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Bendfeldt v. Window World, Inc.

United States District Court, W.D. North Carolina, Statesville Division

September 26, 2017

MIKE BENDFELDT and BETTY MUHR-BENDFELDT, Plaintiffs,
v.
WINDOW WORLD, INC., a North Carolina Corporation and ASSOCIATED MATERIALS, LLC, a Delaware limited liability company, Defendants.

          ORDER

          Graham C. Mullen United States District Judge

         This matter is before the Court upon Defendants' Motions to Dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (Doc. Nos. 35 and 37). These motions have been fully briefed and are ripe for disposition.

         I. FACTUAL BACKGROUND

         Plaintiffs, Mike and Betty Bendfeldt, entered into a series of “License Agreements”[1] with Defendant Window World, Inc. (“WW”) between 2001 and 2009. (Am. Compl. ¶ 15). WW operated a “licensing” system involving the sale and installation of replacement windows. (Id. at ¶ 5). Under the License Agreements, Plaintiffs were led to believe that they would be part of the Window World system, could utilize the WW trademarks, trade dress and business methods and would have access to the best pricing for windows and related materials due to the volume-buying power of the WW system. (Id. at ¶ 7). The License Agreement contained a provision requiring that Plaintiffs and other Licensees purchase windows and related materials only from suppliers approved by WW. (Id. at ¶ 8). Originally, WW permitted franchisees to buy windows from more than one supplier, including Defendant Associated Materials, LLC (“AMI”). AMI had been one of the WW-approved suppliers of replacement windows to WW licensees since at least 2000. (Id. at ¶ 9).

         In 2007, WW announced that it had designated AMI as its exclusive supplier of windows. (Id. at ¶ 37). Plaintiffs allege that WW received “rebates” from AMI for every window sold by AMI, the nature and extent of which were not fully disclosed to WW Licensees. (Id. at ¶ 47). In addition, instead of ensuring that WW Licensees received superior pricing, the agreement between Defendants WW and AMI actually resulted in prices much higher than prices charged to non-WW retailers. However, the Plaintiffs continued to buy several franchises long after WW designated AMI as its exclusive window supplier. (Id. at ¶ 15).

         In 2011, Defendant WW admitted to its Licensees that the relationship of the parties was, and always had been, a franchise relationship. (Id. at ¶ 23). Plaintiffs allege that Defendant WW intentionally misled its “Licensees, ” in order to avoid certain disclosure requirements of the Federal Trade Commission and various state regulations including the requirement that the franchisor (WW) disclose whether it receives any consideration from a mandated supplier. (Id. at ¶¶ 25-28). It was only after WW admitted that it had been selling franchises that Plaintiffs discovered that a large part of the revenue of WW was derived from kickbacks it received from suppliers such as Defendant AMI.

         Plaintiffs[2] filed this lawsuit seeking recovery against Defendants under a variety of legal theories. Count I of the Amended Complaint seeks recovery for violation of the Robinson-Patman Act for competitive injury due to the disparate prices charged by Defendant AMI. Count V seeks recovery for violations of the Sherman Antitrust Act. Counts VI and VII seek recovery alleging violation of the Racketeer Influenced and Corrupt Organization Act (RICO). This case was originally filed in the federal district court in Nebraska and transferred to this Court upon motion of the Defendants on the basis of forum selection clauses and the doctrine of forum non conveniens. Defendants have filed separate Motions to Dismiss Counts I, V, VI and VII pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.

         II. DISCUSSION

         A. Standard of Review

         To survive a motion to dismiss, the Bendfeldts must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This evaluation is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). This “plausibility” standard is “more than a sheer possibility that a defendant has acted unlawfully.” Id. at 678. Pleading facts that could conceivably support a finding of liability is insufficient. Twombly, 550 U.S. at 547; Iqbal, 556 U.S. at 680.

         The Court should not “accept as true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). Neither formulaic recitations of legal elements nor naked assertions devoid of factual enhancement will do. Iqbal, 556 U.S. at 678. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.

         B. Robinson-Patman Act (Count I)

         The Robinson-Patman Act provides in pertinent part:

It shall be unlawful for any person engaged in commerce…to discriminate between different purchasers of commodities of like grade and quality…where the effect of such discrimination may be substantially to lessen competition or tend to create monopoly in any line of commerce or to injure, destroy, or prevent discrimination with any person who either grants or ...

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