Sumrall v. Ricoh USA, Inc.

Filing 19

RULING and ORDER: The 2 Motion to Dismiss Plaintiff's Complaint is DENIED. Signed by Judge John W. deGravelles on 8/4/2015. (BCL)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
CHARLOTTE B. SUMRALL D/B/A
WELCOME HOST

CIVIL ACTION NO. 15-00061
JUDGE JOHN W. deGRAVELLES

VERSUS
RICOH USA, INC.

MAGISTRATE JUDGE STEPHEN
C. RIEDLINGER
RULING AND ORDER

Before the Court is Defendant’s Motion to Dismiss Plaintiff’s Complaint (Doc. 2) filed
by Ricoh, USA, Inc. Plaintiff opposes the motion. (Doc. 15). This Court has jurisdiction pursuant
to 28 U.S.C. § 1332. Oral argument is not necessary.
After carefully considering the law, facts, and arguments of the parties, Defendant’s
motion is denied.
I.

Relevant Facts and Procedural Background
A. Introduction
Plaintiff, Charlotte B. Sumrall doing business as Welcome Host (“Sumrall” or

“Plaintiff”), brought suit against Defendant Ricoh, USA, Inc. (“Ricoh” or “Defendant”) in the
19th Judicial District Court for the Parish of East Baton Rouge alleging Defendant’s breach of
contract, economic duress, and violation of Louisiana’s Unfair Trade Practices and Consumer
Protection Law. (Doc. 1-1). Defendant removed this case to this Court, asserting diversity
jurisdiction. Ricoh is seeking dismissal of Sumrall’s claims for failure to state a claim upon
which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6).

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B. Plaintiff’s Allegations1
1. The Terms of the Master Agreement
On November 19, 2010, Sumrall and Ricoh engaged in a Master Maintenance & Sale
Agreement (“Master Agreement”) which governed the terms and conditions of the relationship
between the parties. (Petition for Damages, Doc. 1-1, ¶ 5, p. 1). When Sumrall wished to
purchase a copy machine or a service plan from Ricoh, the parties would sign a separate service
agreement for that specific transaction. (Master Agreement, Doc. 1-2, p. 1).2 The parties engaged
in Service Order # 1 on the same day, which was for the sale of a copy machine and its
maintenance for a 36-month period. (Petition for Damages, Doc. 1-1, ¶ 6, p. 1). Sumrall executed
Service Order # 2 on September 29, 2011 for the purchase and maintenance of a second copy
machine. (Id. at ¶ 8, p. 2). The agreed upon price for service charges was $0.008 per black and
white image processed and $0.04 per color image processed. (Petition for Damages, Doc. 1-1, at
¶ 8, p. 2). Under the terms of the Master Agreement, each Service Order would automatically
renew for 12 months upon the expiry of their respective 36-month maintenance periods. (Master
Agreement, Doc. 1-2, Section 4, p. 2).
2. The 2014 Order Agreement
At approximately the time that the original 36-month period for Service Order #1 had
expired in late 2013/early 2014, Ricoh allegedly informed Sumrall that the service charges would
increase in price to $0.012 per black and white image processed and $0.055 per color image
processed. (Petition for Damages, Doc. 1-1, ¶ 16, p. 3). These represent fee increases of 50% for
black and white images and 37.5% for color images. (Id. at ¶ 16, p. 3). These new prices were

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These Facts are assumed to be true for purposes of this 12(b)(6) motion.
The Master Agreement was attached to the Petition. Pursuant to Fed. R. Civ. P. 10(c) the Master Agreement is
part of the Petition for all purposes and can be considered for this motion. See Scanlan v. Tex. A&M Univ., 343 F.3d
533, 536 (5th Cir. 2003); Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir. 2000).
2

