Brian Lichtenberg LLC et al v. Alex & Chloe Inc et al

Filing 66

ORDER DENYING DEFENDANTS' MOTION TO DISMISS (Dkt. No. 58) and GRANTING MOTION TO DISMISS (DKT. No. 57) IN PART AND DENYING IN PART by Judge Dolly M. Gee: Defendants' Motion to Dismiss (Dkt. No.58), filed on behalf of Defendants Marked, Yi, Tran, Enright, and Mockett, is DENIED in its entirety. Defendants' other Motion to Dismiss (Dkt. No. 57) is GRANTED in part. Plaintiffs' Second and Third Counts for False Designation of Origin and Dilution, Count 4 CUTSA claim for "man ner of manufacture," and Count 8 claim for trademark infringement regarding "Ballin" and "Ballin Paris" is dismissed with prejudice. In all other respects, Defendants' Motion is DENIED. Plaintiffs shall have 15 days from the date of this Order to file a Second Amended Complaint. Defendants shall file their response within 15 days after service of any amended pleading.granting in part and denying in part 57 Motion to Dismiss for Lack of Jurisdiction ; granting in part and denying in part 57 Motion to Dismiss Case ; denying [] Motion to Dismiss Case (bp)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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BRIAN LICHTENBERG,LLC, a
California limited liability
company; BRIAN LICHTENBERG,
an individual,

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Plaintiff,
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v.
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ALEX & CHLOE, INC., a
California corporation;
CHRISTOPHER WALTER
LICHTENBERG, an individual;
MARKED SHOWROOM, LLC, a
Californai limited liability
company; JACQUELINE YI, an
individual; TU TRAN, an
individual KYLE MOCKETT, an
individual; KAYTEE ENRIGHT,
an individual,

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Defendants.
___________________________

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Case No. CV 13-06837 DDP (PJWx)

ORDER DENYING DEFENDANTS’ MOTION
TO DIMISS (Dkt. No. 58) and
GRANTING MOTION TO DISMISS (DKT.
No. 57) IN PART AND DENYING IN
PART

[Dkt. Nos. 57, 58]

Presently before the court are Defendants’ two Motions to

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Dismiss Plaintiff’s First Amended Complaint.

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58.)

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one motion in its entirety (Dkt. No. 58), and denies the other

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motion in part and grants it in part (Dkt. No. 57) for the

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following reasons.

(Dkt. Nos. 57 and

Having considered the parties’ submissions, the court denies

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I.

Background1

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Plaintiff Brian Lichtenberg (“Brian”) designs clothing and
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accessories and distributes his products through Brian Lichtenberg,
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(First Amended Complaint (“FAC”) ¶¶ 1-2, 19, 23).2

LLC.

Brian’s

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designs include a series of parodies of designer brands, such as
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“Homiès” as a play on “Hermès” and “Bucci,” a parody of “Gucci.”
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(FAC ¶ 44.)

Brian’s spoof or parody logos mimic the style, font,

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and other elements of the luxury brand designs.

(FAC, Ex. A.)

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Brian sells t-shirts, muscle tees, sweatshirts, beanies, and hats
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bearing the various spoof designs.

(FAC ¶ 45.)

Brian alleges that

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his designs are very successful, and are frequently worn by
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celebrities and featured in the media.

(FAC ¶ 43.)

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Brian’s younger brother, Defendant Christopher Walter

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Lichtenberg (“Chris”), is the sole shareholder or director of

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Defendant Alex and Chloe, Inc. (“A&C”).

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2010 and 2013, Brian allowed his merchandise to be sold on

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consignment on A&C’s website “as a favor to Chris.”

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Brian and A&C orally agreed that Brian would receive a portion of

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the proceeds from sales of his products on the A&C website.

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(FAC ¶¶ 3-4.)

Between

(FAC ¶ 57.)

(Id.)

The FAC alleges that in January 2012, Brian developed one
particular parody design, “Ballin,” as a play on the luxury brand
“Balmain.”

(FAC ¶ 54.)

By November 2012, Chris was working as a

“part-time contractor” for Brian.

(FAC ¶ 62.)

