Summary
finding that the plaintiff's causes of action, including breach of contract and tortious interference, were "clearly within the province of a jury"
Summary of this case from In re HarveyOpinion
Civil Action No. SA-04-CA-0819-XR.
April 26, 2005
ORDER
On this date, the Court considered Defendant's Partial Motion to Dismiss (docket no. 5) and Motion to Transfer Venue (docket no. 6). Plaintiff has sued under various causes of actions in relation to a contract dispute. Defendant seeks transfer to the District of New Jersey. As no factor weighs heavily in favor of a transfer, and as Plaintiff has validly chosen this Court, its home forum, as its preferred forum, Defendant's motion to transfer venue is DENIED. Defendant also seeks dismissal of Plaintiff's claims for tortious interference, breach of fiduciary duty, unfair competition, and fraud. Defendant's motion is GRANTED in part and DENIED in part. Plaintiff's breach of fiduciary duty claim is DISMISSED. Plaintiff's other claims remain pending.
I. Factual and Procedural Background
According to Plaintiff's Amended Complaint, Plaintiff is in the business of procuring and distributing human bone and related connective soft tissue for transplantation. Defendant is in the business of providing high quality tissue processing services to entities engaged in the procuring and/or distributing of such tissue. Plaintiff alleges that Defendant represented that it exclusively provided processing services and did provide procurement or distribution services in competition with Plaintiff. Plaintiff and Defendant entered into an agreement on June 1, 2000 in which Defendant agreed to provide tissue processing services to Plaintiff. In the agreement, Defendant agreed to be liable for losses due to its negligence.
Plaintiff alleges that Defendant lost power in one of its tissue processing facilities in Eatontown, New Jersey in August 2002. According to Plaintiff, due to Defendant's negligence, tissue held by Defendant became potentially contaminated and had to be quarantined. Plaintiff further alleges that another of Defendant's processing facilities (in Shrewsbury, New Jersey) became contaminated due to Defendant's negligence. Plaintiff alleges that 70 "donors" provided by Plaintiff to Defendant were contaminated, but that Defendant has not compensated Plaintiff for this loss.
In addition, Plaintiff alleges that Defendant entered into competition with Plaintiff after the agreement was entered into. Plaintiff asserts that this was contrary to Defendant's representations. According to Plaintiff, Defendant acted contrary to the terms of the agreement after entering into competition with Plaintiff and consistently acted to the detriment of Plaintiff's business interests. As an example, Plaintiff alleges that Defendant has kept certain donors of tissue in its facilities for years without processing. Plaintiff asserts that Defendant has procured and distributed the same products that Plaintiff has attempted to have processed through Defendant. According to the agreement, Defendant must use its best efforts to maximize the yield from processed tissue. Plaintiff states that Defendant's actions have been in violation of the agreement and have given rise to a number of tortious causes of actions.
Plaintiff filed his federal Original Complaint on September 9, 2004, basing jurisdiction on diversity. Plaintiff filed his Amended Complaint on December 8, 2004. In the Amended Complaint, Plaintiff has put forth eight causes of actions. Count I alleges a breach of contract; Count II alleges tortious interference with existing contract; Count III alleges tortious interference with prospective business relationships; Count IV alleges negligence; Count V alleges breach of fiduciary duty; Count VI alleges unfair competition; Count VII alleges fraud; and Count VIII alleges federal unfair competition under 15 U.S.C. § 1125. Defendant has now moved for dismissal on Counts II, III, V, VI, VII, and VIII. Defendant has also moved for transfer of venue under 28 U.S.C. § 1404(a).
II. Analysis
A. Choice of Law
The parties generally submit that a choice of law analysis is not necessary at this point. They suggest that there is not conflict between the laws of Texas and New Jersey as applicable to Defendant's partial motion to dismiss. "A federal court considering a diversity case that implicates choice of laws must determine which state's law applies by following the choice of law rules of the forum state." Marchesani v. Pellerin-Milnor Corp., 269 F.3d 481, 485 (5th Cir. 2001). Despite the parties' reluctance at this point to conduct an extensive choice of law analysis, resolution of the pending motions depends somewhat on what law applies to each of Plaintiff's claims.
