Culligan International Company v. Water Systems of Birmingham, Inc.
MEMORANDUM OPINION AND ORDER DENYING 12 First MOTION to Dismiss. Signed by Judge Virginia Emerson Hopkins on 8/26/2013. (JLC)
2013 Aug-26 PM 01:31
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
WATER SYSTEMS OF
) Case No.: 2:13-CV-1085-UNAS-VEH
MEMORANDUM OPINION AND ORDER
Plaintiff Culligan International Company (“Culligan”) initiated this trademark
infringement lawsuit on June 7, 2013. (Doc. 1). Defendant Water Systems of
Birmingham, Inc. (“WSB”) filed a Motion To Dismiss (Doc. 12) (the “Motion”) on
July 15, 2013. (Doc. 12).
On August 23, 2013, Culligan filed a Motion for Leave of Court to File
Response to Defendant’s Motion To Dismiss Out of Time (“Motion for Leave”).
(Doc. 13). The court granted Culligan’s Motion for Leave by a margin order entered
on August 23, 2013. On August 26, 2013, Culligan separately filed in its opposition
to the Motion. (Doc. 14).
Accordingly, the Motion is now ready for disposition, and, for the reasons
explained below, is DENIED.
Rule 12(b)(6) Standard.
A Rule 12(b)(6) motion attacks the legal sufficiency of the complaint. See Fed.
R. Civ. P. 12(b)(6). The Federal Rules of Civil Procedure require only that the
complaint provide “‘a short and plain statement of the claim’ that will give the
defendant fair notice of what the plaintiff’s claim is and the grounds upon which it
rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957), abrogated by Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 545 (2007); see also Fed. R. Civ. P. 8(a).
While a plaintiff must provide the grounds of his entitlement to relief, Rule 8
does not mandate the inclusion of “detailed factual allegations” within a complaint.
Twombly, 550 U.S. at 545 (quoting Conley, 355 U.S. at 47). However at the same
time, “it demands more than an unadorned, the-defendant-unlawfully-harmed-me
accusation.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). “[O]nce a claim has
been stated adequately, it may be supported by showing any set of facts consistent
with the allegations in the complaint.” Twombly, 550 U.S. at 563.
“[A] court considering a motion to dismiss can choose to begin by identifying
pleadings that, because they are no more than conclusions, are not entitled to the
assumption of truth.” Iqbal, 129 S. Ct. at 1950. “While legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations.”
Iqbal, 129 S. Ct. at 1950. “When there are well-pleaded factual allegations, a court
should assume their veracity and then determine whether they plausibly give rise to
an entitlement to relief.” Id. (emphasis added). “Under Twombly’s construction of
Rule 8 . . . [a plaintiff’s] complaint [must] ‘nudge [any] claims’ . . . ‘across the line
from conceivable to plausible.’ Ibid.” Iqbal, 129 S. Ct. at 1950-51.
A claim is plausible on its face “when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 129 S. Ct. at 1949. “The plausibility standard is not akin
to a ‘probability requirement,’ but it asks for more than a sheer possibility that a
defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556).
A Dismissal Premised Upon Culligan’s Status As An Alleged
Unregistered Foreign Corporation Doing Business in
Alabama Is Improper.
Citing to Ala. Code § 10-2B-15.02(a), WSB maintains that Culligan cannot
pursue its trademark claims which allegedly stem from a franchise agreement entered
into by the parties in December of 2006 (Doc. 1 at 3 ¶ 9) because Culligan is a foreign
corporation that has not qualified to do business in Alabama. (Doc. 12-1 at 1-5). Ala.
Code § 10-2B-15.02(a), which was amended and renumbered by the Alabama
Legislature by virtue of Act 2009-513, effective January 1, 2011, provides:
A foreign corporation transacting business in this state without
registering as required under Section 10A-1-7.01 or without complying
with Chapter 14A of Title 40 may not maintain a proceeding in this state
without so registering and complying. All contracts or agreements made
or entered into in this state by foreign corporations prior to registering
to transact business in this state shall be held void at the action of the
foreign corporation or by any person claiming through or under the
foreign corporation by virtue of the contract or agreement; but nothing
in this section shall abrogate the equitable rule that he or she who seeks
equity must do equity.
Ala. Code § 10A-2-15.02 (1975) (emphasis added); see also Ala. Code §10A-17.21(a) (1975) (“A foreign entity transacting business in this state may not maintain
any action, suit, or proceeding in any court of this state until it has registered in this
The court’s own legislative research on Westlaw has shown that, effective
January 1, 2014, following the ratification of the constitutional amendment proposed
by H.B. 357 of the 2012 Regular Session (Act 2012-275), Ala. Code § 10A-2-15.02
will be repealed and an amended version of Ala. Code § 10A-1-7.21 will be in place
by virtue of the adoption of H.B. 359 by the Alabama Legislature during the 2012
Regular Session and approved by the governor on May 9, 2012. See 2012 AL H.B.
