Official Brands Inc v. Roc Nation Sports LLC et al
Filing
25
MEMORANDUM OPINION AND ORDER: The Court GRANTS in part and DENIES in part Roc Nation's 4 12(b)(6) Motion to Dismiss for Failure to State a Claim. The Court DISMISSES Official Brands' claim for tortious interference with prospective contractual relations. The Court also DENIES Roc Nation's Motion for a More Definite Statement. (Ordered by Judge Jane J Boyle on 12/15/2015) (twd)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
OFFICIAL BRANDS, INC.,
Plaintiff,
v.
ROC NATION SPORTS, LLC and ROC
NATION, LLC,
Defendants.
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CIVIL ACTION NO. 3:15-CV-2199-B
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant Roc Nation, LLC’s 12(b)(6) Motion to Dismiss for Failure to
State a Claim, or Alternatively, 12(e) Motion for a More Definite Statement (Doc. 4). For the
reasons that follow, the Court GRANTS in part and DENIES in part the Motion to Dismiss, and
DENIES the Motion for a More Definite Statement.
I.
BACKGROUND
The events underlying this case kicked off in July 2014, when Plaintiff Official Brands, Inc.
(“Official Brands”) signed a contract with Dez I Enterprises, Inc. (“Dez I”), a corporation owned by
Dallas Cowboys wide receiver Dez Bryant (“Bryant”). Doc. 1-4, Original Pet. ¶ 12. The contract
authorized Official Brands “to utilize Dez Bryant’s name, nickname, initials, autograph, facsimile
signature, photograph, likeness, video, and/or endorsement in connection with the advertisement,
marketing, promotion, and sale of” Bryant’s brand, called “Throw up the X.” Id. ¶¶ 11–12. This
arrangement was drawn up to run from July 1, 2014 until June 30, 2016, but it was stopped short
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when Bryant prematurely terminated the contract on February 24, 2015.1 Id. ¶¶ 12, 22. According
to Official Brands, Bryant did this because Defendant Roc Nation, LLC (“Roc Nation”), along with
Roc Nation Sports, LLC (“RNS”) “embarked upon a scheme to . . . unlawfully induce Dez Bryant
to terminate [the] . . . contract with” Official Brands. Id. ¶ 21. Roc Nation’s and RNS’ alleged
gameplan included “unsolicited contact” with Bryant, “false and disparaging statements” about
Official Brands, and “improper enticements to induce” him to cancel the contract. Id.
The reason for this conduct, Official Brands asserts, was to cause Bryant to “move all of his
off-field business” to Roc Nation and RNS. Id. ¶ 23. According to the Original Petition, Bryant
signed a standard representation agreement with both Defendants in November 2014, after which
the alleged interference with Official Brands’ contract began. Id. ¶ 21. For example, Official Brands
states that Kimberly Miale, who allegedly works for Defendants, “reached out to [Official Brand’s]
officers on multiple occasions seeking a copy of the contract” between Official Brands and Dez I. Id.
¶ 17. Roc Nation challenges this, arguing that it has never had a contractual relationship with Bryant
and that Miale is “not an agent, employee[,] or representative” of Roc Nation. Doc. 4, Def.’s Mot.
to Dismiss ¶ 1. It now seeks dismissal for failure to state a claim or, alternatively, a more definite
statement of Official Brands’ claims. Id. The Court has received Official Brands’ response (Doc. 19)
and Roc Nation’s reply (Doc. 22), meaning that the Motions are ready for review.
1
As the Court stated in its recent Memorandum Opinion and Order, it considers the date of
termination included in the Original Petition (February 24, 2014) to be a scrivener’s error. See Doc. 24, Mem.
Op. & Order 2 n.1 [hereinafter “12(b)(2) Order”].
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II.
LEGAL STANDARD
A.
Motion to Dismiss for Failure to State a Claim
In a case that has been removed from state court, the proper pleading standard to apply when
deciding a motion to dismiss is that of the state from whose court the case has been removed. Craig
Penfold Props., Inc. v. Travelers Cas. Ins. Co., No. 14-CV-0326, 2015 WL 356885, at *2 (N.D. Tex.
Jan. 28, 2015); see also De La Hoya v. Coldwell Banker Mex., Inc., 125 F. App’x 533, 537 (5th Cir.
2005) (applying the Texas pleading standard on a motion to dismiss claims in a case removed from
Texas state court); Sutton v. Airsep Corp., No. 11-CV-2669, 2012 WL 253959, at *3 (N.D. Tex. Jan.
