Brand Coupon Network, LLC v. Catalina Marketing Corp. et al
RULING AND ORDER denying in part and granting in part 48 Motion to Dismiss Plaintiff's First Amended Complaint, consistent with the rulings herein. Specifically, the motion is denied for Counts I, II, and IV, and granted for Count V. Defe ndants motion to dismiss Count III is denied with respect to the claim of passing off, and granted with respect to the claims of conspiracy to defraud, theft, conversion, and misappropriation of trade secrets. Plaintiff Brand Coupon's Count V for Tortious Conduct is DISMISSED WITH PREJUDICE Defendant Catalina's 37 Motion to Stay Discovery is DENIED AS MOOT. Signed by Chief Judge Brian A. Jackson on 11/24/2014. (LLH)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
BRAND COUPON NETWORK, LLC
CATALINA MARKETING CORP.,
RULING AND ORDER
Before the Court are Defendant’s Motion to Dismiss Plaintiff’s First
Amended Complaint (Doc. 48) and Defendant’s Motion to Stay Discovery
(Doc. 37), seeking an order dismissing Plaintiff’s Amended Complaint with
prejudice pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(6) and
requesting that the Court stay discovery until resolution of Defendant’s Motion
to Dismiss. Plaintiff opposes Defendant’s Motion to Dismiss. (Doc. 50).
Defendant has been denied leave to file a reply memorandum in response to
Plaintiff’s Opposition. (Doc. 53). Oral argument is not necessary. The Court has
jurisdiction pursuant to 28 U.S.C. § 1332.
On July 7, 2011, Plaintiff Brand Coupon Network, LLC (“Brand Coupon”)
filed a Petition in the Nineteenth Judicial District Court, Parish of East Baton
Rouge, for Damages and Injunctive Relief against Defendant Catalina
Marketing, Inc. d/b/a CouponNetwork.com (“Catalina”), as well as against three
of Catalina’s agents and representatives: Pamela Samniego, Joe Henson, and L.
Dick Buell. (Doc. 1-3). Brand Coupon asserted claims of (1) detrimental reliance;
(2) unjust enrichment; (3) unfair trade practices, (4) trade secret violation; (5)
trademark infringement; (6) breach of loyalty, good faith, and fair dealing; and
(7) tortious conduct. The matter was removed to this Court on a basis of
diversity jurisdiction under 28 U.S.C. § 1441. (See id.). Ruling upon a Rule
12(b)(6) Motion to Dismiss filed on behalf of all defendants, (see Doc. 3), the
Court dismissed all claims, finding that they were either time-barred,
insufficiently pleaded, or failed to show an established legal duty owed by the
individual defendants to Brand Coupon, (Docs. 17–18).
On appeal, the Fifth Circuit Court of Appeals affirmed this Court’s
dismissal of Pamela Samniego, Joe Henson, and L. Dick Buell as defendants in
their individual capacities. (Doc. 33 at pp. 8–9). The Court of Appeals, however,
found that this Court erred in ruling several of Brand Coupon’s claims as timebarred, for this Court had considered an affidavit outside of the pleadings and
not referred to therein. (Id. at p. 8). Plaintiff/Petitioner Brand Coupon did not
challenge this Court’s dismissal of its trade secret claim as insufficiently
pleaded. (Id. at p. 3 n.1). The case was remanded to this Court in April 2014 to
“conduct such proceedings as it determines to be necessary to ascertain whether
a triable issue of fact exists regarding the timeliness of [Brand Coupon]’s claims,
possibly including additional discovery and amended or additional pleadings.”
(Id. at p. 7).
On June 10, 2014, Defendant Catalina, the only remaining defendant from
the original petition, filed the instant Motion to Stay Discovery in anticipation of
its forthcoming Motion to Dismiss. (Doc. 37).
On July 11, 2014 Brand Coupon filed its First Amended Complaint,
alleging five counts in connection with Catalina’s entry into the internet coupon
market: (1) detrimental reliance; (2) unjust enrichment; (3) unfair trade
practices under La. R.S. 51:1401, et seq.; (4) trademark infringement under La.
R.S. 51:211, et seq.; and (5) tortious conduct under La. C.C. art. 2315. (See Doc.
44). On August 28, 2014, Catalina filed the instant Motion to Dismiss Plaintiff’s
First Amended Complaint, arguing that Brand Coupon had failed to sufficiently
allege the necessary elements of each claim under the required pleading
standards pursuant to Rule 12(b)(6). (Doc. 48).
