after FuelCell initiated the arbitrations — it is
clear that POSCO’s demand is not related to its “interests as a stockholder” or otherwise intended
6 The Court may take judicial notice of documents filed on the Delaware docket because
they are “publicly available and [their] accuracy cannot reasonably be questioned.” Apotex Inc. v.
Acorda Therapeutics, Inc., 823 F.3d 51, 60 (2d Cir. 2016).
7 See Park Jae-hyk, POSCO Energy to Sell 2.9% stake in FuelCell Energy, THE KOREA
TIMES, http://m.koreatimes.co.kr/pages/article.asp?newsIdx=258700 (last visited Oct. 1, 2020).
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for a “proper purpose,” see 8 Del. C. § 220, and was intended instead to harass FuelCell and to
improperly solicit documents for use in the arbitrations.
C. POSCO’s New York Lawsuit
Two weeks after POSCO filed the Delaware lawsuit and as part of its campaign to harass
and retaliate, POSCO filed the present meritless litigation, based on stale conduct more than two
years in the past. After POSCO announced its intention to leave the fuel cell business, POSCO
asked FuelCell to remove the restrictive legend from POSCO’s shares so that POSCO could sell
its FuelCell stock. Compl. ¶ 36. The SPAs and POSCO’s stock certificates anticipated that
POSCO would eventually seek to sell its shares and explained how POSCO should initiate that
process. The SPAs provided:
Following the time a legend is no longer required for any Shares hereunder, the
Company will, no later than five (5) Business Days following the delivery by the
Purchaser to the Company or the Company’s transfer agent of a legended certificate
representing such Shares, accompanied by such additional information as the
Company or the Company’s transfer agent may reasonably request, deliver or cause
to be delivered to the Purchaser a certificate representing such Shares that is free
from all restrictive and other legends.
Id. ¶ 21 (quoting SPA § 3.8(b)). The restrictive legend on POSCO’s stock certificates provided
that POSCO’s shares could not be resold or offered for sale unless registered with the SEC or
“pursuant to an available exemption from . . . the Securities Act . . . as evidenced by a legal opinion
of counsel to the transferor to such effect.” Id. ¶ 20 (quoting restrictive legend).
In other words, as POSCO concedes in its Complaint, before FuelCell could replace
POSCO’s restricted shares with unrestricted shares, POSCO had to (i) provide FuelCell with the
physical stock certificates to be replaced, and (ii) provide a letter from POSCO’s counsel,
confirming that POSCO was exempt from the registration requirements imposed by the securities
laws, such that FuelCell could lawfully delegend POSCO’s shares. Id. ¶¶ 67–68. Because POSCO
claimed an exemption from registration under SEC Rule 144, it refers to the latter requirement as
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providing a “Rule 144 opinion letter.” See, e.g., id. ¶¶ 36, 45, 68. The law echoes both
requirements. See UCC § 8–401 (adopted by both Delaware and New York).
POSCO’s June 4, 2018 request did not provide any of the required materials. See Compl.
¶ 38 (alleging POSCO submitted a delegending request on June 4, 2018), ¶ 45 (alleging separately
that POSCO submitted “a Rule 144 opinion letter from counsel, and the original share certificates”
“n the hopes of moving things forward”); see also Ex. 1, POSCO Delegending Request (June 4,
2018). In fact, POSCO did not provide the required letter from counsel until August 17, 2018.
See Compl. ¶ 51; Ex. 2, Email from Korean Counsel for POSCO (Aug. 17, 2018). And POSCO
did not locate or provide its stock certificates to FuelCell until August 24, 2018. See Compl. ¶ 45;
Ex. 3, Email from POSCO’s Transfer Agent (Aug. 23, 2018) (“The stock certificate has just been
arrived. I’ll keep some record and send it to the agent tonight or early tomorrow morning.”); Ex.
4 at 7, Email from FuelCell (Aug. 24, 2018) (“Copied on this email is Jae Ryu, POSCO Energy’s
broker. . . . I have a courier headed to Jae’s office right now to pick up the share certificate and
deliver it to AST [FuelCell’s transfer agent].”).
After POSCO satisfied those contractual and statutory prerequisites, FuelCell’s transfer
agent promptly delegended POSCO’s shares on August 28, 2018. Ex. 5, Direct Registration BookEntry Advice (Aug. 28, 2018). POSCO received the shares on September 11, 2018, following its
own delay to complete additional steps to comply with Korean law. See Compl. ¶ 53; Ex. 4 at 1,
Email from POSCO’s Transfer Agent (Sept. 11, 2018) (“A FedEx messenger service will deliver
the medallion stock power to the address given around 11:00~12:00pm.”); id. at 6, Email from
POSCO’s Transfer Agent (Aug. 24, 2018) (“POSCO needs to finish some paper works required
by the Korean regulator to receive the shares. . . . It can’t be done [in] just one or two days.”). Put
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differently, POSCO did not submit a valid delegending request until August 24, 2018, and clean,
delegended stock certificates were available to POSCO four days later.
