K&F Restaurant Holdings, Ltd. et al v. Rouse et al

Filing 183

RULING AND ORDER granting 139 Motion to Dismiss; granting 140 Motion to Dismiss; granting 143 Motion to Dismiss for Failure to State a Claim; and granting 148 Motion to Dismiss for Failure to State a Claim. Plaintiffs' claims are DISMISSED WITH PREJUDICE. The Court will enter judgment consistent with this Ruling and Order. Signed by Judge John W. deGravelles on 07/24/2018. (KDC)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
K&F RESTAURANT HOLDINGS, LTD.,
d/b/a IZZO’S ILLEGAL BURRITO, ET
AL.

CIVIL ACTION

VERSUS

NO. 16-293-JWD-EWD

DONALD J. ROUSE, JR., ET AL.
RULING AND ORDER
This matter is before the Court on four Motions to Dismiss pursuant to Federal Rule of
Civil Procedure 12(b)(6). The first was filed by Donald J. Rouse, Jr. (“Rouse, Jr.”); Donald J.
Rouse, Sr.; Thomas B. Rouse; Allison Rouse Royster; and Rouse’s Enterprises, LLC (“Rouse’s,”
and collectively “the Rouse Defendants”). (Doc. 148). Plaintiffs K&F Restaurant Holdings, Ltd.
d/b/a Izzo’s Illegal Burrito (“Izzo’s”); K&F Restaurant Operations, LLC; G&O Pizza Holdings,
Ltd., d/b/a LIT Pizza (“LIT Pizza”); G&O Restaurant Operations, LLC; Osvaldo Fernandez; and
A. Gary Kovacs (collectively “Plaintiffs”) oppose. (Doc. 164). The Rouse Defendants have filed
a Reply in further support of their Motion. (Doc. 172).
The second Motion was filed by Victory Berryland, LLC (“Berryland”). (Doc. 139).
Plaintiffs oppose, (Doc. 168), and Berryland has filed a Reply in further support of its Motion,
(Doc. 170).
The third Motion was filed by Stephen Keller and Creekstone Juban I, LLC (“Creekstone,”
and collectively “the Creekstone Defendants”). (Doc. 140). Plaintiffs oppose. (Doc. 165).
The fourth Motion was filed by Russell Mosely and Mosely Holdings, LLC (collectively,
“the Mosely Defendants”). (Doc. 143). Plaintiffs oppose, (Doc. 163), and the Mosely Defendants
have filed a Reply in further support of their Motion, (Doc. 171).

For reasons discussed below, the Motions will be granted, and this case will be dismissed
in its entirety.
I.

BACKGROUND
A. Plaintiff’s Allegations
In September 2011, Jack Trueting, Rouse’s “Director of Perishables,” called Fernandez to

say that Rouse’s was “very impressed with Izzo’s products” and was interested in franchising
Izzo’s burrito restaurants in Rouse’s grocery stores. (Doc. 138 at 3). Izzo’s declined. (Id.). Rouse,
Jr., who manages Rouse’s, then allegedly formed a “scheme” to steal Izzo’s burrito recipes. (Id.).
Specifically, in 2011, Rouse, Jr. “directed” some of his store managers in Lafayette, Louisiana to
make an offer, “essentially a bribe,” to Patrick Dartez, manager of an Izzo’s in Lafayette, to “defect
to Rouse’s with Izzo’s recipes.” (Id.). Dartez accepted. (Id.). Following the success of the
“scheme,” Rouse’s began selling burritos that were “very similar, if not identical,” to Izzo’s
burritos in some of its stores. (Id. at 4). Plaintiffs contend that this constitutes illegal use of Izzo’s
trade secrets. (Id. at 5-6). Plaintiffs also contend that Rouse’s uses the phrase “build your own”
in connection with its burritos and that this phrase is very similar to “roll your own,” which Izzo’s
uses in connection with its burritos. (Id. at 9).
Additionally, in July 2011, Izzo’s sought to “acquire a restaurant” at Juban Crossing, a
commercial development in Livingston, Louisiana managed by Keller and developed by
Creekstone. (Id. at 4). In 2012, Izzo’s, Keller, and Creekstone signed a letter of intent pursuant
to which Izzo’s was to lease space at Juban Crossing. (Id.). However, in a lease agreement
recorded in June 2013, Rouse’s agreed to be the anchor tenant at Juban Crossing. (Id.; see also
Doc. 138-5 at 1). One of the conditions of the agreement was that no portion of Juban Crossing
would be leased or sold to Izzo’s, “K&F Restaurant Management, LLC,” or any affiliate of either.

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(Doc. 138 at 1; see also Doc. 138-5 at 4). According to Plaintiffs, Rouse, Jr. justified the condition
in “interstate phone calls” occurring in 2012, stating that Izzo’s sold “substandard” products and
was “litigious.” (Doc. 138 at 5). Creekstone refused to lease space to Izzo’s, allegedly resulting
in “millions of dollars” in lost profits to Izzo’s. (Id.).
The operative Second Amended Complaint alleges seven “counts.” (Id. at 6-20). Count I
is against Rouse, Jr. for violating the conspiracy provision of the Racketeer Influenced and Corrupt
Organizations Act (“RICO”), 18 U.S.C. § 1962(d). (Id. at 6). Plaintiffs contends that Rouse, Jr.
“conspired to commit three RICO violations against Izzo’s,” i.e., violating the Travel Act via the
scheme to steal Izzo’s recipes, committing wire fraud by stating in phone calls that Izzo’s was
litigious and sold substandard products, and illegally stealing and using trade secrets. (Id. at 6).
Count II is a claim for “Conspiracy To Violate La. Civ. Code Arts. 2324, et seq. as to all
Defendants.” (Id. at 6-7). Plaintiffs claim that their factual allegations “set forth a civil conspiracy
set forth among the defendants to exclude and group boycott the plaintiffs from highly desirable
developments.” (Id. at 7). Plaintiffs also contend that “each of the defendants’ name[d] herein are
made in act of the furtherance of the conspiracy by rejecting Izzo’s[,] Lit and any other
development created by Fernandez and Kovacs.” (Id.).
Count III alleges “Product Defamation and Disparagement against the Rouse’s
Defendants.” (Id. at 7). Plaintiffs claim that “Rouse’s” made false statements concerning the
quality of Izzo’s products and its litigiousness to “several third parties but for certain to each of
the co-conspirators herein, Juban, Keller, Long Farms, Mosely, and Berryland.” (Id. at 7-8).
Plaintiffs assert that these statements were false, as evidenced by Rouse’s desire to franchise Izzo’s
restaurants and Izzo’s decision not to assert claims against Rouse’s when an Izzo’s recipe book
was recovered from a Rouse’s store. (Id. at 8).

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Count IV1 alleges “Tortious Interference and Business Relations as to all Defendants.” (Id.
at 8). Plaintiffs contend that “[t]he various aforementioned acts and practices by the Rouse Group
and co-conspirators have tortiously interfered and continue to tortiously interfere with lawful
business relations between Izzo’s and its partners and other developers.” (Id.). This count also
concerns the statements about Izzo’s alleged litigiousness and substandard products. (Id.).
Count V asserts trademark infringement under La. Rev. Stat. 51:211 et seq. “as to Rouse’s
Defendants” based on the use of the “trade name” “build your own.” (Id. at 9).
Count VI asserts a “Conspiracy under Sherman Act and Restraint of Trade in
Transportation Market[,] 15 U.S.C.A. § 1, 35, 36 as to All Defendants.” (Id. at 9-10). Plaintiffs
contend that “Defendants have monopolized the Market Area in that it has [sic] power to dictate
tenants of its preference and exclude competition in some or all of the Market Area” and have
“acquired, exercised, and maintained its monopoly power willfully and intentionally by way of the
acts set forth above.” (Id. at 10). Plaintiffs similarly allege that Defendants have attempted to
monopolize or conspired to monopolize the “Market Area.” (Id.). Count VI states that “unlawful
agreements [among the Defendants] are evidenced by, among other things, the leases, the deed,
the economic interests of Defendants Rouse’s, Keller, Juban, Mosely, Long Farms, and Berryland;
the close relationships among Defendants; Defendants’ concerns about the competitive threat that
Izzo’s application posed to the Defendants; the history and anticompetitive practices of Rouse’s;
and the timing of various anticompetitive actions taken by Rouse’s, Keller, Juban, Mosely, Long
Farms, and Berryland.” (Id. at 11). Plaintiffs further contend that “Defendants have engaged in
per se anticompetitive behavior, or, alternatively, anticompetitive behavior without procompetitive
justification, that has unreasonably retrained trade in violation of Section 1 of the Sherman Act.”

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The Second Amended Complaint contains two Count III’s. This count and all subsequent counts are renumbered
for clarity.

