St Andrews Links Limited v. Gilfin International Limited et al
Filing
74
ORDER GRANTING 57 MOTION TO DISMISS COUNTERCLAIMS by Judge William H. Orrick. Motion to dismiss is GRANTED as to the state law tort counterclaims and the counterclaim for cancellation of SAL's registrations WITH LEAVE TO AMEND. SAL's special motion to strike is DENIED without prejudice.(jmdS, COURT STAFF) (Filed on 9/5/2019)
1
2
3
4
UNITED STATES DISTRICT COURT
5
NORTHERN DISTRICT OF CALIFORNIA
6
7
ST ANDREWS LINKS LIMITED,
Plaintiff,
8
9
Case No. 18-cv-02131-WHO
ORDER GRANTING MOTION TO
DISMISS COUNTERCLAIMS
v.
GILFIN INTERNATIONAL LIMITED, et
al.,
11
United States District Court
Northern District of California
10
Re: Dkt. No. 57
Defendants.
12
13
14
15
16
17
INTRODUCTION
Plaintiff St Andrews Links Limited (SAL), the business representing the famous golf
course in St. Andrews, Scotland, moves to dismiss and has filed a special motion to strike
counterclaims filed by defendants Gilfin International Limited, Gilfin International (Tapemate)
Limited (collectively “Gilfin International”), Old St. Andrews Limited (“OSA”) (all three
18
19
collectively OSA) under California’s Anti-SLAPP statute (Cal. Code Civ. Proc. § 425.16). The
20
counterclaims are barred as a matter of law under California’s litigation privilege (Cal. Civ. Code
21
§ 47(b)) and by the Noerr-Pennington doctrine because they are made solely in response to SAL’s
22
filing its affirmative case against OSA. OSA has also failed to allege sufficient facts. For these
23
reasons, SAL’s motion to dismiss is granted and the special motion to strike is denied as moot.
24
25
26
BACKGROUND
In its Second Amended Complaint, SAL asserts the following causes of action against
27
OSA: (1) Unfair Competition and False Designation of Origin, under 15 U.S.C. §1125(a)(A) and
28
(B); (2) California Unfair Competition, under Cal. Bus. & Prof. Code Sections 17200 et seq.; (3)
1
California False Advertising, under Cal. Bus. & Prof. Code Sections 17500 et seq.; (4)
2
Cancellation of U.S. Trademark Reg. No. 1,518,200, under 15 U.S.C. §§ 1052(a) and 1119, 15
3
U.S.C. §§ 1058(a) and (b) and 1119, and 15 U.S.C. §§ 1064(3) and 1119, seeking to cancel
4
Gilfin’s Registration and renewal because of its misleading nature; and (5) damages for False
5
Registration, under 15 U.S.C. § 1120. 1
6
OSA answered the SAC and asserts various counterclaims against plaintiff. It alleges that
7
as “early as 1987 and through today, the OSA Products have been sold in golf ball shaped bottles,
8
bearing a lion and golf club logo.” CC ¶ 11. “OSA has acquired and protected the rights
9
associated with the OSA Products and is the owner of U.S. Trademark Reg. No. 1,518,200,
covering OLD ST. ANDREWS for scotch whisky (OSA Mark).” Id. ¶ 12. The “OSA Mark,
11
United States District Court
Northern District of California
10
covered by the OSA Registration, was first used in U.S. commerce in connection with OSA
12
Products at least as early as October 1984.” Id. ¶13. It also alleges that SAL has been aware of
13
OSA’s consistent, lawful use, marketing, and promotion of the OSA Products for at least eight
14
years and that SAL began but abandoned a “litigious campaign” against OSA in 2010 and took
15
actions with the Trademark and Patent Office that “prompted office actions that disclosed or
16
referenced OSA’s OSA Registration.” Id. ¶¶ 14-17. OSA claims that after “sitting on its rights
17
for years, SAL has attempted to interfere and disrupt OSA’s contractual relations with its
18
distributors and business partners, including OSA’s U.S. distributor Niche Import Company
19
(“Niche”), by filing the instant action,” and that SAL “is fully aware that its claims have no
20
evidentiary, factual or legal basis whatsoever, and are time-barred” but has pursued this case to
21
cause OSA’s customers to cease selling OSA products. Id. ¶¶ 18-19.