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referenced in an Order Agreement (“2014 Order Agreement”), despite the fact that Plaintiff
alleges that Service Order #1 was still valid under its renewal term and the original 36-month
term for Service Order #2 had not yet expired. (Id. at ¶ 21, p. 4).
3. Allegations of Economic Duress
Due to the high volume of business that Sumrall typically experienced at this time of year
and the alleged lack of any potential substitute vendors to help service the machines, she agreed
to pay these increased prices on their next two quarterly invoices (March and June 2014) despite
being under the impression that Ricoh was violating the terms of the Master Agreement and both
Service Orders. (Id. at ¶ 14-17, p. 3). Plaintiff alleges that Ricoh “threaten[ed] to withhold
services for which [Sumrall] contracted and paid” in order to force Sumrall into agreeing to the
higher rates. (Petition for Damages, Doc. 1-1, ¶ 21, p. 4).
II.

The Dispute
After paying the second quarterly invoice at the new, higher rate, Sumrall reviewed the

terms of the Master Agreement, which governed the terms of all Service Orders between the
parties. (Id. at ¶ 18, p. 3). The Master Agreement reads, in pertinent part:
Unless otherwise expressly agreed to in writing, if the term of any Service
Order exceeds 12 months, the Periodic Services Charges and the Cost of
Additional Images may be increased by [Ricoh] up to 10% annually for each
year beyond the initial 12-month period, and [Sumrall] expressly consents to
such adjustment without additional notice.
(Master Agreement, Doc. 1-2, Section 5(b), p. 2).
When the next payment became due in September 2014, Sumrall informed Ricoh that all
charges in excess of the 10% contemplated by the Master Agreement were an overcharge and, in
order to recoup their perceived excess charges from the previous two invoices, Sumrall
“readjusted” their own rates to reflect the lower rate on the September invoice. (Petition for

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Damages, Doc. 1-1, ¶ 18-19, p. 3-4). Ricoh responded by placing Sumrall on credit hold and
canceling all of her further orders for toner. (Id. at ¶ 20, p. 4).
III.

Standard for a 12(b)(6) Motion to Dismiss
In Johnson v. City of Shelby, Miss., 135 S.Ct. 346 (2014), the Supreme Court has

explained “Federal pleading rules call for a ‘short and plain statement of the claim showing that
the pleader is entitled to relief,’ Fed. R. Civ. P. 8(a)(2); they do not countenance dismissal of a
complaint for imperfect statement of the legal theory supporting the claim asserted.” 135 S.Ct. at
346-47 (citation omitted).
Interpreting Rule 8(a) of the Federal Rules of Civil Procedure, the Fifth Circuit has
explained:
The complaint (1) on its face (2) must contain enough factual matter (taken as
true) (3) to raise a reasonable hope or expectation (4) that discovery will reveal
relevant evidence of each element of a claim. “Asking for [such] plausible
grounds to inter [the element of a claim] does not impose a probability
requirement at the pleading stage; it simply calls for enough facts to raise a
reasonable expectation that discovery will reveal [that the elements of the claim
existed].”
Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 257 (5th Cir. 2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 556, 127 S.Ct.1 955, 1965 (2007)).
Applying the above case law, the Western District of Louisiana has stated:
Therefore, while the court is not to give the “assumption of truth” to conclusions,
factual allegations remain so entitled. Once those factual allegations are
identified, drawing on the court’s judicial experience and common sense, the
analysis is whether those facts, which need not be detailed or specific, allow “the
court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” [Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949
(2009)]; Twombly, 555 U.S. at 556. This analysis is not substantively different
from that set forth in Lormand, supra, nor does this jurisprudence foreclose the
option that discovery must be undertaken in order to raise relevant information to
support an element of the claim. The standard, under the specific language of Fed.
R. Civ. P. 8(a)(2), remains that the defendant be given adequate notice of the
claim and the grounds upon which it is based. The standard is met by the
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“reasonable inference” the court must make that, with or without discovery, the
facts set forth a plausible claim for relief under a particular theory of law provided
that there is a “reasonable expectation” that “discovery will reveal relevant
evidence of each element of the claim.” Lormand, 565 F.3d at 257; Twombly, 555
U.S. at 556.
Diamond Servs. Corp. v. Oceanografia, S.A. De C.V., No. 10-00177, 2011 WL 938785, at *3
(W.D. La. Fe. 9, 2011) (citation omitted).
More recently, in Thompson v. City of Waco, Tex., 764 F.3d 500 (5th Cir. 2014), the Fifth
Circuit summarized the standard for a Rule 12(b)(6) motion for dismissal:
We accept all well-pleaded facts as true and view all facts in the light most
favorable to the plaintiff. . . To survive dismissal, a plaintiff must plead enough
facts to state a claim for relief that is plausible on its face. 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.
Our task, then, is to determine whether the plaintiff state a legally cognizable
claim that is plausible, not to evaluate the plaintiff’s likelihood of success.
Id. at 502-03 (citations and internal quotations omitted).
IV.