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(Id.). Plaintiffs contend that the product market for this “count” is the “retail food sale market,”
while the relevant geographic market is the state of Louisiana. (Id.).
Count VII asserts a “Complaint for Violation of Federal and Louisiana Antitrust Laws,
Unfair Practices, and Unfair Competition 15 U.S.C.A. § 1, 2, and 13 as to All Defendants.” (Id.
at 14). Plaintiffs define the “many” product markets for “retail food” as “(i) sale of food for
cooking; (ii) the sale of partially prepared food which simply requires heating; (iii) the sale of precooked food, ready to eat; (iv) the sale of pre-cooked food concentration on one type of food;
(v) the sale of pre-cooked food with a variety of types of food; and (vi) the combination of selling
un-cooked food requiring preparation and cooking along with pre-cooked foods, ready to eat.” (Id.
at 15). Plaintiffs define the “relevant geographic markets for retail food sales” as “the entire United
States” and “the states commonly known as the Southeastern United States, including, but not
limited to, Louisiana, Mississippi, Alabama and Florida.” (Id.). Plaintiffs claim that barriers to
entry are high given “[t]he high concentration in the Market Area, the sophisticated technology,
large expenses, high capital costs, [and] relationship[s] with farmers and wholesalers.” (Id. at 16).
Plaintiffs contend that “Defendants” have engaged in refusal to deal and collusion with developers,
constituting monopolization, attempt to monopolize, and conspiracy to monopolize; unreasonable
restraint of trade; and “unfair competition.” (Id. at 16-19).
Attached to the Second Amended Complaint are numerous exhibits, including, inter alia,
an affidavit by Fernandez stating that, in a March 2016 meeting, Russell Mosely expressed regret
that he could not include an Izzo’s in a development, but Rouse, Jr. had told Mosely that there had
been an “incident” between Izzo’s and Rouse’s “years ago” and Izzo’s would “never make a dollar
off of [him]!” (Doc. 138-6 at 1; see also Doc. 138-10 at 7 (Declaration of Covenants excluding
“Any Izzo’s” from a Mosely property)). Also attached to the Second Amended Complaint is a

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Notice of Lease between Berryland and Rouse’s excluding “[a]ny Izzo’s or similar burrito
restaurant.” (Doc. 138-12 at 6).
B. Procedural History
This case was filed in state court in April 2016 and removed shortly thereafter. (Doc. 1).
The initial Petition for Damages named the Rouse Defendants and raised RICO claims and state
law claims for violations of Louisiana’s Unfair Trade Practices and Consumer Protection Act
(“LUTPA”), tortious interference with a contract, product defamation, civil conversion, trademark
infringement, and conspiracy. (Doc. 1-1 at 2, 8-13). The Rouse Defendants moved for dismissal
of Plaintiffs’ state law claims, while Plaintiffs moved to remand. (Docs. 5, 7). The Court denied
the Motion to Remand and granted in part and denied in part the Motion to Dismiss. (Docs. 26,
31). Specifically, the Court ruled that the LUTPA claim was untimely and dismissed it with
prejudice. (Doc. 31 at 5-7, 14). The Court denied the Motion to Dismiss as to the trademark
infringement claim, ruling that Plaintiffs had adequately pled a “protectable right” in the trade
name “roll your own” and Rouse’s violation of that right. (Id. at 12, 14). The Court dismissed the
remaining state law claims with leave to amend as inadequately pled. (Id. at 7-11, 12-14).
Plaintiffs moved for reconsideration and to recuse the then-assigned district judge. (Docs. 38-41).
Plaintiffs later filed an “Amended and Restated Complaint.” (Doc. 70). This pleading
named all of the defendants currently named (along with one other person) and raised RICO
claims, federal antitrust claims, and state law claims for “wrongful conversion of proprietary
information,” conspiracy, product defamation and disparagement, tortious interference with
business relations, trademark infringement, and violation of state antitrust law. (Id.). Several
defendants moved to dismiss. (See Docs. 71, 78, 83).

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The Court then denied the outstanding motions for reconsideration and to recuse. (Docs.
102, 117). Five days after reconsideration was denied, Plaintiffs again moved to disqualify the
then-assigned district judge. (Doc. 118). Although that judge ruled that the basis upon which
disqualification was sought, i.e., a lawsuit brought by Plaintiffs’ counsel, was “a transparent
attempt to create bias and hostility in an effort to provoke disqualification,” the Court granted the
motion given that “the machinations to which Plaintiffs’ counsel ha[d] resorted to poison and
impugn the Court’s impartiality” might cause a “thoughtful and objective observer” to question
the Court’s impartiality. (Doc. 133 at 8-9). The case was thereafter reassigned to this section of
the Court.
Following the case’s reassignment, the Court held a status conference and granted
Plaintiffs’ then-pending motion for leave to file a Second Amended Complaint. (Doc. 136; see
also Doc. 95). The Court informed Plaintiffs’ counsel that “this [was] the last amendment to the
complaint that [would] be allowed by the Court.” (Doc. 136 at 1). The outstanding Motions to
Dismiss were denied without prejudice to renewal following the filing of the Second Amended
Complaint. (Id. at 1-2). The Second Amended Complaint was filed on October 26, 2017.
II.

GENERAL STANDARDS
In Johnson v. City of Shelby, Miss., ––– U.S. ––––, 135 S. Ct. 346 (2014), the Supreme

Court explained that “[f]ederal 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), 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
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evidence of each element of a claim. “Asking for [such] plausible grounds to infer
[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 (2007) (emphasis in Lormand)).
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 (2009)]; Twombly, [550] U.S. at 556, 127 S.
Ct. at 1965. 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 “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, [550] U.S. at 556, 127 S. Ct. at 1965.
Diamond Servs. Corp. v. Oceanografia, S.A. De C.V., No. 10–00177, 2011 WL 938785, at *3
(W.D. La. Feb. 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:
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).

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III.

THE MOTIONS TO DISMISS
A. The Rouse Defendants
1. The Motion
In support of their Motion to Dismiss, the Rouse Defendants first argue that Plaintiffs’

claims for “product defamation and disparagement” fail as vaguely pled and because the
challenged statements concerning Izzo’s alleged “litigiousness” and “substandard product” are
non-actionable matters of opinion. (Doc. 148-1 at 5-6). They also note that defamation claims,
like other tort claims, are subject to a one-year prescriptive period. (Id. at 5). They similarly argue
that Plaintiffs’ claim for tortious interference with business relations is conclusorily pled, is
prescribed, and does not allege that the Rouse Defendants “acted improperly or with actual
malice.” (Id. at 6-8). The Rouse Defendants then argue that Plaintiffs’ trademark infringement
claim fails, as “build your own” is a common, descriptive, generic phrase unlikely to cause
confusion and not subject to trademark protection. (Id. at 8-10). Next, they argue that Plaintiffs’
state law conspiracy claims fail because there is no “underlying tort” nor any non-conclusory
allegations of a conspiratorial agreement as to a particular unlawful outcome or result. (Id. at 1011). With respect to Plaintiffs’ RICO claim, the Rouse Defendants claim that Plaintiffs have failed
to plausibly plead the elements of each predicate act alleged or a “pattern” of racketeering activity.
(Id. at 11-12).
The Rouse Defendants characterize Plaintiffs’ antitrust claims as “facially ridiculous” and
“lack[ing] each and every component of a plausible claim under either federal or state antitrust
law.” (Id. at 13). First, they observe that Plaintiffs complain of being excluded from a few
developments in Louisiana but define the relevant market as essentially all food sales throughout
Louisiana, throughout the Southeastern United States, or throughout the whole of the United

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States. (Id. at 13-14). The Rouse Defendants also argue that Plaintiffs fail to adequately plead
“antitrust injury,” i.e., an injury to competition, not just to Izzo’s, particularly given that Plaintiffs’
competitors were allowed at some of the developments. (Id. at 14-15).
The Rouse Defendants further argue that Plaintiffs’ claims of a vertical price-fixing
conspiracy or vertical concerted refusal to deal under Section 1 of the Sherman Act fail for failure
to plead market power, particularly given the size of the market. (Id. at 16-18). They also claim
that any additional conspiracy claims under 15 U.S.C. §§ 1, 35, or 36 must be dismissed as
duplicative or meritless. (Id. at 19). The Rouse Defendants likewise argue that Plaintiffs’ claims
of monopolization, attempt to monopolize, and conspiracy to monopolize under Section 2 of the
Sherman Act fail for failure to adequately allege market power or market share and specific intent
to monopolize. (Id. at 19-22). The Rouse Defendants further argue that Plaintiffs fail to allege a
“single element” of a claim under 15 U.S.C. § 13. (Id. at 22). The Rouse Defendants also contend
that there is no private right of action for “unfair competition” under the Federal Trade
Commission Act, and Plaintiffs’ LUTPA claims were previously dismissed with prejudice. (Id.).
Finally, the Rouse Defendants argue that Plaintiffs’ state law antitrust claims are interpreted
consistent with federal law and fail for the same reasons. (Id. at 22-23).
2. The Opposition
Plaintiffs oppose, arguing throughout that a short, plain statement of their claims is all that
is required to survive a Rule 12(b)(6) motion. (Doc. 164 at 3).
More specifically, Plaintiffs first represent that the Rouse Defendants have stated to coconspirators that Izzo’s “produced substandard product and was extremely litigious,” giving rise
to a claim for product defamation. (Id.). Plaintiffs contend that these statements are false, as Izzo’s
sole prior lawsuit concerning the recipe book was “100% correct,” and Rouse’s desire to put Izzo’s

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in its stores belies any contention that Rouse’s believed Izzo’s product to be “substandard.” (Id.
at 3-4).

Plaintiffs also argue that the same allegations give rise to a claim for product

disparagement and resulted in Izzo’s exclusion from Juban Crossing. (Id. at 4-5).
Next, Plaintiffs argues that they have pled malice sufficient to support a claim of tortious
interference with a contract, given Rouse, Jr.’s statement that Izzo’s would “never make a dollar
off of [him]!” and the Rouse Defendants’ acknowledgement in prior filings that “the incident”
involving the recipe book was extremely embarrassing. (Id. at 5; see also Doc. 13 at 2). Plaintiffs
argue that, as a result of this ill will, Rouse’s “demanded that Juban and Keller cancel a signed
Letter of Intent to facilitate Rouse’s evil plan” and also “lied [to] and coerced other developers”
like “Mosley, Long Farms, Victory Berryland, and others.” (Doc. 164 at 5-6). Plaintiffs claim
that Rouse’s is able to dictate and demand restrictions due to its size. (Id. at 6).
Next, Plaintiffs argue that their trademark infringement claim is “alive” as law of the case
and that arguments to the contrary should be rejected. (Id. at 7). Plaintiffs also contend that they
have stated a claim for conspiracy based on the aforementioned “embarrassment” and statement
of Rouse, Jr. (Id.).
Plaintiffs then turn to their RICO claim, arguing that the schemes to bribe an Izzo’s
employee to steal the recipe book, to exclude Izzo’s from Juban Crossing, and to “illegally use
Izzo’s trade secrets,” constitute racketeering activity under RICO. (Id. at 8). Plaintiffs contends
that the scheme to steal the recipe book violated the Travel Act via Rouse, Jr.’s act of state law
commercial bribery. (Id. at 8-9). The scheme involving Juban Crossing is alleged to have violated
the wire fraud statute, as the scheme involved the making of false statements over interstate wires.
(Id. at 9-10). Finally, Plaintiffs argue that the unlawful use of trade secrets affecting interstate
commerce is racketeering activity under RICO. (Id. at 10-11). Plaintiffs argue that they have

