Anthony Ostlund wins dismissal of breach of contract claim brought by ex-Napster CEO
"This was a case involving complicated and unique contract language. We were pleased that the district court and the Eighth Circuit agreed with our reading of the contract and dismissed Mr. Gorog's claims before our clients were forced to incur the expense of protracted litigation."
- Brooke Anthony, attorney for Best Buy Co. Inc.
Our client, Best Buy, purchased Napster in 2008. In connection with that purchase, Best Buy entered into an employment and performance award agreement with Napster's then CEO, Christopher Gorog. Nine months later, Mr. Gorog left his employment and entered into a separation agreement which preserved his right to earn a performance award under certain specific circumstances.
When our client sold a portion of Napster in 2011, Mr. Gorog sued under a variety of theories including a claim for breach of contract alleging that he was entitled to a full performance award based on a provision in the award agreement.
We believed that our client would benefit from an aggressive defense right out of the box. We filed a motion to dismiss the complaint for failure to state a claim, claiming that even if what Mr. Gorog pled was true, he was still not entitled to relief under the terms of the Performance Award Agreement.
We argued that because left his employment long before the sale of Napster, he was only entitled to a prorated performance amount under the award agreement if Napster met the required performance metrics. We used our briefing and argument to demonstrate how Mr. Gorog's interpretation of the contract would lead to absurd and illogical results.
Both the federal district court and the Eighth Circuit Court of Appeals agreed, finding that Mr. Gorog had failed to state a claim for breach of contract. The courts determined that because Mr. Gorog had not pled that Napster ever met performance metrics, he could not recover under the Performance Award Agreement.
For more on the Eighth Circuit ruling, click here.
Gorog v. Best Buy Co. Inc., Case No. 13-2231
U.S. Court of Appeals for the Eighth Circuit