Muertos Roasters, LLC v. Schneider

— 1 — — 2 — — 3 — — 4 — — 5 — — 6 — — 7 — 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA — 10 — 11 Muertos Roasters, LLC, No. 2:22-cv-0005 1-KJM-KJN 12 Plaintiff, ORDER 13 v. 14 Luke Schneider, et al., 1S Defendants. — 16 — 17 Plaintiff Muertos Roasters, LLC, a California-based coffee company, brought this seven18 | claim trademark infringement lawsuit against defendants Fire Department Coffee, Inc. and its co19 | founders, Luke Schneider and Lawrence Walton, in their personal capacities. See generally 20 | Compl., ECF No. 1. All defendants are based in Illinois. See id. Jf] 31-33. Plaintiff alleges 21 | defendants are marketing and selling coffee using plaintiffs trademarks in an attempt “to exploit 22 | plaintiffs goodwill and reputation” and confuse the “consuming public.” /d. 9§ 12, 14. The 23 | trademarks at issue involve, as plaintiff puts it, a “unique and distinct trade dress comprising a 24 | novel amalgam of the traditional Dia de los Muertos artwork and motif with classic firefighter 25 | symbols such as the red fireman’s hat.” Jd. 4. 26 Defendants move to dismiss under Rule 12(b)(6), arguing plaintiff does not own the 27 | subject trademarks. See ECF No. 13. Defendant Schneider also moves to dismiss under Rule 28 | 12(b)(2), arguing this court lacks personal jurisdiction over him. See ECF No. 14-4. Schneider 1 alternatively asks the court to transfer this case to the Northern District of Illinois. See id. at 9. 2 Plaintiff filed untimely oppositions to both motions, see ECF Nos. 20 & 21, and defendants 3 replied, see ECF Nos. 23 & 24. As explained below, the court grants both motions. 4 I. RULE 12(B)(6) MOTION TO DISMISS 5 Plaintiff’s lawsuit is premised on its owning the subject trademarks. See generally Compl. 6 But, as defendants note, “each and every [United States Patent and Trademark Office] trademark 7 registration and application asserted as the basis for [plaintiff’s] claims” is owned by a different 8 company: Cup Half Full Holdings, Inc. (CHFH). See Mot. Dismiss at 2; see also Pfeiffer Decl. 9 Exs. 1–10, ECF No. 13-2 (attaching public records from the USPTO showing CHFH owns all of 10 the subject trademarks and applications). The court takes judicial notice of these public records. 11 See Metro Pub., Ltd. v. San Jose Mercury News, 987 F.2d 637 , 641 n.3 (9th Cir. 1993) (taking 12 judicial notice of trademark registrations issued by the USPTO because their “accuracy cannot 13 reasonably be questioned”); Threshold Enterprises Ltd. v. Pressed Juicery, Inc., 445 F. Supp. 3d 14 139, 146–47 (N.D. Cal. 2020) (“Materials in the online files of the USPTO and other matters of 15 public record are proper subjects of judicial notice.” (citing Reyn’s Pasta Bella, LLC v. Visa USA, 16 Inc., 442 F.3d 741 , 746 n.6 (9th Cir. 2006))). The public records also are incorporated by 17 reference in the complaint. See Compl. ¶¶ 6–7. 18 In its opposition, plaintiff submits the declaration of Joshua Held, the chairman of both 19 CHFH and Muertos Roasters. See Held Decl. ¶¶ 2–3, ECF No. 20-1. Mr. Held explains that 20 Muertos Roasters is a wholly owned subsidiary of CHFH and that CHFH “transferred and 21 assigned” the subject trademarks “and the associated goodwill” to Muertos Roasters before 22 Muertos Roasters filed this lawsuit. Id. ¶¶ 4, 7. Mr. Held attaches the trademark assignment 23 agreement to his declaration, see Held Decl. Ex A, but he does not suggest the assignment 24 agreement has been recorded with the USPTO. 25 The court grants defendants’ motion to dismiss. Judicially noticeable USPTO records 26 contradict plaintiff’s alleged ownership of the subject trademarks and applications, and the court 27 is not required to “accept as true allegations that contradict matters properly subject to judicial 28 notice.