Snowizard, Inc. v. Robinson

• Decision Date: 24 September 2012
• Docket Number: Civil Action No. 11–515.
• Parties: SNOWIZARD, INC. v. Ron ROBINSON, et al.
• Court: U.S. District Court — Eastern District of Louisiana

897 F.Supp.2d 472

SNOWIZARD, INC.

v.Ron ROBINSON, et al.

Civil Action No. 11–515.

United States District Court,

E.D. Louisiana.

Sept. 24, 2012.

Jack Edward Morris, Jack E. Morris, Attorney at Law, Metairie, LA, for SnoWizard, Inc.

Mark Edw. Andrews, Andrews Arts & Sciences Law, LLC, Joseph Patrick Tynan, Montgomery Barnett, New Orleans, LA, for Defendants.

ORDER AND REASONS

NANNETTE JOLIVETTE BROWN, District Judge.

Before the Court is Plaintiff, Defendant-in-counterclaim, SnoWizard, Inc.'s (“SnoWizard”) Motion for Summary Judgment regarding Defendants Raggs Supply, LP and its general partner Doty Management, LLC's (collectively, “Raggs”) counterclaims.¹ In SnoWizard's motion, it requests that this Court dismiss Raggs' remaining counterclaims against SnoWizard which have its “ ‘Count 1, Breach of Contract,’ ‘Count 2, Tortious Interference with Business and Contracts,’ ² and ‘Count 3, Unfair Business Practices' ” claims.³ Specifically, SnoWizard avers that Raggs cannot prove the existence of any “obligation” or “valid contract” which SnoWizard allegedly breached as necessary to prevail on its alleged Louisiana or Texas breach of contract claim; that SnoWizard engaged in any improper, malicious, tortious or illegal influencing of others as necessary to prevail on its alleged Louisiana or Texas tortious interference with business and contract claim or any of the essential elements of its alleged claims for unfair business practices under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), the Texas Deceptive Trade Practices Act (“DTPA”), Tex. Bus. And Com.Code § 17.01 et seq., or Louisiana Unfair Trade Practice (“LUPTA”), La. R.S. 51:1401 et seq. After SnoWizard filed the present Motion for Summary Judgment on Remaining Counterclaims raised by Raggs, Raggs stipulated that for the breach of contract and unfair business practices claims, originally brought under both Louisiana and Texas law, Raggs now only pursues these counterclaims under Louisiana law; further, Raggs abandons any tortious interference cause of action for business or contracts under Louisiana law and now only pursues relief for this claim under Texas law. ⁴ Therefore, this Court addresses only Raggs' breach of contract claim under Louisiana law, the claims for “tortious interference with prospective business relations and tortious interference with contract” ⁵ under Texas law, and the claims for unfair business practices under Section 43(a) of the federal Lanham Act and LUTPA.

Having considered the motion, the response, the reply, the record, and the applicable law, for the following reasons, the Court will grant in part and deny in part the motion. Specifically, this Court will grant summary judgment in SnoWizard's favor and dismiss Raggs' counterclaim for unfair competition under Section 43(a) of the Lanham Act. However, this Court will deny SnoWizard's motions for summary judgment on the breach of contract, tortious interference with prospective business relations, tortious interference with contract, and LUTPA counterclaims.

I. Background

A. Factual Background

SnoWizard is a company that began to package and sell snowball ⁶ flavoring concentrates to vendors and other distributors dating back to at least the 1980's.⁷ On August 18, 2009, SnoWizard obtained a trademark for the term “SNOWIZARD” in connection with “food flavorings” from the United States Patent and Trademark Office (“USPTO”).⁸ From 1991 until June 2010, Raggs purchased flavoring from SnoWizard at discounted wholesale prices. There was never a written contract or licensing agreement between the parties.⁹

In May 2010, Walter Cole, a snowball vendor who had previously purchased SnoWizard flavorings from Raggs, complained to SnoWizard that several products that he purchased were mislabeled and contained a different flavor than what the label advertised.¹⁰ SnoWizard alleges that this was the first time it learned that Raggs was repackaging its goods and applying “counterfeit” SnoWizard labels without any disclaimer.¹¹ In late May or early June 2010, SnoWizard sent an email to Raggs requesting that it cease selling SnoWizard products that had been repackaged.¹² The next day Raggs notified SnoWizard that it had removed the repackaged products from its website.¹³

