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Rayeman Elements, Inc. v. Masterhand Milling, LLC

United States District Court, D. Nebraska

June 12, 2015

RAYEMAN ELEMENTS, INC., a Maryland corporation, SAMANTHA RAE WESTERN, an individual, RAYMOND TAYLOR JOHNSON, JR., an individual, Plaintiffs,
v.
MASTERHAND MILLING, LLC, a Kansas limited liability company, INTEGRATED RESOURCES, LLC, an Oklahoma limited liability company, INTEGRATED FEED SOLUTIONS, LLC, an Oklahoma limited liability company, MICHAEL RAY THOMAS, Bill Graddy, an individual, Defendants.

MEMORANDUM AND ORDER

LAURIE SMITH CAMP, District Judge.

This matter is before the Court on two Motions to Dismiss, that of Defendants Integrated Resources, LLC, Integrated Feed Solution, LLC, and Bill Graddy (Filing No. 20), and that of Defendant Masterhand Milling, LLC (Filing No. 27). For the reasons discussed below, the Motions will be granted in part, and this action will be stayed pending the disposition of a parallel state-court proceeding.

SUMMARY OF FACTUAL ALLEGATIONS IN COMPLAINT

As Plaintiffs' Complaint (Filing No. 1) fairly notes, their claims "arise out of a complicated set of facts[.]" ( Id. at 1.) A this stage of the proceedings, the Court accepts as true all well-pled facts in the Complaint, though the Court need not accept the Plaintiffs' conclusions of law.

Summarized and simplified, the Complaint alleges that Plaintiffs Samantha Rae Western ("Western") and Raymond Taylor Johnson, Jr. ("Johnson") and Defendant Michael Ray Thomas ("Thomas") collectively own certain patents, patent applications, and technologies related to the curing, drying, and compressing of distiller's grains used for livestock feed (the "Technology"). On April 15, 2011, Plaintiff Rayeman Elements, Inc. ("Rayeman") obtained an exclusive license to the Technology. On December 24, 2013, Rayeman's lender, Midwest Community Development Fund IV, LLC ("Midwest"), obtained a security interest in the Technology in consideration for certain loans.

In August 2013, Defendant Bill Graddy ("Graddy") acting on behalf of Defendant Integrated Feed Solutions, LLC ("Integrated Feed"), and Western acting on behalf of Rayeman, entered into an Asset Purchase Agreement for the sale of certain physical assets from Rayeman to Integrated Feed. On November 20, 2014, Thomas entered into an Intellectual Property Purchase Agreement with Defendant Integrated Resources, LLC ("Integrated Resources") through which Thomas purported to assign his interest in the Technology to Integrated Resources, which then licensed the purported rights to Integrated Feed which then licensed the purported rights to Defendant Masterhand Milling, LLC ("Masterhand") that has been using the Technology since November 2014.

Plaintiffs contend that Rayeman has the exclusive license to the Technology. Plaintiffs filed this action on March 22, 2015, seeking (1) a declaratory judgment confirming ownership of the Technology in certain percentages held by Western, Johnson, and Thomas; Rayeman's exclusive license to the Technology; and the other Defendants' lack of any right to the Technology, (2) injunctive relief and an award of damages against Masterhand for patent infringement, and (3) an award of damages against Graddy for inducing the alleged infringement.

Defendants have moved to dismiss the Complaint pursuant to Fed.R.Civ.P. 12(b)(6) and (7). All parties have presented evidentiary materials in support of their respective positions.

STANDARD OF REVIEW

Fed. R. Civ. P. 12(b)(6)

A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). "To survive a motion to dismiss, a complaint need not include detailed factual allegations.'" Bradley Timberland Res. v. Bradley Lumber Co., 712 F.3d 401, 406 (8th Cir. 2013) (quoting C.N. v. Willmar Pub. Sch., Indep. Sch. Dist. No. 347, 591 F.3d 624, 629 (8th Cir. 2010)). However, "[a] pleading that offers labels and conclusions' or a formulaic recitation of the elements of a cause of action will not do.'" Magee v. Trustees of Hamline Univ., Minn., 747 F.3d 532, 535 (8th Cir. 2014) (quoting Bell Atlantic Corp v. Twombly 550 U.S. 544, 555 (2007)). Instead, the "complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Id. at 535 (quoting Twombly 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Gallagher v. City of Clayton, 699 F.3d 1013, 1016 (8th Cir. 2012) cert. denied, 133 S.Ct. 2354 (U.S. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009))(internal quotation marks omitted).

"Courts must accept... specific factual allegations as true but are not required to accept... legal conclusions." Outdoor Cent., Inc. v. GreatLodge.com, Inc., 643 F.3d 1115, 1120 (8th Cir. 2011) (quoting Brown v. Medtronic, Inc., 628 F.3d 451, 459 (8th Cir. 2010))(internal quotation marks omitted). "[L]egal conclusions can provide the framework of a complaint" but "must be supported by factual allegations, " Hager v. Arkansas Dep't of Health, 735 F.3d 1009, 1014 (8th Cir. 2013) (quoting Iqbal, 556 U.S. at 679), that "raise a right to relief above the speculative level." Id. at 1014 (quoting Twombly, 550 U.S. at 555). When ruling on a defendant's motion to dismiss, a judge must rule "on the assumption that all the allegations in the complaint are true, " and "a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.'" Twombly, 550 U.S. at 555-556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). However, "to withstand a Rule 12(b)(6) motion, a complaint must contain sufficient factual allegations to state a claim of relief that is plausible on its face." Smithrud v. City of St. Paul, 746 F.3d 391, 397 (8th Cir. 2014) (internal quotation marks omitted) (citing Twombly at 547).

"Two working principles underlie... Twombly. First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 555). "Second, only a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 679 (citing Twombly, 550 U.S. at 556). "Determining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.

"If, on a motion under Rule 12(b)(6)... matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all ...


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