Chris’ duties

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The Court assumes the truth of the material factual
allegations in the First Amended Complaint solely for purposes of
deciding the motions to dismiss.
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Hereinafter, this Order frequently refers to Plaintiffs
Brian Lichtenberg and Brian Lichtenberg, LLC, collectively, as
“Brian.”
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included graphic design and promotional work related to Brian’s

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“Ballin with My Homies” project.

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with those duties, Chris allegedly had access to confidential lists

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of Brian’s customers and industry contacts.

(FAC ¶¶ 62, 65.)

In connection

(FAC ¶¶ 62-62.)

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Plaintiffs allege that Chris, while employed by Brian, slowed
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down the launch of Brian’s “Ballin” products as part of a scheme to
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steal the design and launch a similar A&C product.

(FAC ¶¶ 70-1.)

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The FAC alleges that Chris copied and claimed ownership of the
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“Ballin” design, contacted Brian’s manufacturer and requested that
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products identical to Brian’s be made under the A&C label, and used
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Brian’s confidential customer lists to sell the A&C items.

(FAC ¶¶

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70, 72, 74, 77.)

Chris listed his products for sale on the A&C

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website in late January or early February 2013, before Brian’s
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“Ballin” products came to market.

(FAC ¶ 78.)

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Chris repeatedly claimed to own the “Ballin” design via the

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internet and social media.

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several of Brian’s buyers, stated that Brian’s “Ballin” products

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were counterfeits, and asked that retailers stop selling Brian’s

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“Ballin” products.

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statements claiming that Brian had stolen not only the “Ballin”

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design, but other parody designs as well.

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Chris’s request, social media sites removed images of Brian’s

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“Ballin” apparel posted to Brian’s pages.

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(FAC ¶ 83.)

(FAC ¶¶ 81-82.)

Chris also contacted

Chris then made further public

(FAC ¶¶ 89, 92.)

At

(FAC ¶ 97.)

Chris and A&C then expanded their offerings to include other
products similar to Brian’s, featuring other parody designs beyond
“Ballin.”

(FAC ¶¶ 104, 111.)

Chris also appropriated photographs

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of celebrities wearing Brian’s products, then posted them to A&C’s

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websites and claimed that those celebrities endorsed A&C.

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107, 109-110.)

(FAC ¶

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In March 2013, Plaintiffs filed suit against Chris and A&C in
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Los Angeles County Superior Court.

Plaintiffs later dismissed

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their state court action and, on September 17, 2013, filed the
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instant suit in this court.

Plaintiffs’ FAC alleges nine causes of

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action against Defendants, including unregistered trademark and
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trade dress infringement, unfair competition, and trademark
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dilution under Section 43 of the Lanham Act, 15 U.S.C. § 1125, as
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well as state law causes of action.

Defendants now move to dismiss

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the FAC.

Defendants, all represented by the same counsel, filed

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two separate motions to dismiss.

The bulk of this Order addresses

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the lengthier of the motions (“Motion”) at Docket Entry 57.

The

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court discusses the second, shorter motion at Docket Entry 58 in
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section III(J), below.
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II.

Legal Standard
Though Defendants style their Motion as both a jurisdictional

challenge under Rule 12(b)(1) and motion for failure to state a
claim under Rule 12(b)(6), their supporting memorandum argues that
jurisdiction is lacking because Plaintiffs fail to state a Lanham
Act claim.

(Mot. at 12.)

Where a motion under Rule 12(b)(1)

attacks the allegations of the complaint, the court applies the
same standard as under Rule 12(b)(6).

Thornhill Publ’g Co., Inc.

v. Gen. Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979);

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Org. for Advancement of Minorities with Disabilities v. Brick Oven

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Restaurant, 406 F.Supp.2d 1120, 1124 (S.D. Cal. 2005).

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A complaint will survive a motion to dismiss when it contains
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“sufficient factual matter, accepted as true, to state a claim to
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relief that is plausible on its face.”

Ashcroft v. Iqbal, 556 U.S.

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662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
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570 (2007)). When considering a Rule 12(b)(6) motion, a court must
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“accept as true all allegations of material fact and must construe
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those facts in the light most favorable to the plaintiff.”

Resnick

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v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). Although a complaint
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need not include “detailed factual allegations,” it must offer
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“more than an unadorned, the-defendant-unlawfully-harmed-me
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accusation.”

Iqbal, 556 U.S. at 678.

