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I Love Omni, LLC v. Omnitrition International, Inc.

United States District Court, N.D. Texas, Dallas Division

July 20, 2017

I LOVE OMNI, LLC, ET AL., Plaintiffs,
v.
OMNITRITION INTERNATIONAL, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          A. JOE FISH, SENIOR UNITED STATES DISTRICT JUDGE

         Before the court is the motion of the defendant, Omnitrition International, Inc. (“Omnitrition”), to dismiss the claims of the plaintiffs, I Love Omni, LLC (“ILO”) and Heidi Whitehair (“Whitehair”), pursuant to Fed R. Civ. P. 12(b)(6) (docket entry 29). For the reasons stated below, the defendant's motion is granted.

         I. BACKGROUND

         The court provided a detailed factual background of this case in its memorandum opinion and order dated March 17, 2017 (“Order”) (docket entry 26).

         The plaintiffs filed their original complaint on August 18, 2016. Original Complaint (“Complaint”) (docket entry 1). Whitehair sued Omnitrition for breach of contract, violation of the Texas Theft Liability Act (“TTLA”), business disparagement, tortious interference with business relationships, and violation of the Lanham Act. Id. at 8-12. ILO sued Omnitrition for breach of contract, violation of the TTLA, tortious interference with business relationships, and violating the Lanham Act. Id. The plaintiffs also sought a declaratory judgment concerning five provisions of the contract. Id. at 7-8.

         Omnitrition filed a motion to dismiss the plaintiffs' claims on October 28, 2016. See Defendant's Motion to Dismiss (docket entry 9). The court dismissed the plaintiffs' claims for declaratory judgment, TTLA violations, business disparagement, tortious interference with business relationships, and Lanham Act violations. See Order at 10-17. The court denied the defendant's motion to dismiss the breach of contract claim. Id. at 11-12. The court gave the plaintiffs leave to amend their complaint to cure their pleading defects. Id. at 18.

         The plaintiffs timely filed an amended complaint on March 31, 2017. See Plaintiffs' First Amended Complaint (“Amended Complaint”) (docket entry 27). In the amended complaint, the plaintiffs assert claims against Omnitrition for breach of contract, business disparagement, tortious interference with business relationships, and Lanham Act violations. See id. The plaintiffs dropped their declaratory judgment and TTLA claims. See id.

         In response, Omnitrition filed the instant motion pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss the business disparagement, tortious interference, and Lanham Act claims. See Defendant's Motion to Dismiss First Amended Complaint (“Motion”) (docket entry 29). The plaintiffs then filed a timely response, which was followed by Omnitrition's timely reply. See Plaintiffs' Response to Defendant's Motion to Dismiss First Amended Complaint (“Plaintiffs' Response”) (docket entry 33); Defendant's Reply to Plaintiff's Response to Defendant's Motion to Dismiss First Amended Complaint (“Reply”) (docket entry 39). The motion is now ripe for decision.

         II. ANALYSIS

         A. Rule 12(b)(6) Motion to Dismiss

         “To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead ‘enough facts to state a claim to relief that is plausible on its face.'” In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2007) (quoting Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 570 (2007)), cert. denied, 552 U.S. 1182 (2008). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formalistic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (internal quotation marks, brackets, and citations omitted). “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” In re Katrina Canal, 495 F.3d at 205 (quoting Twombly, 550 U.S. at 555) (internal quotation marks omitted). “The court accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.” Id. (quoting Martin K. Eby Construction Company, Inc. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)) (internal quotation marks omitted).

         The Supreme Court has prescribed a “two-pronged approach” to determine whether a complaint fails to state a claim under Rule 12(b)(6). See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). The court must “begin by identifying the pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.” Id. at 679. The court should then assume the veracity of any well-pleaded allegations and “determine whether they plausibly give rise to an entitlement of relief.” Id. The plausibility principle does not convert the Rule 8(a)(2) notice pleading standard to a “probability requirement, ” but “a sheer possibility that a defendant has acted unlawfully” will not defeat a motion to dismiss. Id. at 678. The plaintiff must “plead[] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged -- but it has not ‘show[n]' -- ‘that the pleader is entitled to relief.'” Id. at 679 (alteration in original) (quoting Fed.R.Civ.P. 8(a)(2)). The court, drawing on its judicial experience and common sense, must undertake the “context-specific task” of determining whether the plaintiffs' allegations “nudge” their claims against Omnitrition “across the line from conceivable to plausible.” See id. at 679, 683.

         1. Whitehair's Business Disparagement Claim

         The general elements of a claim for business disparagement are: (1) publication by the defendant of the disparaging words; (2) falsity; (3) malice; (4) lack of privilege; and (5) special damages. Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 170 (Tex. 2003); 67 Tex. Jur. 3d Slander of Title § 4 (2015). “The tort is part of the body of law concerned with the subject of interference with commercial or economic relations.” Hurlbut v. Gulf Atlantic Life Insurance Company, 749 S.W.2d 762, 766 (Tex. 1987). The Restatement identifies the tort by the name “injurious falsehood” and notes its application “in cases ...


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