Homeland Housewares LLC et al v. Euro-Pro Operating LLC, No. 2:2014cv03954 - Document 46 (C.D. Cal. 2014)
Court Description: ORDER GRANTING IN PART DEFENDANTS MOTION TO DISMISS PLAINTIFFS FIRST AMENDED COMPLAINT WITH LEAVE TO AMEND 24 .Plaintiff is GRANTED LEAVE TO AMEND; such amendment must be filed with the Court no later than ten days from the effective date of this order by Judge Dean D. Pregerson. (lc). Modified on 11/5/2014 .(lc).
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Homeland Housewares LLC et al v. Euro-Pro Operating LLC Doc. 46 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 HOMELAND HOUSEWARES, LLC, a California LLC; NUTRIBULLET, LLC,L a California LLC, 13 Plaintiffs, 14 15 v. EURO-PRO OPERATING LLC, a Massachusetts LLC, 16 17 Defendant. ___________________________ 18 ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 14-03954 DDP (MANx) ORDER GRANTING IN PART DEFENDANT’S MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT WITH LEAVE TO AMEND [Dkt. No. 24] Presently before the court is Defendant Euro-Pro Operating, 19 LLC’s Motion to Dismiss Plaintiffs’ First Amended Complaint. 20 Having considered the submissions of the parties, the court grants 21 the motion in part and adopts the following order. 22 I. Background 23 Plaintiffs Homeland Housewares, LLC and Nutribullet, LLC 24 (hereinafter collectively referred to as “Homeland”) and Defendant 25 Euro-Pro Operating, LLC (“Euro-Pro”) are both in the home blender 26 market. (First Amended Complaint (“FAC”) ¶¶ 4&6, Dkt. No. 12.) 27 Plaintiffs sell several single-serving blenders under its 28 BULLET line of products, including the NUTRIBULLET, the NUTRIBULLET Dockets.Justia.com 1 SPORT, and the NUTRIBULLET PRO. 2 Plaintiffs allege that they have spent several hundred million 3 dollars in advertisements for these products, including investing 4 in infomercials. 5 (FAC ¶ 4, Exs. 2&4, Dkt. No. 12.) (Id.) Defendant sells a competing single-serving blender called the 6 NUTRI NINJA that competes with Plaintiffs’ NUTRIBULLET line of 7 products. 8 product packaging for the NUTRI NINJA. 9 Plaintiffs allege that Defendant duplicated “the color scheme, (Id. at ¶ 6, Ex. 2.) Plaintiffs take issue with the (Id.) Specifically, 10 fonts, phraseology, and overall look and feel of Plaintiff’s 11 NUTRIBULLET packaging trade dress.” 12 packaging compares the NUTRI NINJA to the NUTRIBULLET line 13 regarding several features in the form of a chart (“Chart”). 14 (Id.) Moreover, NUTRI NINJA’s (Id.) Plaintiffs also allege that Defendant planted “false reviews 15 on the Internet, making false claims of defects in NUTRIBULLET 16 blenders and touting the NUTRI NINJA as a superior alternative.” 17 (Id. at ¶ 9.) 18 On May 22, 2014, Plaintiffs filed the Original Complaint 19 seeking damages and injunctive relief for false advertising under 20 both federal and state statutes, trade dress infringement, trade 21 libel, and unfair competition. 22 based primarily on NUTRI NINJA’s packaging. 23 2014, Plaintiffs filed a First Amended Complaint. (Dkt. No. 1.) These claims are (Id.) On July 3, (Dkt. No. 12.) 24 In this motion to dismiss, Defendant seeks to dismiss all of 25 Plaintiffs’ claims with prejudice under Fed. R. Civ. P. 12(b)(6), 26 arguing that Plaintiffs fail to state plausible claims. 27 /// 28 /// 2 1 II. 2 Legal Standard A complaint will survive a motion to dismiss when it contains 3 “sufficient factual matter, accepted as true, to state a claim to 4 relief that is plausible on its face.” 5 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 6 570 (2007)). 7 “accept as true all allegations of material fact and must construe 8 those facts in the light most favorable to the plaintiff.” 9 v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). Ashcroft v. Iqbal, 556 U.S. When considering a Rule 12(b)(6) motion, a court must Resnick Although a complaint 10 need not include “detailed factual allegations,” it must offer 11 “more than an unadorned, the-defendant-unlawfully-harmed-me 12 accusation.” 