27, 2012) (applying state pleading standard on motion to remand because “state court plaintiffs
should not be required to anticipate removal to federal court”). In a case removed from a Texas state
court, the Court applies the Texas pleading standard. Traditionally, Texas courts have applied a
more liberal pleading standard than the federal one, upholding a petition as long as it provides “fair
notice of the claim involved.” Tex. R. Civ. P. 45(b). In March 2013, however, the Texas Supreme
Court adopted Rule 91a of the Texas Rules of Civil Procedure, which provides in pertinent part:
[A] party may move to dismiss a cause of action on the grounds that it has no basis
in law or fact. A cause of action has no basis in the law if the allegations, taken as
true, together with inferences reasonably drawn from them, do not entitle the
claimant to the relief sought. A cause of action has no basis in fact if no reasonable
person could believe the facts pleaded.
Tex. R. Civ. P. 91a. Though not identical to the Rule 12(b)(6) standard, the Texas Courts of
Appeals have interpreted Rule 91a as essentially calling for a Rule 12(b)(6)-type analysis and have
relied on the Rule 12(b)(6) case law in applying Rule 91a. See Wooley v. Schaffer, 447 S.W.3d 71, 76
(Tex. App.—Houston [14th Dist.] 2014, pet. denied); GoDaddy.com, LLC v. Toups, 429 S.W.3d
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752, 754 (Tex. App.—Beaumont 2014, pet. denied). Accordingly, this Court will do the same.
Rule 12(b)(6) authorizes a court to dismiss a plaintiff’s complaint for “failure to state a claim
upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). In considering a Rule 12(b)(6) motion
to dismiss, “[t]he court accepts all well-pleaded facts as true, viewing them in the light most favorable
to the plaintiff.” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting
Martin K. Eby Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)). The Court
will “not look beyond the face of the pleadings to determine whether relief should be granted based
on the alleged facts.” Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999).
To survive a motion to dismiss, a plaintiff must plead “enough facts to state a claim to relief
that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “Threadbare
recitals of the elements of a cause of action, supported by mere conclusory statements, do not
suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. “The plausibility standard is not akin to a ‘probability
requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.
When well-pleaded facts fail to achieve this plausibility standard, “the complaint has alleged—but
it has not shown—that the pleader is entitled to relief.” Id. at 679 (internal quotation marks and
alterations omitted).
B.
Motion for a More Definite Statement
Rule 12(e) allows a party to “move for a more definite statement of a pleading to which a
responsive pleading is allowed” when it is “so vague or ambiguous that the party cannot reasonably
prepare a response.” Fed. R. Civ. P. 12(e). “When a party moves for a more definite statement, a
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court must determine whether the complaint is such that a party cannot reasonably be required to
frame a responsive pleading.” Ash Grove Tex., L.P. v. City of Dall., No. 08-CV-2114, 2009 WL
3270821, at *7 (N.D. Tex. Oct. 9, 2009) (citing Mitchell v. EZ Way Towers, Inc., 269 F.2d 126, 130
(5th Cir. 1959)). “[M]otions for a more definite statement are generally disfavored,” and district
courts have “significant discretion” when considering them. Id. (internal citations and quotations
omitted).
III.
ANALYSIS
The Court has previously addressed the question of what claims Official Brands has advanced
in its Original Petition, and has determined that Official Brands seeks recovery for (1) tortious
interference with contractual relations, and (2) tortious interference with prospective contractual
relations. Doc. 24, 12(b)(2) Order 6–7. It will decide these Motions accordingly.
A.
Motion to Dismiss
1.
Tortious Interference With Contractual Relations
To prevail on a claim for tortious interference with an existing contract, a plaintiff must show
“(1) an existing contract subject to interference, (2) a willful and intentional act of interference with
the contract, (3) that proximately caused the plaintiff's injury, and (4) caused actual damages or
loss.” Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000). The alleged
interference generally must have induced a breach of the contract to be actionable. ACS Investors,
Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex. 1997) (“Ordinarily, merely inducing a contract
obligor to do what it has a right to do is not actionable interference.”). The fact that a contract is
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terminable at will, however, “is no defense to an action for tortious interference with its
performance.” Sterner v. Marathon Oil Co., 767 S.W.2d 686, 689 (Tex. 1989).
Roc Nation argues that Official Brands’ allegations are conclusory, and that it has failed
altogether to allege intent on the part of Roc Nation’s employees to interfere tortiously with Official
Brands’ contract. Doc. 4, Def.’s Mot. to Dismiss ¶¶ 4–7. Official Brands responds that its allegations
are sufficient to survive a motion to dismiss under Rule 12(b)(6). Doc. 19, Pl.’s Resp. 4–7.
i.
