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NFL PROPS., INC. v. DALLAS COWBOYS FOOTBALL CLUB

February 20, 1996

NATIONAL FOOTBALL LEAGUE PROPERTIES, INC., Plaintiff, against DALLAS COWBOYS FOOTBALL CLUB, LTD., TEXAS STADIUM CORPORATION, AND JERRAL W. JONES, Defendants.


The opinion of the court was delivered by: SCHEINDLIN

 SHIRA A. SCHEINDLIN, U.S.D.J.:

 I. Factual Background

 The National Football League ("NFL") is an unincorporated association comprised of 30 Member Clubs, including the Defendant Dallas Cowboys Football Club, Ltd. ("Cowboys Partnership"), which owns and operates the football team known as the Dallas Cowboys. Effective October 1, 1982, entities owning 26 of the then 28 Member Clubs entered into a trust agreement (the "Trust Agreement") which created the NFL Trust. The Trust Agreement provided that each Member Club would transfer to the NFL Trust the exclusive right to use its "Club Marks" for commercial purposes (with certain limited exceptions). These "Club Marks" include a team's name, helmet design, uniform design, and identifying slogans. See Schedule G to Trust Agreement, Exhibit D to Affidavit of Richard W. Cass ("Cass Affid."), Attorney for Defendants, at PP 2, 4. The Member Clubs also granted to the NFL Trust the exclusive right to use NFL Marks, such as the NFL Shield Design, and the names "NFL," "American Football Conference," "National Football Conference," and "Super Bowl." See id. at P 6.

 As soon as the NFL Trust was created, it entered into a "License Agreement" with Plaintiff NFL Properties, Inc. that provides Plaintiff with "the exclusive right to license the use of the Trust Property on all types of articles of merchandise and in connection with all types of advertising and promotional programs." License Agreement, Exhibit D to Cass Affid., at 3. The Club Marks of the Cowboys Partnership, like the marks of other Member Clubs, are included in the Trust Property exclusively licensed to Plaintiff.

 Plaintiff has been active in promoting the NFL and its Member Clubs, and has issued hundreds of licenses for the use of Club Marks. See Complaint at P 18. Plaintiff has also entered into agreements with companies involved in specific product categories -- such as soft drinks or charge cards -- to be exclusive sponsors of the NFL and its Member Clubs. Sponsors are given the right to use the Club Marks and NFL Marks in advertising, promotion and packaging, to promote themselves as an "Official Sponsor" of the NFL and, in some cases, as an "Official Sponsor" of the Member Clubs. See id. The revenue generated from Plaintiff's sale of licensing and sponsorship rights is shared equally by the Member Clubs, which are the sole shareholders of Plaintiff. See id. at PP 2, 19.

 Plaintiff contends that Defendants have embarked upon a wrongful plan and scheme which violates the Trust and License Agreements and infringes upon Plaintiff's rights. Specifically, the Complaint alleges that Defendants have entered into a number of highly-publicized contractual arrangements -- with Dr. Pepper, Pepsi, and NIKE -- that "impermissibly exploit the Club Marks and the NFL Marks, and thus wrongfully misappropriate revenue that belongs to plaintiff and should be shared among all the Member Clubs." Id. at 23. The Complaint also alleges that Defendants are negotiating a similar contract with American Express. See id. at P 38. Although all of the contractual arrangements Plaintiff mentions are nominally between the "sponsors" and Defendant Texas Stadium Corporation, Plaintiff claims that Defendants are using Texas Stadium as a "stand in" to help the Cowboys Partnership circumvent its obligations under the Trust and License Agreements. See id. at P 23.

 The Complaint further alleges that Defendants misappropriated Club Marks and NFL Marks in solicitation materials they submitted to potential sponsors. In particular, Plaintiff asserts that Defendants used Club Marks -- including the Cowboys "Star" logo -- and NFL Marks -- including the NFL's "Shield" logo -- in the solicitation booklet they sent to Dr. Pepper. See id. at P 29. Plaintiff contends that Defendants had no right to use such marks for any purpose. See id. at P 29.

 Defendants deny that their actions in any way violate either the Trust Agreement or the License Agreement. In support of their argument, Defendants have submitted copies of the contracts Texas Stadium entered into with Nike, Pepsi, and Dr. Pepper, as well as the contract it eventually entered into with American Express. Defendants maintain that none of these contracts grant sponsors the right to use any Trust Property -- namely, either Club Marks or NFL Marks; indeed, they note that the contracts with Pepsi, Nike and American Express explicitly state that the sponsor is not entitled to use any Club Marks. See Pepsi Contract, Ex. F to Cass Affid., at P 12; Nike Contract, Ex. G to Cass Affid., at P 3(H)(II); American Express Contract, Ex. H to Cass Affid., at P 8. Defendants argue that all of Plaintiff's claims are based on false assertions that are refuted by the underlying contracts, and that Plaintiff's action should therefore be dismissed.

 II. Legal Standard

 In evaluating a motion to dismiss, courts must accept as true the factual allegations contained in the complaint. See Cohen v. Koenig, 25 F.3d 1168, 1171 (2d Cir. 1994). All reasonable inferences must be drawn in favor of the non-moving party on such a motion. See Allen v. WestPoint-Pepperell, Inc., 945 F.2d 40, 44 (2d Cir. 1991). Moreover, "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of [its] claim which would entitle [it] to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). While courts ordinarily consider only the facts alleged in the complaint and documents incorporated therein, they may also consider documents which are integral to a plaintiff's claims. See I. Meyer Pincus & Assocs. v. Oppenheimer & Co., 936 F.2d 759, 762 (2d Cir. 1991).

 The contracts submitted by the Cowboys are clearly "integral" to Plaintiff's claims. The Complaint repeatedly alleges that Defendants have unlawfully licensed Club Marks and NFL Marks to Pepsi, Nike, and Dr. Pepper. See Complaint at PP 20-23, 29-31, 47-49, 53-54, 72, 75. The fact that the contracts were submitted by Defendants, rather than Plaintiff, is of no moment. Where a "plaintiff fails to introduce a pertinent document as part of [its] pleading, defendant may introduce the exhibit as part of [its] motion attacking the pleading." I. Meyer, 936 F.2d 759, 762 (quoting 5 C. Wright & A. Miller, Federal Practice & Procedure § 1327, at 489 & n. 15).

 "An appended document will be read to evidence what it incontestably shows once one assumes that it is what the complaint says it is (or, in the absence of a descriptive allegation, that it is what it appears to be)." Gant v. Wallingford Bd. of Educ., 69 F.3d 669, 674 (2d Cir. 1995). The contracts submitted by Defendants certainly appear to be the written agreements discussed throughout the Complaint. To the extent that the content of the contracts conflicts with allegations about those contracts made in the Complaint, the actual language of the contracts must control. See Ferber v. Travelers Corp., 802 F. Supp. 698 (D. Conn. 1992). However, Plaintiff is not precluded from demonstrating that terms contained in the contracts are contradicted by the ...


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