D. Extraneous Material in the Complaint
The Complaint includes a host of extraneous allegations regarding the parties’
communications about POSCO’s delegending request, which culminated in POSCO’s decision to
waive certain “bargained-for rights” at the advice of its own counsel. See, e.g., Compl. ¶¶ 5, 48–
50 (alleging FuelCell “forced POSCO to waive its bargained-for right to appoint a board designee”
and “strong-armed POSCO into surrendering its pro rata rights”). Because those allegations (i) do
not form the basis for any count in the Complaint and (ii) precede the date when FuelCell’s duty
to delegend POSCO’s shares arose, they are irrelevant. But, to the extent that the Court considers
them, they demonstrate that POSCO’s June 4, 2018 delegending request was not only incomplete
— because it did not include a Rule 144 opinion letter or POSCO’s legended stock certificates —
but also was not “rightful,” as the law independently requires. See 6 Del. C. § 8–401(a)(7).
A stock issuer like FuelCell may not delegend shares in connection with a sale that it knows
would violate the Securities Act of 1933 (the “1933 Act”), and is justified in requesting information
to show that the contemplated transfer can be made in accordance with the law. See, e.g., Catizone
v. Memry Corp., 897 F. Supp. 732, 736 (S.D.N.Y. 1995) (“Since the transfer violated the 1933 act,
it cannot be considered rightful, and defendants . . . were under no duty to register the transfer.”);
Bender v. Memory Metals, Inc., 514 A.2d 1109, 1116 (Del. Ch. 1986) (“A transfer is not ‘rightful’
if it would violate the 1933 Act.”); Charter Oak Bank & Tr. Co. v. Registrar & Transfer Co., 141
N.J. Super. 425, 434 (N.J. Super. Ct. Law Div. 1976) (applying UCC § 8–401) (“A transfer agent
cannot be required by state law to transfer stock in violation of the Securities Act. Therefore, when
a transfer agent has reasonable cause to believe that a transfer will be in violation of the Securities
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Act, it has a right to refuse to make the transfer until it has received an explanation or showing that
the proposed transfer would not violate the Securities Act.”).
Here, POSCO’s June 4, 2018 delegending request raised concerns as to whether POSCO
was, in fact, free to sell unregistered shares pursuant to an SEC exemption. In particular, while
POSCO purported to fall within a safe harbor provided by SEC Rule 144 for non-affiliates, see
Compl. ¶ 36, an “affiliate” for purposes of the Rule presumptively includes both large shareholders
and officers or directors, see, e.g., Sec. & Exch. Comm’n, “Rule 144: Selling Restricted and
Control Securities” (Jan. 16, 2013)8
(“An affiliate is a person, such as an executive officer, a
director or large shareholder, in a relationship of control with the issuer.”).9
Because POSCO
was a longtime, large shareholder with appointment rights to a seat on FuelCell’s board, Compl.
¶¶ 2, 25, POSCO’s own counsel was concerned as to whether POSCO “could be deemed an
affiliate because of its right to appoint a member to the board,” see id. ¶¶ 42–43, 48.
Ultimately — consistent with its stated intention to exit the fuel cell sector, discontinue its
selling relationship with FuelCell, and divest itself of FuelCell stock — POSCO opted to waive its
right to a seat on FuelCell’s board, which FuelCell accepted as a reasonable solution to the issue
of whether POSCO would be deemed an affiliate. See Compl. ¶ 50.
LEGAL STANDARD
A complaint must give a defendant “fair notice of what the . . . claim is and the grounds
upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). A
plaintiff cannot discharge this obligation by reciting “labels and conclusions,” or by providing a
“formulaic recitation of the elements of a cause of action.” Id. Rather, a plaintiff must allege
8
https://www.sec.gov/reportspubs/investor-publications/investorpubsrule144htm.html.
9 Unless otherwise noted, all emphasis in this Brief has been added.
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“sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Bautista v. CytoSport, Inc., 223 F. Supp. 3d 182, 187 (S.D.N.Y. 2016) (quoting Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009)). “Where a complaint pleads facts that are ‘merely consistent with’ a
defendant’s liability, it ‘stops short of the line between possibility and plausibility of entitlement
to relief.’” Elias v. Rolling Stone LLC, 872 F.3d 97, 104 (2d Cir. 2017) (quoting Twombly, 550
U.S. at 557).
ARGUMENT
As POSCO’s Complaint necessarily acknowledges, there were two prerequisites (among
others) that POSCO was required to satisfy before FuelCell could remove the restrictive legends
from POSCO’s shares. First, pursuant to Delaware’s Uniform Commercial Code (the “Delaware
UCC”) and the express terms of the parties’ SPAs, POSCO had to provide FuelCell with its
original, legended stock certificates before FuelCell could replace them with new, unrestricted
shares. See 6 Del. C. § 8–401; Compl. ¶ 21 (quoting SPA § 3.8(b)). Second, pursuant to the
Delaware UCC and the language printed on the certificates themselves, POSCO was also required
to provide a letter from counsel, opining that FuelCell’s removal of the restrictive legends from
POSCO’s unregistered shares was appropriate under applicable securities laws. See 6 Del. C. §§
8–401(a)(5), 8–204; Compl. ¶ 20 (quoting restrictive legends).
