Black Res. v. Blitz Design, Inc.
| Decision Date | 17 November 2022 |
| Docket Number | 3:22-cv-04227-WHO |
| Parties | IN THE BLACK RESOURCES, LLC, et al., Plaintiffs, v. BLITZ DESIGN, INC., Defendant. |
| Court | U.S. District Court — Northern District of California |
This case arises from an alleged contract between the plaintiffs-In the Black Resources, LLC (dba Black Wall Street (“BWS”)) and its Chief Operating Officer, Marye Dean-and the defendant-Blitz Design, Inc. (“Blitz” or “Blitz Design”)-for marketing, promotion, and production of events to promote the plaintiffs' new book. The defendants filed a motion to dismiss all claims for failure to state a claim, which I grant in part and deny in part.[1]
BWS filed its complaint on March 8, 2022, in the Southern District of Texas (“SDTX”). [Dkt. No. 1]. On April 4, 2022, Blitz filed a motion to strike, [Dkt. No. 8], and a motion to dismiss or transfer venue. [Dkt. No. 9]. BWS opposed each of these motions, [Dkt. Nos. 11, 12], and also filed corrected oppositions, [Dkt. Nos. 16, 17].
BWS filed its first amended complaint (“FAC”) on April 25, 2022. [Dkt. No. 10]. The next day, BWS filed a second amended complaint, [Dkt. No. 15], which it then withdrew, [Dkt. No. 23], after Blitz filed a motion to strike the second amended complaint, [Dkt. No. 22].
On May 2, 2022, Blitz filed an amended motion to dismiss or transfer venue, based on Federal Rule of Civil Procedure 12(b)(2) and (3). [Dkt. No. 19]. The following day, Blitz filed this motion to dismiss for failure to state a claim, (“Mot.”) [Dkt. No. 20], and an amended motion to strike, [Dkt. No. 22].
On May 23, 2022, the plaintiffs filed an opposition to the motion to dismiss or transfer venue, [Dkt. No. 24]. Blitz replied on May 30. [Dkt. No. 27]. The defendant's motion was granted in part on July 20, 2022. See Opinion on Motions (“TX Op.”) [Dkt. No. 36].
On May 24, 2022, the plaintiffs filed an opposition to the amended motion to strike, [Dkt. No. 25], to which Blitz replied on May 31. [Dkt. No. 28]. The motion was granted in part on July 20, 2022. See TX. Op; Order to Strike [Dkt. No. 37]. In that motion, the district court determined California law applied to “the claims related to the contract.” TX Op. at 3.
The plaintiffs also filed an opposition to the present motion to dismiss for failure to state a claim, on May 24. (“Oppo.”) [Dkt. No. 26]. Blitz replied on May 31. (“Repl.”) [Dkt. No. 29]. The SDTX court did not rule on this motion but rather transferred the case to the Northern District of California. See Order to Transfer [Dkt. No. 40].
The operative complaint is the first amended complaint at Docket No. 10. The Order to Strike struck the following from the FAC:
In this court, the plaintiffs did not file a new complaint and the defendants did not file a new motion to dismiss.
Taking the allegations in the complaint as true, BWS is a Texas limited liability company that was “created to uplift and support the black community.” FAC ¶ 1. Dean is the Chief Operating Officer of BWS. TX Op. at 1. Blitz Design is a California corporation engaged in marketing and design. Id. ¶ 2.
BWS contracted with Blitz Design to market and promote a book and to design and produce promotional events. See id. ¶¶ 5, 14-17. According to BWS, Blitz Design “regularly markets and advertises a 100% Money Back Guarantee.” Id. ¶¶ 12-13. BWS alleges that it paid Blitz $45,000 in exchange for certain services, including marketing, producing four promotion events in multiple cities, and publishing the books. See id. ¶¶ 27-28, 36; see also id. ¶ 14 (outlining services). BWS says the “100% Money Back Guarantee” applied to its contract. Id. ¶ 14.