359, at 1 § 1(a) (modifying Ala. Code § 10A-1-7.21) (Westlaw image 1 in PDF
format) (hereinafter “H.B. 359”); H.B. 359, at 2 § 2 (repealing Ala. Code § 10A-215.02); id. § 3 (explaining circumstances surrounding H.B. 359’s effective date); id.
at 3 (H.B. 359’s approval date by Governor Robert Bentley); see also
(General Revenue Related Acts, 2012, Regular Session) at 4 (last accessed on Aug.
8, 2013). The amended version of Ala. Code §10A-1-7.21(a) comparably provides
that “[a] foreign entity transacting business in this state, except a corporation or other
organization formed under federal law, may not maintain any action, suit, or
proceeding in any court of this state until it has registered in this state.” H.B. 359, at
Culligan responds that:
With or without a franchise agreement between the Parties,
Plaintiff’s Complaint clearly and unequivocally states claims for
trademark infringement and false advertising under the Lanham Act.
(Doc. No. 1, Counts I and II alleging violations of 15 U.S.C. § 1114(1)
and 15 U.S.C. § 1125(a)). With or without a franchise agreement
between the parties, Defendant was clearly put on notice of the
obligation to de-identify itself and not use Plaintiff’s trademarks in
violation of the Lanham Act. (Doc. No. 1, Exhibits 1, 2, 3, 4, and 5).
(Doc. 13-1 at 4 ¶ 9);2 (Doc. 14 at 3 ¶ 9).
The court agrees that Culligan’s claims arising under the Lanham Act involve
alleged violations of federal law that exist separate and apart from any potential
breach of contract claim that might be actionable under Alabama law. Moreover,
Culligan has not asserted a breach of contract claim in its complaint. (See generally
Therefore, Culligan’s alleged lack of qualifying to do business in Alabama
(Doc. 12-1 at 1) does not prevent it from pursuing the federal trademark and false
1 § 1(a).
The page references to Doc. 13-1 correspond with the court’s CM/ECF
Culligan’s complaint actually contains three counts: count one is for a
preliminary and permanent injunction (Doc. 1 at 7); count two is for federal
trademark infringement under the Lanham Act (id. at 10); and count three is for
federal false advertising under the Lanham Act. (Id. at 11).
advertising claims at issue in this lawsuit. Accordingly, the Alabama statutory-based
portion of WSB’s Motion is DENIED.
A Dismissal Premised Upon The Res Judicata Doctrine Also Is
WSB also argues that a dismissal of this case is appropriate on res judicata
grounds. (Doc. 12-1 at 5-6). As WSB acknowledges in its brief, “[r]es judicata
stands for the proposition that a final judgment on the merits by a court having
jurisdiction is conclusive between the parties to a suit as to all matters that were
litigated or that could have been litigated in that suit.” (Id. at 5 (emphasis by
underlining added)); see also Maldonado v. U.S. Atty. Gen., 664 F.3d 1369, 1375
(11th Cir. 2011) (“For res judicata to bar a subsequent case, four elements must be
present: ‘(1) there is a final judgment on the merits; (2) the decision was rendered by
a court of competent jurisdiction; (3) the parties, or those in privity with them, are
identical in both suits; and (4) the same cause of action is involved in both cases.’”
(quoting Ragsdale v. Rubbermaid, Inc., 193 F.3d 1235, 1238 (11th Cir. 1999))).
In urging the application of this defensive doctrine, WSB relies upon a decision
entered by the United District Court for the Northen District of Illinois on April 27,
2011, in another federal trademark action involving Culligan, WSB, Ray W. Carlisle
(“Mr. Carlisle”),4 and other parties. (See generally Doc. 12-3 (attaching copy of
authority)). More specifically, WSB confusingly contends that because “[Mr.]
Carlisle has obtained a final judgment on the merits by the United States District
Court which had jurisdiction . . . the Illinois court’s judgment is conclusive between
Carlisle and Culligan as to all matters that were litigated or that could have been
litigated in that suit . . . .” (Doc. 12-1 at 6 (emphasis added)).
To the extent that WSB really means that it, as opposed to Mr. Carlisle, has
obtained a favorable final judgment on the merits, the court, nonetheless, still
concludes that this portion of WSB’s Motion is due to be denied. In particular, the
attached opinion relied upon by WSB is not a merits-based one. Instead, the ruling
is entirely jurisdictional in nature and the dismissal does not constitute a final
judgment on any disputed trademark claims. (See Doc. 12-3 at 3 (“Defendants’
motion to dismiss for lack of personal jurisdiction (9) is granted and the motion to
dismiss for improper venue is denied as moot. The case is, therefore, dismissed.”)
(emphasis added)). Accordingly, the res judicata part of WSB’s Motion is DENIED.
Thus, for the reasons stated herein, the Motion is DENIED. WSB shall answer
or otherwise respond to the complaint within fourteen (14) days of this order.
Notably, Mr. Carlisle is not a party to the litigation pending before this court.
DONE and ORDERED this 26th day of August, 2013.
VIRGINIA EMERSON HOPKINS
United States District Judge
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