It is clear from the face of the Complaint that POSCO failed to satisfy either prerequisite
with its June 4, 2018 request. See Compl. ¶¶ 38, 45. As a result, FuelCell was not under a duty to
delegend POSCO’s certificates on June 4, 2018, and the Complaint on its face forecloses POSCO’s
demands for relief as of that date. See, e.g., Utica Mut. Ins. Co. v. Clearwater Ins. Co., 906 F.3d
12, 22 (2d Cir. 2018) (“A condition precedent . . . must occur before a duty to perform a promise
in the agreement arises.” (quoting Oppenheimer & Co. v. Oppenheim, Appel, Dixon & Co., 86
N.Y.2d 685, 690 (N.Y. 1995))); 6 Del. C. § 8–401 cmt. 1 (“If any of the preconditions do not exist,
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there is no duty to register transfer.”).
Furthermore, because the Complaint conspicuously fails to allege when POSCO satisfied
the relevant prerequisites, it has not alleged sufficient facts to support the conclusion that FuelCell
“unreasonably delayed” in acting on POSCO’s request. See Planète Bleue Télévision, Inc. v. A&E
Television Networks, LLC, No. 16-9317, 2018 WL 10579873, at *12–13 (S.D.N.Y. Sept. 19, 2018)
(dismissing breach-of-contract claims based on delayed performance because complaint’s failure
to plead when plaintiff satisfied conditions precedent rendered its “allegations regarding the
delayed royalty payments [] too conclusory to defeat [defendant’s] motion to dismiss”); Jing Jing
v. Weyland Tech, Inc., No. 17-446, 2017 WL 2618753, at *3 (D. Del. June 15, 2017) (dismissing
§ 8–401 claim because Iqbal does not permit the Court to “infer compliance with the statute’s
requirements”); see also Baraliu, 2009 WL 959578, at *5 (dismissing breach-of-contract claim
because plaintiff failed to adequately allege conditions precedent had occurred).
Finally, documents integral to the Complaint, and referenced therein, confirm that POSCO,
in fact, did not satisfy either prerequisite until late August 2018, and that FuelCell’s transfer agent
delegended POSCO’s shares just four days later. Cf. Landmark Ventures, Inc. v. Wave Sys. Corp.,
No. 11-8440, 2012 WL 3822624, at *3 n.5 (S.D.N.Y. Sept. 4, 2012), aff’d, 513 F. App’x 109 (2d
Cir. 2013) (holding breach-of-contract claim was “premature” when email attached to motion to
dismiss showed that condition precedent had not yet occurred); Leggat v. Equifax Info. Servs., Inc.,
No. 3:09-263, 2009 WL 2432371, at *2 (E.D. Va. Aug. 6, 2009) (“The Complaint — whether
intentionally or inadvertently — omits the dates of repossession and sale of the vehicle at issue.
However, these dates are central to Plaintiff’s claim, and Chase’s affidavit provides this critical
information.”). Because the Complaint does not adequately allege that FuelCell unreasonably
delayed in reissuing POSCO’s stock certificates, all four claims must be dismissed.
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Counts Three and Four of the Complaint suffer from additional, fundamental defects,
which independently require their dismissal. Count Three, which seeks damages under Section
158 of the DGCL, is untenable because Section 158 offers equitable relief alone — specifically,
the power to compel a corporation to issue appropriate stock certificates. See 8 Del. C. § 158; 1
Corp. & Com. Prac. in Del. Ch. § 9.03 (“[A]n action will lie under Section 158 to compel a
corporation to issue a certificate where one has not theretofore been issued.”). Because POSCO
does not seek equitable relief and, in any event, has already received the delegended certificates
that Section 158 provides for, Section 158 can offer POSCO no further relief as a standalone claim.
Count Four, which alleges that FuelCell tortiously interfered with POSCO’s prospective
business advantage, is duplicative of POSCO’s remaining claims and patently fails to state a claim
under New York law. In New York, tortious interference with prospective business advantage
requires intentional interference with “a specific business relationship with an identified third
party.” Mehrhof v. Monroe-Woodbury Cent. Sch. Dist., 168 A.D.3d 713, 714 (N.Y. App. Div.
2019). Count Four must also be dismissed because the Complaint does not allege “a specific
business relationship with an identified third party,” but rather is based only on the possibility that
POSCO could have sold its shares earlier, but for FuelCell’s alleged delay.
I. THE COMPLAINT FAILS TO STATE A CLAIM FOR BREACH OF CONTRACT.
Count One of the Complaint alleges that FuelCell breached the SPAs because it failed to
use “reasonable best efforts” to reissue POSCO clean, delegended stock certificates following
POSCO’s June 4, 2018 request. Compl. ¶¶ 58–64. In support, the Complaint alleges that each of
the parties’ SPAs “contained an identical § 3.8(b), which states that POSCO may request that
FuelCell remove, and that FuelCell agrees to remove, the restrictive legends ‘if such Shares are
eligible for sale without restrictions under Rule 144 or under any no-action letter issued by the
SEC.’” Id. ¶ 21 (quoting SPA § 3.8(b)). The same provision describes the process by which
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POSCO could effect such removal:
Following the time a legend is no longer required for any Shares hereunder, the
Company will, no later than five (5) Business Days following the delivery by the
Purchaser to the Company or the Company’s transfer agent of a legended
certificate representing such Shares, accompanied by such additional information
as the Company or the Company’s transfer agent may reasonably request, deliver
or cause to be delivered to the Purchaser a certificate representing such Shares that
is free from all restrictive and other legends.
Id. (quoting SPA § 3.8(b)).
