Del. Valley Fish Co. v. 3South LLC

601 F.Supp.3d 7

DELAWARE VALLEY FISH COMPANY

v.3SOUTH LLC, et al.

CIVIL ACTION NO. 21-141-JWD-EWD

United States District Court, M.D. Louisiana.

Signed February 24, 2022

Kriste T. Utley, Richard Biddle Ehret, Boykin & Utley, New Orleans, LA, Evan A. Blaker, Pro Hac Vice, Cohen Seglias Pallas Greenhall & Furman, Philadelphia, PA, for Delaware Valley Fish Company.

Jeanne C. Comeaux, Danielle Lauren Borel, Breazeale Sachse & Wilson, Baton Rouge, LA, for 3South LLC, et al.

RULING AND ORDER

JOHN W. deGRAVELLES, UNITED STATES DISTRICT JUDGE

This matter comes before the Court on the Rule 12(b)(6) Motion for Partial Dismissal of Complaint (Doc. 17) filed by Defendants 3South, LLC ("3South") and Charlotte Johnston ("Ms. Johnston") (collectively "Defendants"). Plaintiff Delaware Valley Fish Company ("DVFC" or "Plaintiff") opposes the motion. (Doc. 27.) Defendants then responded to Plaintiff's opposition, (Doc. 28), and Plaintiff subsequently filed a sur-reply, (Doc. 33). Oral argument is not necessary. The Court has carefully considered the law, facts in the record, and arguments and submissions of the parties and is prepared to rule.

For the following reasons, Defendants’ motion is granted in part and denied in part. First, Plaintiff is entitled to bring a LUTPA claim here in addition to its breach of contract claim because Plaintiff satisfies the narrow exception allowing both claims to be brought. In addition, the Court concludes that Plaintiff has sufficiently pled a cause of action under LUTPA and that the claims against Ms. Johnston individually, as an LLC member, are appropriate under Louisiana's limited liability law. Consequently, Defendants’ motion with respect to these claims is denied. Lastly, the Court finds that Plaintiff failed to state a claim for treble damages under LUTPA. Accordingly, Defendants’ motion in this respect is granted, and Plaintiff's claim for treble damages will be dismissed without prejudice.

I. Relevant Factual Background

This suit arises out of a COVID-19 related commercial transaction that went awry.

Plaintiff, DVFC, is a Pennsylvania corporation that typically specializes in the exportation of eels and other seafood delicacies. (First Amended Complaint ("FAC ") ¶ 8, Doc. 12.) In early 2020, however, amid the early stages of the COVID-19 pandemic, DVFC's President "decided to shift the company's focus from the fish industry" toward procurement of personal protective equipment ("PPE") "in order to fulfill the shortage and the public's need for KN95 masks." (Id. ¶ 9.) In or around early April 2020, third-party John Coppolino ("Mr. Coppolino") informed Plaintiff that 3South—a company owned by Ms. Johnston that recommends and provides safety equipment, training, service, and equipment maintenance to a large cliental, including first responders—was interested in obtaining KN95 masks to be supplied to its various customers. (Id. ¶¶ 11-12.)

Mr. Coppolino and Ms. Johnston communicated throughout April 2020 about 3South's need for KN95 masks, and they specifically discussed "the KN95 mask that [Plaintiff] was able to import, known as Ace Neale model 9560." (Id. ¶ 13.) At one point, and at Ms. Johnston's request, Mr. Coppolino conducted a "burn test" of an Ace Neale model 9560 KN95 mask over FaceTime for Ms. Johnston to watch. (Id. ¶ 14.) Plaintiff claims that, upon conclusion of the burn test, Ms. Johnston indicated that she was satisfied with the quality of the masks and wanted to purchase them. (Id. )

According to the allegations in the FAC , Plaintiff explained to Ms. Johnston that it could advance the funds needed to import, store, and re-ship the masks to 3South, but it would not assume risk of nonpayment once the masks cleared United States customs. (Id. ¶ 16.) Plaintiff claims that Defendants never indicated there would be any issues paying Plaintiff for the masks and, specifically, that they deliberately failed to inform Plaintiff that the masks would only be purchased if 3South was able to sell them (Id. ¶ 17.) Thereafter, on April 24, 2020, 3South issued a purchase order to Plaintiff for 100,000 masks. (Id. ¶ 18.)

Plaintiff claims that it emailed Ms. Johnston on May 1, 2020, stating that the masks were to be considered non-sterile, nonmedical masks and that they could not be guaranteed for hospital use. (Id. ¶¶ 20-21.) Ms. Johnston allegedly responded by emailing Plaintiff "We'll take them then." (Id. ¶ 22.) The next day, Plaintiff issued an invoice to Defendants in the amount of $332,800.00, "specifically noting that payment from 3[S]outh was due upon receipt after goods inspected at [Plaintiff]’s warehouse." (Id. ¶ 23.) Ms. Johnston never rejected this invoice, and it remains unpaid. (Id. ) On May 11, 2020, Plaintiff informed Ms. Johnston that the masks had arrived at Plaintiff's warehouse and asked whether a representative of 3South would be coming to inspect the masks. (Id. ¶ 25.) Neither Ms. Johnston nor any representative at 3South responded. (Id. ) To date, 3South has made no payment to Plaintiff, and most of the masks at issue remain in Plaintiff's warehouse. (Id. ¶ 27.)

