Mitchell v. Reddington Structural Solutions, LLC

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA [3] 4 DANIEL MITCHELL, Case No.: 2:25-cv-00170-GMN-EJY [5] Plaintiff, 6 vs. ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER 7 REDDINGTON STRUCTURAL AND PRELIMINARY INJUNCTION SOLUTIONS, LLC, et al., [8] Defendants. [9] 10 Pending before the Court is Plaintiff Daniel Mitchell’s Motion for Temporary 11 Restraining Order, (“TRO”) and Preliminary Injunction, (ECF No. 30).1 Defendant Joe 12 Westerfield, Reddington Structural Solutions, LLC, and Shuren Raymong Cheng filed a 13 Response, (ECF No. 30), to which Plaintiff filed a Reply, (ECF No. 36). Also pending before 14 the Court is the Motion to Strike Defendants’ Response to Motion for Temporary Restraining 15 Order, (ECF No. 34).2 16 Because Plaintiff fails to demonstrate a likelihood of success on the merits, the Court [18] 19 1 Plaintiff also filed the Sealed Appendix of Exhibits in Support of his Motion for TRO, (ECF No. 31). Under the Local Rules, “papers filed with the court under seal must be accompanied by a motion for leave to file those 20 documents under seal.” LR IA 10-5(a). The Local Rules further require a party who files a document under seal to include with the document “either (i) a certificate of service certifying that the sealed documents were served 21 on the opposing attorneys [], or (ii) an affidavit showing good cause why the document has not been served on the opposing attorneys [].” LR IA 10-5(c). Plaintiff must file a Motion to Seal in compliance with LR IA 1022 5(a), and proof of compliance with LR IA 10-5(c), by June 9, 2025. If Plaintiff fails to comply with Local Rule IA 10-5(c) by June 9, 2025, the Court will unseal the Appendix. 23 2 In their Response, Defendants include a Motion to Dismiss under 12(b)(6). “For each type of relief requested or purpose of the document, a separate document must be filed and a separate event must be selected for that 24 document.” LR IC 2-2(b). Accordingly, Defendants must file the Motion to Dismiss separately on the docket. The briefing timeline will be determined by the date that the Motion to Dismiss is filed. Because the Response 25 to the Motion for TRO is valid and should not be stricken, Plaintiff’s Motion to Strike is DENIED. 1 DENIES the Motion for a Temporary Restraining Order and Preliminary Injunction. 2 I. BACKGROUND 3 This is a trademark infringement action brought by the owner of two registered 4 trademarks. (See generally Am. Compl., ECF No. 10). Plaintiff is the founding member and 5 President of Kolay Flooring International, LLC, a company that manufactures and distributes 6 flooring products. (Id. ¶ 23–24). He owns two registered trademarks for Kolay: one for the use 7 of the Kolay brand on carpet tiles, and one for the use of the Kolay brand on hardwood 8 flooring. (Id. ¶ 25–26). For the carpet tiles, the United States Patent and Trademark Office 9 (“USPTO”) Registration Number is 5661477; for hardwood flooring, the Registration Number 10 is 5661478. (Id. ¶ 25). 11 Defendants Junhua “Mark” Mao, Shuren “Raymond” Cheng, and Joe Westerfield 12 previously worked for Kolay. (Id. ¶¶ 33–43). Plaintiff alleges that Mao and Cheng left Kolay 13 to form Reddington, another business that does flooring manufacturing and distribution, and 14 that Westerfield began working for Reddington while still employed at Kolay, without 15 Plaintiff’s knowledge. (Id. ¶ 44–48). Plaintiff further alleges that Westerfield shared Kolay’s 16 confidential list of customers with Reddington. (Id. ¶ 49). Defendants Portiloor and Haoxing, 17 Chinese manufacturing companies that Kolay had previously used, allegedly manufactured the 18 infringing flooring products for Reddington, and Defendant Zehong shipped Reddington’s 19 products. (Id. ¶ 50–58). According to Plaintiff, Westerfield, Cheng, Mao, Reddington, 20 Portiloor, Hoaxing, and Zehong unlawfully used the Kolay trademarks on flooring products 21 they were manufacturing and selling. (Id. ¶ 84). Plaintiff further states that Success Wood, a 22 direct competitor of Kolay that sells flooring products, sold Kolay branded flooring products 23 without Plaintiff’s permission. (Id. ¶ 69–70). 24 Plaintiff brings the following claims against Defendants: (1) Federal Trademark 25 Infringement, (2) Federal false Designation of Origin and Unfair Competition, (3) Nevada 1 Common Law Trademark Infringement and Unfair Competition, (4) Tortious Interference with 2 Economic Advantage, (5) Conversion, and (6) Civil Conspiracy. (See generally Am. Compl.). 3 He now seeks a TRO and Preliminary Injunction preventing Defendants from selling products 4 bearing the term “KOLAY” or anything similar to the term “KOLAY,” or using any proprietary 5 of confusingly similar color names associated with Plaintiff’s products. (Mot. TRO 15:11–16). 