STANDARD OF REVIEW
A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint
against the legal standard set forth in Rule 8, which requires “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed. R.
Civ. P. 8(a)(2). “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.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007)). “Determining whether a complaint states
a plausible claim for relief [is] . . . a context-specific task that requires the
reviewing court to draw on its judicial experience and common sense.” Id. at 679.
“[F]acial plausibility” exists “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 678 (Twombly, 550 U.S. at 556). The complaint
need not allege specific facts, but need only “give the defendant fair notice of
what the claim is and the grounds upon which it rests.” Erickson v. Pardus, 551
U.S. 89, 93 (2007) (citations and quotation marks omitted).
Hence, the complaint need not set out “detailed factual allegations,” but
something “more than labels and conclusions, and a formulaic recitation of the
elements of a cause of action” is required. Twombly, 550 U.S. at 555. When
conducting its inquiry, the Court must “accept all well-pleaded facts as true
and view those facts in the light most favorable to the plaintiff.” Bustos v.
Martini Club Inc., 599 F.3d 458, 461 (5th Cir. 2010) (quotation marks omitted).
The Supreme Court has noted that Rule 12(b)(6) requires dismissal
whenever a claim is based on an invalid legal theory:
Nothing in Rule 12(b)(6) confines its sweep to claims of law which
are obviously insupportable. On the contrary, if as a matter of law it
is clear that no relief could be granted under any set of facts that
could be proved consistent with the allegations, . . . a claim must be
dismissed, without regard to whether it is based on an outlandish
legal theory, or on a close but ultimately unavailing one.
Neitzke v. Williams, 490 U.S. 319, 327 (1989) (quotation marks and internal
citations omitted). However, “[f]ederal pleading rules . . . do not countenance
dismissal of a complaint for imperfect statement of the legal theory supporting
the claim asserted.” Johnson v. City of Shelby, Miss., 574 U.S. ___, ___, 135 S.
Ct. 346, 346 (2014) (per curiam).
The First Amended Complaint (“Complaint”) alleges violations of state
law. Evaluating each claim separately, the Court will assess whether Brand
Coupon’s claims survive Catalina’s Motion to Dismiss.
1. Detrimental Reliance
Catalina asserts that Brand Coupon has not alleged sufficient facts to
maintain its claim for detrimental reliance in Count I. Under the Louisiana Civil
Code, 1 “[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.” La. C.C. art. 1967.
“To establish detrimental reliance, a party must prove three elements by a
preponderance of the evidence: (1) a representation by conduct or word; (2)
justifiable reliance; and (3) a change in position to one's detriment because of the
reliance.” Suire v. Lafayette City-Parish Consol. Gov't, 907 So. 2d 37, 59 (La.
2005). “Louisiana cases make clear that recovery for detrimental reliance is not
limited to oral promises; the detrimental reliance doctrine applies to
In its Complaint, Brand Coupon did not cite a specific provision in the Louisiana Civil Code, but the
theory of detrimental reliance is codified at La. C.C. art. 1967. “Mere technical defects in a pleading
do not provide a basis for dismissal.” Jones v. State of La. Through Bd. of Trs. for State Colls. &
Univs., 764 F.2d 1183, 1185 (5th Cir. 1985). Mere failure to cite the correct statute will not preclude
a plaintiff from asserting recovery under that statute so long as the complaint gives the defendant
fair notice as to the nature of the claims.
representations made by word or by conduct.” Dorsey v. N. Life Ins. Co., 2005
WL 2036738, at *23 (E.D. La. Aug. 15, 2005) (Babkow v. Morris Bart, P.L.C., 726
So.2d 423, 427 (La. Ct. App. 1998)).
In its Complaint, Brand Coupon alleges:
In reliance upon Samniego and Henson’s representations of
confidentiality, [Brand Coupon’s CEO] Abraham shared with
Samniego and Henson confidential information relative to the
internet coupon industry and [Brand Coupon]’s strategies and
business plans . . . . Samniego and Henson provided assurances
regarding confidentiality in order to have Abraham divulge
information that he would not have disclosed to direct competitors.
Samniego and Henson also concealed Catalina’s plans to make a
foray into the internet coupon industry in order to compete directly
with Brand Coupon Network.
