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Ryan v. National Football League, Inc.

United States District Court, E.D. Louisiana

July 30, 2019

DANIEL RYAN, ET AL., Plaintiffs
v.
NATIONAL FOOTBALL LEAGUE, INC, ET AL., Defendants

         SECTION "E" (3)

          ORDER AND REASONS

          SUSIE MORGAN, UNITED STATES DISTRICT JUDGE.

         Before the Court is a Motion to Dismiss filed by Defendants the National Football League (“NFL”), Roger Goodell, William Vinovich, III, Patrick Turner, Gary Cavaletto, and Alberto Riveron.[1] Plaintiffs Daniel and Barbara Ryan oppose the motion.[2] Defendants filed a reply.[3] For the following reasons, the motion is GRANTED.

         BACKGROUND

         I. Factual Background

         This case arises out of the events in the final two minutes of the National Football Conference (“NFC”) championship game between the New Orleans Saints and the Los Angeles Rams, held in New Orleans, Louisiana on January 20, 2019.[4] Plaintiffs allege that Los Angeles Rams cornerback, Nickell Robey-Coleman, made improper helmet-to-helmet contact with New Orleans Saints wide receiver, Tommylee Lewis, and improperly interfered with his ability to catch a pass.[5] Plaintiffs allege, and it is undisputed, that the officials at the game did not call either a pass-interference or a helmet-to-helmet contact penalty.[6]

         On February 27, 2019, Plaintiffs filed suit against Defendants the NFL; Roger Goodell, the commissioner of the NFL; William Vinovich, III, the referee for the game; Patrick Turner, the down judge for the game; Gary Cavaletto, the side judge for the game; and Alberto Riveron, the senior vice president of officiating for the NFL.[7] Plaintiffs bring causes of action for detrimental reliance, [8] negligent and/or intentional misrepresentation, [9] breach of fiduciary duties, [10] unjust enrichment, [11] and conspiracy to commit those causes of action.[12] Plaintiffs' claims are brought individually, and on behalf of similarly situated persons who purchased tickets and attended the NFC Championship game on January 21, 2019, [13] seeking damages including the cost of the ticket to attend the game, the cost of parking for the game, the cost to travel to the game, and the cost of concessions and merchandise purchased at the game.[14] On April 2, 2019, Defendants filed the instant motion to dismiss Plaintiffs' claims under Rule 12(b)(6).[15]

         II. Constitutional Versus Statutory Standing

         Despite the fact that the instant motion to dismiss is filed under Rule 12(b)(6), Defendants express their argument in terms of the Plaintiffs' lack of a “legally cognizable right” to assert their claims and rely on similar cases against the NFL doing the same.[16] The Defendants argue, “ticket holding spectators do not have standing to recover any alleged damages for any of these alleged wrongdoings, ”[17] because Plaintiffs “have no legally cognizable right to the damages they seek, and therefore lack standing.”[18] Because they argue the Plaintiffs have no “legally cognizable right, ” the Defendants conflate the issue of constitutional standing, more appropriately addressed in a motion under Rule 12(b)(1), with statutory standing, also called prudential standing, which is more appropriately addressed in a motion under Rule 12(b)(6).

         Constitutional standing stems from Article III, which gives federal courts authority to hear cases and controversies. If a plaintiff lacks constitutional standing, the court lacks jurisdiction.[19] Constitutional standing “address[es] the question of whether a federal court may grant relief to any plaintiff given the claim asserted.”[20] The “irreducible constitutional minimum of standing” contains three elements: (1) an injury in fact, (2) a causal connection between the injury and the conduct complained of, and (3) a likelihood that the injury will be redressed by a favorable decision.[21] The Supreme Court has explained the injury in fact test requires a showing of “an invasion of a judicially cognizable interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical.”[22] By arguing the Plaintiffs have no legally cognizable right to the damages they seek, the Defendants, in effect, argue the Plaintiffs suffered no injury in fact and, as a result, the Plaintiffs lack constitutional standing and this Court lacks jurisdiction.

