Walker Mfg., Inc. v. Hoffmann, Inc., No. 00-103 MJM.

• Court: United States District Courts. 8th Circuit. Northern District of Iowa
• Writing for the Court: Melloy
• Citation: 157 F.Supp.2d 1012
• Parties: WALKER MANUFACTURING, INC., Plaintiff, v. HOFFMANN, INC., an Iowa Corporation; Larry Emmert; Marty Sixt; and Jan Rule d/b/a J.R. Sales and Advantage Sprayers; Defendants.
• Docket Number: No. 00-103 MJM.
• Decision Date: 25 April 2001

157 F.Supp.2d 1012 WALKER MANUFACTURING, INC., Plaintiff,
v.
HOFFMANN, INC., an Iowa Corporation; Larry Emmert; Marty Sixt; and Jan Rule d/b/a J.R. Sales and Advantage Sprayers; Defendants. No. 00-103 MJM. United States District Court, N.D. Iowa, Cedar Rapids Division. April 25, 2001.

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COPYRIGHT MATERIAL OMITTED

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Mark L. Zaiger, Kevin J. Caster, Shuttleworth & Ingersoll, Cedar Rapids, IA, for plaintiff.

Michael L. Noyes, Lane & Waterman, Davenport, IA, Brian J. Laurenzo, Michael C. Gilchrist, James R. Quilty, Dorsey & Whitney, Des Moines, IA, for Hoffman, Inc.

Michael L. Noyes, Lane & Waterman, Davenport, IA, for Larry Emmert.

Marty Sixt, Iowa City, IA, pro se.

Michael McDonough, Moyer Bergman, Cedar Rapids, IA, Gregory Lederer, Simmons Perrine Albright Ellwood, Cedar Rapids, IA, for Jan Rule, dba J.R. Sales and Advantage Sprayers.

OPINION and ORDER

MELLOY, District Judge.

In this action, the plaintiff, Walker Manufacturing, Inc., asserts federal copyright, trade dress and racketeering claims, along with related state claims, against the above-named defendants arising from defendant Hoffmann, Inc.'s manufacture and marketing of corn crop sprayers. Currently before the court is a motion by defendants Hoffmann and Larry Emmert to dismiss count 1 of the plaintiff's Amended Complaint alleging claims under the Racketeer Influenced and Corrupt Organizations (RICO) statute, 18 U.S.C. § 1962(c), and the Iowa Ongoing Criminal Conduct Act (IOCCA), § 706A.2(1)(c) of the Iowa Code (IC). Because the court finds that the plaintiff cannot establish the continuity element required under RICO and IC § 706A.2(1)(c), the defendants' motion to dismiss is granted.

STANDARD FOR MOTION TO DISMISS

In addressing a motion to dismiss for failure to state a claim upon which relief could be granted under Federal Rule of Civil Procedure 12(b)(6), a court must presume that the factual allegations in the complaint are true and accord all reasonable inferences from those facts to the plaintiff. See Cruz v. Beto, 405 U.S. 319, 322, 92 S.Ct. 1079, 31 L.Ed.2d 263 (1972); Midwestern Machinery v. Northwest Airlines, Inc., 167 F.3d 439, 441 (8th Cir.1999); Valiant-Bey v. Morris, 829 F.2d 1441, 1443 (8th Cir.1987). The motion should be granted only where "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) (as quoted in Valiant-Bey, 829 F.2d at 1443); accord, Estate of Rosenberg v. Crandell, 56 F.3d 35, 37 (8th Cir.1995).

FACTS

The plaintiff, Walker Manufacturing, is in the business of producing self-propelled, high-clearance crop sprayers. (Amended Complaint, ¶ 8). In May, 2000, Walker Manufacturing purchased certain assets of a company known as RJ Manufacturing, Inc., including numerous trademarks associated with the manufacture of crop sprayers ("the Walker trademarks") and the goodwill associated with those trademarks. (Id., ¶¶ 5, 8 and 9).

Defendant Hoffmann is an Iowa Corporation with its principal place of business in Muscatine, Iowa. (Id., ¶ 2). Defendant Emmert is the president and principal owner of Hoffmann. (Id., ¶ 3).

Before Walker Manufacturing's acquisition, RJ Manufacturing was the owner of the Walker trademarks, and had produced and sold self-propelled crop sprayers under the Walker trademarks since 1995. (Id., ¶¶ 8 and 9). At some point prior to its sale of assets, RJ Manufacturing gave proprietary and confidential drawings to Hoffmann for the limited purpose of producing components for RJ Manufacturing's self-propelled crop sprayers. (Id., ¶ 10).

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In conjunction with Hoffmann's alleged misappropration and misuse of those drawings, Walker Manufacturing brought suit in this court asserting Lanham Act violations, copyright infringement, misappropriation of trade secrets, unfair competition and breach of contract. (Doc. no. 1). Following a hearing, the court granted Walker Manufacturing's request for a temporary injunction against Hoffmann. (Doc. nos. 30 and 33). Approximately one month later, Walker Manufacturing filed an amended complaint adding, in count 1, alleged violations of RICO and the IOCCA. (Doc. no. 43).

Along with Hoffmann and Emmert, count 1 of the amended complaint names two additional defendants: Marty Sixt, who worked for RJ Manufacturing from October 1996 to December 20, 1999, and then worked for Hoffmann from January 10, 2000 through at least July 18, 2000 (id., ¶ 6); and Jan Rule, d/b/a as J.R. Sales and Advantage Sprayers, who has an exclusive distribution agreement with Hoffmann for the Hoffmann crop sprayers. (Id., ¶ 14). Walker Manufacturing asserts that since at least January 10, 2000, all named defendants conducted or participated in a scheme to manufacture and market a sprayer using Walker Manufacturing trade secrets and to prevent Walker Manufacturing from manufacturing and marketing any competing sprayers. (Id., ¶¶ 15 and 16).

In support of its claim, Walker Manufacturing points to numerous actions by the defendants allegedly done in furtherance of the scheme, including, inter alia:

— mail and wire fraud violations from February 2, 2000 through late spring 2000, in conjunction with Hoffmann's wrongful retention of fixtures provided to Hoffmann by RJ Manufacturing for the limited purpose of manufacturing specific crop sprayer components, (Id., ¶ 17);

— mail and wire fraud violations in April 2000 in conjunction with false statements made in a patent application for an invention which allegedly belonged to Walker Manufacturing, (Id., ¶ 18);

— mail and wire fraud violations since at least June 27, 2000, in conjunction with false statements made by Emmert and Rule in a fax campaign to former Walker Manufacturing customers, (Id., ¶ 19);

— violation of IC § 714.1(2)(1), theft in the first degree, and IC § 706.1, conspiracy, from January 10 to June 16, 2000, in conjunction with Hoffmann's and Sixt's misappropriation of diagrams owned by Walker Manufacturing and containing trade secrets relating to the Walker sprayers, (Id., ¶ 20).

Walker Manufacturing contends that the defendants' actions have caused and continue...