-MDD Weiland Sliding Doors and Windows v. Panda Windows and Doors, LLC, No. 3:2010cv00677 - Document 127 (S.D. Cal. 2012)
Court Description: ORDER granting 117 Plaintiff's Motion to Dismiss Defendant Panda Windows and Doors, LLC's Second Amended Counterclaims: Panda may file any amended counterclaim within 28 days of the date this Order is electronically docketed. Signed by Judge Janis L. Sammartino on 1/23/12. (lmt)
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-MDD Weiland Sliding Doors and Windows v. Panda Windows and Doors, LLC Doc. 127 1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 WEILAND SLIDING DOORS AND WINDOWS, INC., CASE NO. 10CV677 JLS (MDD) 13 ORDER GRANTING PLAINTIFF’S MOTION TO DISMISS DEFENDANT PANDA WINDOWS AND DOORS, LLC’S SECOND AMENDED COUNTERCLAIMS Plaintiff, 14 vs. 15 16 PANDA WINDOWS AND DOORS, LLC and EYAN AVI SHOSHAN, 17 (ECF No. 117) Defendants. 18 19 Presently before the Court is Plaintiff and Counter-Defendant Weiland Sliding Doors and 20 Windows, Inc.’s (“Weiland”) motion to dismiss Defendant and Counter-Plaintiff Panda Windows 21 and Doors, LLC’s (“Panda”) second amended counterclaims (“SACC”). (Mot. to Dismiss, ECF 22 No. 117) Also before the Court are Panda’s opposition, (Resp. in Opp’n, ECF No. 122), and 23 Weiland’s reply, (Reply in Supp., ECF No. 123). The hearing set for the motion on January 19, 24 2012, was vacated, and the matter taken under submission on the papers. Having considered the 25 parties’ arguments and the law, the Court GRANTS Weiland’s motion. 26 // 27 // 28 // -1- 10cv677 Dockets.Justia.com 1 BACKGROUND 2 In the underlying patent infringement suit, Weiland asserts claims against Panda and its 3 president, Eyan Avi Shoshan, for direct patent infringement, inducement of infringement, and 4 contributory infringement of two of Weiland’s patents: U.S. Patent Nos. 7,007,343 and 6,792,651. 5 (Third Am. Compl. (“TAC”), ECF No. 112) Following the filing of the first amended complaint 6 (“FAC”) on April 26, 2010, (FAC, ECF No. 6), Panda answered and counterclaimed for 7 intentional interference with business relationships, (Answer & Countercl., ECF No. 7). Weiland 8 answered, (Answer, ECF No. 11), and later filed a motion to dismiss or, in the alternative, motion 9 for judgment on the pleadings, (Mot. to Dismiss Countercl., ECF No. 23). The Court denied 10 Weiland’s anti-SLAPP motion to dismiss, and granted the motion for judgement on the pleadings 11 as to the litigation privilege affirmative defense. (Order, Oct. 28, 2010, ECF No. 45) 12 Subsequently, Panda filed a first amended counterclaim, (First Am. Countercl., ECF No. 13 59), which Weiland again moved to dismiss, (Mot. to Dismiss First Am. Countercl., ECF No. 70). 14 Again, the Court denied Weiland’s anti-SLAPP motion to dismiss, but granted the motion to 15 dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (Order, August 29, 2011, ECF No. 16 110) Then, Weiland filed its TAC, (TAC, ECF No. 112), and Panda filed the operative SACC, 17 (SACC, ECF No. 115), soon followed by the instant motion to dismiss, (Mot. to Dismiss, ECF No. 18 117). 19 20 LEGAL STANDARD Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that 21 the complaint “fail[s] to state a claim upon which relief can be granted,” generally referred to as a 22 motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and 23 sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a “short and plain 24 statement of the claim showing that the pleader is entitled to relief.” Although Rule 8 “does not 25 require ‘detailed factual allegations,’ . . . it [does] demand[] more than an unadorned, the- 26 defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, — US — , 129 S. Ct. 1937, 1949 27 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, “a 28 plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than -2- 10cv677 1 labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” 2 Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). “Nor does a 3 complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Iqbal, 4 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 557). 