Kalencom Corporation v. Shulman
ORDER granting in part 27 Motion to Dismiss Counterclaim for Failure to State a Claim. Signed by Judge Jay C. Zainey. (jrc)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
THE KALENCOM CORPORATION
ANNE MARIE MONTAGNE SHULMAN
ORDER AND REASONS
Before the Court is The Kalencom Corporation’s (“Kalencom”) Motion to Dismiss (Rec.
Doc. 27). Defendant Anne Marie Montagne Shulman (“Shulman”) opposes the motion (Rec. Doc.
32) and Kalencom has replied. (Rec. Doc. 36). The motion, set for submission on March 7, 2018,
is before the Court on the briefs without oral argument. Having considered the motions and
memoranda of counsel, the record, and the applicable law, the Court finds that Kalencom’s Motion
to Dismiss (Rec. Doc. 27) is GRANTED in PART.
Kalencom brings the instant motion seeking to dismiss Shulman’s counterclaims pursuant
to Federal Rule of Civil Procedure 12(b)(6). This case arises out of a dispute between a former
employer, Kalencom, and a former employee/independent contractor, Shulman. Kalencom is a
manufacturer of diaper bags, handbags, jewelry boxes, packaging, and infant products. Shulman
worked for two years as an employee at Kalencom’s New Orleans office. Thereafter, Shulman
moved to the Atlanta area and began providing consulting services for Kalencom as an
independent contractor. Shulman worked for Kalencom a total of twenty-one years until February
Kalencom alleges that after their relationship ended, Shulman formed her own company
through which she used Kalencom’s confidential and proprietary information to her own benefit.
Specifically, Kalencom accuses Shulman of using its proprietary and confidential information to
obtain an order from its client, Neiman Marcus. Kalencom’s claims of tortious interference with
a business relationship under Louisiana and Georgia law were previously dismissed. (Rec. Doc.
20). However, Kalencom’s breach of fiduciary duty claim and Kalencom’s claims that Shulman
violated the Louisiana Unfair Trade Secrets Act, the Georgia Trade Secrets Act, and the Louisiana
Unfair Trade Practices Act all survived Shulman’s motion to dismiss. Id.
In her Answer, Shulman includes the following counterclaims against Kalencom: (1) unfair
trade practices under Louisiana law, (2) tortious interference with contract and business relations
under Georgia and Louisiana law, and (3) defamation under Georgia and Louisiana law.
Shulman’s allegations stem largely from the accusations made against her in this lawsuit. Shulman
alleges, inter alia, that Kalencom is interfering in her relationship with her current employer by
attempting to enforce non-compete, non-disclosure, non-solicitations, and/or confidentiality
agreements that do not exist. In sum, Shulman brings these claims alleging Kalencom is illegally
interfering with her ability to freely practice her trade. Kalencom brings the instant motion seeking
to dismiss those claims.
Under well-settled standards governing Rule 12(b)(6) motions to dismiss, a claim may not
be dismissed unless it appears certain that the plaintiff cannot prove any set of facts that would
entitle him to legal relief. In re Supreme Beef Processors, Inc., 468 F.3d 248, 251 (5th Cir. 2006)
(citing Benton v. United States, 960 F.2d 19 (5th Cir. 1992)). To survive a Rule 12(b)(6) motion
to dismiss, the plaintiff must plead enough facts to “state a claim to relief that is plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)). A claim is facially plausible “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. A court must accept all well-pleaded facts as true and must draw all reasonable
inferences in favor of the plaintiff. Lormand v. US Unwired, Inc., 565 F.3d 228, 239 (5th Cir.
2009). But the Court is not bound to accept as true legal conclusions couched as factual
allegations. Iqbal, 556 U.S. at 678.
A legally sufficient complaint need not contain detailed factual allegations, but it must go
beyond labels, legal conclusions, or formulaic recitations of the elements of a cause of action. Id.