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shown a pattern of activity that is “related and continuous,” as the activity was all “conducted and
carried out by Rouse[,] Jr. for the purpose of retaliating and harming the Plaintiffs after they
refused to acquiesce to Rouse[,] Jr.’s request to franchise Izzo’s in his grocery stores.” (Id. at 1112). Plaintiffs maintain that the pattern is “open-ended,” as the trade secret violations “continue
unabated.” (Id. at 12). Plaintiffs also address several other of the Rouse Defendants’ “scattershot”
arguments. (Id. at 12-15).
With respect to an alleged wrongful conversion claim, Plaintiffs contend that the Rouse
Defendants “wrongfully argue[]” that a trade secret and trademark cannot be wrongfully converted
and that the “conversion continues until the conversion stops.” (Id. at 15).
Plaintiffs then address their antitrust claims. They argue that the Court should consider the
“aggregate effect of the multiple agreements that eliminate [Izzo’s and LIT Pizza] from several
developments, not just one” and the fact that, if these restaurants were “allowed in these 4
developments, that would create 8 more stores for consumers, and promote competition in the
market.” (Id. at 16). Plaintiffs argue that “Rouse’s used its size and leverage to create both
horizontal and vertical conspiracies in restraint of trade, which is exactly what the antitrust laws
are created to prevent[.]” (Id. at 16-17). However, Plaintiffs later contend that, “[b]ecause the
conspiracies and contracts are between Rouse’s and the other defendants/developers, they are not
on the same level, so the here the plaintiffs [sic] allege a vertical level conspiracy between Rouse’s
and the developers.” (Id. at 17).
Plaintiffs maintain that Rouse’s is the largest grocery store chain in Louisiana and
possesses the largest market share “among grocers, second only to Walmart, (which sells much
more than groceries).” (Id. at 18). Plaintiffs contend that this gives Rouse’s monopoly power,
permitting it to “set prices at its choosing,” buy land for new stores, and lease from “anyone whom

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it wishes.” (Id.). Plaintiffs also contend that Rouse’s “has no barriers to entry,” but “opening a
grocery store has a high level of barriers to entry.” (Id.).
Plaintiffs further argue that the conspiracies were “reduced to writing in leases and deed
restrictions,” and that such leases and restrictions “can be found across Louisiana barring Izzo’s
and its affiliates from entry while Rouse’s enjoys all the growth it wants by virtue of its monopoly.”
(Id.). Plaintiffs also argue that the agreements are evidenced by “the economic interests” of
Defendants, the “close relationships” among them, Defendants’ “concerns about the competitive
threat that Izzo’s application posed to the Defendants”; the history and anticompetitive practices
of Rouse’s, and the timing of Defendants’ “various anticompetitive actions.” (Id. at 19). Plaintiffs
contend that they have been harmed by Rouse’s actions, and consumers are harmed “because
customers cannot find Izzo’s or Lit Pizza.” (Id. at 18). Plaintiffs argue that Defendants’ conduct
is both per se anticompetitive and that it violates the rule of reason. (Id. at 19-20). Plaintiffs
maintain that any benefits flowing from Defendants’ “restraints of trade” can be accomplished by
less harmful means. (Id. at 21).
3. The Reply
The Rouse Defendants’ Reply generally reiterates arguments previously made. (Doc. 172
at 1-6). They contend that the Court is free to reconsider and reverse its prior ruling on “the
trademark claim” “for any reason it deems sufficient.” (Id. at 1 n.1). They also reiterate that
statements that Izzo’s produced “substandard product” or was “extremely litigious” are purely
expressions of opinion and cannot support a claim of defamation. (Id. at 2). The Rouse Defendants
further argue that the Second Amended Complaint contains no wrongful conversion claim and that
any claim for misappropriation of trade secrets based on events in 2012 had prescribed when the
instant action was filed in 2016. (Id. at 2-3 & n.7). The Rouse Defendants also argue that Plaintiffs

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have not alleged sufficient facts to plausibly suggest a RICO conspiracy, either with respect to an
underlying agreement or predicate acts. (Id. at 3-4). The Rouse Defendants further contend that
several of the predicate acts undergirding the conspiracy had prescribed by the time this suit was
filed. (Id. at 4).
B. Berryland
In its Motion, Berryland argues that the restrictive covenants in its lease agreements are
common, lawful provisions and that the Second Amended Complaint makes virtually no
allegations against Berryland. (Doc. 139-1 at 2-4). Berryland then addresses specific causes of
action, contending first that Plaintiffs fail to allege that Berryland acted with “actual malice,” as is
necessary to support a tortious interference claim. (Id. at 5-6). Berryland next addresses Plaintiffs’
antitrust claims, arguing that they have failed to adequately allege: (1) any facts in support of a per
se unreasonable horizontal conspiracy among competitors at the same level; (2) that any vertical
conspiracy had anticompetitive effects; (3) that Berryland had a significant share of the food sales
market, a “dangerous probability” of achieving monopoly power in that market, or the specific
intent to monopolize that market; and (4) any facts in support of a price discrimination claim. (Id.
at 6-16). Next, Berryland claims that any “unfair competition” claim based on trademark
violations does not involve Berryland. (Id. at 16). Finally, Berryland argues that, because
Plaintiffs’ underlying claims fail, there is no viable state law conspiracy claim. (Id. at 16-17).
Plaintiffs argue that Berryland’s Motion is “absurd and completely lacking in any
legitimate argument” and that Berryland was “well aware that Rouse’[s]” participated in a larger
practice of excluding Izzo’s and its affiliates from developments other than Berryland.” (Doc. 168
at 1-2). Plaintiffs contend that Berryland has admitted to engaging in conspiracies in restraint of
trade by executing lease provisions prohibiting Plaintiffs from leasing in “desired developments.”

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(Id. at 2). Plaintiffs argue that Berryland is liable because Rouse’s “could not have carried out
their intent to abolish Izzo’s without the necessary cooperation from developers, each and every
one.” (Id.).
Plaintiffs further maintain that “[t]he defendants, Rouse’s and Berryland, acted with illwill and ill-motive as they have admitted . . . that getting caught with the recipe book caused them
great embarrassment and anger.” (Id. at 6). Plaintiffs clarify, however, that they are not pursuing
wrongful conversion, tortious interference, or product defamation claims against Berryland
“except as co-conspirators.” (Id.). Concerning their RICO claim, Plaintiffs reiterate arguments
made in opposition to the Rouse Defendants’ Motion. (Id. at 7-14).
Concerning their antitrust claims, Plaintiffs allege that, by entering into an agreement with
Rouse’s, which competes with Izzo’s, Berryland created “both horizontal and vertical restraints,”
although Plaintiffs again acknowledges that, “[b]ecause the conspiracies and contracts are between
Rouse’s and the other defendants/developers, they are not on the same level, so the here the
plaintiffs [sic] allege a vertical level conspiracy between Rouse’s and the developers.” (Id. at 16).
Plaintiffs’ argument concerning their antitrust claims also generally tracks arguments made in
opposition to the Rouse Defendants’ Motion. (Id. at 16-20).
In reply, Berryland contends that most of the allegations in this action concern the Rouse
Defendants’ conduct, and “[t]here is nothing talismanic about repeatedly labeling [Berryland] a
co-conspirator without substantive supporting allegations, and Plaintiffs cannot survive a motion
to dismiss on allegations directed solely against another party.” (Doc. 170 at 1-3). Regarding the
antirust and civil conspiracy claims, Berryland contends that Plaintiffs wholly fail to address the
arguments made in Berryland’s Motion. (Id. at 1-2). Berryland also argues that, by acknowledging

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that Izzo’s and Berryland are not competitors, Plaintiffs have foreclosed any argument that a
horizontal conspiracy exists. (Id. at 4).
C. The Creekstone Defendants
The briefing on the Creekstone Defendants’ Motion is extremely similar to that on
Berryland’s Motion. The Creekstone Defendants argue that the lease between Rouse’s and
Creekstone contains “standard” leasing provisions and exclusions that are in no way improper.
(Doc. 140-1 at 2-3). The Creekstone Defendants note that most, if not all, of the leases they execute
with tenants exclude some competitive retailers by name. (Id. at 3-4). The Creekstone Defendants
further argue that: (1) Plaintiffs fail to allege in support of their tortious interference claims that
the Creekstone Defendants acted with “actual malice”; (2) the Second Amended Complaint
contains no specific factual allegations that any Defendants engaged in anticompetitive activities,
whether separately or as a group; (3) Plaintiffs fail to “detail” any “unfair competition” claim
against the Creekstone Defendants; and (4) absent an underlying tort, Plaintiffs’ state law
conspiracy claims fail. (Id. at 8-11). Plaintiffs’ Opposition largely tracks their opposition to
Berryland’s Motion; they again note that they are not pursuing wrongful conversion, tortious
interference, or product defamation claims against the Creekstone Defendants “except as coconspirators[.]” (Doc. 165 at 4).
D. The Mosely Defendants
The briefing on the Mosely Defendants’ Motion is extremely similar to that on Berryland’s
and the Creekstone Defendants’ Motions. The Mosely Defendants argue that Plaintiffs do not
make “a single direct factual allegation of misconduct against the Mosely Defendants . . . and there
are few, if any allegations that would actually link the purported conduct of Rouse’s to the Mosely
Defendants.” (Doc. 143-1 at 2). The Mosely Defendants next observe that a state law civil

16

conspiracy claim requires both a showing of “intentional” or “willful” conduct and an underlying
tort. (Id. at 3-4). The Mosely Defendants argue that “entering into a contract – even a contract
with a restrictive covenant – is not an independent basis for a cause of action by a third-party [sic].”
(Id. at 4). The Mosely Defendants further maintain that Plaintiffs’ RICO claim, claims for product
defamation and disparagement, claims for tortious interference, and claims for trademark
infringement are based solely on conduct by the Rouse Defendants. (Id. at 5-7). The Mosely
Defendants further argue that there are no plausible allegations that they possess monopoly power
in the relevant market and that any claim against them must be a claim of a vertical restraint. (Id.
at 8-9). ). Plaintiffs’ Opposition largely tracks their opposition to the Motions by Berryland and
the Creekstone Defendants; yet again, they state that they are not pursuing wrongful conversion,
tortious interference, or product defamation claims against the Mosely Defendants “except as coconspirators[.]” (Doc. 163 at 5). In reply, the Mosely Defendants reiterate arguments previously
made. (See generally Doc. 171).
IV.

