SnoWizard, Inc. v. Robinson et al

Filing 54

ORDER AND REASONS granting 31 Motion to Dismiss Counterclaims. Signed by Judge Ivan L.R. Lemelle on 10/14/2011. (lag, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
SNOWIZARD, INC.

CIVIL ACTION NO. 11-515

VERSUS

SECTION“B”(2)

RON ROBINSON d/b/a RAGGS SNO-CONE
SUPPLIES, JULIE K. DOTY d/b/a RAGGS
SNO-CONE SUPPLIES, RAGGS SUPPLY LP
d/b/a RAGGS SNO-CONE SUPPLIES, and
DOTY MANAGEMENT, LLC

JUDGE LEMELLE
MAGISTRATE WILKINSON

ORDER AND REASONS
IT IS ORDERED that Plaintiff SnoWizard’s opposed Motion to
Dismiss Counterclaims (Rec. Doc. No. 31) is GRANTED.
A.

Motion to Dismiss Standard
When reviewing a motion to dismiss, courts must accept all

well-pleaded

facts

as

true

and

view

them

in

the

light

most

favorable to the non-moving party. Baker v. Putnal, 75 F.3d 190,
196 (5th Cir. 1996). However, “[f]actual allegations must be enough
to raise a right to relief above the speculative level.” Bell Atl.
Corp. V. Twombly, 550 U.S. 544, 555 (2007). “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.”

2009)(quoting

Gonzales

v.

Ashcroft

Kay,
v.

577

Iqbal,

F.3d
129

600,
S.Ct.

603

(5th

1937,

Cir.
1949

(2009))(internal quotation marks omitted). The Supreme Court in
Iqbal explained that Twombly promulgated a “two-pronged approach”
to determine whether a complaint states a plausible claim for
relief. Iqbal, 129 S.Ct. at 1950. First, courts must identify those

pleadings that, “because they are no more than conclusions, are not
entitled to the assumption of truth.” Id. Legal conclusions “must
be supported by factual allegations.” Id. “Threadbare recitals of
the elements of a cause of action, supported by mere conclusory
statements, do no suffice.” Id. at 1949.
Upon identifying the well-pleaded factual allegations, courts
then

“assume

their

veracity

and

then

determine

whether

they

plausibly give rise to an entitlement of relief.” Id. at 1950. 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.” Id. at 1949.
This is a “context-specific task that requires the reviewing court
to draw on its judicial experience and common sense.” Id. The
plaintiffs

must

“nudge[]

their

claims

across

the

line

from

conceivable to plausible.” Twombly, 550 U.S. at 570.
B.

Analysis
Defendant Raggs counterclaims for breach of contract under

Louisiana and Texas state law (Rec. Doc. No. 25 at ¶ 37) and unfair
business practices under Louisiana, Texas, and federal law (Rec.
Doc. No. 25 at ¶ 38). Nevertheless, Raggs argues that the question
of applicable law is unsettled as long as a written master contract
has not been identified. (Rec. Doc. No. 40 at 1). It is clear,
however, that under any law Raggs cites, it's counterclaims
are untimely.
When a thing sold is rendered useless because of a defect (La.

C.C. art 2520), an action must be brought no more than four years
from the date of delivery of the defective product or one year from
the date the defect was discovered by the buyer. La. C.C. art
2534(A)(1). Under Texas law, an action for breach of an implied
warranty of merchantability, a warranty that the thing sold is fit
for the purpose for which such thing is used (Tex. Bus. & Com. Code
§2.314(b)), must be commenced within four years after the cause of
action accrues. Tex. Bus. & Com. Code §2.725(a). The cause of
action accrues when the breach occurs, regardless of the aggrieved
party’s knowledge of the breach. A breach of warranty occurs when
tender of delivery is made. Tex. Bus. & Com. Code §725(b).
Either Louisiana’s law of redhibition or Texas’ law of breach
of implied warranty of merchantability would apply to the facts of
this case. Under either of these laws, regardless of when the
defect was discovered, Raggs would have been required to bring its
claim within four years of the date of delivery of the allegedly
defective

products.

Because

Raggs’

pleading

recites

that

the

products were delivered in late 2005 (after Hurricane Katrina
[August 2005] and before the change of ownership in November 2005),
Raggs’ claim should have been brought by November 2009 at the
latest. Raggs’ breach of contract counterclaim, filed in 2011, is
therefore untimely and there is no plausible entitlement to relief.
Similarly, Louisiana law requires that claims for unfair
business practices under the Louisiana Unfair Trade Practices Act
(LUTPA), La. R.S. 51:1405, et seq., prescribe one year after the

transaction

or

51:1409(E).

The

act

that

gives

plaintiff’s

rise

to

knowledge

of

the
the

claim.

La.

unfair

R.S.

business

practice is irrelevant to the peremptive period. Canal Marine
Supply, Inc. V. Outboard Marine Corp. Of Waukegan, Ill., 522 So.2d
1201, 1203-04 (La.App. 4 Cir. 1988); Morris v. Sears, Roebuck &
Co., 99-2772, p. 5 (La.App. 4 Cir. 5/13/00), 765 So.2d 419, 422.
Under the Texas Deceptive Trade Practices Act (DTPA), Tex. Bus. &
Com. Code § 17.01, et seq., actions must be brought “within two
years after the date on which the false, misleading, or deceptive
act or practice occurred or within two years after the consumer
discovered or in the exercise of reasonable diligence should have
discovered” its occurrence. Tex. Bus. & Com. Code §17.565.
Raggs’ claim for unfair business practices under the LUTPA is
perempted, regardless of when Raggs discovered the basis for its
claim,

because

it

was

filed

more

than

one

year

after

the

transaction giving rise to the claim. Under the Texas DTPA, the
court must consider the date of discovery of the unfair practice.
However, the pleadings, on their face, reveal that Raggs discovered
the defects in the product in 2005. That the business changed hands
after the delivery of the defective product does not negate Raggs’
admission that the then-owner discovered the defect upon delivery.
Pako Corp. v. Thomas, 855 S.W.2d 215, 218-18 (Tex.App.-Tyler 1993).
Therefore, on the face of the pleadings, Raggs’ Louisiana and Texas
claims for unfair business practices are untimely and must be
dismissed.

Finally, Raggs asserts a federal claim for unfair business
practice under section 43(a) of the Lanham Act, 15 U.S.C. §
1125(a).

However, the Lanham Act applies to the misuse of marks

and unfair competition. Two Pesos, Inc. v. Taco Cabana, Inc., 505
U.S. 763, 767-68 (1992). The specific section cited by Raggs
creates a cause of action against a defendant who uses a mark or
false

description

of

fact

which

is

likely

to

cause

mistake

regarding a person’s affiliation with a product or, in commercial
advertising, misrepresents the nature, characteristics, qualities,
or geographic origin of the product. 15 U.S.C. § 25(a).
In

its

counterclaim,

Raggs

alleges

only

that

SnoWizard

represented the flavor concentrate to be “undamaged during the
hurricane and therefore suitable for re-sale.” (Rec. Doc. No. 25 ¶
32). Raggs makes no allegations that the representation was likely
to cause confusion or mistake as to a person’s affiliation with the
product,
commercial

or

that

SnoWizard

advertising

or

made

any

misrepresentations

promotion.

Therefore,

in

Raggs’

counterclaim, again, failed to state a plausible claim for relief
under the Lanham Act, and must be dismissed.
New Orleans, Louisiana, this 14th day of October, 2011.

____________________________
UNITED STATES DISTRICT JUDGE