Intercollegiate Women's Lacrosse Coaches Ass'n v. Corrigan Sports Enters., Inc.

• Decision Date: 04 December 2020
• Docket Number: 1:20-cv-00425
• Citation: 505 F.Supp.3d 570
• Court: U.S. District Court — Middle District of North Carolina
• Parties: The INTERCOLLEGIATE WOMEN'S LACROSSE COACHES ASSOCIATION, Plaintiff, v. CORRIGAN SPORTS ENTERPRISES, INC. and Richard Lee Corrigan, Jr. in his individual and corporate capacities, Defendants.

505 F.Supp.3d 570

The INTERCOLLEGIATE WOMEN'S LACROSSE COACHES ASSOCIATION, Plaintiff,

v.CORRIGAN SPORTS ENTERPRISES, INC. and Richard Lee Corrigan, Jr. in his individual and corporate capacities, Defendants.

1:20-cv-00425

United States District Court, M.D. North Carolina.

Signed December 4, 2020

Robert C. Ekstrand, Stefanie Anne Sparks, Ekstrand & Ekstrand, LLP, Durham, NC, for Plaintiff.

Andrew R. Shores, Robert Van Arnam, Williams Mullen, Raleigh, NC, David P. Corrigan, Melissa Y. York, Harman, Claytor, Corrigan & Wellman, Glen Allen, VA, for Defendants.

MEMORANDUM OPINION AND ORDER

THOMAS D. SCHROEDER, Chief District Judge.

This case involves claims arising out of the failed business relationship between a sponsor of national high school lacrosse tournaments and the company it partnered with to host them in the fallout of the ongoing COVID-19 pandemic. Before the court is the motion of Defendants Corrigan Sports Enterprises, Inc. ("CSE") and Richard Lee Corrigan, Jr. to dismiss all claims against them pursuant to Federal Rule of Civil Procedure 12(b)(6).¹ (Doc. 23.) Plaintiff Intercollegiate Women's Lacrosse Coaches Association ("IWLCA") filed a response in opposition (Doc. 59), to which Defendants replied (Doc. 62). For the reasons set forth below, the motion will be granted in part and denied in part.

I. BACKGROUND

A. Factual background

IWLCA's amended complaint contains the following factual allegations, which are taken as true for the purposes of the present motion:

IWLCA is a non-profit corporation whose membership is comprised of coaches of the National Collegiate Athletic Association ("NCAA") women's lacrosse programs. (Doc. 15 ¶ 1.) Since 2006, IWLCA has hosted annual tournaments for female student-athletes who are currently or will soon be eligible for recruitment by college lacrosse programs. (Id. ¶ 7.) Over time, IWLCA added tournaments, such that it currently hosts the IWLCA Champions Cup, the IWLCA New England Cup, the IWLCA Midwest Cup, the IWLCA Capital Cup, the IWLCA Presidents Cup, and the IWLCA Debut (collectively "the Recruiting Tournament Series"). (Id. ) The Recruiting Tournament Series, attended by IWLCA's member coaches, is popular among high school lacrosse teams across the country. (See id. ¶ 1.) The 2020 Recruiting Tournament Series was expected to cause a total of approximately 37,000 people to travel from all over the country to compete in five central tournament locations. (Id. ) Each of these tournaments is associated with a specific alleged trademark. (Id. ¶ 7.)

The Recruiting Tournament Series is typically managed, or "hosted," by a third-party event management company selected by IWLCA. (See id. ) The third-party event management company has multiple responsibilities in running the tournaments, including securing a venue, setting up and maintaining the website for registering teams, collecting registration fees, and acquiring necessary event insurance. (See Doc. 15-1.) Since 2009, IWLCA selected CSE to host its tournaments. (See id. ) Through 2017, IWLCA and CSE operated pursuant to some form of periodic contract. (See id. ¶ 7.)

On February 6, 2017, IWLCA published a "Request for Proposals" ("RFP") seeking bids from event management companies to host the 2018–2020 Recruiting Tournament Series. (Doc. 15 ¶ 8; Doc. 15-1.) Defendant CSE submitted a proposal in response to the RFP (Doc. 15-2), and on May 10, 2017, the IWLCA Board of Directors accepted CSE's proposal (Doc. 15 ¶¶ 9, 10). CSE was selected to host these tournaments as part of its ongoing business relationship with IWLCA. (See id. ¶ 7.) No separate contract to formalize their agreement was entered into. (See id. ¶ 11.) Pursuant to the RFP and CSE's proposal, CSE successfully hosted the Recruiting Tournament Series throughout 2018 and 2019. (Id. ¶ 13.)

Near the end of 2019, cognizant of concerns relating to COVID-19, the IWLCA Board of Directors decided to evaluate IWLCA's potential exposure should any of the 2020 tournaments need to be cancelled. (Id. ¶ 17.) To facilitate that evaluation, between December 2019 and April 2020, the IWLCA Executive Director requested that CSE produce information and documents relating to the 2020 Recruiting Tournament Series. (Id. ) The requested documents included copies of all insurance policies that CSE was required to obtain for each of the 2020 tournaments, copies of all agreements relating to the 2020 tournaments, a listing of the teams registered for each of the 2020 tournaments and an accounting of the fees paid by them, and an accounting of all expenses incurred up to that point in connection with the 2020 tournaments. (Id. ) CSE refused to produce this information. (Id. ¶ 18.)

