## Facts

- Magellan International Corporation, an Illinois steel-products distributor, negotiated with Salzgitter Handel GmbH, a German steel trader, for Salzgitter to act as intermediary for Magellan’s purchase of steel bars manufactured to Magellan’s specifications by a Ukrainian mill.
- Magellan provided written specifications, proposed pricing, and proposed payment by letter of credit (LC); Salzgitter proposed higher prices.
- Magellan accepted the higher prices, reduced the quantity to 4,000 tons, added an amount to account for shipment from Magellan’s preferred port, and issued purchase orders reflecting those terms.
- Salzgitter sent price “amendments” that Magellan countersigned; Salzgitter later sent pro forma order confirmations.
- The parties continued negotiating remaining sales terms, and Magellan ultimately opened an approximately $1.2 million LC after disputes were allegedly resolved.
- Salzgitter later demanded changes to the LC; Magellan refused. Salzgitter stated it would not feel obligated to perform unless the LC was amended and indicated it would sell the steel to other buyers.
- Magellan sought cancellation of the LC and alleged Salzgitter attempted to sell the steel to Magellan’s customers.
- Magellan sued for (1) breach of contract under the CISG, (2) specific performance or replevin under Illinois UCC remedies, and (3) misappropriation of trade secrets under the Illinois Trade Secrets Act (ITSA).

## Issues

1. Whether the complaint plausibly alleged formation of a CISG-governed sales contract and an anticipatory repudiation sufficient to state a breach claim.
2. Whether the complaint plausibly alleged entitlement to specific performance or replevin under Illinois UCC remedies based on the asserted inability to cover for specialized goods.
3. Whether the complaint plausibly alleged that Magellan’s specifications were protectable trade secrets and that Salzgitter misappropriated them under the ITSA.

## Decision

- The court denied the motion to dismiss as to Count I (CISG breach/anticipatory repudiation).
- The court denied the motion to dismiss as to Count II (specific performance or replevin under Illinois UCC remedies).
- The court granted the motion to dismiss as to Count III (ITSA), without prejudice.

## Legal Principles

- On a Rule 12(b)(6) motion, the court accepts well-pleaded factual allegations as true and asks whether the complaint gives fair notice of the claim and grounds for relief under Rule 8(a).
- A CISG breach claim is sufficiently pleaded where the complaint alleges contract formation through offer/counteroffer/acceptance on material terms, the plaintiff’s performance or readiness to perform, the defendant’s repudiation or nonperformance, and resulting damages.
- A seller’s demand for new payment conditions coupled with a statement of nonperformance unless the buyer complies can support an anticipatory repudiation theory at the pleading stage under the CISG.
- A buyer may plead a basis for specific performance or replevin under UCC-style remedies by alleging that goods are specialized and that cover is not reasonably obtainable; detailed proof of market unavailability is not required at the complaint stage.
- An ITSA claim requires allegations showing (1) information has independent economic value from not being generally known or readily ascertainable, (2) reasonable secrecy measures, and (3) misappropriation; labeling specifications as “trade secrets” and alleging only speculative misuse is insufficient.

## Conclusion

The court allowed Magellan’s CISG contract and related UCC remedy claims to proceed because the complaint plausibly alleged a formed agreement and a repudiation tied to LC demands, but dismissed the trade secret count without prejudice for failing to allege concrete facts establishing trade secret status and misappropriation.


Magellan Int'l Corp. v. Salzgitter Handel GmbH, 76 F. Supp. 2d 919 (N.D. Ill. 1999)