(Doc. 44 at ¶¶ 2.13, 2.15). Catalina argues that Brand Coupon’s references to
“representations” and “assurances” are vague and conclusory. In support of its
argument, Catalina directs this Court to several decisions from this Court and
its sister court of the Eastern District of Louisiana which have dismissed
detrimental reliance claims pursuant to Rule 12(b)(6) motions, for failure to
sufficiently plead representations by conduct or word. In each of these cases, the
pleadings of the alleged representations fell short of the level of specificity
present in the instant Complaint. See, e.g., Mose v. Keybank Nat’l Ass'n, 2011
WL 3204451, at *4 (M.D. La. July 26, 2011), aff'd, 464 F. App'x 260 (5th Cir.
2012) (complaint alleged “tacit endorsement,” the representation of which was
not made directly to plaintiffs); Blackstone v. Chase Manhattan Mortg. Corp.,
802 F. Supp. 2d 732, 739–40 (E.D. La. 2011) (complaint did not identify source of
representation). In contrast, here Brand Coupon clearly identifies the alleged
makers of the representation, Catalina’s representatives Samniego and Henson,
and alleges that they assured the confidentiality of communications between
Brand Coupon and these agents of Catalina. Although the Complaint does not
specify what precisely was said or done, its allegations exceed the threshold of
plausibility on this point of representations, to make out a claim of detrimental
Catalina further argues that Brand Coupon’s reliance on alleged
representations was unreasonable as a matter of law. Yet the reasonability of
reliance is generally a matter for the trier of fact to resolve. See Drs. Bethea,
Moustoukas & Weaver LLC v. St. Paul Guardian Ins. Co., 376 F.3d 399, 403 (5th
Cir. 2004) (“Whether a plaintiff reasonably relied on a promise is generally a
fact-bound determination.”). In instances in which the Fifth Circuit has found
that reliance was unreasonable as a matter of law, the records have
demonstrated that the plaintiffs relied on extra-contractual representations in
contradiction of an existing unambiguous, fully-integrated written agreement.
See id.; Active Mortg., LLC v. Trans Union, LLC, No. 09-CV-986, 2010 WL
4627730, at *5 (M.D. La. Nov. 4, 2010); Morris v. Friedman, 663 So. 2d 19, 25
(La. 1995). In the instant matter, absent an existing contract containing terms
contrary to the alleged representation, it is not for the Court to decide at this
juncture whether Brand Coupon’s reliance was reasonable or not.
Accordingly, Defendant’s Motion to Dismiss for failure to sufficiently plead
its claim of detrimental reliance is DENIED.
2. Unjust Enrichment
Catalina argues that Brand Coupon fails to sufficiently allege in Count II
Brand Coupon’s own lack of fault in its claim for unjust enrichment. Under
Louisiana law, a person is liable if he is enriched without cause at the expense of
another person. 2 La. C.C. art. 2298. Louisiana courts have established five
elements for a claim of unjust enrichment: (1) an enrichment; (2) an
impoverishment; (3) a connection between the enrichment and resulting
impoverishment; (4) an absence of “justification” or “cause” for the enrichment
and impoverishment; and (5) the plaintiff has no other remedy at law. Minyard
v. Curtis Prods., Inc., 251 La. 624, 652 (La.1967).
Catalina avers that the Complaint demonstrates that Brand Coupon’s
voluntary disclosure of confidential information regarding its strategies and
business plans to Samniego and Henson was undertaken at Brand Coupon’s own
risk. “The impoverishment element is met only when the factual circumstances
show that the impoverishment was not a result of the plaintiffs' own fault or
negligence or was not undertaken at his own risk.” Gray v. McCormick, 663 So.
2d 480, 487 (La. Ct. App. 1995).
Similar to its detrimental reliance claim, Plaintiff did not cite a specific provision in the Louisiana
Civil Code for its claim of unjust enrichment. For the same reasons noted above, however, Plaintiff is
not barred from relief under the statutory provision La. C.C. art. 2298 due to mere lack of citation in
Courts applying Louisiana law, however, have found the plaintiff at fault
for his own impoverishment only when the plaintiff had actual knowledge of
circumstances to permit inference that he knew or should know of specific risks
associated with his own actions. See, e.g., Dorsey v. N. Life Ins. Co., No. CIV.A.
