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Cooper v. Primary Care Solutions, Inc.

United States District Court, M.D. Louisiana

March 21, 2017

TAMMY COOPER, CROSS OVER THERAPY, LLC AND KENDALL “KEN” BROWN
v.
PRIMARY CARE SOLUTIONS, INC., WILLIAM BULLOCK, MONICA LEWIS, AND KIM ROUNDTREE

          RULING AND ORDER ON MOTION TO DISMISS UNDER FRCP 12(B)(2) AND 12(B)(6)

          ERIN WILDER-DOOMES UNITED STATES MAGISTRATE JUDGE.

         Before the court is a Motion to Dismiss Under FRCP Rule 12(b)(2) and 12(b)(6) (the “Motion to Dismiss”), filed by defendants, Primary Care Solutions, Inc. (“PCS”), William Bullock (“Bullock”), Monica Lewis (“Lewis”), and Kim Roundtree (“Roundtree”) (collectively PCS, Bullock, Lewis and Roundtree are “Defendants”).[1] The Motion is opposed.[2] Defendants filed a Reply Memorandum[3] and a Supplemental Memorandum[4] in support of their Motion. For the reasons that follow, IT IS HEREBY ORDERED that the Motion to Dismiss is GRANTED IN PART AND DENIED IN PART.

         IT IS FURTHER ORDERED that Plaintiffs shall file an Amended Complaint, within twenty-one (21) days of this Ruling and Order setting forth: (1) the domicile of the individual plaintiffs; and (2) the citizenship of each of the member(s) of Cross Over Therapy, LLC in accordance with the requirements of § 1332(a) and (c). To the extent Plaintiffs believe the deficiencies discussed herein with regard to the court's rulings pursuant to Fed.R.Civ.P. 12(b)(6) and 12(b)(2) can be remedied, Plaintiffs may also amend the substantive allegations set forth in their Complaint. IT IS FURTHER ORDERED that Plaintiffs' Amended Complaint may be filed within twenty-one (21) days of this Ruling and Order without further leave of court.

         IT IS FURTHER ORDERED that a scheduling conference in this matter is hereby set for May 25, 2017 at 10:00 a.m.[5] The parties are ORDERED to file an Amended Joint Status Report by May 11, 2017.

         I. Factual and Procedural Background

         Tammy Cooper (“Cooper”), Cross Over Therapy, LLC (“COT”), and Kendall Brown (“Brown”) (collectively Cooper, COT and Brown are “Plaintiffs”), filed their original Complaint on April 22, 2016, alleging violations of the Federal Trade Commission Act, 15 U.S.C. § 41, et seq. (the “FTCA”), and the Fair Labor Standards Act, 29 U.S.C. § 216(b) (the “FLSA”), as well as Louisiana state law claims for unfair and deceptive trade practices, violations of Louisiana securities law, breach of contract, interference with contracts, conversion and unjust enrichment. Plaintiffs allege Bullock, Lewis and Roundtree (the “Individual Defendants”) are alter egos of PCS and that Defendants collectively induced Plaintiffs to enter into a franchise investment scheme. Plaintiffs seek to recover lost profits, attorney's fees and costs, treble damages, damages for lost investment opportunities, return of any and all investments, wages, and loss of property value.

         The case arises from contractual relationships between Cooper and PCS and Brown and PCS. Specifically, in April 2014, Cooper executed a Site Director Consultant Agreement with PCS whereby Cooper was to serve as a Site Director in Donaldsonville, Louisiana.[6] Brown executed a Site Director Consultant Agreement with PCS in July 2014, whereby he was to serve as a Site Director in St. Francisville, Louisiana.[7] Plaintiffs allege they were misled by Defendants into investing in what Plaintiffs believed to be franchises of PCS without providing Plaintiffs with appropriate disclosures, and that PCS ultimately sold the offices established by Cooper and Brown to Seaside HCBS, LLC (“Seaside”) without paying Plaintiffs a percentage of the profits derived from the sale.[8]

         In response to the Complaint, Defendants filed the instant Motion to Dismiss, which seeks dismissal of the claims against the Individual Defendants for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2), and seeks dismissal of certain causes of action set forth in the Complaint for failure to state a claim upon which relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6).