Discussion
A. Breach of Contract Claim
1. Parties’ Arguments
Sumrall argues that Ricoh violated the Master Agreement as well as the renewed terms of

Service Order # 1. (Opposition to Motion to Dismiss, Doc. 15, p. 4). Sumrall contends that both
the original Service Orders were still in effect at the time that Ricoh increased the charges for
toner resupply and that the increase of fees constitutes a breach of the terms of the parties’
agreements. (Id.).
Furthermore, the Master Agreement governs the terms and conditions of every
subsequent agreement in which the parties engage. (Id. at 1). By raising the fees for toner
resupply above the 10% which the Master Agreement refers to, Ricoh allegedly violated the

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contract. (Id. at 4). Rather than acceding to the new rates which Ricoh quoted, Plaintiff states that
she “yield[ed] under Ricoh’s economic pressure” and only acceded to the 2014 Order Agreement
under duress. (Id., discussed infra).
Sumrall argues that there are three essential elements to a claim for breach of contract:
First, a plaintiff in a breach of contract claim must prove that the obligor
undertook an obligation to perform [. . .] Next, the plaintiff must prove that the
obligor failed to perform the obligation, resulting in a breach. Finally, the failure
to perform must result in damages to the obligee.
(Id. at 4-5; Sanga v. Perdomo, No. 14-CA-609, ___ So. 3d ___, 2014 WL 7499383, at *7 (La.
App. 5 Cir. Dec. 30, 2014)). She contends that the underlying facts alleged in the Complaint are
sufficient to meet these elements. (Doc. 15, p. 5). “Accordingly, [she] has stated a claim for
which relief can be granted.” (Id.). With regard to Ricoh’s allegation that Sumrall ratified the
2014 Order agreement by paying the invoices, Sumrall argues that ratification is an issue of fact
which ought properly to be argued at trial. (Id.).
Ricoh moved to dismiss Sumrall’s Complaint for failure to state a claim, pursuant to Fed.
R. Civ. P. 12(b)(6). (Memorandum in Support of Motion to Dismiss, Doc. 2-1, p. 3). The crux of
Ricoh’s argument is that by enjoying the benefits of the 2014 Order Agreement in the form of
goods and services from Ricoh and by acknowledging the existence of this agreement by paying
two invoices over a six-month period, Sumrall may not now repudiate the 2014 Order
Agreement. (Id. at 4).
Ricoh asserts that Plaintiff is barred from alleging breach of contract under the Service
Orders because Plaintiff ratified the 2014 Order Agreement by paying two invoices at the
increased rates. (Id. at 4). Ricoh cites authority to state that “[a] party with full knowledge of all
of the facts who accepts the benefit of a contract is deemed to have ratified the contract and is
precluded from repudiating the agreement.” (Id., quoting McLemore v. Landry, 687 F. Supp.
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1038, 1041 (M.D. La. 1988) aff’d, 898 F.2d 996 (5th Cir. 1990)). Defendant stresses the fact that
Sumrall “accepted the benefits of Ricoh’s services under the 2014 Order Agreement” for two
billing periods and that Sumrall did not attempt to repudiate the Agreement until after accepting
its terms through confirmation/ratification.3 (Defendant’s Reply to Opposition to Motion to
Dismiss, Doc. 18, p. 2-3). Defendant argues that these undisputed facts lead to the conclusion
that Sumrall ratified the subsequent 2014 Order Agreement, which was at most a “relatively
null” contract due to Plaintiff’s alleged lack of consent at the time of the contract’s execution.
(Id. at 2). A relatively null contract can be confirmed pursuant to Louisiana Civil Code Article
2031. (Id.). Ricoh maintains that Sumrall’s actions represent the confirmation of a relatively null
contract and therefore the breach of contract claim must be dismissed. (Id. at 3).
2. Analysis
The first issue is whether the Plaintiff has stated a claim when she can recover under the
Master Agreement despite a subsequently entered, but subordinate, secondary contract that
violates the Master Agreement. The Court finds that Plaintiff can recover under these
circumstances.
Under Louisiana law, a plaintiff must prove three essential elements in order to prevail on
a claim for breach of contract: (1) that the obligor undertook an obligation to perform; (2) that
the obligor failed to perform the obligation; and (3) that the failure to perform this obligation
resulted in damages to the plaintiff. Cent. Facilities Operating Co., LLC v. Cinemark USA, Inc.,
36 F. Supp. 3d 700, 712 (M.D. La. 2014); Sanga v. Perdomo, No. 14-CA-609, ___ So. 3d ___,
2014 WL 7499383, at *7 (La. App. 5 Cir. Dec. 30, 2014); Favrot v. Favrot, 2010–0986 (La.
App. 4 Cir. 02/09/11); 68 So. 3d 1099, 1108-09.