Conclusory allegations or

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allegations that are no more than a statement of a legal conclusion
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“are not entitled to the assumption of truth.”

Id. at 679. In

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other words, a pleading that merely offers “labels and
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conclusions,” a “formulaic recitation of the elements,” or “naked
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assertions” will not be sufficient to state a claim upon which
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relief can be granted.

Id. at 678 (citations and internal

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quotation marks omitted).
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“When there are well-pleaded factual allegations, a court should

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assume their veracity and then determine whether they plausibly

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give rise to an entitlement of relief.” Id. at 679. Plaintiffs must

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allege “plausible grounds to infer” that their claims rise “above

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the speculative level.”

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whether a complaint states a plausible claim for relief” is a

Twombly, 550 U.S. at 555. “Determining

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“context-specific task that requires the reviewing court to draw on

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its judicial experience and common sense.”

Iqbal, 556 U.S. at 679.

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III. Discussion
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A.

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Relevant Allegations

Defendants go to great lengths to recount their version of
events related to the dispute between Brian and Chris.
12.)

(Mot. at 4-

Defendants support their factual position with extensive

citations to Chris’ declaration, filed in connection with earlier
motion practice before this court, as well as with factual
descriptions of state court proceedings that are neither alleged in
the FAC nor supported by exhibits.

As an initial matter, the court

reiterates that on this Rule 12(b)(6) motion, it must “accept as
true all allegations of material fact and must construe those facts
in the light most favorable to the plaintiff.”

Resnick 213 F.3d at

447.

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Citing Bradley v. Chiron Corp., 136 F.2d 1317 (Fed. Cir.

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1998), Defendants argue that several of the FAC’s allegations
contradict Plaintiffs’ earlier allegations, and should be stricken
as a sham.

(Mot. at 8.)

The Ninth Circuit, however, has

explicitly declined to follow Bradley.

PAE Gov’t Servs., Inc. v.

MPRI, Inc., 514 F.3d 856, 859 (9th Cir. 2007).

As the PAE court

explained, absent a showing of bad faith, nothing in the Federal
Rules of Civil Procedure prevents a party from making inconsistent

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allegations or empowers this court to strike even contradictory

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pleadings.3

Id. at 858-60.

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Lastly, Defendants contend that certain allegations conflict
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with exhibits referenced in the complaint, and should be stricken
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on that basis.

(Mot at 10-11.)

This court need not accept as true

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allegations that contradict exhibits attached to or referenced by a
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complaint.

Sprewell v. Golden State Warriors, 266 F.3d 979, 988

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(9th Cir. 2001); United States v. Ritchie, 942 F.3d 903, 908 (9th
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Cir. 2003).

Specifically, Defendants ask that the court strike

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allegations regarding (1) an e-mail from Kanye West and (2) a
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promotional flyer featuring Brian and a “Ballin With My Homies”
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sweatshirt.
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As to the e-mail, the FAC alleges that Kanye West sent Brian

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an e-mail that discussed the word “Ballin.”

(FAC ¶ 53.)

Contrary

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to Defendants’ assertion, the FAC does not allege that the e-mail

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involved a discussion of a design featuring the term “Ballin.”

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Furthermore, Defendants appear to misidentify the message in

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question.

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their request for judicial notice, filed on October 21, 2013 in

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connection with an earlier motion, that exhibit is an e-mail

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message between Chris and Brian on an unrelated subject.

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42-2 at 27).

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their contention that the term “Ballin,” as used in the e-mail,

While Defendants point to Exhibit 10 to Exhibit N of

(Dkt. No

Further, Defendants’ request that the court accept

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While Defendants’ Reply makes some brief mention of bad
faith, Defendants have not moved for sanctions, nor do their moving
papers make any reference to Rule 11. See PAE, 514 F.3d at 860
(explaining that a showing of bad faith can only be made after the
accused party has been given the opportunity to respond in
accordance with Rule 11).
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does not mean what the FAC alleges it to mean runs afoul of the

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requirement that all inferences be drawn in Plaintiffs’ favor.

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TwoRivers v. Lewis, 174 F.3d 987, 991 (9th Cir. 1999).

See

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Similarly, the exhibits cited by Defendants with respect to
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the promotional flyer are not what Defendants purport them to be.
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In any event, Defendants again mischaracterize the FAC, which
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alleges that the flyer featured a picture of Brian in a “Ballin
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With my Homies” sweatshirt, and not, as Defendants contend,
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anything to do with “Ballin Paris.”