In other words, the face of the complaint must contain enough factual matter to raise a reasonable
expectation that discovery will reveal each element of the claim. Lormand, 565 F.3d at 257. If
there are insufficient factual allegations to raise a right to relief above the speculation level, or if
it is apparent from the face of the complaint that there is an insuperable bar to relief, the claim
must be dismissed. Twombly, 550 U.S. at 555.
Law and Analysis
Kalencom argues that Shulman has failed to allege sufficient facts to support a claim for
violation of unfair trade practices law under Louisiana law, tortious interference with contract and
business relations under Georgia and Louisiana law, or defamation under Georgia and Louisiana
A. Violation of Louisiana’s Unfair Trade Practices Act
Under the Louisiana Unfair Trade Practices Act (“LUTPA”), a plaintiff must show that the
defendant used “(1) an unfair or deceptive trade practice declared unlawful; (2) that impact[ed] a
consumer, business competitor[,] or other person to whom the statute grants a private right of
action; [and] (3) which has caused ascertainable loss.” Omnitech Intern., Inc. v. Clorox Co., 11
F.3d 1316, 1332 (5th Cir. 1994). “A trade practice is deemed unfair when it offends established
policy and when the practice is immoral, unethical, oppressive, unscrupulous, or substantially
injurious to consumers . . . [or] business competitors.” Landreneau v. Fleet Fin. Grp., 197 F.
Supp. 2d 551, 557 (M.D. La. 2002) (internal quotations omitted). Courts must decide what
constitutes an “unfair trade practice” on a case-by-case basis. Id. (citing Marshall v. Citicorp.,
601 So.2d 669, 670 (La. App. 5 Cir. 1992)). LUTPA does not prohibit sound business practices,
the exercise of permissible business judgment, or appropriate free enterprise transactions. Id.
(citing Moore Med. Clinic, Inc. v. Hosp. Corp. of Am., 522 So.2d 1362, 1365 (La. App. 2 Cir.
Kalencom argues that Shulman’s counterclaim fails to state a claim under LUTPA because:
(1) Shulman’s allegations in support of her LUTPA claim do not qualify as unfair trade practices,
and (2) Shulman fails to provide specific allegations that she suffered an “ascertainable loss.”
(Rec. Doc. 27).
Kalencom contends that Shulman has not alleged facts sufficient to show that Kalencom
has committed the sort of acts prohibited by LUTPA. Shulman has alleged that Kalencom made
unsupported, false, and defamatory statements about Shulman to Shulman’s former, current, or
prospective customers and/or suppliers. Such allegations are sufficient to rise to the level of
“fraud, misrepresentation, deception or other unethical conduct” required by LUTPA. Therefore,
Shulman has sufficiently alleged Kalencom engaged in unfair trade practices.
Kalencom additionally argues that Shulman has failed to offer specific allegations that she
suffered an “ascertainable loss” as required by Louisiana Revised Statute § 51:1409(A). Shulman
alleges that she suffered loss of business opportunities, damages to her goodwill, reputation, and
esteem in the industry, mental anguish, and humiliation. These allegations are more than “general
categories of alleged damages” as Kalencom argues. (Rec. Doc. 27, p. 5). Accordingly, Shulman
has sufficiently set forth a claim against Kalencom under LUTPA.
B. Tortious Interference with Contract and Business Relations Under
Georgia and Louisiana Law
In order to establish a claim for interference with a business relationship under Louisiana
law, a plaintiff must allege that defendant, beyond merely affecting plaintiff’s business interests,
“actually prevented plaintiff from dealing with a third party.” Bogues v. La. Energy Consultants,
Inc., 71 So.3d 1128, 1135 (La. App. 2 Cir. 2011). “Louisiana courts have limited this cause of
action by imposing a malice element, which requires that the plaintiff show the defendant acted
with actual malice.” Id. Actual malice “seems to require a showing of spite or ill will.” Id. “In
order to sustain a claim for tortious interference with business relations, actual malice must be
pleaded in the complaint.” Id.