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Ricoh argues that the terms “confirmation” and “ratification” are interchangeable terms under Louisiana law.
(Defendant’s Reply to Opposition to Motion to Dismiss, Doc. 18, p. 2-3).

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Plaintiff alleges Defendant failed to adhere to the terms of the Master Agreement,
specifically to Section 5(b) which contains a limitation of 10% on any increase in Service Order
charges. (Doc 15, p. 4; Doc 1-1, ¶9, p. 2 ).
Defendant does not dispute that the 2014 Order Agreement is bound by the terms and
conditions of the Master Agreement but characterizes the 2014 Order Agreement as a “new
written service order with an uncapped price increase.” (Doc. 18, p. 5). Defendant argues that
Plaintiff may not sue for breach of contract because Plaintiff ratified the 2014 Order Agreement.
(Id. at p. 2-3).
Pacificorp Capital, Inc. v. State Through Div. of Admin., Office of State Purchasing,
involved a challenge to the validity of a contract bid between Delgado Community College and
its preferred provider for computer equipment, IBM. 647 So. 2d 1122, 1124 (La. App. 1 Cir.
1994). One of the grounds for the challenge was that the final, accepted contract contained
terminology that differed from the Invitation to Bid (“ITB”). Id. at 1129. In order to resolve the
discrepancy in terms, the court referenced the pertinent language of the Master Agreement,
which read in part: “Notwithstanding any other provisions to the contrary in the Master
Agreement [. . .] in the event of any conflict between the ITB, the IBM bid response and this
contract, the ITB shall prevail, then IBM's bid response, then the contract.” Id. Though the
contract, which incorporated the Master Agreement, was subordinated to the ITB, this was only
because the terminology of the Master Agreement required it. Importantly, even when the ITB
was allowed to supersede aspects of the contract to provide computer equipment, it was only
because the language of the Master Agreement relegated itself to a subordinate role in the event
of conflict.