         In contrast, statutory standing asks, “whether this plaintiff has a cause of action.”[23] “The question of statutory standing is closely related to the merits inquiry (oftentimes overlapping it) and is analytically distinct from the question whether a federal court has subject-matter jurisdiction to decide the merits of a case.”[24] Statutory standing prohibits (1) generalized grievances, (2) the assertion of an interest outside the zone of interests protected by the law invoked, and (3) the assertion of the right of a third party.[25]

         The conflation of the two concepts is notable because the cases on which the Defendants rely most heavily are Mayer and Mancina.[26] In reviewing the ruling on a motion to dismiss in Mayer, purportedly decided under Rule 12(b)(6), the Third Circuit uses the language of Rule 12(b)(1) and states the plaintiffs “failed to set forth a legally cognizable right, interest, or injury.”[27] In Mayer, the Third Circuit identifies several causes of action brought by the plaintiff ticketholders but only substantively discusses their claim for breach of contract when granting the motion to dismiss under Rule 12(b)(6). The Mayer court does not perform a Rule 12(b)(6) analysis with respect to the elements of the other causes of action the plaintiffs asserted, which are more akin to the causes of action asserted in this case. The Mayer court ultimately bases its dismissal of those causes of action, other than breach of contract, on public policy considerations without ever conducting a true 12(b)(6) analysis to determine whether the pleadings state any claim for relief that is plausible on its face. In ruling on a motion to dismiss under Rule 12(b)(6) in Mancina, the court identifies several causes of action but, similarly, analyzes only the plaintiff ticketholders' claims for breach of contract.[28] The Mancina court otherwise adopts the reasoning of Mayer.

         This Court does not find either Mayer or Mancina to be thorough, well-reasoned, or persuasive. Both opinions analyze only the plaintiff ticketholders' causes of action for breach of contract under Rule 12(b)(6) and do not analyze the other claims asserted. In this case, the plaintiff ticketholders do not assert a cause of action for breach of contract and, instead, bring claims for detrimental reliance, negligent or intentional misrepresentation, breach of fiduciary duties, and unjust enrichment. As a result, this Court finds the reasoning of Mancina and Mayer not helpful in this case.

         Because Defendants filed their motion under Rule 12(b)(6), the Court assumes the Defendants are arguing the Plaintiffs lack statutory standing, such that these Plaintiffs may not seek relief. The Court will analyze each of the Plaintiffs' causes of action under Rule 12(b)(6) for failure to state a claim.

         LEGAL STANDARD

         Pursuant to Federal Rule of Civil Procedure 12(b)(6), a district court may dismiss a complaint, or any part of it, for failure to state a claim upon which relief may be granted if the plaintiff has not set forth factual allegations in support of his claim that would entitle him to relief.[29] “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.'”[30]“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”[31] The court, however, does not accept as true legal conclusions or mere conclusory statements, and “conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss.”[32] “[T]hreadbare recitals of elements of a cause of action, supported by mere conclusory statements” or “naked assertion[s] devoid of further factual enhancement” are not sufficient.[33]

         In summary, “[f]actual allegations must be enough to raise a right to relief above the speculative level.”[34] “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not show[n]'-that the pleader is entitled to relief.”[35] “Dismissal is appropriate when the complaint ‘on its face show[s] a bar to relief.'”[36]

         LAW AND ANALYSIS

         I. Count One: Detrimental Reliance

         In count one, Plaintiffs allege the Defendants are liable to them under the theory of detrimental reliance. The theory of detrimental reliance is codified in Louisiana Civil Code article 1967:

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. Recovery may be limited to the expenses incurred or the damages suffered as a result of the promisee's reliance on the promise. Reliance on a gratuitous promise made without required formalities is not reasonable.[37]

         The doctrine of detrimental reliance is designed to prevent injustice by barring a party from taking a position contrary to his prior acts, admissions, representations, or silence.[38]“The doctrine usually functions when no written contract or an unenforceable contract exists between the parties.”[39] The elements of a detrimental reliance claim are that: (1) the defendant made a promise, (2) the promise was made in a manner that the promisor should have expected the promisee to rely on it, (3) the plaintiff's reliance on this represented promise was reasonable, and (4) the plaintiff's reliance caused a change in position to its detriment.[40]

         The first element of a claim for detrimental reliance is that the defendant made a promise.[41] While Louisiana Civil Code article 1967 references a “promise, ” some courts describe the first element of a detrimental reliance claim in terms of it requiring a “representation.”[42] The Fifth Circuit has clarified that, for detrimental reliance purposes, a representation must be a representation related to a promise or contract, [43] although the Plaintiff need not prove the existence of a formal, valid, and enforceable contract.[44] In the end, whether called a promise or a representation, the requirement is essentially the same.