22
Based on these allegations, OSA asserted the following counterclaims: (1) intentional
23
interference with contractual relations; (2) intentional interference with prospective economic
24
advantage; (3) cancellation of the SAL’s registrations; (4) unfair competition; and (5) unfair
25
competition under Section 17200. SAL’s motions to dismiss and strike followed. 2
26
27
28
1
The two other defendants named in this suit Niche and Epic, who were alleged to have been
distributors or business partners of OSA, were dismissed without prejudice on June 26, 2019
2
SAL does not move to dismiss or strike OSA’s Third (III) Counterclaim, which seeks a
2
LEGAL STANDARD
1
Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint
2
if it fails to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6). To survive a
4
12(b)(6) motion, the plaintiff must allege “enough facts to state a claim to relief that is plausible
5
on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). A claim is facially plausible
6
when the plaintiff pleads facts that “allow the court to draw the reasonable inference that the
7
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
8
(citation omitted). There must be “more than a sheer possibility that a defendant has acted
9
unlawfully.” Id. While courts do not require “heightened fact pleading of specifics,” a plaintiff
10
must allege facts sufficient to “raise a right to relief above the speculative level.” Twombly, 550
11
United States District Court
Northern District of California
3
U.S. at 555, 570.
In deciding whether the plaintiff has stated a claim upon which relief can be granted, the
12
13
court accepts the plaintiff’s allegations as true and draws all reasonable inferences in favor of the
14
plaintiff. Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the court is
15
not required to accept as true “allegations that are merely conclusory, unwarranted deductions of
16
fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir.
17
2008). If the court dismisses the complaint, it “should grant leave to amend even if no request to
18
amend the pleading was made, unless it determines that the pleading could not possibly be cured
19
by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000).
DISCUSSION
20
21
22
I.
TORT CLAIMS AND PRIVILEGE
SAL first moves to dismiss OSA’s California tort claims (the two interference claims and
23
the unfair competition claims) because they are barred – as they are based only on conduct SAL
24
has taken in this litigation – under two doctrines: (1) California’s litigation privilege, Cal. Civ.
25
Code § 47(b); and (2) the Noerr-Pennington doctrine.
26
California Civil Code section 47(b) protects communications made in the context of a
27
28
declaration of non-violation of 15 U.S.C. §§ 1125(a)(A) & (B).
3
1
judicial proceeding. Cal. Civ. Code § 47. “The principal purpose of section 47(b)(2) is to afford
2
litigants and witnesses the utmost freedom of access to the courts without fear of being harassed
3
subsequently by derivative tort actions.” Silberg v. Anderson, 50 Cal. 3d 205, 213 (1990), as
4
modified (Mar. 12, 1990) (internal citation omitted).
The Noerr-Pennington doctrine “shields lobbying and litigation activity” and serves as
5
6
“immunity from liability, not from trial.” 3 Nunag-Tanedo v. E. Baton Rouge Par. Sch. Bd., 711
7
F.3d 1136, 1140 (9th Cir. 2013). The activity is only shielded as long as it was not a “sham.” City
8
of Columbia v. Omni Outdoor Advert., Inc., 499 U.S. 365, 380 (1991). “The ‘sham’ exception
9
to Noerr encompasses situations in which persons use the governmental process—as opposed to
the outcome of that process—as an anticompetitive weapon.” Id. (emphasis in original). The
11
United States District Court
Northern District of California
10
sham litigation exception does not apply so long as the party “was genuinely seeking
12
governmental action.” Oregon Nat. Res. Council v. Mohla, 944 F.2d 531, 535 (9th Cir. 1991)
13
(citing Franchise Realty Interstate Corp. v. San Francisco Local Joint Exec. Bd. of Culinary
14
Workers, 542 F.2d 1076, 1081 (9th Cir. 1976)).
