Digby Adler Group LLC v. Image Rent A Car, Inc. et al

Filing 83

ORDER by Judge Samuel Conti granting #66 Motion for Leave to File (sclc1, COURT STAFF) (Filed on 3/16/2011)

Digby Adler Group LLC v. Image Rent A Car, Inc. et al

Doc. 83

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For the Northern District of California

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

DIGBY ADLER GROUP LLC, Plaintiff, v. IMAGE RENT A CAR, INC., and VAN RENTAL CO., INC., Defendants. I. INTRODUCTION

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Case No. 10-617 SC ORDER GRANTING PLAINTIFF LEAVE TO FILE FIRST AMENDED COMPLAINT

Before the Court is a Motion by Plaintiff Digby Adler Group LLC ("Plaintiff") for leave to file a first amended complaint. No. 66 ("Mot."). ECF

Defendants Image Rent A Car, Inc. ("Image"), and

Van Rental Co., Inc. ("Van Rental") (collectively, "Defendants") filed an Opposition, and Plaintiff filed a Reply. ("Opp'n"), 81 ("Reply"). ECF Nos. 80

For the following reasons, the Court

GRANTS Plaintiff's Motion.

II.

BACKGROUND Plaintiff is a California limited liability company

headquartered in San Francisco that rents cars and vans, with a focus on long-term rentals to touring music groups. ("Compl.") ¶¶ 4, 10. ECF No. 1

Plaintiff operates rental locations in

California, New Jersey, Illinois, and Oregon, and provides van

Dockets.Justia.com

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rentals for use throughout the United States.

Id. ¶ 11.

Since

2003, Plaintiff has done business under the service mark "Bandago" ("the Mark"). Id. ¶ 12. Plaintiff filed an application to

register the Mark with the U.S. Patent and Trademark Office in 2008, but a Certificate of Registration has not yet issued. Id.

In 2003, Plaintiff registered the Internet domain name bandago.com and has since used it in connection with its van rental business. Id. ¶¶ 13-14. On February 11, 2010, Plaintiff brought this action against Defendants, alleging cybersquatting, unfair competition, and false advertising under the Lanham Act, as well as common law trademark infringement and violation of Section 17200 of California's Business and Professions Code. See Compl. Plaintiff alleges that

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in August 2008, Van Rental, as an agent of Image, registered the Internet domain name bandago.net. Id. ¶¶ 18-21. Plaintiff claims

that Defendants created a website at bandago.net that redirects visitors to Imagerentacar.com. Id. ¶¶ 18-21. Plaintiff alleges

that Defendants had never before used the "Bandago" name in commerce, and that Defendants used bandago.net solely to divert Plaintiff's customers to Defendant. Id. ¶¶ 24, 25. Plaintiff

claims it has received calls from confused customers, and claims that some customers have used Defendants' services rather than Plaintiff's. Id. ¶ 28.

On March 4, 2010, Defendants moved to dismiss the action for lack of jurisdiction. ECF No. 8. The Court denied this motion on

the basis that Defendants, who are both corporate entities, were not represented by counsel in violation of Civil Local Rule 3-9(b). ECF No. 9. On March 12, 2010, Defendants filed an almost identical

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motion to dismiss, which the Court again denied.

ECF Nos. 10, 14.

Defendants moved for two extensions of time to respond to the Complaint; the Court denied the first because Defendants had yet to associate with counsel and granted the second. 18, 20. ECF Nos. 10, 17,

After associating with counsel, Defendants filed a third

motion to dismiss for lack of jurisdiction, which the Court denied. ECF Nos. 21, 37. On July 29, 2010, Plaintiff served Defendants with its first set of discovery requests; on November 3, 2010, Plaintiff filed a motion to compel, claiming Defendants had failed to respond to these requests. Reply at 2. Id. Defendants began to serve responses

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on December 3, 2010.