(FAC ¶ 62.)

Again, the

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meaning of the term “Ballin,” as used in the flyer, is debatable,
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and construed in Plaintiffs’ favor at this stage.
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The court therefore declines to strike any of the allegations

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in the FAC, and proceeds to discuss the sufficiency of the

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pleadings of Plaintiffs’ claims.

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B.

Count 1: Trademark and Trade Dress Infringement

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i.

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Trademark Infringement

The FAC raises a cause of action for unregistered trademark

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and trade dress infringement under Section 43(a) of the Lanham Act,

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15 U.S.C. § 1125(a).

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‘Ballin’ and ‘Ballin Paris’” and (2) wrongful use of certain trade

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dress, described in further detail below.

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make clear that they “are not seeking blanket protection for the

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use of the slang term ‘Ballin’ or the term ‘Ballin Paris.’”

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at 12.)

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any other trademark.

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the terms themselves are not the trademarks, Defendants’ Motion to

The FAC alleges (1) “wrongful use of the name

Nevertheless, Plaintiffs

(Opp.

The allegations in Count 1, however, make no reference to
Given Plaintiffs’ apparent concession that

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Dismiss is granted, insofar as it relates to trademark

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infringement.4

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ii.

Trade Dress Infringement

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Trade dress, or the “total image of a product,” is protectable

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under Section 43(a) of the Lanham Act.

Int’l Jensen, Inc. v.

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Metrosound U.S.A., Inc., 4 F.3d 819, 822 (9th Cir. 1993).

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succeed on a trade dress infringement claim, which is analytically

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similar to an unregistered trademark claim, plaintiffs must show

To

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that a trade dress is nonfunctional, is distinctive or has acquired

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secondary meaning, and that a defendant’s use of a similar mark or

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trade dress is likely to confuse consumers.

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Id. at 823.

The FAC identifies trade dress comprised of:

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1.

40-weight cotton cut, dyed, and enzyme washed in a
signature way with a screen printed logo inside the
neck;5

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an oversized, bulky, shapeless cut;

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red, hot pink, orange, and black colors;

4.

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damask main labels folded to 3.5 x. 1.25 inches and 50/50
cotton/polyester size labels folded to 1.25 x 1.625
inches;

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woven stitching;

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hang tags with a Century Gothic font;

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This concession also appears
arguments regarding first use of the
While Defendants appear to suggest a
respect to trade dress claims (Reply
claim to have used the alleged trade
to Brian’s 2010 use.
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to vitiate Defendants’
“Ballin” term. (Mot. at 13.)
first use argument with
at 7), nowhere do Defendants
dress, discussed below, prior

Plaintiffs do not explain how the neck portion would apply
to beanies and hats, both of which, Plaintiffs contend, feature the
protected trade dress.
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minimal graphics that center around high end luxury,
centered on the chest;

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white, black, and gold embroidery (only on beanies and
hats); and

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logo placement in a large font in the middle of the
garment.

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FAC ¶ 45.

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1.

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Functionality

Defendants contend that Plaintiffs’ trade dress is functional,
and therefore unprotectable.

(Mot. at 15.)

In analyzing

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functionality, courts look to “(1) whether the design yields a

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utilitarian advantage, (2) whether alternative designs are

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available, (3) whether advertising touts the utilitarian advantage

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of the design, and (4) whether the particular design results from a

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comparatively simple or inexpensive method of manufacture.”

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Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1260 (9th Cir.

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2001) (citing Disc Golf Assoc., Inc. v. Champion Discs, Inc., 158

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F.3d 1002, 1006 (9th Cir. 1998)).

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individual elements constituting a trade dress, but rather the

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“overall visual impression” and “composite tapestry of visual

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effects.”

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functional.

Id. at 1259.

Clicks

The focus is not on the

Purely aesthetic features cannot be

Id. at 1260.

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Defendants argue that competitors would be at a significant
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disadvantage if they were unable to use “pre-manufactured cotton t24
shirts with stitching, black labels, and logos that are placed on
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the front, center of each t-shirt.”

(Mot. at 15.)

Defendants,

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however, set up a straw man.