04-0342, 2005 WL 2036738, at *23 (E.D. La. Aug. 15, 2005) (plaintiffs acted at
their own risk when voluntarily providing defendants with client lists in the face
of a written contract providing that such documents belonged to defendants with
no restrictions on use); Bamburg Steel Bldgs., Inc. v. Lawrence Gen. Corp., 817
So. 2d 427, 438–39 (La. Ct. App. 2002) (plaintiff could not claim unjust
enrichment based on violation of public bid law when plaintiff voluntarily
entered construction contract with full awareness of private source of funding);
Gray, 663 So. 2d at 487 (plaintiffs’ loss of property resulted from own failure to
act, and plaintiffs’ expenditures for property improvements made at own risk,
when record clearly showed plaintiffs’ knowledge that property would only be
transferred to them if owners were released from mortgage indebtedness and
plaintiffs made no attempts to release owners).
In the instant matter, the Complaint states that Brand Coupon’s CEO
Abraham would not have divulged the information he did to Samniego and
Henson if he knew they were, or were about to become, direct competitors. (Doc.
44 at ¶ 2.15). According to the Complaint, Brand Coupon was mistaken about
Catalina’s intentions to compete in the internet coupon market when it
volunteered to share business information, and Brand Coupon would not have
shared such information had it had knowledge of Catalina’s imminent entrance
into the same market. Thus, the Court does not find as a matter of law that
Brand Coupon’s alleged impoverishment was taken at Brand Coupon’s own fault
Accordingly, Defendant’s Motion to Dismiss for failure to sufficiently plead
its claim of unjust enrichment is DENIED.
3. Unfair Trade Practices
Catalina avers that Brand Coupon fails to sufficiently allege underlying
misconduct in its claim for Unfair Trade Practices under Louisiana’s Unfair
Trade Practices and Consumer Protection Laws (“LUTPA”), La. R.S. § 51:1401,
et seq. LUTPA provides a cause of action to “[a]ny person who suffers any
ascertainable loss of money or movable property, corporeal or incorporeal, as a
result of the use or employment by another person of an unfair or deceptive
method, act, or practice.” La. R.S. § 51:1409. The Fifth Circuit has stated that
“[t]he real thrust of the LUTPA, modeled after the Federal Trade Commission
Act, is to deter injury to competition.” Reingold v. Swiftships, Inc., 126 F.3d 645,
653 (5th Cir.1997) (citations omitted). Determinations of what constitutes unfair
or deceptive methods, acts, or practices are largely left to courts to adjudge “on a
case-by-case basis,” although “Louisiana courts have interpreted these terms to
include a practice that is unethical, oppressive, unscrupulous, or substantially
injurious.” Id. (citations and internal quotation marks omitted).
Here, in Count III, the Complaint asserts that Catalina, in violation of
LUTPA, engaged in the following business acts and practices:
(a) participation in a conspiracy to defraud Plaintiff, (b) theft of
“BRAND COUPON NETWORK” name, identity, goodwill, vendors,
and/or customers; (c) misappropriation of Plaintiff’s trade secrets;
(d) passing off or coercion of their products as “BRAND COUPON
NETWORK” products; and (e) conversion of Plaintiff’s property.
(Doc. 44 at ¶ 5.3). For various reasons explained herein, each of these claims is
insufficiently pleaded except the claim of passing off of products.
i. Conspiracy to Defraud
Where a plaintiff’s LUTPA claim is based on alleged fraudulent
misrepresentation, the LUTPA claim must meet the heightened pleading
requirements of Rule 9(b). See Pinero v. Jackson Hewitt Tax Serv. Inc., 594 F.
Supp. 2d 710, 721 (E.D. La. 2009); Fed. R. Civ. P. 9(b) (“[A] party must state
with particularity the circumstances constituting fraud.”). Courts, interpreting
Rule 9(b), find a fraud complaint sufficient when it specifies “the time, place and
contents of the false representation, as well as the identity of the person making
the misrepresentation and what that person obtained thereby.” U.S. ex rel.
Grubbs v. Kanneganti, 565 F.3d 180, 186 (5th Cir. 2009) (quotation marks
omitted). The Fifth Circuit “interprets Rule 9(b) strictly, requiring the plaintiff
to specify the statements contended to be fraudulent, identify the speaker, state
when and where the statements were made, and explain why the statements
were fraudulent.” Flaherty & Crumrine Preferred Income Fund, Inc. v. TXU
Corp., 565 F.3d 200, 207 (5th Cir. 2009) (quotation marks omitted). “The who,
what, when, where, and how” must be laid out. Benchmark Elecs., Inc. v. J.M.
