New Leaf Service Contracts LLC v. Gerhard's Inc
3:23-cv-02544
N.D. Tex.May 19, 2025Background
- New Leaf Service Contracts, LLC (New Leaf Texas) entered into a Dealer Administration Agreement with Gerhard's Inc., in 2012, to administer service-contract programs for consumer-products dealers.
- The Agreement automatically renews unless terminated with proper notice, with the current term extending through at least September 2025.
- Gerhard’s allegedly breached the Agreement by selling similar contracts through a different provider without authorization.
- There was ambiguity over which New Leaf entity was the actual contracting party (New Leaf Texas, a Texas LLC, or New Leaf Delaware, a Delaware LLC), leading to a prior lawsuit that was dismissed for lack of standing.
- In this renewed action, Gerhard’s moved to dismiss for lack of standing, arguing New Leaf Texas was not the contracting party, relying on prior employee testimony and entity documents, while New Leaf Texas presented new evidence supporting its status as the contracting entity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing: Contracting Entity | New Leaf Texas was the Agreement party | Only New Leaf Delaware could have contracted | New Leaf Texas established standing |
| Factual Attack on Standing | New evidence corrects prior confusion | Hicks's prior statements are controlling | New evidence reasonably explains prior mistake |
| Burden of Proof for Standing | Preponderance of evidence met | Plaintiff must rule out other possibilities | Plaintiff only needs more-likely-than-not |
| Redressability of Alleged Injury | Damages flow from breach of contract | Entity identity means injury is speculative | Alleged injury is redressable by damages |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing elements under Article III)
- Bennett v. Spear, 520 U.S. 154 (prongs of constitutional standing)
- Summers v. Earth Island Institute, 555 U.S. 488 (concrete, particularized injury requirement)
- Paterson v. Weinberger, 644 F.2d 521 (burden on plaintiff in 12(b)(1) factual challenge)
- TransUnion LLC v. Ramirez, 594 U.S. 413 (concrete injury sufficient for standing)