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Pure Marketing, LLC v. Got Matcha Premium Tea Co. LLC

United States District Court, W.D. Kentucky, Owensboro Division

January 15, 2020




         This matter is before the Court on Defendant's Motion to Dismiss. [DN 16]. Fully briefed, this matter is ripe for decision. For the following reasons, the Defendant's motion is GRANTED.

         I. Background

         According to the Amended Complaint, Pure Marketing, LLC (“Pure”) is the owner of a 30% interest in Matcha Premium Tea Co., LLC (“Matcha”). [DN 14 ¶ 7]. Matcha develops and manufactures organic matcha and matcha-related products and sells those products through distributors and over the internet. [Id. ¶ 5]. Pure alleges that Matcha “expended and committed assets of Matcha for the benefit of a joint venture or other business arrangement . . . and excluded Pure from such joint venture.” [Id. ¶ 9]. As a result, Pure maintains that “[a]ny proceeds or profits from the joint venture will be denied to Matcha, notwithstanding Matcha's contribution” by virtue of its interest in Matcha. [Id. ¶ 10]. In the alternative, should the joint venture fail, Pure alleges it will lose the benefit of the assets it committed to Matcha to become a shareholder. [Id. ¶ 11]. These allegations form the basis of Pure's first cause of action-breach of contract. [Id. ¶¶ 15-18]. Pure next alleges that Matcha “has withheld relevant information and concealed from Pure negotiations between Matcha and the third party”-specifically, Pure complains that “Matcha has withheld information from Pure regarding, without limitation its operations, financial condition, management, employment agreements, related party agreements and third party negotiations.” [Id. ¶¶ 12-13]. That allegation forms the basis of Pure's second cause of action-a request for an accounting of and access to all books and records of Matcha. [Id. ¶¶ 19-20].

         Matcha previously filed a motion to dismiss citing the same bases for dismissal as it does here. [DN 8]. Pure opposed that Motion but also requested leave to amend its Complaint. [DN 11 at 8]. The Court granted Pure fourteen days during which it was entitled to amend its Complaint. [DN 15]. Pure filed an amended complaint during the allowed timeframe. [DN 14]. The instant Motion is Matcha's refiled Motion to Dismiss relating to Pure's Amended Complaint. [DN 16]. Matcha maintains three independent grounds for dismissal: (1) the allegations, even taken as true, fail to state a claim for either cause of action asserted; (2) the asserted claims are subject to mandatory arbitration under the Operating Agreement; and (3) improper venue. [DN 17 at 1-2]. Pure responded and Matcha replied. [DN 18; DN 19]. Additionally, Pure filed a Motion for leave to supplement its response. [DN 20]. That Motion is GRANTED and the supplemental response was considered in ruling on the Motion to Dismiss.

         II. Standard of Review

         Upon a motion to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6), a court “must construe the complaint in the light most favorable to plaintiffs, ” League of United Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007) (citation omitted), “accept all well-pled factual allegations as true, ” id., and determine whether the “complaint . . . states a plausible claim for relief, ” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). Under this standard, the plaintiff must provide the grounds for its entitlement to relief, which “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A plaintiff satisfies this standard only when it “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. A complaint falls short if it pleads facts “merely consistent with a defendant's liability” or if the alleged facts do not “permit the court to infer more than the mere possibility of misconduct.” Id. at 679. Instead, “a complaint must contain a ‘short and plain statement of the claim showing that the pleader is entitled to relief.'” Id. at 663 (quoting Fed.R.Civ.P. 8(a)(2)). “But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Id. at 679 (quoting Fed.R.Civ.P. 8(a)(2)).

         If “matters outside the pleadings are presented to and not excluded by the court” when ruling upon a motion under Rule 12(b)(6), the Federal Rules require that “the motion must be treated as one for summary judgment under Rule 56.” Fed.R.Civ.P. 12(d). This Rule does not require the Court to convert a motion to dismiss into a motion for summary judgment every time the Court reviews documents that are not attached to the complaint. Greenberg v. Life Ins. Co. of Va., 177 F.3d 507, 514 (6th Cir. 1999). “[W]hen a document is referred to in the complaint and is central to the plaintiff's claim . . . [, ] the defendant may submit an authentic copy [of the document] to the court to be considered on a motion to dismiss, and the court's consideration of the document does not require conversion of the motion to one for summary judgment.” Id. (quotation omitted).

         III. Discussion

         A. Consideration of Matters Outside the Pleadings

         First, the Court must determine, as outlined above, whether to construe the Motion by Matcha as one to dismiss or one for summary judgment. The pleadings in this case do not shed much light on the grounds that would support Matcha's motion. Instead, the grounds for granting Matcha's motion are set out in a document attached to the Motion itself. The document- Matcha's Operating Agreement-is not referred to in Pure's Complaint, and for the Court to consider it, the Motion must be converted into one for summary judgment pursuant to Fed.R.Civ.P. 12(d).

         Rule 12(d) advises that, when converting a motion to dismiss into one for summary judgment, “[a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.” “Where one party is likely to be surprised by the proceedings, notice is required” to that party that the Court is converting the motion into one for summary judgment. Bruce v. Corr. Med. Servs., Inc., 389 Fed.Appx. 462, 465 (6th Cir. 2010).

         After considering this standard, the Court converts Matcha's Motion into one for summary judgment. Both parties have cited to matters outside the pleadings and attached documents to their filings on the Motion, demonstrating that both not only were on notice that the Court may refer to them but that they expected as much. Because both parties attached and relied upon documents not contained in the pleadings and had an opportunity to respond to the documents ...

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