“‘Although its meaning is not perfectly clear, the malice element seems to require a
showing of spite or ill will, which is difficult (if not impossible) to prove in most commercial cases
in which conduct is driven by the profit motive, not by bad feelings. In fact, there appear to be no
reported cases in which anyone actually has been liable for the tort.’” JCD Mktg. Co. v. Bass
Hotels & Resorts, Inc., 812 So.2d 834, 841 (La. App. 4 Cir. 2002) (quoting George Denegre, Jr.,
Shannon S. Holtzman, & John A. Lovett, Tortious Interference and Unfair Trade Claims:
Louisiana’s Elusive Remedies for Business Interference, 45 Loy. L. Rev. 395, 401 (1999)). “A
plaintiff bringing a claim for tortious interference with business must ultimately show ‘by a
preponderance of the evidence that the defendant improperly influenced others not to deal with the
plaintiff.’” Bogues, 71 So.3d at 1134–35 (quoting Junior Money, 970 F.2d at 10); accord
Henderson v. Bailey Bark Materials, 116 So.3d 30, 37 (La. App. 2 Cir. 2013).
Here, Shulman pleads that Kalencom has restricted and interfered with Shulman’s ability
to practice her trade with her new employer by enforcing non-disclosure, non-compete, nonsolicitation and/or confidentiality agreements that Kalencom knows Shulman did not enter into
and do not exist. (Rec. Doc. 25, ¶¶ 63–64). Shulman also pleads that Kalencom’s “unlawful effort
to effectively prevent [Shulman] from lawfully competing against it [has] been committed with
malice.” (Rec. Doc. 25, ¶ 68). While pleading malice is necessary for this tortious interference
claim, Shulman fails to provide more than conclusory statements in support of her allegation that
Kalencom is acting with malice. To properly maintain a claim for tortious interference with a
business relationship, Shulman’s malice accusation will need to provide more precise factual
details concerning the acts or statements reflecting malice allegedly committed by Kalencom.
Accordingly, Shulman’s claim for tortious interference with a business relationship under
Louisiana law is dismissed without prejudice, and Shulman may amend her counterclaim to the
extent that it can add allegations of actual malice.
Shulman also alleges that Kalencom has “knowingly acted in contravention of its duty not
to engage in an illegal restraint of trade, and has therefore intentionally and unlawfully interfered
with [Shulman]’s contractual” relationship with her current employer and current or prospective
customers and suppliers. Id. at ¶ 67. Louisiana law recognizes a narrow cause of action for
intentional interference with a contract. In 9 to 5 Fashions, Inc. v. Spurney, 538 So.2d 228 (La.
1989), the Louisiana Supreme Court held that an action for tortious interference with a contract
could be maintained against a corporate officer if a claimant had a contract or legally protected
interest with the officer’s corporation, the officer knew of the contract, and the officer intentionally
and without justification caused the corporation to breach the contract and damage the plaintiff.
Id. at 234. Louisiana courts have not expanded the limited scope of Spurney to other situations.
See Petrohawk Props., L.P. v. Chesapeake La., L.P., 689 F.3d 380, 395 (5th Cir. 2012) (discussing
“the limited nature of Louisiana’s claim for tortious interference with a contract”).
Shulman’s counterclaim for intentional interference with a contract fails to state a claim
for relief. This Court recently acknowledged the narrow scope of intentional interference with a
contract claim, and recognized that such a claim can only be brought when the alleged interference
is committed by a corporate officer. CG & JS Enterprises, LLC v. H&R Block, Inc., No. 14-1322,
2017 WL 5483763, at *6 (E.D. La. 2015). Shulman’s claim does not allege the necessary elements
because she is bringing her claim against the corporation itself (Kalencom), and the contract that
is allegedly being breached is between Shulman and her current employer, not between the
corporation (Kalencom) and a third person.