         II. Law and Analysis

         A. Personal Jurisdiction Over the Individual Defendants

         Fed. R. Civ. P. 12(b)(2) authorizes dismissal of an action where the court lacks personal jurisdiction over a defendant. “Where a defendant challenges personal jurisdiction, the party seeking to invoke the power of the court bears the burden of proving that jurisdiction exists.” Luv N' Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006) (citing Wyatt v. Laplan, 686 F.2d 276, 280 (5th Cir. 1982)). When, as in this case, a court rules on a motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, the plaintiff need only make a prima facie showing of personal jurisdiction. Johnston v. Multidata Systems Intern. Corp., 523 F.3d 602, 609 (5th Cir. 2008) (quoting Buillion v. Gillepsie, 895 F.2d 213, 217 (5th Cir. 1990) (citations omitted)). “Moreover, on a motion to dismiss for lack of jurisdiction, uncontroverted allegations in the plaintiff's complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in the plaintiff's favor for purposes of determining whether a prima facie case for personal jurisdiction exists.” Id. (“Proof by preponderance of the evidence is not required.”). However, in assessing whether the plaintiff has presented a prima facie case of personal jurisdiction, the court “will not ‘credit conclusory allegations, even if uncontroverted.'” Sealed Appellant 1 v. Sealed Appellee 1, 625 Fed.Appx. 628, 631 (5th Cir. 2015) (quoting Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 869 (5th Cir. 2001)). The court may consider “affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery.” Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002) (quoting Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985)).

         1. Plaintiffs Only Allege Specific Jurisdiction

         “A nonresident defendant's contacts may support either specific or general jurisdiction.” Service Steel Warehouse, Co. L.P. v. Eakin, 2011 WL 3439132, at * 2 (M.D. La. Aug. 5, 2011). “Specific jurisdiction over a nonresident defendant is present where the ‘suit arises out of or [is] related to the defendant's contacts with the forum....'” Id. (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984); Clemens v. McNamee, 615 F.3d 374, 378-379 (5th Cir. 2010) (stating that “[s]pecific jurisdiction ... requires a sufficient nexus between the nonresident's contacts with the forum and the cause of action”). “Alternatively, general jurisdiction exists ‘when a nonresident defendant's contacts with the forum are substantial, continuous, and systematic.'” Id. (citing Johnston v. Multidata Systems Intern. Corp., 523 F.3d 602, 609 (5th Cir. 2008)). Here, Plaintiffs do not argue that the Individual Defendants are subject to general personal jurisdiction in Louisiana.[9] Accordingly, the applicable inquiry is whether the Individual Defendants are subject to this court's specific personal jurisdiction.

         The Fifth Circuit has set forth a three-step analysis for specific personal jurisdiction, whereby the court considers:

(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposely availed itself of the privileges of conducting activities there; (2) whether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.

Nuovo Pignone, SpA v. Storman Asia M/V, 310 F.3d 374, 378 (5th Cir. 2002) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)). “A defendant has minimum contacts with a forum state if ‘the defendant's conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there.” Burger King, 471 U.S. at 474. “Even where a defendant has no physical presence in the forum state, a single purposeful contact is sufficient to confer personal jurisdiction if the cause of action arises from the contact.” Nuovo Pignone, 310 F.3d at 379. “Once a plaintiff establishes minimum contacts between the defendant and the forum state, the burden of proof shifts to the defendant to show that the assertion of jurisdiction is unfair and unreasonable.” Id. (citing Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208, 215 (5th Cir.1999)).

         In their Complaint, Plaintiffs allege that the Individual Defendants are the “alter egos” of PCS.[10] Plaintiffs allege that Bullock is the president and sole shareholder of PCS, and that Lewis and Roundtree are directors of PCS.[11] Plaintiffs allege that “[d]uring a presentation meeting, Kendall ‘Ken' Brown and others were told that the company had decided to franchise Primary Care Solutions.”[12] Plaintiffs further allege that “[i]n early 2014, Tammy Cooper and Kendall ‘Ken' Brown were approached by their employer and PCS alter egos, William Bullock, Monica Lewis and Kim Roundtree at different times and asked if each would be interested in starting their own satellite agency of PCS”[13] and that “[b]ased on discussions and email communications, Tammy Cooper and Kendall Brown were lead to believe that they were investing in starting a new site agency of PCS in which they had a vested ownership interest.”[14] The Complaint specifically references a March 11, 2014 email from Roundtree to Cooper (with Bullock and Lewis copied), [15]a June 11, 2014 “electronic message” from Lewis and Roundtree, [16] and a February 4, 2015 email exchange with “the PCS alter egos, William Bullock, Kim Roundtree and Monica Lewis” regarding whether “they would sign ‘a franchise agreement for an extended amount of time.'”[17]

