Confidence Empire, Inc. v. Facebook, Inc.
Filing
78
ORDER granting 60 Motion to Dismiss. See attached ruling and order for details. Signed by Judge Robert N. Chatigny on 3/31/2022. (Salah, M.)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
CONFIDENCE EMPIRE, INC., LEONEL :
LOPS,
:
:
Plaintiffs,
:
:
v.
:
:
META PLATFORMS, INC.,
:
:
Defendant.
:
Case No. 3:20-cv-01617 (RNC)
RULING AND ORDER
Plaintiffs Confidence Empire, Inc. (Confidence Empire) and
Leonel Lops bring this action against defendant Meta Platforms,
Inc. (Meta), formerly known as Facebook, Inc., alleging several
business torts, copyright infringement, and violation of the
Connecticut Unfair Trade Practices Act.
dismiss the entire action with prejudice.
Meta has moved to
After three attempts,
plaintiffs have failed to state any claim on which relief may be
granted.
Based on plaintiffs’ “repeated failure to cure
deficiencies by amendments previously allowed,” dismissal with
prejudice is now warranted.
See Sprague v. Salisbury Bank & Tr.
Co., 969 F.3d 95, 101 (2d Cir. 2020) (quoting Foman v. Davis,
371 U.S. 178, 182 (1962)).
Defendant’s motion is therefore
granted.
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I.
Background
The corrected second amended complaint alleges the
following.
Plaintiff Confidence Empire is a Connecticut
corporation “engaged in the business of selling goods and
services[,]” including clothing, luggage, accessories, and “yoga
over the Internet[.]”
ECF No. 57 at 2, ¶ 6.
Confidence Empire
“relies primarily on the Internet for its business model[,]” and
uses Meta’s Facebook platform to advertise and sell its products
and services.
Id.
Plaintiff Leonel Lops owns a registered
figurative trademark that includes a stylized crown above the
words “CONFIDENCE EMPIRE.”
Id. at 1, ¶ 3; see ECF No. 43 Ex. C. 1
Confidence Empire “has attained common law trademark rights” to
Mr. Lops’ registered trademark by putting “goods and services
into commerce.”
Id. at 4, ¶ 9.
Plaintiffs contend that Facebook “hosts a page with the
name Confidence Empire which was created without the Defendant’s
consent.”
Id. at 2, ¶ 7.
(I assume this is a typographical
error, and plaintiffs mean that the page was created without
plaintiffs’ consent.)
[Facebook] website.”
Meta also hosts “Plaintiffs’ page on its
Id. at 2, ¶ 8.
Meta “allowed
At several points in their Second Amended Complaint, Plaintiffs
reference exhibits that were attached to their First Amended
Complaint but mistakenly omitted from the Second Amended
Complaint. In its motion to dismiss the SAC, Meta treats the
exhibits as incorporated by reference. See ECF No. 60., ECF No.
71 (denying motion to amend on this basis).
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[plaintiffs’] page to be corrupted or infiltrated by others,”
and allowed potential customers to be “diverted” from
plaintiffs’ page to “disturbing images of false content videos
and websites” that are unrelated to plaintiffs’ business,
causing customers to “not engage with the Plaintiffs to conduct
business.”
Id.
When plaintiffs asked defendant to “stop this
practice,” (presumably referring to the alleged diversions from
plaintiffs’ page), defendant “refused to take any steps” in
response.
Id. at 2, ¶ 9.
Plaintiffs also allege that they “discovered several pages
on Facebook” that displayed Mr. Lops’ registered trademark.
at 5, ¶ 10.
Id.
Plaintiffs submitted a “take-down request” for
three allegedly infringing pages, but defendant declined to
remove them.
II.
Id. at 5, ¶ 11.
Legal Standard
Under Rule 12(b)(6), a complaint is properly dismissed when
it fails to state a claim upon which relief may be granted.
To
withstand a properly supported motion to dismiss under this
Rule, a complaint must present a claim that is “plausible on its
face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
The
plausibility standard requires that a complaint contain factual
allegations permitting a reasonable inference that the defendant
is liable for the alleged wrong.
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III. Discussion
a. Count One: Tortious Interference with Business
Relations
Plaintiffs first attempt to state a claim for tortious
interference with business relations.
The elements of a
tortious interference claim are “(1) a business relationship
between the plaintiff and another party; (2) the defendant’s
intentional interference with the business relationship while
knowing of the relationship; and (3) as a result of the
interference, the plaintiff suffers actual loss.”
