Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—M.D. Pa.: Court painstakingly analyzes, finds some duplicative claims in distributorship dispute, (Jul 23, 2026)

By Justin Marcus Smith, J.D.

The basis for a breach of implied covenant claim was distinct because it took a step beyond mere breach of contract by alleging affirmative, bad faith conduct in an attempt to sabotage the plaintiff’s course of business.

An industrial tank distributor could proceed with most, but not all, breach of contract and tort claims against a Florida tank supplier and its Mexican parent, held the federal district court in Scranton, Pennsylvania. The breach of implied covenant claims survived because they were based on conduct separate from that of the breach of contract claims. An unjust enrichment equitable cause of action could proceed where the tank supplier’s parent was not in privity of contract. The defendant tank distributor correctly noted that the gist of the action doctrine would bar a tortious interference with contract claim if it were not independent of a contract claim pleaded in parallel with it. However, the defendant did not develop the argument, and the complaint pleaded existing contracts and prospective business relationships with customers within the alleged distribution territory. The court also denied dismissal of the fraud claim because it appeared tort claims related to contractual inducement were collateral to contract performance. The court granted dismissal of the breach of fiduciary duty claim because it was based on obligations inseparable from contract. The civil conspiracy claim failed because the tank supplier could not conspire with its parent entity. The gist of the action barred the conversion claim because the parties’ agreement established property interests. The gist of the action doctrine also barred the negligence claim against the tank supplier because there was no allegation of breach of a public duty arising under tort law. However, the tank supplier’s parent was not a party to the agreement, the court denied dismissal of the negligence claim insofar as it pertained to the parent (Tank Bros, LLC v. Acuantia, Inc., No. 3:26-cv-00922-MEM (M.D. Pa. Jul. 16, 2026)).

Background. Tank Bros, LLC, the operator of an industrial tank distribution yard, sued Acuantia, Inc., a manufacturer of plastic industrial tanks, and Acuantia’s parent company, Grupo Rotoplas, S.A.B. de C.V., in connection with a representative-distributor agreement. Tank Bros said it was to drop-ship Acuantia tanks, and that Acuantia represented, during the negotiation of parties’ 2022 agreement, that Tank Bros would receive a protected territory, guaranteed commissions on all sales, and a “Partner Store” relationship.

According to the allegations of the complaint, the agreement appointed Tank Bros the non-exclusive representative and distributor of Acuantia’s products within a 500-mile diameter of an address in Scranton Pennsylvania. The agreement guaranteed Tank Bros a 15% commission on total invoiced revenue. Acuantia was not to appoint any other distributor or sell direct in the defined territory without Tank Bros’ consent.

The intent may have been to form an independent contractor relationship, but the actual course of dealing appeared to be a franchise-like relationship with Acuantia exercising substantial control over Tank Bros’ operations. Tank Bros said it functioned initially as a stock yard, but Acuantia gradually shifted operational burdens to Tank Bros.

Tank Bros alleged that Acuantia filled orders, including by drop shipment, within the Tank Bros territory that did not ship from the Tank Bros yard. As such, Tank Bros alleged it suffered substantial economic damages including lost commissions, lost profits, and damage to goodwill.

Tank Bros claimed (1) breach of express contract; (2) breach of the covenant of good faith and fair dealing; (3) unjust enrichment in the alternative to express breach of contract; (4) tortious interference with contract and business relations; (5) fraud and fraudulent inducement; (6) breach of fiduciary duty; (7) civil conspiracy; (8) conversion; and (9) negligence.

After removal from state court, Acuantia, Inc. moved to dismiss all but the breach of express contract claim for failure to state a claim.

Breach of implied covenant. The court disagreed with Acuantia that Tank Bros could not simultaneously assert breach of contract and breach of implied covenant in the context of the instant pleading. Acuantia argued that Pennsylvania does not recognize a separate breach of contractual duty of good faith and fair dealing claim if it falls under the breach of contract claim. Despite the outcome in case law Acuantia cited, Pennsylvania law only bars the simultaneous pleading of breach of contract and breach of implied covenant based on the same conduct.

