United States District Court, W.D. Louisiana, Shreveport Division
A. DOUGHTY JUDGE
REPORT AND RECOMMENDATION
L. HORNSBY MAGISTRATE JUDGE
Tripp, Jimmy Tripp, and Steve Stone
(“Plaintiffs”) developed a solar-powered chemical
injection pump to be used in oil and gas production. They
allege that they contracted with Richart Distributors d/b/a
Flomore Products (“Flomore”) to market the
product and split the profits evenly. The relationship
soured, and Plaintiffs filed this suit in state court against
Flomore and Richard Pickens, who is Flomore's CEO and
primary shareholder. Plaintiffs asserted claims of breach of
contract, detrimental reliance, and unjust enrichment.
and Pickens (“Defendants”) removed the case based
on diversity jurisdiction and filed a motion for summary
judgment. Doc 29. Plaintiffs conceded to the dismissal of Mr.
Pickens as a defendant. Judge Doughty denied Flomore's
request for summary judgment because he found genuine
disputes of material fact as to whether the Plaintiffs and
Flomore had a valid oral contract that could form the basis
of Plaintiffs' breach of contract and detrimental
reliance claims. Doc 51.
represent that they later discovered that Mr. Pickens had
secretly filed a patent application for the pump that listed
him as the sole inventor, and he had lied about it in his
deposition. In April 2018, soon after an unsuccessful attempt
to negotiate a settlement of the case, Flomore sent
Plaintiffs a letter and gave notice that, to the extent there
was a contract between the parties, it was terminated as of
May 31, 2018. Plaintiffs then sought leave to amend their
complaint to add claims against Flomore and Mr. Pickens under
the Louisiana Unfair Trade Practices Act
(“LUTPA”) based on (1) the secret patent
application and (2) Flomore's unilateral termination of
the pump distribution contract without a good-faith basis.
court found that Plaintiffs had demonstrated good cause and
granted leave to amend. A continuance of the trial was
ordered to allow for discovery and other proceedings related
to the new claims. Before the court is Defendants' Motion
to Dismiss (Doc. 81) that attacks the new LUTPA claims as (1)
untimely and (2) failing to state a claim against Flomore or
Mr. Pickens. For the reasons that follow, it is recommended
that Defendants' motion be denied.
of Relevant Allegations
is a Rule 12(b)(6) contest, so the court must “accept
all well-pleaded facts as true and view those facts in the
light most favorable to the plaintiff.” Midwest
Feeders, Inc. v. Bank of Franklin, 886 F.3d 507, 513
(5th Cir. 2018). Plaintiffs' original complaint alleged
that they met Flomore representatives at a trade show in 2013
and eventually introduced them to the idea of launching a new
pump that Plaintiffs had designed that had advantages over
the pump that Flomore was marketing at the time. A prototype
was demonstrated, and Flomore agreed with the Plaintiffs that
they would go into business together to sell the pump and
split the profits 50/50. Flomore would receive the benefit of
the improved pump design, and Plaintiffs would benefit from
Flomore's expertise in manufacturing and sales.
Plaintiffs allege that they “shook hands on the deal,
thereby forming a valid and enforceable contract.”
Plaintiffs devoted substantial effort to get the pump ready
for sale. The parties discussed having lawyers reduce the
agreement to writing. Mr. Pickens told Plaintiffs that he
would do so, but he never followed through. Plaintiffs allege
that Mr. Pickens was attempting induce them to continue
developing the pump for market.
product launched in August 2014, and it was a tremendous
success. Plaintiffs soon attempted to contact Mr. Pickens to
discuss moving forward on their agreement to split the
profits, but Mr. Pickens refused to discuss it. Mr. Pickens
and Flomore employees soon cut off all communication with
Plaintiffs. Plaintiffs never received any financial benefit
from Flomore or Mr. Pickens for sales of the pump or the work
they devoted towards development of the pump.
allegations in the amended complaint are particularly
relevant to the issues at hand. A sealed copy of the amended
complaint was filed at Doc. 75, and a redacted version is at
Doc. 78. The pleading was filed under seal to protect certain
business information, but it is necessary to discuss some of
those facts to resolve the pending motion.
