Springboards to Education Inc v. Kipp Foundation

Brief/Memorandum in Support

N.D. Tex.February 14, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION SPRINGBOARDS TO EDUCATION, INC., Plaintiff, v. KIPP FOUNDATION; KIPP, INC.; and KIPP TEXAS SCHOOLS, Defendants. § § § § § § § § § § CIVIL ACTION NO. 3:16-cv002436-G DEFENDANT KIPP FOUNDATION’S BRIEF IN SUPPORT OF ITS PARTIAL MOTION TO DISMISS UNDER RULE 12(b)(6), OR ALTERNATIVELY, RULE 12(e) MOTION FOR MORE DEFINITE STATEMENT Barry A. Moscowitz Texas Bar No. 24004830 E-mail: bmoscowitz@thompsoncoe.com Chantel L. Lee Texas Bar No. 24081001 E-mail: clee@thompsoncoe.com THOMPSON, COE, COUSINS & IRONS, L.L.P. Plaza of the Americas 700 N. Pearl Street, Twenty-Fifth Floor Dallas, Texas 75201-2832 Telephone: (214) 871-8200 Facsimile: (214) 871-8209 ATTORNEYS FOR DEFENDANT KIPP FOUNDATION Case 3:16-cv-02436-G Document 33 Filed 02/14/17 Page 1 of 11 PageID 275 TABLE OF CONTENTS Table of Contents ............................................................................................................................. i Table of Authorities ........................................................................................................................ ii I. INTRODUCTION .................................................................................................................... 1 II. RULE 12(B)(6) MOTION TO DISMISS PLAINTIFF’S CONSPIRACY CLAIM AGAINST THE FOUNDATION ............................................................................................. 2 A. The Legal Standard Under Federal Rule of Civil Procedure 12(b)(6).............................. 2 B. Plaintiff Fails to State a Conspiracy Claim Against the Foundation ................................ 3 III. RULE 12(E) MOTION FOR MORE DEFINITE STATEMENT ............................................ 5 IV. CONCLUSION AND PRAYER .............................................................................................. 7 i Case 3:16-cv-02436-G Document 33 Filed 02/14/17 Page 2 of 11 PageID 276 TABLE OF AUTHORITIES Cases Aschroft v. Iqbal, 556 U.S. 662 (2009) ....................................................................................... 2, 3 Balderrama v. Pride Indus., Inc., 963 F. Supp. 2d 646 (W.D. Tex. 2013)................................. 6, 7 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ........................................................ 2, 3, 5, 7 Cates v. Int’l Tel. & Tel. Corp., 756 F.2d 1161 (5th Cir. 1985) ..................................................... 6 Chon Tri v. J.T.T., 162 S.W.3d 552 (Tex. 2005) ............................................................................ 4 Deaton v. United Mobile Networks, L.P., 926 S.W.2d 756 (Tex. App.-Texarkana 1996, writ granted) ...................................................................... 4 Massey v. Armco Steel Co., 652 S.W.2d 932 (Tex. 1983) .............................................................. 4 Mitchell v. E-Z Way Towers, Inc., 269 F.2d 126 (5th Cir. 1959) ................................................... 6 Sisk v. Texas Parks and Wildlife Dept., 644 F.2d 1056 (5th Cir. 1981) ......................................... 6 Tilton v. Marshall, 925 S.W.2d 672 (Tex. 1996) ............................................................................ 4 Travelers Indem. Co. of Conn. v. Presbyterian Healthcare, 313 F.Supp.2d 648 (N.D. Tex. 2004) ................................................................................. 6 Statutes 15 U.S.C. §§ 1114(a) and 1125(a), 1125(c) .................................................................................... 1 Tex. Bus. & Com. Code § 16.103 ................................................................................................... 1 Rules Fed. R. Civ. P. 8 .............................................................................................................................. 