MEMORANDUM OPINION [DKT. ## 31, 32]
RICHARD J. LEON UNITED STATES DISTRICT JUDGE.
Plaintiff
K&D, LLC is the owner and operator of Cork Wine Bar
(hereinafter, "plaintiff or "Cork"), a
restaurant and bar located in the downtown Washington, D.C.
area. Am. Compl. 2 [Dkt. #30]. On March 9, 2017, Cork brought
this action against defendants Trump Old Post Office, LLC
("OPO") and President Donald J. Trump
("President Trump" or "the President"),
alleging that defendants are liable in tort for unfair
competition under D.C. common law and seeking injunctive
relief. Id. at ¶¶ 30-42; see D.C.
Sup. Ct. Compl. 11 [Dkt. #1-1].[1] OPO, which is owned by a
revocable trust that acts for the sole benefit of President
Trump, operates a hotel and restaurants under the name Trump
International Hotel ("Hotel"). Am. Compl.
¶¶ 2, 5, 12-13. The Hotel is located within the
historic Old Post Office Pavilion at 1100 Pennsylvania
Avenue, N.W., which OPO leases from the General Services
Administration ("GSA"). Id. at
¶¶ 7-8.
Pending
before the Court are OPO's and the President's
motions to dismiss. See Def. Trump Old Post Office
LLC's Mot. to Dismiss and Stmt, of Points and Authorities
in Support ("OPO Mot. to Dismiss") [Dkt. ## 31,
31-1]; Def. Donald J. Trump's Mot. to Dismiss
("Pres. Trump Mot. to Dismiss") [Dkt. # 32]. Upon
consideration of the pleadings and the relevant law, and for
the reasons stated below, defendants' motions to dismiss
are GRANTED and this case is
DISMISSED.
BACKGROUND
The
crux of Cork's complaint is that since President Trump
took office on January 20, 2017, Cork has been damaged by
unfair competition resulting from the President's
ownership, through OPO, of the Hotel. Cork alleges that it
"competes with the restaurants in the Hotel by providing
the same or similar services that are provided by them in the
same marketplace." Am. Compl. ¶ 32. Specifically,
Cork asserts that a large portion of its business involves
hosting and catering "receptions and dinners for large
groups of lobbyists, as well as for political fundraisers and
conventions" attended by individuals and organizations
who have business before and/or seek to influence federal
officials and United States policy. Id. at ¶ 4,
19, 24-28.
Since
the President's election, Cork claims, "many
organizations and individuals, including citizens of nations
other than the United States, [have] substantially increased
their use of the Hotel and its various facilities to the
detriment of Cork." Id. at ¶ 17. Cork
attributes this upswing to an intentional effort by the
Hotel, President Trump, and Trump family members and
associates "to promote the Hotel to maximize its
exposure and income-producing potential." Id.
at ¶ 20. The Amended Complaint provides several examples
of these so-called "promotional activities,"
including the use of "Trump" name branding as well
as former White House Press Secretary Sean Spicer's
televised encouragement to visit the Hotel, which he
described as "absolutely stunning." Id. at
¶20(a)-(b). Cork also references press reports
documenting the Hotel's patronage by foreign diplomats
and lobbyists, purportedly demonstrating the Hotel's
unfair advantage. Id. at ¶¶ 21-23.
In
addition, Cork emphasizes Section 37.19 of OPO's lease
with the GSA, which prohibits any elected United States or
D.C. official from being "admitted to any share or part
of this Lease, or to any benefit that may arise
therefrom," unless the official is "a shareholder
or other beneficial owner of any publicly held corporation or
other entity, if this Lease is for the general benefit of
such" entity. Id. at ¶ 10. According to
Cork, President Trump's beneficial ownership of the Hotel
through OPO violates Section 37.19, placing OPO in default.
Id. at ¶¶ 35, 38. The parties dispute the
importance of this alleged breach; defendants contend that it
is fundamental to Cork's unfair competition claim,
see OPO Mot. to Dismiss 9-13; Pres. Trump Mot. to
Dismiss 12-13, while Cork describes it as an ancillary
illustration of D.C.'s "understanding of fair
competition norms," see Pl.'s Mem. of
Points and Authorities in Opp'n to February 2018 Mots, of
Defs. to Dismiss ("Pl.'s Opp'n") 24 [Dkt. #
34]. In either case, after President Trump took office, the
GSA determined that his assumption of the Presidency does
not constitute a breach of Section 37.19 and that
OPO remains in compliance with the lease. See OPO
Mot. to Dismiss 4-5.