ANALYSIS
Briefing in this case has revealed that Defendants can be divided into two groups. One

consists of Berryland, the Creekstone Defendants, and the Mosely Defendants (collectively the
“Developer Defendants”), while the second consists of the Rouse Defendants. Where appropriate,
the Court will address the parties’ arguments as they apply against a particular set of Defendants.
The Court turns first to Plaintiffs’ antitrust claims.
A.

Antitrust Claims

The Second Amended Complaint raises against all Defendants claims for “conspiracy
under [the] Sherman Act and restraint of trade in [the] transportation market” and “violation of
federal and Louisiana antitrust laws, unfair practices, and unfair competition[.]” (Doc. 138 at 9,

17

14 (capitalization altered)). Although this section of the Second Amended Complaint is structured
somewhat confusingly and is sometimes repetitive, Plaintiffs purport to state claims under 15
U.S.C. §§ 1, 2, 13, 35, and 36. (Id.).
1. 15 U.S.C. § 1
Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, provides that “[e]very contract,
combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce
among the several States, or with foreign nations, is declared to be illegal.” To state a claim under
this provision, a plaintiff must show that the defendants “(1) engaged in a conspiracy (2) that
restrained trade (3) in a particular market.” Tunica Web Advert. v. Tunica Casino Operators Ass’n,
Inc., 496 F.3d 403, 409 (5th Cir. 2007). A “necessary ingredient” of a Section 1 conspiracy is “a
showing of concerted action on the part of the defendants.” Id. To establish concerted action, the
plaintiff must show that the defendants had a conscious commitment to a common scheme
designed to achieve an unlawful objective. See id.
Section 1 conspiracies are generally analyzed under the “rule of reason,” which requires a
court to analyze whether the particular agreement at issue in fact unreasonably restrains
competition. Id. at 411-12. That is, under this rule, an agreement is only unlawful if the plaintiff
shows that it actually had an adverse effect on competition. Id. at 412. However, some agreements
among firms that compete with each other at the same level of the market (i.e., “horizontal”
agreements) are viewed as per se anticompetitive and generally do not require proof that the
agreement was actually anticompetitive. See id.
Plaintiffs’ stance on whether this case involves horizontal agreements is unclear but,
regardless, the only agreements alleged with any specificity in the Second Amended Complaint
are between Rouse’s and individual Developer Defendants, who are not competitors at the same

18

level of any market alleged. Plaintiffs’ remaining allegations concerning “the close relationships
among Defendants,” their “economic interests,” and the “timing” of their actions are vague and
therefore unavailing. Therefore, the only agreements alleged with the necessary particularity are
not “horizontal” agreements within the meaning of antitrust law, notwithstanding that the
agreements may have had “horizontal effects” on Plaintiffs. See Bus. Elecs. Corp. v. Sharp Elecs.
Corp., 485 U.S. 717, 730 n.4 (1988) (stating that “a restraint is horizontal not because it has
horizontal effects, but because it is the product of a horizontal agreement” and noting that “all
anticompetitive effects are by definition horizontal effects”); see also Spectators’ Commc’n
Network Inc. v. Colonial Country Club, 253 F.3d 215, 224 (5th Cir. 2001) (evidence of sponsors
making separate agreements with PGA, but not among themselves, was “hub and spoke sort of
proof” insufficient to establish a horizontal conspiracy). This case will be analyzed under the rule
of reason, and Plaintiffs will ultimately be required to show an adverse effect on competition. See
PSKS, Inc. v. Leegin Creative Leather Prod., Inc., 615 F.3d 412, 417 (5th Cir. 2010); see also
Marucci Sports, L.L.C. v. Nat’l Collegiate Athletic Ass’n, 751 F.3d 368, 374 (5th Cir. 2014)
(regardless of whether per se rule or rule of reason applies, “ultimate[] focus” of court’s inquiry
should be on the “competitive significance” of a restraint).
Here, the Court cannot conclude that Plaintiffs have adequately alleged that further
proceedings will reveal meaningful evidence of anticompetitive effects. As Plaintiffs’ multiple
Oppositions make clear, their arguments of harm to competition are fundamentally that “customers
cannot find Izzo’s or Lit Pizza,” depriving them of that option and causing them to pay higher
prices. (Doc. 163 at 15; Doc. 164 at 18; Doc. 165 at 15; Doc. 168 at 17; see also Doc. 138 at 19
(“Consumers, who will all need food, have been deprived of food options as a direct result of
Defendants’ wrongful conduct.”)). The Court doubts whether Plaintiffs’ exclusion from a handful

19

of developments would constitute a plausible showing of the alleged “destruction” of their own
businesses within the relevant markets (alleged to include retail food sales throughout an area at
least as large as Louisiana). (Doc. 138 at 11, 13-14). However, antitrust laws exist to protect
competition, not individual competitors, and even the total elimination of a competitor does not
make a restraint unreasonable as long as “sufficient competitors remain to ensure that competitive
prices, quality, and service persist.” See Marucci Sports, L.L.C., 751 F.3d at 376-77. Plaintiffs
have made no non-conclusory, non-speculative allegations of anticompetitive effects within the
relevant market, as Plaintiffs have chosen to broadly define it. Plaintiffs’ claims under Section 1
therefore fail.
2. 15 U.S.C. § 2
Section 2 of the Sherman Act, 15 U.S.C. § 2, prohibits monopolization, attempting to
monopolize, or conspiring to monopolize “any part of the trade or commerce among the several
States.”
To prevail on a monopolization claim, a plaintiff must show that the defendant:
(1) possesses monopoly power in the relevant market, and (2) willfully acquired or maintained that
power. Felder’s Collision Parts, Inc. v. Gen. Motors Co., 960 F. Supp. 2d 617, 624 (M.D. La.
2013).
To prevail on an attempted monopolization claim, a plaintiff must show: (1) that the
defendant has engaged in predatory or anticompetitive conduct with (2) a specific intent to
monopolize and (3) a dangerous probability of achieving monopoly power. Retractable Techs.,
Inc. v. Becton Dickinson & Co., 842 F.3d 883, 891 (5th Cir. 2016), cert. denied, 137 S. Ct. 1349,
197 L. Ed. 2d 522 (2017).

20

Finally, to state a claim for conspiracy to monopolize, the plaintiff must allege: (1) specific
intent to monopolize, (2) the existence of a combination or conspiracy to monopolize, (3) an overt
act in furtherance of the combination or conspiracy, and (4) an effect upon a substantial portion of
interstate commerce. Felder’s Collision Parts, Inc., 960 F. Supp. 2d at 624.
In connection with monopolization claims, a plaintiff must provide an adequate, plausible
definition of the relevant product and geographic markets. See Apani Sw., Inc. v. Coca-Cola
Enterprises, Inc., 300 F.3d 620, 628 (5th Cir. 2002); see also id. at 633 (favorably citing Endsley
v. City of Chicago, 230 F.3d 276, 282 (7th Cir. 2000), for proposition that, to survive a motion to
dismiss, antitrust plaintiff must set forth facts sufficient to create an inference that defendant “had
enough market power to create a monopoly”). Monopoly power under Section 2 requires
“something greater” than market power under Section 1. Eastman Kodak Co. v. Image Tech.
Servs., Inc., 504 U.S. 451, 481 (1992).
None of the Developer Defendants are liable for monopolization or attempted
monopolization of the retail food market, as there are no allegations that they participated in that
market or came anywhere near achieving monopoly power in that market. Therefore, Plaintiffs’
claims against them must be conspiracy claims. However, such conspiracy claims also require a
showing of the “existence of a combination or conspiracy to monopolize” and that a defendant
acted with “specific intent to monopolize.” Felder’s Collision Parts, Inc., 960 F. Supp. 2d at 624.
There are simply no factual allegations that would permit an inference that any of the Developer
Defendants’ individual leases with Rouse’s constituted the joining of such a conspiracy with such
an intent. Restrictive covenants in shopping center leases do not violate antitrust laws in and of
themselves, (see, e.g., Doc. 143-1 at 10 (collecting cases)), and virtually no other actions taken by
any of the Developer Defendants are identified with particularity in the Second Amended

21

Complaint, much less any actions that evince an intent to monopolize. Indeed, Plaintiffs’ own
exhibits suggest that, after observing that Rouse’s restrictive covenants prevented Izzo’s from
leasing a particular location, Mosely said that he would be “happy to put Izzo’s in phase 3 across
the street where the restrictions did not apply,” (Doc. 138-6 at 1), while a Creekstone representative
said that he would “send . . . info on Millerville” once it was “sketched,” (Doc. 138-9 at 1). No
claims under Section 2 lie against the Developer Defendants.
With respect to the monopolization claims against the Rouse Defendants, there is similarly
no non-conclusory allegation of specific intent or conspiracy to monopolize the retail food services
market. Plaintiffs themselves suggest that Rouse’s has “facilitated the placement of one of Izzo’s
competitors in the same location that Izzo’s was supposed to be in[.]” (Doc. 164 at 6; see also
Doc. 138-9 at 2 (email attached to Second Amended Complaint noting that there was a “Moe’s”
at Juban Crossing already)). There are simply no factual allegations that transform the Rouse
Defendants’ alleged ill will into an intent to monopolize the retail food market.
Moreover, with respect to the monopoly power required to undergird a claim of
monopolization or attempted monopolization, Plaintiffs’ Opposition confirms that its allegations
of monopoly power are based on Rouse’s position as the “largest grocer in Louisiana.” (Doc. 164
at 18). As the Eastern District of Louisiana has set forth at some length:
A nonconclusory allegation that a defendant holds a predominant share of the
relevant market will usually satisfy the monopoly power element of a
monopolization claim. [United States v. Grinnell, 384 U.S. 563, 571 (1966)]; U.S.
Anchor Mfg. Inc. v. Rule Indus., Inc., 7 F.3d 986, 999 (11th Cir. 1993) (principal
measure of monopoly power is market share). The precise market share a defendant
must control before it has monopoly power remains undefined, but, the case law
supports the conclusion that a market share of more than 70 percent is generally
sufficient to support an inference of monopoly power. See, e.g., Eastman Kodak
Co. v. Image Technical Serv., Inc., 504 U.S. 451, 481, 112 S.Ct. 2072, 119 L.Ed.2d
265 (1992) (factfinder can infer monopoly power from an 80 percent market share);
Morgenstern v. Wilson, 29 F.3d 1291, 1296 n. 3 (8th Cir. 1994) (share of more than
80 percent sufficient); Heatransfer Corp. v. Volkswagenwerk, A.G., 553 F.2d 964,
22