As the SPAs make clear, a condition precedent to FuelCell’s removal of the restrictive
legends was “delivery by [POSCO]” of the actual “legended certificate[s] representing [POSCO’s]
shares.” Id. As discussed below, with respect to Count Two, presentment of the legended shares
was also a statutory prerequisite to removal of the restrictive legend. See 6 Del. C. § 8–401; 7
Frederick H. Miller, Hawkland Unif. Com. Code Series § 8–401:02 (2013) (“Perhaps the most
obvious requirement that must be satisfied before the issuer’s duty to register a transfer arises, is
that the certificate be presented.”); see also Nash v. Coram Healthcare Corp., No.
96-0298, 1996 WL 363166, at *3 (S.D.N.Y. June 28, 1996) (“[U]nder New York law, a
corporation’s duty to register a transfer of restricted stock arises when the stockholder submits to
the issuer (i) the certificates evidencing the restricted shares; and (ii) a ‘no action’ letter from the
SEC.”). The SPAs and relevant securities laws impose this requirement because, “f a new
certificate was registered and issued without the old one being surrendered, the issuer could find
itself subject to claims based upon both.” 7 Miller, § 8–401:02.
It is axiomatic that a contractual duty to act does not arise until conditions precedent are
met. Utica Mut. Ins. Co., 906 F.3d at 22 (“A condition precedent . . . must occur before a duty to
perform a promise in the agreement arises.” (quoting Oppenheimer & Co., 86 N.Y.2d at 690)).
Consequently, FuelCell was not under a duty to remove the restrictive legend from POSCO’s
shares — and indeed could not have properly removed the restrictive legend — until POSCO
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surrendered its legended stock certificates. See Compl. ¶ 21.
The Complaint does not allege that POSCO satisfied the contractual conditions precedent
to POSCO’s delegending request. See Compl. ¶¶ 58–64; cf. Fed. R. Civ. P. 9(c); Baraliu, 2009
WL 959578, at *5 (“Under the Federal Rules, a plaintiff is required to ‘allege generally that all
conditions precedent have occurred or been performed.’ Plaintiff fails to do so . . . hence this claim
must be dismissed.” (quoting Fed. R. Civ. P. 9(c)). At best, the Complaint alleges that FuelCell
invoked Section 3.8(b) of the parties’ SPAs on June 4, 2018, and that — at some point in the future
— “n the hopes of moving things forward, POSCO provided FuelCell with all other
documentation FuelCell requested, including a Rule 144 opinion letter from counsel, and the
original share certificates.” Compl. ¶¶ 38, 45. That is not enough to state a claim based on
FuelCell’s alleged unreasonable delay.
On its face, the Complaint thus forecloses any suggestion that FuelCell’s duty to act arose
on June 4, 2018. That is, the Complaint is explicit that POSCO had not satisfied the conditions
precedent by that date.
Moreover, by omitting when POSCO presented its stock certificates to FuelCell, the
Complaint has not plausibly alleged that FuelCell failed to exercise “reasonable best efforts” on
account of its “unjustified and unlawful delays.” See Redwing Constr. Co. v. Sexton, 181 A.D.3d
1027, 1028 (N.Y. App. Div. 2020) (“[N]o action for breach of contract lies where the party seeking
to enforce the contract has failed to perform a specified condition precedent.” (internal quotation
omitted)). A plaintiff cannot plausibly allege unreasonable delay without alleging when the duty
to act actually arose. See Planète Bleue, 2018 WL 10579873, at *12–13 (holding breach-ofcontract claim based on delayed payment “too conclusory” to withstand dismissal when
defendant’s obligation to pay was “contingent on Plaintiff having performed” and complaint failed
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to allege “when Plaintiff completed the necessary performance”); see also Robb Evans & Assocs.
LLC v. Sun Am. Life Ins., No. 10-5999, 2012 WL 488257, at *2 (S.D.N.Y. Feb. 14, 2012) (“The
Receiver cannot escape dismissal by omitting the relevant payment dates from its second
complaint and simply pleading the legal conclusion that the payments occurred within the
limitations period. While legal conclusions can provide the framework for a complaint, they are
not entitled to an assumption of truth, and must be supported by factual allegations.”).
Finally, documents that are integral to the Complaint and referenced therein demonstrate
that POSCO, in fact, did not provide its stock certificates to FuelCell until August 24, 2018. See
Compl. ¶ 21 (alleging FuelCell had a duty to delegend POSCO’s shares “following the delivery
by [POSCO] . . . of a legended certificate representing such shares”), ¶ 45 (alleging POSCO
“provided FuelCell with . . . the original share certificates”); Ex. 4 (demonstrating POSCO did not
provide FuelCell with the original share certificates until August 24, 2018). FuelCell’s transfer
agent removed the restriction from POSCO’s shares four days later, Ex. 5, and the delegended
shares were available to POSCO on September 11, 2018, to accommodate POSCO’s “need to
finish some paper works required by the Korean regulator to receive the shares,” Ex. 4 at 1, 6; see
also Compl. ¶ 53 (alleging “FuelCell’s stock transfer agent finally notified POSCO on or about
September 11, 2018 that the stock could now be transferred”).
