Nat'l Rifle Ass'n of Am. v. Ackerman McQueen, Inc.
| Decision Date | 14 September 2020 |
| Docket Number | CIVIL ACTION NO. 3:19-CV-2074-G |
| Parties | NATIONAL RIFLE ASSOCIATION OF AMERICA, Plaintiff and Counter-Defendant, and WAYNE LAPIERRE, Third-Party Defendant, v. ACKERMAN MCQUEEN, INC., Defendant and Counter-Plaintiff, and MERCURY GROUP, INC., ET AL., Defendants. |
| Court | U.S. District Court — Northern District of Texas |
Before the court is the defendants' motion to dismiss certain of the plaintiff's claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (docket entry 28), and the defendants' brief in support (Defendants' Brief in Support of Motion to Dismiss for Failure to State a Claim ("Motion") (docket entry 29)). For the reasons that follow, the defendants' motion is GRANTED in part and DENIED in part.
The following factual allegations are drawn from the plaintiff's first amended complaint unless otherwise noted.
The plaintiff the National Rifle Association of America ("NRA") is a not-for profit corporation organized under the laws of the State of New York with its principal place of business located in Fairfax, Virginia. Plaintiff's First Amended Complaint (docket entry 18) at 5. The NRA asserts that it is "the foremost defender of the Second Amendment of the United States Constitution," and that the NRA is a "501(c)(4) tax-exempt organization" that "has approximately five million members, hundreds of thousands of donors, and many millions more who support its legendary advocacy." Id.
There are six named defendants in this case: Ackerman McQueen, Inc. ("AMc"); Mercury Group, Inc. ("Mercury"); Henry Martin ("Martin"); William Winkler ("Winkler"); Melanie Montgomery ("Montgomery"); and Jesse Greenberg ("Greenberg") (collectively, "defendants"). Id. at 6-7. AMc is a corporation organized under the laws of the State of Oklahoma with its principal place of business located in Oklahoma City, Oklahoma. Id. at 6. The company wasco-founded by Angus McQueen ("Angus"). Id. at 33. Angus, who served as CEO of AMc for many years, passed away in 2019 shortly before the commencement of this lawsuit. See Brief in Support of Defendants' Motion to Disqualify Plaintiff's Counsel (docket entry 111) at 2, 14. Angus's son Revan McQueen ("Revan") has since assumed the mantle of CEO of AMc. Id. at 18.
AMc is an advertising and public relations agency that counted the NRA among its clients for more than thirty years. AMc maintains a principal office in Dallas, Texas, out of which the NRA's account was serviced. Defendants' Amended Answer and Defendant/Counter-Plaintiff Ackerman McQueen, Inc.'s Amended Counterclaim and Third-Party Complaint ("Amended Answer & Counterclaim") (docket entry 31) at 6. The NRA alleges that "Mercury is a wholly-owned subsidiary of [AMc] and specializes in public communications strategy, including on behalf of advocacy groups such as the NRA." Plaintiff's First Amended Complaint at 6. Martin, Winkler, Montgomery, and Greenberg each held during relevant times, or continue to hold, executive positions at AMc. Id. at 6-7. The NRA asserts that each of the defendants engaged in wrongful conduct that gave rise to the filing of this lawsuit. Id.
The NRA used AMc's services from "at least the 1980s" until 2019. Id. at 2, 36. During the course of their business relationship, AMc performed a wide range of services for the NRA, "including public relations and strategic marketing; planningand placement of media; management of digital media and websites; and the management of NRATV, a digital-media platform frequently perceived by the public as the 'voice' of the NRA." Id. at 9. "AMc's work on behalf of the NRA was governed by successive incarnations of a Services Agreement [("the services agreement")] containing detailed specifications for how various types of work performed by [AMc] should be budgeted and billed." Id. at 9-10. The NRA and AMc executed the most recent iteration of the services agreement on April 30, 2017 and amended the services agreement on May 6, 2018. Id. at 24. The parties terminated the services agreement in May or June of 2019; the NRA asserts that the NRA terminated the agreement by letter dated June 25, 2019, id. at 36, and the defendants assert that AMc terminated the agreement "pursuant to the [agreement's] 90-day notice provision on May 29, 2019," Amended Answer & Counterclaim at 121.