Inc. v. Com-Tronics, Inc., 255 Conn. 20, 27 (2000).
Hi-Ho Tower,
Plaintiffs
must also “plead and prove at least some improper motive or
improper means.”
Daley v. Aetna Life & Cas. Co., 249 Conn. 766,
806 (1999) (internal quotation marks omitted).
Plaintiffs’ tortious interference count rests on two
factual allegations: First, there are other pages on the
Facebook platform whose name contains the phrase “Confidence
Empire,” ECF No. 57 at 2, ¶ 7, and second, “Plaintiffs’ page” on
the Facebook platform was “infiltrated by others such that when
potential customers click on the Confidence Empire page they are
diverted” to content that is “unrelated to and harmful to the
Plaintiffs’ business reputation and image,” id. ¶ 8 (emphasis
added).
Plaintiffs allege that defendant’s failure to rectify
these issues constitutes tortious interference.
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Meta argues first that plaintiffs’ allegations on this
count are so vague that they fail to put Meta on fair notice of
plaintiffs’ claim – for instance, the SAC does not identify the
plaintiffs’ page, “including whether it is a Page maintained by
the corporate entity Confidence Empire or a personal Page
maintained by Mr. Lops.
Likewise, the SAC fails to identify
where visitors are allegedly redirected or what is offensive or
disturbing about those pages.”
ECF No. 60-1 at 11.
Moreover,
defendant argues, plaintiffs fail to allege the necessary
elements of a tortious interference claim.
Id. at 12-13.
In response, plaintiffs cite Conrad v. Erickson, which
holds that the parties in an intentional interference case need
not be competitors.
41 Conn. App. 243, 245 (1996).
Further, to
counter the argument that they have not alleged the requisite
improper motive, plaintiffs allege without legal support that
“trademark interference is an improper motive per se.”
ECF No.
67 at 4.
Plaintiffs have failed to state a claim for tortious
interference.
Their reliance on Conrad misses the point;
nothing in that case suggests that the elements of a tortious
interference claim are somehow modified or waived when the
parties are not competitors.
See 41 Conn. App. at 245–46.
And,
as defendant points out, plaintiffs do not allege that Meta knew
about any specific business relationship between plaintiffs and
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a third party and, knowing of that relationship, intentionally
interfered with it.
The closest plaintiffs come is alleging
that they “have repeatedly asked” defendant “to stop this
practice” (presumably referring to redirecting users from
plaintiffs’ page, but maybe also referring to allowing pages
other than plaintiffs’ to display the name “Confidence Empire”)
but Facebook “has refused to take any steps to stop the practice
despite its ability to do so,” ECF No. 57 at 2 ¶ 9, and despite
knowing that the alleged redirects “negatively impacted the
plaintiffs’ business,” id. ¶ 10.
But alleging that Meta ignored
a takedown request is not the same as alleging that it intended
to interfere with any particular business relationship of
plaintiffs by doing so.
Likewise, the only further allegation of “actual loss” is
plaintiffs’ claim that they “have suffered damages including
lost revenue, lost profit and a destruction of the enterprise
value of their business.”
Id. ¶ 11.
The SAC contains no
factual support for this claim, which is insufficient on its
own.
See Villages, LLC v. Longhi, 187 Conn. App. 132, 147
(2019) (“[I]t is essential to a cause of action for unlawful
interference with business that it appear that, except for the
tortious interference of the defendant, there was a reasonable
probability that the plaintiff would have entered into a
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contract or made a profit.” (quoting Goldman v. Feinberg, 130
Conn. 671, 675 (1944)).
Finally, plaintiffs argue that “trademark infringement is
an improper motive per se.”
No case has been cited or found
that supports this proposition.
Moreover, plaintiffs’ trademark
infringement claim is unavailing for reasons discussed below.
See section d, infra.
Accordingly, count one is dismissed.
b. Count Two: Trade Libel
Plaintiffs also attempt to bring a claim for trade libel.
To successfully plead such a claim, plaintiffs must allege that
(1) defendant made a defamatory statement; (2) the defamatory
statement identified the plaintiffs to a reasonable third
person; (3) the defamatory statement was published to a third
person; and (4) plaintiffs suffered injury as a result of the
statement.
See Antech Diag., Inc. v. Vet. Oncology & Hematology
Ctr., LLC, 2019 WL 10351654, at *4 (D. Conn. March 5, 2019)
(noting that trade libel is “treated as a ‘species of
defamation’ and analyzed by courts in a similar manner” (quoting
QSP, Inc. v. Aetna Cas. & Sur. Co., 256 Conn. 343, 356 (2001)).