The parties differ somewhat in how they address the choice of law issue. Defendant argues that Texas and New Jersey law are not in conflict, but that if there are conflicts, New Jersey law should apply to all claims. Plaintiff argues that Texas and New Jersey law are not in conflict, but that if there are conflicts, Plaintiff does not agree New Jersey law applies. Defendant's citations are primarily to New Jersey law, while Plaintiff's citations are primarily to Texas law.
The agreement at issue between the parties contains a choice of law provision. Paragraph 14 (Applicable Law) states "[t]his Agreement shall be construed in accordance with the laws of the State of New Jersey, without giving effect to any conflict of laws principles." (Emphasis added). Accordingly, all of Plaintiff's claims requiring the Court to "construe" the agreement are governed by New Jersey law. Plaintiff's contract claims thus fall within this choice of law provision. Not all of Plaintiff's claims can be said to fall within the category of a contract claim, however. Plaintiff has sued not only for breach of contract, but tortious interference with existing and prospective contracts, negligence, breach of fiduciary duty, unfair competition, and fraud. The claims other than breach of contract initially appear to sound in tort. The Fifth Circuit has tended to read choice of law provisions such as that in the agreement at issue very narrowly. In Benchmark Electronics, Inc. v. J.M. Huber Corp., 343 F.3d 719, 726-27 (5th Cir. 2003), the Fifth Circuit held that a choice of law provision that stated the "Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York" did not necessitate applying New York law to tort claims of negligent misrepresentation and fraud. See also Canton v. Leach Corp., 896 F.2d 939, 942-43 (5th Cir. 1990) (holding the same in interpreting a choice of law provision to be "construed" under foreign law). As to each of Plaintiff's claims, the Court finds that the choice of law provision in the agreement must be read narrowly and does not apply to Plaintiff's claims sounding in tort.
Whether the choice of law provision applies to any of Plaintiff's claims other than the breach of contract claim depends upon whether the Court finds that any of those claims sound in contract. In Benchmark Electronics, the Fifth Circuit held that a fraud cause of action sounded in tort under a contractual choice of law provision nearly identical to the one at issue. Somewhat in contrast, the Texas Supreme Court has recently held that whether a contract was induced by fraud is a dispute "involving" the agreement. In re J.D. Edwards World Solutions Co., 87 S.W.3d 546, 550-51 (Tex. 2002). The contractual provision at issue in J.D. Edwards, however, involved a contractual provision with materially different language. The language at issue in J.D. Edwards required arbitration of disputes "involving" the contract. Id. In this case, like in Benchmark Electronics, the contractual provision contains the term "construed." This term has traditionally been given a limited reading and is not generally considered to encompass causes of actions such as fraud. All of Plaintiff's claims, other than breach of contract, sound in tort. Consequently, the contractual choice of law provision applies only to the Plaintiff's breach of contract claim.
As to Plaintiff's tort claims, where the parties have not agreed to the application of law to a particular issue, "the law of the state with the most significant relationship to the particular substantive issue will be applied to resolve that issue." Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 421 (Tex. 1984); Mitchell v. Lone Star Ammunition, Inc., 913 F.2d 242, 249 (5th Cir. 1990) (noting that Texas has adopted the "most significant relationship" test in tort cases). In determining which state law applies, the Court must consider: (1) the place where the injury occurred; (2) the place where the conduct causing the injury occurred; and (3) the place where the relationship between the parties is centered. Gutierrez v. Collins, 583 S.W.2d 312, 319 (Tex. 1979) (citing Restatement (Second) Conflict of Laws § 145 (1971)). The domicile, residence, nationality, place of incorporation, and place of business of the parties are also relevant considerations. Maxus Exploration Co. v. Moran Brothers, Inc., 817 S.W.2d 50, 53 (Tex. 1991) (citing Restatement (Second) Conflicts of Law § 188 (1971)). The selection of applicable law depends on the qualitative nature of the contacts. See Mitchell, 913 F.2d at 249.