15
To be considered a sham, the lawsuit must be (1) objectively baseless and (2) brought with
16
an unlawful motive. Prof’l Real Estate Inv’rs, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49,
17
60 (1993) (PRE); Sosa v. DIRECTV, Inc., 437 F.3d 923, 938 (9th Cir. 2006). Litigation is
18
objectively baseless if “no reasonable litigant could realistically expect success on the merits.”
19
PRE, 508 U.S. at 60. Litigation is brought with an unlawful motive if it “conceals an attempt to
20
interfere directly with the business relationships of a competitor.” Id. at 60–61 (internal citation
21
omitted, emphasis in original). Where claims are based on activities shielded by Noerr-
22
Pennington immunity, the plaintiff must plead the sham litigation exception with specificity.
23
Oregon Nat. Res., 944 F.2d at 534–35; see also Formula One Licensing v. Purple Interactive, No.
24
C 00-2222 MMC, 2001 WL 34792530, at *2 (N.D. Cal. Feb. 6, 2001) (dismissing claims with
25
leave to amend where the sham pleadings alleged only a “meritless trademark infringement
26
27
28
3
The doctrine was originally limited to the antitrust context but now applies more broadly. See
Theme Promotions, Inc. v. News Am. Mktg. FSI, 546 F.3d 991, 1008 (9th Cir. 2008) (intentional
interference claims); Monolithic Power Sys., Inc. v. O2 Micro Int’l Ltd., No. C 04-2000 CW, 2007
WL 801886, at *4 (N.D. Cal. Mar. 14, 2007) (UCL claims).
4
1
action . . . alleging the infringement of unenforceable, generic marks”).
2
SAL contends that the tort counterclaims asserted against it are barred under these
3
doctrines because they are based solely on the filing of this lawsuit, which is privileged conduct.
4
SAL points to paragraphs 18 and 19 of the counterclaims where OSA alleges that SAL has
5
attempted to “interfere and disrupt” OSA’s relations with its distributors and business partners “by
6
filing the instant lawsuit” which has “caused” Niche and Epic (the former co-defendants) to cease
7
selling OSA products. CC ¶¶18-19. SAL cites a number of decisions applying both the California
8
litigation privilege and Noerr-Pennington to dismiss intentional interference claims and unfair
9
competition claims like the ones asserted here. Mot. [Dkt. No. 57] at 8-10.
10
In Opposition, OSA does not dispute or distinguish those cases. Instead, it argues that
United States District Court
Northern District of California
11
Noerr-Pennington does not apply because SAL’s suit is a baseless “sham” and part of a “pattern”
12
of harassment that creates exceptions to the application of the doctrine. To contend that the SAL
13
suit is objectively baseless, OSA relies only on its defenses to SAL’s trademark claims (that SAL
14
sat on its rights and its affirmative claims are time-barred). OSA does not provide any authority or
15
other support to demonstrate that these defenses make SAL’s suit baseless as a matter of law.
16
This is not, on its face, either a well-pleaded or adequately supported sham allegation.
17
OSA then argues that the “pattern” exception to Noerr-Pennington applies. That exception
18
is invoked where “the conduct involves a series of lawsuits ‘brought pursuant to a policy of
19
starting legal proceedings without regard to the merits’ and for an unlawful purpose.” Sosa v.
20
DIRECTV, Inc., 437 F.3d 923, 938 (9th Cir. 2006). However, there are no allegations in the
21
counterclaims that make this exception plausible. While there is a passing reference to the fact
22
that in 2010 or 2011 “SAL began an unsuccessful litigious campaign against OSA that it later
23
withdrew,” CC ¶ 15, there are no facts alleged concerning the nature of that campaign, whether it
24
included a series of lawsuits, and whether they were filed for an unlawful purpose.
