BBJ, Inc. v. Millercoors, LLC

• Decision Date: 21 July 2015
• Docket Number: Civil Action No. 12-cv-11305-IT
• Parties: BBJ, INC. and WESTON O. GRAVES, Plaintiffs, v. MILLERCOORS, LLC, COORS BREWING COMPANY, MILLER BREWING COMPANY, and RENEE CUSACK, Defendants.
• Court: U.S. District Court — District of Massachusetts

BBJ, INC. and WESTON O. GRAVES, Plaintiffs,
v.
MILLERCOORS, LLC, COORS BREWING COMPANY,
MILLER BREWING COMPANY, and RENEE CUSACK, Defendants.

Civil Action No. 12-cv-11305-IT

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

July 21, 2015

MEMORANDUM

TALWANI, D.J.

I. Introduction

BBJ, Inc. and Weston Graves ("Plaintiffs") bring this action against MillerCoors, LLC ("MillerCoors"), Coors Brewing Company ("Coors"), Miller Brewing Company ("Miller"), and Renee Cusack ("Cusack") arising out of alleged misrepresentations and contracts between the parties for the sale of promotional merchandise between 2007 and 2009. Presently before this court are Miller's Rule 12(b)(6) Motion to Dismiss [#108], Coors and Cusack's Rule 12(b)(6) Motion to Dismiss Based on Forum Selection Clause, or, in the Alternative, to Sever and Transfer [#104], MillerCoors's Rule 12(b)(6) Motion to Dismiss Based on Forum Selection Clause or, in the Alternative, to Sever and Transfer [#101], Plaintiffs' Motion to Sever and Stay or, in the Alternative, to Sever and Transfer Plaintiffs' Claims Against Defendant MillerCoors, LLC [#99], and several subsidiary motions.

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II. Factual Background

Plaintiffs allege the following facts in their Second Amended Complaint [#98]:

BBJ, Inc. is a company that markets and sells promotional merchandise for brewing and beverage companies. Second Am. Compl. ¶ 3. Weston Graves is BBJ, Inc.'s president. Id. ¶ 1. Prior to and throughout 2007, BBJ, Inc. had licensing agreements with Coors and Miller for the sale of promotional merchandise under Coors and Miller's Licensed Promotional Merchandise ("LPM") programs. Id. ¶¶ 12-23.

In July 2007, Cusack, a Coors employee, initiated discussions with BBJ, Inc. to induce BBJ, Inc. to become a distributor under Coors's Print to Order ("PTO") program. Id. ¶ 25. Cusack explained that the PTO program was run differently than the LPM program, that as a PTO distributor BBJ, Inc. would be required to stock inventory of "big ticket" items not carried in the LPM program, and that the PTO program did not require a license. Id. ¶¶ 26-27. Cusack further explained that the PTO program would require BBJ, Inc. to stock approximately $2,000,000 in inventory, whereas the LPM program had previously required BBJ, Inc. to stock only $200,000 in inventory. Id. ¶ 30. When Graves expressed concern over the increased investment required to stock $2,000,000 in inventory, Cusack promised that Coors would help BBJ, Inc. sell through the inventory it stocked under the PTO program. Id. ¶¶ 30-31. BBJ, Inc. agreed to become a PTO distributor for Coors in reliance on Cusack's promise. Id. ¶ 32.

In February 2008, BBJ, Inc. received a purchase order from Coors for $1,900,000 of merchandise under the PTO program as an inducement for BBJ, Inc. to increase its inventory to the levels required under the PTO program. Id. ¶ 35; Mem. Supp. Mot. Dismiss or Transfer Ex. B [#105-2]. In May 2008, Plaintiffs entered into a new licensing agreement with Coors Global Properties, Inc. to continue participation in Coors's LPM program as well. Second Am. Compl.

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¶ 34; Mem. Supp. Mot. Dismiss or Transfer Ex. A [#105-1]. In June 2008, Miller and Coors created a joint venture known as MillerCoors. Second Am. Compl. ¶ 36. From November 2008 until April 2009, BBJ, Inc. invested capital in building its inventory for Coors's PTO program. Id. ¶ 39. Additionally, in 2009, BBJ, Inc. and MillerCoors entered into a licensing agreement for the year 2009. Id. ¶ 38.

In April 2009, MillerCoors and Coors notified BBJ, Inc. that they were terminating BBJ, Inc.'s licenses and that BBJ, Inc. would no longer be a distributor under Coors's PTO program. Id. ¶ 40. Following this notification, "MillerCoors, Coors, and Miller breached Coors' express promise that it would help [BBJ, Inc.] . . . sell through its millions of dollars of purchased PTO inventory." Id. ¶ 41. As a result, BBJ, Inc. was left with "approximately 515,000 Coors branded items valued at approximately $2,000,626." Id. ¶ 43. Subsequently, MillerCoors, Coors, and Miller published false statements to two or more people "on the internet" that "Graves was disingenuous" and that BBJ, Inc. and Graves "were not forthright and acted outside of these Defendants' policies." Id. ¶¶ 88-92.