In the present case, Plaintiff is a Texas limited partnership with its principal place of business in Texas. Defendant, on the other hand, is a Delaware corporation with its principal place of business in New Jersey. The torts of tortious interference with existing and prospective contracts, negligence, and unfair competition all clearly arise from conduct that took place in New Jersey. According to Plaintiff's Amended Complaint, Defendant engaged in these torts through actions of procuring and distributing tissue through its facilities in New Jersey. Where all or a great majority of the actions that give rise to the tortious claim took place in one state, that state's law will typically apply, even though the effects of the activity may have been felt in Texas. State Nat. Bank v. Academia, Inc., 802 S.W.2d 282, 291 (Tex.App.-Corpus Christi 1990, writ denied) (holding a tortious interference claim was governed by foreign state's laws where all the defendant's actions took place in the foreign state, even though the effects were also felt in Texas). In addition, the place where the relationship between the parties is centered weighs in favor of New Jersey, as the majority of the contacts between the parties occurred in New Jersey. Although Plaintiff argues that the effects of Defendant's actions have had a great impact on Plaintiff's business in Texas, this is not enough to weigh in favor of applying Texas law. The Court therefore finds that New Jersey law applies to Plaintiff's claims for tortious interference, negligence, and unfair competition. Plaintiff's other claims for breach of fiduciary duty and fraud are less clear, but are also covered by New Jersey law. These tort claims relate much more to the construction of the contract than the other claims. There is no indication that any of these claims have any relation to activities that took place in Texas. Plaintiff has not alleged that the contract was negotiated or entered into in Texas. The fact that the contract contains a choice of law provision referencing New Jersey suggests that the contract was centered around New Jersey. Accordingly, the Court finds that the relationship between the parties centered around New Jersey and the conduct giving rise to a claim for fraud and breach of fiduciary duty occurred in New Jersey. The Court therefore finds that New Jersey law applies to those tortious claims, as it does to all of Plaintiff's claims.
B. Motion to Transfer
Defendant has moved to have this case transferred to the United States District Court for the District of New Jersey. Defendant argues that all of the operative facts in this case took place in New Jersey, that New Jersey law applies, and that the majority of the witnesses reside in New Jersey. Defendant argues, therefore, that this case should be transferred for the convenience of the parties and witnesses and in the interests of justice. Plaintiff disagrees, arguing that a significant number of witnesses reside in Texas, that Plaintiff's tortious claims are connected, at least in part, to Texas, and that Texas, as Plaintiff's home state, should be respected as Plaintiff's forum choice.
The party asserting a motion to transfer, here Defendant, bears the burden of demonstrating to the Court that it should transfer the case. Peteet v. Dow Chem. Co., 868 F.2d 1428, 1436 (5th Cir. 1989). In making a determination of whether a motion to transfer venue is proper the first consideration is whether the potential transferee forum would be a forum in which the claim could have originally been filed. In re Volkswagon AG, 371 F.3d 201, 203 (5th Cir. 2004). Both parties agree that suit could have been originally filed in the District of New Jersey. Second, the Court should turn to the language of the transfer statute, 28 U.S.C. § 1404(a). Section 1404(a) speaks to "the convenience of parties and witnesses" and "in the interest of justice." The determination of "convenience" focuses on private and public interest factors, none of which are given dispositive weight. In re Volkswagon, 371 F.3d at 203 (citing Action Indus., Inc. v. U.S. Fidelity Guar. Co., 358 F.3d 337, 340 (5th Cir. 2004)). The private concerns include: (1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make trial of a case easy, expeditious and inexpensive. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n. 6 (1981)). The public concerns include: (1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflict of laws of the application of foreign law. Id. In addition, Plaintiff's choice of forum is a factor to be considered, but is neither determinative nor conclusive. In re Horseshoe Entertainment, 337 F.3d 429, 434 (5th Cir. 2004). The choice of forum is generally entitled to greater deference when Plaintiff's home forum has been chosen. Reyno, 454 U.S. at 256 (citing Koster v. (Am.) Lumbermens Mut. Cas. Co., 330 U.S. 518, 523 (1947)).