2 Fed. R. Civ. P. 12(b)(6)................................................................................................................... 2 Fed. R. Civ. P. 12(e) ....................................................................................................................... 6 ii Case 3:16-cv-02436-G Document 33 Filed 02/14/17 Page 3 of 11 PageID 277 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION SPRINGBOARDS TO EDUCATION, INC., Plaintiff, v. KIPP FOUNDATION; KIPP, INC.; and KIPP TEXAS SCHOOLS, Defendants. § § § § § § § § § § CIVIL ACTION NO. 3:16-cv002436-G DEFENDANT KIPP FOUNDATION’S BRIEF IN SUPPORT OF ITS PARTIAL MOTION TO DISMISS UNDER RULE 12(b)(6), OR ALTERNATIVELY, RULE 12(e) MOTION FOR MORE DEFINITE STATEMENT Defendant KIPP Foundation (“Defendant” or “the Foundation”) submits its brief in support of this Partial Motion to Dismiss Under Rule 12(b)(6), Or Alternatively, Rule 12(e) Motion for More Definite Statement, and would respectfully show as follows. I. INTRODUCTION Plaintiff Springboards to Education, Inc. (“Plaintiff” or “Springboards”), without identifying any alleged wrongdoing by California-based KIPP Foundation, originally asserted claims against this defendant under 15 U.S.C. §§ 1114(a) and 1125(a), 1125(c), Tex. Bus. & Com. Code § 16.103, and common law trademark infringement, unfair competition and conspiracy under Texas law. After the Foundation filed a motion to dismiss this complaint, plaintiff filed an amended complaint that added two additional defendants - KIPP, Inc. and KIPP Texas Schools - but still no facts that identified a cause of action against the KIPP Foundation. DEFENDANT KIPP FOUNDATION’S BRIEF IN SUPPORT OF ITS RULE 12(b)(6) MOTION TO DISMISS, OR ALTERNATIVELY, RULE 12(e) MOTION FOR MORE DEFINITE STATEMENT PAGE 1 Case 3:16-cv-02436-G Document 33 Filed 02/14/17 Page 4 of 11 PageID 278 Without specifying the role of any defendant, Springboard’s Amended Complaint (“Complaint”) now concludes that all the defendants conspired to counterfeit, dilute, and infringe upon Springboard’s purported trademarks and engage in unfair competition. (Dkt. 21 at ¶ 131). With respect to Plaintiff’s conspiracy claim, the Complaint contains only a threadbare recitation of the elements and asserts legal conclusions for each of these causes of action. These allegations are insufficient to state a claim for relief under Rule 8 of the Federal Rules of Civil Procedure, and are conclusory, confused, and unclear. As a matter of law, Plaintiff must provide a definite statement of facts that supports its claims against the Foundation. However, because Plaintiff fails to include factual allegations sufficient to show the existence of a facially plausible conspiracy claim against the Foundation, that claim should be dismissed, or alternatively this Court should instruct Plaintiff to file a more definite statement, with regard to its conspiracy claim, pursuant to Rule 12(e). II. RULE 12(B)(6) MOTION TO DISMISS PLAINTIFF’S CONSPIRACY CLAIM AGAINST THE FOUNDATION A. The Legal Standard Under Federal Rule of Civil Procedure 12(b)(6) Following the United States Supreme Court’s decision in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the pleading standard under Rule 8 of the Federal Rules of Civil Procedure demands more than “unadorned accusations” that the defendant caused unlawful harm. Aschroft v. Iqbal, 556 U.S. 662, 678 (2009). In order to survive a Rule 12(b)(6) motion, a plaintiff’s complaint must state the grounds for entitlement to relief, including factual allegations sufficient to show that the claim is facially plausible. Id. at 555-56; Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007); see also FED. R. CIV. P. 12(b)(6). “The plausibility standard is not akin to a DEFENDANT KIPP FOUNDATION’S BRIEF IN SUPPORT OF ITS RULE 12(b)(6) MOTION TO DISMISS, OR ALTERNATIVELY, RULE 12(e) MOTION FOR MORE DEFINITE STATEMENT PAGE 2 Case 3:16-cv-02436-G Document 33 Filed 02/14/17 Page 5 of 11 PageID 