Plaintiffs’ FAC does not identify so

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general or amorphous a trade dress.
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While the trade dress at issue

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does include some of the elements Defendants identify, it also is

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comprised of specific colors, fonts, subject material, styles, and

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textures.

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whole notable for its aesthetic properties.

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sufficiently alleged nonfunctional trade dress.

These elements combine to form a distinctive, unitary
Plaintiffs have

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2.

Secondary Meaning

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Trade dress acquires secondary meaning when consumers
associate the dress with a particular source.

Clicks Billiards,

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251 F.3d at 1262.

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no source-identifying function, it is not protectable.

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If a design has only an aesthetic effect, with
Here,

Plaintiffs’ opposition does not specifically address the FAC’s
allegations regarding secondary meaning.

The FAC, however,

repeatedly alleges that consumers “instantly recognize” Brian’s
designs and products (FAC ¶¶ 16-17), that “the public has come to
know [the trade dress] exclusively as hallmarks” of Brian’s
products (FAC ¶ 45), and that consumers have been confused when
presented with images of A&C products bearing the alleged trade
dress. (FAC ¶ 96.)

While Defendants conclusorily assert that there

is no secondary meaning attached to Plaintiffs’ design (Mot. at
15), whether the alleged trade dress has actually acquired
secondary meaning is a question of fact for another day.
Billiards, 251 F.3d at 1262.

analysis, secondary meaning is adequately alleged.

Defendants’

Motion is denied with respect to Plaintiffs’ trade dress
infringement claims.
C.

Count 2:

Clicks

For purposes of a Rule 12(b)(6)

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Id.

False Designation of Origin
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The FAC alleges that “Defendants’ unlawful copying and use of

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PLAINTIFFS’s [sic] registered Trade Dress Marks in connection with

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their footwear products is a false and misleading designation of

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origin and a false and misleading representation of facts . . . .”

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(FAC ¶ 122.)

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be amended to correct certain “typographical errors.”

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13.)

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Dress marks” to “unregistered Trade Dress Marks,” and to replace

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“footwear” with “t-shirt, sweatshirt, beanie, and baseball cap.”

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Plaintiffs acknowledge that these allegations need to
(Opp. at

Specifically, Plaintiffs seek to change “registered Trade

(Id.)

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“Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a),
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prohibits the use of false designations of origin, false
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descriptions, and false representations in the advertizing [sic]
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and sale of goods and services.”

Jack Russell Terrier Network v.

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Am. Kennel Club, Inc., 407 F.3d 1027, 1036 (9th Cir. 2005).
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Plaintiffs appear to base their false designation of origin claims
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on the allegations that Chris appropriated pictures of celebrities
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wearing Brian’s products, then posted those pictures on Chris’ and
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A&C’s websites, thus giving the impression that the celebrities
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were wearing and/or endorsing A&C’s products instead of Brian’s.
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(Opp. at 14.)
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Defendants assert, without any support, that allowing

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Plaintiffs to amend would be futile.

(Reply at 12:28.)

The court

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disagrees.

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described above, which could conceivably support a false

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designation claim if applied to the proper apparel.

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Plaintiffs’ second cause of action is dismissed with leave to

The FAC already includes the factual allegations

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Accordingly,

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amend.

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D.

Count 3:

Trademark Dilution

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Plaintiffs do not acknowledge any typographical errors in

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their third cause of action for trademark dilution.

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correct, however, that this claim, as currently pled, refers only

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to trade dress “on footwear products.”

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viable Lanham Act dilution claim, Plaintiffs must allege that they

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own a famous, distinctive mark or dress, Defendants have used a

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nearly identical mark in commerce after Plaintiffs’ mark became

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famous, and Defendants’ use is likely to dilute or blur Plaintiffs’

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mark.

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F.3d 1158, 1161 (9th Cir. 2011).

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allege dilution with respect to any footwear trade dress, it

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appears, as above, that Plaintiffs may be able to plead a viable

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claim upon amendment.

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dismissed with leave to amend.

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(FAC ¶ 25.)

Defendants are

To state a

Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., 633

E.

Count 4:

While the FAC does not adequately

The third cause of action is therefore

California Uniform Trade Secrets Act

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The FAC alleges a cause of action against Chris and A&C for
misappropriation of trade secrets in violation of California’s
Uniform Trade Secrets Act (“CUTSA”), California Civil Code § 3426.
(FAC ¶¶ 130-141.)