In this case, the private and public concerns seem to be relatively equal. As to the private concerns, it appears that there may be a number of witnesses who reside in each state. The witnesses who reside in New Jersey will primarily be employed by Defendant, however, a consideration that will typically be entitled to less weight. See Lemery v. Ford Motor Co., 244 F. Supp.2d 720, 731 (S.D. Tex. 2002). Plaintiff has put forward a number of Texas witnesses that would be necessary regarding proof of the tort claims. Plaintiff points to the fact that 65% of its end-users reside in Texas, and that witnesses from these entities will likely be necessary to prove such claims as tortious interference with existing contract, tortious interference with prospective business, and unfair competition. In addition, there does not appear to be any relative difficulty in obtaining access to evidence, as Plaintiff's counsel has established a willingness to travel to Defendant's facilities in New Jersey. The fact that the Court has found New Jersey law should apply to all of Plaintiff's claims weighs in favor of transfer.
As to the public concerns, this Court is not entirely familiar with the law of New Jersey, but notes that the parties are in agreement that there is generally no conflict between the laws of New Jersey and Texas as to Plaintiff's claims. There is also local interest in determining many of Plaintiff's claims, as some of these claims relate to Plaintiff's relationships with local end-users. Finally, the fact that the Western District of Texas is Plaintiff's home forum is a consideration that weighs in favor of retaining venue in this Court. The Court therefore finds that Defendant has not met its burden to demonstrate that transfer to the District of New Jersey would be to the convenience of the parties and witnesses and in the interests of justice. Defendant's motion to transfer is DENIED.
C. Motion to Dismiss
Defendant has moved for dismissal of all of Plaintiff's claims other than breach of contract and negligence. In considering a motion to dismiss, the Court must accept all well-pleaded facts as true and view them in the light most favorable to the plaintiff. Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). The issue is not whether the plaintiff will prevail but whether the plaintiff is entitled to pursue its complaint and offer evidence in support of its claims. Doe v. Hillsboro Indep. Sch. Dist., 81 F.3d 1395, 1401 (5th Cir. 1996). The Court may not look beyond the pleadings in ruling on the motion. Baker, 75 F.3d at 196. Motions to dismiss are disfavored and are rarely granted. Beanal v. Freeport-McMoran, Inc., 197 F.3d 161, 164 (5th Cir. 1999). Dismissal should not be granted "`unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle his claim to relief.'" Id. at 164 (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). However, the Court does not accept conclusory allegations or unwarranted deductions of fact as true. Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1067 (5th Cir. 1994).
Defendant seems to confuse the standard for a motion to dismiss with a motion for summary judgment, which requires a quantum of evidence. Defendant oftentimes references the point that Plaintiff has not "established" a certain fact, or that "there is no evidence" of a certain fact. Under a motion to dismiss, however, the Court must accept all well-pleaded facts as true and view them in the light most favorable to the plaintiff. Baker, 75 F.3d at 196. Plaintiff is not required to establish facts with evidence. In fact, at a motion to dismiss stage, establishing facts with evidence is rarely possible, as discovery has not taken place and the Court may not consider matters outside the pleadings. FED. R. CIV. P. 12. Defendant has not attached any evidence outside the pleadings in an effort to convert this motion to a summary judgment motion. Accordingly, the Court accepts all Plaintiff's well-pleaded facts as true.