981 (5th Cir. 1977) (71–76 percent share sufficient); Int’l Audiotext Network v. Am.
Tel. & Tel. Co., 893 F.Supp. 1207, 1217–18 (S.D.N.Y. 1994) (70 percent market
share generally adequate at the pleading stage); see also ABA Section of Antitrust
Law, Antitrust Law Developments 230–31 (7th ed. 2012) (collecting cases).
In contrast, courts almost never find monopoly power when market share is less
than about 50 percent. American Telephone & Telegraph Co. v. Delta Commc’ns
Corp., 408 F.Supp. 1075, 1107 (S.D.Miss. 1976), aff’d per curiam, 579 F.2d 972
(5th Cir. 1978) (adopting district court opinion), modified on other grounds, 590
F.2d 100 (5th Cir.1979) (41% share of local prime time television market
insufficient to subject television network to Section 2 monopolization scrutiny);
Bailey v. Allgas, Inc., 284 F.3d 1237, 1250 (11th Cir. 2002) (“market share at or
less than 50% is inadequate as a matter of law to constitute monopoly power”);
Blue Cross & Blue Shield United of Wisconsin v. Marshfield Clinic, 65 F.3d 1406,
1411 (7th Cir.1995) (“Fifty percent is below any accepted benchmark for inferring
monopoly power from market share”). The Fifth Circuit adheres to Judge Learned
Hand’s widely accepted rule of thumb that “while a 90 percent market share
definitely is enough to constitute monopolization, ‘it is doubtful whether 60 or 64
percent would be enough; and certainly, 33 percent is not.’ ” Domed Stadium Hotel,
Inc. v. Holiday Inns, Inc., 732 F.2d 480, 489 (5th Cir. 1984) (citing United States
v. Aluminum Co. of America, 148 F.2d 416 (2d Cir. 1945), approved and adopted,
American Tobacco Co. v. United States, 328 U.S. 781, 811–14, 66 S.Ct. 1125, 90
L.Ed. 1575 (1946)).
Leading scholars concur that “it would be rare indeed to find that a firm with half
of a market could individually control price over any significant period.” 3 Areeda
& Hovenkamp ¶ 532c, at 250 (2007). The Department of Justice agrees that “as a
practical matter, a market share of greater than fifty percent has been necessary for
courts to find the existence of monopoly power.” Department of Justice
Guide/Report, COMPETITION AND MONOPOLY: SINGLE–FIRM CONDUCT
UNDER SECTION 2 OF THE SHERMAN ACT 2008 WL 4606679 (D.O.J.), 24
(noting that the DOJ is not aware of any court that has found that a defendant
possessed monopoly power when its market share was less than fifty percent).
In re Pool Prod. Distribution Mkt. Antitrust Litig., 940 F. Supp. 2d 367, 382–83 (E.D. La. 2013)
(Vance, J.) (complaint inadequate where it contained “no specific allegations of a dominant market
share and no allegations that allow such an inference”).
The Second Amended Complaint’s allegations of monopoly power are inadequate to
support a claim of monopolization or attempted monopolization. Plaintiffs variously allege that
Rouse’s is “the largest grocer in Louisiana,” with “over 50 stores,” (Doc. 138 at 3), that Rouse’s

23

market share “exceeds any other grocer in Louisiana,” (id. at 10), that Rouse’s is “one of the largest
grocers in Louisiana,” (id. at 15), and that the “Market Area, more so in Louisiana, are [sic] highly
concentrated by [Rouse’s],” which is “the primary grocer in Louisiana,” (id. at 16). Plaintiffs’
Opposition reiterates that Rouse’s has monopoly power as “the largest grocery store chain in
Louisiana[,] . . .possess[ing] the largest market share among grocers, second only to Walmart,
(which sells much more than groceries).” (Doc. 164 at 18). The Second Amended Complaint also
focuses on certain additional features of the “grocery” market. (See, e.g., Doc. 138 at 17 (because
demand for retail food services is inelastic, “it is easier for grocers and wholesalers to set prices
collusively”)).
Plaintiffs’ allegations of market share are vague and often appear inconsistent. Moreover,
the most specific numerical figure attached to Plaintiffs’ allegations, i.e., that Rouse’s operates
“over 50 stores,” (Doc. 138 at 3), falls well short of plausibly suggesting monopoly power in a
geographic market alleged to span at least the entire state of Louisiana.
Plaintiffs’ focus on “grocers” as a yardstick for measuring Rouse’s market power is also
problematic. That is, the relevant product market (“retail food sales,” including both grocers and
restaurants and focusing in this case particularly on pre-cooked, ready-to-eat food, (see Doc. 138
at 14-15)), is defined to include Izzo’s, which is a restaurant, not a grocer. Using “grocers” as the
measure of monopoly power within this market omits restaurants like Izzo’s and likely includes
grocery stores lacking the “deli/food court” section that Rouse’s has. (Id. at 15). As a result,
Plaintiffs’ allegations of market share, and accordingly of monopoly power or a “dangerous
probability” of achieving monopoly power, are inadequate. See Apani Sw., Inc., 300 F.3d at 628,
633. Plaintiffs’ Section 2 claims fail.

24

3. 15 U.S.C. §§ 13, 35, and 36
15 U.S.C. § 13(a), the only subprovision of 15 U.S.C. § 13 that might arguably apply in
this case, prohibits any person engaged in commerce from discriminating in price “between
different purchasers of commodities of like grade and quality” where the effect of that
discrimination is to substantially lessen competition or tend to create a monopoly. The Second
Amended Complaint does not allege price discrimination or any of the elements necessary to
support such a claim. (See Doc. 139-1 at 15). To the extent that such a claim is made, it must be
dismissed as inadequately pled.
15 U.S.C. §§ 35 and 36 concern the availability of damages and fees available from local
government entities, and those acting at their direction, in actions under the Clayton Act. They do
not give rise to a cause of action.
4. “Unfair Competition”
The section of the Second Amended Complaint concerning Plaintiffs’ antitrust allegations
ends with a section entitled “unfair competition,” which alleges that, by engaging in acts described
earlier in the Second Amended Complaint, “Defendants have engaged in unfair competition in
violation of the Sherman Act, Clayton Act, RICO, civil conspiracies, theft of trade secrets and
infringement of trademarks.” (Doc. 138 at 19).
The underlying claims discussed in this “unfair competition” section have been addressed
or will be addressed elsewhere in this Ruling and Order, but Plaintiffs provide no legal basis for a
standalone “unfair competition” claim and do not identify with particularity the facts upon which
it is based. This claim adds nothing to Plaintiffs’ lawsuit and will accordingly be dismissed.

25

5. State Law Antitrust Claims
Louisiana’s antitrust laws are “virtually identical” to Sections 1 and 2 of the Sherman Act,
and federal analysis of the Sherman Act is “persuasive, although not controlling.”

HPC

Biologicals, Inc. v. UnitedHealthcare of Louisiana, Inc., 2016-0585 (La. App. 1 Cir. 5/26/16), 194
So. 3d 784, 792-93, reh’g denied (June 21, 2016). Plaintiffs’ federal antitrust claims fail, and
neither the Court nor any party has identified any basis upon which their state law antitrust claims
should be resolved differently. Plaintiffs’ state law antitrust claims therefore fail.
B. Civil Conspiracy Claims
The Court next considers Plaintiffs’ state law conspiracy claims. Notably, according to the
Second Amended Complaint as clarified by Plaintiffs’ Oppositions, Plaintiffs’ only remaining
claims against the Developer Defendants are state law conspiracy claims. (Doc. 138 at 6-9; Doc.
138 at 6-9; Doc. 168 at 6; Doc. 165 at 4; Doc. 163 at 5).
Louisiana Civil Code article 2324 provides that anyone who conspires with another person
to commit an intentional or willful act is answerable, in solido, with that person, for the damage
caused by such act. If a conspiracy is conceived and executed and injury results, the injured person
has a cause of action against all of the conspirators, who may be held civilly liable for damage to
a third party resulting therefrom. Butz v. Lynch, 97-2166 (La. App. 1 Cir. 4/8/98), 710 So. 2d
1171, 1174, writ denied, 98-1247 (La. 6/19/98), 721 So. 2d 473.
Article 2324 does not itself impose liability for a conspiracy: the “actionable element” is
not the conspiracy, but rather the tort which the conspirators agree to perpetrate and “actually
commit in whole or in part.” Id. To demonstrate an Article 2324 conspiracy, a plaintiff must
ultimately “provide evidence of the requisite agreement between the parties”; that is, the plaintiff
must “establish a meeting of the minds or a collusion between the parties for the purpose of

26

committing wrongdoing.” Thomas v. N. 40 Land Dev., Inc., 2004-0610 (La. App. 4 Cir. 1/26/05),
894 So. 2d 1160, 1174. Though a conspiracy may be inferred from knowledge of the impropriety
of actions taken by a co-conspirator, the plaintiff must prove “an unlawful act and assistance or
encouragement that amounts to a conspiracy,” and the assistance or encouragement must be “of
such quality and character that a jury would be permitted to infer from it an underlying agreement
and act[.]” Id. A conspiracy claim requires more than negligence: it requires either intentional or
willful conduct. Id. at 1177-78.
The only specific allegations of agreement in this case concern lease agreements between
Rouse’s and the Developer Defendants. However, as each of the Developer Defendants correctly
argue, restrictive covenants between a lessor and lessee are not themselves unlawful, tortious, or
violative of antitrust law. (See Doc. 139-1 at 3 n.3; Doc. 140-1 at 2-3; Doc. 143-1 at 10 (collecting
cases)). Winn-Dixie Stores, Inc. v. Dolgencorp, LLC is not to the contrary, as that case considered
whether, under Louisiana law, a restrictive covenant “ran with the land” even though it was not
expressed in the land’s “title documents,” not the general appropriateness of such restrictions. 746
F.3d 1008, 1030-31 (11th Cir. 2014). Therefore, the parties’ mere entry into leases containing
restrictive covenants provides inadequate support for claims of a tortious conspiracy and does not
constitute a sufficient “step” toward the completion of an underlying tort to support a plausible
claim under Article 2324. Plaintiffs’ remaining allegations of conspiracy are conclusory and do
not rise to the level of “assistance or encouragement that amounts to a conspiracy[.]” Thomas, 894
So. 2d at 1174. Accordingly, Plaintiffs’ state law conspiracy claims fail. The Court now turns to
the remaining claims against the Rouse Defendants.