         In opposition to the Motion to Dismiss for lack of personal jurisdiction, Plaintiffs provide affidavits from Cooper and Brown.[18] In her affidavit, Cooper asserts that the Individual Defendants made periodic visits to the Louisiana and also communicated with her via phone, text messages, and emails.[19] Cooper further alleges that her initial contract with PCS was signed while she was in Louisiana, [20] and that the Individual Defendants communicated with her through telephone conversations and text messages regarding the Donaldsonville office while she was in Louisiana.[21] Similarly, Brown asserts that he met with Bullock in Louisiana three to four times between 2014 and 2015, and that he spoke with him “at the PCS Christmas party that was held in Louisiana.”[22] Brown also asserts that Roundtree and Lewis “would come to meet with us in Louisiana during the third (3rd) week of each month and stay the entire week to check on operations in the Louisiana offices”[23] and that the “presentation meeting” referenced in the Complaint “occurred in 2014 in Louisiana in the Baton Rouge office. William Bullock, Kim Roundtree, and Monica Lewis were present at the meeting when I, and others were told that the company had decided to franchise Primary Care Solutions.”[24] Brown asserts that the Individual Defendants “negotiated the contract with me in both Louisiana and North Carolina, ”[25] “stalled and interfered with my development of the St. Francisville, LA office”[26] and “came into Louisiana and sold all of the Louisiana office [sic] including the office that I development [sic] in St. Francisville….”[27]

         Plaintiffs argue that “a court which has jurisdiction over a corporation has jurisdiction over its alter egos.”[28] Plaintiffs additionally assert that “if the tortious corporate activity is attributable to the corporate officer personally, then the acts of that corporation which constitute it as doing business in this state are attributable to the individuals for purposes of determining jurisdiction”[29] and that Defendants “completely ignore[] there [sic] persistent presence in the state through personal appearances, negotiating contracts in the state, [30] sending emails, text messages and phones calls to the plaintiffs.”[31]

         2. The Fiduciary Shield Doctrine Precludes the Exercise of In Personam Jurisdiction Over the Individual Defendants

         “[T]he general rule is that jurisdiction over an individual cannot be predicated upon jurisdiction over a corporation….” Stuart v. Spademan, 772 F.2d 1185, 1197 (5th Cir. 1985). As explained by the Spademan court, “the fiduciary-shield doctrine - which holds that an individual's transaction of business within the state solely as a corporate officer does not create personal jurisdiction over that individual though the state has in personam jurisdiction over the corporation.” Id. See also, FloQuip, Inc. v Chem Rock Technologies, 2016 WL 4574436, at * 12 (W.D. La. June 20, 2016) (“The fiduciary shield doctrine holds that an individual's transaction of business within a state solely as a corporate officer does not create personal jurisdiction over that individual, though the state may have personal jurisdiction over the corporation.”); Service Steel Warehouse, Co., L.P. v. Eakin, 2011 WL 3439132, at * 2 (M.D. La. Aug. 5, 2011) (“The Court notes that the cause of action is based on alleged representations made by the defendant in his role as the corporate representative of a Louisiana corporation. The Fiduciary Shield Doctrine, however, provides that ‘an individual's transaction of business within a state solely as a corporate officer does not create personal jurisdiction over that individual though the state has in personam jurisdiction over the corporation.'”) (citing Spademan).

         “Although the general rule is that jurisdiction over a corporate officer cannot be predicated upon jurisdiction over a corporation, two exceptions to the fiduciary shield doctrine have been recognized. First, courts may disregard the corporate form and exercise jurisdiction over an individual officer if the corporation is the ‘alter ego' of the officer.” FloQuip, Inc. v Chem Rock Technologies, 2016 WL 4574436, at * 12 (W.D. La. June 20, 2016) (citing Spademan, 772 F.2d at 1197) (“courts have recognized an exception to this rule when the corporation is the alter ego of the individual.”). “Second, the court may exercise personal jurisdiction over an officer who allegedly committed an intentional tort directed at the forum state.” Id. See also, General Retail Services, Inc. v. Wireless Toyz Franchise, LLC, 255 Fed.Appx. 775, 795 (5th Cir. 2007) (“So while the fiduciary-shield could prohibit this court from ascribing acts of Wireless Toyz to Simtob, it does not prohibit Simtob from being held personally liable for his own tortious conduct simply because he is an officer of a corporation.”); Dykes v. Maverick Motion Picture Group, LLC, 2011 WL 900276, at * 5 (M.D. La. March 14, 2011) (“for a court to exercise jurisdiction over a corporate representative, the individual must have personally engaged in activities within the forum state which would bring him within the state's long-arm statute, for instance, by committing a tort, such as fraud, in the forum state.”) (internal citations omitted); Sheriff's Office of St. Tammany Parish v. Nathan, 2015 WL 3651343, at * 5 (E.D. La. June 11, 2015) (“The exception provides that the fiduciary shield doctrine will not defeat personal jurisdiction where a non-resident corporate agent commits a tort within the forum state which would subject him to personal liability under the laws of that state.”); Southeast Wireless Network, Inc. v. U.S. Telemetry Corp., 954 So.2d 120, 128 (La. 2007) (“The court in [Escoto v. U.S. Lending Corp., 675 So.2d 741 (La.App. 4 Cir. 1996)] went on to recognize an exception to the fiduciary shield doctrine, which provides that the fiduciary shield doctrine will not defeat personal jurisdiction where a non-resident corporate agent commits a tort within a forum state which would subject him to personal liability under the laws of that state.”).