On
February 26, 2018, defendants moved to dismiss Cork's
Amended Complaint under Federal Rule of Civil Procedure
12(b)(6). Defendants contend that Cork has failed to state an
unfair competition claim under D.C. common law because: (1)
the allegedly tortious conduct does not constitute an
"unlawful act" under D.C.'s narrow unfair
competition law; (2) our Circuit Court precedent forecloses
unfair competition claims predicated on the competitive
advantage derived from a public figure's prominence; and
(3) Cork cannot sue in tort to enforce a contract (the GSA
lease) to which it is not a party. OPO Mot. to Dismiss 7-15;
Pres. Trump Mot. to Dismiss 9-14. President Trump's
defense rests on the additional federal law grounds that, as
President, he is entitled to absolute immunity from
Cork's lawsuit, and that Cork's claim is preempted
under the Constitution's Supremacy Clause, which
precludes D.C. from directly regulating federal officials.
Pres. Trump Mot. to Dismiss 4-9. Cork opposed defendants'
motions to dismiss on March 12, 2018, see [Dkt. #
34], and OPO and the President filed their reply briefs on
March 19, 2018, see [Dkt. ## 35-36]. On September
25, 2018, the parties presented their oral argument on the
motions to dismiss.
LEGAL
STANDARD
To
survive a Rule 12(b)(6) motion to dismiss, "a complaint
must contain sufficient factual matter, accepted as true, to
'state a claim to relief that is plausible on its
face.'" Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). A complaint "does not need
detailed factual allegations," but it does need
"more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not
do." Twombly, 550 U.S. at 555 (alteration in
original) (citations and internal quotations marks omitted).
A facially plausible claim requires "factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged."
Iqball 556 U.S. at 678. "The Court assumes the
truth of all well-pleaded factual allegations in the
complaint and construes reasonable inferences from those
allegations in the plaintiffs favor[.]" Sissel v.
U.S. Dep't of Health & Human Servs., 760 F.3d 1,
4 (D.C. Cir. 2014). The Court "need not, however, accept
inferences drawn by a plaintiff if such inferences are
unsupported by the facts set out in the complaint."
Nurriddin v. Bolden, 818 F.3d 751, 756 (D.C. Cir.
2016) (per curiam) (alterations and internal quotation marks
omitted). Nor must it "accept legal conclusions couched
as factual allegations." Id. (citing
Iqbal, 556 U.S. at 678). In deciding a Rule 12(b)(6)
motion to dismiss, the Court may consider not only the
factual allegations in the complaint, but also any
"documents attached to or incorporated in the complaint,
matters of which courts may take judicial notice, and
documents appended to a motion to dismiss whose authenticity
is not disputed, if they are referred to in the complaint and
integral to a claim." Harris v. Amalgamated Transit
Union Local 689, 825 F.Supp.2d 82, 85 (D.D.C. 2011).
ANALYSIS
While
appearing at first blush to be just another unfair
competition action, there are constitutional questions of
profound weight and import lurking within the contours of
this case. Fortunately, however, the pending motions can be
resolved without opening that Pandora's box of novel
issues. Thus, for the reasons set forth below, I have
concluded on the merits that Cork has failed to state a claim
of unfair competition under D.C. law and that defendants
OPO's and President Trump's motions to dismiss must
be GRANTED.[2]
I.
Unfair Competition
Reflecting
"our society's encouragement of 'aggressive
economic competition, '" the tort of unfair
competition is actionable at D.C. common law only in
"limited" circumstances. Econ. Research Servs.,
Inc. v. Resolution Econs., LLC,208 F.Supp.3d 219, 231
(2016) (quoting Ray v. Proxmire,581 F.2d 998, 1002
(D.C. Cir. 1978)); see also Scanwell Labs., Inc. v.
Thomas,521 F.2d 941, 949 (D.C. Cir. 1975) (tort of
unfair competition must be "limited in scope in a free
market economy based on free and open competition for
business"). The law does not enumerate "specific
elements" which, if established, make out a cause of
action for unfair competition. Camarda v. Certified Fin.
Planner Bd. of Standards, Inc.,672 Fed.Appx. 28, 30
(Mem) (D.C. Cir. 2016) (quoting Furash & Co., Inc. v.
McClave,130 F.Supp.2d 48, 57 (D.D.C. 2001)). Instead,
the claim is defined "by the description of various acts
that would constitute the tort if they resulted in
damage." Id. These acts include
"defamation, disparagement of a competitor's goods
or business methods, intimidation of customers or employees,
interference with access to the business, threats of
groundless suits, commercial bribery, inducing employees to
sabotage, [and] false ...