Subsequently, but still in late May and early June, Raggs placed new orders with SnoWizard, to which SnoWizard initially did not respond.¹⁴ Raggs alleges that SnoWizard purposefully ignored its phone calls inquiring about the fulfillment of these orders.¹⁵ Raggs further claims that while SnoWizard was “delaying” the orders, an existing customer of Raggs, Manuel Hernandez, attempted to buy 94 gallons of SnoWizard flavoring product from Raggs. Raggs alleges that due to SnoWizard's delay, Raggs was unable to fulfill “contracts of sale between [itself] and customers.” ¹⁶ Specifically, Raggs alleges that its contract with Hernandez could not be fulfilled and therefore Hernandez contacted SnoWizard directly to purchase the 94 gallons of flavoring concentrate. According to Raggs, and undisputed by SnoWizard, not only did SnoWizard sell the product directly to Hernandez, but it also gave Hernandez a 7.5% discount from the price for which SnoWizard would normally have sold the product.¹⁷ It was not until the day after this sale, on June 8, 2010, that SnoWizard responded to Raggs' several inquiries relating to its orders and explained that Raggs' orders had been delayed due to its previous repackaging and re-labeling of SnoWizard products. Moreover, SnoWizard refused to fulfill the orders unless Raggs agreed to specific terms which Raggs refused to do. Raggs immediately canceled all remaining orders with SnoWizard and liquidated any remaining SnoWizard product.¹⁸

B. Procedural Background

SnoWizard filed a complaint in this matter on March 3, 2011.¹⁹ The suit was originally assigned to Judge Ivan L.R. Lemelle but later was transferred to Section “G.” In its complaint, SnoWizard seeks damages for alleged trademark infringement, unfair competition, and defamation.²⁰ Raggs filed an answer on July 22, 2011, wherein it denies liability for the claims against it and asserts counterclaims of its own; specifically, Raggs alleges that SnoWizard is liable for breach of contract under Louisiana law, “tortious interference with business and contracts” under Texas law, and unfair business practices under Section 43(a) of the federal Lanham Act and LUTPA.²¹ On April 13, 2012, SnoWizard filed the pending motion seeking summary judgment in its favor regarding Raggs' counterclaims.²² Raggs' filed an opposition on April 16, 2012.²³ After receiving leave of court, SnoWizard filed a reply on April 23, 2012.²⁴

II. Standard Applied to a Motion for Summary Judgment

Summary judgment is appropriate when the pleadings, discovery and disclosure materials on file, and any affidavits show that “there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” ²⁵ When assessing whether a dispute as to any material fact exists, the court considers “all of the evidence but refrains from making credibility determinations or weighing the evidence.” ²⁶ All reasonable inferences are drawn in favor of the nonmoving party, but “unsupported allegations or affidavits setting forth ‘ultimate or conclusory facts and conclusions of law’ are insufficient to either support or defeat a motion for summary judgment.” ²⁷ If the record, as a whole, could not lead a rational trier of fact to find for the nonmoving party, then no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law.²⁸ Because factual disputes may not be resolved on summary judgment, a plaintiff need not offer all of its evidence, but rather only enough to show that a jury might return a verdict in its favor.²⁹ If the nonmovant would bear the burden of proof at trial on a claim, the movant may simply point to the absence of evidence, which then returns the burden on the motion for summary judgment to the nonmovant.³⁰ Then, the nonmovant must point to competent evidence that there is an issue of material fact so as to warrant trial.³¹ To defeat summary judgment, the nonmovant must direct the court's attention to specific evidence in the record to establish an issue of material fact as to each claim on which it will bear the burden of proof at trial.³²

III. Law and Analysis

A. Breach of Contract

In its counterclaim for breach of contract, Raggs claims “SnoWizard's refusalto ship orders, and the demands made on and after 8 June 2010, including a unilateral imposition of new terms, to the disadvantage of Raggs, in an already existing 19–year distribution relationship, were a breach of contract under Texas and Louisiana law.” ³³ In its motion for summary judgment on the issue of breach of contract, SnoWizard asserts that “Raggs has not and cannot identify, much less prove the existence of, any contractual duty which SnoWizard owed to Raggs and breached under either Louisiana or Texas law.” ³⁴

In order to recover for breach of contract under Louisiana law,³⁵ the plaintiff must prove: (1) the obligor's undertaking of an obligation to perform; (2) that the obligor failed to perform the obligation (i.e. breach); and (3) that the breach resulted in damages to the obligee.³⁶ An obligation, or contract, is defined in the Louisiana Civil Code as “a legal relationship whereby a person, called the obligor, is bound to render a performance in favor of another.” ³⁷ “A contract is formed by consent of the parties established through offer and acceptance.” ³⁸ In order to create a binding obligation, both parties must agree to the substantial elements of the contract.³⁹ Consent to a sales contract must include agreement on the thing and the price.⁴⁰ If the parties do not agree on all the terms, then there is no contract. ⁴¹ Unless specific statutes state otherwise, Louisiana law allows offer and acceptance to be made in any manner that is ...