Existing contract
Official Brands has alleged the existence of a contract subject to interference. The Original
Petition describes a two-year agreement between Official Brands and Dez I that authorized the
former to use Bryant’s likeness, signature, etc., to grow the “Throw up the X” brand. Doc. 1-4,
Original Pet. ¶ 12. This is sufficient to establish the first element of the claim.
ii.
Willful and intentional interference
“To show tortious interference, a plaintiff is not required to prove intent to injure, but rather
‘only that the actor desires to cause the consequences of his act, or that he believes that the
consequences are substantially certain to result from it.’” Amigo Broad., LP v. Spanish Broad. Sys., Inc.
521 F.3d 472, 490 (5th Cir. 2008) (quoting Sw. Bell Tel. Co. v. John Carlo Tex., Inc., 843 S.W.2d
470, 472 (Tex. 1992)). “[T]he interfering party must have ‘actual knowledge of the contract or
business relation in question, or knowledge of facts and circumstances that would lead a reasonable
person to believe in the existence of the contract or business relationship.’” Id. (quoting Steinmetz &
Assocs., Inc. v. Crow, 700 S.W.2d 276, 277–78 (Tex. App.—San Antonio 1985, writ ref’d n.r.e.)).
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Official Brands’ allegations are more than sufficient to meet this standard. Roc Nation clearly
knew of the contract, as Miale—its employee—requested a copy of it “on multiple occasions.”2 Doc.
1-4, Original Pet. ¶ 17. The Original Petition further alleges that Roc Nation provided Bryant with
“numerous improper enticements in order to induce . . . [him] to terminate the contract” and to convince
him to shift his business to Roc Nation. Id. ¶¶ 21, 23 (emphasis added). These assertions, taken as
true, demonstrate that Roc Nation “desire[d] to cause the consequences of [its] act,” Amigo Broad.,
521 F.3d at 490, and thus are sufficient to establish the second element of the claim.
The allegations in this case resemble those in Hambric Sports Management, LLC v. Team AK,
Inc., No. 09-CV-1662, 2010 WL 2605243 (N.D. Tex. June 29, 2010). There, the plaintiff was a
sports agency that had represented golfer Anthony Kim, and one of the defendants was a rival
management company that had allegedly attempted to lure Kim away from the plaintiff. The court
found that this element was fulfilled on the basis of allegations that the defendant (1) “possessed
[and reviewed] copies” of the plaintiff’s contract with Kim; (2) “entertained the prospect of entering
into an agency agreement with Kim”; and (3) “research[ed] Kim’s marketability with potential
endorsement companies while the Agreement was in effect.” Id. at *8. Here, Roc Nation allegedly
(1) requested a copy of the contract between Official Brands and Dez I; (2) actually entered into a
representation agreement with Bryant; and (3) blocked endorsement agreements that Official Brands
2
Roc Nation asserts that Miale is not, in fact, its employee. But that is a factual dispute, and on a
motion to dismiss “[t]he court accepts all well-pleaded facts as true, viewing them in the light most favorable
to the plaintiff.” In re Katrina Canal Breaches Litig., 495 F.3d at 205. Therefore, the Court assumes as true
Official Brands’ allegation that Miale is Roc Nation’s employee, or at least that she was at the time relevant
to this litigation.
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sought to negotiate. Doc. 1-4, Original Pet. ¶¶ 17, 19, 21. Accordingly, the Court concludes that this
activity, if true, would constitute intentional and willful interference.
iii.
Proximate cause
Establishing proximate cause requires a plaintiff to show that “the defendant took an active
part in persuading a party to a contract to breach it.” Amigo Broad., 521 F.3d at 493 (quoting Davis
v. HydPro, Inc., 839 S.W.2d 137, 139 (Tex. App.—Eastland 1992, writ denied)). It is unclear
whether Dez I’s termination of the contract with Official Brands was a breach.3 As explained above,
though, the termination of an at-will contract can give rise to a tortious interference claim, even if
that termination was not a breach. See Sterner, 767 S.W.2d at 688–89.4 It follows logically, then, that
proximate cause is shown in a case such as this when a plaintiff alleges that the defendant actively
persuaded a party to an at-will contract to terminate it.
