Battle Born Munitions Inc v. Dick's Sporting Goods Inc

District Court, D. Nevada·Decided April 16, 2020·No. 3:19-cv-00561·Unknown

Opinion

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BATTLE BORN MUNITIONS, INC., Case No. 3:19-cv-00561-MMD-CLB

Plaintiff, ORDER v. DICK'S SPORTING GOODS, INC., Defendant. Plaintiff Battle Born Munitions, Inc. seeks to represent a putative class of vendors of Defendant Dick’s Sporting Goods, alleging violations of Nevada’s Deceptive Trade Practices Act, NRS § 598.0903 to 598.0999 (“NDTPA”) and fraud in the inducement, in a commercial dispute arising from Defendant’s alleged late payments for large shipments of bullets. However, Plaintiff already sued Defendant in a case arising out of the same facts that is still pending in the Western District of Pennsylvania, Battle Born Munitions, Inc. v. Dick’s Sporting Goods, Inc., Case No. 2:18-cv-01418-NBF (W.D. Pa. Filed Oct. 23, 2018) (the “PA Case”). While this order resolves several motions currently before the Court,1 it focuses on Defendant’s motion for summary judgment arguing this case is barred under the doctrine prohibiting claim splitting (“Motion”).2 (ECF No. 54.) Because the Court agrees with Defendant this case is barred under the anti-claim splitting doctrine,3 and as further

1(ECF Nos. 9, 10, 17, 21, 51, 55.) The Court also reviewed the responses, replies, and related errata corresponding to these motions. (ECF Nos. 16, 19, 20, 22, 26, 28, 29, 31, 32, 38, 50, 52, 53, 56, 58.)

2Plaintiff filed a response (ECF No. 57), and Defendant replied (ECF No. 60).

3The Court uses the phrasing ‘anti-claim splitting doctrine’ though some other courts call it the claim splitting doctrine or the prohibition on claim splitting because the caselaw makes clear claim splitting is undesirable, and the doctrine is meant to discourage and dismiss this case. A. Factual Background Plaintiff filed the PA Case against Defendant in October 2018, and this case in September 2019. The parties and factual allegations in the complaints in both cases are the same. (Compare ECF No. 1 with ECF No. 54-2.) More specifically, and to provide the factual background for this case, the Court describes below the material facts alleged in each complaint. Plaintiff entered into a written agreement—“Vendor Agreement”—with Defendant to provide bullets to Defendant packaged and branded as “Field and Stream,” a brand owned by Defendant. (ECF No. 1 at 3-4; ECF No. 54-2 at 2.) Relying on the Vendor Agreement, Plaintiff purchased nearly $4.5 million worth of bullets. (ECF No. 1 at 4; ECF No. 54-2 at 3-4.) Plaintiff expected Defendant to take delivery of these bullets in November 2016, but Defendant did not take delivery of them until August 2017. (ECF No. 1 at 4-5; ECF No. 54-2 at 3.) Plaintiff’s claims arise from Defendant’s delayed acceptance of delivery of the bullets. As a result of the delay, Defendant did not pay Plaintiff when Plaintiff expected to be paid. That also meant that Plaintiff had to hold onto all of the bullets in the meantime. This, in turn, caused Plaintiff to incur costs it would not have otherwise incurred. (ECF No. 1 at 5; ECF No. 54-2 at 4-5.) Plaintiff also alleges that later, when Defendant did pay Plaintiff, Defendant did not pay Plaintiff the full amount it expected to be paid, because Defendant applied certain chargebacks and an allegedly inapplicable discount to the amounts it paid Plaintiff. (ECF No. 1 at 5; ECF No. 54-2 at 4-5.) Moreover, Plaintiff alleges Defendant required it to take

