United States District Court, N.D. Indiana, South Bend Division
OPINION AND ORDER
L. Miller, Jr. Judge, United States District Court
to the complaint, James Cross submitted a T-shirt design and
trademark ideas to Nike, Inc. in 2012, in hopes that Nike
would pay him for the rights to use the design and trademark.
When Nike returned his submissions without consideration,
pursuant to its corporate policy on unsolicited submissions,
Mr. Cross resubmitted his ideas in 2014 and sent samples to
Nike in 2015, with the same results, and ultimately filed
suit against Nike alleging that it discriminates against
“black inventors” generally, and him
specifically, in violation of 42 U.S.C. § 1981, Title
VII of the Civil Rights Act of 1964, and federal and state
securities fraud laws. Nike's fully-briefed motion to
dismiss the complaint with prejudice under Fed.R.Civ.P.
12(b)(6) and Mr. Cross's motion to amend currently pend
before the court. The court grants the motion to dismiss and
denies the motion to amend.
Standard of Review
se complaints are held to “less stringent
standards than formal pleadings drafted by lawyers, ”
Haines v. Kerner, 404 U.S. 519, (1972)), and are
liberally construed, Alvarado v. Litscher, 267 F.3d
648, 651 (7th Cir. 2001), but they too “must contain
sufficient factual matter...to ‘state a claim to relief
that is plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
The court construes the complaint in the light most favorable
to the nonmoving party, accepts all well-pleaded facts as
true, and draws all reasonable inferences in the
plaintiff's favor. Ashcroft v. Iqbal, 556 U.S.
at 678; Anicich v. Home Depot U.S.A., Inc., 852 F.3d
643, 648 (7th Cir. 2017). Federal Rule of Civil Procedure
8(a)(2), however, “demands more than an unadorned,
the-defendant-unlawfully-harmed-me accusation, ”
Ashcroft v. Iqbal, 556 U.S. at 678, and legal
conclusions aren't entitled to any presumption of truth.
Munson v. Gaetz, 673 F.3d 630, 632 (7th Cir. 2012).
Mr. Cross offers little more in his complaint.
summarized, the complaint alleges that Mr. Cross designed and
patented a “convertible T-shirt” (the Zip-A-Tee)
and owns a registered trademark for that design
(“Authentic Zip-A-Tee”). In 2012, he submitted
his patented design idea and the trademark to Nike, in hopes
of entering into a business relationship with Nike. Nike has
an express, written policy regarding the submission of
unsolicited ideas, that provides as follows:
To submit an idea to Nike, you must have a patent for your
idea. If you'd like information about patenting your
idea, consult a patent attorney for assistance.
Nike only considers ideas that are embodied in an issued
utility patent, utility model, or a pending non-provisional
utility patent application that has been filed with an
appropriate governmental agency. Nike will not consider
submissions of designs (including design patents), artwork,
advertising, marketing suggestions, copyright registrations,
slogans, logos, brands, trademarks, or similar matters.
Product submissions that do not meet the guidelines of our
program will be returned to you without consideration.
Mr. Cross submitted his patented “Zip-A-Tee”
design idea and “Authentic Zip-A-Tee” trademark
to Nike in 2012, 2014, and 2015, Nike returned his
submissions without consideration based on its stated policy.
Mr. Cross sent letters to Nike in 2015 and 2016, expressing
his belief that its decision was motivated by racial bias,
and demanding that: (1) Zip-A-Tee, Inc. become a Nike
licensed supplier, (2) Nike buy Zip-A-Tee's two patents,
trademarks and logo, or (3) settle out of court for
discriminating against him. When Nike declined, Mr. Cross
filed the present law suit alleging that it discriminated
against him based on his race, in violation of Title VII and
42 U.S.C. § 1981, and had violated federal and state
securities fraud laws. Nike moved to dismiss, contending that
the complaint is factually and legally deficient. The court
response to the motion to dismiss, Mr. Cross abandons his
Title VII, federal securities law claim, and state
“deceptive trade” claims, but argues that he
should be allowed to proceed on his claims under 42 U.S.C.
§ 1981 and Ind. Code §§ 23-19-5-1 and
23-19-5-5 (which relate to securities violations), or, in the
alternative, to amend his complaint.
the many statutes that combat racial discrimination, §
1981, originally § 1 of the civil Rights Act of 1866, 14
Stat. 27, has a specific function: It protects the equal
right of ‘[a]ll persons within the jurisdiction of the
United States' to ‘make and enforce contracts'
without respect to race.” Domino's Pizza, Inc.
v. McDonald, 546 U.S. 470, 474 (2006) (quoting 42 U.S.C.
§ 1981). Although the allegations in Mr. Cross's
complaint are ambiguous, he appears to allege that Nike used
its submission policy as a pretext for discrimination,
refused to enter into a contractual relationship with him
because of his race, and caused him to lose profits and
unidentified “benefits”, in violation of 42
U.S.C. § 1981.
survive Nike's motion to dismiss, Mr. Cross's
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
Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007)). While § 1981 applies to “would-be
contractor[s]” like Mr. Cross, Domino's Pizza,
Inc. v. McDonald, 546 U.S. at 476, the complaint
doesn't allege any facts from which a court could
reasonably infer that Nike refused to deal with him because
he was black. To make a prima facie showing of
discrimination under § 1981, Mr. Cross must show that he
is a member of a minority group, that his submissions met the
requirements of an available contract, that Nike rejected
those submissions, and that “the contract was
eventually given to an individual who is not a member of a
protected class.” Brown v. American Honda Motor
Co., 939 F.2d 946, 949 (11th Cir. 1991). He hasn't
place of facts, Mr. Cross relies on conclusory
and information from the internet relating to Nike's
dealings with “white inventors” (R.L Beard and
Jacobus Rentmeeter) and “Caucasian corporations”
(the NBA, NFL, MLB and NCAA). Legal conclusions aren't
entitled to any presumption of truth, Munson v.
Gaetz, 673 F.3d 630, 632 (7th Cir. 2012), and Mr. Cross
concedes in his complaint that his submissions didn't
meet Nike's requirements. The court can't reasonably
infer from any of the information contained in the exhibits
attached to Mr. Cross's complaint that Nike refused to
enter into a contract with him because he was black, or that
its stated reason for not considering his design patents and
trademark submissions wasn't a legitimate,
non-discriminatory business decision based on a facially
neutral corporate policy. Indeed, there's no indication
that Nike was even aware of Mr. Cross's race when it
initially rejected his submissions in 2012 and 2014. See
Holmes v. Potter, 384 F.3d 356, 362 (7th Cir. 2004)
("Usually, an employer's lack of knowledge about a
protected category rings a death knell for discrimination
claims.”). To the extent Mr. Cross contends that Nike
treated “white inventors” and “Caucasian
corporations” more favorably under its policy, the
exhibits attached to his complaint disprove that argument.
The exhibits attached to the complaint show that Mr.
Beard's patent was a utility patent, not a design patent,
and that Nike's contractual relationships with Mr.
Rentmeeter, the NBA, NFL, MLB, and NCAA weren't the
result of unsolicited ...