Federal Exp. Corp. v. U.S. Postal Service

• Decision Date: 22 November 1999
• Docket Number: No. 96-3151 D/A.,96-3151 D/A.
• Court: U.S. District Court — Western District of Tennessee
• Parties: FEDERAL EXPRESS CORPORATION, Plaintiff, v. UNITED STATES POSTAL SERVICE, FCB/Leber Katz Partners Inc., True North Communications, Inc., and Young & Rubicam, Inc., Defendants.

75 F.Supp.2d 807

FEDERAL EXPRESS CORPORATION, Plaintiff, v. UNITED STATES POSTAL SERVICE, FCB/Leber Katz Partners Inc., True North Communications, Inc., and Young & Rubicam, Inc., Defendants.

No. 96-3151 D/A.

United States District Court, W.D. Tennessee, Western Division.

November 22, 1999.

COPYRIGHT MATERIAL OMITTED

R. Larry Brown, Lester A. Bishop, Jr., Federal Express Corporation, Legal Department, Memphis, TN, Dwayne S. Byrd, Federal Express Corporation, Legal Department, Memphis, TN, for Federal Express Corporation, plaintiff.

Joe A. Dycus, U.S. Attorney's Office, Memphis, TN, for United States Postal Service, defendant.

Charles F. Morrow, Garrison Morris & Haight, Memphis, TN, Lawrence I. Weinstein, Kevin J. Perra, Brendan J. O'Rourke, Dana L. Dorgan, Proskauer Rose, LLP, New York City, for FCB/Leber Katz Partners, Inc., True North Communications, Inc., defendants.

Jef Feibelman, Douglas F. Halijan, Burch Porter & Johnson, Memphis, TN, for Young & Rubicam Inc., defendant.

Joe A. Dycus, U.S. Attorney's Office, Memphis, TN, for United States Postal Service, counter-claimant.

R. Larry Brown, Lester A. Bishop, Jr., Federal Express Corporation, Legal Department, Memphis, TN, Dwayne S. Byrd, Federal Express Corporation, Legal Department, Memphis, TN, for Federal Express Corporation, counter-defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTIONS TO DISMISS

DONALD, District Judge.

Before the court are two motions to dismiss the plaintiff's, Federal Express Corporation (hereinafter "FedEx"), first amended complaint, one filed by the defendants, Foote, Cone & Belding (apparently incorrectly sued as FCB/Leber Katz Partners, Inc., hereinafter "FCB") and FCB's parent, True North Communications, Inc. (hereinafter "True North"), and the other filed by the defendant, Young & Rubicam, Inc. (hereinafter "Y & R"), pursuant to Fed.R.Civ.P. 12(b)(6). The grounds raised by the defendants are statute of limitations and the doctrine of laches.

BACKGROUND

On November 6, 1996, FedEx filed its initial complaint in this matter, naming the United States Postal Service as the sole defendant, alleging violation of 15 U.S.C. § 1125(a) (part of the Lanham Act, 15 U.S.C. §§ 1051 et seq.). No other defendants were named at that time.

On May 5, 1999, FedEx filed its First Amended Complaint, adding the defendants, FCB, True North, and Y & R, alleging: 1) false advertising and unfair competition in violation of 15 U.S.C. § 1125(a) and 2) unfair or deceptive business practices in violation of T.C.A. §§ 47-18-101 et seq. and the common law of the State of Tennessee. FedEx requested declaratory, equitable, and compensatory relief, to include attorneys' fees. All of the new defendants, FCB, True North, and Y & R, filed their motions to dismiss alleging the same grounds: 1) FedEx's claim under T.C.A. §§ 47-18-101 et seq. is barred by the one year statute of limitations and 2) FedEx's claim under 15 U.S.C. § 1125(a) is barred by the doctrine of laches. Service on the new defendants was accomplished on May 13, 1999.

STANDARDS OF LAW

Fed.R.Civ.P. 12(b)(6)

A party may bring a motion to dismiss for failure to state a claim under Fed. R.Civ.P. 12(b)(6).¹ The purpose of a motion to dismiss under Fed.R.Civ.P. 12(b)(6) is to test the formal sufficiency of the claim and not to resolve the facts or merits of the case. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); 5A Charles Wright & Arthur R. Miller, Federal Practice and Procedure, § 1356 (West 1990). This motion only tests whether a cognizable claim has been pleaded in the complaint. Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir.1988). Essentially, it allows the court to dismiss meritless cases which would otherwise waste scarce judicial resources and result in unnecessary discovery. See Neitzke v. Williams, 490 U.S. 319, 326-27, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989).

Generally, a motion for failure to state a claim under Fed.R.Civ.P. 12(b)(6) should be made prior to the filing of a responsive pleading. 5A Wright & Miller, Federal Practice & Procedure § 1357 (West 1990). However, later filing may be permitted. Fed.R.Civ.P. 12(h).