Because FuelCell could not have delegended POSCO’s shares until POSCO provided its
original share certificates, Count One — which is based on FuelCell’s allegedly unreasonable
delay and consequent failure to exercise reasonable best efforts — “must fail based on the terms
of the contract and [POSCO’s] implicit admission in the complaint that the conditions precedent
were not satisfied” when it demanded action. See Baraliu, 2009 WL 959578, at *4.
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II. THE COMPLAINT FAILS TO STATE A CLAIM UNDER DGCL § 8–401.
Count Two fails for the same reasons and others. Count Two alleges that FuelCell’s
“unreasonable delay” in reissuing POSCO’s stock certificates also violated Section 8–401 of the
DGCL, which requires a stock issuer to reissue a certificated security upon request and provides
damages for losses to the stockholder resulting from unreasonable delay. See 6 Del. C. § 8–401.
The Complaint fails to plead a Section 8–401 claim for three reasons. First, as noted above,
presenting a certificated security to the issuer was not only a contractual condition precedent, but
also a statutory prerequisite to a Section 8–401 demand. Second, Section 8–401 further required
POSCO to provide a valid Rule 144 letter before FuelCell could reissue POSCO’s shares. Third,
and relatedly, the Complaint does not allege that POSCO met the other prerequisites imposed by
Section 8–401, including the requirement that “the transfer is in fact rightful.” See id. POSCO
consequently cannot demonstrate that FuelCell “unreasonably delayed” in delegending POSCO’s
stock certificates, or that POSCO suffered damages as a result.
It is well-established that a threshold requirement for a Section 8–401 demand is the actual
presentment of the certificated securities, as the Complaint necessarily acknowledges. See 7
Miller, § 8–401:02 (“Perhaps the most obvious requirement that must be satisfied before the
issuer’s duty to register a transfer arises, is that the certificate be presented.”); Compl. ¶¶ 67–68;
see also Nash, 1996 WL 363166, at *3 (dismissing DGCL § 8–401 claim when, “nlike the cited
cases, and in contravention of the UCC’s requirements, the shares in this instance were neither in
registered form nor presented to the issuer”). Without surrendering the original stock certificates
to the issuer, the issuance of new, delegended certificates would result in the existence of duplicate
shares. 7 Miller, § 8–401:02; Jing Jing, 2017 WL 2618753, at *3 (“Presenting the certificated
security is not a technicality. . . . Without presenting the security, duplicate shares would exist, and
the issuer would be liable for litigation arising out of both the re-issued shares and the old shares.”).
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For the reasons discussed above, the Complaint (i) does not allege that POSCO met this
threshold requirement on June 4, 2018, and (ii) does not plausibly allege delay because it fails to
specify when POSCO provided the certificates to FuelCell. Moreover, POSCO, in fact, did not
provide its stock certificates to FuelCell until late August 2018, at which point FuelCell promptly
reissued POSCO’s stock certificates just four days later. See Exs. 4, 5.
POSCO was subject to a second statutory prerequisite, which it also did not satisfy until
August 2018. Specifically, before FuelCell could remove the restrictive legend from POSCO’s
stock certificates, POSCO was required to provide a letter from counsel, confirming that POSCO
was exempt from registering its shares under SEC Rule 144.
DGCL Section 8–204 provides an issuer’s right to impose restrictions on transfer if they
are “noted conspicuously on the security certificate.” 6 Del. C. § 8–204. Section 8–401 only
applies if the contemplated sale “does not violate any restriction on transfer imposed by the issuer
in accordance with Section 8–204.” 6 Del. C. § 8–401(a)(5); see also 6 Del. C.
§ 8–401 cmt. 1 (“If any of the preconditions do not exist, there is no duty to register transfer.”).
Here, POSCO’s stock certificates stated that, before POSCO could sell or offer to sell its shares,
POSCO was required to provide a “legal opinion of counsel” that the contemplated sale was
exempt from the registration requirements of applicable securities laws. Compl. ¶ 20 (quoting
restrictive legends); see also id. ¶¶ 67–68 (recognizing that “provid[ing] a Rule 144 opinion letter”
was a “statutory prerequisite for removal of the restrictive legend”).
The Complaint alleges that POSCO intended to sell its shares pursuant to a Rule 144
exemption from registration, and that POSCO provided FuelCell with a letter from counsel to that
effect. Id. ¶¶ 36, 45. But, foreclosing the possibility that POSCO satisfied this second prerequisite
as of June 4, 2018, the Complaint alleges that POSCO did not provide a Rule 144 letter to FuelCell
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until August 17, 2018. See Compl. ¶ 51. Because the Complaint does not adequately allege that
FuelCell’s removal of the restrictive legend was “unreasonably delayed” following POSCO’s
satisfaction of this second statutory prerequisite, and documents integral to the Complaint confirm
that it was not, see Exs. 2, 5, Count Two must be dismissed for this independent reason, see Kolber
v. Body Cent. Corp., 967 F. Supp. 2d 1061, 1066 (D. Del. 2013) (“As the Court has already ruled,
there was no duty for Defendants to respond to Plaintiffs’ inquiries before the Rule 144 opinion
was issued.”).