1. Tortious Interference
Plaintiff has filed separate claims for tortious interference with existing contract and tortious interference with prospective business relationships. "There is no question that New Jersey law protects both contracts and prospective business relationships from tortious interference." Van Natta Mech. Corp. v. Di Staulo, 649 A.2d 399, 403 (N.J.Sup.Ct. App. Div. 1994). A tortious interference with contract or with prospective business relationships claim can be waged only against a third-party who is not a party to the contractual or economic relationship at issue. Silvestre v. Bell Atlantic Corp., 973 F. Supp. 475, 486 (D.N.J. 1997). To properly state a claim for tortious interference with contract, Plaintiff must allege (1) the existence of the contract; (2) interference which was intentional and with malice; (3) the loss of the contract or prospective gain as a result of the interference; and (4) damages. Printing Mart-Morristown v. Sharp Elec., 563 A.2d 31, 37 (N.J. 1989). The New Jersey Supreme Court in Sharp Elec. emphasized that malice in this context does not mean "ill will toward" the victim but rather "that the harm was inflicted intentionally and without justification or excuse." Id. On the issue of causation, Plaintiff need only allege that had there been no interference, there was "a reasonable probability that the victim of the interference would have received the anticipated economic benefits." Id. (quotation omitted). Plaintiff's Amended Complaint is somewhat vague and does not allege any specific contract that has been interfered with. However, Plaintiff has alleged that it is in the business of procuring donor tissue from donor sources and distributing tissue to end-users and that Defendant "willfully and intentionally" interfered with these third-party contracts to Plaintiff's detriment. At this point, this allegation is sufficient to state a claim for tortious interference with contract.
To state a claim for tortious interference with prospective business relationships, Plaintiff must allege that (1) there was reasonable expectation of economic advantage; (2) Defendant's actions were malicious in the sense that the harm was inflicted intentionally and without justification or excuse; (3) such interference caused the loss of the prospective gain or there was a reasonable probability that Plaintiff would have obtained the anticipated economic benefit; and (4) the injury caused Plaintiff damage. Sharp Elecs, 563 A.2d at 37. The protected interest required to establish a cause of action for tortious interference with a prospective economic advantage need not rise to the level of an enforceable contract. Patel v. Soriano, 848 A.2d 803, 831 (N.J.Super.Ct. App. Div. 2004). Instead, Plaintiff must demonstrate that without the interference, there was a reasonable probability that he would have received the anticipated economic benefits. Id. at 832. Where a plaintiff's loss of business is merely the incident of healthy competition, there is no tortious conduct. Ideal Dairy Farms, Inc. v. Farmland Dairy Farms, Inc., 659 A.2d 904, 933 (N.J.Super.Ct. App. Div. 1995). The conduct must be both "injurious and transgressive of generally accepted standards of common morality or of law." Harper-Lawrence, Inc. v. United Merchants and Mfrs., Inc., 619 A.2d 623, 630 (N.J.Super.Ct. App. Div.), certif. denied, 134 N.J. 478, 634 A.2d 525 (1993). "The line clearly is drawn at conduct that is fraudulent, dishonest, or illegal and thereby interferes with a competitor's economic advantage." Lamorte Burns Co., Inc. v. Walters, 770 A.2d 1158, 1171 (N.J. 2001) (citing Ideal Dairy Farms, Inc., 659 A.2d at 936). Again, Plaintiff has not specifically pointed to any prospective business relationship that may have been interfered with by Defendant's actions. Plaintiff does allege that Defendant used its position as Plaintiff's exclusive processing facility to delay processing of Plaintiff's products and to gain insight into Plaintiff's existing and prospective donor and end-user customers. Plaintiff alleges that Defendant used this knowledge to enter the market place and take business that in all reasonably probability would have gone to Plaintiff. These allegations are sufficient to state a claim for tortious interference with prospective business relationships.