13 allegations that are no more than a statement of a legal conclusion 14 “are not entitled to the assumption of truth.” 15 under the liberal pleading standard of Federal Rule of Civil 16 Procedure 8(a)(2), under which a party is only required to make a 17 “short and plain statement of the claim showing that the pleader is 18 entitled to relief,” a “pleading that offers ‘labels and 19 conclusions’ or a ‘formulaic recitation of the elements of a cause 20 of action will not do.’” 21 555). 22 III. Discussion 23 A. 24 Iqbal, 556 U.S. at 678. Conclusory allegations or Id. at 679. Even Id. 678 (quoting Twombly, 550 U.S. at False Advertising Claim Because Defendant has withdrawn its motion to dismiss 25 Plaintiffs’ false advertising claims as to NUTRI NINJA’s packaging, 26 (Reply at 2:1-5), the Court considers the motion to dismiss solely 27 as to Plaintiffs’ false advertising claims based on allegedly false 28 reviews. 3 1 The elements of a Lanham Act § 43(a)1 false advertising claim 2 are: "(1) a false statement of fact by the defendant in a 3 commercial advertisement about its own or another’s product; (2) 4 the statement actually deceived or has the tendency to deceive a 5 substantial segment of its audience; (3) the deception is material, 6 in that it is likely to influence the purchasing decision; (4) the 7 defendant caused its false statement to enter interstate commerce; 8 and (5) the plaintiff has been or is likely to be injured as a 9 result of the false statement . . . ." 10 11 Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 (9th Cir. 1997). Plaintiffs have not sufficiently alleged facts to support its 12 false advertising claim based on allegedly false reviews, primarily 13 because it has not alleged clearly that Defendant made a false 14 statement of fact.2 15 “false claims of defects” Defendant is supposed to have made. 16 Without something more, the allegation is ambiguous. Plaintiffs have not specified what sort of Do the 17 1 18 19 20 21 22 23 24 The Lanham Act § 43(a), codified at 15 U.S.C. § 1125(a), provides in pertinent part: 1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any ... false or misleading representation of fact, which— (A) ... (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. 15 U.S.C. § 1125(a) (1988). 2 25 26 27 28 Defendant argues that Rule 9(b)’s fraud pleading standard applies to false advertising claims even though the Ninth Circuit has not clearly addressed this issue. See EcoDisc Tech. AG v. DVD Format/Logo Licensing Corp., 711 F. Supp. 2d 1074, 1085 (C.D. Cal. 2010). However, the Court does not need to address whether Rule 9(b)’s heightened pleading standard applies to false advertising claims because Plaintiffs have not sufficiently pled facts to meet the requirements of Rule 8(a). 4 1 reviews, for example, label Plaintiff’s products “poorly made” or 2 “too small” or “ugly,” which would be statements of opinion? 3 they make falsifiable factual claims about Plaintiffs’ blenders? 4 Secondarily, even if Defendant made statement of fact, were they 5 material? 6 Defendant said negative things about one’s product is not stating a 7 claim for false advertising. 8 allegations to state a cognizable false advertising claim based on 9 false reviews. Or do These questions matter, because merely alleging that Plaintiffs must clarify its See, e.g., Newcal Indus., Inc. v. Ikon Office 10 Solution, 513 F.3d 1038, 1052-53 (9th Cir. 2008) (plaintiff had 11 “alleged all elements of a Lanham Act violation” when it listed 12 particular statements constituting false or misleading statements 13 of fact). 14 Secondarily, simply stating that “false reviews” can be found 15 somewhere on the internet does not provide sufficient notice to the 16 Defendant as to what exactly Plaintiff alleges, as the internet is 17 vast and contains multitudes. 