279 ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 663 (quoting Twombly, 550 U.S. at 556). A claim is not facially plausible unless the facts alleged in the complaint, taken as true, allow the court to draw a reasonable inference that the defendant is liable for the misconduct alleged. Twombly, 550 U.S. 555-56; Iqbal, 556 U.S. at 663 (“Where a complaint pleads facts that are merely consistent with a defendant’s liability, it stops short of the line between possibility and plausibility of entitlement to relief.”) (internal citations omitted). While the court should accept as true all allegations in the complaint and the reasonable inferences that can be drawn from them, the court is not bound to accept as true legal conclusions couched as factual allegations. Iqbal, 556 at 679. In fact, the court may disregard such legal conclusions when the complaint includes only “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Twombly, 550 U.S. at 678-79. Simply put, under Twombly and Iqbal, a pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 557. And a complaint that tenders “naked assertions” devoid of further factual enhancement will not suffice. Id.; see also Iqbal, 556 U.S. at 678. B. Plaintiff Fails to State a Conspiracy Claim Against the Foundation The elements for a cause of action for civil conspiracy are as follows: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as the proximate result. DEFENDANT KIPP FOUNDATION’S BRIEF IN SUPPORT OF ITS RULE 12(b)(6) MOTION TO DISMISS, OR ALTERNATIVELY, RULE 12(e) MOTION FOR MORE DEFINITE STATEMENT PAGE 3 Case 3:16-cv-02436-G Document 33 Filed 02/14/17 Page 6 of 11 PageID 280 Chon Tri v. J.T.T., 162 S.W.3d 552, 556 (Tex. 2005); Massey v. Armco Steel Co., 652 S.W.2d 932, 934 (Tex. 1983). Under Texas law, civil conspiracy is not an independent tort; rather, it is a means for imposing joint and several liability on defendants for their participation in an underlying intentional tort. Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996) (noting that civil conspiracy is a derivative tort); see also Deaton v. United Mobile Networks, L.P., 926 S.W.2d 756, 760 (Tex. App.-Texarkana 1996, writ granted) (“There is no independent cause of action for conspiracy. Any finding on conspiracy must be based on some underlying tort”), aff’d on this ground, rev’d in part on other grounds, 939 S.W.2d 146 (Tex. 1997) (citation omitted). Thus, a plaintiff cannot adequately plead a “claim” for conspiracy without first pleading sufficient factual allegations to support an underlying intentional tort. Plaintiff has not done so. Instead, Plaintiff refers the Court to Part III.D of its Complaint, which wholly fails to identify the manner in which any Individual Defendant allegedly diluted or otherwise infringed upon Plaintiff’s purported trademarks. Indeed, Plaintiff commingles all the defendants, indiscriminately and inaccurately referencing them collectively as “KIPP” or the “KIPP defendants.” Plaintiff’s decision to confusingly conflate all three co-defendants is fatal to its conspiracy claim. For example, Plaintiff states: KIPP is blatantly copying (or attempting to copy) the Read a Million Words® program and is utilizing Springboards to Education’s Trademarks or confusingly similar Marks without purchasing the program from Springboards to Education and without properly implementing the program in accordance with Springboards to Education’s quality and standards, thus diluting and infringing upon Springboards to Education’s Trademarks. (Dkt. 21 at ¶ 31). Thus, not only are Plaintiff’s allegations of an alleged conspiracy conclusory, but the alleged underlying torts are equally unsupported by the facts. The KIPP Foundation, KIPP, Inc. and KIPP Texas Schools are entirely separate entities, incorporated in different states, with DEFENDANT KIPP FOUNDATION’S BRIEF IN SUPPORT OF ITS RULE 12(b)(6) MOTION TO DISMISS, OR ALTERNATIVELY, RULE 12(e) MOTION FOR MORE