United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
RONNIE L. WHITE, District Judge.
This matter is before the Court on Defendants' Motion to Dismiss Plaintiff's Amended Complaint, or in the Alternative, to Compel Arbitration (ECF No. 94). The motion is fully briefed and ready for disposition.
Defendant Stephen Wren is the inventor of certain new and useful improvements in a system for electronically communicating between remote facilities and for facilitating transactions between central and remote facilities. (First Am. Compl. ["FAC"] ¶ 9, ECF No. 89) These inventions are the subject of three patents ('514, '044, and '900). ( Id. ) On November 6, 2000, Wren assigned his intellectual property rights in the inventions to Variant Holdings, LLC ("Holdings"). ( Id. at ¶ 10) On that same date, Plaintiff Scottrade, Inc. ("Scottrade") entered into a License Agreement with Holdings, creating a partnership ("Partnership") to exploit patent rights and know how associated with the inventions. ( Id. at ¶¶ 11, 17-25)
According to the License Agreement, Holdings and Scottrade each had 50% ownership of the Partnership. (FAC ¶ 12; License Agreement ¶ 8(a), ECF No. 1-2) Scottrade claims that, despite the obligation of each party to fund 50% of the Partnership, Scottrade provided $700, 000 in funding, and Holdings provided none. (FAC ¶ 12) The License Agreement also granted to Scottrade a nonexclusive, non-assignable license to use Holdings' intellectual property rights throughout the U.S. and all foreign countries and an exclusive, non-assignable license to use Holdings' intellectual property rights throughout the U.S. with regard to financial service companies. (FAC ¶ 24; License Agreement, ¶ 3) In addition, the License Agreement allowed Holdings to license the rights for use of future patents to others with whom Holdings formed a license agreement, subject to Scottrade's right of first refusal. (FAC ¶¶ 21-22; License Agreement ¶¶ 4, 5) Scottrade had the right to enter into any subsequent agreements concerning the intellectual property rights to the exclusion of a third party within 60 days from the time Scottrade was notified in writing of the terms of the third party agreement. (FAC ¶¶ 21-23; License Agreement ¶ 5) Holdings could terminate the agreement if the Partnership defaulted in making any payment or report in accordance with the agreement; if it became insolvent; or if a receiver was appointed to take over Partnership's business. (License Agreement ¶ 15) If a dispute arose, the parties agreed to submit to arbitration and abide finally by any decision of the arbitration proceeding. ( Id. at ¶ 18)
In May 2004, Wren, though Holdings, initiated arbitration with the American Arbitration Association, seeking to terminate the Partnership and obtain a determination that Scottrade was obligated to pay 100% of the Partnership's costs. (FAC ¶ 13) The Arbitrator found that each party retained all of its rights under the agreement and that each party was responsible for 50% of the costs, with any amounts contributed by Scottrade in excess of 50% was an advance. (FAC ¶¶ 14, 71-72; Award of Arbitrator, ECF No. 1-3) Despite this Award of Arbitrator, Wren/Holdings refused to comply with the funding obligation and contended that the Partnership was terminated. (FAC ¶ 15, 73)
According to Plaintiff Scottrade, Wren secretly formed a corporation called Variant, Inc. ("Variant"), in order to avoid his contractual obligations under the License Agreement and keep the financial value in the Intellectual Property Rights to himself. (FAC ¶ 26) Wren granted an exclusive license for the Intellectual Property Rights to this new corporation instead of giving Scottrade its right of first refusal. ( Id. at ¶ 27-31) Thus, Variant became the exclusive licensee of patents '900 and '044, issued on May 27, 2008 and November 24, 2009, respectively. ( Id. at ¶¶ 19-20, 30-31) Variant obtained the rights to enforce the patent and sue alleged infringers. ( Id. at ¶¶ 30-31) Wren and Variant did not notify Scottrade in writing or otherwise that Holdings planned to enter into an exclusive license with Variant. ( Id. at ¶ 32) Shortly thereafter, Variant began filing numerous lawsuits against a variety of entities, including entities in the U.S. financial services industry, for infringement of the '044 and '900 patents. ( Id. at ¶ 33) Scottrade maintains that Variant obtained in excess of $4 million dollars in settlement payments, which Scottrade was entitled to. ( Id. at ¶ 34) Scottrade learned of the lawsuits when a defendant in one of the infringement actions subpoenaed Plaintiff Scottrade. ( Id. at ¶ 35)
Scottrade's First Amended Complaint alleges Alter Ego Liability between Wren, Holdings, and Variant (Count I); Tortious Interference with Contract against Wren and Variant (Count II); Unjust Enrichment against Wren (Count III); Constructive Trust against Wren (Count IV); and an Action to Enforce Arbitration Award against Wren (Count V). Defendants filed a Motion to Dismiss all counts contained in the First Amended Complaint.
II. Legal Standard
With regard to motions to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), a complaint must be dismissed if it fails to plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) (abrogating the "no set of facts" standard set forth in Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). While the Court cautioned that the holding does not require a heightened fact pleading of specifics, "a plaintiff's obligation to provide the grounds' of his entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. In other words, "[f]actual allegations must be enough to raise a right to relief above the speculative level...." Id. This standard simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the claim. Id. at 556.
Courts must liberally construe the complaint in the light most favorable to the plaintiff and accept the factual allegations as true. See Id. at 555; see also Schaaf v. Residential Funding Corp., 517 F.3d 544, 549 (8th Cir. 2008) (stating that in a motion to dismiss, courts accept as true all factual allegations in the complaint); Eckert v. Titan Tire Corp., 514 F.3d 801, 806 (8th Cir. 2008) (explaining that courts should liberally construe the complaint in the light most favorable to the plaintiff). Further a court should not dismiss the complaint simply because the court is doubtful that the plaintiff will be able to prove all of the necessary factual allegations. Twombly, 550 U.S. at 556. However, "[w]here the allegations show on the face of the complaint there is some insuperable bar to relief, dismissal under Rule 12(b)(6) is appropriate." Benton v. Merrill Lynch & Co., 524 F.3d 866, 870 (8th Cir. 2008) (citation omitted). Courts "are not bound to accept as true a legal conclusion couched as a factual allegation.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). When considering a motion to dismiss, a court can "begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id. at 679. Legal conclusions must be supported by factual allegations to survive a motion to dismiss. Id.
A. Tortious Interference
Under Missouri law,  to prove a claim for tortious interference with a contract or business expectancy, a plaintiff must show: "(1) a contract or valid business expectancy; (2) defendant's knowledge of the contract or relationship; (3) intentional interference by the defendant inducing or causing a breach of the contract or relationship; (4) absence of justification; and (5) damages resulting from defendant's conduct." Western Blue Print Co., LLC v. Roberts, 367 S.W.3d 7, 19 (Mo. 2012) (citation omitted). Defendants maintain that Scottrade is unable to establish tortious interference because an action for tortious interference will not lie against a party to the relationship, and Scottrade has failed to allege sufficient facts that Defendants are third parties. Scottrade, on the other hand, asserts that U.S. District Judge Henry E. Autrey previously found that Plaintiff had stated a cognizable claim for tortious ...