W. Jones (together, Defendants") move, pursuant to Fed. R. Civ. P. 12(b)(6), to dismiss this lawsuit for failure to state a claim upon which relief can be granted. For the reasons set forth below, this motion is granted in part and denied in part.
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.
The Complaint contains nine counts. Count I alleges that Defendants' actions violate § 43(a) of the Lanham Act. Counts II and III assert, respectively, that Defendants have acted in concert to cause the Cowboys Partnership to breach express provisions of the Trust and License Agreements and the implied covenant of good faith. Count IV maintains that the Cowboys Partnership has breached its obligations as a settlor of the NFL Trust and as an owner of marks licensed to Plaintiff. Count V alleges that, by engaging in the scheme set forth in the Complaint, the Cowboys Partnership and Defendant Jones have violated fiduciary duties owed to Plaintiff and the other Member Clubs. Count VI asserts that Defendants have been unjustly enriched by their scheme, Count VII that they have misappropriated revenue belonging to Plaintiff, and Count VIII that they have tortiously interfered with contractual rights granted by Plaintiff to its licensees. Finally, Count IX seeks a declaratory judgment establishing that Defendants' actions violate the law, as set forth in Counts I through VIII.
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 actual conduct of the contracting parties. Cf. Gant, 69 F.3d at 675 (noting that by attaching a document to a complaint, a plaintiff does not admit as true all assertions contained therein).
Plaintiff repeatedly alleges in its Complaint that Defendants, through Texas Stadium, have granted sponsors the right to use the mark "Texas Stadium, home of the Dallas Cowboys." See Complaint at PP 31(a), 38, 47-48, 53. Plaintiff also alleges that Defendants have "authorized NIKE branded apparel to be worn on the field and on the sidelines during televised NFL games." Id. at P 49. An examination of the contracts at issue reveals that they neither grant the use of the phrase "home of the Dallas Cowboys" nor authorize NIKE apparel to be worn on the Dallas Cowboys' sidelines. Defendants contend that because the contracts do not authorize the alleged misconduct, Plaintiff's entire case must be dismissed.
A. Breach of Contract
Plaintiff's claim for breach of contract withstands Defendants' motion to dismiss for a number of reasons. First, although the contracts do not contain the language discussed above, they do grant other rights which may violate the Trust and License Agreements. The Pepsi contract grants Pepsi the right to use a logo which says "Texas Stadium/Home of America's Favorite Team," which Plaintiff claims is a Club Mark. The logo licensed for use by American Express contains a star which Plaintiff claims is similar to the star that appears on the Dallas Cowboys' helmets.
Accepting Plaintiff's allegation that Texas Stadium entered into these contracts as a "stand in" for the Cowboys Partnership,
and drawing all inferences in favor of Plaintiff, the use of either of these logos would violate the Trust and License Agreements.
Second, the Complaint alleges that Defendants engaged in conduct which might violate the Trust and License Agreements -- namely, a concerted campaign to create the impression that companies such as NIKE and Pepsi were sponsors of the Dallas Cowboys organization. During a nationally televised game, Defendant Jones, who controls both the Cowboys Partnership and Texas Stadium Corporation, allegedly escorted the CEO of NIKE to the Dallas Cowboys' sideline while both men prominently wore NIKE branded attire. See id. at P 36. The Complaint further alleges that Jones ordered team personnel not to dress in apparel licensed by Plaintiff during this game, so that "millions of television viewers observed no apparel brand other than NIKE" on the Cowboys' sideline. Id. at PP 36(e), 36(g). Hence, despite contractual provisions to the contrary, in practice Defendants may have authorized NIKE apparel to be worn on the Dallas Cowboys' sideline, adjacent to players wearing the Club Marks.
Plaintiff also alleges that, in furtherance of their scheme to mislead the public, the Dallas Cowboys and NIKE jointly issued a press release in which the CEO of NIKE referred to the agreement as one with the "Dallas Cowboys"; and that Defendant Jones announced that the entire Cowboys organization drinks Pepsi, and posed for pictures at a press conference dressed in a "shirt emblazoned with a Cowboys Club Mark and boots emblazoned with a Pepsi logo . . . ." Id. at PP 36(d), 31(c), 31(d). All of the above conduct may constitute an impermissible use of Club Marks (e.g., the name "Dallas Cowboys" and the team's uniforms), since under the Trust and License Agreements the Cowboys Partnership gave Plaintiff the exclusive right to use these marks for commercial purposes. At a minimum, alleging such conduct is sufficient to state a claim for breach of the implied duty of good faith, which constitutes a breach of contract under New York law. See Canstar v. J.A. Jones Constr. Co., 212 A.D.2d 452, 622 N.Y.S.2d 730, 731 (1st Dep't 1995); Fasolino Foods Co. v. Banco Nazionale del Lavoro, 961 F.2d 1052, 1058 (2d Cir. 1992).
Finally, the Complaint alleges that Defendants misappropriated Club Marks and NFL Marks in solicitation materials they sent to potential sponsors. Specifically, the Complaint states that Defendants used the Club's "Star" logo and the NFL's "Shield" logo in a solicitation booklet they sent to Dr. Pepper. See Complaint at P 29. Because the Trust and License Agreements give Plaintiff the exclusive right to use these Marks for commercial purposes, Defendants may have breached these agreements by using these Marks in a solicitation booklet. Defendants' counsel conceded that his clients' use of the Marks in solicitation materials was "absolutely inappropriate" and "probably violated their obligations . . . ." Transcript of Oral Argument, February 15, 1996, at 11.
B. The Lanham Act
Plaintiff also alleges that Defendants violated § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), which provides in relevant part:
(a)(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which--
(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities of another person, . . .