         The court notes at the outset that although Plaintiffs' allegations and the relevant Affidavits indicate that the Individual Defendants negotiated contracts with Plaintiffs and communicated thereafter with Plaintiffs on behalf of PCS, Plaintiffs have not alleged that the Individual Defendants had any personal contacts with Plaintiffs outside of the Individual Defendants' capacities as representatives of PCS. See, Ostrowiecki v. Aggressor Fleet, Ltd., 2008 WL 2313140, at * 6 (E.D. La. May 30, 2008) (“[D]ue to the fiduciary shield doctrine, Chinchilla's individual and personal contacts with Louisiana must be assessed. The negotiation of the franchise agreement and these communications between Chinchilla and AFFI in Louisiana were on AMO's behalf…”); Downs v. Red River Shipping Corp., 1994 WL 148729, at * 3 (E.D. La. April 18, 1994) (“[T]he Court notes that the plaintiff does not allege any contacts by Gregory other than those made while acting in his corporate capacity on behalf of Red River….Thus, even if the Court were to find that it had personal jurisdiction over Red River, Mr. Gregory's contacts with Louisiana on behalf of Red River, without more, would not subject him to personal jurisdiction of this Court. Because Gregory has no contacts with Louisiana other than those growing out of his work for Red River, the Court cannot exercise personal jurisdiction over him and this action must be dismissed as to Rodney Gregory.”).

         a. Plaintiffs Have Not Alleged Sufficient Facts to Establish the Individual Defendants are Alter Egos of PCS

         Plaintiffs assert throughout their Complaint that the Individual Defendants are the “alter egos” of PCS, but they have provided no basis to support such a finding. In his Declaration, William Bullock asserts that “[a]t all applicable times, Primary Care Solutions maintained a separate legal existence. For example Primary Care Solutions filed Articles of Incorporation with the North Carolina Secretary of State, filed annual reports, appointed an agent, maintained its own separate bank accounts, and observed other corporate formalities.”[32] Plaintiffs have not controverted this assertion and have provided no basis for their position that the Individual Defendants should be considered the “alter egos” of PCS for purposes of the personal jurisdiction analysis. See, Spademan, 772 F.2d at 1197 (noting factors that have been considered in determining whether a corporation was the alter ego of its dominant shareholder, including whether the corporation is undercapitalized, does not keep separate books or finances, is used to promote fraud or illegality, does not follow corporate formalities, and is merely a sham.); Dykes v. Maverick Motion Picture Group, LLC, 2011 WL 900276, at * 5 (M.D. La. March 14, 2011) (“In determining whether to ‘pierce the corporate veil' under an alter-ego theory, courts consider factors such as whether a corporation was adequately capitalized for the undertaking, whether the corporation was solvent, whether the entity paid dividends to the shareholders, whether officers and directors acted properly, and whether the corporation acted as a façade for the dominant shareholder.”); Green v. Freeman, 367 N.C. 136, 270 ( N.C. 2013) (“Evidence upon which we have relied to justify piercing the corporate veil includes inadequate capitalization, noncompliance with corporate formalities, lack of a separate corporate identity, excessive fragmentation, siphoning of funds by the dominant shareholder, nonfunctioning officers and directors, and absence of corporate records.”).[33] Accordingly, the court does not find that personal jurisdiction over the Individual Defendants can be exercised based on their alleged status as the “alter egos” of PCS.

         b. Plaintiffs Have Not Alleged the Individual Defendants Committed Intentional Torts with the Requisite Specificity

