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AMERICAN NEEDLE & NOVELTY, INC. v. DREW PEARSON MK

April 26, 1993

AMERICAN NEEDLE & NOVELTY, INC., Plaintiff,
v.
DREW PEARSON MARKETING, INC., Defendant.



The opinion of the court was delivered by: CHARLES RONALD NORGLE, SR.

 CHARLES R. NORGLE, SR., District Judge:

 Before the court are defendant Drew Pearson Marketing, Inc.'s ("DPMI") motions to dismiss count III and count IV of plaintiff American Needle & Novelty, Inc.'s ("American Needle") complaint. For the following reasons, the motions are granted.

 FACTS

 American Needle is an Illinois corporation in the business of manufacturing licensed headwear upon which appear sports team logos or insignia. Its customers include national chains such as Sears, J.C. Penney's, K-Mart, Walmart, Foot Locker, licensed sportswear chains, ball park and stadium concessionaires, grocery stores and regional discounters. American Needle is a licensee of Major League Baseball, the National Football League, and the National Hockey League. It is not a licensee of the National Basketball Association (the "NBA").

 Because it was not an NBA licensee, American Needle entered into a distributorship agreement (the "Agreement") with DPMI, which is a licensee of the NBA, providing American Needle with the right to purchase and distribute NBA licensed products through January 1, 2001. Although American Needle was to be a DPMI distributor for ten years, on September 17th, 1992, DPMI sent a letter to American Needle purporting to terminate the Agreement. DPMI sent a copy of the September 17th letter to officials of the NBA, including an NBA licensing executive whom American Needle had contacted in an effort to obtain a direct license. According to American Needle, the September 17th letter contained numerous false and defamatory statements regarding American Needle's business methods. Counts III and IV of American Needle's complaint are based on the allegedly libelous September 17 letter.

 According to the complaint, the September 17th letter states a claim for libel per se and violates Section 43(a)(2) of the Lanham Act, 15 U.S.C. ยง 1125(a)(2). The pertinent portions of the letter complained of are as follows:

 
This letter is to formally notify you of your company's continual and flagrant breaches of the Distribution Agreement.
 
Specifically, the terms of the agreement require that "the billing is payable by Distributor upon receipt of invoice from Licensee." I have attached a copy of the aged receivables for your review.
 
Additionally, we have been notified by you bank that the letter of credit for invoice 5642 in the amount of $ 14,760.72 is not being honored due to discrepancies in the letter of credit. In the past, these discrepancies would be waived. However, it is apparent by the bank's actions, you have chosen not to do so.

 According to American Needle, this language was intended to falsely disparage its commercial activities and business methods, and delivery of the letter to the NBA caused injury to American Needle's standing, goodwill, and general business reputation. DPMI has responded to these claims with motions to dismiss.

 DISCUSSION

 On a motion to dismiss, all well-pleaded factual allegations are presumed to be true. Johnson v. Martin, 943 F.2d 15, 16 (7th Cir. 1991); Perkins v. Silverstein, 939 F.2d 463, 466 (7th Cir. 1991). The court must view those allegations in the light most favorable to the plaintiff, Gomez v. Illinois State Board of Education, 811 F.2d 1030, 1039 (7th Cir. 1987), and all reasonable inferences to be drawn from those allegations are also accepted as true. Meriwether v. Faulkner, 821 F.2d 408, 410 (7th Cir.), cert. denied 484 U.S. 935, 98 L. Ed. 2d 269, 108 S. Ct. 311 (1987). Additionally, the court must construe the pleadings liberally, and mere vagueness or lack of detail alone will not constitute sufficient grounds to dismiss a complaint. Strauss v. City of Chicago, 760 F.2d 765, 767 (7th Cir. 1985). Furthermore, the complaint need not specify the correct legal theory nor point to the right statute to survive a Rule 12(b) motion to dismiss, Bartholet v. ...


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