Accordingly, Shulman’s claim for tortious
interference with a contract under Louisiana law is dismissed without prejudice, and Shulman may
amend her counterclaim to the extent that it can allege the necessary elements for an intentional
interference with a contract claim.
To recover on a claim of tortious interference with a contract or business relations under
Georgia law, a plaintiff must prove the following elements: (1) improper action or wrongful
conduct by the defendant without privilege; (2) the defendant acted purposely and with malice
with the intent to injure; (3) the defendant induced a breach of contractual obligations or caused a
party or third party to discontinue or fail to enter into an anticipated business relationship with the
plaintiff; and (4) the defendant’s tortious conduct proximately caused damage to the plaintiff.
Mabra v. SF, Inc., 728 S.E.2d 737, 739–40 (2012) (citations omitted).
The Court’s finding that Shulman failed to properly plead the malicious intent requirement
under Louisiana law also applies to its analysis of Shulman’s claim for tortious interference with
a contract or business relations under Georgia law. To properly maintain a claim for tortious
interference with a contract or business relations under Georgia law, Shulman’s malice accusation
will need to provide more precise factual details concerning the acts or statements of malice
allegedly committed by Kalencom. Accordingly, Shulman’s claim for tortious interference with
a contract or business relations under Georgia law is dismissed without prejudice, and Shulman
may amend her counterclaim to the extent that it can add allegations of actual malice.
Shulman’s final counterclaim alleges defamation under Georgia and Louisiana law.
Shulman alleges two separate instances of defamation on the part of Kalencom. First, Shulman
accuses Kalencom of “knowingly or negligently ma[king] unsupported, false, and defamatory
statements against [Shulman] in this lawsuit regarding theft, dishonesty, and illegal conduct
allegedly committed by [Shulman] in the course of her profession.” (Rec. Doc. 25, ¶ 71). Second,
Shulman accuses Kalencom of “knowingly or negligently ma[king] unsupported, false, and
defamatory statements against [Shulman] to [Shulman]’s former, current, or prospective customers
and/or suppliers regarding theft, dishonesty, and illegal conduct allegedly committed by [Shulman]
in the course of her profession.” Id. at ¶ 72.
Under Louisiana law, a claim of defamation has the following elements: “(1) a false and
defamatory statement concerning another; (2) an unprivileged publication to a third party; (3) fault
(negligence or greater) on the part of the publisher; and (4) resulting injury.” Trentecosta v. Beck,
703 So.2d 552, 559 (La. 1997). The law denotes statements as defamatory per se when the
statements “accuse another of criminal conduct, or which, by their very nature tend to injure one’s
personal or professional reputation, even without considering extrinsic facts or surrounding
circumstances.” Costello v. Hardy, 864 So.2d 129, 140 (La. 2004) (citations omitted). In such a
case, the elements of falsity, fault, and injury are presumed, but may be rebutted. Id.
As to Shulman’s allegations that Kalencom’s statements made in this lawsuit constitute
defamation, the Court agrees with Kalencom. The Court need not look any further than Louisiana
law holding that “an action for defamation arising out of allegations made in a judicial proceeding,
and made against a party to those proceedings, cannot be brought until those proceedings are
terminated.” 5-Star Premium Finance, Inc. v. Wood, No. 99-3705, 2000 WL 1678010, *1 (E.D.
La. 2000) (citing Ortiz v. Barriffe, 523 So.2d 896, 898 (La. App. 4 Cir. 1988)). A party must be
given the chance to prove the truth or falsity of their allegations before an opposing party can
counterclaim for defamation and reputational harm. Id. (citing Calvert v. Simon, 311 So.2d 13,
15–16 (La. App. 2 Cir. 1975)). Shulman must wait until the conclusion of the instant litigation
before bringing a defamation claim based on statements made by Kalencom in this lawsuit.