         A “promise” for purposes of detrimental reliance is defined as:

[A] declaration which binds the person who makes it, either in conscience or law, to do a specific thing, which then gives to the other person a right to expect or claim the performance of that thing. Another definition of a promise is that it is an offer which is definite and certain and which the promisor intends to be binding. A promise must be clear and unambiguous in order to be enforceable. The mere expression of an intention is not a promise.[45]

         Plaintiffs do not allege any promise or representation was made by Defendants William Vinovich, III, Patrick Turner, Gary Cavaletto, and Alberto Riveron. The motion to dismiss Plaintiffs' claim for detrimental reliance is granted as to them.

         With respect to Defendants NFL and Goodell, Plaintiffs allege NFL and Goodell promised:

[T]hat[, ] in the event of an extraordinary or unfair act or occurrence [such] that[, ] pursuant to the NFL Operations Manual Handbook[46] (The “NFL bible” - Rule 17 Section 2 Article 3) the result of the game in question would be inequitable to one of the participating teams[, ] that Goodell would use his vested authority to act and, if appropriate, reverse the game's result and/or rescheduling of the game, either from the beginning or from the point at which the extraordinary act occurred.[47]

         This allegation is based on Rule 17 of the Official Playing Rules which gives the Commissioner the sole authority to determine whether an event is extraordinarily unfair and what action to take, if any. This is not a promise to act or not to act in a specified manner, except perhaps for the Commissioner to exercise his authority to decide. The Plaintiffs do not allege Goodell promised to reverse the game's result or reschedule the game.[48] This representation is not sufficient to constitute an actionable promise because it does not manifest an intention to act or not to act in a specified manner.[49]

         The second element of a claim for detrimental reliance is that the promise was made in a manner that the promisor should have expected the promisee to rely on the promise.[50] The promise on which Plaintiffs allege they relied is based on Rule 17, Section 2 of the Official Playing Rules of the NFL.[51] The NFL is an unincorporated association made up of thirty-two member clubs.[52] The Constitution and Bylaws of the NFL, Article II, provides, “the League is organized to promote and foster the primary business of League members, each member being an owner of a professional football club located in the United States . . . [and] to do and perform such other functions as may be necessary to carry out the purpose and objects of the League.”[53] Article XI of the Constitution and Bylaws provides, “[t]he playing rules of the League shall be those set out in the Official Playing Rules of the National Football League.”[54] The stated purpose of the NFL is to promote the business interests of its members, and the Official Playing Rules are adopted by, and for the benefit of, the NFL members. Plaintiffs do not allege the NFL adopted or published the Official Playing Rules for their benefit, nor do the Plaintiffs allege the NFL adopted or published the Official Playing Rules in a manner in which they did or should have expected the Plaintiffs to rely on them. As a result, the Plaintiffs have not alleged facts to support an inference that the promise on which they allegedly relied was made in a manner such that the NFL and Goodell did, or should have, expected the Plaintiffs to rely on it.

         The third element of a claim for detrimental reliance is that the plaintiff's reliance on the promise was reasonable.[55] The Official Playing Rules were not adopted or published for the benefit of Plaintiffs, or intended for their use. Plaintiffs include only a conclusory allegation that they “have a justifiable [or reasonable] reliance on the representations.”[56] To support the allegation that the Plaintiffs' reliance was reasonable, the Plaintiffs include only allegations regarding a statement issued by Saints owner Gayle Benson[57] and a letter written by Louisiana Governor John Bel Edwards to Commissioner Goodell[58] expressing disappointment with the events of the game. The letter and statement merely demonstrate that many people were disappointed in the outcome of the game; they do not support the Plaintiffs' threadbare allegation that their reliance on a promise contained in the Official Playing Rules of the National Football League was reasonable.

