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Corporate Trade, Inc. v. Golf Channel

United States District Court, Second Circuit

September 24, 2013

CORPORATE TRADE, INC., Plaintiff,
v.
GOLF CHANNEL, Defendant.

MEMORANDUM AND ORDER

P. KEVIN CASTEL, District Judge.

Plaintiff Corporate Trade, Inc. ("CTI") brings five claims under New York law, asserting that defendant Golf Channel unlawfully interfered with a contractual arrangement between CTI and a non-party media-buying firm, KSL Media, Inc. ("KSL"). CTI alleges that there was an arrangement between Golf Channel and KSL under which KSL received undisclosed rebates for all ads placed on Golf Channel on behalf of CTI's client, non-party Callaway Golf Company ("Callaway"). It alleges that this arrangement injured CTI because KSL alone made "a larger profit from placing Callaway's advertising with Golf Channel" even though, according to CTI's contract with KSL, "all profits earned from the placement of Callaway's advertising by KSL was to be divided equally between KSL and CTI." (Compl't ¶¶ 19, 18.)

Defendant contends that the action is time-barred, and moves to dismiss the Complaint pursuant to Rule 12(b)(6), Fed.R.Civ.P. Because plaintiff commenced this action beyond the limitations period and has not alleged facts sufficient to plead that the limitations period is equitably estopped, the Complaint is dismissed.

BACKGROUND.

A. The Parties.

Plaintiff CTI is a Nevada corporation with its principal place of business in New Jersey. (Compl't ¶ 1.) CTI states that it "provides asset recovery services" to its clients by purchasing their "undervalued asset portfolios" for full book value. (Compl't ¶ 7.) It purchases those assets using cash and trade credits. (Compl't ¶¶ 8-9.) Trade credits "can be applied towards media advertising, event sponsorships, and other pre-budgeted corporate marketing and advertising expenditures." (Compl't ¶¶ 8.) Defendant Golf Channel is a cable network available in more than 120 million homes. (Compl't ¶ 5.)

According to the Complaint, Golf Channel is an LLC that "is owned by NBCUniversal Media LLC, which is owned 51% by Comcast and 49% by General Electric Company." (Compl't ¶ 4.) In a statement filed with this Court on September 16, 2013 pursuant to Rule 7.1, Fed. R. Civ. P., counsel to Golf Channel states that, as of March 19, 2013, NBCUniversal Media LLC "is indirectly owned 100% by Comcast Corporation...." (Docket # 18.) Comcast is a Delaware corporation with its principal place of business in Pennsylvania. (Compl't ¶ 2.)

Complete diversity exists between the parties, the Complaint properly alleges the amount in controversy, and this Court therefore has subject matter jurisdiction. 28 U.S.C. § 1332(a).

B. The Rebate Arrangement between KSL and Golf Channel.

According to the Complaint, in December 2001, CTI entered into a media-placement agreement with KSL. (Compl't ¶ 13.) Under the terms of this agreement, CTI outsourced certain media-buying duties to KSL, with KSL working at the direction of CTI. (Compl't ¶ 13.) All clients who used KSL's services "expressly" remained the clients of CTI. (Compl't ¶ 13.) The agreement included provisions on the division of profits and losses between KSL and CTI, as well as auditing requirements. (Compl't ¶ 14.)

The Complaint alleges upon information and belief that sometime in or around 2003, KSL and Golf Channel entered into an arrangement whereby Golf Channel provided a 10% rebate to KSL for its media placements on Golf Channel. (Compl't ¶ 19.) CTI asserts that KSL then placed advertisements on Golf Channel for a CTI client, Callaway, which resulted in KSL "making a larger profit from placing Callaway's advertising with Golf Channel." (Compl't ¶ 19.) The rebate was not disclosed to CTI or Callaway. (Compl't ¶¶ 19-20.) Plaintiff asserts that Golf Channel made "numerous inappropriate and undisclosed rebate payments to KSL, " which resulted in "substantial" benefits to Golf Channel and KSL "at the direct and proximate cost to Callaway and CTI." (Compl't ¶ 22.) CTI asserts that it "was entitled to receive from Callaway a percentage of the value of cash savings on media purchases that Callaway realized from the use of CTI's media buying expertise or trade credits3 provided by CTI." (Compl't ¶ 20.)

C. CTI's Actions upon Learning of the KSL/Golf Channel Rebate.

According to the Complaint, at an unspecified date, Brian Egan, who is CTI's president and CEO, "eventually suspected that KSL was acting improperly and in bad faith in connection with the media purchases for Callaway, " and estimated that the rebates were costing Callaway hundreds of thousands of dollars per year. (Compl't ¶¶ 7, 23.) Egan informed Callaway of his suspicions. (Compl't ¶ 23.) CTI and Callaway then entered into a confidentiality agreement pursuant to which they agreed to share any recovery from KSL or Golf Channel. (Compl't ¶ 23.)

The Complaint alleges upon information and belief that in 2008, Callaway reached settlements with both KSL and Golf Channel. (Compl't ¶¶ 24-25.) Consistent with the CTI-Callaway confidentiality agreement, from 2008 to 2010, Callaway made payments to CTI in connection with the settlements. (Compl't ¶ 26.) According to the Complaint, at the time of these 2008 settlements, CTI still did not ...


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