KANSAS CITY –– The legal battle between State Line Bag company and CompanionLabs, an apparrel company, will continue after a federal judge found the two entities had a viable contract.
In the Aug. 22 ruling, Judge Greg Kays of the U.S District Court for the Western District of Missouri granted in part State Line Bag's motion for judgment. However, Kays could not rule CompanionLabs breached the contract, because State Line Bag did not outline the contract terms in the original complaint.
“State Line Bag does not discuss all of the elements of its breach of contract claim and focuses most of its argument on whether the parties formed a contract," Kays wrote. “After arguing a contract was formed ... State Line Bag jumps to the conclusion that the court should grant summary judgment on its breach of contract claim. The court cannot make such a leap and only addresses contract formation.”
Kays denied CompanionLabs motion in the order.
According to court documents, CompanionLabs, under its apparel division, began placing large orders for drawstring bags with State Line Bag company in 2015. Two years later, State Line Bag began holding inventory to allow for quicker shipment to CompanionLabs. The dispute began when CompanionLabs discontinued its use of plastic bags and refused to purchase the bags remaining with State Line Bag.
State Line Bag and CompanionLab discussed their arrangement over a series of emails. The court determined the two companies had an agreement that State Line Bag would “maintain an inventory of custom bags and CompanionLabs would purchase that inventory.”
CompanionLabs defended itself by claiming that the plaintiff purchased the branded inventory on its own volition. Kays, however, noted that “the parties entered into a contract through their conduct. Where the writings of the parties do not establish a contract, performance by both parties may be sufficient.”