To prevail on a CUTSA claim, a plaintiff must

show that (1) he owned a trade secret, (2) the defendant acquired,
used, or disclosed that secret through improper means, and (3) the
plaintiff was damaged.

Cytodyn, Inc. V. Amerimmune Pharms., Inc.,

160 Cal. App. 4th 288, 297 (2008).

The California Civil Code

defines “trade secret” as information that “(1) [d]erives
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independent economic value . . . from not being generally known to

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the public . . .; and (2) [i]s the subject of efforts that are

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reasonable under the circumstances to maintain its secrecy.”

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Civ. Code § 3426.1(d).

Cal.

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Here, Count 4 of the FAC alleges misappropriation of Brian’s
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customer lists, manufacturer lists, product specifications, and
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“manner of manufacture.”6

(FAC ¶¶ 131-134.)

The FAC alleges that

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these secrets “have economic value in that it is information not
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generally known to other apparel designers and represented many
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years of research and client communications.”

(FAC ¶ 135.)

The

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FAC further alleges that Chris copied these secrets while working
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as Brian’s employee, then used the secrets to create and sell
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imitation items.

(FAC ¶¶ 137-138.)

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Defendants first argue that the FAC fails to allege that Chris

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had access to the alleged secrets.

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states that in January 2013, Chris “misappropriated [the secrets]

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by copying them, [and] leaving the employment of Plaintiffs . . .

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.”

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The court disagrees.

The FAC

(FAC ¶ 137.)
Second, Defendants contend that customer and manufacturer

lists are not secrets because customer and manufacturer contact
information is publicly available.

(Mot. at 22.)

For support,

Defendants selectively quote Mor-Life, Inc. v. Perry, 56 Cal. App.
4th 1514 (1997).

Indeed, the Mor-Life court stated that “courts

are reluctant to protect customer lists to the extent they embody

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While the FAC does elsewhere refer to the “Ballin” parody
design as a trade secret (FAC ¶ 68), that supposed secret is not
specifically identified in Count 4.
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information which is ‘readily available’ through public sources,

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such as business directories.”

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In the very next sentence, however, the court explained, “On the

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other hand, where the employer has expended time and effort

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identifying customers with particular needs or characteristics,

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courts will prohibit former employees from using this information

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to capture a share of the market.”

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that a customer list may constitute a protectable trade secret.”

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Gable Leigh, Inc. v. North Am. Miss; No. CV 01-01019 MMM(SHX); 2001

Mor-Life, 56 Cal. App. 4th at 1521.

Id.

“It is well-established

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WL 521695 at *15 (C.D. Cal. Apr. 13, 2001).

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disagree with the FAC’s allegations that Brian expended time,

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energy, and money compiling contact lists, such allegations must be

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accepted as true at this stage.

While Defendants

Resnick, 213 F.3d at 447.

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Lastly, Defendants argue that the FAC does not adequately
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describe Brian’s secret manufacturing process.

(Mot. at 23.)

“If

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the subject matter of the claimed trade secret is a manufacturing
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process, the plaintiff must . . . supply sufficient data concerning
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the process, without revealing the details of it, to give both the
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court and defendant reasonable notice of the issues . . . .”
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Pellerin v. Honeywell Int’l, Inc., 877 F.Supp.2d 983, 988 (S.D.
21
Cal. 2012).

Plaintiffs posit that “the trade secret in the present

22
case is not the manufacturing process, per se, but rather the
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specifications for the manufactured product.”

(Opp. at 18::12-13.)

24
The FAC, however, mentions both “manner of manufacture,” including
25
“unique stitching, the fabrics, the size and placement of the
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labels, and the color schemes” (FAC ¶ 133) as well as “product
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specifications.”

(FAC ¶ 134.)

Nonetheless, the court will take

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15

1

Plaintiffs at their word that they did not intend to include manner

2

of manufacture in their claim.

3

claims regarding manner of manufacture are dismissed, with leave to

4

amend.

Accordingly, Plaintiffs’ CUTSA

5
F.

Count 5:

Unfair Competition

6
7

For the reasons stated above, at least some of Plaintiffs’

8

Lanham Act and CUTSA claims are adequately pled.