Shulman’s second allegation of defamation stems from alleged statements that Kalencom
made to Shulman’s former, current, or prospective customers and/or suppliers. Kalencom argues
that Shulman’s allegations concerning such statements fail for a lack of specificity. Under
Louisiana law, “a petitioner alleging a cause of action for defamation must set forth in the petition
with reasonable specificity the defamatory statements allegedly published by the defendant.”
Express Lien, Inc. v. Nationwide Notice Inc., No. 16-2926, 2017 WL 1091252, *2 (E.D. La. 2017)
(citing Badeaux v. Southwest Computer Bureau, Inc., 2005-0612, p. 10 (La. 3/17/06), 929 So.2d
Shulman argues that her allegations are sufficiently specific by accusing Kalencom of
making “unsupported, false, and defamatory statements . . . against [Shulman] to [Shulman]’s
former, current, or prospective customers and/or suppliers regarding theft, dishonesty, and illegal
conduct allegedly committed by [Shulman].” (Rec. Doc. 25, ¶¶ 72–74). In Express Lien,
defamation claims were dismissed for lack of specificity when the plaintiff’s allegations failed to
provide information regarding who made the defamatory statements, how the alleged statements
were communicated, the specific language of the alleged statements, or to whom the statements
were made. Express Lien, at *2. The same situation is present here. Shulman’s defamation claim
fails to give the names of any individuals or entities to whom the alleged defamatory statements
were made. Moreover, Shulman provides no information as to how the defamatory statements
were made nor regarding the specific language of the alleged defamatory statements. In fact, the
plaintiff in Express Lien was at least able to provide a time frame for when the alleged defamatory
statements took place. Such an allegation is absent from Shulman’s counterclaim in the instant
Accordingly, Shulman’s claim for defamation under Louisiana law is dismissed without
prejudice. Shulman may amend her counterclaim to the extent that it can allege with specificity
the alleged defamatory statements made by Kalencom.
Under Georgia law, there are four elements to a defamation claim: “(1) a false and
defamatory statement concerning the plaintiff; (2) an unprivileged communication to a third party;
(3) fault by the defendant amounting at least to negligence; and (4) special harm or the actionability
of the statement irrespective of special harm.” Smith v. DiFrancesco, 802 S.E.2d 69, 72 (Ga. App.
2017). The Court agrees with Kalencom’s assertion that relevant allegations made in connection
with ongoing litigation, which are pertinent to the relief sought, are privileged. Because the
communication made to a third party must be unprivileged, Shulman’s defamation claim based on
Kalencom’s allegations in the instant litigation fails under Georgia law.
As to Shulman’s allegations that Kalencom made defamatory statements to Shulman’s
“former, current, or prospective customers and/or suppliers,” the Court agrees that Shulman’s
allegations are not sufficiently specific under Georgia law. The principal concern of Georgia
courts in pleading defamation is giving the defendant facts concerning the claim that are sufficient
to provide the defendant with notice of both the content of the allegedly defamatory statements
and the context in which those statements were made. Wylie v. Denton, 746 S.E.2d 689, 697 (Ga.
App. 2013) (citing Benedict v. State Farm Bank, FSB, 709 S.E.2d 314 (Ga. App. 2011) (a
complaint must contain “enough detail to afford the defendant . . . a fair opportunity to frame a
responsive pleading”) (citations omitted)).
Accordingly, Shulman’s claim for defamation under Georgia law is dismissed without
prejudice. Shulman may amend her counterclaim to the extent that it can allege with specificity
the alleged defamatory statements made by Kalencom.
IT IS ORDERED that Kalencom’s Motion to Dismiss (Rec. Doc. 27) is GRANTED in
PART. Shulman’s claims for tortious interference with contract and business relations under
Georgia and Louisiana law and Shulman’s claims for defamation under Georgia and Louisiana
law are DISMISSED WITHOUT PREJUDICE. Shulman may amend her counterclaims within
20 days of this Order to the extent that it can remedy the deficiencies identified herein.
April 11, 2018
JUDGE JAY C. ZAINEY
UNITED STATES DISTRICT JUDGE
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