Mr. Mudbug, Inc. v. Bloomin' Brands, Inc.
2:15-cv-05265
E.D. La.Jan 18, 2017Background
- MMI Culinary Services (Plaintiff) manufactured pre-prepared foods for Bloomin Brands, Inc. (BBI) and its subsidiary Bonefish Grill for ~8 years; the relationship ended in Dec. 2014.
- Plaintiff sued on open account for two unpaid invoices; BBI removed and counterclaimed for breach of contract regarding product quality.
- Plaintiff amended to add breach of contract, detrimental reliance, and bad faith; Court previously dismissed the bad faith claim and allowed amendment.
- In the Second Amended Complaint, Plaintiff alleged Bonefish Grill breached a limited-time offer (LTO) lobster bisque supply agreement in bad faith to avoid losses; the LTO agreement was between Plaintiff and Bonefish Grill (the subsidiary), not BBI.
- The Court held BBI (parent) could not be liable for the subsidiary’s alleged bad faith because Plaintiff failed to allege facts warranting piercing the corporate veil or a single-business-enterprise theory.
- Plaintiff moved for reconsideration arguing BBI and Bonefish Grill operate as a single business enterprise; the Court denied the motion for failure to show new evidence or manifest error and because the complaint lacked facts supporting veil-piercing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper procedural vehicle for reconsideration of interlocutory order | Motion for reconsideration allowed under Rule 54(b)/59 standards | Denied (relies on same standards) | Court treated motion under Rule 54(b)/Rule 59(e) standards and refused relief |
| Whether BBI is liable for subsidiary Bonefish Grill’s alleged bad faith breach | BBI and Bonefish Grill operate as a single business enterprise, so parent is liable | BBI not a party to LTO agreement; no basis to hold parent liable for subsidiary | Court held BBI not liable; no facts alleged to pierce corporate veil or show single enterprise |
| Whether Plaintiff presented newly discovered evidence or showed manifest error | Plaintiff submitted facts/exhibits in motion for reconsideration | BBI argued evidence was presented late and not newly discovered | Court found no showing of new evidence or manifest error; motion barred as belated argument |
| Adequacy of pleadings to support single business enterprise theory | Plaintiff should be allowed to plead single-enterprise facts | BBI argued complaint lacked necessary factual allegations | Court held pleadings insufficient; even if argued earlier, facts were not alleged to make theory viable |
Key Cases Cited
- Templet v. HydroChem, 367 F.3d 473 (5th Cir. 2004) (standard limiting Rule 59(e) relitigation and rehashing arguments)
- Advocare Int’l, LP v. Horizon Labs., 524 F.3d 679 (5th Cir. 2008) (Rule 59(e) permits relief only for manifest error or newly discovered evidence)
- Guy v. Crown Equip. Corp., 394 F.3d 320 (5th Cir. 2004) (definition of "manifest error")
- Hale v. Townley, 45 F.3d 914 (5th Cir. 1995) (district courts’ discretion in altering judgments)
- Schiller v. Physicians Res. Grp. Inc., 342 F.3d 563 (5th Cir. 2003) (motions for reconsideration cannot raise arguments that should have been made earlier)