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In this case, the Court finds that it must look to the Master Agreement in order to resolve
conflicts in the contractual language. In doing so, it is apparent that Ricoh is in violation of the
terms of Service Order # 1 per Plaintiff’s Complaint. The Master Agreement grants an automatic
renewal to the Service Order and has set limitations on the rate increases, which Ricoh has
allegedly exceeded. (Master Agreement, Doc. 1-2, Section 4, p. 2; Id. at Section 5(b), p. 2).
Even if the Court were to dispense with the Iqbal standard of “accepting as true” the
factual matter alleged in the complaint and instead, accept Defendant’s argument that the 2014
Order Agreement does not violate the limitation on price increases, this still would not justify
Ricoh’s purported cancellation of the automatic Service Order renewal to which Plaintiff had a
right pursuant to Section 4 of the Master Agreement.
Furthermore, Defendant’s argument that the parties are entitled to negotiate a “new
written service order with an uncapped price increase” is ostensibly reliant on Section 18 of the
Master Agreement. (Doc 18, p. 5). However, Section 18 of the Master Agreement deals with
Force Majeure and assignations of rights or interests arising thereunder. No section of the Master
Agreement appears to authorize unlimited price increases by Ricoh.
Plaintiff has alleged sufficient facts in her complaint to make a plausible claim that
Defendant is liable for the contractual breaches alleged. Therefore, Defendant’s Motion to
Dismiss Plaintiff’s breach of contract claim for failure to state a claim is denied.
B. Claim for Economic Duress and Declaratory Relief
1. Parties’ Arguments
Sumrall contends that the fear of economic deprivation is sufficient to meet the level of
duress required to vitiate consent under Louisiana law. (Opposition to Motion to Dismiss, Doc.
15, p. 6; Wolf v. La. State Racing Comm’n, 545 So. 2d 976, 981 (La. 1989)). “In order to be

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actionable, the duress must be of such a nature as to cause a ‘reasonable fear’ of unjust and
considerable injury to a party’s property.” (Doc. 15 at 6; Monterrey Ctr., LLC v. Education
Partners, Inc., 5 So. 3d 225, 230-31 (La. App. 1 Cir. 2008). Furthermore, Sumrall argues that
she meets the standard articulated by the U.S. Fifth Circuit case mentioned supra in Defendant’s
Motion. (Monterrey Ctr., LLC, 5 So. 3d at 230-31). If the applicable standard for vitiating
consent is a threat sufficient to cause reasonable fear for a party’s property, then Plaintiff argues
that, a fortiori, Defendant’s actual withholding of services to Plaintiff constituted duress
sufficient to vitiate consent. (Id.). Therefore, Plaintiff moves the court for declaratory judgment
on the 2014 Order Agreement, declaring it invalid due to Plaintiff’s lack of consent. (Id.).
Because Sumrall allegedly cannot prove economic duress, Ricoh argues that the Court
should dismiss Plaintiff’s claim for declaratory judgment stating that the 2014 Order Agreement
is null and void for lack of consent. (Doc. 2-1, p. 5-6). Ricoh argues that Plaintiff has incorrectly
stated the standard for the level of duress required to vitiate consent. (Defendant’s Reply to
Opposition to Motion to Dismiss, Doc. 18, p. 4). Ricoh states that the present case is factually
distinguishable from Wolf v. La. State Racing Comm’n, 545 So. 2d 976, 976 (La. 1989), supra,
because in that case the plaintiff “protested prior to entering into the agreement and only finally
executed the agreement in question after a clause was added indicating that they were signing
under protest.” (Id.; quoting Wolf, 545 So. 2d at 976).
Ricoh alleges that a party may successfully argue duress vitiating consent if that party has
been induced by threats to such an extent that there are no reasonable alternatives to consent.
(Doc. 18 at 5; Wolf, 545 So. 2d at 980) (emphasis added). Ricoh argues that there cannot have
been “no reasonable alternatives” because Sumrall had the financial wherewithal to pay the two
invoices at increased rates and ceased future payments only because Sumrall felt “excused from

