Progressive EMU Inc v. Nutrition & Fitness Inc
MEMORANDUM OPINION AND ORDER re: briefs doc 45 and 46 ; Georgia law applies to the breach contract claims; Alabama law applies to Pro Emus declaratory judgment claims regarding intellectual property rights; and North Carolina law applies to NFIs unfair and deceptive trade practices claim and to its tortious interference claim. Signed by Judge William M Acker, Jr on 11/5/12. Associated Cases: 2:12-cv-02805-WMA, 2:12-cv-01079-WMA(KGE, )
2012 Nov-05 PM 02:56
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
PROGRESSIVE EMU, INC., f/k/a
JOHNSON EMU, INC.,
NUTRITION & FITNESS, INC.,
CIVIL ACTION NO.
MEMORANDUM OPINION AND ORDER
counterclaim defendant, Progressive Emu, Inc. (“Pro Emu”), and
defendant and counterclaim plaintiff, Nutrition & Fitness, Inc.
(“NFI”) (Docs. 45 and 46), each responding to this court’s request
that the parties address the question of what state law applies.
On March 28, 2012, Pro Emu filed a complaint against NFI in
the Circuit Court of Jefferson County, Alabama. On April 10, 2012,
NFI removed the action to this court (the “Alabama Action”).
its complaint Pro Emu asserts claims for breach of contract and
seeks declaratory judgment regarding Pro Emu’s ability to sell oil
under the terms of the contract and regarding Pro Emu’s common law
property rights in the Blue Emu trademark.1
(See 12-1079, Doc. 1-
Pro Em’s original complain contained a claim for an
accounting. That claim has been abandoned and is no longer
The next day, on April 11, 2012, NFI filed a practically
mirror-image complaint in the United States District Court for the
Eastern District of North Carolina (the “North Carolina Action”).
On August 24, 2012, the North Carolina Action was transferred to
this court and consolidated with the Alabama Action.
As a result,
NFI had both counterclaims from the Alabama Action and claims from
consolidate its claims and counterclaims, on October 19, 2012, NFI
filed an amended answer and counterclaims.
include breach of contract, unfair and deceptive trade practices,
tortious interference with business relations, and a declaratory
judgment regarding common law intellectual property rights.2
When a federal court exercises jurisdiction based on diversity
of citizenship (28 U.S.C. § 1332) the court must apply the choice
substantive law applies.
Grupo Televisa, S.A. v. Telemundo Comms.
Group, Inc., 485 F.3d 1233, 1240 (11th Cir. 2007) (citing Klaxon
Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S. Ct. 1020
This court must therefore apply Alabama’s choice of law
before this court.
NFI is no longer asserting a claim for breach of covenant
of good faith and fair dealing or a claim for an accounting.
“As a preliminary matter, the court must characterize the
legal issue and determine whether it sounds in torts, contracts,
property law, etc.”
For example, Alabama’s choice of law rule
with regard to tort claims is lex loci delici.
Fitts v. Minn.
Mining & Mfg. Co., 581 So. 2d 819, 820 (Ala. 1991).
determined by the law of the state where the injury occurred.
However, if a party sues under a specific statute, there is no true
choice of law issue, and the party cannot attempt to apply the law
of a state other than the state in which the statute was enacted.
Memorandum Opinion of Judge Abdul Kallon, Case No. 08-cv-01423 AKK, Doc. 294 at 8.
A court may apply the laws of different states
to different legal issues in a single case.
See e.g., Velten v.
Regis B. Lippert, Intercat, Inc., 985 F.2d 1515 (11th Cir. 1993).
Unfair and Deceptive Trade Practices Claims
The parties dispute whether Alabama or North Carolina law
applies to NFI’s claim for unfair and deceptive trade practices.
Pro Emu argues that Alabama law applies to this claim because NFI’s
claim for unfair and deceptive trade practices cites an Alabama
statute, Ala. Code § 18-19-1 et seq., and therefore arises solely
under Alabama law.
(See 12-1079, Doc. 24).
fails to address two key points.
