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Joe Hand Promotions, Inc. v. Mills

July 30, 2008


The opinion of the court was delivered by: Irenas, Senior District Judge


This case began with Plaintiff Joe Hand Promotions, Inc.'s ("Joe Hand") Complaint against Defendants Taylor L. Mills and Taylor's Sports Bar, Grill & Dance Club*fn1 (collectively, "Taylor's"). Joe Hand asserts that on January 19, 2008, Taylor's showed to its patrons television program "UFC #80" without purchasing the right to do so from Joe Hand. Joe Hand allegedly holds the exclusive right to distribute the program.*fn2

Taylor's asserts two counterclaims: violation of New Jersey's Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. ("CFA") and common law fraud.*fn3 Those claims arise out of the events that took place immediately preceding the initiation of Joe Hand's suit. Joe Hand presently moves to dismiss the counterclaims pursuant to Fed. R. Civ. P. 12(b)(6). For the reasons stated herein, the Motion will be granted.


On February 15, 2008, Taylor's received a letter from Joe Hand's attorney wherein Joe Hand accused Taylor's of violating Joe Hand's exclusive licensing rights by exhibiting UFC #80 on January 19, 2008. (Answer at 6, ¶¶ 7-8.) The letter states Joe Hand's intention to sue Taylor's in federal court, explaining, "[i]n this litigation we will be seeking maximum statutory damages . . . which may exceed $110,000.00. . . . This Amount does not include interest and attorneys fees." (Taylor Cert. Ex. A.) The letter goes on to offer settlement as an alternative to litigation, but cautions that if Taylor's does not respond within 14 days, Joe Hand will "commence[] legal action . . . without further notice to you." (Id.)

Taylor's allegedly responded, through their attorney, by letter dated February 26, 2008 ("February 26th letter"). Taylor's stated that it purchased UFC #80 from Satellite Sales, L.L.C. ("Satellite Sales") and "Direct TV."*fn4 (Answer at 6, ¶ 9.) According to Taylor's, it "lawfully obtained the subject program through Satellite Sales, L.L.C., and Direct TV" which it asserts are agents or apparent agents for Joe Hand. (Answer at 5, ¶¶ 2-3; 6, ¶¶ 10-11; 7, ¶ 14.) Thus, Taylor's asserts that it did not infringe Joe Hand's rights or violate federal law.

Despite the response from Taylor's, Joe Hand filed the Complaint on April 15, 2008. Taylor's asserts that Joe Hand filed the Complaint in disregard of the information contained in the February 26th letter. Taylor's further claims that Joe Hand "failed to conduct any investigation into the actions of Direct TV and its agents prior to initiating the suit." (Answer at 6, ¶ 13.)

Based on the theory that Joe Hand knowingly threatened Taylor's with a federal lawsuit in an "attempt[] to obtain monies from the defendants which plaintiff knows defendants are not lawfully required to pay and monies which plaintiff knows it is not lawfully entitled to receive," (Answer at 6, ¶ 12.), Taylor's asserts two claims: violation of New Jersey's Consumer Fraud Act (Counterclaim 1), and common law legal and equitable fraud (Counterclaim 2). Joe Hand moves to dismiss the counterclaims for failure to state a claim upon which relief may be granted.


Pursuant to Federal Rule of Civil Procedure 12(b)(6), a court may dismiss a complaint "for failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). In considering a 12(b)(6) motion, the court will "'accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.'" Phillips v. County of Allegheny, 515 F.3d 224, 233, 2008 U.S. App. LEXIS 2513 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)). In order to survive a 12(b)(6) motion, the plaintiff's "'[f]actual allegations must be enough to raise a right to relief above the speculative level.'" Id. at 232 (quoting Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1965 & n.3, 167 L.Ed. 2d 929, 2007 U.S. LEXIS 5901 (2007)). In sum, "'stating . . . a claim requires a complaint with enough factual matter (taken as true) to suggest' the required element." Id. at 234 (quoting Twombly, 127 S.Ct. at 1965).

A party alleging fraud "must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). A plaintiff must "state the circumstances of the alleged fraud with sufficient particularity to place the defendant on notice of the 'precise misconduct with which [it is] charged.'" Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007) (quoting Lum v. Bank of Am., 361 F.3d 217, 223-24 (3d Cir. 2004)). Plaintiffs can satisfy the requirements of Rule 9(b) by "pleading the 'date, place or time' of the fraud, or through 'alternative means of injecting precision and some measure of substantiation into their allegations of fraud.'" Lum, 361 F.3d at 224 (quoting Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786, 791, 1984 U.S. App. LEXIS 18846 (3d Cir. 1984)). A plaintiff must also "allege who made a representation to whom and the general content of the misrepresentation." Id. The heightened pleading standards of Rule 9(b) apply to claims of fraud brought under New Jersey law. Frederico, 507 F.3d at 200.



Taylor's claims that Joe Hand violated the CFA by selling to Taylor's, through its alleged agents, UFC #80, and then attempting to intimidate Taylor's into paying money to Joe Hand, ostensibly to settle what Joe Hand knew to be a meritless claim arising out of the broadcast of the program at Taylor's. Joe Hand argues that the allegations of the Counterclaim are insufficient as a matter of law. The Court agrees because the CFA does not apply to the factual scenario alleged.

The CFA prohibits

[t]he act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation . . . in connection with the sale or ...

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