27

C. Product Defamation and Disparagement
In this case, this Court previously noted that, under Louisiana law, a defamation claim
requires: “(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.” K&F Rest. Holdings, Ltd. v. Rouse, 2017 WL 465470, at *5 (M.D. La. Feb. 2, 2017) (citing
Fitzgerald v. Tucker, 98-2313 (La. 6/29/99); 737 So.2d 706, 715). Opinions are generally not
actionable as defamation. See Thompson v. Lee, 38,930 (La. App. 2d Cir. 2004), 888 So. 2d 300,
304 (press release equating a doctor’s behavior to “that found in the Soviet Union or third world
countries” was non-actionable opinion). More specifically, an expression of opinion is actionable
“only if it implies the existence of underlying facts ascertainable by a reasonable person with some
degree of certainty, and the implied factual assertions are false, defamatory, made with actual
malice, and concern another.” Fitzgerald v. Tucker, 98-2313 (La. 6/29/99), 737 So. 2d 706, 717.
Similarly, to prove a product disparagement claim, a plaintiff must plead “publication, with malice,
of false allegations concerning the property or product, and the causing of pecuniary harm.” K&F
Rest. Holdings, Ltd., 2017 WL 465470, at *5 (citing Taquino v. Teledyne Monarch Rubber, 893
F.2d 1488, 1501 (5th Cir. 1990)).
In Louisiana, “delictual actions,” including those raising defamation claims, are subject to
a prescriptive period of one year that begins running when injury is sustained. See Louisiana Civil
Code article 3492; Alexander v. Times-Picayune L.L.C., 2016-1134 (La. App. 4 Cir. 5/31/17), 221
So. 3d 198, 203, reh’g denied (June 27, 2017), writ denied, 2017-1322 (La. 11/6/17), 229 So. 3d
469. The burden of proving prescription generally lies with the party asserting prescription, but,
when a claim has prescribed on its face, the burden shifts to the plaintiff to prove that his claim
has not prescribed. Alexander, 221 So. 3d at 203.

28

Plaintiffs allege that Rouse’s told the Developer Defendants that Izzo’s produced
substandard product and was “litigious” or “extremely litigious.”

(Doc. 138 at 5, 7).

Preliminarily, these statements are expressions of opinion in vague and general terms that would
not permit a reasonable person to ascertain the existence of underlying facts “with some degree of
certainty.” Fitzgerald, 737 So. 2d at 717. Plaintiffs’ own exhibits suggest that Izzo’s exclusion
from the Mosely Defendants’ development did not result from such statements or the Mosely
Defendants’ understanding of any underlying facts derived from them. (See Doc. 138-6 at 1
(Fernandez’s affidavit stating that, during a March 2016 meeting, Russell Mosely expressed regret
that he could not include Izzo’s in a development because of Rouse’s demand for a restrictive
covenant, but he did not “know the reason” for the restriction and repeatedly asked Fernandez
“what happened” between Rouse’s and Izzo’s)).
Moreover, despite Plaintiffs’ assertion that these false statements were made “for certain”
to each of the Developer Defendants, (Doc. 138 at 8), the only instance of defamation or
disparagement alleged with any particularity in the Second Amended Complaint is the statement
by Rouse, Jr. to Creekstone in 2012, (Doc. 138 at 5), which, in or around June 2013, allegedly
resulted in Creekstone and Rouse’s signing a lease agreement excluding Plaintiffs, (Doc. 138-5 at
8). This lawsuit was filed in April 2016, (see Doc. 1-1), far more than a year after the harm arising
from this statement occurred. Plaintiffs’ defamation and disparagement claims arising from these
facts are therefore prescribed on their face, and Plaintiffs have not provided facts or argument
meaningfully undermining this conclusion.2 Therefore, these claims fail.

2

Plaintiffs attach as an Exhibit to their Oppositions an April 2016 letter from the law firm representing the Rouse
Defendants. (See, e.g., Doc. 164-1). The letter states that Rouse’s follows a “justifiable policy to locate only in
shopping centers where it will not be at risk of baseless allegations from competing businesses.” (Id.). The Court
declines to consider this letter, which was not referenced in or attached to the Second Amended Complaint. In any
event, the letter does not suggest that Rouse’s made statements concerning this “policy” to any Developer Defendants
during the events underlying this lawsuit. Plaintiffs also attempted to file a sur-reply arguing, in part, that all of their
claims were “filed timely” and the Rouse Defendants failed to “mention or disprove . . . how these claims are

29

D. Tortious Interference with Business Relations3
To prove tortious interference with business relations, a plaintiff must show that the
defendant improperly and maliciously influenced others not to deal with the plaintiff. See Muslow
v. A.G. Edwards & Sons, Inc., 18708-CA (La. App. 2d Cir. 6/10/87), 509 So.2d 1012, 1020, writ
denied, 512 So.2d 1183 (La. 1987). Louisiana jurisprudence views this cause of action with
“disfavor” and has limited it by requiring a plaintiff to show that the defendant acted with actual
malice. Brown v. Romero, 05–1016 (La. App. 3d Cir. 2/1/06), 922 So.2d 742, 747, writ denied,
06–0480 (La. 5/5/06), 927 So.2d 315; JCD Marketing, Co. v. Bass Hotels and Resorts, Inc., 01–
1096 (La. App. 4th Cir. 3/6/02), 812 So.2d 834, 841; see also George Denegre, Jr., et al., Tortious
Interference and Unfair Trade Claims: Louisiana’s Elusive Remedies for Business Interference,
45 Loy. L. Rev. 395, 401 (1999) (“[T]here appear to be no recorded cases in which anyone actually
has been held liable for the tort [of tortious interference with business relations].”). Additionally,
it is not enough to allege that a defendant’s actions affected plaintiff’s business interests; the
plaintiff must allege that the defendant actually prevented the plaintiff from dealing with a third
party. Bogues v. Louisiana Energy Consultants, Inc., 46,434 (La. App. 2 Cir. 8/10/11), 71 So. 3d
1128, 1135 (claim failed for, inter alia, failure to describe “any conversation between a particular
plaintiff/lessor and any particular entity with whom LEC was attempting to confect a business
relationship”).

continuing torts and have not prescribed.” (Doc. 174-1 at 1). The Court denied leave to file a sur-reply, (Doc. 176),
but it notes that the proposed sur-reply argued that the alleged torts were continuing “as you can purchase a burrito
from Rouse’s,” which does not establish that individual instances of alleged defamation or disparagement constitute
a continuing tort. See, e.g., Scott v. Zaheri, 2014-0726 (La. App. 4 Cir. 12/3/14), 157 So. 3d 779, 787 (publication of
four anonymous letters constituted four “separate and distinct acts” of defamation, with particular damages flowing
from each act, and did not “rise to the level of a continuing tort”).
3
Plaintiffs’ Opposition characterizes this claim as “Tortious Interference With a Contract.” (Doc. 164 at 5). The
Second Amended Complaint, however, describes how the Rouse Defendants “tortiously interfered and continue to
tortiously interfere with lawful business relations.” (Doc. 138 at 8).

30

According to the Second Amended Complaint and attached exhibits, in 2011 or 2012,
Izzo’s signed a letter of intent to lease space at Juban Crossing but Rouse’s demanded that Izzo’s
be “kept out,” claiming in 2012 that Izzo’s is “litigious” and produces a “substandard product.”
(Doc. 138 at 4-5; Doc. 138-5 at 2). Plaintiffs’ tortious interference claims appear to be based on
this incident as well as unspecified, undescribed incidents involving other developers. (Id. at 8-9;
see also Doc. 164 at 5-7 (“Likewise, Rouse’s lied and coerced other developers to exclude Izzo’s
from their developments. The numerous contracts, leases and deeds entered into by Rouse’s all
include a provision to exclude Izzo’s. . . . Rouse’s has interfered with business relations with Juban,
Keller, Mosley, Long Farms, Victory Berryland, and others. Furthermore, other developers have
heard of the restrictions that Rouse’s has imposed on all of its agreements to exclude Izzo’s and
made it more difficult for Izzo’s to find developers willing to rent space to Izzo’s, despite the fact
that Izzo’s has always been a good tenant and provided an excellent product.”)). Plaintiffs’
Opposition also argues that Rouse’s “interfered with the contract that Izzo’s had with its employee,
Patrick Dartez[.]” (Id. at 5).
Plaintiffs’ tortious interference claims fail. The only such claims pled with any specificity
and with respect to a particular business relationship or negotiation (rather than Plaintiffs’ general
business interests) are their claims concerning Dartez and Juban Crossing.4 However, these events
occurred in or before 2012, far more than a year before this action was filed in April 2016. The
Rouse Defendants accordingly raise a prescription defense. (Doc. 148-1 at 7-8). Plaintiffs’
Opposition does not argue that the prescriptive period was suspended or started later than these
dates; rather, it obliquely suggests that the Rouse Defendants’ torts are ongoing. (See Doc. 164 at
5-7). However, Plaintiffs’ allegations of ongoing harm are conclusory and appear to rely on injury

4

The Court reiterates that, as discussed supra, a lease containing a restrictive covenant is not inherently tortious.