On March 4, 2021, Plaintiff filed the present suit claiming, inter alia¹ , that Defendants’ actions violated Louisiana's Unfair Trade Practices and Consumer Protection Act ("LUTPA"), La. R.S. 51:1401, et seq. , and seeking treble damages and attorney's fees under that Act. (Id. ¶¶ 44, 46.) Specifically, Plaintiff alleges that Defendants’ failure to make payment despite their "continuous representation" that the masks at issue were sufficient and their "continued assurance" that Plaintiff would be paid for the masks "constitutes fraud, misrepresentation, deception, and/or other unethical conduct as prohibited by the Act." (Id. ¶ 44.)

II. Rule 12(b)(6) Standard

In Johnson v. City of Shelby, Miss. , 574 U.S. 10, 135 S.Ct. 346, 190 L.Ed.2d 309 (2014), the Supreme Court explained "Federal pleading rules call for a ‘short and plain statement of the claim showing that the pleader is entitled to relief,’ Fed. R. Civ. P. 8(a)(2) ; they do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted." Johnson , 574 U.S. at 11, 135 S.Ct. 346 (citation omitted).

Interpreting Rule 8(a) of the Federal Rules of Civil Procedure, the Fifth Circuit has explained:

The complaint (1) on its face (2) must contain enough factual matter (taken as true) (3) to raise a reasonable hope or expectation (4) that discovery will reveal relevant evidence of each element of a claim. "Asking for [such] plausible grounds to infer [the element of a claim] does not impose a probability requirement at the pleading stage; it simply calls for enough facts to raise a reasonable expectation that discovery will reveal [that the elements of the claim existed]."

Lormand v. U.S. Unwired, Inc. , 565 F.3d 228, 257 (5th Cir. 2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).

Applying the above case law, the Western District of Louisiana has stated:

Therefore, while the court is not to give the "assumption of truth" to conclusions, factual allegations remain so entitled. Once those factual allegations are identified, drawing on the court's judicial experience and common sense, the analysis is whether those facts, which need not be detailed or specific, 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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)] ; Twombly , 55[0] U.S. at 556 . This analysis is not substantively different from that set forth in Lormand, supra , nor does this jurisprudence foreclose the option that discovery must be undertaken in order to raise relevant information to support an element of the claim. The standard, under the specific language of Fed. R. Civ. P. 8(a)(2), remains that the defendant be given adequate notice of the claim and the grounds upon which it is based. This standard is met by the "reasonable inference" the court must make that, with or without discovery, the facts set forth a plausible claim for relief under a particular theory of law provided that there is a "reasonable expectation" that "discovery will reveal relevant evidence of each element of the claim." Lormand , 565 F.3d at 257 ; Twombly , 55[0] U.S. at 556 .

Diamond Servs. Corp. v. Oceanografia, S.A. De C.V. , No. 10-00177, 2011 WL 938785, at *3 (W.D. La. Feb. 9, 2011) (citation omitted).

The Fifth Circuit further explained that, in deciding a Rule 12(b)(6) motion, all well-pled facts are taken as true and viewed in the light most favorable to the plaintiff. Thompson v. City of Waco, Tex. , 764 F.3d 500, 502–03 (5th Cir. 2014). The task of the Court is not to decide if the plaintiff will eventually be successful, but to determine if a "legally cognizable claim" has been asserted. Id. at 503.

III. Discussion

A. Parties’ Arguments

1. Defendants’ Original Memorandum (Doc. 17-1)

In support of their motion, Defendants first argue that Plaintiff's LUTPA claim must be dismissed because the factual allegations in the FAC clearly go toward Plaintiff's claim that Defendants breached the parties’ agreement, and "[o]ur courts have consistently held that LUTPA is not a substitute for a breach of contract claim." (Doc. 17-1 at 6.) According to Defendants, the jurisprudence makes clear that "[w]here there is a breach of contract claim, the plaintiff may not also bring a LUTPA claim based on the same allegations." (Id. ) Defendants state that the Louisiana Supreme Court, the United States Court of Appeals for the Fifth Circuit, and this Court have all held that "LUTPA does not provide an alternative remedy for simple breaches of contract." (Id. (citing Cenac v. Orkin, LLC , 941 F.3d 182, 194 (5th Cir. 2019) ) (citing Cheramie Services, Inc. v. Shell Deepwater Prod. Inc. , 2009-1633 (La. 4/23/10), 35 So. 3d 1053, 1059 ); Shaw Industries Inc. v. Brett , 884 F.Supp. 1054 (M.D. La. 1994) ; Landreneau...