6 Plaintiff also seeks an order that prevents Defendants from contacting, soliciting, or conducting 7 business with any of Plaintiff’s customers; enjoins Defendants from disposing of the proceeds 8 of their sales until the resolution of this matter; and requires Defendants to deposit the proceeds 9 into a segregated bank account that is disclosed to the Court. (Id. 15:16–16:2). 10 II. LEGAL STANDARD 11 Federal Rule of Civil Procedure 65 governs preliminary injunctions and temporary 12 restraining orders. Fed. R. Civ. P. 65. The standard for both forms of relief is the same. See 13 Stuhlbarg Int’l Sales Co. v. John D. Brush & Co., 240 F.3d 832 , 839 n.7 (9th Cir. 2001). 14 Furthermore, a temporary restraining order “should be restricted to serving [its] underlying 15 purpose of preserving the status quo and preventing irreparable harm just so long as is 16 necessary to hold a hearing, and no longer.” Granny Goose Foods, Inc. v. Bhd. of Teamsters & 17 Auto Truck Drivers Local No. 70, 415 U.S. 423, 439 (1974). Like a preliminary injunction, the 18 Court may issue a temporary restraining order if a plaintiff establishes: (1) likelihood of success 19 on the merits; (2) likelihood of irreparable harm in the absence of preliminary relief; (3) that the 20 balance of equities tips in his favor; and (4) that an injunction is in the public interest. Winter v. 21 Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). 22 III. DISCUSSION 23 Plaintiff argues that he is entitled to a TRO and Preliminary Injunction because he is 24 likely to succeed on the merits and has no adequate remedy at law to address the continued 25 infringement of the Kolay trademarks. (See generally Mot. TRO). Because the Court finds that 1 Plaintiff has not established a likelihood of success on the merits, it denies Plaintiff’s Motion 2 for a TRO. The Court discusses the likelihood of success on the merits for each of Plaintiff’s 3 claims below. 4 A. Trademark Infringement and Unfair Competition 5 “To prevail on a claim of trademark infringement under the Lanham Act, 15 U.S.C. 6 § 1114, a party must prove: (1) that it has a protectible ownership interest in the mark; and (2) 7 that the defendant’s use of the mark is likely to cause consumer confusion.” Network 8 Automation, Inc. v. Advanced Sys. Concepts, 638 F.3d 1137, 1144 (9th Cir. 2011). The test for 9 unfair competition under the Lanham Act is almost identical: “whether the public is likely to be 10 deceived or confused by the similarity of the marks.” New W. Corp. v. NYM Co. of Cal., Inc., [11] 595 F.2d 1194 , 1201 (9th Cir. 1979) (citations omitted).3 12 Defendants do not contest the ownership of the trademarks, and Plaintiff has provided 13 evidence that he is the owner of two registered trademarks of the word “Kolay.” (Reg. 14 Certificates for Kolay Trademarks, Ex. A to Am. Compl., ECF No. 10-1). Federal registrations 15 constitute “prima facie evidence of the validity of a registered mark” and the owner’s exclusive 16 right to use the mark. 15 U.S.C. § 1115 (a). Plaintiff has therefore satisfied the first element of 17 trademark infringement. 18 As for the second element, however, Plaintiff has failed to produce any evidence to 19 support a finding that Defendants have actually used the mark, or anything that could be 20 confused with the mark. Plaintiff states in his Motion for TRO and Declaration that Defendants 21 used the “KOLAY” mark on their Reddington flooring products. (Mot. TRO 8:16–18); 22 (Mitchell Decl. ¶ 13, Exhibit F to Addendum to Mot. TRO, ECF No. 31). But he attaches no [24] 25 3 Nevada’s state laws for trademark infringement and unfair competition mirror the federal standards, so the findings in this section apply equally to Plaintiff’s state-law claims. See A.L.M.N., Inc. v. Rosoff, 104 Nev. 274 , 757 P.2d 1319, 1320 (Nev. 1988); McCarthy on Trademarks and Unfair Competition § 23:1.50 (5th ed.). 1 additional evidence of the use of the word “Kolay” on Reddington’s products. Meanwhile, 2 Defendants attach photos of their product and packaging, neither of which appear to bear the 3 word “Kolay.” (Photos, Exhibits E and F to Resp., ECF No. 33). Given that Defendants have 4 rebutted Plaintiff’s statement in his declaration that Defendants used the Kolay mark, and 5 Plaintiff has not attached any other evidence of the use, Plaintiff has failed to establish that he 6 is likely to succeed on the merits of his trademark infringement claim. And because the test for 7 unfair competition is almost identical to that of trademark infringement, the Court finds that 8 Plaintiff has also failed to establish a likelihood of success on his unfair competition claim. 