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Young v. Affliction Holdings, LLC

United States District Court, S.D. West Virginia, Beckley Division

May 24, 2017

THOMAS GARY YOUNG II, individually and dba Afflicted of WV LLC, Plaintiff,
v.
AFFLICTION HOLDINGS, LLC, and THE BUCKLE, INC., Defendants.

          MEMORANDUM OPINION AND ORDER

          IRENE C. BERGER UNITED STATES DISTRICT JUDGE

         The Court has reviewed the Defendants' Motion to Dismiss Amended Complaint (Document 16) and Memorandum of Law in Support (Document 17), the Plaintiff's Response in Opposition to Defendants' Motion to Dismiss Amended Complaint (Document 18), and the Defendants' Reply to Plaintiff's Response in Opposition to Defendants' Motion to Dismiss Amended Complaint (Document 19), as well as the Plaintiff's Amended Complaint (Document 12) and all attached exhibits. For the reasons stated herein, the Court finds that the motion to dismiss should be granted.

         FACTUAL ALLEGATIONS AND PROCEDURAL HISTORY

         The Plaintiff, Thomas Gary Young II, initiated this action by filing his complaint in the Circuit Court of Raleigh County, West Virginia, on July 21, 2016. Mr. Young named Affliction Holdings LLC (“Affliction”) and The Buckle, Inc. (“Buckle”) as defendants. The Defendants removed the matter to this Court on November 23, 2016, citing diversity jurisdiction. On January 19, 2017, the Plaintiff filed an amended complaint, filing as Thomas Gary Young II, individually, and doing business as Afflicted of WV, LLC.

         The amended complaint alleges that in or around October of 2013, Thomas Gary Young II, doing business as Afflicted of WV LLC, entered into a contract with the Defendant Affliction to sell Affliction's merchandise from his retail store in Beckley, West Virginia. Affliction is a clothing manufacturer and retailer based in Seal Beach, California. The Plaintiff's alleged contract with Affliction granted his store the “exclusive rights” to sell Affliction's clothing within a fifty-mile radius of his retail store in Beckley. (Pl.'s Compl. at ¶ 8.) Based on this contract, the Plaintiff purchased forty-seven thousand dollars' worth of merchandise from Affliction between November 2013 and February 2014. On February 14, 2014, the Plaintiff opened his retail store, at which time the Plaintiff alleges that Affliction forced other retail stores in the Beckley area to cease the selling of Affliction merchandise. However, on April 15, 2015, the Defendant Buckle opened a retail store in the Crossroads Mall located in Beckley, West Virginia. Buckle is a fashion retailer based in Kearney, Nebraska, that maintains and operates over 450 stores in 44 states nationwide. Upon opening its retail store in Crossroads Mall, Buckle also began to sell Affliction's merchandise within the same territory as the Plaintiff in violation of the alleged contract between the Plaintiff and Affliction.

         Count I of the amended complaint alleges a breach of contract between the Plaintiff and Affliction. Count II alleges Affliction was unjustly enriched by its failure to honor the contract with the Plaintiff. Count III asserts a claim of promissory estoppel against Affliction for its failure to abide by the contract. Count IV claims tortious interference with business relations against both of the Defendants, and Count V asserts a claim of intentional damage to the Plaintiff's business reputation. Count VI alleges that Affliction took part in fraudulent inducement, Count VII asserts a claim of civil conspiracy, and Count VIII seeks a declaratory judgment in the Plaintiff's favor.

         The Defendants filed their joint motion to dismiss the amended complaint on February 2, 2017. The Plaintiff responded on February 14, 2017, and the Defendants replied on February 21, 2017. The motion is fully briefed and ripe for review.

         STANDARD OF REVIEW

         A motion to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of a complaint. Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009); Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). “[T]he legal sufficiency of a complaint is measured by whether it meets the standard stated in Rule 8 [of the Federal Rules of Civil Procedure] (providing general rules of pleading) . . . and Rule 12(b)(6) (requiring that a complaint state a claim upon which relief can be granted.)” Id. Federal Rule of Civil Procedure 8(a)(2) requires that a pleading must 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 reviewing a motion to dismiss under Rule 12(b)(6) for failure to state a claim, the Court must “accept as true all of the factual allegations contained in the complaint.” Erikson v. Pardus, 551 U.S. 89, 93 (2007). The Court must also “draw[ ] all reasonable factual inferences from those facts in the plaintiff's favor.” Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999). However, statements of bare legal conclusions “are not entitled to the assumption of truth” and are insufficient to state a claim. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). Furthermore, the Court need not “accept as true unwarranted inferences, unreasonable conclusions, or arguments.” E. Shore Mkts., v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice… [because courts] ‘are not bound to accept as true a legal conclusion couched as a factual allegation.'” Iqbal, 556 U.S. at 678 (quoting Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

         To survive a motion to dismiss, “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.) In other words, this “plausibility standard requires a plaintiff to demonstrate more than ‘a sheer possibility that a defendant has acted unlawfully.'” Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (quoting Twombly, 550 U.S. at 570.) In the complaint, a plaintiff must “articulate facts, when accepted as true, that ‘show' that the plaintiff has stated a claim entitling him to relief.” Francis, 588 F.3d at 193 (quoting Twombly, 550 U.S. at 557.) “Determining whether a complaint states [on its face] a plausible claim for relief [which can survive a motion to dismiss] will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679.

         DISCUSSION

         The Defendants argue that the Plaintiff's complaint should fail in its entirety. The Defendants assert that each claim of the Plaintiff's complaint is based on the existence of an alleged contract between the Plaintiff and the Defendants, and that the Plaintiff has failed to allege that such a contract was formed. Because the Plaintiff has failed to sufficiently allege that a contract was formed, the Defendants assert that the entire complaint should be dismissed. Moreover, regardless of the existence of a contract between the Plaintiff and Affliction, the Defendants argue that the Plaintiff's amended complaint should be dismissed because he does not have standing to bring suit as an individual or doing business as Afflicted of WV LLC. The Defendants contend that Mr. Young does not have standing individually because any harm that did arise from the alleged breach of contract would have been an injury suffered by the business entity rather than Mr. Young. The Defendants further claim that Afflicted of WV LLC does not have standing as a business entity because it was administratively terminated by the West Virginia Secretary of State, thereby eliminating its ability to bring suit. The Plaintiff did not address the standing argument in his response in opposition to the motion to dismiss.

         The Court finds Mr. Young does not have standing to sue, under these facts, in his individual capacity. The Supreme Court of the United States has established a three-part test used to determine whether a party has standing to sue: (1) the plaintiff must have suffered “an injury in fact” which is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical;” (2) there must be a “causal connection” between the plaintiff's injury and the conduct alleged in the complaint; and (3) it must be “likely, as ...


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