Brand Coupon Network, LLC v. Catalina Marketing Corp.
748 F.3d 631
5th Cir.2014Background
- BCN (Brand Coupon Network) sued Catalina and three employees after Catalina launched CouponNetwork.com, allegedly copying BCN’s BrandCouponNetwork.com and using confidential information discussed at an April 27, 2010 ACP meeting.
- BCN filed in July 2011 asserting claims including detrimental reliance, unjust enrichment, unfair trade practices (LUTPA), trade secret violation, trademark infringement, breach of good faith, and tortious conduct; trade secret claim was dismissed below and not appealed.
- A key factual dispute concerned when BCN knew or should have known of Catalina’s online entry — Defendants say April/May 2010; BCN says October 2010 (affidavit and December 2010 letter attached to its opposition).
- District court granted 12(b)(6) dismissal as time barred, treating BCN’s petition language and BCN’s opposition exhibits as establishing knowledge in April 2010; also dismissed claims against the individual defendants for failure to allege personal duty.
- Fifth Circuit held the district court erred by relying on evidence outside the pleadings without converting to summary judgment, found a genuine factual dispute on notice/timeliness, vacated dismissal of the substantive claims as time barred and remanded, but affirmed dismissal of individual defendants for failure to preserve argument.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness/prescription of claims | BCN: Injury/actual knowledge occurred in October 2010; suit filed within one-year period | Catalina: BCN knew by April/May 2010 so claims filed in July 2011 are prescribed | Court: Vacated dismissal for time bar; genuine factual dispute exists and district court improperly resolved it on 12(b)(6) without converting to summary judgment |
| Use of extrinsic evidence on Rule 12(b)(6) | BCN: Attached affidavit and December communications in opposition showing later discovery | Catalina: Relied on petition language and opposition exhibits to show April knowledge | Court: District court erred by considering post-pleading evidence not referred to in complaint without conversion to Rule 56; remand for appropriate proceedings |
| Trade secret claim sufficiency | BCN: Asserted trade secret misuse based on confidential ACP discussions | Catalina: Argued insufficiently pleaded | Court: Trade secret claim was dismissed below as insufficient and BCN did not appeal that ruling (affirmed by implication) |
| Individual liability under LUTPA | BCN: Individual officers owed personal duties and may be liable | Catalina: BCN failed to preserve/plead basis for individual LUTPA liability; agency status shields individuals absent veil-piercing | Court: Affirmed dismissal of individual defendants; BCN did not present necessary arguments below to preserve issue for appeal |
Key Cases Cited
- Morris v. Livingston, 739 F.3d 740 (5th Cir. 2014) (standard of review for Rule 12(b)(6) dismissal)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must state plausible claim; legal conclusions insufficient)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings)
- Collins v. Morgan Stanley Dean Witter, 224 F.3d 496 (5th Cir. 2000) (limits on courts considering matters outside pleadings on Rule 12(b)(6))
- Campo v. Correa, 828 So. 2d 502 (La. 2002) (prescription begins when plaintiff has actual or constructive knowledge of tort)
- Industrias Magromer Cueros y Pieles S.A. v. La. Bayou Furs Inc., 293 F.3d 912 (5th Cir. 2002) (agent status generally shields individuals from LUTPA liability absent extraordinary circumstances)