9 B. Tortious Interference with Economic Advantage 10 To succeed on a claim for tortious interference with economic advantage, a plaintiff 11 must show that “(1) a prospective contractual relationship between the Plaintiff and a third 12 party; (2) the defendant’s knowledge of this prospective relationship; (3) the intent to harm the 13 plaintiff by preventing the relationship, (4) the absence of privilege or justification by the 14 defendant; and (5) actual harm to the plaintiff as a result of the defendant’s conduct.” 15 Consolidated Generator-Nevada, Inc. v. Cummins Engine Co., Inc., 971 P.2d 1251, 1255 (Nev. 16 1998). 17 Plaintiff asserts that Defendants stole Kolay’s customer list and then sold flooring 18 products to those customers, which he contends constitutes tortious interference with his 19 economic advantage. (Mot. TRO 10:22–11:19). But Plaintiff’s tortious interference with 20 economic advantage claim suffers from a threshold problem—the potential contractual 21 relationships would have been with Kolay, not Plaintiff, while the elements of the claim 22 specifically require “a prospective contractual relationship between plaintiff and a third party.” 23 See Consolidated Generator-Nevada, 971 P.2d at 1255 . Though Plaintiff states that 24 Defendants’ actions deprived him of the opportunity to make sales, he concedes that the list of 25 customers belongs to Kolay, so it follows that future sales with those customers would have 1 also been with Kolay rather than Plaintiff as an individual. Plaintiff cannot bring this claim on 2 behalf of Kolay’s lost potential contracts. Thus, the Court finds that he has not established that 3 he is likely to succeed on his for Tortious Interference with Economic Advantage. 4 C. Conversion 5 Plaintiff asserts that he is likely to succeed on his conversion claim because Defendants 6 have “asserted dominion over the Kolay flooring products and over the Kolay Trademarks” by 7 infringing the trademarks. (Mot. TRO 11:27–28). However, Courts in this circuit have rejected 8 the argument that a trademark can be “converted.” See, e.g., McZeal v. Amazon Services, LLC, [9] 2021 WL 5213099 , *4 (C.D. Cal. 2021), aff’d 2021 WL 5213099 (9th Cir. 2023) (“Plaintiff’s 10 claim for conversion of his trademark is not actionable and must also be dismissed.”); see also 11 McCarthy on Trademarks and Unfair Competition § 25:70 (5th ed.) (“Across the nation, courts 12 that have been faced with a claim that a trademark has been “converted” have rejected the 13 concept outright.”). Therefore, the Court finds that Plaintiff has failed to establish a likelihood 14 of success on this claim. 15 D. Civil Conspiracy 16 “To establish a claim for civil conspiracy, a plaintiff must show: (1) the commission of 17 an underlying tort; and (2) an agreement between the defendants to commit that tort.” 18 Eastwood v. Lehman Bros. Bank, FSB, No. 3:09-cv-00656-LRH, 2010 WL 2696479 , at *2 (D. 19 Nev. July 2, 2010) (citing GES, Inc. v. Corbitt, 21 P.3d 11, 15 (Nev. 2001)). Plaintiff’s civil 20 conspiracy claim rests on his assertion that Defendants entered into a conspiracy to infringe his 21 trademarks. However, because trademark infringement is not a tort, Plaintiff’s allegations do 22 not satisfy the requirement of the commission of an underlying tort. Plaintiff is therefore 23 unlikely to succeed on this claim. 24 In sum, the Court finds that Plaintiff has not established a likelihood of success on the 25 merits on any of his claims. Because likelihood of success is a threshold issue, the Court need 1 consider the other three Winter elements. Garcia v. Google, Inc., 786 F3d 733, 740 (9th Cir. 2 2015); Baird v. Bonta, 81 F4th 1036, 1040 (9th Cir. 2023). Accordingly, Plaintiff's Motion for 3 || TRO and Motion for Preliminary Injunction are DENIED without prejudice. 4 CONCLUSION 5 IT IS HEREBY ORDERED that Plaintiff's Motion for Temporary Restraining Order, 6 || (ECF No. 30), is DENIED without prejudice. 7 IT IS FURTHER OREDERED that Plaintiff's Motion for Preliminary Injunction, 8 || (ECF No. 30), is DENIED without prejudice. 9 IT IS FURTHER ORDERED that Plaintiff's Motion to Strike, (ECF No. 34), is 10 || DENIED. 11 IT IS FURTHER ORDERED that Defendants are required to file their Motion to 12 || Dismiss as a separate item on the docket. 13 IT IS FURTHER ORDERED that Plaintiff must comply with Local Rule 10-5 for his 14 ||Sealed Appendix of Exhibits at ECF No. 31 by June 13, 2025. Failure to comply will result in 15 || the Court unsealing the Appendix. [16] 17 DATED this _4 __ day of June, 2025. i Yj, 0 Gloria M. arro, District Judge UNITED STATES DISTRICT COURT [25] Page 7 of 7