“parties agreed that any patents relating to the pump
design would be submitted in the names of the Plaintiffs and
Pickens and/or Flomore as co-inventors.” Amended
Complaint, Doc. 75 at ¶ 7. In June 2014, when Plaintiffs
were actively developing the production version of the pump,
Flomore and Mr. Pickens secretly applied for a provisional
patent for the pump. The application, part of a scheme to
steal Plaintiffs' ideas, did not list Plaintiffs as
co-inventors. ¶¶ 10-10(a). The application instead
listed Mr. Pickens as the sole inventor and applicant. Mr.
Pickens signed a declaration of inventorship in which he
swore to the truth of the application's contents,
including its listing of Pickens as the sole inventor. ¶
10(b). Plaintiffs allege that, despite the representations in
the 2014 patent application, “Plaintiffs are the sole
inventors, or, at a minimum[, ] co-inventors thereof.”
deliberately hid from Plaintiffs that they had caused the
provisional patent application to be filed. Mr. Pickens
“made a false statement about the existence of the
patent application in his deposition in this matter in
September 2017.” Plaintiffs did not learn of the
application until a December 2017 deposition of a Flomore
manager, who admitted that an application had been filed.
¶ 11. Plaintiffs then asked Defendants to produce all
materials filed with the patent office concerning the pump.
Defendants, after initially refusing to produce the
materials, produced a portion of the documents in February
2018. Plaintiffs determined that the material was incomplete,
made further demands, and eventually received from Defendants
more material in March 2018. ¶ 11.
produced material included a second, non-provisional patent
application that had been filed in June 2015. This
application also listed Mr. Pickens as the sole inventor and
applicant, and it included a declaration by Pickens swearing
to the truth of its contents. ¶ 12. Flomore and Mr.
Pickens knew when the application was filed that it contained
false statements of material information. Neither Flomore nor
Pickens has corrected either of the applications to list
Plaintiffs as inventors or co-inventors, which Plaintiffs
assert violates federal patent law. ¶ 13. This
misconduct was compounded by the fact that Mr. Pickens had
represented to Plaintiffs that he would cause Flomore's
attorney to apply for a patent that would include
Plaintiffs' names once the pump was launched in the
marketplace. ¶ 14.
also base a LUTPA claim on the fact that Flomore and Mr.
Pickens sent Plaintiffs a letter on April 23, 2018 to advise
that Flomore “was unilaterally terminating the contract
between it and the Plaintiffs, effective as of May 31,
2018.” ¶ 21. Flomore took this action in bad faith
to retaliate against Plaintiffs for asserting their rights
under the contract. There was no valid economic reason for
Flomore to cease selling the pump, so the termination letter
was issued “in bad faith and is contrary to the intent
of the contract confected by the parties, ” so it
should be declared null and void. ¶ 22. Plaintiffs
believe that Flomore continues to market and sell the pump to
this day, as if it were Flomore's own product, with no
right to profits benefitting Plaintiffs. The pump has
generated substantial revenue for Flomore, but Plaintiffs
have not seen a dime. ¶ 24.
Defendants have challenged Plaintiffs' LUTPA claims by
filing a motion to dismiss for failure to state a claim under
Federal Rule of Civil Procedure 12(b)(6). In assessing the
motion, the court must accept as true all well-pleaded facts
in the complaint and view those facts in the light most
favorable to the plaintiff. See In re Katrina Canal
Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007).
“To survive a Rule 12(b)(6) motion to dismiss, a
complaint ‘does not need detailed factual
allegations,' but must provide the plaintiff's
grounds for entitlement to relief-including factual
allegations that when assumed to be true ‘raise a right
to relief above the speculative level.'”
Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir.
2007) (quoting Bell Atl. Corp. v. Twombly, 127 S.Ct.
1955, 1964-65 (2007)). ...