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Southern Transportation, Inc. v. LYFT, Inc.

United States District Court, W.D. Tennessee, Western Division

June 30, 2017

SOUTHERN TRANSPORTATION, INC., Plaintiff,
v.
LYFT, INC.; UBER TECHNOLOGIES, INC.; and RASIER, LLC, Defendants.

          ORDER

          SAMUEL H. MAYS, JR. UNITED STATES DISTRICT JUDGE.

         Before the Court is Defendant Lyft, Inc.'s October 17, 2016 Motion to Dismiss (“Lyft's Motion”). (ECF No. 33 at 91.[1]) Plaintiff Southern Transportation, Inc., responded on November 14, 2016. (ECF No. 46 at 158.) Lyft replied on December 8, 2016. (ECF No. 58 at 200.)

         Also before the Court is Defendant Uber Technologies, Inc., and Rasier, LLC's (collectively, the “Uber Defendants”) October 20, 2016 Motion to Dismiss (“Uber's Motion”). (ECF No. 35 at 113.) Plaintiff responded on November 14, 2016. (ECF No. 46 at 158.) The Uber Defendants replied on December 8, 2016. (ECF No. 59 at 213.) Plaintiff filed a supplemental response on February 7, 2017. (ECF No. 63 at 244.) The Uber Defendants filed a supplemental reply on February 21, 2017. (ECF No. 64 at 246.)

         For the following reasons, Lyft's Motion and Uber's Motion are GRANTED.

         I. Background

         On August 16, 2016, Plaintiff filed this action against Defendants, alleging intentional interference with business relationships, acting in concert, and “class action.” (ECF No. 1 ¶¶ 24-48 at 6-11.) Plaintiff's Complaint alleges the following facts.

         Plaintiff operates Yellow Cabs, a taxicab service, and other passenger-transportation services in Memphis, Tennessee, and the surrounding area. Plaintiff provides passenger transportation to and from Memphis International Airport and various hotels, restaurants, and other businesses. (Id. ¶¶ 8-9 at 3.) In April 2014, Defendants began providing passenger-transportation services in Memphis and the surrounding area. Defendants also provide passenger transportation to and from the same kinds of businesses as Plaintiff. (Id. ¶¶ 10, 16 at 3-4.)

         Defendants are “transportation network companies.” (Id. ¶ 11 at 3.) They operate digital networks that connect passengers with drivers who provide prearranged rides. (Id. ¶ 12 at 3.) Through this system, passengers request rides using Defendants' digital networks, and the digital networks in turn connect passengers with drivers who provide the rides using their personal vehicles. Of the fee a passenger pays for a ride, a portion goes to the driver and a portion to Defendants. (Id. ¶¶ 13-15 at 3-4.)

         Plaintiff alleges that Defendants, acting in concert with their drivers, “have and continue to intentionally interfere with the business relationships of” Plaintiff. (Id. ¶ 30 at 7; see also Id. ¶¶ 24-29 at 6-7.) Plaintiff alleges that it has prospective business relationships with “all persons in Memphis and the surrounding area desiring passenger transportation services.” (Id. ¶ 31 at 8.) Plaintiff alleges that both it and Defendants provide the same service in the same market. Plaintiff alleges that, because Defendants are aware of their own prospective business relationships and are aware that other companies provide passenger-transportation services in Memphis and the surrounding area, Defendants have knowledge of Plaintiff's prospective business relationships. (Id. ¶ 32 at 8.)

         Plaintiff alleges that “Defendants have and continue to intend to cause breach of plaintiff's prospective relations.” (Id. ¶ 33 at 8.) Plaintiff contends that it and Defendants “provide the same service to the same market, and business gained by one party generally means business lost by the other party.” (Id.) Plaintiff alleges that “Defendants desire to interfere with plaintiff's business relations and take business from plaintiff, or they know that the interference is substantially certain to occur as a result of their actions.” (Id.) Plaintiff alleges that “Defendants know and intend that their actions will result in a loss of business and income to the plaintiff.” (Id.)

         Plaintiff alleges that Defendants “have and continue to use improper means to interfere with plaintiff's business relations.” (Id. ¶ 34 at 9.) Plaintiff alleges that, while it has operated in full compliance with various Tennessee statutes and Memphis city ordinances regulating passenger-transportation services, Defendants have “failed and refused to comply” with those authorities, “operat[ing] illegally in defiance of these statutes and ordinances.” (Id. ¶¶ 22-23, 34 at 5-6, 9.) Plaintiff contends that it has lost income and profits as a result of Defendants' interference with its business relations. (Id. ¶ 35 at 9.)

         Plaintiff seeks to bring this action on behalf of itself and a class of other similarly situated parties. (Id. ¶¶ 40-48 at 10-12.) Plaintiff seeks compensatory and punitive damages, disgorgement of profits, costs, and attorney's fees. (Id. at 12.)

         II. Jurisdiction and Choice of Law

         Under 28 U.S.C. § 1332(a), this Court has original jurisdiction over all civil actions between citizens of different states “where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs.” 28 U.S.C. § 1332(a)(1). Plaintiff is a Tennessee corporation with its principal place of business in Tennessee. (ECF No. 1 ¶ 1 at 1.) Rasier's sole member is Uber. (ECF No. 66 at 268.) Both Lyft and Uber are Delaware corporations with their principal places of business in California. (ECF No. 1 ¶¶ 2-3 at 1-2.) Plaintiff seeks damages in excess of $75, 000. (Id. ¶ 7 at 2.) The parties are completely diverse, and the amount-in-controversy requirement is satisfied.

         In a diversity action, state substantive law governs. See Brocklehurst v. PPG Indus., Inc., 123 F.3d 890, 894 (6th Cir. 1997) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938)). Where, as here, there is no dispute that a certain state's substantive law applies, the court will not conduct a “choice of law” analysis sua sponte. See GBJ Corp. v. E. Ohio Paving Co., 139 F.3d 1080, 1085 (6th Cir. 1998). Tennessee substantive law applies.

         III. Standard of Review

         In addressing a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), the court must construe the complaint in the light most favorable to the plaintiff and accept all well-pled factual allegations as true. League of United Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007). A plaintiff can support a claim “by showing any set of facts consistent with the allegations in the complaint.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 563 (2007).

         This standard requires more than bare assertions of legal conclusions. Tackett v. M&G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009). “[A] formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. To survive a motion to dismiss, a complaint must contain sufficient facts “to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citation omitted). A plaintiff with no facts and “armed with nothing more than conclusions” cannot “unlock the doors of discovery.” Id. at 678-79. To survive a motion to dismiss, a complaint must “contain either direct or inferential allegations respecting all material elements necessary for recovery under a viable legal theory.” D'Ambrosio v. Marino, 747 F.3d 378, 383 (6th Cir. 2014) (quotation marks omitted).

         IV. Analysis

         A. Intentional Interference with Business Relationships

         Defendants contend that Plaintiff has not adequately pled each element of its claim for intentional interference with business relationships (the “intentional-interference claim”). (ECF No. 33-1 at 95-96, ECF No. 35-1 at 120-21.) Plaintiff disagrees. (ECF No. 46 at 166-67.)

         To sustain a claim for intentional interference with business relationships under Tennessee law, a plaintiff ...


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