Official Brands has made this showing. It asserts that Roc Nation initiated “unsolicited
contact” with Bryant, made “false and disparaging statements” about Official Brands, and provided
Bryant “with numerous improper enticements,” all to incentivize Bryant to terminate the contract
with Official Brands. Doc. 1-4, Original Pet. ¶ 21. These allegations suffice to show active persuasion
on Roc Nation’s part. The third element is therefore fulfilled.
3
Official Brands does assert that, absent Roc Nation’s interference, “Bryant would not have
attempted to terminate and breach the agreement.” Doc. 1-4, Original Pet. ¶ 29. This phrasing suggests that
the termination and breach were distinct effects of the interference, though it is admittedly ambiguous.
4
It is possible to read Sterner as holding only that the fact that a contract was terminable at will is not
a defense against a tortious interference claim arising out of some other breach of the contract. The facts of
Sterner, however, belie that interpretation. In that case, the plaintiff was a construction worker who sued
Marathon for allegedly causing the plaintiff’s employer—an independent contractor—to terminate his at-will
employment contract. 767 S.W.2d at 688. No independent breach of the employment contract was alleged,
yet the Texas Supreme Court still found that the plaintiff had stated a claim for tortious interference. Id. at
688–89.
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iv.
Actual damages or loss
Official Brands has also adequately alleged this element, as it asserts that Roc Nation’s
interference resulted in the termination of the contract and the accompanying revocation of Official
Brands’ ability to use and promote “Throw up the X.” Id. ¶ 22. This constitutes actual damages or
loss. Cf. U.S. Enercorp, Ltd. v. SDC Mont. Bakken Expl., LLC, 966 F. Supp. 2d 690, 706–07 (W.D.
Tex. 2013) (denying motion to dismiss where plaintiff alleged that defendant’s tortious interference
resulted in the loss of a sale to which the plaintiff was otherwise contractually entitled).
The Original Petition thus contains satisfactory allegations of all four elements of tortious
interference with an existing contract. Accordingly, Roc Nation is not entitled to dismissal of this
claim.
2.
Tortious Interference With Prospective Contractual Relations
The elements of Official Brands’ second claim are:
(1) there was a reasonable probability that the plaintiff would have entered into a
business relationship with a third party; (2) the defendant either acted with a
conscious desire to prevent the relationship from occurring or knew the interference
was certain or substantially certain to occur as a result of the conduct; (3) the
defendant’s conduct was independently tortious or unlawful; (4) the interference
proximately caused the plaintiff injury; and (5) the plaintiff suffered actual damage
or loss as a result.
Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909, 923 (Tex. 2013). Roc Nation
contends, again, that the allegations in the Original Petition are conclusory and therefore insufficient
to state a claim, and that Official Brands has failed to allege the third element of the claim. Doc. 4,
Def.’s Mot. to Dismiss ¶¶ 4–6, 8. Official Brands rejects this reading, arguing that it has properly
alleged each element of the claim. Doc. 19, Pl.’s Resp. 4–7.
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i.
Reasonable probability of future business relationship
This element requires more than speculation or the bare possibility that a plaintiff would have
entered into a future business relationship. See Flying Crown Land Grp. v. Reed, No. 15-CV-1225,
2015 WL 4750786, at *2 (N.D. Tex. Aug. 11, 2015). “[M]ere negotiations” are not enough, but a
pre-existing business relationship can suffice to show a reasonable probability of prospective
contractual relations. N. Cypress Med. Ctr. Operating Co., Ltd. v. Gallagher Benefit Servs., Inc., No.
11-CV-0685, 2012 WL 2870639, at *7 (S.D. Tex. July 11, 2012) (quoting Richardson-Eagle, Inc. v.
William M. Mercer, Inc., 213 S.W.3d 469, 475 (Tex. App.—Houston [1st Dist.] 2006, pet. denied)).
Here, Official Brands and Dez I not only had a pre-existing business relationship, but a contractual
arrangement. Moreover, as a result of Official Brands’ efforts, “the [Throw up the X] brand started
showing signs of real progress at the end of 2014,” resulting in “tens of thousands of dollars” in
royalties for Dez I. Doc. 1-4, Original Pet. ¶ 18. The Court is satisfied that these allegations
demonstrate a reasonable probability that Official Brands and Dez I would have entered into a future
business relationship.
ii.
Conscious desire/substantial certainty
Official Brands has also pled that Roc Nation carried out its interference with the intent that
Bryant would “move all of his off-field business to” it. Id. ¶ 23. This intent constitutes a conscious
desire to interfere with any prospective relations between Official Brands and Dez I—if Bryant did
indeed move all of his off-field business to Roc Nation, that would necessarily prevent Official Brands
from entering into any future business relationship with Dez I. This element is therefore also fulfilled.