Huber Corp., 343 F.3d 719, 724 (5th Cir. 2003), opinion modified on denial of
reh'g, 355 F.3d 356 (5th Cir. 2003).
Here, the Complaint asserted that on April 27, 2010, Catalina
representative, Abraham. (Doc. 44 at ¶ 2.11). It alleged that, in that meeting,
Abraham relied on Samniego and Henson’s “representations of confidentiality”
to share with them “confidential information relative to the internet coupon
industry.” (Doc. 44 at ¶ 2.13). It further alleged that Samniego and Henson
provided “assurances regarding confidentiality” to induce Abraham to disclose
information and “concealed Catalina’s plans to make a foray into the internet
coupon industry.” (Id. at ¶ 2.15).
Although the Court rules herein, supra, that the alleged representations
of confidentiality made by Catalina, as pleaded by Brand Coupon, are sufficient
to state a claim for detrimental reliance, the Complaint does not meet the
heightened pleading standards for fraud, which are strictly interpreted in the
Fifth Circuit. In addition to not specifying where the alleged representations
took place, the Complaint does not sufficiently state, for the purposes of a fraud
Complaint does specify whether the statements were oral, written, or nonverbal
and it does not plead with particularity the content of the statements that
Furthermore, the LUTPA claim contains a bare assertion of “conspiracy”
without specifying anywhere in the Complaint the alleged participants in the
conspiracy. There is but one defendant in this matter: Catalina. To the extent
that the Complaint identifies officers or employees of Catalina, the LUTPA
claims against these officers or employees in their individual capacities were
dismissed in a prior ruling by this Court, for failing to establish that the
individuals acted beyond the scope of their role as agents and employees for
Catalina. (Doc. 17 at pp. 11–12). These dismissals were affirmed upon appeal.
(Doc. 33 at pp. 10–11). Thus, conspiracy to defraud has not been alleged with
sufficient particularity and must be dismissed.
ii. Theft/Conversion of Property
The Complaint alleges that Catalina violated LUTPA by committing theft
of Brand Coupon’s name, identity, goodwill, vendors, and/or customers, as well
as by committing conversion of Brand Coupon’s property.
Conversion, or civil theft, is the commission of a wrongful act of dominion
over the property of another in denial of or in a manner inconsistent with the
owner's rights. Junior Money Bags, Ltd. v. Segal, 970 F.2d 1, 11 (5th Cir. 1992)
(citation omitted). Louisiana laws limit the scope of conversion to that
concerning personal property, which does not include business relationships. See
Union Sav. Am. Life Ins. Co. v. N. Cent. Life Ins. Co., 813 F. Supp. 481, 493 (S.D.
Miss. 1993) (Navratil v. Smart, 400 So. 2d 268, 276 (La. Ct. App. 1981), writ
denied, 405 So. 2d 320 (La. 1981)); see also Dual Drilling Co. v. Mills Equip.
Invs., Inc., 721 So. 2d 853, 857 (La. 1998) (conversion requires unlawful
interference with chattel).
This Court acknowledges that sister U.S. District courts within the Fifth
Circuit, when interpreting Texas’s conversion law, which is defined similarly to
Louisiana’s, have recognized claims for conversion of intangible property
interests. See, e.g., Alliantgroup, L.P. v. Feingold, 803 F. Supp. 2d 610, 626–27
(S.D. Tex. 2011). Even so, however, the courts interpreting Texas law have found
valid conversion claims for intangible property interests only “where the
underlying intangible right has been merged into a document, such as a
customer list.” Id. Even if this Court were to consider the non-binding authority
of courts interpreting Texas law, the Complaint contains no mention of any
document or writing, such as customer lists or vendor lists or contracts,
belonging to Brand Coupon and converted by Catalina.
Brand Coupon’s claims of theft and conversion under LUTPA have not
been alleged with sufficient plausibility and must be dismissed.
iii. Misappropriation of Trade Secrets
Furthermore, Brand Coupon has not sufficiently pleaded the existence of
trade secrets, much less their misappropriation. In a prior ruling in this matter,
this Court dismissed Brand Coupon’s trade secrets violation claim under the
Louisiana Uniform Trade Secrets Act (“LUTSA”). In explaining this dismissal,
this Court found:
There are no allegations within the Complaint from which it could
be inferred that Plaintiff made any effort to maintain secrecy with
regard to Plaintiff’s “trade secrets” vis-à-vis the Defendants.