25
While OSA is correct that the applicability of the sham and pattern exceptions should not
26
be resolved on a motion to dismiss when the court “cannot rule out the possibility” that the
27
litigation might be a sham, Catch Curve, Inc. v. Venali, Inc., 519 F. Supp. 2d 1028, 1037 (C.D.
28
Cal. 2007), there are no plausible facts alleged in the current counterclaims (or persuasive
5
1
authority provided on this motion) to make those exceptions even facially applicable.
OSA also notes in its Opposition that non-litigation conduct, including harassment and
2
3
threats to customers, are not encompassed within Noerr-Pennington’s protections. However, no
4
non-litigation statements or conduct have been alleged in the counterclaims nor have any evidence
5
of threats or harassment been identified. The only acts identified are the filing of this suit and then
6
the subsequent dismissal of Epic and Niche.
7
Finally, OSA argues that California’s litigation privilege does not bar its tort claims
8
because it is an inherently factual determination whether SAL’s communications to OSA’s
9
business partners were made in “good faith” and under serious consideration of litigation. But
there are no facts alleged about any communications made by SAL that would implicate the good
11
United States District Court
Northern District of California
10
faith standard. The only conduct alleged (again) is the filing of this suit and the subsequent
12
dismissal without prejudice of Niche and Epic. All of that conduct on its face is directly
13
connected with this suit and there are no plausible facts alleged that this case was filed in bad faith
14
or for an improper purpose.
15
SAL’s request for dismissal of these claims with prejudice, however, is not warranted.
16
OSA may be able to cure these deficiencies and make factual and legal assertions showing the
17
facial applicability of the two identified Noerr-Pennington exceptions to save the tort claims.
18
Therefore, DISMISSAL of Claims 1, II, and IV, and V is GRANTED with leave to amend.
19
II.
20
FAILURE TO STATE CLAIMS
SAL also argues that OSA fails to adequately allege its claims. As I have dismissed the
21
California tort claims with leave, I need not reach this argument concerning those claims.
22
However, if OSA decides to amend those claims, it should consider identifying wrongful conduct
23
(other than filing this lawsuit) in support of the interference and unlawful competition claims. To
24
the extent OSA bases any claim on alleged misrepresentations by SAL, it should identify those
25
representations consistent with Rule 9(b)’s heightened specificity requirements.
26
SAL argues that OSA’s claim for cancellation of SAL’s registrations is deficient because
27
OSA does not identify which of SAL’s registrations it seeks cancellation of or why those marks
28
should be cancelled. In response, OSA argues that because SAL has not been clear regarding
6
1
which of its many registrations it is asserting, OSA’s claim limiting cancellation to “the
2
trademarks asserted by SAL” is sufficient. CC ¶ 40. Yet OSA does not identify any facts in
3
support of why those many registrations should be cancelled. This claim, too, is DISMISSED
4
with leave to amend.
5
III.
ANTI-SLAPP
Finally, SAL moves to strike the state law tortious interference claims and the unfair
6
7
business claims under California’s Anti-SLAPP statute (Cal. Code Civ. Proc. § 425.16) arguing
8
that the conduct underlying those claims is “protected activity” under the statute because the only
9
conduct complained of by OSA is the filing of SAL’s lawsuit and statements made in connection
with SAL’s lawsuit. Given this, the burden to defeat the anti-SLAPP motion falls to OSA to
11
United States District Court
Northern District of California
10
establish a likelihood of prevailing on the merits which – as shown above – it has not done.
However, as I am dismissing the state law claims with leave to amend, I need not reach the
12
13
anti-SLAPP special motion to strike. It may be renewed if SAL moves to strike any amended
14
claims.
15
CONCLUSION
16
SAL’s motion to dismiss is GRANTED as to the state law tort counterclaims and the
17
counterclaim for cancellation of SAL’s registrations WITH LEAVE TO AMEND. SAL’s special
18
motion to strike is DENIED without prejudice.
19
20
IT IS SO ORDERED.
Dated: September 5, 2019
21
22
William H. Orrick
United States District Judge
23
24
25
26
27
28
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?