Finally, the Complaint does not adequately allege that POSCO satisfied any of the other
Section 8–401 requirements, including demonstrating that the contemplated stock sale was “in fact
rightful.” See 6 Del. C. § 8–401(a). Section 8–401 lists seven statutory prerequisites that must be
satisfied to trigger a stock issuer’s duty to reissue a stock certificate. See id. A plaintiff pursuing
a Section 8–401 claim bears the burden of demonstrating that all seven requirements — in addition
to the presentment requirement — have been met. See CAPM Corp. Advisors AB v. Protegrity,
Inc., No. 18676, 2001 WL 1360122, at *6 (Del. Ch. Oct. 30, 2001) (“[I]n order for CAPM to
establish that Protegrity breached its duty to register the transfer under § 8–401, it must further
establish that no material issue of fact exists regarding whether the seven additional conditions
were met.”); see also Campbell v. Liberty Transfer Co., No. 02-3084, 2006 WL 3751529, at *11
(E.D.N.Y. Dec. 19, 2006) (“To determine whether plaintiff has satisfied his burden of showing
that the requested transfer of PMWP shares was ‘rightful,’ thus satisfying UCC § 8-401(a)(7),
requires reference to the [1933 Act] and to regulation 17 C.F.R. § 230.144 (‘Rule 144’).”).
For purposes of Section 8–401, a “rightful” stock transfer must comply with the registration
requirements of the 1933 Act. See Bender, 514 A.2d at 1116 (“A transfer is not ‘rightful’ if it
would violate the 1933 Act.”). Thus, a transfer agent is under no obligation to issue stock
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19
certificates pursuant to DGCL Section 8–401 to facilitate a transfer that would violate the Act.
See, e.g., JW Acquisitions, LLC v. Shulman, No. 1712-N, 2006 WL 4782399, at *1 (Del. Ch. Oct.
25, 2006) (“According to the Uniform Commercial Code provision at issue, the LLC’s entitlement
to relief [under §§ 8–401 and 158] depends on whether the ‘transfer [was] in fact rightful.’”);
Catizone, 897 F. Supp. at 736 (“Since the transfer violated the 1933 act, it cannot be considered
rightful, and defendants Memry and AST&T were under no duty to register the transfer.”
(collecting cases)).
The Complaint does not allege that POSCO’s prospective sale of unregistered shares was
“rightful,” as Section 8–401 requires. Nor does it plead sufficient factual matter from which the
Court could so conclude. To the contrary — the Complaint explains that POSCO was a longtime,
large FuelCell shareholder with a perpetual right to appoint a director to FuelCell’s board. See
Compl. ¶¶ 2, 25. POSCO, in other words, fell squarely within the SEC’s presumptive definition
of an “affiliate.” See, e.g., PWP Xerion Holdings III LLC v. Red Leaf Res., Inc., No. 2017-0235,
2019 WL 5424778, at *8 (Del. Ch. Oct. 23, 2019) (“As customarily interpreted, an officer or
director of an entity is affiliated with that entity.”); United States v. Shkreli, No. 15-637, 2018 WL
9539774, at *14 (E.D.N.Y. Feb. 26, 2018), aff’d, 779 F. App’x 38 (2d Cir. 2019) (reciting expert
testimony defining a Rule 144 affiliate as “someone who can exert a certain amount of control
over a company, either they are an officer or director or they own a large amount of shares”).
Consequently, the Complaint fails to allege that POSCO’s Section 8–401 demand was
“rightful” at least until POSCO entered into a waiver letter on August 22, 2018, waiving its seat
on FuelCell’s board. See Compl. ¶ 52; see also SEC v. Lybrand, 200 F. Supp. 2d 384, 396
(S.D.N.Y. 2002) (“[T]o accept [defendants’] argument that the literal transfer of majority
ownership constitutes the moment at which a former affiliate may sell freely into the market is to
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ignore the guiding purpose of the Securities Act — the protection of ‘those who do not know
market conditions from the overreachings of those who do.’” (internal quotations omitted)).
Because POSCO has not pleaded a plausible Section 8–401 claim, Count Two must be
dismissed.
III. THE COMPLAINT FAILS TO STATE A DGCL § 158 CLAIM.
The Complaint also fails to state a claim under 8 Del. C. § 158. To the extent Section 158
supports an independent cause of action apart from Section 8–401,
10 it provides equitable relief
alone — which POSCO does not seek and, in any event, has already received.
Section 158 of the DGCL provides that “[e]very holder of stock represented by certificates
shall be entitled to have a certificate signed by, or in the name of, the corporation by any 2
authorized officers of the corporation representing the number of shares registered in certificate
form.” Compl. ¶ 33 (quoting 8 Del. C. § 158). Delaware courts have clarified that, “y necessary
implication this includes the right to a proper certificate without a legend or restriction, where
such a legend is no longer appropriate.” Leonard, 2000 WL 1528909, at *8 (quoting Bender,
514 A.2d at 1115 (alterations omitted)). Count Three of the Complaint alleges that, by delaying
the removal of the restrictive legend from POSCO’s shares, FuelCell denied POSCO the
certificates to which it was entitled under Section 158 and caused POSCO over $1 million in losses
as a result. Id. ¶¶ 77–80. POSCO seeks an award of monetary damages to redress its alleged loss.
Id. at 17 (Prayer for Relief).