18 vague, it also does not tend to show that the audience is likely to 19 be deceived, that the message was placed into interstate commerce, 20 or that Plaintiff has been or is likely to be injured. 21 indication of the nature and scope of the communication is required 22 to successfully allege false advertising. And because the allegation is so Some 23 Accordingly, the Court grants Defendant’s motion to dismiss 24 Plaintiffs’ false advertising claim based on false reviews, with 25 leave to amend. 26 B. 27 28 Trade Dress Infringement Claim “Section 43(a) of the Lanham Act provides a remedy for a broad range of deceptive marking, packaging and marketing of goods or 5 1 services in commerce.” 2 Inc., 826 F.2d 837, 841 (9th Cir. 1987). 3 total image of a product and may include features such as size, 4 shape, color or color combination, texture, graphics, or even 5 particular sales techniques.” 6 Inc., 505 U.S. 763, 765 n. 1 (1992); see also One Indus., LLC v. 7 Jim O’Neal Distrib., Inc., 578 F.3d 1154, 1165 (9th Cir. 2009). 8 9 Fuddruckers, Inc. v. Doc’s B.R. Others, Trade dress involves "the Two Pesos, Inc. v. Taco Cabana, To sustain a claim for trade dress infringement, Plaintiffs must specifically prove: “(1) that its claimed dress is 10 nonfunctional; (2) that its claimed dress is inherently distinctive 11 or has acquired secondary meaning; and (3) that the defendant’s 12 product or service creates a likelihood of consumer confusion.” 13 Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1259 14 (9th Cir. 2001). 15 As an initial matter, “[a] plaintiff seeking to recover for 16 trade dress infringement under section 43(a) must show that its 17 trade dress is protectable. . . .” 18 Others, Inc., 826 F.2d 837, 841 (9th Cir. 1987). 19 plaintiff must specifically define the list of elements that 20 comprise the trade dress.” 21 05-923 PK, 2006 WL 2812770 at *14 (D. Or. May 5, 2006). 22 can the court and the parties coherently define exactly what the 23 trade dress consists of and determine whether the trade dress is 24 valid and if what the accused is doing is an infringement.” 25 (internal quotation marks and citation omitted). 26 Globefill Inc. v. Elements Spirits, Inc., 473 F. App’x 685, 686 27 (9th Cir. 2012) (recognizing that Plaintiff’s Second Amended 28 Complaint alleged with specificity the elements of the trade dress Fuddruckers, Inc. v. Doc's B.R. In particular, “a Treat, Inc. v. Dessert Beauty, No. 6 “Only then Id. See also 1 it sought to protect with the following factual description: “a 2 bottle in the shape of a human skull, including the skull itself, 3 eye sockets, cheek bones, a jaw bone, a nose socket, and teeth, and 4 including a pour spout on the top thereof.”). 5 Plaintiffs have not clearly articulated what comprises their 6 claimed trade dress. 7 described their trade dress because they have provided a photograph 8 of their trade dress in Exhibit 2 of the First Amended Complaint 9 and have provided a written description to accompany it in the 10 11 Plaintiffs argue that they have sufficiently First Amended Complaint. (Pls. Opp’n. at p. 13, Dkt. 28.) However, the written description solely describes the claimed 12 trade dress as “the color scheme, fonts, phraseology, and overall 13 look and feel” of Plaintiffs’ 14 No. 12.) 15 sufficiently identify the particular elements of the packaging that 16 they seek to protect. 17 Cascade Co., 113 F.3d 373, 381 (2d Cir. 1997) (holding that “focus 18 on the overall look of a product does not permit a plaintiff to 19 dispense with an articulation of the specific elements which 20 comprise its distinct dress,” because the court must be able to 21 evaluate the claim and narrowly tailor relief). 22 not sufficiently described their claimed trade dress. 23 product packaging. (FAC ¶ 18, Dkt. This description and the photograph alone do not See Landscape Forms, Inc. v. Columbia Plaintiffs have Because the Court finds that Plaintiffs have not sufficiently 24 described their trade dress, it need not reach whether Plaintiffs 25 have sufficiently pled the elements of distinctiveness or 26 likelihood of confusion.3 See Keep a Breast Found. v. Seven Grp., 27 3 28 Both parties have briefed this issue. 