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Major Brands, Inc. v. Mast-Jagermeister US, Inc.

United States District Court, E.D. Missouri, Eastern Division

March 12, 2019

MAJOR BRANDS, INC., Plaintiff,
v.
MAST-JÄGERMEISTER US, INC., MAST-JÄGERMEISTER U.S. HOLDING, INC., SOUTHERN GLAZER'S WINE AND SPIRITS OF MISSOURI, LLC, SUPERIOR WINES AND LIQUORS, INC., and SOUTHERN GLAZER'S WINE AND SPIRITS, LLC Defendants.

          OPINION, MEMORANDUM AND ORDER

          HENRY EDWARD AUTREY UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Defendant Mast-Jägermeister US, Inc.'s Motion to Dismiss, [Doc. No. 12], Defendant Mast-Jägermeister U.S. Holding, Inc.'s Motion to Dismiss, [Doc. No. 16], and Defendants Southern Glazer's Wine and Spirits of Missouri, LLC, Southern Glazer's Wine and Spirits, LLC and Superior Wine and Liquors, Inc.'s Motion to Dismiss, [Doc. No. 18]. Plaintiff opposes the Motion. For the reasons set forth below, Defendant Mast-Jägermeister US, Inc.'s Motions will be granted in part and denied in part; Defendant Mast-Jägermeister U.S. Holding, Inc.'s Motion to Dismiss will be granted; and Defendants Southern Glazer's Wine and Spirits of Missouri, LLC, Southern Glazer's Wine and Spirits, LLC and Superior Wine and Liquors, Inc.'s Motion to Dismiss will be granted.

         Facts and Background

         Plaintiff alleges the following facts.[1]

         Major Brands is a wholesaler licensed in the State of Missouri, under the provisions of Chapter 311 Mo.Rev. Stat., to sell intoxicating liquor to retailers licensed in the State of Missouri.

         Southern Missouri and Superior are wholesalers licensed in the State of Missouri under the provisions of Chapter 311 Mo.Rev.Stat, to sell intoxicating liquor to retailers licensed in the State of Missouri, and both compete with Major Brands.

         Jagermeister is a manufacturer whose brands of intoxicating liquor are distributed through duly-licensed wholesalers in the State of Missouri.

         Major Brands has had a longstanding agreement (the "Distribution Agreement") with Jagermeister for decades whereby it was granted the rights to offer, sell, and distribute within the State of Missouri certain brands of spirits (the "Brands") and Major Brands has for decades offered, sold and distributed those Brands of spirits within the State of Missouri creating demand and value for those Brands in this State.

         Pursuant to the Distribution Agreement, Major Brands has made substantial investments in the marketing and distribution of the Brands, and has built up and developed goodwill over the decades for those products throughout the State of Missouri. Major Brands' investments include, without limitation, significant expenditures of time, money, and human resources.

         Plaintiff further alleges that under Missouri's Franchise law [Mo. Rev. Stat. § 407.400, et. seq.] and as part of the Distribution Agreement, Jägermeister may only terminate the Distribution Agreement and Major Brands' rights to distribute the Brands after first establishing “good cause” for the termination, as that term is defined in Section 407.413.5 of the Revised Statutes of Missouri.

         On February 13, 2018, Jägermeister told Major Brands that it was purporting to terminate the Distribution Agreement. Jägermeister did not provide any reasonable grounds for the purported termination that would constitute “good cause” under Section 407.413.5 of the Revised Statutes of Missouri. Jägermeister admitted that the purported termination had “nothing to do with Major Brands' performance, ” but was the result of Jägermeister's desire to consolidate nationally with Southern.

         Southern (including SGWS, Southern Missouri, and Superior) is aware of Missouri's Franchise law and is willfully and purposefully inducing Jägermeister to violate Missouri law.

         Jägermeister's attempt to terminate Major Brands as a wholesaler, after Major Brands has built up the sales and Jägermeister brand over decades, without establishing good cause violates Missouri's Franchise law [Mo. Rev. Stat. § 407.400, et. seq.], and, therefore, any purported termination is null and void.

         Plaintiff initially filed a lawsuit against Defendants Mast-Jägermeister US, Inc., Mast-Jägermeister U.S. Holding, Inc. (together, “Mast-Jägermeister”) and Southern Glazer's Wine & Spirits of Missouri, LLC (“Southern Glazer's of Missouri”) in the Twenty-Second Judicial Circuit of St. Louis City, Missouri on February 13, 2018 (the “first action”). Major Brands alleged that it had a franchise with Mast-Jägermeister, and that Mast-Jägermeister unlawfully terminated this relationship. Major Brands also alleged that Southern Glazer's of Missouri tortiously interfered with the alleged franchise relationship, and that these defendants engaged in a civil conspiracy.