31

to Plaintiffs’ general business interests rather than particular business relations with a particular
third party. Particularly given the “disfavored” status of tortious interference claims, the Court
cannot find such a claim adequately pled.
E. Conversion
Plaintiffs’ Opposition purports to address a “wrongful conversion” claim. (Doc. 164 at
15). As the Rouse Defendants correctly observe, however, no conversion claim is raised in the
Second Amended Complaint. (Doc. 148-1 at 4 n.16; Doc. 172 at 2-3; see generally Doc. 138).
The Court accordingly declines to consider any such claim.
F. Trade Name Infringement
The primary issues in a trade name infringement case are (1) whether the party seeking
relief has a protectable proprietary right in the name it seeks to exclude others from using, and
(2) if so, whether there has been an infringement of that right. Gulf Coast Bank v. Gulf Coast Bank
& Tr. Co., 94-2203 (La. 4/10/95), 652 So. 2d 1306, 1309.
The Second Amended Complaint contends that Rouse’s use of “build your own” in
connection with its burrito bars infringes on Plaintiffs’ trade name of “roll your own.” (Doc. 138
at 9).

The previously-assigned district judge ruled that a prior iteration of the Complaint

adequately stated a claim concerning the use of “build your own,” “declin[ing] to make a
determination on the inherent or acquired distinctiveness of [‘roll your own’]” and finding
adequate the Complaint’s allegations that Rouse’s used “build your own” to cause confusion or
mistake and deceive consumers about the origin of “such goods or services.” (Doc. 31 at 11-12).
The Rouse Defendants invite the Court to reconsider this ruling, arguing that the Court is
generally free to reconsider prior rulings. (Doc. 172 at 1 n.1); see also Stoffels ex rel. SBC Tel.
Concession Plan v. SBC Commc’ns, Inc., 677 F.3d 720, 727 (5th Cir. 2012) (under law of the case

32

doctrine, courts show “deference to decisions already made” but are free to reconsider and reverse
interlocutory orders for “any reason [they] deem[] sufficient”; when a successor judge replaces
another judge, the successor judge has the same discretion to reconsider the first judge’s order).
The substance of the Rouse Defendants’ argument is that it is implausible that a customer would
enter a Rouse’s burrito bar and be confused about the source of the burritos, and “build your own”
(the term actually used by Rouse’s) is a generic, descriptive term not amenable to trademark or
trade name protection regardless of how used. (Doc. 148-1 at 8-10); see also Gulf Coast Bank,
652 So. 2d at 1313 (“A generic term is the name of a particular genus or class of which an
individual article, service or business is but a member.”).
In Gulf Coast Bank, the Supreme Court of Louisiana opined that a generic term is not given
trademark or trade name protection. 652 So. 2d at 1313. However, a “descriptive term,” which
“identifies a characteristic or quality of an article, service or business” and is not ordinarily
protectable, may become protected “if it acquires a secondary meaning.” Id. Among those generic
terms listed as examples in the Restatement (Third) of Unfair Competition are “camera,”
“computer programming,” “bank,” “light” when used to describe beer, and “diet” when used to
describe cola. Restatement (Third) of Unfair Competition § 15 (1995); see also CG Roxane LLC
v. Fiji Water Co. LLC, 569 F. Supp. 2d 1019, 1026 (N.D. Cal. 2008) (ruling that “bottled at the
source” was generic when referring to bottled water because the primary importance of the “mark”
was to describe “the product itself” rather than the company that bottled it; comparing “bottled at
the source” to “disinfectable nail files,” “light beer,” and “brick oven pizza”); 2 McCarthy on
Trademarks and Unfair Competition § 12:20 (5th ed.) (“The distinction between highly descriptive
terms and generic names is difficult to state in the abstract. The best that can be done conceptually
is to observe that descriptive terms describe a thing, while generic terms name the thing. But in

33

applying this to actual words, one quickly realizes that there is only a fine line between describing
and naming.” (footnote omitted)).
The Court agrees with the Rouse Defendants. While the Court recognizes the importance
of showing proper deference to the decision of the previously-assigned district judge, the Fifth
Circuit has emphatically stated that a successor judge remains entitled to revise an interlocutory
order for any “sufficient” reason. Stoffels, 677 F.3d at 727. The Court does not disagree with the
prior ruling that “roll your own,” the term that Plaintiffs seek to protect in this action, may be
descriptive and therefore protected under certain circumstances. However, Plaintiffs must also
make sufficient allegations of the infringement of their protected rights. Gulf Coast Bank, 652 So.
2d at 1309. Plaintiffs’ allegations of infringement are that Rouse’s use of “build your own” and
Izzo’s “proprietary information is intended to and is likely to cause confusion or mistake and is
intended to and has deceived consumers as to the source of origin of such goods or services.”
(Doc. 138 at 9). Under Rule 12(b)(6), such an “unadorned, the-defendant-unlawfully-harmed-me
accusation” and “formulaic recitation of the elements of a cause of action” will not do. Iqbal, 556
U.S. at 678. As the Rouse Defendants persuasively argue, their infringement of any rights in “roll
your own” is alleged to arise from their use of a common, generic phrase (“build your own”)
describing the product itself and distinct from the mark to be protected. See also Urgent Care Inc.
v. S. Mississippi Urgent Care Inc., 289 F. App’x 741, 742, 744-45 (5th Cir. 2008) (reversing grant
of preliminary injunctive relief that prevented defendants from using the mark “urgent care”;
although “UrgiCare” mark was protectable, “urgent care” was a generic term, and plaintiffs could
not “prevent use of the term by registering a similar-sounding, but differently spelled mark”).
Thus, even assuming that “roll your own” may be entitled to protection, Plaintiffs have failed to

34

adequately allege that the Rouse Defendants’ use of the generic phrase “build your own” is
infringing. Plaintiffs’ claims of trade name infringement must be dismissed.
G. Civil RICO
RICO makes it illegal for any person “employed by or associated with any enterprise
engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or
participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of
racketeering activity or collection of unlawful debt.” 18 U.S.C. § 1962(c). RICO further prohibits
conspiring to violate the aforementioned provision. 18 U.S.C. § 1962(d).
Civil RICO claims have three common elements: “‘(1) a person who engages in (2) a
pattern of racketeering activity, (3) connected to the acquisition, establishment, conduct, or control
of an enterprise.’” Snow Ingredients, Inc. v. SnoWizard, Inc., 833 F.3d 512, 523–24 (5th Cir. 2016)
(quoting Abraham v. Singh, 480 F.3d 351, 355 (5th Cir. 2007)). “‘A pattern of racketeering activity
consists of two or more predicate criminal acts that are (1) related and (2) amount to or pose a
threat of continued criminal activity.’” Id. at 524 (quoting St. Germain v. Howard, 556 F.3d 261,
263 (5th Cir. 2009)). The predicate criminal acts can be violations of either state or federal law.
Id. (citing St. Germain, 556 F.3d at 263).
“‘Predicate acts are “related” if they have the same or similar purposes, results,
participants, victims, or methods of commission, or otherwise are interrelated by distinguishing
characteristics and are not isolated events.’” Bordelon v. Wells Fargo Fin. Louisiana, LLC, 2018
WL 2717521, at *2 (E.D. La. June 6, 2018) (citing In re Burzynski, 989 F.2d 733, 742 (5th Cir.
1993)). “To establish continuity, plaintiffs must prove ‘continuity of racketeering activity, or its
threat.’” Word of Faith World Outreach Ctr. Church, Inc. v. Sawyer, 90 F.3d 118, 122 (5th Cir.
1996) (quoting H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 241 (1989)). “This may be shown by

35

either a closed period of repeated conduct, or an open-ended period of conduct that ‘by its nature
projects into the future with a threat of repetition.’” Id. (quoting H.J. Inc., 492 U.S. at 242). Where
alleged RICO predicate acts are “part and parcel” of a single, otherwise lawful transaction, a
“pattern of racketeering activity” has not been shown. Castrillo v. Am. Home Mortg. Servicing,
Inc., 670 F. Supp. 2d 516, 530 (E.D. La. 2009) (Vance, J.) (citing Word of Faith, 90 F.3d at 123)
(further ruling that it was immaterial to analyzing continuity that, had the defendants successfully
“submitted their forgery,” the “fraud would have continued until the note was satisfied”; RICO
concerns long-term criminal conduct, not the long-term consequences of isolated or sporadic
conduct).
The core of a civil RICO conspiracy claim under 18 U.S.C. § 1962(d) is “an agreement to
commit predicate acts,” and a complaint alleging such a claim, “at the very least, must allege
specifically such an agreement.” Crowe v. Henry, 43 F.3d 198, 206 (5th Cir. 1995) (affirming
dismissal of civil RICO conspiracy claims where plaintiff had only conclusorily alleged that
defendants had “conspired”); see also Snow Ingredients, Inc., 833 F.3d at 526 (affirming dismissal
of civil RICO conspiracy claims where complaint alleged that attorney defendants should have
known that their conduct was unlawful but failed to allege agreement between them).
The Second Amended Complaint raises a civil RICO conspiracy claim against Rouse, Jr.
via Rouse’s, which Plaintiffs claim is a RICO “enterprise.” (Doc. 138 at 6). Specifically, Plaintiffs
contend that Rouse, Jr. “agreed” to violate RICO on three separate occasions, in violation of 18
U.S.C. § 1962(d), as part of three separate “schemes”: the scheme “to bribe an Izzo’s employee to
steal its recipe book,” the scheme “to exclude Izzo’s from the Juban Crossing shopping center,”
and the scheme to illegally use Izzo’s trade secrets, i.e., its recipes. (Id. at 4-6). The Rouse
Defendants argue that Plaintiffs have failed to adequately allege a pattern of predicate acts or a