7 Without reaching the (continued...) 1 No. 11-CV-00570 BEN WMC, 2011 WL 3240756, at *3 (S.D. Cal. July 28, 2 2011). 3 infringement claim with leave to amend. 4 C. 5 Thus, the Court dismisses Plaintiffs’ trade dress Trade Libel Claim Under California law, “trade libel is an intentional 6 disparagement of the quality of property, which results in 7 pecuniary damage.” 8 Prod., Inc., 12 F. Supp. 2d 1068, 1081 (C.D. Cal. 1998). 9 trade libel, Plaintiff must show (1) a statement that (2) was Films of Distinction, Inc. v. Allegro Film “To prove 10 false, (3) disparaging, (4) published to others in writing, (5) 11 induced others not to deal with it, and (6) caused special 12 damages.” 13 (C.D. Cal. 2004). 14 New.Net, Inc. v. Lavasoft, 356 F. Supp. 2d 1090, 1113 “A cause of action for trade libel requires pleading and 15 showing special damages.” 16 Lerner Associates, Inc., 946 F. Supp. 2d 957, 981 (N.D. Cal. 2013). 17 “Under federal pleading requirements, ‘[w]hen items of special 18 damages are claimed, they shall be specifically stated.’” 19 Motors Ltd. v. Consumers Union of U.S., Inc., 12 F. Supp. 2d 1035, 20 1047 (C.D. Cal. 1998) (quoting Fed. R. Civ. P. 9(g)). 21 the requirement that plaintiff plead special damages arises from 22 state law governing a claim for product disparagement, the 23 requirement that special damages be specifically pleaded stems from 24 Fed. R. Civ. P. 9(g).” Piping Rock Partners, Inc. v. David Isuzu “Thus, while Id. 25 26 27 28 3 (...continued) merits of this issue, the Court notes that Plaintiffs need to allege facts to establish all three elements of their trade dress infringement claim. A mere recitation of the required elements and/or conclusory allegations will not survive a motion to dismiss. 8 1 Plaintiffs cannot satisfy the special damages requirement for 2 trade libel under California law. Plaintiffs argue that they have 3 sufficiently established special damages in support of their trade 4 libel claim by pleading that they have suffered “lost sales, 5 disruption of business relationships, loss of market share and of 6 customer goodwill” and by requesting $3 million dollars in damages 7 in their prayer for relief. (Pls. Opp’n. at p. 17-18, Dkt. 28) 8 However, Plaintiffs’ general statements of economic loss and 9 bare statement for relief of $3 million dollars in damages do not 10 sufficiently identify special damages. 11 Supp. 2d 1035, 1047 (C.D. Cal. 1998) (finding a claim for special 12 damages from "the loss of revenue from wholesale and retail sales 13 of [plaintiff]" to be a bare allegation of the amount of pecuniary 14 loss and therefore to be inadequate). 15 damages in the amount of $3 million for the false advertising, 16 unfair competition, and trade libel claims. 17 allege specifically what amount of that total is attributable to 18 the libelous statements as a whole. 19 Servs. Corp. v. Private Eyes, Inc., 569 F. Supp. 2d 929, 938 (N.D. 20 Cal. 2008) (party did not adequately plead special damages where it 21 alleged a total loss of $4-$5 million but did not provide specific 22 damages for the trade libel claim). 23 See Isuzu Motors, 12 F. Plaintiffs generally seek But Plaintiffs do not See First Advantage Background Moreover, to recover damages based on general business loss, 24 Plaintiffs “should have alleged facts showing an established 25 business, the amount of sales for a substantial period preceding 26 the publication, the amount of sales subsequent to the publication, 27 [and] facts showing that such loss in sales were the natural and 28 probable result of such publication[.]” 9 Isuzu Motors, 12 F. Supp. 1 2d 1035, 1047 (C.D. Cal. 1998) (citations omitted). 2 not set forth any factual allegations other than that Plaintiffs 3 lost sales, market share, and customer goodwill. 