The NRA alleges that despite the termination of the services agreement, AMc's website continues to "prominently feature[] unauthorized and unlicensed NRA-owned photos and reference[] . . . the NRA with greater frequency than any other AMc client." Plaintiff's First Amended Complaint at 38. The NRA further alleges that AMc's display of the name NRA and NRA-owned photos has caused a loss of value to the NRA's trademarks and lost royalties from the licensing of said trademarks, and has injured the NRA's reputation, brand, and goodwill. See id. at41-42; Plaintiff National Rifle Association of America's Opposition to Defendants' Motion to Dismiss Pursuant to Rule 12(b)(6) ("Response") (docket entry 42) at 6, 8-9.
The NRA filed its original complaint on August 30, 2019 (docket entry 1). Then, on October 25, 2019, the NRA filed its first amended complaint, which is the operative complaint in this case. See Plaintiff's First Amended Complaint. In its first amended complaint, the NRA asserts eight claims for relief, the first seven of which are leveled against all defendants, and the eighth of which is leveled against AMc and Mercury. These claims are: (1) false association under the Lanham Act, 15 U.S.C. § 1125(a)(1)(A); (2) copyright infringement under 17 U.S.C. § 101 et seq.; (3) conversion; (4) fraud; (5) breach of fiduciary duties; (6) conspiracy to commit fraud and extortion; (7) breach of the fiduciary duty of loyalty; and (8) breach of contract. Id. at 40-61.
On November 15, 2019, the defendants filed an answer to the plaintiff's first amended complaint, which the defendants combined with a set of counterclaims against the NRA and a third-party complaint against the NRA's CEO, Wayne LaPierre ("LaPierre"). See Amended Answer & Counterclaim. Also on November 15, 2019, the defendants filed the instant Rule 12(b)(6) motion to dismiss various of the NRA's claims. See Motion. The defendants' motion to dismiss targets the NRA'sclaims for: (1) false association; (2) copyright infringement; (3) conversion; (4) fraud and conspiracy (as those claims pertain to Mercury); and (5) breach of fiduciary duties (as those claims pertain to the individual defendants). See generally, id. The defendants have not moved to dismiss the NRA's claim for breach of contract.
On December 23, 2019, the NRA filed a response to the defendants' motion to dismiss. Response. On January 20, 2020, the defendants filed a reply in support of their motion to dismiss. Defendants' Reply in Support of Motion to Dismiss for Failure to State a Claim ("Reply") (docket entry 46). The defendants' motion to dismiss is therefore ripe for determination.
"To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead 'enough facts to state a claim to relief that is plausible on its face.'" In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2007) (quoting Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 570 (2007)), cert. denied, 552 U.S. 1182 (2008). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of the cause of action will not do." Twombly, 550 U.S. at 555 (citations, quotations marks, and brackets omitted). "Factual allegations mustbe enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." In re Katrina Canal, 495 F.3d at 205 (quoting Twombly, 550 U.S. at 555) (internal quotation marks omitted). "The court accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff." Id. (quoting Martin K. Eby Construction Company, Inc. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)) (internal quotation marks omitted).
The Supreme Court has prescribed a "two-pronged approach" to determine whether a complaint fails to state a claim under Rule 12(b)(6). See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). The court must "begin by identifying the pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id. at 679. The court should then assume the veracity of any well-pleaded allegations and "determine whether they plausibly give rise to an entitlement of relief." Id. The plausibility principle does not convert the Rule 8(a)(2) notice pleading standard to a "probability requirement," but "a sheer possibility that a defendant has acted unlawfully" will not defeat a motion to dismiss. Id. at 678. The plaintiff must "plead[ ] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not 'show[n]'—'that the pleader isentitled to relief.'" Id. at 679 (alteration in original) (quoting FEDERAL RULE OF CIVIL PROCEDURE 8(a)(2)). The court, drawing on its judicial experience and common sense, must undertake the "context-specific task" of determining whether the plaintiff's allegations "nudge" his claims against the defendant "across the line from conceivable to plausible." See id. at 679, 683.
As noted above, the defendants' motion to dismiss targets the NRA's claims for: (1) false association (count I); (2)...
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