On March 11, 2020, the COVID-19 outbreak was declared a pandemic. (Id. ¶ 23.) In light of that and related restrictions on large events, on April 13, 2020, the IWLCA Board of Directors voted to cancel the 2020 Recruiting Tournament Series and informed CSE of its decision. (Id. ¶¶ 42, 43.) IWLCA directed CSE to issue registered teams a full refund of the registration fees and deposits, less any documented unrecoverable costs incurred prior to the cancellation decision, that CSE had collected as part of its management responsibilities.² (Id. ¶¶ 28, 44, 54.) IWLCA then notified its membership of the cancellation decision and released a public statement to inform the lacrosse community and registrants of the cancellation. (Id. ¶ 48.) IWLCA was unable to inform registrants directly because CSE refused to release the list of registered teams acquired through its management responsibilities, despite IWLCA's request. (Id. ¶ 50.)

Though IWLCA directed CSE to issue refunds, Defendants refused to refund registrants’ fees to the extent IWLCA requested. (Id. ¶¶ 36, 40, 49, 52–56.) Further, Defendants refused to cancel the tournaments. (Id. ¶ 51.) Following IWLCA's announcement of the cancellation, CSE released multiple communications publicly indicating that the 2020 Recruiting Tournament Series was not cancelled. (Id. ) On April 18, 2020, CSE released a statement stating, "Contrary to IWLCA's announcement earlier today, [CSE] plans to host the scheduled 2020 [Recruiting Tournament Series]. We regret that the IWLCA Board of Directors has decided to step away from its ‘official involvement’ with the tournaments this year." (Id. ) That same day, CSE posted an announcement to Twitter stating, "DESPITE THE RUMORS, GIRLS LAX TOURNAMENTS ARE STILL ON!" (Id. ) This announcement prominently displayed IWLCA's alleged trademarks, modified by removing "IWLCA" from each tournament's trademark name and logo. (Id. ) On April 20, 2020, CSE again announced that the tournaments were still scheduled but renamed each of the tournaments to include CSE rather than IWLCA. (Id. ) For example, the "IWLCA Presidents Cup" became the "CSE Presidents Cup." (Id. ) The announcement stated that the tournaments "will look and feel the exact same as they always have." (Id. )

Although CSE refused to cancel the Recruiting Tournament Series, it soon decided to postpone individual tournaments. On April 23, 2020, CSE announced that the "CSE" Champions Cup, originally scheduled for June 19-21, 2020, was cancelled and rescheduled for August 7-9, 2020. (Id. ¶ 52.) Although these August dates fell within an NCAA "dead period" during which coaches were prohibited from watching prospective student athletes compete in person, CSE did not issue refunds. (Id. ) On April 30, 2020, CSE announced that the "CSE" New England Cup, originally scheduled to take place in Amherst, Massachusetts on June 26-28, 2020, was cancelled and rescheduled for July 24-26, 2020, even though Massachusetts had barred all events like it. (Id. ¶ 53.) Despite this state ban, CSE did not issue refunds. (Id. )

IWLCA claims that its tournaments and related trademarks, although unregistered, were created and are owned by it. (Id. ¶ 7.) However, sometime between December 2019 and April 2020, CSE filed trademark applications seeking to register and convert ownership of the trademarks for the Recruiting Tournament Series to itself. (Id. ¶ 21.) On June 12, 2020, IWLCA filed trademark applications for the word marks of the names for the tournaments within the Recruiting Tournament Series, as well as the mark for IWLCA itself, based on its first use of these marks in commerce. (Docs. 15-6, 15-7, 15-8, 15-9, 15-10, 15-11, 15-12.) All trademark applications submitted by both IWLCA and CSE remain pending with the U.S. Patent and Trademark Office.

B. Procedural history

On May 6, 2020, IWLCA filed this action in North Carolina state court seeking declaratory, monetary, and injunctive relief. (Doc. 1-1.) On May 13, 2020, Defendants removed the action to this court (Doc. 1), and on June 18, 2020, IWLCA filed an amended complaint (Doc. 15). On June 24, 2020, IWLCA moved for temporary injunctive relief (Doc. 18), which this court denied without prejudice on July 23, 2020 (Doc. 43). On September 2, 2020, the parties presented, and this court granted, a consent motion for entry of a permanent injunction whereby Defendants are permanently enjoined from any future use of the trademarks/service marks at issue in this litigation. (Doc. 54.)

Defendants filed the present motion to dismiss on July 2, 2020. (Doc. 23.) The motion is fully briefed (Docs. 59, 62) and is ready for resolution.

II. ANALYSIS

A. Standard of review

Federal Rule of Civil Procedure 8(a)(2) provides that a 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)(2). Under Federal Rule of Civil Procedure 12(b)(6), "a complaint must contain sufficient factual matter ... to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim is plausible "when the plaintiff pleads factual content that allows the...