2. Breach of Fiduciary Duty
Plaintiff asserts that there is a fiduciary relationship between the parties. Under New Jersey law, "[t]he essence of a fiduciary relationship is that one party places trust and confidence in another who is in a dominant or superior position." F.G. v. MacDonell, 696 A.2d 697, 703-04 (N.J. 1997). "Traditional fiduciary relationships include those between trustee and beneficiary, guardian and ward, agent and principal, attorney and client, corporate director and shareholder, and the members of a partnership." Avon Bros., Inc. v. Tom Martin Const. Co., Inc., No. A-740-99T1, 2000 WL 34241102, at *4 (N.J.Super.Ct. App. Div. Aug. 30, 2000) (citing 1 Scott on Trusts § 2.5 (3d ed. 1967)). "The existence of a fiduciary duty is `not dependent solely on an agreement or contractual relation between the fiduciary and the beneficiary but results from the relation.'" Id. (quoting Restatement (Second) Torts § 874, comment b (1979)). In general, a contractual relationship is not such a traditional fiduciary relationship. Nor does there appear to be any reason to infer such a relationship. See, e.g., United Jersey Bank v. Kensey, 704 A.2d 38, 44 (N.J.Super.Ct. App. Div. 1997), certif. denied, 709 A.2d 795 (N.J. 1998) (noting that where the parties' relationship is "essentially adversarial," the "general presumption" is one of an arms' length transaction).
Plaintiff argues that there is a confidential or special relationship between the parties based on relative size and position in the industry and unequal bargaining power. Duties may be imposed on manufacturers and suppliers independent of contract, such as the duty to use reasonable care not to place defective products in the market. See Saitel v. GSI Consultants, Inc., 788 A.2d 268, 277 (N.J. 2002) (citing Flintkoe Co. v. Dravo Corp., 678 F.2d 942, 946 (11th Cir. 1982)). In addition, it appears to be possible under New Jersey law to establish a fiduciary relationship between parties to a contract where the terms of the contract or the conduct of the parties in executing the contract establish one party's superior power, knowledge or control over the terms. See Avon Bros., 2000 WL 34241102, at *5 (citing H.G. Davis v. W.C. Carpenter, 274 S.E.2d 567 (Ga. 1981)). Plaintiff has not alleged facts sufficient to state a claim under this standard, however. The entirety of Plaintiff's factual allegations would establish that Plaintiff has been engaged in business for many years and is experienced in the procurement and distribution of human bone and tissue. Plaintiff's argument that it was not in an equal bargaining position due to the disparity in size between the parties is not availing. An arms' length transaction such as this does not establish a fiduciary relationship. Therefore, Plaintiff's claim for breach of fiduciary duty is DISMISSED.
3. Fraud
Defendant claims that Plaintiff's claim for fraud does not meet the specificity requirement of FED. R. CIV. P. 9(b). "[A]rticulating the elements of fraud with particularity requires a plaintiff to specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent." ABC Arbitrage Plaintiffs Group v. Tchuruk, 291 F.3d 336, 349 (5th Cir. 2002). In other words, a party is required to set forth the "who, what, when, where, and how" of the alleged fraud. United States ex rel. John Doe v. Dow Chemical, 343 F.3d 325, 328 (5th Cir. 2003) (internal citations omitted). Even if the Court finds that Plaintiff has failed to meet the particularity requirements of pleading its fraud claim, amendment, rather than dismissal is the proper remedy. Hart v. Bayer Corp., 199 F.3d 239, 248 (5th Cir. 2000) ("Although a court may dismiss the claim, it should not do so without granting leave to amend, unless the defect is simply incurable or the plaintiff has failed to plead with particularity after being afforded repeated opportunities to do so.").
