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Coty, Inc. v. L'Oreal S.A.
Citation: 320 F. App'x 5Docket: No. 08-0903-cv
Court: Court of Appeals for the Second Circuit; March 31, 2009; Federal Appellate Court
Coty Inc. appeals a February 4, 2008, district court order dismissing its complaint against L’Oreal S.A. The dispute centers on a $6.4 million accounting entry related to a Chinese cosmetics company, previously owned by Coty and sold to L’Oreal under a Master Assignment and Transfer Agreement dated January 23, 2004. A neutral arbitrator determined that the accounting entry, labeled as "Intercompany—interest free," should remain as a payable even after the sale. Coty did not contest this arbitration decision but sought payment from L’Oreal for the $6.4 million. The district court found that Coty's complaint did not demonstrate any benefit to L’Oreal from the alleged debt, leading to its dismissal. On appeal, Coty argued for the reversal of the dismissal of its unjust enrichment claim. However, New York law stipulates that unjust enrichment claims cannot proceed if a valid contract covers the matter. The Master Agreement allowed Coty to settle intercompany obligations before closing, indicating that Coty had fully performed under this contract. Consequently, the unjust enrichment claim was deemed invalid. The appellate court affirmed the district court's order dismissing Coty’s complaint.