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). Moreover, the 1 unrecorded assignment agreement on which plaintiff relies to prove ownership is not properly 2 before the court: It is not subject to judicial notice under Federal Rule of Evidence 201, and 3 plaintiff does not attach it to the complaint or even mention in the complaint that it owns the 4 trademarks by way of assignment. To the contrary, plaintiff alleges “Plaintiff Muertos Roasters 5 has applied for and received several federal registrations” for the subject trademarks. Compl. ¶ 6. 6 II. RULE 12(B)(2) MOTION TO DISMISS 7 A party may seek dismissal of a claim for lack of personal jurisdiction under Rule 8 12(b)(2). The burden of establishing personal jurisdiction rests with the plaintiff. Boschetto v. 9 Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008). If the court decides a Rule 12(b)(2) motion 10 without conducting an evidentiary hearing, the plaintiff need only make a prima facie showing of 11 the facts supporting personal jurisdiction. Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163 , 12 1168 (9th Cir. 2006). In deciding whether plaintiff has made a prima facie showing, a court need 13 only consider the pleadings and any submitted affidavits. Boschetto, 539 F.3d at 1015 . 14 Uncontroverted factual allegations generally must be taken as true, Schwarzenegger v. Fred 15 Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004), but “mere ‘bare bones’ assertions of 16 minimum contacts with the forum or legal conclusions unsupported by specific factual allegations 17 will not satisfy a plaintiff’s pleading burden,” Swartz v. KPMG LLP, 476 F.3d 756, 766 (9th Cir. 18 2007) (citations omitted). 19 Schneider moves to dismiss under Rule 12(b)(2), arguing he is not subject to personal 20 jurisdiction in California because he has practically no contacts with California. See Mot. 21 Dismiss at 2–3, ECF No. 14; Schneider Decl. ¶¶ 6–13. Plaintiff submitted a three-page 22 opposition; it did not submit any evidence in response to Schneider’s motion, relying instead on 23 the bare allegations of its complaint. 24 Plaintiff’s complaint has two core flaws. First, plaintiff’s allegations are mostly against 25 defendants generally. See, e.g., Compl. ¶ 14 (“Defendants’ prominent unauthorized use of 26 Plaintiff’s federally registered trademark in the title of Defendants’ Internet advertisements is a 27 flagrant and unlawful attempt to exploit Plaintiff’s goodwill and reputation . . . .”) (emphasis 28 added). Plaintiff may not aggregate factual allegations concerning multiple defendants in order to 1 demonstrate personal jurisdiction over any individual defendant. See Rush v. Savchuk, 444 U.S. 2 320 , 331–32 (1980) (rejecting aggregation of co-defendants’ forum contacts in determining 3 personal jurisdiction as “plainly unconstitutional” because “the requirements of International 4 Shoe must be met as to each defendant over whom a . . . court exercises jurisdiction”); Calder v. 5 Jones, 465 U.S. 783, 790 (1984) (defendant’s “contacts with California are not to be judged 6 according to their employer’s activities there. . . . Each defendant’s contacts with the forum State 7 must be assessed individually.”). 8 Second, the two paragraphs in the complaint that do single out Schneider’s alleged 9 wrongdoing assert mere legal conclusions. Plaintiff alleges: 10 . . . Defendant Schneider and Defendant Walton personally 11 participated in the decisions to intentionally engage in the pervasive 12 infringing behavior and to intentionally misappropriate the Muertos 13 Roasters’ Trademarks and the Muertos Roasters’ Trade Dress, and 14 therefore are personally liable for such actions and decisions. 15 This Court has personal jurisdiction over Defendant Schneider and 16 Defendant Walton because, inter alia, Defendant Schneider and 17 Defendant Walton actively took part in the decisions to engage in 18 infringing and unlawful business practices in the State of California, 19 and purposefully directed their unlawful behavior at a California 20 company, Plaintiff Muertos Roasters, with full knowledge that 21 Plaintiff Muertos Roasters was a California based company and the 22 harm would be suffered in the State of California and the Eastern 23 District of California. 