Plaintiff has proffered no evidence that a trade secret exists, except
for Plaintiff’s website name (record citation omitted). This Court
does not recognize the secrecy in Plaintiff’s website name or website
design, as they are freely viewable to any individual with an
(Doc. 17 at p. 17). Brand Coupon did not challenge the dismissal of the trade
secrets violation claim on appeal, and the amended Complaint does not correct
the deficiencies of Brand Coupon’s initial complaint. Thus, Brand Coupon has
not sufficiently pleaded misappropriation of trade secrets under LUTPA and the
claim must be dismissed.
iv. Passing Off of Products
“A party is prohibited from ‘passing off’ its product as those of a competitor
by employing a substantially similar trade dress which is likely to confuse
consumers as to the source of the product.” KV Pharm. Co. v. Medecor Pharma,
L.L.C., 354 F. Supp. 2d 682, 686 (E.D. La. 2003). To prevail on this claim, Brand
Coupon must establish that its “trade dress is entitled to protection because it is
distinctive or has acquired a secondary meaning.” Id. The elements of a passing
off claim are “nearly identical” to those of a trademark infringement claim. Nola
Spice Designs, LLC v. Haydel Enters. Inc., 969 F. Supp. 2d 688, 703 (E.D. La.
2013). Because the Court finds that Brand Coupon has stated a plausible claim
of trademark infringement under Louisiana Trademark Law, infra, the Court
finds that Brand Coupon has stated a plausible claim of “passing off.”
Accordingly, Catalina’s motion to dismiss is DENIED with respect to the
claim of passing off of product, pursuant to LUTPA. Catalina’s motion to dismiss
is GRANTED with respect to the claims of conspiracy to defraud, theft,
conversion, and misappropriation of trade secrets.
4. Trademark Infringement/Dilution
Catalina asserts that in Count IV, Brand Coupon has not sufficiently
alleged trademark infringement or dilution under the Louisiana Trademark Law
(“LTL”), La. R.S. § 51:211, et seq. The LTL’s anti-infringement clause provides
that a person shall be liable for the unconsented use of any “colorable imitation
of a mark registered under this Sub-part in connection with . . . advertising of
any goods or services on or in connection with which such use is likely to cause
confusion or mistake or to deceive as to the source of origin of such goods or
services.” La. R.S. § 51:222. Plaintiff has not alleged that it registered “Brand
Coupon Network” as a trade name with the Louisiana Secretary of State
pursuant to the LTL, or with the U.S. Patent and Trademark Office. However,
required showings for trademark infringement under Louisiana state law mirror
those under the federal Lanham Act, see Prudhomme v. Procter & Gamble Co.,
800 F. Supp. 390, 395 (E.D. La. 1992), and judicial interpretation of federal law
is instructive here. Brand Coupon’s failure to plead registration of “Brand
Coupon Network” as a trade name is not an absolute bar to relief under the
LTL’s anti-infringement statute, for courts have afforded some leniency
regarding the registration requirement: “While registration may provide a
presumption of protection under the [Landham] Act, certain marks will be
protected by the courts even if they are not registered. The necessary showing is
that the mark be either ‘distinctive,’ or have acquired a secondary meaning.” Id.
at 395. Secondary meaning may be demonstrated when “words with an ordinary
or primary meaning of their own, may, by long use with a particular product,
service or business, come to be known by the public as specifically designating
that particular product.” Gulf Coast Bank v. Gulf Coast Bank & Trust Co., 652
So. 2d 1306, 1314 (La. 1995).
In addition to the LTL’s anti-infringement clause, an anti-dilution clause
provides: “Likelihood of injury to business reputation or of dilution of the
distinctive quality of a mark or trade name shall be a ground for injunctive relief
in cases of infringement of a mark registered or not registered.” La. R.S. §
51:223.1. The LTL anti-dilution statute requires distinctiveness, not fame.
Advantage Rent-A-Car, Inc. v. Enter. Rent-A-Car, Co., 238 F.3d 378, 381 (5th
Cir. 2001). 3
Louisiana courts have not yet addressed whether the distinctiveness element required for dilution
claims differs from the distinctiveness element required for trademark infringement claims under
The Supreme Court of Louisiana has followed federal Supreme Court precedent in
interpreting the state's distinctiveness requirement to mean that the mark must
either be inherently distinctive or have acquired distinctiveness through secondary
meaning in the context of trademark infringement, but it has not made clear whether
these requirements extend to dilution cases.