III. Procedural Background

MillerCoors, Miller, Coors, and Cusack previously moved to dismiss the claims against them based on a forum selection clause in the 2009 License Agreement, an agreement signed by Plaintiffs and MillerCoors. See Mot. Dismiss [#10]. On September 30, 2014, a magistrate judge issued a Report and Recommendation recommending that the court allow the defendants' motion. See Report & Recommendation [#76]. On January 20, 2015, the court issued an order adopting in part and denying in part the magistrate judge's recommendation. See Order [#92]. In particular, the court held that MillerCoors, as a signatory to the 2009 License Agreement, was

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entitled to enforce the forum selection clause. The court did not, however, decide the proper method for MillerCoors to enforce the forum selection clause or which claims against MillerCoors fall within the scope of the forum selection clause. The court further held that Miller, Coors, and Cusack—who were not signatories to the 2009 License Agreement—had not established that they were entitled to enforce the forum selection clause. Ultimately, the court denied the defendants' motion to dismiss without prejudice.

The court subsequently issued a Scheduling Order imposing deadlines for the parties to file any motions to sever, transfer, or dismiss. See Scheduling Order [#95]. The court further granted Plaintiffs leave to amend their complaint for the limited purpose of replacing the terms "Defendant" and "Defendants" with the names of the particular defendants referred to in each allegation and count. Id. After Plaintiffs filed their Second Amended Complaint, the parties filed their pending motions to dismiss and transfer, addressed below.

IV. Miller's Motion to Dismiss

Miller moves to dismiss all counts against it for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). To survive a Rule 12(b)(6) motion to dismiss, a complaint must allege sufficient facts "to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In resolving such a motion, the court must accept all factual allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). The court need not, however, accept the plaintiff's legal conclusions as true. Id.

Although somewhat unclear, the Second Amended Complaint appears to bring the following claims against Miller: Count I (Fraud), Count II (Mass. Gen. Laws ch. 93A), Count IX

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(Commercial Disparagement), Count XI (Unjust Enrichment), Count XII (Open Account), and Count XIII (Declaratory Relief). In response to Miller's motion to dismiss, Plaintiffs assert that they state plausible claims for interference with contractual relations, commercial disparagement, and violation of Mass. Gen. Laws ch. 93A. Plaintiffs do not oppose Miller's motion to dismiss the remaining counts. Accordingly, Miller's motion to dismiss Counts I (Fraud), XI (Unjust Enrichment), XII (Open Account), and XIII (Declaratory Relief) is ALLOWED as unopposed.

A. Interference with Contractual Relations

As stated above, Plaintiffs contend that they state a plausible claim against Miller for interference with contractual relations. "To make out a claim of tortious interference with contractual relations, a plaintiff must demonstrate that '(1) he had a contract with a third party; (2) the defendant knowingly induced the third party to break that contract; and (3) the defendant's interference, in addition to being intentional, was improper in motive or means; and (4) the plaintiff was harmed by the defendant's actions.'" Cavicchi v. Koski, 855 N.E.2d 1137, 1141 (Mass. App. Ct. 2006) (quoting Draghetti v. Chmielewski, 626 N.E.2d 862, 868 (Mass. 1994)).

Plaintiffs' Second Amended Complaint does not include a claim against Miller for interference with contractual relations. Plaintiffs did not list Miller in Count VIII, entitled "Interference with Advantageous Commercial Relations." Rather, Count VIII includes allegations related only to Coors.¹ In their opposition, Plaintiffs contend that Miller interfered

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with contractual relations by "making false and disparaging statements about Plaintiffs and by encouraging Plaintiffs' customers not to do business with Plaintiffs anymore." Mem. Opp'n 12 [#119]. Plaintiffs, however, fail to allege the elements of a claim for interference with contractual relations against Miller in their complaint. Plaintiffs do not, for instance, allege that Miller knowingly induced third parties to break contracts with Plaintiffs. Nor do Plaintiffs allege that Miller's interference was improper in motive or means. Thus, to the extent that Plaintiffs attempt to bring a claim against Miller for interference with contractual relations in the Second Amended Complaint, Miller's motion to dismiss that claim is ALLOWED.

B. Commercial Disparagement

Miller moves to dismiss Plaintiffs' commercial disparagement claim on two grounds. First, Miller contends that Plaintiffs failed to plead a false statement...