Unlike Section 8–401, which provides for damages under appropriate circumstances, see
10 The rights POSCO seeks to enforce under Sections 8–401 and 158 are coextensive. Often,
they are pleaded together as single claim. See, e.g., Leonard Loventhal Acct. v. Hilton Hotels
Corp., No. 17803, 2000 WL 1528909, at *8 (Del. Ch. Oct. 10, 2000), aff’d sub nom. Account v.
Hilton Hotels Corp., 780 A.2d 245 (Del. 2001); Klita v. Cyclo3pss Corp., No. 15374, 1997 WL
33174421, at *1 (Del. Ch. Apr. 8, 1997); Bender, 514 A.2d at 1115.
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6 Del. C. § 8–401(b), Section 158 provides injunctive relief alone. In particular, “an action will
lie under Section 158 to compel a corporation to issue a certificate where one has not theretofore
been issued.” 1 Corp. & Com. Prac. in Del. Ch. § 9.03; accord Graham v. Com. Credit Co., 200
A.2d 828, 831 (Del. 1964) (“[T]his action was brought to compel the issuance to the appellant of
new certificates for 11,600 shares pursuant to 8 Del. C. § 158.”); Caravias v. Interpath Commc’ns,
Inc., No. 3301, 2008 WL 2268355, at *3 (Del. Ch. May 28, 2008) (“[Plaintiff] seeks an order
compelling Interpath to issue the Deficiency Shares in accordance with the requirements of 8 Del.
C. § 158.”); Klita, 1997 WL 33174421, at *1–2 (“Count V seeks to compel Cyclo3pss to issue to
plaintiff unrestricted shares of common stock in accordance with 6 Del. C. § 8–401 and 8 Del. C.
§ 158. . . . [P]laintiff’s right under section 158 to a ‘clean’ certificate is no different than the specific
performance claim under Count I.”).
POSCO does not seek injunctive relief in this case. See Compl. at 17. And, in any event,
POSCO has already received the delegended stock certificates to which it was allegedly entitled.
Id. ¶ 53. Count Three thus seeks relief that is not authorized by the statute, and is moot as to the
only relief that Section 158 could provide. See, e.g., In re Fisher for DNAinfo, 722 F. App’x 40,
41 (2d Cir. 2018) (“A case becomes moot, at any stage of litigation, when there is no longer a live
case or controversy for a court to decide, such as when the plaintiff has already received the relief
sought.”); Schlenger v. Fid. Emp. Servs. Co., LLC, 785 F. Supp. 2d 317, 336–37 (S.D.N.Y. 2011)
(granting summary judgment as to ERISA claim seeking monetary damages when statute provided
only equitable relief).
Even if that were not the case, however, POSCO’s Section 158 claim would fail for the
same reasons as its claim under Section 8–401. Section 158 entitles a stockholder to a delegended
stock certificate only “where such a legend is no longer appropriate.” Compl. ¶ 33 (quoting
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Bender, 514 A.2d at 1115). For the same reasons that the Complaint has not adequately pleaded
a claim under Section 8–401, it has not adequately alleged that FuelCell failed to remove a
restrictive legend that was no longer appropriate. Namely, the complaint does not allege when the
restrictive legend was no longer appropriate — i.e., when POSCO satisfied all the preconditions
for its removal. And documents integral to the Complaint and referenced therein demonstrate that
FuelCell, in fact, removed the restrictive legend from POSCO’s shares promptly after POSCO
fulfilled its statutory and contractual conditions precedent. See Exs. 2, 4, 5; see also Leonard,
2000 WL 1528909, at *8–9 (dismissing claim under both §§ 8–401 and 158 when plaintiff failed
to show restrictive legend was “no longer appropriate”). For all of these reasons, Count Three
must be dismissed.
IV. THE COMPLAINT FAILS TO STATE A CLAIM FOR TORTIOUS INTERFERENCE WITH
PROSPECTIVE BUSINESS ADVANTAGE UNDER NEW YORK LAW.
Count Four, alleging tortious interference with POSCO’s prospective business advantage,
is duplicative of Counts One through Three and fails to state a claim in any event. “Under New
York law, claims are duplicative [and are properly dismissed as such] when both ‘arise from the
same facts and seek the identical damages for each alleged breach.’” Deutsche Bank Nat. Tr. Co.
v. Quicken Loans Inc., 810 F.3d 861, 869 (2d Cir. 2015) (quoting Amcan Holdings, Inc. v.
Canadian Imperial Bank of Com., 70 A.D.3d 423, 426 (N.Y. App. Div. 2010)). A tortious
interference claim is duplicative of a breach of contract claim when “the conduct that allegedly
constitutes tortious interference . . . is exactly the same conduct [p]laintiffs assign as a breach of
contract.” Norte v. Worldbusiness Capital, Inc., No. 14-10143, 2015 WL 7730980, at *12
(S.D.N.Y. Nov. 24, 2015), aff’d sub nom. Maricultura Del Norte, S. de R.L. de C.V. v. Umami
Sustainable Seafood, Inc., 769 F. App’x 44 (2d Cir. 2019). Likewise, a common law claim is
duplicative of a statutory claim when the former “rise[s] and fall[s]” with the latter. In re Novartis
Case 1:20-cv-07509-MKV Document 25 Filed 10/21/20 Page 28 of 33
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& Par Antitrust Litig., No. 18-11835, 2019 WL 3841711, at *7 (S.D.N.Y. Aug. 15, 2019). That
is precisely the case here.