24 Compl. ¶¶ 25, 38. These conclusory allegations trace Calder’s three-part “effects” test.1 And 25 although Schneider does not directly challenge these allegations, the court is only required to 26 accept uncontroverted allegations as true “to the extent they assert facts rather than legal 27 conclusions.” Ketayi v. Health Enrollment Grp., 516 F. Supp. 3d 1092 , 1116 (S.D. Cal. 2021) 28 (citations omitted); Swartz, 476 F.3d at 766 . 29 ///// 1 This test requires that the defendant “(1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state.” Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1228 (9th Cir. 2011) (internal quotation marks omitted). 1 Moreover, even if the court accepted plaintiff’s allegations as true, plaintiff would still fall 2 short of meeting its burden at this stage. See Whiteslate, LLP v. Dahlin, No. 20-1782, 2021 WL 3 2826088, at *4 (S.D. Cal. July 7, 2021) (“Corporate officers must generally be the guiding spirit 4 and the active directing hand in full charge of [the corporation’s] operations in order to be subject 5 to personal jurisdiction.” (internal quotation marks and citation omitted)); Calder, 465 U.S. at 790 6 (employees not shielded from personal jurisdiction if they were “primary participants in an 7 alleged wrongdoing intentionally directed at” the forum state). Plaintiff’s conclusory allegations 8 that Schneider “personally participated” and “actively took part” in the decisions to engage in 9 infringing behavior fall short of suggesting he was a “primary participant” or “guiding spirit” in 10 any wrongdoing. 11 Plaintiff’s complaint is similar to the complaint in Whiteslate, in which the Southern 12 District of California found it lacked personal jurisdiction over a defendant named Smith in his 13 personal capacity: 14 Plaintiff allege[d] no facts that render Defendant Smith a “guiding 15 spirit” of any of the alleged claims or corporate operations. Plaintiff 16 only references Smith when (1) identifying him as a resident of San 17 Diego County (Compl. ¶ 5), identifying his role as Chief Financial 18 Officer and Secretary of ClickUp (Id. ¶ 62), and when merely 19 asserting legal conclusions without factual analyses (e.g., 20 “Defendant[ ] Smith ... personally participated in the wrongful 21 conduct of infringing on Slate’s copyrighted contracts and work22 product”). (Id. ¶ 127.) — 23 — 2021 WL 2826088 at *4. 24 In sum, plaintiff has not met its burden of establishing personal jurisdiction is proper here. 25 As in Whiteslate, plaintiff’s complaint alleges only legal conclusions; it neither alleges nor shows 26 Schneider played any specific role in Fire Department Coffee’s alleged wrongdoing. Courts have 27 found personal jurisdiction absent when presented with much more. See, e.g., Ind. Plumbing 28 Supply, Inc. v. Standard of Lynn, Inc., 880 F. Supp. 743 (C.D. Cal. 1995) (finding jurisdiction 29 over out-of-state company but rejecting jurisdiction over company’s president in personal 30 capacity despite his admitting to authorizing publication of subject advertisements with contested 31 trademark in national magazines he knew were distributed in California; noting president did not 1 develop advertising campaign using trademarked phrase and was only one of three people who 2 collectively made decision to use advertisement). 3 III. CONCLUSION 4 The court grants defendants’ 12(b)(6) motion to dismiss and grants defendant 5 Schneider’s 12(b)(2) motion to dismiss; both motions are granted with leave to amend given that 6 amendment to cure the pleadings does not appear futile. Fed. R. Civ. P. 15. The court does not 7 reach Schneider’s alternative request to transfer this case to the Northern District of Illinois. 8 This order resolves ECF Nos. 13 & 14. 9 IT IS SO ORDERED. 10 DATED: August 29, 2022.