it. See, e.g., Adams v. California Dep’t of Health Servs., 487 F.3d 684, 689 (9th Cir. 2007) (mentioning the “doctrine against claim-splitting”). of the bullets in November 2016. (ECF No. 1 at 5; ECF No. 54-2 at 5.) Plaintiff thus alleges it incurred damages of inappropriate discounts totaling $108,462, chargeback deductions of $14,608, warehousing costs of $45,125, and insurance premium costs of $32,743. (ECF No. 1 at 5; ECF No. 54-2 at 5.) Moreover, Plaintiff alleges that it made a deal to sell 12 Bell helicopters to the government of Lebanon around the same time, from which Plaintiff would have profited $5,224,000, but Plaintiff was unable to sell the helicopters to Lebanon because the capital it needed for that deal was tied up in the bullets it was warehousing for Defendant. (ECF No. 1 at 8-9; ECF No. 54-2 at 5-7.) Plaintiff therefore also sought, or seeks, lost profits damages of $5,224,000. (ECF No. 1 at 8-9; ECF No. 54-2 at 5-7.) The parties refer to these damages as the ‘Helicopter Damages.’ For ease of reference, the Court will as well. While both cases share these common factual allegations, Plaintiff brings slightly different claims in the two cases. In the PA Case, Plaintiff sued Defendant for breach of contract, fraudulent inducement, and negligent misrepresentation. (ECF No. 54-2 at 9-11.) Plaintiff later amended its claims in the PA case to include a claim of a violation of the Restatement (Second) of Torts § 552. (ECF No. 54-3 at 14-15.) As mentioned supra, in this case, Plaintiff brings claims for fraud in the inducement and violation of the NDTPA, and seeks to represent a class of other vendors it suspects were similarly mistreated by Defendant. (ECF No. 1.) B. Procedural History The procedural history of the PA Case is also important here. First, on Defendant’s motion (ECF No. 54-4), United States District Judge Nora Barry Fischer of the Western District of Pennsylvania dismissed all of Plaintiff’s claims except the breach of contract claim on May 3, 2019 (ECF Nos. 54-7, 54-8). In pertinent part, Judge Fischer found that Pennsylvania law governed the relationship between the parties per the terms of the Vendor Agreement, Plaintiff’s non-contractual claims were barred because the duties Defendant allegedly breached were created by the express terms of the parties’ contract consequential, and lost profit damages (including the Helicopter Damages) on its breach of contract claim were barred by the terms of the Vendor Agreement. (ECF No. 54-7 at 8- 17.) Second, after first filing a proposed second amended complaint without the requisite motion accompanying it, Plaintiff filed a motion for leave to amend its complaint, primarily to add class action allegations. (ECF No. 54-9 (proposed second amended complaint), 54-10, 54-11, 54-12, 54-13.) Judge Fischer denied Plaintiff’s motion to amend on October 22, 2019 because it was untimely, and she found that Plaintiff failed to demonstrate good cause to excuse its late filing. (ECF No. 54-14 at 6-9.) She wrote in pertinent part that Plaintiff’s “untimely actions in seeking leave to add the class action claims are, at best, attributable to attorney error or legal strategy such that neither diligence nor good cause have been shown.” (Id. at 7.) She also noted that Plaintiff conceded “that it knew about the potential class action claims from the beginning of this litigation [in the fall of 2018] and concedes that it failed to adhere to this Court’s September 1, 2019 deadline to file motions for leave to amend and add new parties.” (Id.) Third, Defendant filed a motion to enjoin Plaintiff from proceeding with this case under the first filed rule in the PA Case. (ECF No. 54-15 at 2.) Judge Fischer denied that motion on February 4, 2020.4 (Id.) She found that “Defendant has failed to meet its burden that this Court should exercise its discretionary power under the first filed rule to issue the extraordinary relief of an injunction barring Plaintiff” from prosecuting this case. (Id.) Judge Fischer further found that the first filed rule did not bar this case because Plaintiff asserts a class action claim under the NDTPA in this case, which Plaintiff did not assert—and as to the class action aspect of Plaintiff’s Complaint in this case, was not allowed to assert— in the PA Case. (Id. at 3.) Judge Fischer also noted that no court had yet adjudicated

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Battle Born Munitions Inc v. Dick's Sporting Goods Inc, (D. Nev. 2020).

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