Panther Brands, LLC v. Indy Racing League, LLC

• Decision Date: 25 March 2015
• Docket Number: Case No. 1:14-cv-00472-TWP-TAB
• Citation: Panther Brands, LLC v. Indy Racing League, LLC, Case No. 1:14-cv-00472-TWP-TAB (S.D. Ind. Mar 25, 2015)
• Parties: PANTHER BRANDS, LLC, and PANTHER RACING, LLC, Plaintiffs, v. INDY RACING LEAGUE, LLC doing business as INDYCAR, RAHAL LETTERMAN LANIGAN RACING, LLC, DOCUMENT AND PACKAGING BROKERS, INC., doing business as DOCUPAK, Defendants.
• Court: U.S. District Court — Southern District of Indiana

PANTHER BRANDS, LLC, and PANTHER RACING, LLC, Plaintiffs, v. INDY RACING LEAGUE, LLC doing business as INDYCAR,RAHAL LETTERMAN LANIGAN RACING, LLC,DOCUMENT AND PACKAGING BROKERS, INC., doing business as DOCUPAK, Defendants.

Case No. 1:14-cv-00472-TWP-TAB

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION

March 25, 2015

ENTRY ON MOTIONS TO DISMISS

This matter is before the Court on several Motions to Dismiss filed by Defendants Rahal Letterman Lanigan Racing, LLC ("Rahal") (Filing No. 55), Indy Racing League, LLC ("IndyCar") (Filing No. 61), and Document and Packaging Brokers, Inc. ("Docupak") (Filing No. 63)¹. Plaintiffs Panther Brands, LLC ("Panther Brands") and Panther Racing, LLC ("Panther Racing") (collectively, "Panther") filed this action against Defendants alleging breach of contract, interference with contract, unjust enrichment, conversion, unfair competition and bid rigging arising from a sponsorship agreement between IndyCar and Panther Brands. For the reasons set forth below, Defendants' motions to dismiss are GRANTED.

I. BACKGROUND

The following relevant facts are from Plaintiffs' Amended Complaint (Filing No. 51) and are accepted as true for purposes of these motions to dismiss. IndyCar is the sanctioning body for the Indy Racing League race car series, a role it has served since 1996. Panther Racing is an IndyCar race team, and Panther Brands is a marketing services and brand management company that provides such services to Panther Racing and its sponsors. Rahal is also an IndyCar race team and a competitor of Panther Racing. Docupak is a subcontractor of Laughlin Marinaccio and Owens, Inc. d/b/a/ LM&O Advertising ("LM&O").

On an annual basis, IndyCar enters into sponsorship agreements which identify the specific marketing benefits for the use of the race teams and the race teams' sponsors. The marketing tools and benefits provided by IndyCar to race teams and their sponsors include, but are not limited to, at-track presence within the "Fan Village" at all United States racing events; advertising space in event programs; use of photographs and video footage for promotional purposes; radio advertisement time; website advertisement space; safety car rides around the track; placement of the sponsor's marks on equipment, marketing collateral, and safety trucks; and the right to be a promotional partner of IndyCar and the IZOD IndyCar Series.

One important benefit provided to sponsors is access to the "Fan Village" or "Fan Zone," which is an area designated for use by parties who have entered into sponsorship agreements to market their businesses to IndyCar fans. Race teams and their sponsors are allowed to establish promotional displays and exhibits, and food and entertainment is provided for the purpose of enhancing the fans' experience at race venues during practice, qualification, and race days at all United States events. The Fan Village includes sophisticated systems for gathering marketing information and feedback from race fans. For example, in 2013, 300,000 fans registered andvisited the IndyCar Fan Village. Access to the Fan Village is a valuable and highly coveted component of the IndyCar sponsorship agreements.

From 2008 through 2013, the Army National Guard ("ARNG" or "National Guard") sponsored Panther Racing in the IndyCar series, including the Indianapolis 500 Mile Race. ARNG utilized its IndyCar sponsorship for the purpose of marketing its "Guard Strength Sustainment Division," whose specific mission was to assist in the recruitment of ARNG enlistees, and to assist in the retention of ARNG members. ARNG unilaterally determined the sponsorship amount for each year, which was accepted by Panther without negotiation or input, in exchange for various promotional benefits from IndyCar through Panther. As part of the sponsorship arrangement, Panther developed, coordinated and administered multiple racing-based programs to procure direct contacts between interested IndyCar fans and ANRG recruiters. Panther's programs were also initiated to link employers with National Guard soldiers to provide employment opportunities to these individuals in need of jobs when not deployed, and to encourage the employment of National Guard soldiers upon their separation from National Guard service.