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such payment.” (Doc. 18 at 5-6). Therefore, Ricoh argues that Sumrall has failed to make a claim
for duress vitiating consent and the claim for declaratory judgment should be dismissed. (Id. at
6).
2. Analysis
The Court finds that Plaintiff has sufficiently alleged economic duress such that her
consent to the 2014 Order Agreement was vitiated and therefore denies Defendant’s motion on
this issue. Article 1959 of the Louisiana Civil Code stipulates that “[c]onsent is vitiated when it
has been obtained by duress of such a nature as to cause fear of unjust and considerable injury to
a person’s property, person, or reputation.” The personal circumstances of a party must be taken
into account when evaluating the reasonableness of that party’s fear.
Sumrall cites Wolf v. La. State Racing Comm’n, supra, in support of its argument that
fear of economic deprivation is sufficient to vitiate consent for duress. But not every court
interprets Article 1959 of the Civil Code in this way. In Wolf, the dispute arose between racing
jockeys and the Fair Grounds. 545 So. 2d 976, 976-77 (La. 1989). In order to race, jockeys were
forced to waive their rights to sue in tort for injuries sustained while racing in exchange for a
worker’s compensation agreement. Id. The jockeys signed these contracts under protest and
immediately sought to have these contracts reviewed by the Louisiana State Racing Commission
and then by a state court. Id. at 977.
The Louisiana Supreme Court held that the contract was invalid due to the Fair Grounds’
superior bargaining strength and the fear of economic deprivation that the jockeys would suffer
from an inability to practice their profession if they did not agree to sign the contract. Id. Sumrall
argues that this case supports the proposition that “[t]he fear of economic deprivation is
sufficient to meet the level of duress required to vitiate consent.” (Doc. 15 at p. 6).

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However, other courts have been more reluctant to find mere economic pressures
sufficient to establish duress. For example, in Pellerin Const., Inc. v. Witco Corp., the court
found that a party who signed a contract modification to its economic detriment while in
financial straits does not suffer economic duress sufficient to vitiate consent. 169 F. Supp. 2d
568, 579-80 (E.D. La. 2001). There, a construction company sued a manufacturer of specialty
chemicals to escape a series of contract modifications which the plaintiff signed to its financial
detriment. Id. at 576.
Among the factors considered by the court in determining there was sufficient economic
duress to vitiate the contract were (1) whether the defendant improperly threatened the plaintiff;
(2) whether the defendant had purposely delayed the construction project so that it could make
unreasonable demands of the plaintiff; and (3) whether the defendant withheld payments to the
plaintiff during contract negotiations in order to extract more favorable business concessions. Id.
at 580. The court concluded that evidence failed to show that the defendant had “engage[d] in
conduct designed to produce [financial] stress.” Id. at 579. “While there is undoubtedly some
relationship between [Plaintiff’s] financial condition and the project delays, defendants did not
engage in conduct designed to produce [Plaintiff's] economic problems, and the mere stress of
[Plaintiff's] business conditions does not constitute economic duress.” Id. at 580.
It is sometimes necessary for a court to engage in a fact-intensive inquiry in order to
determine whether a contract is void for economic duress. In Advocate Fin., LLC v. Cardenas, is
court considered a case involving a financial services company and the terms of a loan
repayment contract with a law firm. No. 09-1023, 2012 WL 370189, at *1 (M.D. La. 2012) aff’d,
502 Fed. App’x. 384 (5th Cir. 2012). There, Mr. Cardenas financed his litigation practice with a
line of credit from Advocate Financial which reached into the hundreds of thousands of dollars.