         Reliance by Plaintiffs on Rule 17 is patently unreasonable. On its face, Rule 17 Section 2 of the Official Playing Rules of the NFL states:

[t]he Commissioner has the sole authority to investigate and take appropriate disciplinary and/or corrective measures if any club action, non-participant interference, or calamity occurs in an NFL game which the Commissioner deems so extraordinarily unfair . . . that such action has a major effect on the result of the game. The investigation called for in this Section 2 will be conducted solely on the Commissioner's initiative . . . In all cases, the Commissioner will conduct a full investigation, including . . . any other procedure the Commissioner deems appropriate.”[59]

         Rule 17 grants the Commissioner complete and sole discretion to investigate any events and determine what action is to be taken under Rule 17. To be reasonable, “[t]he representation on which [the] plaintiff relies must not be vague[, ] and plaintiff's reliance cannot simply be based on assumption.”[60] Any reliance by the Plaintiffs on the assumption that, given the circumstances that occurred in New Orleans on January 20, 2019, the Commissioner would choose to exercise his complete and sole discretion to require the teams to replay all or a portion of the game is not reasonable.

         Claims of detrimental reliance are not favored under Louisiana law; such claims must be examined carefully and strictly.[61] It is difficult to recover under the theory of detrimental reliance because estoppel is not favored in Louisiana.[62] “Detrimental reliance is designed to prevent injustice by barring a party from taking a position contrary to his prior acts, admissions, representations, or silence.”[63]

         The factual allegations contained in the Complaint do not state a claim against the NFL or Goodell for detrimental reliance that is plausible on its face. Even accepting all factual allegations as true, Plaintiffs fail to allege facts to support an inference that the alleged promise was made in a manner such that the NFL and Goodell should have expected the Plaintiffs to rely on it. Nor have the Plaintiffs alleged facts to support an inference that they justifiably or reasonably relied on the promise. Accordingly, Defendants' motion to dismiss Plaintiffs' claim for detrimental reliance is granted as to Defendants NFL and Goodell. An injustice did occur in the NFC Championship game, but not as a result of any promises or representations made by the NFL or Goodell to the Plaintiffs.

         II. Count Two: Negligent and/or Intentional Misrepresentation

         In count two, Plaintiffs allege the Defendants are liable to them for negligent or intentional misrepresentation.[64] Plaintiffs allege no facts supporting negligent or intentional misrepresentation by Defendants Vinovich, Turner, and Cavaletto. Instead, Plaintiffs allege merely that these three Defendants “were negligent in their duties resulting in the NFL, GOODELL and RIVERON's negligent misrepresentations and/or intentional misrepresentations to the Plaintiffs [.]”[65] Accordingly, the motion to dismiss count two as to Defendants Vinovich, Turner, and Cavaletto is granted.

         The Court now addresses the motion to dismiss count two as to the remaining Defendants, NFL, Goodell, and Riveron. Plaintiffs claim both intentional misrepresentation and negligent misrepresentation by these Defendants. The elements of a claim for intentional misrepresentation in Louisiana are: “(1) a misrepresentation of a material fact; (2) made with intent to deceive; and (3) causing justifiable reliance with resultant injury.”[66] Plaintiffs do not allege Defendants had an intent to deceive Plaintiffs. Accordingly, the motion to dismiss Plaintiffs' intentional misrepresentation claim against Defendants is granted.

         Turning to Plaintiffs' negligent misrepresentation claim, negligent misrepresentation originated as a common law tort, and historically Louisiana jurisprudence limited the application of negligent misrepresentation to cases in which a contractual or fiduciary relationship exists between the parties.[67] Plaintiffs do not allege breach of contract, and the Court has determined that no fiduciary duty exists between the parties.[68] More recently, Louisiana courts have integrated negligent misrepresentation into Louisiana's civilian duty-risk analysis for torts.[69]