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iii.
Independently tortious or unlawful behavior
A plaintiff seeking recovery for tortious interference with prospective contractual relations
must “prove that the defendant's conduct was independently tortious or wrongful as an element of
the cause of action.” In re Mem’l Hermann Hosp. Sys., 464 S.W.3d 686, 705 (Tex. 2015) (quoting
Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 726 (Tex. 2001)). Consequently, such a plaintiff is
required to plead independently tortious behavior to survive a motion to dismiss under Rule
12(b)(6). XP Innovations Inc. v. Black Rapid, Inc., No. H-13-1856, 2013 WL 6230368, at *4 (S.D.
Tex. Dec. 2, 2013). “‘Independently tortious’ does ‘not mean that the plaintiff must be able to prove
an independent tort’”; rather, a plaintiff must “prove that the defendant's conduct would be
actionable under a recognized tort.” N. Cypress Med. Ctr., 2012 WL 2870639, at *7 (quoting Sturges,
52 S.W.3d at 726).
The conduct in which Roc Nation allegedly engaged is independently tortious. Roc Nation
purportedly made “false and disparaging statements to . . . Bryant concerning [Official Brands]” in
an effort to induce him to terminate the contract with Official Brands. Doc. 1-4, Original Pet. ¶ 21.
This Court has previously found that false statements made to prevent the formation of an agreement
are independently tortious. Cooper v. Harvey, No. 14-CV-4152, 2015 WL 2359518, at *7 (N.D. Tex.
May 18, 2015) (Boyle, J.). Although Official Brands has not specifically alleged that the statements
were knowingly false, as the plaintiff in Cooper did, the Court construes these facts “in the light most
favorable to the plaintiff.” In re Katrina Canal Breaches Litig., 495 F.3d at 205. Thus, Official Brands
has adequately pled this element.
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iv.
Proximate cause and actual damages
Where Official Brands’ claim falters, however, is on the fourth and fifth elements. To state
a claim for tortious interference with prospective business relations, a plaintiff must show an actual
loss suffered, and that the defendant’s tortious interference proximately caused that loss. But such
a loss must be ascertainable at the time of the litigation. See Impala African Safaris, LLC v. Dall. Safari
Club, Inc., No. 13-CV-2175, 2014 WL 4555659, at *8 (N.D. Tex. Sept. 9, 2014) (dismissing a
tortious interference with prospective relations claim where the harm to the plaintiff, if any, would
not occur until after the complaint, amended complaint, and opposition to the motion to dismiss had
been filed). Here, the contract between Official Brands and Dez I was to run until June 30, 2016.
Any prospective contractual relation, then, would have occurred after that time. Therefore, any loss
Official Brands may suffer in the future as the result of Roc Nation’s alleged interference is purely
speculative. In other words, Official Brands has not yet suffered any actual damages with regard to
prospective contractual relations. For the same reason, its allegations also fail to demonstrate that
Roc Nation’s actions proximately caused it loss.
Official Brands has failed to sufficiently allege each element of a tortious interference with
prospective contractual relations claim. That claim therefore cannot survive Roc Nation’s Motion
and should be dismissed. Furthermore, because any damages would not be ascertainable for several
months at least, these defects are incurable. Thus, the Court will not grant Official Brands leave to
amend its claim. See Rio Grande Royalty Co., Inc. v. Energy Transfer Partners, L.P., 620 F.3d 465, 468
(5th Cir. 2010) (“[A] trial court acts within its discretion in denying leave to amend where the
proposed amendment would be futile because it could not survive a motion to dismiss.”)
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B.
Motion for a More Definite Statement
The Court has determined that Official Brands has successfully stated a claim for tortious
interference with contractual relations, and therefore believes that a more definite statement as to
that claim is not necessary. In a similar vein, because the Court has concluded that Official Brands’
tortious interference with prospective contractual relations claim should be dismissed, a more definite
statement as to that claim would be superfluous. Accordingly, the Court will deny Roc Nation’s
alternative Motion for a More Definite Statement.
IV.
CONCLUSION
Based on the foregoing, the Court GRANTS in part and DENIES in part Roc Nation’s
12(b)(6) Motion to Dismiss for Failure to State a Claim. The Court DISMISSES Official Brands’
claim for tortious interference with prospective contractual relations. The Court also DENIES Roc
Nation’s Motion for a More Definite Statement.
SO ORDERED.
SIGNED: December 15, 2015.
_________________________________
JANE J. BOYLE
UNITED STATES DISTRICT JUDGE
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