Panther Brands entered into a sponsorship agreement with IndyCar for the 2013 racing season (the "2013 Sponsorship Agreement"). (Filing No. 51-1.) The term of the agreement was January 1, 2013 through December 31, 2013 (the "Term"). Panther Brands paid approximately $1.7 million dollars as consideration for the 2013 Sponsorship Agreement with the understanding that ARNG would primarily receive the promotional benefits set forth in Exhibit B of the agreement. (Filing No. 51-1, at ECF pp. 10-14.) At issue in this case is Section 9.15 of the 2013 Sponsorship Agreement, which states:

INDYCAR agrees that, other than through Panther Brands, it will not enter into sponsorship agreements during the Term and for a period of one (1) year following the Term with the following Panther Brand clients: National Guard, Lincoln Tech, Drash, TriWest, Oracle and Emergent. It is understood and agreed that the forgoinglimitation extends to agreements for the benefit of the sponsors listed in the preceding sentence with agencies or companies representing such sponsors (other than Panther Brands), including, without limitation Document Packaging Brokers, Inc. and LM&O Advertising.

(Filing No. 51-1, at ECF p. 7.) Panther alleges that this provision grants it the exclusive right to obtain and provide sponsorship benefits for IndyCar events to ARNG in 2014, including Fan Village access.

In September 2013, ARNG began the process of soliciting bids for the 2014 IndyCar racing season. One of ANRG's requirements was Fan Village access. The 2014 ANRG sponsorship requirements were sent by Docupak to Panther on September 3, 2012. The bid request required a formal written response from Panther by September 6, 2013.

II. LEGAL STANDARD

When considering a motion to dismiss pursuant to Rule 12(b)(6), the court examines the sufficiency of the complaint, not the merits of the lawsuit. United States v. Clark Cnty., Ind., 113 F. Supp. 2d 1286, 1290 (S.D. Ind. 2000). The court will dismiss a complaint for failure to state a claim if it "'appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Hamlin v. Vaudenberg, 95 F.3d 580, 583 (7th Cir. 1996) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). When reviewing a 12(b)(6) motion, the court takes all well-pleaded allegations in the complaint as true and draws all inferences in favor of the plaintiff. Bielanski v. Cnty. of Kane, 550 F.3d 632, 633 (7th Cir. 2008) (citations omitted). However, the allegations must "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests" and the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Pisciotta v. Old Nat'l Bancorp, 499 F.3d 629, 633 (7th Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Stated differently, the complaint must include "enough facts to state a claim to relief that is plausible on its face." Hecker v. Deere& Co., 556 F.3d 575, 580 (7th Cir. 2009) (citations omitted). To be facially plausible, the complaint must allow "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted).

III. DISCUSSION

Panther asserts a breach of contract claim against IndyCar in Count I of their Amended Complaint, alleging that IndyCar repudiated the 2013 Sponsorship Agreement by drafting a letter to Rahal on November 11, 2013, stating that IndyCar could provide Rahal with Fan Village access for ARNG as a sponsor of Rahal in 2014. Count II asserts a claim against Rahal for interference with contract, alleging that Rahal was aware of the existence of the 2013 Sponsorship Agreement and induced IndyCar to breach the agreement by requesting the November 11, 2013 letter. Count III asserts claims against Rahal, IndyCar and Docupak for unjust enrichment and conversion,² asserting that Rahal and Docupak falsely represented that Rahal could provide Fan Village access and other marketing benefits to ARNG, and that Defendants misappropriated Panther's exclusive contractual rights. Count IV, asserted against Rahal, IndyCar and Docupak, is a claim for unfair competition and bid rigging in violation of Ind. Code § 35-43-5-11, based upon Panther's assertion that Defendants conspired with each other to improperly and unlawfully influence and alter the bid award process for the 2014 ARNG sponsorship.

A. Breach of Contract/Anticipatory Breach

All of Panther's claims hinge upon whether IndyCar breached the 2013 Sponsorship Agreement, as Panther's claims are all based upon the assumption that they had the exclusive right to provide the benefits under the sponsorship agreement to ARNG in 2014, including Fan Village access, based upon the language in Section 9.15 of the 2013 Sponsorship Agreement. WhetherPanther has asserted a viable breach of contract claim primarily depends upon the Court's interpretation of Section 9.15, which the parties agree is not ambiguous and thus may be interpreted by this Court as a matter of law. Allen v. Cedar Real Estate Grp., LLP, 236 F.3d 374, 379 (7th Cir. 2001) (a contract provision is not ambiguous simply because the parties disagree on its meaning). In interpreting the contract, the Court must "read the contract as a whole and construe the language as not to render any words, phrases, or terms ineffective or meaningless." Murat Temple Ass'n, Inc. v. Live Nation Worldwide, Inc., 953 N.E.2d 1125, 1129 (Ind. Ct. App. 2011).

In viewing the 2013 Sponsorship Agreement as a whole, the Court finds that the contract does not grant Panther the exclusive right to...