5 “To survive a motion to dismiss, a complaint must contain sufficient factual matter, 6 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id. (quoting Twombly, 7 550 U.S. at 570); see also Fed. R. Civ. P. 12(b)(6). A claim is facially plausible when the facts 8 pled “allow[] the court to draw the reasonable inference that the defendant is liable for the 9 misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). That is not to say that the claim must 10 be probable, but there must be “more than a sheer possibility that a defendant has acted 11 unlawfully.” Id. Facts “‘merely consistent with’ a defendant’s liability” fall short of a plausible 12 entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557). Further, the Court need not accept 13 as true “legal conclusions” contained in the complaint. Id. This review requires context-specific 14 analysis involving the Court’s “judicial experience and common sense.” Id. at 1950 (citation 15 omitted). “[W]here the well-pleaded facts do not permit the court to infer more than the mere 16 possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’—‘that the pleader is 17 entitled to relief.’” Id. Moreover, “for a complaint to be dismissed because the allegations give 18 rise to an affirmative defense[,] the defense clearly must appear on the face of the pleading.” 19 McCalden v. Ca. Library Ass’n, 955 F.2d 1214, 1219 (9th Cir. 1990). 20 Where a motion to dismiss is granted, “leave to amend should be granted ‘unless the court 21 determines that the allegation of other facts consistent with the challenged pleading could not 22 possibly cure the deficiency.’” DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 23 1992) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 24 1986)). In other words, where leave to amend would be futile, the Court may deny leave to 25 amend. See Desoto, 957 F.2d at 658; Schreiber, 806 F.2d at 1401. 26 // 27 // 28 // -3- 10cv677 1 2 ANALYSIS Panda’s SACC again asserts a claim for intentional interference with prospective business 3 advantage, this time based solely on Weiland’s alleged verbal communications with potential 4 Panda customers.1 (SACC ¶¶ 17–28, ECF No. 115) Specifically, Panda alleges that Weiland 5 communicated with several potential Panda customers and warned them of potential patent 6 liability if they purchased products from Panda. (Id. ¶ 17) Weiland allegedly made these 7 representations even when it had no information suggesting that the potential customers 8 contemplated purchasing the Panda drainage track at issue in this action. (Id.) And Weiland 9 continued to make these representations even after Weiland knew that Panda stopped selling the 10 potentially infringing track. (Id.) Importantly, the SACC adds an allegation that 11 Weiland’s allegations of patent infringement, to the extent presented to potential Panda customers who were not contemplating the purchase of the accused infringing product, were objectively false and were made in bad faith; i.e., with knowledge of their incorrectness or falsity, or disregard for either. As such, Weiland’s statements were unlawful. 12 13 14 (Id. ¶ 20) 15 Panda contends that Weiland’s statements were made for the purpose of confusing and 16 intimidating Panda customers. (Id. ¶ 18) Weiland allegedly misrepresented the possibility of 17 patent liability in order to “persuade potential Panda customers to not purchase from Panda and to 18 instead buy product from Weiland.” (Id. ¶ 19) 19 Weiland moves to dismiss the SACC on three bases: (1) Panda fails to allege that Weiland 20 engaged in an independently wrongful act; (2) the alleged communications are protected by the 21 litigation privilege; and (3) Panda’s allegations fail to satisfy the pleading standards required by 22 Federal Rules of Civil Procedure 8 and 9(b). (Mot. to Dismiss 2, ECF No. 117) Because the 23 Court finds that the Weiland’s motion should be granted on the first and third asserted bases, and 24 because of the inherent vagueness of the allegations regarding Weiland’s verbal communications 25 1 26 27 28 Weiland misreads the SACC as alleging intentional interference based on both Weiland’s alleged verbal communications and the 2010 Press Release that was the subject of the original and first amended counterclaims. (Mot. to Dismiss 2, ECF No. 117) Though the 2010 Press Release is mentioned in the SACC, it is clear that the allegations of intentional interference are based solely on Weiland’s alleged verbal communications, and not the Press Release. Panda confirms this reading of the SACC. (Resp. in Opp’n 6, ECF No. 122 (“Panda’s SACC is not based upon those statements made in the Press Release.”)) -4- 10cv677 1 to Panda customers, the Court declines to consider at this stage whether the communications fall 2 within the litigation privilege. 