United States District Court, D. Massachusetts
Xiao Wei Yang Catering Linkage in Inner Mongolia Co., LTD., and Fei Xie, Plaintiffs,
Inner Mongolia Xiao Wei Yang USA, Inc., d/b/a, Xiao Wei Yang and/or Little Lamb Restaurant, Cheng Xu, and Yonghua Qin, Defendants
[Copyrighted Material Omitted]
Xiao Wei Yang Catering Linkage In Inner Mongolia Co., Ltd.,
Fei Xie, Plaintiff: Frank Xu, LEAD ATTORNEY, PRO HAC VICE,
Law Office of Frank Xu, PLLC, New York, NY; Hunter D. Keeton,
Michael A. Albert, Wolf, Greenfield & Sacks, PC, Boston, MA.
Inner Mongolia Xiao Wei Yang USA, Inc. doing business as Xiao
Wei Yang doing business as Little Lamb Restaurant, Cheng Xu,
Yonghua Qin, Defendants: Todd J. Bennett, Bennett & Belfort,
P.C., Cambridge, MA.
J. Casper, United States District Judge.
Xiao Wei Yang Catering Linkage in Inner Mongolia Co., LTD.
(" Xiao Wei Yang Catering-China" ) and Fei Xie
(" Xie" ) (collectively, " Plaintiffs" )
have filed this lawsuit against Defendants Inner Mongolia
Xiao Wei Yang USA, Inc., d/b/a Xiao Wei Yang and/or Little
Lamb Restaurant (" Inner Mongolia USA" ), Cheng Xu
(" Xu" ) and Yonghua Qin (" Qin" )
(collectively, " Defendants" ) alleging breach of
contract (Count I), breach of the implied covenant of good
faith and fair dealing (Count II), fraudulent inducement
(Count III), unjust enrichment (Count IV), trademark
infringement (Count V), false designation of origin (Count
VI), trademark dilution (Count VII), unfair competition
(VIII) and unfair and deceptive trade practices (Count IX).
D.1. Defendants have now moved to dismiss. D. 8. For the
reasons stated below, the Court DENIES the motion in part
with prejudice (as to trademark claims) and in part without
prejudice (as to the contract claims) and grants limited
jurisdictional discovery regarding the forum selection
Standard of Review
motion to dismiss for failure to state a claim upon which
relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6), the
Court must determine if the facts alleged " plausibly
narrate a claim for relief." Schatz v. Republican
State Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012)
(citation omitted). Reading the complaint " as a
whole," the Court must conduct a two-step,
context-specific inquiry. García-Catalá n
v. United States, 734 F.3d 100, 103 (1st Cir. 2013).
First, the Court must distinguish the factual allegations
from the conclusory legal allegations contained therein.
Id. Factual allegations must be accepted as true,
while conclusory legal conclusions are not entitled to
credit. Id. Second, the Court must determine whether
the factual allegations present a " reasonable inference
that the defendant is liable for the misconduct
alleged." Haley v. City of Boston, 657 F.3d 39,
46 (1st Cir. 2011). In sum, the complaint must provide
sufficient factual allegations for the Court to find the
claim " plausible on its face."
García-Catalá n, 734 F.3d at 103 (internal
quotation marks and citation omitted).
following allegations are drawn from the complaint, D.1, and
as true for the purpose of the motion to dismiss. Xiao Wei
Yang Catering-China is one of the leading and best known
restaurant chains, brand names and franchises in China. D.1 ¶
1. Xie is a master and expert chef for the chain.
Id. ¶ 2. Inner Mongolia USA is a Massachusetts
corporation that operates the " Little Lamb
Restaurant" located in Boston, Massachusetts.
Id. ¶ 3. Xu, a resident of Massachusetts, is the
president of Inner Mongolia USA. Id. ¶ 4. Qin, also
a resident of Massachusetts, is the treasurer and secretary
of Inner Mongolia USA. Id. ¶ 5. At all times
relevant to this lawsuit, Xu and Qin have been " de
facto and/or legal spouses." Id. ¶ 6. Xu
and Qin are also owners and principals of Little Lamb USA,
LLC, a limited liability company organized under the laws of
about early 2011, Xu and Qin traveled to Xiao Wei Yang
Catering-China's headquarters in Inner Mongolia to engage
in negotiations on Xiao Wei Yang Catering-China's
franchise, brand-name licensing and related business
developments in the United States. Id. ¶ 11. The
negotiations resulted in a contract, the Cooperation
Agreement (" Cooperation Agreement" ). Id.
¶ 12. Under the terms of the Cooperation Agreement, Xu and
Qin incorporated Inner Mongolia USA. Id. ¶ 16.
the negotiation of the Cooperation Agreement, Plaintiffs
allege that Xu and Qin fraudulently represented themselves as
making an arms-length transaction. Id. ¶ 13. They
contend that Xu and Qin concealed material facts, including
that they were married and were self-dealing in this matter.
Id. Xu and Qin expressly denied Xiao Wei Yang
Catering-China's inquiry on this issue. Id. ¶
14. Xu and Qin allegedly used their misrepresentations to
induce Xiao Wei Yang Catering-China to enter into the
Cooperation Agreement. Id. ¶ ¶ 13-14. Xiao Wei Yang
Catering-China would not have entered into the Cooperation
Agreement had they not relied upon Xu and Qin's
fraudulent representations and concealment of material facts.
Id. ¶ 15.
process of incorporating Inner Mongolia USA, it is further
alleged that Xu and Qin misappropriated Plaintiffs'
brand-name, confidential and specialized knowledge.
Id. ¶ 16. Xu and Qin conducted business as "
Xiao Wei Yang and/or Little Lamb Restaurant at 326 Cambridge
Street, Boston, Massachusetts," purportedly as Xiao Wei
Yang Catering-China's first franchisee and/or brand-name
restaurant in the United States. Id. Moreover,
Plaintiffs alleged that Defendants " violated and are in
continuous violation of" their federal trademark
registration and common law rights and other intellectual
property rights. Id. ¶ 17.
also contend that Defendants gained substantial business
revenues, monies and profits as a purported franchisee, party
to and/or beneficiary of the Cooperation Agreement with Xiao
Wei Yang Catering-China. Id. ¶ 18. Pursuant to the
Cooperation Agreement, Xiao Wei Yang Catering-China has
transferred capital investment and monies to Defendants.
Id. ¶ 19. Xiao Wei Yang Catering-China also sent
Xie, its expert chef with specialized knowledge, to the
United States to train and monitor Inner Mongolia USA's
business and operations. Id. During Xie's stay
in the United States, Defendants requested and obtained loans
and other advances of operation expenses from Xie as a
representative of Xiao Wei Yang Catering-China. Id.
¶ 20. Those loans and advances amounted to $66,125.88.
Id. According to Plaintiffs, Defendants were thereby
unjustly enriched. Id.
further allege that Defendants also breached the Cooperation
Agreement by unilaterally withdrawing Xie's U.S. visa
sponsorship and/or its renewal. Id. ¶ 19.
Defendants also allegedly exploited Xie's work,
specialized knowledge and trade secrets while refusing to pay
his compensation, accommodations, translation and
transportation as required under Paragraph 11 of the
Cooperation Agreement. Id. Defendants also failed to
submit 50% franchise fees or applicable profits to Xiao Wei
Yang Catering-China as required by the Cooperation Agreement.
Id. ¶ 22.