         Defendants in the first action removed it shortly after it was filed on the grounds that complete diversity existed between the parties. Major Brands Inc. v. Mast-Jägermeister US, Inc., No. 4:18-cv-00254-HEA. Plaintiff dismissed the first action and filed another lawsuit in the Twenty-Second Judicial Circuit of St. Louis City, Missouri. Major Brands added of two defendants, Southern Glazer's Wine and Spirits, LLC (“Southern Glazer's”) and Superior Wines and Liquors, Inc. (“Superior”), a Missouri corporation. No. other changes were made to the Petition in the second suit. Major Brands did not add any specific allegations regarding Southern Glazer's or Superior, instead grouping the two new defendants in with the allegations originally made against the defendants in the first action.

         Defendants timely removed the second lawsuit to this Court on the basis that Superior was fraudulently joined for the sole purpose of avoiding this Court's jurisdiction. Major Brands moved to remand, arguing that this Court did not have diversity jurisdiction due to the Missouri citizenship of Superior. Major Brands also argued that the Court should ignore the form of Southern Glazer's of Missouri, a limited liability company comprised of Texas and Florida members, and the diverse residency of its members, and instead treat Southern Glazer's of Missouri as a Missouri corporation for purposes of diversity jurisdiction.

         The Court denied Plaintiff's Motion to Remand, Superior was dismissed and the Court denied Plaintiff's invitation to deviate from established law regarding the citizenship of limited liability corporations.

         Count I of the Petition is brought for a declaratory judgment; Count II for a violation of Mo.Rev.Stat. § 407.413; Count III is an alleged breach of contract claim; Count IV is a breach of the covenant of good faith and fair dealing; Count V is brought for recoupment; Count VI is an unjust enrichment claim; Counts VII and VIII are alleged tortious interference claims; and Count IX is a claim for civil conspiracy. Defendants move to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.

         Legal Standard

         A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). To satisfy this requirement, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Corrado v. Life Inv'rs Ins. Co. of Am., 804 F.3d 915, 917 (8th Cir. 2015) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Barton v. Taber, 820 F.3d 958, 964 (8th Cir. 2016) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Zink v. Lombardi, 783 F.3d 1089, 1098 (8th Cir. 2015) (quoting Iqbal, 556 U.S. at 678), cert. denied, 135 S.Ct. 2941 (2015). The complaint's factual allegations must be “sufficient to ‘raise a right to relief above the speculative level.'” McDonough v. Anoka Cty., 799 F.3d 931, 946 (8th Cir. 2015) (quoting Twombly, 550 U.S. at 555). The Court must accept factual allegations as true, but it is not required to accept any “legal conclusion couched as a factual allegation.” Brown v. Green Tree Servicing LLC, 820 F.3d 371, 373 (8th Cir. 2016) (quoting Iqbal, 556 U.S. at 678). Thus, “[a] pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.'” Ash v. Anderson Merchandisers, LLC, 799 F.3d 957, 960 (8th Cir. 2015) (quoting Iqbal, 556 U.S. at 678), cert. denied, 136 S.Ct. 804 (2016).

         On a motion to dismiss, courts must rule “on the assumption that all the allegations in the complaint are true, ” and “a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and ‘that a recovery is very remote and unlikely.'” Twombly, 550 U.S. at 555, 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). “Determining whether a complaint states a plausible claim for relief ... [is] a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Mickelson v. Cty. of Ramsey, 823 F.3d 918, 923 (8th Cir. 2016) (alteration in original) (quoting Iqbal, 556 U.S. at 679).

         Discussion Defendant Mast-Jägermeister US, Inc.

         Counts I and II

         In Count I of its Petition, Plaintiff seeks a declaration that Jägermeister has no right to terminate Plaintiff as a wholesaler pursuant to the Missouri Franchise law, Mo. Rev.Stat. § 407.413, et seq. because it has not established good cause for such termination. In Count II, Plaintiff claims a violation of the Missouri Merchandising Practices Act based on Jägermeister's termination of the Distributor Agreement without good cause.

         Defendant Mast-Jägermeister US, Inc. (“Jägermeister”) argues that Counts I and II must be dismissed since Plaintiff's lawsuit is dependent upon the existence of a “franchise” between it and Jägermeister, and no such franchise relationship exists. Plaintiff contends that the “general” definition of franchise in the Franchise Act does not apply to it since it is a liquor wholesaler, and even if it does, the Petition states a cause of action under both franchise definitions.

         The Missouri Merchandising Act defines “franchise:”

“Franchise” means a written or oral arrangement for a definite or indefinite period, in which a person grants to another person a license to use a trade name, trademark, service mark, or related characteristic, and in which there is a community of interest in the marketing of goods or services at wholesale, retail, by lease, agreement, or otherwise, including but not limited to a commercial relationship of definite duration or continuing indefinite duration, between a “wholesaler, ” such wholesaler being a person as defined in this section, licensed pursuant to the provisions of chapter 311, to sell at wholesale, intoxicating liquor, as defined in section 311.020, to retailers, duly licensed in this state, and a “supplier, ” being a person engaged in the business as a manufacturer, distiller, rectifier or out-of-state solicitor whose brands of intoxicating liquor are distributed through duly licensed wholesalers in this state, and wherein a wholesaler is granted the right to offer, sell, and distribute within this state or any designated area ...

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