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Power Marketing Direct, Inc. v. Clark

September 6, 2006


The opinion of the court was delivered by: Judge Algenon L. Marbley

Magistrate Judge Abel



This matter comes before the Court on Defendant, Jimmie Clark's ("Defendant" or "Clark"), Motion to Dismiss Counts One through Three of Power Marketing Direct, Inc.'s ("Plaintiff" or "PMD") complaint. Defendant claims that Counts One through Three of Plaintiff's complaint fail to state a claim on which relief can be granted. For the reasons set forth herein, the Court GRANTS Defendant's Motion to Dismiss.


A. Background

Plaintiff, PMD, operates a business selling furniture and bedding through a nationwide network of manufacturers and dealers. PMD considers its sales and marketing methods and its industry contacts to be valuable intellectual property. PMD licensees gain access to this information only after signing a License Agreement ("Agreement"), which contains a covenant not to compete (the "Non-Compete"), prohibiting them from competing with PMD for a period of three years after the termination of the Agreement. The Agreement also includes a choice-of-law-and-forum clause providing that Ohio law will govern and that any claims arising under the Agreement will be heard in Franklin County, Ohio.

Defendant started a wholesale mattress business in Texas in December 2000. On or about March 19, 2001, Defendant signed an Agreement with PMD to become the company's exclusive licensee in the Austin, Texas metropolitan area through March 2011. Defendant terminated his relationship with PMD in April, 2005. Plaintiff now asserts that Defendant solicited other PMD dealers and vendors to terminate their relationships with PMD in direct violation of the Non-Compete.

B. Procedural History

PMD filed suit in the Franklin County Court of Common Pleas on August 12, 2005, asserting the following claims: (1) Count One - Breach of Contract; (2) Count Two - Violation of Ohio's Uniform Trade Secrets Act ("UTSA"); (3) Count Three - Tortious Interference with Contractual and Business Relationships; (4) Count Four - Amounts Due on Account.

Defendant filed a Notice of Removal to federal court on August 12, 2005. Subsequently, on September 8, 2005, Defendant filed the present Motion to Dismiss Counts One through Three pursuant to Federal Rules of Civil Procedure 12(b)(6). The matter has been fully briefed and is now ripe for decision.


A motion to dismiss under Rule 12(b)(6) is designed to test "whether a cognizable claim has been pleaded in the complaint." Scheid v. Fanny Farmer Candy Shops, Inc. 859 F.2d 434, 436 (6th Cir. 1988). In considering such a motion, the Court is limited to evaluating whether a plaintiff's complaint sets forth allegations sufficient to make out the elements of a cause of action. Windsor v. The Tennessean, 719 F.2d 155, 158 (6th Cir. 1983). Dismissal under Rule 12(b)(6) streamlines litigation by "dispensing with needless discovery and fact-finding" on claims that are legally untenable in the first place. See Neitzke v. Williams, 490 U.S. 319, 326-27 (1989).

All factual allegations made by a plaintiff are deemed admitted and ambiguous allegations must be construed in his favor. Murphy v. Sofamor Danek Gp., Inc., 123 F.3d 394, 400 (6th Cir. 1997). A complaint should not be dismissed under Rule 12(b)(6) "'unless it appears beyond doubt that the [p]laintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Lillard v. Shelby County Bd. of Educ., 76 F.3d 716, 724 (6th Cir. 1996) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). While the complaint need not specify every detail of a plaintiff's claim, it must give the defendant "'fair notice of what the plaintiff's claim is and the grounds upon which it rests.'" Gazette v. City of Pontiac, 41 F.3d 1061, 1064 (6th Cir. 1994) (quoting Conley, 355 U.S. at 47).

Nonetheless, this liberal standard of review does require more than the bare assertion of legal conclusions. Allard v. Weitzman, 991 F.2d 1236, 1240 (6th Cir. 1993) (citation omitted). Under the federal pleading requirements, a plaintiff's complaint must include "a short and plain statement of the claim showing that the pleader is entitled to relief." See FED. R. CIV. PRO. 8(a)(2). The short and plain statement must "give the defendant fair notice of what plaintiff's claim is, and the grounds upon which it rests." A complaint must contain either direct or inferential allegations with respect to all the material elements necessary to sustain a recovery under some viable legal theory. Id. (citations omitted).


A. Count One - Breach of Contract & the ...

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