The Complaint alleges that FuelCell tortiously interfered with the prospective sale of
POSCO’s shares by “failing to reasonably and timely respond to POSCO’s request,” causing
POSCO to suffer “damages in excess of over $1,000,000.00.” Compl. ¶¶ 81–88. POSCO’s
tortious interference claim, in other words, rests on exactly the same facts, and seeks exactly the
same damages, as the three claims before it. See id. ¶¶ 58–64 (Count One) (“POSCO realized a
loss of over $1,000,000.00 from its inability to sell its shares due to FuelCell’s unjustified and
unlawful delays.”); ¶¶ 65–74 (Count Two) (“POSCO realized a loss of over $1,000,000.00 from
its inability to sell its shares due to FuelCell’s unjustified and unlawful delays.”); ¶¶ 75–80 (Count
Three) (“POSCO realized a loss of over $1,000,000.00 from its inability to sell its shares due to
FuelCell’s unjustified and unlawful delays.”). Because Count Four arises from the same facts and
seeks the same damages as Counts One through Three, it should be dismissed as duplicative. See
Deutsche Bank, 810 F.3d at 869; Rinaldi v. SCA La Goutte, D’Or, No. 16-1901, 2020 WL
5441290, at *6 (S.D.N.Y. Sept. 9, 2020) (dismissing unfair competition and breach of fiduciary
duty claims as duplicative of breach of contract claim); Ethelberth v. Choice Sec. Co., 91 F. Supp.
3d 339, 362 (E.D.N.Y. 2015) (dismissing common law claims seeking the same recovery and
“premised on the same facts” as statutory claims).
In any event, however, Count Four must be dismissed because the Complaint fails
completely to state a tortious interference claim. Under New York law, a claim for tortious
interference with prospective economic advantage lies only when “(1) [the plaintiff] had a business
relationship with a third party; (2) the defendant knew of that relationship and intentionally
interfered with it; (3) the defendant acted solely out of malice, or used dishonest, unfair, or
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improper means; and (4) the defendant’s interference caused injury to the relationship.” Kirch v.
Liberty Media Corp., 449 F.3d 388, 400 (2d Cir. 2006) (citation omitted). “The failure to identify
a specific business relationship renders a plaintiff’s allegations to the speculative level and, thus,
insufficient.” AYDM Assocs., LLC v. Town of Pamelia, 205 F. Supp. 3d 252, 276 (N.D.N.Y. 2016),
aff’d, 692 F. App’x 78 (2d Cir. 2017); see also Mehrhof, 168 A.D.3d at 714 (“In order to state a
cause of action to recover for tortious interference with prospective economic advantage, the
plaintiff must allege a specific business relationship with an identified third party with which the
defendants interfered.”).
POSCO has not identified a specific business relationship, or a third party to whom it would
have sold its shares, but for FuelCell’s alleged interference. Instead, Count Four — and, indeed,
the Complaint as a whole — rests on the possibility that POSCO could have sold its shares earlier
and for a greater sum if FuelCell had delegended them more quickly.
11
See Compl. ¶ 82. That is
not enough to state a claim under New York law. See, e.g., Allocco Recycling, Ltd. v. Doherty,
378 F. Supp. 2d 348, 375 (S.D.N.Y. 2005) (“Plaintiff does not allege that it had any specific
business relationship with which Defendants interfered and therefore has failed to plead that but
for [Defendants’] actions it would have consummated a business relationship.” (internal quotation
omitted)); see also AYDM Assocs., LLC, 205 F. Supp. 3d at 276 (“Tortious inference with a
business relationship is, by definition, conduct directed not at the plaintiff itself, but at the party
with which the plaintiff has or seeks to have a relationship. Therefore, any conduct alleged to be
tortious interference must be directed at the third party.” (internal quotations and citation omitted)).
11 Notably, POSCO’s own public announcement demonstrates that POSCO’s board did not
even approve the decision to sell POSCO’s stake in FuelCell until November 15, 2018. See
Yonhap News Agency, POSCO Energy Board OKs Sale of Stake in U.S. Fuel Cell Firm (Nov. 15,
2018), https://en.yna.co.kr/view/AEN20181115009200320.
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Nor does the Complaint adequately allege that FuelCell’s alleged interference was
“dishonest, unfair, or improper,” as the third element requires. See Kirch, 449 F.3d at 400. “In all
but the most egregious circumstances, ‘dishonest, unfair, or improper means’ must amount to
misconduct that constitutes either a crime or an independent tort.” PKG Grp., LLC v. Gamma
Croma, S.p.A., 446 F. Supp. 2d 249, 251 (S.D.N.Y. 2006). As discussed above, FuelCell was not
under any duty to remove the restrictive legend from POSCO’s stock certificates until POSCO
satisfied the prerequisites for removal, which FuelCell promptly did upon their satisfaction. See
Compl. ¶¶ 21, 67–68; 6 Del. C. § 8–401 cmt. 1 (“A duty exists only if certain preconditions exist.
If any of the preconditions do not exist, there is no duty to register transfer.”). Because the
Complaint fails to adequately plead the elements of a tortious interference claim, Count Four must
likewise be dismissed.
CONCLUSION
For the foregoing reasons, the Complaint should be dismissed with prejudice