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Loco Brands, LLC v. Butler America, LLC

United States District Court, E.D. Texas, Tyler Division

May 29, 2019




         This action was referred to United States Magistrate Judge K. Nicole Mitchell pursuant to 28 U.S.C. § 636. Docket No. 2. The Report and Recommendation of the Magistrate Judge (Docket No. 95, the “Report”), which contains her findings, conclusions, and recommendations regarding motions to dismiss filed by Defendant Frontier Communications Corporation (“Frontier”) and Defendant Butler America, LLC (“Butler”) (Docket Nos. 67 & 69), has been presented for consideration. The Report recommends granting-in-part and denying-in-part both motions. Docket No. 95. Plaintiff Loco Brands, LLC d/b/a Direct TEK (“Direct TEK”) filed written objections (Docket No. 103), to which Butler and Frontier separately responded (Docket Nos. 107 & 108). Frontier also filed written objections (Docket No. 106), to which Direct TEK responded (Docket No. 109). Having conducted a de novo review, the Court OVERRULES Direct TEK's and Frontier's objections for the reasons stated herein. The Magistrate Judge's Report is accordingly ADOPTED.

         1. Standard of Review and Reviewability

         The Court reviews objected-to portions of a Magistrate Judge's Report and Recommendation de novo. See Fed. R. Civ. P. 72; 28 U.S.C. § 636(b)(1) (“A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings and recommendations to which objection is made.”). In conducting a de novo review, the Court examines the entire record and makes an independent assessment under the law. Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1430 (5th Cir. 1996) (en banc), superseded on other grounds by statute, 28 U.S.C. § 636(b)(1) (extending the time to file objections from ten to fourteen days).

         II. Direct TEK's Objections

         Direct TEK objects to the dismissal of its civil conspiracy claims and the denial of its request for leave to amend. Docket No. 103 at 2. Notably, Direct TEK does not assign error to any of Judge Mitchell's findings or conclusions, but rather objects to the recommendation “[b]ecause Plaintiff now has evidence it did not possess at the time the Second Amended Complaint was filed, and because such evidence demonstrates a preconceived plan and meeting of the minds.” Docket No. 103 at 2. In support, Direct TEK submits the affidavit of Michael Crawford, who “worked as a telecommunications technician at property owned by Frontier.” Docket No. 103-1 at ¶ 1.

         Butler and Frontier ask the Court to overrule the objection for two reasons. See Docket Nos. 107 & 108. First, Defendants contend that an amendment based on the new allegations in Mr. Crawford's affidavit would be untimely. See Docket Nos. 107 at 1; 108 at 1-2. The Court agrees. The time for amending pleadings has passed, discovery is closed, and Direct TEK has had three opportunities to state a claim for civil conspiracy against Defendants. Docket Nos. 107 at 2; 108 at 2. Direct TEK, moreover, does not offer any substantive reason to justify its delay. Allowing Direct TEK to amend its pleadings at this late stage would be unduly burdensome and prejudicial to Defendants. Judge Mitchell thus correctly denied Direct TEK's request to replead.

         Defendants also argue that Mr. Crawford's affidavit does not remedy the identified deficiencies in Direct TEK's civil conspiracy claim. Docket Nos. 107 at 2; 108 at 2-4. Again, the Court agrees. Judge Mitchell found that Direct TEK failed to state a claim for civil conspiracy because it “fail[ed] to state a preconceived plan or a time and place at which the Defendants had a meeting of the minds.” Docket No. 95 at 16. Nothing in Mr. Crawford's affidavit fixes that problem. Mr. Crawford does not assert that there was a preconceived plan between Butler and Frontier, nor does he specify a time and place at which Butler and Frontier had a meeting of the minds. See Docket No. 103-1.

         Accordingly, Direct TEK's objections are OVERRULED.

         III. Frontier's Objections

         Frontier objects to the Report “insofar as it recommends denying Frontier's Motion to Dismiss as to the two remaining claims of . . . [Direct TEK]: (1) Tortious Interference with Contract . .; and (2) Discrimination and Retaliation under 42 U.S.C. § 1981.” Docket No. 106 at 1. The Court addresses each claim in turn.

         A. Tortious Interference with Contract

         To state a claim for tortious interference with contract, a plaintiff must allege: “(1) the existence of a valid contract subject to interference; (2) that the defendant willfully and intentionally interfered with the contract; (3) that the interference proximately caused the plaintiff's injury; and (4) that the plaintiff incurred actual damage or loss.” Cmty. Health Sys. Prof'l Servs. Corp. v. Hansen, 525 S.W.3d 671, 689 (Tex. 2017) (citing Butnaru v. Ford Motor Co., 84 S.W.3d 198, 207 (Tex. 2002)). “To prevail on tortious interference with contract, a plaintiff must allege the existence of a specific contract.” Randall v. L-3 Commc'ns Corp., 2017 WL 412416, at *3 (N.D. Tex. Jan. 31, 2017) (citing Funes v. Villatoro, 352 S.W.3d 200, 213 (Tex. App.-Houston [14th Dist.] 2011, pet denied)).

         Frontier first argues that “Direct TEK failed to specifically identify any of the technicians [ ] whose contracts it claims that Frontier willingly and intentionally interfered.” Docket No. 106 at 2 (citing Randall, 2017 WL 412416 at *3). Rejecting a similar argument by Butler, Judge Mitchell explained that, “[w]hile Plaintiff has not described its contracts with its technicians in detail, the facts alleged are sufficient to support the inference that contracts existed between Plaintiff and its technicians that were subject to interference.” Docket No. 95 at 21. The Court agrees. In its Complaint, Direct TEK alleges that “Plaintiff contracts with many telecommunications technicians and places them across the country via its contracts and business relationships.” Docket No. 55 at ¶ 6. Direct TEK also alleges that it “placed” technicians with “Butler on a project for Frontier.” Id. at ¶ 7(e). Further, Direct TEK alleges that “[t]here was/is an existing contract between Direct TEK and the technicians ...

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