Brand Coupon was established as a limited liability company in 2004.
(Doc. 44 at p. 1). The Complaint alleges that prior to Catalina’s entry into the
internet coupon industry in 2010 under the name CouponNetwork.com, there
were only four major participants in the market: Brand Coupon, Invenda,
Coupons.com, and Smartsource.com. (Doc. 44 at ¶ 2.21). Brand Coupon also
states that it had “gained name recognition and identity in the internet coupon
industry” since its inception, (Id. at ¶ 2.3), and that “[Brand Coupon]’s business
name and identity became confused with Catalina’s,” (Id. at ¶ 2.26). From the
pleaded facts, it is plausible that the “Brand Coupon Network” mark had
acquired distinctiveness or secondary meaning in the industry comprised of four
main competitors, during the six years Brand Coupon was in operation before
Catalina entered the market. Furthermore, it is plausible that the facial
similarity between Plaintiff’s “Brand Coupon Network” and Defendant’s
“Coupon Network” websites was likely to confuse coupon consumers and clients
as to the origin and nature of the coupon services.
Accepting the veracity of Brand Coupon’s well-pleaded factual allegations,
the Court finds that they plausibly give rise to an entitlement to relief under the
LTL anti-infringement or anti-dilution statutes. Accordingly, Catalina’s Motion
to Dismiss for Plaintiff’s failure to sufficiently plead its claim of infringement is
Advantage Rent-A-Car, 238 F.3d at 381 (citations omitted).
5. Tortious Conduct
Lastly, Catalina argues that Brand Coupon has not sufficiently alleged
the necessary elements of its tortious conduct claims under La. C.C. art. 2315,
which contains the general authority for recovery for damages arising in tort
offenses: “Every act whatever of man that causes damage to another obliges him
by whose fault it happened to repair it.”
Count V of the Complaint claims that Catalina’s acts constitute
“intentional torts and predatory business practices based on fraud, conversion
and contract.” (Doc. 44 at ¶ 8.3). 4 Catalina contends that the Complaint also
appears to allege tortious interference with business relations and similarly
argues that this claim is insufficiently alleged. In evaluating Brand Coupon’s
claims for fraud, conversion, and interference with business relations under
article 2315, the Court finds all such claims insufficiently pleaded for the
reasons explained herein.
Catalina asserts that the Complaint fails to allege fraud with required
particularity under Rule 9(b) and that, to the extent that Brand Coupon alleges
fraud based on unfulfilled promises of confidentiality, such allegations are not
actionable as fraud. For the reasons discussed regarding Brand Coupon’s claim
Plaintiff enumerates “contract” as a source of its cause of action under article 2315, although the
face of the Complaint does not reference any specific contract, nor does it attempt to explain why or
how a tort remedy would be appropriate for a contract claim. No mention of tortious interference
regarding intentional interference with contract appeared in either Catalina’s Motion to Dismiss or
Brand Coupon’s Response in Opposition. Accordingly, the Court declines to address the point here.
of fraud under LUTPA, supra, Brand Coupon has failed to allege with requisite
particularity the tort of fraud based on Catalina’s alleged misrepresentations of
Another potential cause of action under article 2315 is similarly foreclosed
to Brand Coupon. Brand Coupon’s assertion that Samniego and Henson
“concealed Catalina’s plans,” (Doc. 44 at ¶ 2.15), may appear to allege the tort of
nondisclosure and misinformation cases. See Soc'y of Roman Catholic Church of
Diocese of Lafayette, Inc. v. Interstate Fire & Cas. Co., 126 F.3d 727, 742 (5th Cir.
1997). Yet nowhere does the Complaint identify negligent misrepresentation as
a cause of action and, beyond that, such a claim would fail because it requires a
showing that the person committing the tort “has a legal duty to supply correct
information.” Id. (Barrie v. V.P. Exterminators, Inc., 625 So.2d 1007 (La.1993)).
Brand Coupon has not alleged any facts indicating that Samniego and Henson
had a legal duty to tell Abraham or Brand Coupon about Catalina’s plans to
enter the internet coupon industry.