9

for unfair competition under California Business & Professions Code

10

§ 17200, therefore, also survives to the extent it is derivative of

11

those claims.

12

competition shall mean and include any unlawful, unfair or

13

fraudulent business act . . . .”).

14
15

G.

Plaintiffs’ claim

See Cal. Bus. & Profs. Code § 17200 (“[U]nfair

Counts 6 and 7:

Intentional Interference with

Prospective Economic Advantage and Contractual Relations

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17
18
19
20
21
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23
24
25
26
27
28

Defendants argue that Plaintiffs do not identify any specific
third parties with whom Plaintiffs had an economic relationship or
any specific contracts with those customers.

(Mot. at 24-25.)

Defendants ignore, among other allegations, paragraph 81 of the
FAC, which specifically lists ten different companies with which
Brian maintained economic and contractual relations.

The FAC

describes at least three of these relationships in detail.
82,84, 87.)

(FAC ¶¶

Defendants appear to abandon this argument in their

Reply, instead referring again to the “Ballin” marks, in which
Plaintiffs have disclaimed any interest, as described above.
Counts 6 and 7 are adequately pled.
H.

Count 8:

Defamation, Libel, and Slander
16

1

Defendants assert that Count 8’s claim

for defamation, libel,

2

and slander must be dismissed because (1) Plaintiffs have not

3

provided any evidence that Brian created the “Ballin” design, (2)

4

“Defendants have been adamant that they created “Ballin Paris” and

5

truth is an absolute defense,” and (3) Plaintiffs do not allege

6

that any statements were made orally.

7
Again, Defendants misapprehend the standard for a Motion to
8
Dismiss.

Plaintiffs need not present any evidence at this stage,

9
and Defendants’ version of the facts, no matter how adamantly
10
stated, is not relevant.
11
12

As to slander, Plaintiffs do not identify, nor does the FAC

13

appear to allege, any oral statements.

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slander claim is dismissed, with leave to amend.

15

Comstock, 212 Cal. App. 4th 931, 948 (2012); Cal Civ. Code § 46.

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I.

Count 9:

Accordingly, Plaintiffs’
See Aber v.

Common Count

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25
26
27

Lastly, Plaintiffs’ claim for common count, apparently for
money due, alleges that Chris owes Brian $30,000 in proceeds from
consignment sales of Brian’s products on the A&C website.
184, 186).

(FAC ¶

Contrary to Defendants’ claim that the FAC does not

identify the time span or nature of the agreement, the FAC states
that Brian made an oral agreement with A&C, and that the agreement
was in effect between 2010 and 2013.

(FAC ¶¶ 56-58.)

“The only

essential allegations of a common count are (1) the statement of an
indebtedness of a certain sum, (2) the consideration . . ., and (3)
nonpayment.

Farmers Ins. Exchange v. Zerin, 53 Cal. App. 4th 445,

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17

1

460 (1997) (internal quotation and citation omitted).

2

Count 9 is

adequately pled.

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J.

The Second Motion:

Defendants Marked, Tran, Yi, Enright

4
and Mockett
5
i.

6
7
8
9
10
11
12
13
14
15
16
17
18

Background

Defendant Marked Showroom, LLC agreed to sell A&C products and
provide public relations services to Chris and A&C.
98.)

(FAC ¶¶ 5,

Defendants Yi and Tran (collectively with Marked, the “Marked

Defendants”) are alleged to be Marked’s shareholders, officers,
principals, or employees.

(FAC ¶¶ 6-7.)

The FAC alleges that the

Marked Defendants are assisting Chris and A&C’s infringing
activities.

(FAC ¶ 108.)

The Marked Defendants are alleged to

falsely claim on their website that various celebrities, including
celebrities who wear or endorse Brian’s products, endorse A&C’s
products.

(FAC ¶ 107.)

Defendant Tran is named only in Count 5

for unfair business practices.

Defendants Marked and Yi are named

in Count 5 and the three Lanham Act counts.

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20
21
22
23
24
25

Defendants Mockett and Enright are alleged to be employees or
agents of A&C.

(FAC ¶¶ 8-9.)

Mockett and Enright allegedly agreed

to “participate in the selling of the A&C Defendants’ Imitation
Ballin merchandise.”

(FAC ¶ 101.)