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Id. Between the years 2003 and 2009, Cardenas was forced to renegotiate the terms of his line of
credit because he habitually did not make any payments on his outstanding interest as required.
Id. Advocate Financial filed suit against Cardenas seeking a money judgment as well as formal
recognition of its security interest in the assets Cardenas had offered as collateral. Id. at *2. In his
defense, Cardenas claimed that he was economically coerced into signing each subsequent loan
agreement, each of which contained more onerous terms, so that he could maintain the “lifeline
and bloodline” of his business. Id. Cardenas argued he did not legally consent to these loan
agreements because of the coercion of financial duress. Id.
The court applied a test similar to that used in Pellerin to determine whether Cardenas
was under the requisite level of duress. It concluded that (1) the threat of a lawful activity did not
constitute duress, although making a threat that is only lawful in appearance might constitute
duress; and (2) “neither financial strait nor the mere stress of business conditions constitute
economic duress if the opposing party did not engage in conduct designed to produce that
stress.” Id. at *4. See also Key Bank Nat’l Ass’n v. Perkins Rowe Assocs., LLC, No. 09-497-JJBSCR, 2011 WL 3444301, at *4 (M.D. La. 2011 Aug. 8, 2011) aff’d, 539 Fed. App’x. 414 (5th
Cir. 2013) (“[t]hough Defendants may have felt compelled to sign the Amendment in order to
keep the project economically viable, Plaintiff played no role in causing the project to go overbudget”); Comeaux v, Entergy Corp., 734 So. 2d 105, 107 (La. App. 5 Cir. 1999) (“Louisiana
appellate courts have held that financial strait does not constitute duress”); Shepherd v. Allstate
Ins. Co., 562 So. 2d 1099, 1101 (La. App. 4 Cir. 1990) (holding that a car accident victim who
signed a compromise with defendant insurance company mere hours after the accident was not
under economic duress despite “need[ing] money immediately”).

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Ricoh contends that its alleged threats to withhold maintenance and toner resupply
services from Sumrall does not equate to economic duress because they were not “of such
character as to destroy the free agency of the party to whom the threat was directed.”
(Memorandum in Support of Motion to Dismiss, Doc. 2-1, p. 5; quoting Palmer Barge Line, Inc.
v. S. Petrol. Trading Co., 776 F.2d 502, 505 (5th Cir. 1985)). It argues that threatening to break a
contract is, by itself, insufficient to constitute economic duress. (Id.; Hartsville Oil Mill v. United
States, 271 U.S. 43, 49 (1926)).
While the bar to successfully assert economic duress to the extent that it vitiates a party’s
consent is a high one, Sumrall’s Complaint alleges sufficient facts to clear the bar. Ricoh’s threat
to withhold goods and services from the copy machines unless Sumrall acceded to the 2014
Order Agreement, under the circumstances existing at the time, resembles the situation which
existed in Wolf, supra: (1) Sumrall’s economic viability depended on a working commercial
contract with a service provider for Sumrall’s copy machines; (2) Sumrall was not the cause of
her own financial distress; and (3) it was Defendant’s conduct that created the fear of economic
duress.
For these reasons, Defendant’s Motion to Dismiss Plaintiff’s claim for economic duress
is denied because Plaintiff’s allegations are facially plausible and, if true, entitle her to relief.
C. Claim under LUTPA for Unfair Trade Practices
Ricoh argues that Louisiana’s Unfair Trade Practices and Consumer Protection Law
(“LUTPA”; La. R.S. 51:1401 et seq.) does not provide a cause of action for commercial
contracts – rather, it only allows for suits by direct consumers or business competitors. (Doc. 2-1,
p. 6). Because Sumrall is neither, Ricoh argues that Plaintiff has failed to state a claim for which
relief can be granted. (Id. at 7).

