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RG Golf Warehouse, Inc. v. Golf Warehouse, Inc.

United States District Court, D. Minnesota

August 26, 2019

RG Golf Warehouse, Inc., Plaintiff,
v.
The Golf Warehouse, Inc., Defendant.

          ORDER

          Wilhelmina M. Wright United States District Judge

         This matter is before the Court on Defendant's motion to dismiss Counts III and IV of Plaintiff's complaint. (Dkt. 13.) For the reasons addressed below, the motion to dismiss is granted.

         BACKGROUND

         Plaintiff RG Golf Warehouse, Inc. (RG) owns the registered domain name golfwarehouse.com. Defendant The Golf Warehouse, Inc.[1] (TGW) owns and operates several websites for the sale of golf merchandise and owns the registered trademark “The Golf Warehouse.” In 2011, RG and TGW entered into a contract in which RG agreed to refer online customers from its website, golfwarehouse.com, to TGW's websites in exchange for referral fees and commissions. The contract contemplated that TGW would use computer-tracking cookies and other mechanisms to track customer traffic and calculate the amount of commissions owed.

         By at least as early as 2012, RG determined that TGW had disabled its computer-tracking cookies. RG suspected that TGW was underreporting the commissions it owed to RG so that TGW could better position itself for a possible sale. But TGW “continually assured [RG] that TGW had no intention of keeping earnings from [RG], that there was no cookie issue, that bugs were being worked out, [and] that TGW was performing an exhaustive investigation.” On multiple occasions, RG demanded a full report of TGW's sales. TGW did not comply with RG's demands.

         TGW terminated the contract with RG on November 11, 2014. On or before this date, RG entered into a separate contract with Golfsmith International (Golfsmith). Similar to its arrangement with TGW, RG agreed to redirect online customers to Golfsmith's website in exchange for referral fees and commissions. But in December 2014, TGW sent a cease-and-desist letter to Golfsmith, warning Golfsmith that TGW deemed redirection of traffic from RG's website, golfwarehouse.com, to any of TGW's competitors as infringement of TGW's registered trademark, “The Golf Warehouse.” Golfsmith terminated its contract with RG after receiving TGW's letter.

         RG subsequently commenced this lawsuit against TGW, alleging breach of contract (Count I), breach of implied covenant of good faith and fair dealing (Count II), tortious interference with contract (Count III), and fraud (Count IV).[2] The parties stipulated to dismiss Count II with prejudice and the Court issued an order to that effect. As such, only Counts I, III, and IV remain. TGW now moves to dismiss RG's tortious interference with contract claim and fraud claim, Counts III and IV, respectively.

         ANALYSIS

         TGW moves to dismiss Counts III and IV for failure to state claims on which relief can be granted. See Fed. R. Civ. P. 12(b)(6). TGW argues that Count III is time-barred and Count IV does not state a cause of action that is independent from Count I.

         A complaint must allege sufficient facts such that, when accepted as true, a facially plausible claim to relief is stated. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). If a complaint fails to state a claim on which relief can be granted, dismissal is warranted. See Fed. R. Civ. P. 12(b)(6). When determining whether a complaint states a facially plausible claim, a district court accepts the factual allegations in the complaint as true and draws all reasonable inferences in the plaintiff's favor. Blankenship v. USA Truck, Inc., 601 F.3d 852, 853 (8th Cir. 2010). Factual allegations must be sufficient to “raise a right to relief above the speculative level” and “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). Mere “labels and conclusions” are insufficient, as is a “formulaic recitation of the elements of a cause of action.” Id. at 555. Legal conclusions couched as factual allegations may be disregarded. See Iqbal, 556 U.S. at 679. And the Court may consider exhibits that are embraced by the pleadings without converting a motion to dismiss to a motion for summary judgment. Finch v. Unum Life Ins. Co. of Am., 465 F.Supp.2d 901, 902 n.2 (D. Minn. 2006) (citing Silver v. H&R Block, Inc., 105 F.3d 394, 397 (8th Cir. 1997)).

         I. Tortious Interference with Contract (Count III)

         TGW contends that Count III is barred by the 2-year statute of limitations governing any of the potentially applicable state laws. RG counters that, unlike the other state laws, Minnesota has a 6-year statute of limitations that applies to this claim. As Minnesota law is the appropriate law to apply, RG argues, the tortious-interference claim is not time-barred under the 6-year statute of limitations.

         Under Minnesota's choice-of-law principles, in the absence of a controlling choice-of-law provision, [3] courts determine “whether the choice of one state's law over another creates an actual conflict.” Fla. State Bd. of Admin., 262 F.Supp.2d at 1010-11. If a conflict does not exist, the court need not continue the choice-of-law analysis. Id. at 1011.

         Minnesota has a 6-year statute of limitations for contract disputes, Minn. Stat. § 541.05, and a 2-year statute of limitations that applies to claims for “libel, slander, assault, battery, false imprisonment, or other tort resulting in personal injury, ” id. § 541.07(1). The “other tort” category can include “wrongful interference with business relationships by means of defamation, misrepresentation, and intentional infliction of emotional distress.” Larson v. New Richland Care Ctr., 538 N.W.2d 915, 920 (Minn.Ct.App. 1995) (overruled on other grounds); accord ...


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