         Further, Plaintiffs have not asserted that the Individual Defendants committed intentional torts that would subject the Individual Defendants to personal liability. While “[f]raud, of course, is an intentional tort, ” Frees, Inc. v. McMillian, 2007 WL 2701200, at * 3 (W.D. La. June 25, 2007) (citing In re Mercer, 246 F.3d 391, 421 (5th Cir. 2001)), as discussed below with respect to Plaintiffs' claim under the LUTPA, although Plaintiffs generally allege that they were “coerced” into signing the contracts with PCS, they have not alleged any specific fraud, misrepresentation, deception, or unethical conduct in the negotiation of their contracts with PCS. Moreover, while the court recognizes that Plaintiffs have alleged that the Individual Defendants are “liable jointly and severally” for violations of Louisiana securities law, [34] as discussed herein, Plaintiffs own allegations are contrary to a finding that the agreements at issue constitute investment contracts, and the court finds that Plaintiffs have failed to state a claim under Louisiana securities law. Likewise, with respect to Plaintiffs' claim of interference with contract against the Individual Defendants, Plaintiffs have not alleged that any Individual Defendant acted outside the scope of their corporate authority or knowingly committed an act adverse to the interests of PCS.

         Because Plaintiffs have provided no basis upon which this court can apply an exception to the fiduciary shield doctrine, the court GRANTS Defendants' Motion to Dismiss Plaintiffs' claims against the Individual Defendants for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2).

         B. Rule 12(b)(6) Failure to State a Claim[35]

         In addition to asserting that Plaintiffs' claims against the Individual Defendants should be dismissed for lack of personal jurisdiction, Defendants also assert that certain of Plaintiffs' claims should be dismissed pursuant to Rule 12(b)(6) for failure to state a claim.[36] A motion filed pursuant to Rule 12(b)(6) challenges the sufficiency of a plaintiff's allegations. “When ruling on a 12(b)(6) motion, the court accepts the plaintiff's factual allegations as true, and construes all reasonable inferences in a light most favorable to the plaintiff or the nonmoving party.” Freeman v. Rubin, 2012 WL 820472, at * 1 (W.D. La. March 8, 2012) (citing Gogreve v. Downtown Development District, 426 F.Supp.2d 383, 388 (E.D. La. 2006)). See also, Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999). To avoid dismissal pursuant to Rule 12(b)(6), Plaintiffs must plead enough facts to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). “Rule 8 does not require ‘detailed factual allegations, but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.'” Brand Coupon Network, LLC v. Catalina Marketing Corp., 748 F.3d 631, 634 (5th Cir. 2014) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, (2009) (internal quotation marks omitted)). As this court has previously explained “[s]tated differently, a complaint must state ‘more than labels and conclusions'; ‘a formalistic recitation of the elements of a cause of action will not do.'” Rodrigue v. Seafood Source of Louisiana, Inc., 2014 WL 4986840, at * 2 (M.D. La. Sept. 15, 2014) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

         1. Louisiana Unfair Trade Practices Act (“LUTPA”)

         LUTPA prohibits “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce….” La. R.S. § 51:1405(A). “Louisiana has left the determination of what is an ‘unfair trade practice' largely to the courts to decide on a case-by-case basis.” Turner v. Purina Mills, Inc., 989 F.2d 1419, 1422 (5th Cir. 1993). See also, Cheramie Services, Inc. v. Shell Deepwater Production, Inc., 35 So.3d 1053, 1059 (La. 2010) (“It has been left to the courts to decide, on a case-by-case basis, what conduct falls within the statute's prohibition.”) (citing Dufau v. Creole Engineering, Inc., 465 So.2d 752, 758 (La.App. 5 Cir. 1985) (In order to recover under LUTPA a plaintiff must prove “some element of fraud, misrepresentation, deception, or other unethical conduct” on the part of the defendant.)). “The courts have repeatedly held that, under this statute, the plaintiff must show the alleged conduct ‘offends established public policy and ... is immoral, unethical, oppressive, unscrupulous, or substantially injurious.'” Cheramie, 35 So.3d at 1059 (citations omitted). The Louisiana Supreme Court has explained that “the range of prohibited practices under LUTPA is extremely narrow.” Cheramie, 35 So.3d at 1060. Further, the Fifth Circuit has held that “the statute does not provide an alternate remedy for simple breaches of contract. There is a great deal of daylight between a breach of contract claim and the egregious behavior the statute proscribes.” Turner, 989 F.2d at 1422. See also, Innovative Sales, LLC v. Northwood Mfg., Inc., 2008 WL 3244114, at * 6 (5th Cir. 2008) (“Innovative argues that the same actions taken by Northwood that support a breach of contract claim also support a LUTPA claim. This argument, however, is foreclosed by Turner v. Purina Mills, Inc., wherein this court expressly acknowledged that LUTPA ‘does not provide an alternate remedy for simple breaches of contract, ' noting that ‘[t]here is a great deal of daylight between a breach of contract claim and the egregious behavior the statute proscribes.'”).