4 statement is not sufficient to properly plead special damages for 5 trade libel under California law. 6 Plaintiffs did This conclusory Thus, the Court finds that Plaintiffs have failed to satisfy 7 the special damages requirement for a trade libel claim. 8 Accordingly, the Court grants Defendant’s motion to dismiss 9 Plaintiffs’ claim for trade libel, with leave to amend. 10 11 D. California False Advertising and Unfair Competition Claims “The Ninth Circuit has consistently held that state common law 12 claims of unfair competition and actions pursuant to California 13 Business and Professions Code § 17200 are ‘substantially congruent’ 14 to claims made under the Lanham Act.” 15 F.3d 1255, 1262-63 (9th Cir. 1994); see also Japan Telecom, Inc. v. 16 Japan Telecom Am. Inc., 287 F.3d 866, 875 (9th Cir. 2002) 17 (plaintiff's “California unfair competition claim fails because its 18 related Lanham Act claims fail”); Denbicare U.S.A., Inc. v. Toys 19 “R” Us, Inc., 84 F.3d 1143, 1152–53 (9th Cir. 1996), abrogated on 20 other grounds (dismissal of plaintiff’s § 17200 and § 17500 claims 21 were proper since plaintiff’s Lanham Act claim was properly 22 dismissed); 23 2009 WL 766517, at *2 (9th Cir. Mar. 24, 2009) (“Because we affirm 24 the finding of trademark infringement, we also affirm the finding 25 of unfair competition”). 26 Cleary v. News Corp., 30 Cosmos Jewelry, Ltd. v. Po Sun Hon Co., No. 06-56338, Because their related Lanham Act claims fail for the reasons 27 stated above, the Court dismisses Plaintiffs’ Cal. Bus. & Prof. 28 Code § 17200 and 17500 claims as to 1) Plaintiffs’ false 10 1 advertising claim based on allegedly false reviews, and 2) 2 Plaintiffs’ trade dress infringement claim. 3 E. Cal. Bus. & Prof. Code Section 17508 Claim 4 “It shall be unlawful for any person doing business in 5 California and advertising to consumers in California to make any 6 false or misleading advertising claim, including claims that (1) 7 purport to be based on factual, objective, or clinical evidence, 8 (2) compare the product’s effectiveness or safety to that of other 9 brands or products, or (3) purport to be based on any fact.” 10 Cal. Bus. & Prof. Code § 17508(a). 11 Defendant argues that Plaintiffs, as private persons, cannot 12 sustain a claim for false advertising under § 17508. 13 at p. 24-25.) 14 invoked by certain California public officials, namely ‘the 15 Director of Consumer Affairs, the Attorney General, any city 16 attorney, or any district attorney.’” (Id.) 17 that a private plaintiff can assert a claim under § 17508, although 18 he cannot take advantage of the substantiation and burden-shifting 19 provisions in subdivisions (b)-(c) of the statute. 20 14.) 21 (Mot. Dismiss Defendant claims that “the statute can only be Plaintiffs counter (Opp’n at 19:1- The application of Cal. Bus. & Prof. Code. § 17508 is somewhat 22 unclear. 23 advantage of the “substantiation” provisions of the statute, Cal. 24 Bus. & Prof. Code. § 17508(b)-(c), it is less certain whether the 25 statute permits private persons to bring suit at all. 26 dearth of reported cases dealing with § 17508: the Court has found 27 only 23 cases in Westlaw’s database that even mention the statute, 28 and in many of those the statute is not actually at issue in the Although it is clear that a private plaintiff cannot take 11 There is a 1 case. The closest any California court has come to answering the 2 question is in Nat'l Council Against Health Fraud, Inc. v. King Bio 3 Pharm., Inc., where the appeals court held that the substantiation 4 procedure “is limited to prosecuting authorities and may not be 5 utilized by private persons.” 6 The court also stated immediately thereafter that “[B]oth private 7 persons and prosecuting authorities may sue to enjoin false 8 advertising and obtain restitution . . . .” Id. at 1344. 