36

criminal enterprise, the “continuing threat” posed by that enterprise, or the identity or roles of other
participants in the enterprise. (Doc. 148-1 at 11-12).
Plaintiffs’ RICO claim fails. Most significantly, the claim is expressly styled only as a
conspiracy claim, but the Second Amended Complaint does not adequately allege the identities of
Rouse, Jr.’s co-conspirators, the content or nature of the agreement they entered into, or the
circumstances under which they entered into it. Crowe, 43 F.3d at 206; Snow Ingredients, Inc.,
833 F.3d at 526. Plaintiffs’ Opposition re-iterates that its RICO claim is brought under “§ 1962(d),
the conspiracy provision,” and it argues that “Rouse[,] Jr. conspired with his store managers to
steal the burrito recipes.” (Doc. 164 at 13 n.10). However, although the Second Amended
Complaint refers to unnamed “employee conspirators,” the most specific allegation concerning
them is that Rouse, Jr. “directed some of his store managers” in Lafayette to approach Dartez with
an offer to defect. (Doc. 138 at 3). This falls short of specifically and plausibly alleging agreement
supporting a RICO conspiracy. Moreover, Plaintiffs’ allegations of a conspiracy (between Rouse,
Jr. and his managers or Dartez) are limited to a single alleged crime in 2011 or 2012; there is no
meaningful suggestion that the managers or Dartez conspired “to violate any of the provisions of
[18 U.S.C. § 1962(c)],” by “conduct[ing] or participat[ing], directly or indirectly, in the conduct
of [the] enterprise’s affairs through a pattern of racketeering activity.” Crowe, 43 F.3d at 206; see
also Tel-Phonic Servs., Inc. v. TBS Int’l, Inc., 975 F.2d 1134, 1140-41 (5th Cir. 1992) (complaint
deficient for failure to allege facts “implying any agreement involving each of the Defendants to
commit at least two predicate acts”; citing favorably similar standards of First, Second, and Third
Circuits); Ellis v. Warner, 2017 WL 634287, at *12 (S.D. Fla. Feb. 16, 2017) (in Eleventh Circuit,
RICO conspiracy may be proved by showing defendant’s agreement as to an “overall objective”
or to commit two predicate acts). Especially damning is the lack of specific allegations that anyone

37

other than Rouse, Jr. participated in or agreed to participate in the only “continuous” RICO
violation alleged, i.e., the continuing possession and use of Izzo’s trade secrets. See Malvino v.
Delluniversita, 840 F.3d 223, 231 (5th Cir. 2016) (“continuity” requirement keeps civil RICO
“focused on the long term criminal conduct Congress intended it to address, and prevent RICO
from becoming a surrogate for garden-variety fraud actions properly brought under state law”
(citations and quotation marks omitted)). Moreover, as discussed supra, there are no nonconclusory allegations that any of the Developer Defendants conspired with any of the Rouse
Defendants to engage in unlawful activity, much less an ongoing pattern of unlawful activity.
Some of the alleged predicate offenses are also insufficiently pled. For example, Plaintiffs
contends that the circumstances of the “bribe” violate the Travel Act, 18 U.S.C. § 1952, but the
Rouse Defendants correctly observe that this crime requires travel in interstate or foreign
commerce or the use of the mail or a “facility” in interstate commerce. This element is generally
not difficult to prove. See United States v. Rodriguez-Cruz, 681 F. App’x 312, 313 (5th Cir. 2017)
(cell phones are “facilities of interstate commerce,” and even wholly intrastate use of a cell phone
can satisfy jurisdictional “commerce” element of federal crimes); BCCI Holdings (Luxembourg)
Societe Anonyme v. Khalil, 56 F. Supp. 2d 14, 53 (D.D.C. 1999), aff’d in part, rev’d in part on
other grounds and remanded sub nom. BCCI Holdings (Luxembourg), S.A. v. Khalil, 214 F.3d 168
(D.C. Cir. 2000) (“use of a facility in commerce” includes interstate wire transfers and use of mail,
telephone, or telegrapy). However, Plaintiffs do not allege the use of such a facility in connection
with this offense. Particularly, Plaintiffs appear to incorrectly believe that it suffices to allege that
Rouse’s purchases supplies from out of state, (Doc. 138 at 4; Doc. 164 at 9), without alleging that
travel, mail, or a facility of interstate commerce was used in connection with this alleged crime.

38

Cf. United States v. Marek, 238 F.3d 310, 320 (5th Cir. 2001) (to satisfy “commerce” element,
“the facility, not its use, is what must be ‘in interstate or foreign commerce.’”).
Similarly, even if Rouse, Jr. claimed over interstate wires that Izzo’s made “substandard”
product and was “litigious,” and even if one or more of these statements can be considered “false,”
see supra, the contours of any broader “scheme or artifice to defraud” in connection with Juban
Crossing are only vaguely alleged. See United States v. Brown, 459 F.3d 509, 518 (5th Cir. 2006)
(elements of wire fraud are “(1) the formation of a scheme or artifice to defraud, and (2) use of the
wires in furtherance of the scheme”); United States v. Bajoghli, 785 F.3d 957, 962–63 (4th Cir.
2015) (“While fraud can be committed simply by engaging in an isolated transaction, a scheme to
defraud requires a plot, plan, or arrangement that is executed by a fraudulent transaction. See
Black’s Law Dictionary 1546 (10th ed. 2014) (defining “scheme” as “[a] systemic plan; a
connected or orderly arrangement”; or “[a]n artful plot or plan, [usually] to deceive others”).”
(emphasis in original)); see also United States v. Locke, 643 F.3d 235, 247 (7th Cir. 2011) (“We
have previously noted that the crime comprehended by the mail and wire fraud statutes is the
scheme to defraud, not just the isolated iterations of wire transmissions or mailings[.]”).
In short, Plaintiffs’ RICO conspiracy claim lacks sufficient non-conclusory allegations in
support of the alleged agreements underlying it, of more than one of the continuing offenses that
it is RICO’s purpose to protect against, and indeed of any offense beyond Rouse’s alleged
continuing possession of trade secrets resulting from the theft of a recipe book. See United States
v. Case, 309 F. App’x 883, 886 & n.2 (5th Cir. 2009) (suggesting that knowing possession of trade
secrets without authorization and with the “inten[t] to convert” under 18 U.S.C. § 1832(a) is a
continuing offense). The civil RICO claim therefore fails.

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H. Leave to Amend
“[A] court ordinarily should not dismiss the complaint except after affording every
opportunity to the plaintiff to state a claim upon which relief might be granted.” Byrd v. Bates, 220
F.2d 480, 482 (5th Cir. 1955). The Fifth Circuit has further stated:
In view of the consequences of dismissal on the complaint alone, and the pull to
decide cases on the merits rather than on the sufficiency of pleadings, district courts
often afford plaintiffs at least one opportunity to cure pleading deficiencies before
dismissing a case, unless it is clear that the defects are incurable or the plaintiffs
advise the court that they are unwilling or unable to amend in a manner that will
avoid dismissal.
Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (5th Cir. 2002).
Relying on Great Plains and other cases from this circuit, one district court in Texas articulated
the standard as follows:
When a complaint fails to state a claim, the court should generally give the plaintiff
at least one chance to amend before dismissing the action with prejudice unless it
is clear that the defects in the complaint are incurable. See Great Plains Trust Co.
v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (5th Cir. 2002); see also
United States ex rel. Adrian v. Regents of the Univ. of Cal., 363 F.3d 398, 403 (5th
Cir. 2004) (“Leave to amend should be freely given, and outright refusal to grant
leave to amend without a justification . . . is considered an abuse of discretion.”)
(internal citation omitted). However, a court may deny leave to amend a complaint
if the court determines that “the proposed change clearly is frivolous or advances a
claim or defense that is legally insufficient on its face.” 6 Charles A. Wright, Arthur
R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1487 (2d ed.1990)
(footnote omitted); see also Martin's Herend Imports, Inc. v. Diamond & Gem
Trading United States of Am. Co., 195 F.3d 765, 771 (5th Cir. 1999) (“A district
court acts within its discretion when dismissing a motion to amend that is frivolous
or futile.”) (footnote omitted).
Tow v. Amegy Bank N.A., 498 B.R. 757, 765 (S.D. Tex. 2013). Finally, one leading treatise
explains:
As [] numerous case[s] . . . make clear, dismissal under Rule 12(b)(6) generally is
not immediately final or on the merits because the district court normally will give
the plaintiff leave to file an amended complaint to see if the shortcomings of the
original document can be corrected. The federal rule policy of deciding cases on
the basis of the substantive rights involved rather than on technicalities requires that
the plaintiff be given every opportunity to cure a formal defect in the pleading. This
40

is true even when the district judge doubts that the plaintiff will be able to overcome
the shortcomings in the initial pleading. Thus, the cases make it clear that leave to
amend the complaint should be refused only if it appears to a certainty that the
plaintiff cannot state a claim. A district court’s refusal to allow leave to amend is
reviewed for abuse of discretion by the court of appeals. A wise judicial practice
(and one that is commonly followed) would be to allow at least one amendment
regardless of how unpromising the initial pleading appears because except in
unusual circumstances it is unlikely that the district court will be able to determine
conclusively on the face of a defective pleading whether the plaintiff actually can
state a claim for relief.
5B Charles A. Wright, Arthur R. Miller, et al., Federal Practice and Procedure § 1357 (3d ed.
2016).
Further leave to amend is unwarranted. Acting in accordance with “wise judicial practice,”
the Court previously afforded Plaintiffs multiple opportunities to amend their original Complaint.
As a partial result, this case has been pending two years and has not advanced past the pleading
stage. These multiple amendments strongly suggest that Plaintiffs have pled their best case.
Moreover, the Court has expressly informed the parties that the Second Amended Complaint
would be the final complaint in this case. (Doc. 136 at 1). Therefore, further leave to amend is
unwarranted and will be denied.
V.

CONCLUSION
Accordingly, the Motions, (Docs. 139, 140, 143, 148), are GRANTED, and Plaintiffs’

claims are DISMISSED WITH PREJUDICE. The Court will enter judgment consistent with this
Ruling and Order.
Signed in Baton Rouge, Louisiana, on July 24, 2018.

S

JUDGE JOHN W. deGRAVELLES
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
41