         Defendants argue that “Plaintiffs are attempting to obtain an alternative remedy for simple breach of contract.”[37] In response, Plaintiffs assert that they have stated a claim under the LUTPA because Defendants “solicited [Plaintiffs] to invest in a purported franchise investment scheme without following federal or Louisiana franchising or security laws;” and “coerced plaintiffs to sign contracts with an oppressive non-complete clause, invest in PSC and set up satellite offices that promised to pay 40% of the profits monthly after a $25, 000.00 sweat equity investment…” and thereafter “sold certain named offices including the satellite offices established by Cooper and Brown to Seaside HCBS, LLC without paying Cooper/Cross Over Therapy, LLC or Brown any percentage of the profits from the sale of their offices to Seaside.”[38]

         To the extent Plaintiffs rely on the alleged failure to provide franchise disclosure documents as a basis for their LUTPA claim, the only Louisiana court to consider this issue has found that “the failure to comply with the FTC disclosure regulations did not constitute an unfair trade practice” where there was “no element of fraud, misrepresentation, deception or unethical conduct in the confection of the franchise agreement.” Leblanc v. Belt Center Inc., 509 So.2d 134, 137 (La.App. 1 Cir. 1987). See also, Brill v. Catfish Shaks of America, Inc., 727 F.Supp. 1035, 1041 n. 12 (E.D. La. 1989) (noting that although Federal Trade Commission regulations provide that it is an unfair or deceptive act or practice for a franchisor to fail to provide the franchisee with a disclosure document, the court would be “bound to follow” the holding of Leblanc “that the failure to provide a disclosure document is not per se violative of Louisiana's UTPA because an unfair trade practice requires a showing of fraud, misrepresentation, deception, or unethical conduct” if plaintiffs' LUTPA claim was not otherwise time barred). Plaintiffs have not outlined in their Complaint how they contend they were “coerced” into signing the contracts with PCS, and, as discussed below, have not alleged any specific fraud, misrepresentation, deception, or unethical conduct in the negotiation of their contracts with PCS.

         The Fifth Circuit has instructed that “Rule 9(b) applies by its plain language to all averments of fraud, whether they are part of a claim of fraud or not.” Lone Star Ladies Inv. Club v. Schlotzsky's, Inc., 238 F.3d 363, 368 (5th Cir. 2001). See also, Alford v. Anadarko E&P Onshore, LLC, 2014 WL 1612454, at * 8 (E.D. La. April 22, 2014) (same). “Fraud can be averred by specifically alleging fraud, or by alleging facts that necessarily constitute fraud even if the term ‘fraud' is not used.” Wagoner v. Exxon Mobil Corp., 2010 WL 3168382, at * 2 (E.D. La. Aug. 9, 2010) (citing In re Hollander, 2009 WL 2707445, at * 4 (E.D. La. Aug. 25, 2009)).[39] Fed.R.Civ.P. 9(b) “imposes a heightened level of pleading for fraud claims: ‘In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.'” Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1067 (5th Cir. 1994). See also, Max Access, Inc. v. Gee Cee Co. of LA, Inc., 2016 WL 454389, at * 2 (E.D. La. Feb. 5, 2016) (“For claims alleging fraud, a Rule 12(b)(6) motion should be granted if the complaint fails to plead the conduct constituting fraud with particularity.”); Fed.R.Civ.P. 9(b). The Fifth Circuit requires that a pleading of fraud set out the time, place, and contents of the false misrepresentation, as well as the identity of the person making the misrepresentation and why the statements were fraudulent. Williams v. WMX Technologies, Inc., 112 F.3d 175, 177-178 (5th Cir. 1997). “‘What constitutes ‘particularity' will necessarily differ with the facts of each case….' ‘At a minimum, Rule 9(b) requires allegations of the particulars of time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.'” Benchmark Elec. Inc. v. J.M. Huber Corp., 343 F.3d 719, 724 (5th Cir. 2003) (quoting Guidry v. Bank of LaPlace, 954 F.2d 278, 288 (5th Cir. 1992) and Tel-Phonic Servs., Inc. v. TBS Int'l, Inc., 975 F.2d 1134, 1139 (5th Cir. 1992)). Here, although Plaintiffs allege that Defendants engaged in fraudulent conduct in general terms throughout their Complaint, Plaintiffs fail to provide any specifics with regard to what was said to them, by whom it was said or where, and what (especially with respect to the Individual Defendants) was obtained thereby. For example, Plaintiffs allege that PCS used “deceptive practices, ”[40] that the Individual Defendants “coerc[ed] and induc[ed]” Plaintiffs into entering “into a franchise investment scheme and fraudulent investment contracts, ”[41]and that Defendants “devised an unethical, oppressive, and unscrupulous scheme that offends established public policy that amounts to fraud, deceit, and misrepresentation by soliciting [Plaintiffs]....without following federal or Louisiana security laws;”[42] however, Plaintiffs' Complaint is lacking in any specifics setting out the time, place, contents, and speaker of the allegedly false representations coercing and inducing them into entering into the agreements at issue.

