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Brand Coupon Network, LLC v. Catalina Marketing Corp.

United States District Court, M.D. Louisiana

November 24, 2014

BRAND COUPON NETWORK, LLC,
v.
CATALINA MARKETING CORP., ET AL

RULING AND ORDER

BRIAN A. JACKSON, Chief District Judge.

Before the Court are Defendant's Motion to Dismiss Plaintiff's First Amended Complaint (Doc. 48) and Defendant's Motion to Stay Discovery (Doc. 37), seeking an order dismissing Plaintiff's Amended Complaint with prejudice pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6) and requesting that the Court stay discovery until resolution of Defendant's Motion to Dismiss. Plaintiff opposes Defendant's Motion to Dismiss. (Doc. 50). Defendant has been denied leave to file a reply memorandum in response to Plaintiff's Opposition. (Doc. 53). Oral argument is not necessary. The Court has jurisdiction pursuant to 28 U.S.C. § 1332.

I. BACKGROUND

On July 7, 2011, Plaintiff Brand Coupon Network, LLC ("Brand Coupon") filed a Petition in the Nineteenth Judicial District Court, Parish of East Baton Rouge, for Damages and Injunctive Relief against Defendant Catalina Marketing, Inc. d/b/a CouponNetwork.com ("Catalina"), as well as against three of Catalina's agents and representatives: Pamela Samniego, Joe Henson, and L. Dick Buell. (Doc. 1-3). Brand Coupon asserted claims of (1) detrimental reliance; (2) unjust enrichment; (3) unfair trade practices, (4) trade secret violation; (5) trademark infringement; (6) breach of loyalty, good faith, and fair dealing; and (7) tortious conduct. The matter was removed to this Court on a basis of diversity jurisdiction under 28 U.S.C. § 1441. ( See id. ). Ruling upon a Rule 12(b)(6) Motion to Dismiss filed on behalf of all defendants, ( see Doc. 3), the Court dismissed all claims, finding that they were either time-barred, insufficiently pleaded, or failed to show an established legal duty owed by the individual defendants to Brand Coupon, (Docs. 17-18).

On appeal, the Fifth Circuit Court of Appeals affirmed this Court's dismissal of Pamela Samniego, Joe Henson, and L. Dick Buell as defendants in their individual capacities. (Doc. 33 at pp. 8-9). The Court of Appeals, however, found that this Court erred in ruling several of Brand Coupon's claims as time-barred, for this Court had considered an affidavit outside of the pleadings and not referred to therein. ( Id. at p. 8). Plaintiff/Petitioner Brand Coupon did not challenge this Court's dismissal of its trade secret claim as insufficiently pleaded. ( Id. at p. 3 n.1). The case was remanded to this Court in April 2014 to "conduct such proceedings as it determines to be necessary to ascertain whether a triable issue of fact exists regarding the timeliness of [Brand Coupon]'s claims, possibly including additional discovery and amended or additional pleadings." ( Id. at p. 7).

On June 10, 2014, Defendant Catalina, the only remaining defendant from the original petition, filed the instant Motion to Stay Discovery in anticipation of its forthcoming Motion to Dismiss. (Doc. 37).

On July 11, 2014 Brand Coupon filed its First Amended Complaint, alleging five counts in connection with Catalina's entry into the internet coupon market: (1) detrimental reliance; (2) unjust enrichment; (3) unfair trade practices under La. R.S. 51:1401, et seq. ; (4) trademark infringement under La. R.S. 51:211, et seq. ; and (5) tortious conduct under La. C.C. art. 2315. ( See Doc. 44). On August 28, 2014, Catalina filed the instant Motion to Dismiss Plaintiff's First Amended Complaint, arguing that Brand Coupon had failed to sufficiently allege the necessary elements of each claim under the required pleading standards pursuant to Rule 12(b)(6). (Doc. 48).

II. STANDARD OF REVIEW

A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint against the legal standard set forth in Rule 8, which requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) ( Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "Determining whether a complaint states a plausible claim for relief [is]... a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. "[F]acial plausibility" exists "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678 ( Twombly, 550 U.S. at 556). The complaint need not allege specific facts, but need only "give the defendant fair notice of what the claim is and the grounds upon which it rests." Erickson v. Pardus, 551 U.S. 89, 93 (2007) (citations and quotation marks omitted).

Hence, the complaint need not set out "detailed factual allegations, " but something "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action" is required. Twombly, 550 U.S. at 555. When conducting its inquiry, the Court must "accept[] all well-pleaded facts as true and view[] those facts in the light most favorable to the plaintiff." Bustos v. Martini Club Inc., 599 F.3d 458, 461 (5th Cir. 2010) (quotation marks omitted).