The Supreme Court has held that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). See also Neitzke v. Williams, 490 U.S. 319, 326-27, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989); Lewis v. ACB Business Services, Inc., 135 F.3d 389, 405 (6th Cir.1998); Housing Opportunities Made Equal, Inc. v. Cincinnati Enquirer, Inc., A Division of Gannett Co., Inc., 943 F.2d 644, 646 (6th Cir.1991). Thus, the standard to be applied when evaluating a motion to dismiss for failure to state a claim is very liberal in favor of the party opposing the motion. Westlake v. Lucas, 537 F.2d 857, 858 (6th Cir.1976). Even if the plaintiff's chances of success are remote or unlikely, a motion to dismiss should be denied. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974).

To determine whether a motion to dismiss should be granted, the court must first examine the complaint. The complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a). What the complaint must do is provide the defendant with "fair notice of what the plaintiff's claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Westlake v. Lucas, 537 F.2d 857, 858 (6th Cir.1976). The complaint need not specify all the particularities of the claim. Id.² However, this does not relieve the plaintiff of the obligation to allege the essential material facts of the case. Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436-37 (6th Cir. 1988).³

In reviewing the complaint, the court must accept as true all factual allegations in the complaint and construe them in a light most favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172, 174-75, 86 S.Ct. 347, 15 L.Ed.2d 247 (1965); Windsor v. The Tennessean, 719 F.2d 155, 158 (6th Cir.1983), cert. denied, 469 U.S. 826, 105 S.Ct. 105, 83 L.Ed.2d 50 (1984). Indeed, the facts, as alleged by the plaintiff, cannot be disbelieved by the court. Neitzke v. Williams, 490 U.S. 319, 327, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989); Murphy v. Sofamor Danek Group, Inc. (In re Sofamor Danek Group, Inc.), 123 F.3d 394, 400 (6th Cir.1997), cert. denied, 523 U.S. 1106, 118 S.Ct. 1675, 140 L.Ed.2d 813 (1998). Where there are conflicting interpretations of the facts, they must be construed in the plaintiff's favor. Sinay v. Lamson & Sessions Co., 948 F.2d 1037, 1039-40 (6th Cir.1991). However, legal conclusions or unwarranted factual inferences should not be accepted as true. Lewis v. ACB Business Services, Inc., 135 F.3d 389, 405-06 (6th Cir.1998); Morgan v. Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir.1987).

Finally, the court will generally only consider the pleadings on a motion to dismiss for failure to state a claim. However, if the court decides to consider other materials besides the pleadings, then it will be treated as a motion for summary judgment under Fed.R.Civ.P. 56. See Fed.R.Civ.P. 12(b).⁴

The Doctrine of Laches

The doctrine of laches is an equitable doctrine.⁵ Essentially, it bars an action where there is an unreasonable delay in bringing the action such that prejudice would result to the opposing party. Czaplicki v. the Hoegh Silvercloud, 351 U.S. 525, 533, 76 S.Ct. 946, 100 L.Ed. 1387 (1956); Gardner v. Panama Railroad Co., 342 U.S. 29, 30-31, 72 S.Ct. 12, 96 L.Ed. 31 (1951); Bylinski v. City of Allen Park, 169 F.3d 1001, 1003 (6th Cir.1999), cert. denied, ___ U.S. ___, 119 S.Ct. 2396, 144 L.Ed.2d 796, 67 U.S.L.W. 3683 (1999); Patton v. Bearden, 8 F.3d 343, 347-48 (6th Cir.1993); 30A C.J.S., Equity § 129 (West 1992); 51 Am.Jur.2d, Limitation of Actions § 6 (Lawyers Cooperative 1970). Thus, the doctrine of laches is different from statutes of limitations in that statutes of limitation apply independent of the existence of any prejudice and apply only after a pre-determined time period has elapsed. In very rare cases, however, the doctrine of laches may be applied when the statute of limitations has not run. Patton, 8 F.3d at 348 (citing Consumer Credit Union v. Hite, 801 S.W.2d 822 (Tenn. Ct. App.1990); Elvis Presley Enterprises v. Elvisly Yours, Inc., 936 F.2d 889 (6th Cir.1991)).

The doctrine of laches will generally be applied when no specific statute of limitations exists for a substantive statute. Patton, 8 F.3d at 348. Where the statute under which a claim is brought provides no specific limitations period, the court should apply the most appropriate or analogous statute of limitations. Wilson v. Garcia, 471 U.S. 261, 266-68, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985). Although Wilson does not specifically refer to the doctrine of laches, the situation which is analyzed in Wilson is identical to one in which it would apply. Thus, Wilson provides instructive guidance in this matter. See also Meade v. Pension Appeals and Review Committee, 966 F.2d 190, 194-95 (6th Cir.1992) (holding that as the federal ERISA statutes do not provide a statute of limitations, the most analogous statute of limitations is the state statute of limitations which applies for a breach of contract).

Pursuant to Wilson, to determine which statute of limitations is the most appropriate or analogous, three questions must be answered. Answering these questions is a function of statutory construction. Wilson, 471 U.S. at 268, 105 S.Ct. 1938.

First, it must be determined if the claim before the court is to be characterized under state or federal...