         Plaintiffs' allegations are more akin to a breach of contract claim than the sort of “egregious” behavior contemplated by LUTPA. Under such circumstances, dismissal of Plaintiffs' claim under LUTPA is appropriate. See, Nussli US, LLC v. Nola Motorsports Host Committee, Inc., 2016 WL 4064011, at *11 (E.D. La. July 29, 2016) (granting motion to dismiss LUTPA claim against particular defendant where plaintiff did not plead “any false or misleading statements allegedly made by” the defendant and the “core” of plaintiff's allegations was “a claim that [defendant] failed to pay it the amount it was due under its contract….[T]he law is clear that LUTPA does not provide an alternate remedy for simple breaches of contract. [Plaintiff's] bare assertions of deceptive conduct on the part of [defendant] are insufficient to constitute deception, unethical conduct, or egregious behavior that would constitute a claim pursuant to LUTPA.”); Nola Fine Art, Inc. v. Ducks Unlimited, Inc., 88 F.Supp.2d 602, 613 (E.D. La. 2015) (granting summary judgment on plaintiffs' LUTPA claim because claim was “ ‘more similar to a breach of contract claim than to a claim for the egregious behavior covered under LUTPA'” and noting that “Plaintiffs cannot manufacture a LUTPA violation by simply adding the words ‘deceit' and ‘misrepresentation' to their contract claim.”) (quoting Target Constr., Inc. v. Baker Pile Driving & Site Work, LLC, 2012 WL 5878855, at * 4 (E.D. La. Nov. 20, 2012)); Guillory v. Broussard, 194 So.3d 764, 778 (La.App. 3 Cir. 2016) (“Defendant's failure to abide by his contractual agreement with Plaintiff regarding distribution of profits sufficient for Plaintiff to pay her taxes annually in exchange for her agreement to convert SBT to an S Corporation, presents a general breach of contract claim. It does not meet the criteria for finding a special LUTPA violation.”). See also, Shaw Industries, Inc. v. Brett, 884 F.Supp. 1054, 1058 (M.D. La. 1994) (“since the Fifth Circuit has explicitly stated that LUTPA does not provide an alternate remedy for breach of contract, summary judgment is proper.”).[43] Accordingly, the court GRANTS Defendants' Motion to Dismiss Plaintiffs' claims under the LUTPA.

         2. Federal Trade Commission Act (“FTCA”)

         Defendants assert that even assuming arguendo that the parties' agreements meet the federal definition of a franchise, “the FTCA does not provide for private causes of action”[44] and therefore this claim should be dismissed. Plaintiffs do not address this contention in their opposition.[45]

         The court agrees with Defendants that Plaintiffs' FTCA claim must be dismissed. “The Federal Trade Commission Act (FTC Act) does not provide for private causes of action.” Yumilicious Franchise, LLC v. Barrie, 819 F.3d 170, 176 (5th Cir. 2016). See also, Norman v. Torch, Inc., 1993 WL 149658, at * 2 (E.D. La. May 4, 1993) (“the FTCA does not provide a private right of action.”) (citing Fulton v. Hecht, 580 F.2d 1242, 1249 (5th Cir. 1978) (“there is no private cause of action for violation of the FTC Act.”)); Brill v. Catfish Shaks of America, Inc., 727 F.Supp. 1035, 1041 (E.D. La. 1989) (“there is no private right of action for violation of the FTC's franchise disclosure rules.”). Accordingly, the court GRANTS Defendants' Motion to Dismiss Plaintiffs' cause of action under the FTCA.

