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Salty Fin Holdings, LLC v. Salty Fin International, LLC

United States District Court, D. South Carolina, Columbia Division

March 2, 2017

SALTY FIN HOLDINGS, LLC and MICHAEL A. LETTS, Plaintiffs,
v.
SALTY FIN INTERNATIONAL, LLC, THE SALTY FIN REAL ESTATE COMPANY, LLC, SALTY FIN REALTY, LLC, SALTY FIN, LLC, SALTY FIN HOLDINGS & REALTY, LLC, and STACY AGRAN, Defendants.

          MEMORANDUM OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS

          MARY GEIGER LEWIS UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         This is an action for trade dress infringement and false designation of origin under 15 U.S.C. § 1125(a) and related claims arising under state law. The Court has jurisdiction over this matter under 28 U.S.C. §§ 1331 and 1367.

         Pending before the Court is Defendants' Motion to Dismiss brought under Rule 12(b)(6) of the Federal Rules of Civil Procedure. ECF No. 31. Having carefully considered the motion, the response, the reply, the record, and the applicable law, it is the judgment of the Court Defendants' Motion to Dismiss will be granted in part and denied in part. The Court will grant the portion of the Motion to Dismiss requesting the Court dismiss the claims asserted by Plaintiff Michael A. Letts (Letts), and the Court will deny the remainder of the Motion to Dismiss.

         II. FACTUAL AND PROCEDURAL HISTORY

         Plaintiffs filed their initial complaint in the Court of Common Pleas for Richland County, South Carolina, on April 27, 2016. ECF No. 1-1. Defendants filed a notice of removal on June 3, 2016, and removed the case to this Court. ECF No. 1.

         Defendants filed a motion to dismiss the initial complaint under Rule 12(b)(6) on June 10, 2016. ECF No. 9. In Plaintiffs' response to the motion, they requested leave to amend the complaint. ECF No. 17. On November 21, 2016, the Court entered a text order granting Plaintiffs leave to amend the complaint and dismissing without prejudice Defendants' motion to dismiss the initial complaint. ECF No. 24.

         Plaintiffs filed an amended complaint on December 2, 2016. ECF No. 25. Plaintiffs subsequently filed two additional amended complaints to correct clerical errors. ECF Nos. 26, 28. The operative complaint was filed on December 7, 2016 (Complaint). ECF No. 28.

         The Complaint asserts claims for common law trademark infringement, trade dress infringement and false designation of origin under 15 U.S.C. § 1125(a)(1)(A), breach of fiduciary duty, unjust enrichment, breach of contract, violation of the South Carolina Trade Secrets Act, violation of the South Carolina Unfair Trade Practices Act, fraud, negligence/gross negligence, civil conspiracy, and constructive fraud. Id. The claims are all asserted against Defendants collectively and arise out of Defendants' alleged misappropriation of Plaintiffs' trademark, trade dress, and trade secrets and the business relations between Plaintiffs and Defendants. See id.

         Defendants filed the Motion to Dismiss currently before the Court on December 21, 2016. ECF No. 31. Plaintiffs responded on January 26, 2017, ECF No. 34, and Defendants filed a reply on February 2, 2017, ECF No. 35. Having been fully briefed on the relevant issues, the Court is now prepared to discuss the merits of Defendants' Motion to Dismiss.

         III. STANDARD OF REVIEW

         “The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint.” Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). To survive a motion to dismiss, the Federal Rules of Civil Procedure require a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b).

         Although Rule 8(a) does not require “‘detailed factual allegations, '” it requires “more than an unadorned, the-defendant-unlawfully-harmed-me accusation, ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)), to “‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests, '” Twombly, 550 U.S. at 555 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). In other words, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556).

         In considering a motion to dismiss, a plaintiff's well-pled allegations are taken as true, and the complaint and all reasonable inferences are liberally construed in the plaintiff's favor. MylanLabs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). The Court may consider only the facts alleged in the complaint, which may include any documents either attached to or incorporated in the complaint, and matters of which the Court may take judicial notice. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). Although the Court must accept the plaintiff's factual allegations as true, any conclusory allegations are unentitled to an assumption of truth, and even those allegations pled with factual support need be accepted only to the extent “they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at ...


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