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However, the cases relied on by Ricoh have been overruled by Cheramie Services, Inc. v.
Shell Deepwater Prod., Inc., 2009-1633 (La. 4/23/10), 35 So. 3d 1053, which expanded the pool
of potential suitors under LUTPA beyond merely consumers or competitors. (Doc. 15 at 7).
“Although business consumers and competitors are included in the group afforded in this right of
action, they are not its exclusive members. Contrary holdings are hereby repudiated, because any
limitation must be contained in the language of the statute.” (Id.; quoting Cheramie, 35 So. 3d at
1057-58). Cheramie has been followed by this and other federal courts in Louisiana. Nola Fine
Art, Inc. v. Ducks Unlimited, Inc., No. 13-4904, 2015 WL 631244, at *8 (E.D. La. Feb. 12, 2015)
(applying the Cheramie standard to a contractual dispute between an artist and a conservation
group); Burgers v. Bickford, No. 12-2009, 2014 WL 4186757, at *3 (E.D. La. Aug. 22, 2014)
(“In light of Cheramie, the Court finds that Plaintiff has standing to bring his LUTPA claims”);
Felder’s Collision Parts, Inc. v. General Motors Co., 960 F. Supp. 2d 617, 638 (M.D. La. 2013)
(“The Supreme Court of Louisiana recently held that this right of action extends to all persons,
including business competitors, who assert loss of money or property as a result of another's
unfair or deceptive trade practices”) (emphasis added).
In addition, Ricoh argues that LUTPA does not protect against the kind of conduct
Plaintiff claims Ricoh engaged in. The “range of prohibited practices under LUTPA is extremely
narrow.” Cheramie, 35 So. 3d at 1060. Specifically, LUTPA prohibits “[u]nfair methods of
competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”
La-R.S. 51:1405. Louisiana courts have ruled inconsistently as to whether breach of contract is
actionable under LUTPA. Some courts have held that a mere breach of contract claim is not
actionable under this statute. Turner v. Purina Mills, Inc., 989 F.2d 1419, 1422 (5th Cir. 1993)
(“There is a great deal of daylight between a breach of contract claim and the egregious behavior

15

the statute proscribes”); Schenck v. Living-Centers East, Inc., 917 F. Supp. 432, 439 (E.D. La.
1996) (“Mere breach of contract is not actionable under . . . LUTPA”).
However, other courts have held that breach of contract claims are not automatically
excluded from LUTPA. In State ex rel. Guste v. Orkin Exterminating Co., Inc., the State of
Louisiana filed suit under LUTPA against Orkin for unilaterally raising its rates in violation of a
contract which fixed those rates. 528 So. 2d 198, 199 (La. App. 5 Cir. 1988); writ denied, 533
So. 2d 18 (La. 1988). In contracting with thousands of Louisiana consumers to provide pest
control services, one of the inducements used by Orkin was the promise to charge the same
renewal fee every year without any increase in the amount charged for as long as the covered
structure remained standing. Id. In violation of the contract, Orkin began to increase its renewal
fees. Id. Orkin argued that breach of contract is insufficient to merit a suit under LUTPA because
the behavior proscribed by LUTPA must be of a more nefarious nature. Id. at 202. The court,
quoting an investigatory report compiled by the Federal Trade Commission, characterized
Orkin’s conduct as “a widespread, systematic program implemented by Orkin to effect a
unilateral modification of its own standard contract terms agreed to by many thousands of
consumers.” Id. (emphasis added). While the misconduct at issue in Orkin was much more
widespread than the misconduct alleged in the present case, the underlying conduct was similar.
See also, Nola Fine Art, Inc. v. Ducks Unlimited, Inc., No. 13-4904, 2015 WL 631244, at *8
(E.D. La. Feb. 12, 2015) (plaintiff could sue for defendant’s breach of commercial contract with
“unfair or deceptive acts”).
Furthermore, Sumrall is not alleging a simple breach of contract in the present case, but
also Defendant’s use of economic duress and threats to Sumrall’s business in order to coerce

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Sumrall to execute the 2014 Order Agreement. (Plaintiff’s Complaint, Doc. 1-1, ¶ 26-27, p. 5).
Thus, Plaintiff has alleged a plausible violation of LUTPA, and Defendant’s motion is denied.
V.

Conclusion
Accordingly,
IT IS ORDERED that Ricoh, USA Inc.’s Motion to Dismiss Plaintiff’s Complaint (Doc.

2) is hereby DENIED.
Signed in Baton Rouge, Louisiana, on August 4, 2015.

S

JUDGE JOHN W. deGRAVELLES
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

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