Plaintiff argues that it has sufficiently met the requirements of Rule 9(b) and that after discovery, it will be able to point directly to persons who made fraudulent statements. Plaintiff asserts that employees of Defendant made fraudulent statements during the negotiations of the agreement at issue to the effect that Defendant's business centered solely on the processing of human bone and tissue, and that based on these statements, Plaintiff entered into an exclusive processing agreement. Plaintiff asserts that these statements were false. The allegations in Plaintiff's Amended Complaint are sufficient to meet the heightened pleading requirements of Rule 9(b).
4. Unfair Competition
Plaintiff has alleged a general claim of "unfair competition," as well as a claim for "unfair competition" under the Lanham Act, 15 U.S.C. § 1125. The New Jersey Supreme Court has recently upheld a judgment against a defendant for a number of tort claims, including "unfair competition." LaMorte Burns, 770 A.2d at 1172. The New Jersey Supreme Court held that actions by the defendant involving the "taking of plaintiff's confidential and proprietary property and then using it effectively to target plaintiff's clients" supported claims for claims for breach of loyalty, tortious interference with an economic advantage, misappropriation, and unfair competition. Id. In this action, Plaintiff alleges that Defendant used proprietary information gained from the processing of Plaintiff's products to enter the marketplace and compete for business. A finding in favor of Plaintiff on either of its tortious interference claims would support a claim for unfair competition under LaMorte Burns. At this point, Plaintiff's allegations are sufficient to state a claim for unfair competition.
As to Plaintiff's federal Lanham Act "unfair competition" claim, Plaintiff asserts that Defendant is making disparaging misrepresentations about the character and quality of Plaintiff's products to Plaintiff's existing and prospective customers. Under 28 U.S.C. § 1125(a), false or misleading commercial speech is actionable under the commonly referred term of "product disparagement" or "commercial defamation." See Procter Gamble Co. v. Amway Corp., 242 F.3d 539, 547 n. 13 (5th Cir. 2001); U.S. Healthcare, Inc. v. Blue Cross of Greater Philadelphia, 898 F.2d 914, 921 (3rd Cir. 1990) (citing 2 J. McCARTHY, TRADEMARKS UNFAIR COMPETITION, § 27:7B (2d ed. 1984)). If a speaker has an economic motivation for publishing misrepresentations, such an act may be a Lanham Act violation. Proctor Gamble, 242 F.3d at 552. Plaintiff's allegations of Defendant's conduct is sufficient to state a claim under § 1125(a).
IV. Conclusion
Plaintiff has filed claims against Defendant for actions arising out of a processing agreement between the parties. Plaintiff, a distributor of human bone and soft tissue, entered into an agreement to grant Defendant the exclusive right to process Plaintiff's products. Plaintiff asserts that Defendant represented that it was exclusively in the business of processing human bone and soft tissue, and was not in the business of procurement or distribution. According to Plaintiff, after entering into this agreement, Defendant used information gained through its association with Plaintiff to enter into the market as a distributor. Plaintiff has sued Defendant for breach of contract, tortious interference with existing contract and prospective business relationships, negligence, fraud, breach of fiduciary duty, and unfair competition. Defendant has moved for partial dismissal of all claims except for breach of contract and negligence. Defendant has also moved for transfer to the District of New Jersey. The Court finds that New Jersey law should apply to all of Plaintiff's state law claims. Defendant's motion to transfer venue is DENIED (docket no. 6). Consideration of the private or public interest considerations do not weigh in favor of transfer, and as Plaintiff has chosen to sue in its home forum, the Court finds that Defendant has not its burden in demonstrating transfer would be in the convenience of the parties and witnesses and in the interests of justice. Defendant's partial motion to dismiss is GRANTED in part and DENIED in part (docket no. 5). Plaintiff's claim for breach of fiduciary duty (Count V of Plaintiff's Amended Complaint) is DISMISSED, as Plaintiff has not alleged a valid fiduciary relationship between the parties. Plaintiff's claims other than breach of fiduciary duty remain pending.