Thus, the Complaint does not allege with sufficient particularity the tort
of fraud, either for misrepresentation of confidentiality or for concealment of
information, and must be dismissed.
Catalina argues that the Complaint fails to allege conversion, one of the
acts contemplated by article 2315. In Count V, the Complaint alleges that Brand
Coupon has suffered, inter alia, loss of business, loss of net worth, loss of future
profit, loss of reputation, and loss of business opportunity. (Doc. 44 at ¶ 8.4). As
discussed regarding Brand Coupon’s claims for theft and conversion under
LUTPA, supra, Louisiana laws limit the scope of conversion to that of personal
property. The speculative losses enumerated in Count V of the Complaint do not
constitute personal property. The Complaint fails to identify any property
interest of Brand Coupon’s over which Catalina assumed control. Thus, the
Complaint does not state a plausible claim for conversion under article 2315 and
the claim must be dismissed.
c. Tortious Interference with Business
In addition, Catalina notes that the Complaint appears to allege tortious
interference with business relations and similarly argues that this claim is
insufficiently alleged. Louisiana law recognizes a cause of action under article
2315 for tortious interference with business. Dussouy v. Gulf Coast Inv. Corp.,
660 F.2d 594, 601 (5th Cir. 1981). The law protects businesses from “malicious
and wanton interference,” permitting only interferences intended to protect a
legitimate interest of the actor. Id. (citations omitted). A plaintiff bringing suit
for tortious interference with business must show that the defendant improperly
influenced others not to do business with the plaintiff. Junior Money Bags, Ltd.
v. Segal, 970 F.2d 1, 10 (5th Cir. 1992). “This burden is not satisfied by general
allegations of a decrease in business. One party must show that the other
actually prevented him from having dealings with an identifiable third party.”
Allstate Ins. Co. v. Cmty. Health Ctr., Inc., No. CIV.A. 08-810, 2014 WL 1689701,
at *30–31 (M.D. La. Apr. 29, 2014). Additionally, there exists a required element
of actual malice, interpreted as approximating “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.” JCD Mktg. Co. v.
Bass Hotels & Resorts, Inc., 812 So. 2d 834, 841 (La. Ct. App. 2002).
Here, according to the Complaint, Catalina sought “to acquire [Brand
Coupon]’s market share through the use of deceptive and unfair tactics,” and
“Catalina’s actions resulted in confusion among the consumer packaged goods
manufacturers” with whom Brand Coupon partnered. (Doc. 44 at ¶¶ 2.21, 2.27).
The Complaint, however, fails to set forth specific facts to show that Catalina
improperly influenced any identifiable consumer packaged goods manufacturers
or other third parties to prevent them from doing business with Brand Coupon.
Nor does the Complaint show that Catalina exhibited malice in allegedly taking
market share from Brand Coupon. Because Brand Coupon has not sufficiently
pleaded tortious interference, the Court must dismiss the claim.
Accordingly, Defendant’s motion to dismiss Count V of the Complaint,
alleging Tortious Conduct under La. C.C. art. 2315 is GRANTED, and the
claims shall be ordered DISMISSED WITH PREJUDICE.
MOTION TO STAY DISCOVERY
On June 10, 2014, Catalina moved to stay discovery until after resolution
of the instant Motion to Dismiss. (Doc. 37). Considering the rulings herein which
resolve all issues raised in Catalina’s Motion to Dismiss, this Motion to Stay
Discovery is now moot and shall be denied as such.
IT IS ORDERED that Defendant Catalina’s Motion to Dismiss
Plaintiff’s First Amended Complaint (Doc. 48) is DENIED IN PART and
GRANTED IN PART, consistent with the rulings herein. Specifically, the
motion is denied for Counts I, II, and IV, and granted for Count V. Defendant’s
motion to dismiss Count III is denied with respect to the claim of passing off,
and granted with respect to the claims of conspiracy to defraud, theft,
conversion, and misappropriation of trade secrets.
IT IS FURTHER ORDERED that Plaintiff Brand Coupon’s Count V for
Tortious Conduct is DISMISSED WITH PREJUDICE.
IT IS FURTHER ORDERED that Defendant Catalina’s Motion to Stay
Discovery (Doc. 37) is DENIED AS MOOT.
Baton Rouge, Louisiana, this 24th day of November, 2014.
BRIAN A. JACKSON, CHIEF JUDGE
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
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