On January 20, 2011, Plaintiff notified Defendants' counsel of Plaintiff's intent to amend its complaint, seeking a stipulation from Defendants. 2011. See Mot. Plaintiff filed the current Motion on January 26, Plaintiff alleges that through Defendants'

discovery responses, it learned that two individuals, Shneior Zilberman ("Zilberman") and Gad Sebag ("Sebag"), directed Defendants' alleged misconduct, and that Defendants also infringed on Plaintiff's copyright. Id. Plaintiff alleges that discovery

responses and documents produced by third parties revealed that Image and Van Rental had not adhered to basic corporate formalities; that Image and Van Rental operate as alter egos, working at the same address, using the same e-mail account and websites, employing the same personnel, and using the same financial and office resources; that Zilberman and Sebag registered and used the domain name bandago.net; that Defendants bid on Plaintiff's Bandago trademark in the Google AdWords service; and

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that Defendants infringed Plaintiff's copyright.

Mot. at 2.

Plaintiff seeks to add Zilberman and Sebag as defendants and add additional copyright and trademark claims. Id.

On February 11, 2010, the date before Defendants' Opposition was due, Defendants filed a motion for additional time to respond to Plaintiff's Motion. ECF No. 73. Defendants sought a two-month Id.

extension, citing a recent illness of Defendant's counsel.

Plaintiff opposed the motion, alleging it was one of many acts by Defendants' counsel to delay proceedings. ECF No. 74. The Court

granted the motion in part, giving Defendants two additional weeks to file its Opposition. ECF No. 77.

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III. LEGAL STANDARD A party may amend its pleadings with leave of the court, and "[t]he court should freely give leave when justice so requires." Fed. R. Civ. P. 15(a)(2). "extreme liberality." This policy should be applied with

Eminence Capital, LLC v. Aspeon, Inc., 316 However, district courts may deny

F.3d 1048, 1051 (9th Cir. 2003).

amendments that would cause undue prejudice to another party, that would cause undue delay, that are sought in bad faith, or that are futile. Bowles v. Reade, 198 F.3d 752, 757-58 (9th Cir. 1999).

Not all of these factors merit equal weight, as "it is the consideration of prejudice to the opposing party that carries the greatest weight." omitted). Eminence Capital, 316 F.3d at 1052 (citations

"The party opposing amendment bears the burden of DCD Programs, Ltd. v. Leighton, 833 F.2d 183,

showing prejudice." 187 (9th Cir. 1987).

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IV.

DISCUSSION Defendants argue that they will be unduly prejudiced if

Plaintiff is permitted to amend its Complaint, alleging that because there are "but a few months left in discovery," Defendants would not have enough time to "properly conduct discovery to defend against these claims." Opp'n at 1. Defendants also allege that

Plaintiff unduly delayed in bringing this Motion, arguing that Plaintiff knew these claims existed well before its filing of this Motion. Id.

In response, Plaintiff refers to the above timeline of proceedings in this action as evidence that Defendants, not Plaintiff, are responsible for delay in this action by failing to respond to discovery requests and seeking a continuance of this Motion. Reply at 2-3. Plaintiff also disputes Defendants'

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allegation that it knew of its additional claims before filing its motion, stating: "While Plaintiff knew that Sebag and Zilberman were employees of Defendants, Plaintiff did not know of their individual misconduct until Plaintiff received documents from Defendants, Google, and Network Solutions." Id. at 4. Plaintiff

alleges that while it knew Defendants had engaged in some copyright infringement before January 2011, it believed the infringement was de minimis, and "[o]nly after Plaintiff spent considerable time reviewing the thousands of pages comprising Defendants' websites, did Plaintiff discover significant and chronic copyright infringement." Id.

Upon consideration of the above arguments and in light of this circuit's liberal rules for amendment, the Court finds for Plaintiff. Defendants have not shown that allowing Plaintiff to

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amend its Complaint to include Zilberman and Sebag as Defendants and add new trademark and copyright claims would cause undue prejudice or delay proceedings, or that Plaintiff's Motion was brought in bad faith.

V.

CONCLUSION For the foregoing reasons, the Court GRANTS Plaintiff Digby

Adler Group LLC's Motion for Leave to File a First Amended Complaint. Plaintiff must file its amended complaint within ten

(10) days of this Order.

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11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Dated: March 16, 2011 UNITED STATES DISTRICT JUDGE IT IS SO ORDERED.

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