3 “To establish a claim for interference with prospective economic advantage . . . a plaintiff 4 must plead that the defendant engaged in an independently wrongful act. . . . An act is not 5 independently wrongful merely because [the] defendant acted with an improper motive.” Korea 6 Supply Co. v. Lockheed Martin Corp., 63 P.3d 937, 953 (Cal. 2003). “[A]n act is independently 7 wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, 8 common law, or other determinable legal standard.” Id. at 954. 9 In the SACC, Panda supplements its allegations with the contention that Weiland’s 10 statements were unlawful or “independently wrongful”—a deficiency the Court previously noted 11 in dismissing the intentional interference claim based on the alleged verbal communications. 12 (Order, Aug. 29, 2011, at 11, ECF No. 110). Specifically, as expounded on in its opposition brief, 13 Panda alleges that Weiland’s verbal communications are “independently wrongful because Federal 14 Circuit authority prohibits a patentee from making communications of information about the 15 existence or pendency of patent rights that are subjectively baseless and that were made in bad 16 faith.” (Resp. in Opp’n 2, ECF No. 122) 17 While “it is not improper for a patent owner to advise possible infringers of its belief that a 18 particular product may infringe the patent,” Mikohn Gaming Corp. v. Acres Gaming, 165 F.3d 19 891, 897 (Fed. Cir. 1998), such communications must be made in good faith, see Dominant 20 Semiconductors Sdn. Bhd. v. OSRAM GmbH, 524 F.3d 1254, 1260 (Fed. Cir. 2008). Thus, to state 21 a claim for intentional interference, Panda must allege that Weiland’s verbal communications were 22 made in bad faith, which “includes separate objective and subjective components.” Id. “[A] 23 threshold showing of incorrectness or falsity, or disregard for either, is required in order to find 24 bad faith in the communication of information about the existence or pendency of patent rights.” 25 Mikohn Gaming, 165 F.3d at 897. 26 Here, the SACC includes conclusory allegations that Weiland’s verbal communications 27 “were made in bad faith; i.e., with knowledge of their incorrectness or falsity, or disregard for 28 either.” (SACC ¶¶ 20, 26, ECF No. 115) What the SACC is lacking, however, are factual -5- 10cv677 1 allegations supporting such a conclusion. And as this Court held previously, “to the extent that 2 Weiland’s statements sound in fraud, Panda’s allegations to that effect would be subject to Rule 3 9(b)’s heightened pleading standard; a standard that Panda’s current pleadings cannot satisfy.” 4 (Order, Aug. 29, 2011, at 11, ECF No. 110 (citing Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1091, 5 1106 (9th Cir. 2003) (“Averments of fraud must be accompanied by the who, what, when, where, 6 and how of the misconduct charged.” (internal quotation marks omitted)))).2 7 8 9 10 11 CONCLUSION For the reasons stated above, the Court GRANTS Weiland’s motion to dismiss. Panda may file any amended counterclaim within 28 days of the date this Order is electronically docketed. IT IS SO ORDERED. 12 13 DATED: January 23, 2012 14 Honorable Janis L. Sammartino United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 2 28 Notably, except for a single paragraph, Panda’s allegations regarding Weiland’s verbal communications mirror those of the prior amended counterclaims. Thus, the Court again finds them deficient, under both Federal Rules of Civil Procedure 8 and 9(b). -6- 10cv677
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