Pro Emu’s argument
First, this is a consolidated
NFI’s counterclaim in the Alabama Action was not the only
unfair and deceptive trade practices claim NFI asserted.
complaint filed in the North Carolina Action, NFI asserted a claim
for unfair and deceptive trade practices and specifically cited the
relevant North Carolina statute, N.C. Gen. Stat. § 75-1.1, et seq.
Second, NFI’s amended answer and counterclaims includes a claim for
unfair and deceptive trade practices under the North Carolina
(See Doc. 44).
Therefore, Pro Emu’s argument based on
the Alabama language of NFI’s counterclaim in its initial answer in
the Alabama action is not determinative of the choice of law
Because NFI asserted a claim under the North Carolina Unfair
and Deceptive Trade Practices Act in its complaint in the North
Carolina Action and in its amended answer and counterclaims, there
is no true choice of law issue.
Just as FNI could not argue that
North Carolina law applied to its counterclaim under the Alabama
Act, Pro Emu cannot argue that Alabama law applies to NFI’s claim
under the North Carolina Act.
Additionally, because the North
Carolina action was transferred pursuant 28 U.S.C. § 1404(a), this
court must apply the same state law that the North Carolina court
would have applied to that claim - North Carolina law.
& Sheet Metal Servs., Inc. v. La Quinta Motor Inns., Inc., 689 F.2d
982, 991 (11th Cir. 1982).
Furthermore, the application of Alabama’s choice of law rules
would render the same result.
Claims under the North Carolina
Unfair and Deceptive Trade Practices Act are considered tort
New Bar P’Ship v. Martin, 729 S.E.2d 675, 680 n.1 (N.C.
App. Ct. 2012)(“The tort commonly referred to as ‘unfair and
deceptive trade practices’ in our case law is actually ‘unfair or
deceptive acts or practices in or affecting commerce’ in our
Thus, under the doctrine of lex loci delicti
North Carolina law would apply if the injury occurred in North
NFI has alleged the following injuries that occurred in
North Carolina: (1) receiving invoices for emu oil with overcharges
in North Carolina; (2) having to pay for additional emu oil
purchased in the open market from North Carolina bank accounts; (3)
NFI, a North Carolina company, being denied the right to purchase
emu oil when available; (4) misrepresentations about Pro Emu’s
ability to ship emu oil into North Carolina; (5) interfering with
business relationships that NFI coordinates from its North Carolina
headquarters; and (6) refusing to fill NFI’s orders for emu oil it
received from North Carolina. Pro Emu has offered no argument that
the alleged injuries did not occur in North Carolina.3
North Carolina law applies to NFI’s claim for unfair and deceptive
trade practices under Alabama’s choice of law rules.
Beach of Contract Claims
Additionally, Pro Emu’s arguments regarding the application
of North Carolina law to the tortious interference claim lend
further support to this conclusion.
The parties agree that Georgia law governs the Sales and
Marketing Agreement and therefore applies to the breach of contract
The court also agrees that Georgia law applies here.
Tortious Interference with Business Relations Claim
Pro Emu contends that North Carolina law applies to NFI’s
tortious interference claim because the alleged injury occurred in
NFI does not address this claim in its brief.
court agrees that under the theory of lex loci delici, North
Carolina law applies to NFI’s tortious interference claims.
Declaratory Judgment Claim - Intellectual Property
Pro Emu also contends that Alabama law governs its declaratory
judgment action regarding its common law trademark rights.
does not address this issue in its brief.
Pro Emu’s argument that
Alabama law governs its declaratory judgment claim regarding common
law intellectual property because personal property rights of
Alabama residents are governed by Alabama substantive law is well
Alabama law governs Pro Emu’s declaratory judgment claim
regarding its common law intellectual property rights.
For the reasons stated above, Georgia law applies to the
declaratory judgment claims regarding intellectual property rights;
and North Carolina law applies to NFI’s unfair and deceptive trade
practices claim and to its tortious interference claim.
It is so
DONE this 5th day of November 2012.
WILLIAM M. ACKER, JR.
UNITED STATES DISTRICT JUDGE
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