         The duty-risk analysis is “employed on a case by case basis.”[70] Under the duty-risk analysis, a plaintiff in a negligent misrepresentation case must allege the following four elements: (1) the defendant, in the course of its business or other matters in which it had a pecuniary interest, supplied false information; (2) the defendant had a legal duty to supply correct information to the plaintiff; (3) the defendant breached its duty, which can be breached by omission as well as by affirmative misrepresentation; and (4) the plaintiff suffered damages or pecuniary loss as a result of its justifiable reliance upon the omission or affirmative misrepresentation.”[71]

         For Plaintiffs to prevail under a theory of negligent misrepresentation, “it must first be established that [Defendants] owed a legal duty to [Plaintiffs] to provide correct information.”[72] Plaintiffs fail to allege facts showing Defendants had a legal duty to supply correct information to Plaintiffs. As stated above, Plaintiffs do not allege breach of contract, and the Court has decided that no fiduciary duty exists between the parties.[73]When there is no contractual or fiduciary relationship between the parties, the Louisiana Supreme Court has found the duty of care owed is compatible with the duty stated in the Restatement (Second) of Torts § 552.[74] Section 522 provides:

(1) One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.
(2) Except as stated in Subsection (3), the liability stated in Subsection (1) is limited to loss suffered
(a) by the person or one of a limited group of persons for whose benefit and guidance he intends to supply the information or knows that the recipient intends to supply it; and
(b) through reliance upon it in a transaction that he intends the information to influence or knows that the recipient so intends or in a substantially similar transaction.[75]

         The Restatement limits liability of the negligent supplier of information to cases in which the information is supplied in the context of a commercial transaction and to cases in which the supplier of the information “manifests an intent to supply the information for the sort of use in which the plaintiff's loss occurs.”[76]

         The rationale of the Restatement is reinforced by Louisiana case law. For example, in Louisiana a termite inspector owes a duty of reasonable care to supply accurate information to both the seller of the home and a prospective purchaser because “[t]ermite inspections are designed to protect both the buyer and the seller.”[77] Similarly, a real estate agent or broker owes a duty of reasonable care to supply accurate information to the seller and purchaser.[78] Further, a bank owes a duty of reasonable care to supply accurate information to its customer when advising its customer on how to open a joint account that will allow for the disbursal of account funds after death.[79] Likewise, a company owes its customer a duty of reasonable care to supply accurate information regarding a change in the customer's insurance policy.[80] In contrast, an employer does not owe a duty to its employee to supply accurate information regarding the manufacturer of a piece of equipment which injured the employee, especially since the employer was unaware the employee intended to use the information to file suit against the manufacturer.[81]

         Plaintiffs make a conclusory allegation that “the defendants owed a duty to the Plaintiffs.”[82] To support this threadbare assertion of an element of the cause of action for negligent or intentional misrepresentation, Plaintiffs allege the Defendants owed a duty to them because the Defendants solicited Plaintiffs as fans and solicited Plaintiffs to purchase tickets and other incidental items.[83] Even accepted as true, these allegations are insufficient to support the assertion that the Defendants owed the Plaintiffs a duty to supply accurate information. Plaintiffs do not allege the Defendants provided the alleged misinformation in the context of a contractual or fiduciary relationship with them. Plaintiffs do not allege the Defendants provided the alleged misinformation to a limited group of persons for whose benefit the Defendants supplied the information, nor do Plaintiffs allege the Defendants supplied the alleged misinformation in the context of a transaction in which the Defendants intended or expected the Plaintiffs to rely on the misinformation. Plaintiffs also do not allege the Defendants provided the alleged misinformation for the guidance of others in their business transactions. Accepting the allegations contained in the complaint as true, Plaintiffs' allegations do not raise their right to relief above the speculative level; the allegations are insufficient to state a claim that is plausible on its face.

         Because Plaintiffs fail to plead that Defendants owed a duty to supply correct information to Plaintiffs, Plaintiffs consequently cannot plead any breach thereof.[84] Further, it is not at all clear that Plaintiffs suffered damages or pecuniary loss as a result of any justifiable reliance on Defendants' alleged misrepresentations. To prove the fourth element of negligent misrepresentation, Plaintiffs must allege a “causal link between [Defendants'] purported omission [or affirmative misrepresentation] and [Plaintiffs'] financial ruin.”[85] As to damages or pecuniary ...


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