DEFINITE STATEMENT PAGE 4 Case 3:16-cv-02436-G Document 33 Filed 02/14/17 Page 7 of 11 PageID 281 distinct and different officers, directors and employees. Accordingly, Plaintiff has failed to state a claim for civil conspiracy because it merely recites the elements of a conspiracy claim and concludes that KIPP Foundation is liable without pleading sufficient factual allegations. Twombly, 550 U.S. at 557. For example, Plaintiff concludes, “. . .the KIPP Defendants had a meeting of the minds on the object or course of action” and “The KIPP Defendants engaged in one or more unlawful, overt acts in furtherance of the conspiracy as set forth in Part III.D above” (Dkt. 21 at ¶¶ 132-33). However, even in citing to another section of its Complaint, Plaintiff fails to provide even a single fact to support its conclusions. Even reading the allegations most favorably to Plaintiff, the allegations of a marriage between a KIPP CEO and Teach For America’s co-founder, the allegation that some teachers trained by Teach For America (a non- party to this action) end up teaching in KIPP schools, and the allegation that KIPP schools and Teach for America share curriculum simply do not establish a “meeting of the minds” among the three named KIPP co-defendants to engage in the alleged trademark violations. (Complaint, ¶ 36). From the allegations, an inference cannot be drawn that the Foundation had a “meeting of the minds” with the Individual Defendants in accomplishing an unlawful course of action or a lawful course of action by unlawful means. As a result, Plaintiff cannot state a claim for relief, and its conspiracy claim should be dismissed. See Twombly, 550 U.S. at 555-56. III. RULE 12(E) MOTION FOR MORE DEFINITE STATEMENT As pleaded, Plaintiff’s Complaint fails to state a claim for relief sufficient to survive a Rule 12(b)(6) motion to dismiss. However, if this Court declines to grant the Foundation’s Rule 12(b)(6) motion to dismiss Plaintiff’s conspiracy claim, the Foundation requests, in the DEFENDANT KIPP FOUNDATION’S BRIEF IN SUPPORT OF ITS RULE 12(b)(6) MOTION TO DISMISS, OR ALTERNATIVELY, RULE 12(e) MOTION FOR MORE DEFINITE STATEMENT PAGE 5 Case 3:16-cv-02436-G Document 33 Filed 02/14/17 Page 8 of 11 PageID 282 alterative, that the Court instruct Plaintiff to file a more definite statement pursuant to Rule 12(e). FED. R. CIV. P. 12(e). “A party may move for a more definite statement of a pleading to which a responsive pleading is allowed but which is so vague or ambiguous that the party cannot reasonably prepare a response.” FED. R. CIV. P. 12(e); Sisk v. Texas Parks and Wildlife Dept., 644 F.2d 1056, 1059 (5th Cir. 1981); see also Balderrama v. Pride Indus., Inc., 963 F. Supp. 2d 646, 667 (W.D. Tex. 2013). “A motion under Rule 12(e) is the proper remedy where allegations in a complaint are ‘conclusory, confused, and unclear,’ but do not ‘justify dismissal of the suit on - the merits and without leave to amend.’” Balderrama, 963 F. Supp. 2d at 667 (quoting Cates v. Int’l Tel. & Tel. Corp., 756 F.2d 1161, 1180 (5th Cir. 1985)). “Whether to grant a motion for more definite statement is within the Court’s sound discretion.” Id. (citing Mitchell v. E-Z Way Towers, Inc., 269 F.2d 126, 130 (5th Cir. 1959); Travelers Indem. Co. of Conn. v. Presbyterian Healthcare Res., 313 F.Supp.2d 648, 653-54 (N.D. Tex. 2004). Here, Plaintiff’s indiscriminate use of “KIPP” and/or “KIPP Defendants” throughout its pleading makes it impossible for the Foundation to prepare a defense without additional information as to what factual allegations and claims allegedly apply to the Foundation. (See, e.g., Dkt. 21 at ¶¶ 31, 33, and 39). At times, Plaintiff also pleads facts without alleging that any Defendant, much less the Foundation, is responsible for the alleged conduct. (See, e.g., Dkt 21, at ¶ 35). The ambiguity and vague references to the parties in Plaintiff’s Complaint, coupled with, references to third-parties, such as