9 the plaintiff in that case had brought its complaint under § 17500 107 Cal. App. 4th 1336, 1343 (2003). Because 10 (the general false advertising law), however, and because the 11 discussion of § 17508 revolved primarily around establishing burden 12 of proof under the state’s false advertising law generally, the 13 court’s statements are not helpful in determining whether § 17508 14 can be the basis of an independent cause of action. 15 However, Plaintiff brings its Fifth Cause of Action under § 16 17500 and § 17508. 17 advertising generally. 18 specific flavors of false advertising are actionable under the 19 general false advertising provisions of § 17500, at least absent a 20 statutory exemption. 21 of a statutory exemption: it is more like a statutory inclusion, 22 clarifying specifically that advertising that makes false 23 statements of verifiable fact, including false comparisons, is 24 unlawful. 25 this function, specifying particular kinds of unlawful false 26 advertising, all of which are presumably actionable under § 17500. 27 See Cal. Bus. & Prof. Code § 17505 (prohibiting the 28 misrepresentation of ownership or control); Cal. Bus. & Prof. Code § 17500 prohibits and makes actionable false Logically it is surely the case that Section 17508 seems to serve as the opposite Several of the sections that follow § 17500 seem to fill 12 1 § 17505.2 (prohibiting misrepresentation of one’s status as a 2 recreation therapist); Cal. Bus. & Prof. Code § 17507 (prohibiting 3 failure to adequately identify pricing when advertising multiple 4 items of the same type). 5 substantiation mechanism, § 17508 first identifies a particular 6 kind of unlawful false advertising: false comparative advertising. 7 See § 17508(a). 8 it becomes somewhat academic to ask whether the claim is “under” § 9 17508 as well, or whether § 17508 merely clarifies that false Although it also creates the As false advertising is actionable under § 17500, 10 comparative advertising is, indeed, actionable false advertising 11 under § 17500.4 12 The Court therefore holds that a sufficiently well-pled claim 13 that Defendants made false comparative statements in advertising is 14 permissible under California false advertising law. 15 claim shares the same factual predicate as Plaintiffs’ federal 16 false advertising claim, and because Defendant has withdrawn its 17 motion to dismiss Plaintiffs’ federal false advertising claims as 18 to NUTRI NINJA’s packaging, (Reply at 2:1-5), the Court denies the 19 motion to dismiss as to the Fifth Cause of Action for false 20 advertising under state law. 21 IV. Conclusion 22 23 Because this For the foregoing reasons Defendant’s motion to dismiss Plaintiffs’ First Amended Complaint is GRANTED IN PART. It is 24 25 26 27 28 4 California courts apparently allow plaintiffs to bring claims under multiple sections of the “False Advertising” portion of the Code at once, which lends support to the Court’s interpretation of the statute. E.g., Blatty v. New York Times Co., 42 Cal. 3d 1033, 1038 (1986) (“In his amended complaint Blatty . . . asserted . . . false and misleading advertising in violation of Business and Professions Code sections 17500 to 17508 . . . .”). 13 1 GRANTED as to Plaintiff’s Lanham Act claims with regard to “false 2 reviews” and trade dress infringement, as well as related state 3 unfair competition claims. 4 trade libel claim. 5 federal claim regarding the comparison chart on Defendant’s 6 packaging, and it is also denied as to Plaintiff’s related claims 7 under Cal. Bus. & Prof. Code §§ 17200, 17500, and 17508. 8 is GRANTED LEAVE TO AMEND; such amendment must be filed with the 9 Court no later than ten days from the effective date of this order. It is further GRANTED as to Plaintiff’s However, the motion is DENIED as to Plaintiff’s Plaintiff 10 11 IT IS SO ORDERED. 12 13 14 Dated: November 5, 2014 15 DEAN D. PREGERSON 16 United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28 14
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