The circumstances here were similar to another case that distinguished the viability of simultaneous breach of contract and breach of implied covenant claims based on separate conduct. The basis for the instant breach of implied covenant claim was distinct because it took a step beyond mere breach of contract by alleging affirmative, bad faith conduct in an attempt to sabotage Tank Bros’ course of business. The court denied dismissal of the breach of implied covenant claim accordingly.

Unjust enrichment. Acuantia similarly argued for dismissal of the unjust enrichment equitable cause of action in light of the breach of contract claim. The court noted that R. 8(d) generally permits pleading in the alternative, but Tank Bros could not plead both breach of contract and unjust enrichment without calling into question the existence or validity of the parties’ contract.

Acuantia did not deny the existence of a valid, written, and enforceable contract, but its parent, Grupo Rotoplas, had not acknowledged it. The parent was also not in contractual privity with Tank Bros. The court held the unjust enrichment equitable cause of action could proceed.

Tortious interference. Acuantia correctly noted that the gist of the action doctrine would bar a tortious interference with contract claim were it not independent of a contract claim pleaded in parallel with it; however, Acuantia did not state more about how to apply the doctrine to this case. Nor did Acuantia argue that the Tank Bros claim was not independent of a contract claim pleaded along with it.

The question was whether Tank Bros pleaded sufficient facts to show that Acuantia and its parent tortiously interfered with a contract between Tank Bros and a third party. Acuantia argued that Tank Bros failed to allege any third-party contract, but the court noted the complaint pleaded existing contracts and prospective business relationships with customers within territory. The complaint also stated both defendants knew about them. The court rejected the idea that Tank Bros had to enumerate each individual contract. The pleading was sufficient here, so the court denied dismissal of the tortious interference claim.

Fraud. The court held the fraudulent inducement claim could proceed. The court analyzed how numerous courts have held that the gist of the action doctrine would not necessarily apply to fraud in the inducement of a contract. Fraud to induce is generally collateral to contract terms, but the court acknowledged there was no bright line rule here. The court cited to various cases.

The court found the instant circumstances were similar to a case that held tort claims related to contractual inducement were collateral to performance. Accordingly, the gist of the action doctrine would not bar them. Tank Bros alleged Acuantia fraudulently agreed to perform obligations it never intended to perform to induce Tank Bros to enter the parties’ agreement. The court denied dismissal of the fraud claim.

Fiduciary duty. The court found that the Tank Bros’ based its breach of fiduciary duty claim on duties that were, in one form or another, almost identical to the parties’ contractual obligations forming the basis of the breach of contract claim. The fiduciary duties in question were inseparable from, and not collateral to, the breach of contract claim. Accordingly, the court held the gist of the action doctrine barred the breach of fiduciary claim. The court granted dismissal of the breach of fiduciary claim.

Civil conspiracy. Acuantia argued the civil conspiracy claim should fail because the gist of the action doctrine barred the tort claims; however, the court had already ruled some tort claims were viable.

In the alternative, Acuantia argued a single entity could not conspire with itself, and the court agreed. Acuantia and its parent were incapable of conspiring with one another. Legal impossibility called for dismissal of the conspiracy claim.

Conversion. The gist of the action doctrine applied to the conversion claim because Tank Bros based the conversion claim entirely on property interests established under the parties’ agreement. The court dismissed the conversion claim accordingly.

Negligence. The court’s plain reading of the complaint indicated that Acuantia’s duties facially arose solely from the parties’ agreement and would not exist outside the contractual relationship. Tank Bros also failed to identify any case law to support its contention that Acuantia had a duty beyond the contract to provide commissions, disclose sales information, and route customer opportunities through Tank Bros. The gist of the action doctrine barred the negligence claim against Acuantia because Tank Bros did not allege the breach of a public duty arising under tort law. However, Acuantia’s parent was not a party to the agreement. The court granted dismissal of the negligence claim only to the extent it applied to Acuantia. The court denied dismissal with respect to parent Grupo Rotoplas.

The Case is No. 3:26-cv-00922-MEM.

Judge: Mannion, M.

Attorneys: Jonathan S. Comitz (Comitz Law Firm, LLC) for Tank Bros, LLC. Daniel T. Brier (Myers, Brier & Kelly, LLP) for Acuantia, Inc.

Companies: Tank Bros, LLC; Acuantia, Inc.

Cases: FranchisingDistribution PennsylvaniaNews