According to the complaint, the plaintiffs' first promotional event was held on June 1, 2021. Id. ¶ 16. BWS alleges that Blitz Design started planning very last minute and failed to follow through on multiple contractual obligations in producing this event, including to book hotels, create stationery and branding materials, provide various amenities at the events, bring in media coverage, produce marketing and promotional materials for nine months, and otherwise follow through on its marketing and publishing promises. See id. ¶ 17. “As a result, Plaintiffs immediately requested a refund.” Id. ¶ 20.
BWS alleges that Blitz “acknowledged their negligence and agreed to provide Plaintiff with a new team and team lead.” Id. ¶ 21. The parties negotiated a new contract and on June 29, 2021, BWS agreed to pay[3] Blitz an additional $15,000. Id. ¶ 22. The terms were substantially authenticity of the exhibits were disputed and the court found it was unclear whether the conversations were recorded with consent. See id. identical to the terms of the first service agreement. Compare id. at ¶ 23 (new terms) with id. at ¶ 14 (initial terms). The complaint alleges that “none of these deliverables” were performed or delivered. Id. ¶ 24.
Instead, the plaintiffs assert, Dean engaged in repeated communications with two Blitz employees, Sarah McKenzie and Jim Kennedy. Id. ¶¶ 25-28. The complaint alleges that McKenzie agreed that plaintiffs were eligible for a refund and tried to process one. Id. ¶¶ 28. And the complaint says that Kennedy “harassed and insulted” Dean by taunting her, questioning her intelligence, accusing her of being racist, and refusing to refund the whole amount paid, though he offered a partial refund of $8,000. Id. ¶ 27. The complaint asserts that Blitz Design is liable for the actions and injuries caused by McKenzie and Kennedy via respondeat superior liability. See id. ¶¶ 31-32.
The plaintiffs state that they “performed all conditions, covenants and obligations required under th[e] agreement.” Id. ¶ 36. In addition to the $45,000 paid, the plaintiffs claim that they “have lost thousands of investment dollars thanks to Defendant's actions.” Id. ¶ 28. They seek punitive treble damages, civil penalties, attorney fees, and costs, a total “in excess of $500,000.” See id. ¶¶ 34, 38. They seek general, special, consequential, and exemplary damages. Id. ¶ 63.
The causes of action in the FAC are not labeled but it seems the plaintiffs assert seven: (1) breach of contract, id. ¶¶ 35-38; (2) breach of covenant of good faith and fair dealing, id. ¶¶ 39-44; (3) unjust enrichment, id. ¶¶ 45-48; (4) intentional infliction of emotional distress, id. ¶¶ 49-50; (5) negligence, id. ¶¶ 51-53; (6) gross negligence, id. ¶¶ 54-57; (7) deceptive trade practices in violation of the Texas Deceptive Trade Practices and Consumer Protection Act (D.T.P.A.), Tex. Bus. & Com. Code §§ 17.41-17.63, id. ¶¶ 58-62. At the hearing on Blitz's motion to dismiss, plaintiffs' counsel failed to appear.
Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when the plaintiff pleads facts that “allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). There must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. While courts do not require “heightened fact pleading of specifics,” a plaintiff must allege facts sufficient to “raise a right to relief above the speculative level.” See Twombly, 550 U.S. at 555, 570.
In deciding whether the plaintiff has stated a claim upon which relief can be granted, the Court accepts the plaintiff's allegations as true and draws all reasonable inferences in favor of the plaintiff. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the court is not required to accept as true “allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” See In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).
If the court dismisses the complaint, it “should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” See Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000). In making this determination, the court should consider factors such as “the presence or absence of undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies by previous amendments, undue prejudice to the opposing party and futility of the proposed amendment.” See Moore v. Kayport Package Express, 885 F.2d 531, 538 (9th Cir. 1989).
Blitz moves to dismiss all seven causes of action for failure to state a claim under Rule 12(b)(6). The plaintiffs present almost no counterargument, stating only that they ...
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