         3. Louisiana Securities Law

         La. R.S. § 702(15)(a) defines a “security” as:

any note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit-sharing agreement; collateral-trust certificate; preorganization certificate or subscription; transferable share; investment contract; voting-trust certificate; certificate of deposit for a security; fractional undivided interest in oil, gas, or other mineral rights; any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof); or, in general, any interest or instrument commonly known as a ‘security'; or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.[46]

         Plaintiffs allege that Defendants solicited them to “invest in a purported franchise/stock investment scheme” which falls within the scope of Louisiana securities laws.[47] Defendants assert that Plaintiffs' claims under Louisiana securities law should be dismissed because the agreements at issue do not constitute “investment contracts.”[48] In their opposition, Plaintiffs do not address Defendants' position and do not analyze whether the contracts at issue should be considered securities or investment contracts.[49]

         “The provisions of the Louisiana Securities Law, (formerly known as Louisiana Blue Sky Law) are analogous to the provisions of the federal Securities Act of 1933. Our courts therefore look to the federal law and jurisprudence interpreting the securities law for guidance in interpreting the Louisiana provisions.” State v. Powdrill, 684 So.2d 350, 353 (La. 1996) (internal citations omitted). See also, Macareno v. Karon, 2010 WL 743564, at * 5 (W.D. La. Feb. 10, 2010) (“because the jurisprudence of Louisiana's securities law is relatively undeveloped, courts routinely turn to federal decisions in this area for guidance as the Louisiana law was modeled after the federal system.”).

         “An investment contract is a contract, transaction or scheme whereby (1) a person invests his money, (2) in a common enterprise, and (3) is led to expect profits solely from the efforts of the promoter or a third party.” Nunez v. Robin, 415 Fed.Appx. 586, 587 (5th Cir. 2011). The Fifth Circuit has explained that with respect to the third element, “the critical inquiry is ‘whether the efforts made by those other than the investor are the undeniably significant ones, those essential managerial efforts which affect the failure or success of the enterprise.'” SEC v. Koscot Interplanetary, Inc., 497 F.2d 473, 483 (5th Cir. 1974) (citing SEC v. Glen W. Turner Enterprises, Inc., 474 F.2d 476, 482 (9th Cir. 1973)). See also, Dufour v. U.S. Home Corp., 581 So.2d 765, 768 (La.App. 4 Cir. 1991) (affirming trial court's grant of exception of no cause of action because purchase of condominium units did not fit within the scope of a security under La. R.S. § 51:702 and explaining that to be an investment contract “[t]he profits expected from the investment must be achieved primarily from the efforts of the promoter or third party.”).

         In Martin v. T.V. Tempo, Inc., 628 F.2d 887 (5th Cir. 1980), the Fifth Circuit considered whether a franchise agreement was a security. The court considered the standard set forth in Koscot and reasoned that because “plaintiffs had immediate control over the essential managerial conduct of the enterprise and defendants exercised merely remote control” and because “[t]he efforts of plaintiffs were the undeniably significant ones in determining profit and loss, ” the agreements at issue “were not securities.” Id. at 891. Compare, Koscot, 497 F.2d at 484 (finding investment contract existed where “promoters retain[ed] immediate control over the essential managerial conduct of an enterprise and where the investor's realization of profits [was] inextricably tied to the success of the promotional scheme” and “acknowledg[ing] that a conventional franchise arrangement, wherein the promoter exercises merely remote control over an enterprise and the investor operates largely unfettered by promoter mandates presents a different question….”).

         Here, Plaintiffs own allegations are contrary to a finding that the agreements at issue constitute investment contracts. Plaintiffs allege that they were each required to make a “$25, 000.00 sweat equity investment” to “start their own satellite offices”[50] in St. Francisville and Donaldsonville and that each Plaintiff “believed that they were purchasing a franchise.”[51] Ms. Cooper alleges that she “set up”[52] the Donaldsonville office, and Mr. Brown alleges that he “invested a substantial amount of time and unpaid labor into establishing the St. Francisville office….”[53] Plaintiffs allege that the Donaldsonville office “was growing rapidly”[54] and that the St. Francisville office “was growing and showing a net profit as of April 2015”[55] due, presumably, to the efforts of Ms. Cooper and Mr. Brown, respectively. Such allegations, taken as true, run counter to a characterization of the contracts as securities under Louisiana law. Accordingly, the court GRANTS Defendants' Motion to Dismiss Plaintiffs' claims under Louisiana securities law.

         4. Breach of Contract Against the Individual Defendants

         Defendants seek dismissal of Plaintiffs' breach of contract claim against the Individual Defendants based on Defendants' assertion that “Plaintiffs have not alleged any facts that would support a finding of alter ego status.”[56] Because the court has found it lacks personal jurisdiction over the Individual Defendants, the court also GRANTS Defendants' Motion to Dismiss Plaintiffs' breach of contract claim against the Individual Defendants.[57]

         5. Interference with Contract Against the Individual Defendants

         Per their Complaint, Plaintiffs seek to bring a cause of action for interference with contract against the Individual Defendants.[58] Defendants argue that under Louisiana law, “a tortious interference claim may lie against [the Individual Defendants] if they acted beyond the scope of their corporate authority or ...


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