The Supreme Court has noted that Rule 12(b)(6) requires dismissal whenever a claim is based on an invalid legal theory:

Nothing in Rule 12(b)(6) confines its sweep to claims of law which are obviously insupportable. On the contrary, if as a matter of law it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations, ... a claim must be dismissed, without regard to whether it is based on an outlandish legal theory, or on a close but ultimately unavailing one.

Neitzke v. Williams, 490 U.S. 319, 327 (1989) (quotation marks and internal citations omitted). However, "[f]ederal pleading rules... do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted." Johnson v. City of Shelby, Miss., 574 U.S. ___, ___, 135 S.Ct. 346, 346 (2014) (per curiam).

III. DISCUSSION

The First Amended Complaint ("Complaint") alleges violations of state law. Evaluating each claim separately, the Court will assess whether Brand Coupon's claims survive Catalina's Motion to Dismiss.

1. Detrimental Reliance

Catalina asserts that Brand Coupon has not alleged sufficient facts to maintain its claim for detrimental reliance in Count I. Under the Louisiana Civil Code, [1] "[a] party may be obligated by a promise when he knew or should have known that the promise would induce the other party to rely on it to his detriment and the other party was reasonable in so relying." La. C.C. art. 1967. "To establish detrimental reliance, a party must prove three elements by a preponderance of the evidence: (1) a representation by conduct or word; (2) justifiable reliance; and (3) a change in position to one's detriment because of the reliance." Suire v. Lafayette City-Parish Consol. Gov't, 907 So.2d 37, 59 (La. 2005). "Louisiana cases make clear that recovery for detrimental reliance is not limited to oral promises; the detrimental reliance doctrine applies to representations made by word or by conduct." Dorsey v. N. Life Ins. Co., 2005 WL 2036738, at *23 (E.D. La. Aug. 15, 2005) ( Babkow v. Morris Bart, P.L.C., 726 So.2d 423, 427 (La. Ct. App. 1998)).

In its Complaint, Brand Coupon alleges:

In reliance upon Samniego and Henson's representations of confidentiality, [Brand Coupon's CEO] Abraham shared with Samniego and Henson confidential information relative to the internet coupon industry and [Brand Coupon]'s strategies and business plans.... Samniego and Henson provided assurances regarding confidentiality in order to have Abraham divulge information that he would not have disclosed to direct competitors. Samniego and Henson also concealed Catalina's plans to make a foray into the internet coupon industry in order to compete directly with Brand Coupon Network.

(Doc. 44 at ¶¶ 2.13, 2.15). Catalina argues that Brand Coupon's references to "representations" and "assurances" are vague and conclusory. In support of its argument, Catalina directs this Court to several decisions from this Court and its sister court of the Eastern District of Louisiana which have dismissed detrimental reliance claims pursuant to Rule 12(b)(6) motions, for failure to sufficiently plead representations by conduct or word. In each of these cases, the pleadings of the alleged representations fell short of the level of specificity present in the instant Complaint. See, e.g., Mose v. Keybank Nat'l Ass'n, 2011 WL 3204451, at *4 (M.D. La. July 26, 2011), aff'd, 464 F.Appx. 260 (5th Cir. 2012) (complaint alleged "tacit endorsement, " the representation of which was not made directly to plaintiffs); Blackstone v. Chase Manhattan Mortg. Corp., 802 F.Supp.2d 732, 739-40 (E.D. La. 2011) (complaint did not identify source of representation). In contrast, here Brand Coupon clearly identifies the alleged makers of the representation, Catalina's representatives Samniego and Henson, and alleges that they assured the confidentiality of communications between Brand Coupon and these agents of Catalina. Although the Complaint does not specify what precisely was said or done, its allegations exceed the threshold of plausibility on this point of representations, to make out a claim of detrimental reliance.

Catalina further argues that Brand Coupon's reliance on alleged representations was unreasonable as a matter of law. Yet the reasonability of reliance is generally a matter for the trier of fact to resolve. See Drs. Bethea, Moustoukas & Weaver LLC v. St. Paul Guardian Ins. Co., 376 F.3d 399, 403 (5th Cir. 2004) ("Whether a plaintiff reasonably relied on a promise is generally a fact-bound determination."). In instances in which the Fifth Circuit has found that reliance was unreasonable as a matter of law, the records have demonstrated that the plaintiffs relied on extra-contractual representations in contradiction of an existing unambiguous, fully-integrated written agreement. See id. ; Active Mortg., LLC v. Trans Union, LLC, No. 09-CV-986, 2010 WL 4627730, at *5 (M.D. La. Nov. 4, 2010); Morris v. Friedman, 663 So.2d 19, 25 (La. 1995). In the instant matter, absent an existing contract containing terms contrary to the alleged representation, it is not for the Court to decide at this juncture whether Brand Coupon's reliance was reasonable or not.

Accordingly, Defendant's Motion to Dismiss for failure to sufficiently plead its claim of ...


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