Defendants Mockett and Enright

are only named in Count 5 for unfair business practices.
ii.

Marked Defendants

26
Defendants argue that the FAC does not allege any Lanham Act
27
claims against the Marked Defendants.
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18

Defendants are mistaken.

1

The FAC alleges that Marked falsely represents that A&C products

2

sold on the Marked website are endorsed by certain celebrities,

3

including Brian’s endorsers.

4

infringing goods may be liable for violations of the Lanham Act.

5

See Philip Morris USA Inc. v. Shalabi, 352 F. Supp. 2d 1067, 1073-

6

74 (C.D. Cal. 2004); BMW of North Am. v. DinoDirect Corp., No. C

7

11-04598, 2012 WL 6000573 at *3 (N.D. Cal. Nov. 30, 2012).

(FAC ¶ 107.)

Furthermore, sellers of

8
Defendant Yi and Tran are alleged to be owners or directors of
9
Marked.

(FAC ¶¶ 6-7.)

Corporate officers are generally liable for

10
Lanham Act violations that they authorize or direct.

See Coastal

11
Abstract Serv., Inc. v. First Am. Title Ins. Co, 173 F.3d 725, 734
12
(9th Cir. 1999).

While Defendants appear to suggest that Yi and

13
Tran cannot be held liable for acts undertaken within the scope of
14
their employment (Reply at 6), Defendants cite no authority for
15

that proposition.7

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iii.

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18
19
20
21
22

Enright and Mockett

Similarly, Defendants argue that Defendants Enright and
Mockett are not alleged to have acted beyond the scope of their
employment at A&C.

As above, Defendants do not explain why Enright

and Mockett’s employment status would absolve them of liability for
their individual acts.

23
24

K.

Colorado River Abstention

25
26
7

27
28

Given the identical allegations regarding Yi and Tran’s
activities and relationship to Marked, it is unclear why Tran is
named only in Count 5, while Yi is named in Count 5 and the three
Lanham Act causes of action.
19

1

Defendants also request that this court stay this case during

2

the pendency of state court proceedings under the Colorado River

3

doctrine.

4

424 U.S. 800, 813-19 (1976).

5

request is somewhat unclear, it appears to be premised upon

6

Plaintiffs’ state court suit regarding ownership of the “Ballin”

7

design (Opp. at 22.)

8

regarding that litigation, the scope and status of which is unknown

9

to this court.

See Colorado River Water Cons. Dist. v. United States,
While the basis for Defendants’

Defendants have not cited to any exhibits

In any event, “the pendency of an action in the

10

state court is no bar to proceedings concerning the same matter in

11

the Federal court having jurisdiction.”

12

at 817 (internal quotation and citation omitted).

13

“potential for conflict in the result of adjudications does not,

14

without more, warrant staying exercise of federal jurisdiction.”

15

Id. at 816.

16

from what the court can discern, would have no bearing on the

17

Lanham Act claims brought here, which may or may not subsume the

18

design ownership question presented in state court.

19

the court declines to stay this litigation.

Colorado River, 424 U.S.
Indeed, even the

Furthermore, the resolution of the state court case,

Accordingly,

20
IV.

Conclusion

21
22

For the reasons stated above, Defendants’ Motion to Dismiss

23

(Dkt. No. 58), filed on behalf of Defendants Marked, Yi, Tran,

24

Enright, and Mockett, is DENIED in its entirety.

25
26
27

Defendants’ other Motion to Dismiss (Dkt. No. 57) is GRANTED
in part.

Plaintiffs’ Second and Third Counts for False Designation

of Origin and Dilution, Count 4 CUTSA claim for “manner of

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20

1

manufacture,” and Count 8 claim for slander are DISMISSED, with

2

leave to amend.

3

infringement regarding “Ballin” and “Ballin Paris” is dismissed

4

with prejudice.

5

DENIED.

Plaintiffs’ Count 1 claim for trademark

In all other respects, Defendants’ Motion is

6
Plaintiffs shall have 15 days from the date of this Order to
7
file a Second Amended Complaint.

Defendants shall file their

8
response within 15 days after service of any amended pleading.
9
10

IT IS SO ORDERED.

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12
13
14

DATED:

February 13, 2014
DOLLY M. GEE FOR
HONORABLE DEAN D. PREGERSON

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