Teach for America, make it difficult, if not impossible, for the Foundation to prepare an appropriate defense. Indeed, Plaintiff’s insistence on confusingly referencing all three parties as “KIPP” and its claim of conspiracy based on irrelevant allegations DEFENDANT KIPP FOUNDATION’S BRIEF IN SUPPORT OF ITS RULE 12(b)(6) MOTION TO DISMISS, OR ALTERNATIVELY, RULE 12(e) MOTION FOR MORE DEFINITE STATEMENT PAGE 6 Case 3:16-cv-02436-G Document 33 Filed 02/14/17 Page 9 of 11 PageID 283 of a marriage and an alleged meeting not involving any of the co-defendants here is exactly the type of implausible pleading that Twombly is intended to prevent. Additionally, due to the lack of factual specificity regarding the alleged conduct ascribed any of the Individual Defendants, the Foundation cannot determine the applicability of certain affirmative defenses, including limitations defenses it believes to be applicable under Texas law. Finally, to the extent Plaintiff seeks to hold the Foundation liable for conduct it claims was committed by others, including the Individual Defendants, additional facts must be pleaded to demonstrate the basis for imposing liability on the Foundation for conduct Plaintiff alleges was committed by KIPP, Inc. and/or KIPP Texas Schools. See Balderrama, 963 F. Supp. 2d at 667. Baldly asserting that “KIPP” is a “non-profit network[,]”1 and that the Individual Defendants “had a meeting of the minds”2 is insufficient. Plaintiff’s Complaint and the allegations against the Foundation are “conclusory, confused, and unclear.” Id. Because Plaintiff has failed to allege facts with sufficient specificity concerning its numerous claims against the Foundation, the Foundation cannot ascertain what additional affirmative defenses may apply and how the vague factual allegations referenced above allegedly subject it to liability. Accordingly, the Court should instruct Plaintiff to file a more definite statement with regard to any conduct Plaintiff attempts to ascribe to the Foundation. IV. CONCLUSION AND PRAYER Plaintiff has failed to allege any facts to support its naked allegations as to its conspiracy claims against the Foundation. Thus, it is respectfully submitted that the Court should dismiss Plaintiff’s conspiracy claim against the Foundation pursuant to Federal Rule of Civil Procedure 1 See Dkt. 21 at ¶ 32. 2 Id. at ¶ 132. DEFENDANT KIPP FOUNDATION’S BRIEF IN SUPPORT OF ITS RULE 12(b)(6) MOTION TO DISMISS, OR ALTERNATIVELY, RULE 12(e) MOTION FOR MORE DEFINITE STATEMENT PAGE 7 Case 3:16-cv-02436-G Document 33 Filed 02/14/17 Page 10 of 11 PageID 284 12(b)(6). Alternatively, it is respectfully submitted that Plaintiff be required pursuant to Federal Rule of Civil Procedure 12(e) to plead facts with greater specificity to resolve the “conclusory, confused, and unclear” allegations in its Complaint and to provide sufficient detail to permit the Foundation to properly defend the allegations against it. Respectfully submitted, /s/ Barry A. Moscowitz Barry A. Moscowitz Texas Bar No. 24004830 E-mail: bmoscowitz@thompsoncoe.com Chantel L. Lee Texas Bar No. 24081001 E-mail: clee@thompsoncoe.com THOMPSON, COE, COUSINS & IRONS, L.L.P. Plaza of the Americas 700 N. Pearl Street, Twenty-Fifth Floor Dallas, Texas 75201-2832 Telephone: (214) 871-8200 Facsimile: (214) 871-8209 CERTIFICATE OF SERVICE Pursuant to Fed. R. Civ. P. 5(b)(2)(E) and 5(b)(3), I hereby certify a true and correct copy of the foregoing document was filed electronically on this 14th day of February, 2017. The parties may access this filing through the court's system. Notice of this filing will be sent to all parties by operation of the court's electronic filing system. /s/ Barry A. Moscowitz Barry A. Moscowitz DEFENDANT KIPP FOUNDATION’S BRIEF IN SUPPORT OF ITS RULE 12(b)(6) MOTION TO DISMISS, OR ALTERNATIVELY, RULE 12(e) MOTION FOR MORE DEFINITE STATEMENT PAGE 8 Case 3:16-cv-02436-G Document 33 Filed 02/14/17 Page 11 of 11 PageID 285