Meta argues plaintiffs’ trade libel count fails for two
separate reasons: First, it is missing several elements for a
claim of trade libel in Connecticut and therefore fails as a
matter of law.
Second, even if the claim were adequately
pleaded, it would nonetheless fail because Meta is protected
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from liability by Section 230(c)(1) of the Communications
Decency Act (“CDA”), 47 U.S.C. § 230(c)(1).
I need not address Facebook’s CDA argument because I agree
that the SAC does not state a claim for trade libel.
Plaintiffs
allege that certain “screen shots and images” of other pages
containing the words “Confidence Empire” “are defamatory of the
Plaintiffs’ legitimate business in that they charge improper
conduct or a lack of skill or integrity in one’s business and is
of such a nature that it is calculated to cause injury to one in
it its profession or business,” ECF No. 57 at 3 ¶ 12, and,
further, that they “constitute libel per se as they in no way
represent Plaintiffs’ actual business operations and are
offensive” to customers, id. ¶ 13.
Simply put, the SAC contains no factual support for these
conclusory allegations.
Plaintiffs do not explain how the
materials shown in the attached screenshots are defamatory or
offensive.
Nor do they explain why other Facebook pages using
the name “Confidence Empire” and/or posts on those pages should
be understood as “statements” attributable to Meta, when they
appear to be content posted to Meta’s Facebook platform by third
parties.
Count two must therefore be dismissed.
c. Count Three: Negligence
Plaintiffs next attempt a negligence claim.
The elements
of a negligence claim are duty, breach of that duty, causation,
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and actual injury.
641, 649 (2015).
Lawrence v. O & G Indus., Inc., 319 Conn.
The basis of plaintiffs’ negligence claim is
that defendant breached a duty “to not allow its trade mark to
be interfered with,” ECF No. 57 at 3 ¶ 11, because “it has
allowed others unknown to the Plaintiffs to use the name
Confidence Empire,” “despite demand [sic] from the Plaintiffs to
remove” other pages bearing the name, id. at 4 ¶ 12.
Meta argues that it does not owe a legal duty to plaintiffs
to prevent “interference” with their trademark, and even if such
a duty existed, the complaint alleges (and the attached exhibit
shows) that the other pages do not actually use either
plaintiff’s trademark.
Rather, they use only the phrase
Confidence Empire, which appears in the registered figurative
trademark owned by Lops but is not itself trademarked by either
plaintiff.
ECF No. 60-1 at 11.
Even assuming Meta would have had a duty to stop trademark
infringement occurring via its Facebook platform, plaintiffs’
claim fails because they do not plausibly allege trademark
infringement.
See Section d, infra.
Therefore, even if they
have pled a duty, they fail to plead a breach, and their
negligence claim must fail.
d. Count Four: Trademark Infringement
In count four, plaintiffs allege trademark infringement
under both state and federal law, based on Meta’s alleged
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refusal to take down Facebook pages with “Confidence Empire” in
their names.
See ECF No. 57 at 5 ¶¶ 11-14. 2
Courts analyze
trademark infringement claims under a two-part test: “The test
looks first to whether the plaintiff’s mark is entitled to
protection, and second to whether [the] defendant’s use of the
mark is likely to cause consumers confusion as to the origin or
sponsorship of the defendant’s goods.”
Nawab, 335 F.3d 141, 146 (2d Cir. 2003).
Virgin Enters., Ltd. v.
In the Second Circuit,
courts look to eight principal factors to evaluate the
“likelihood of confusion”: “(1) the strength of the senior mark;
(2) the degree of similarity between the two marks; (3) the
proximity of the products; (4) the likelihood that the prior
owner will ‘bridge the gap’; (5) actual confusion; (6) the
defendant's good faith (or bad faith) in adopting its own mark;
(7) the quality of defendant's product; and (8) the
sophistication of the buyers.”
Savin Corp. v. Savin Grp., 391
F.3d 439, 456 (2d Cir. 2004) (citing Polaroid Corp. v. Polarad
Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961)).
Defendant
Plaintiffs allege that “the CONFIDENCE EMPIRE mark was being
used” on other pages, ECF No. 57 at 5 ¶ 10, but the supporting
exhibits show that only the words “Confidence Empire,” and not
Mr. Lops’ registered figurative trademark, appear on the pages.
When, as here, a plaintiff’s factual allegations are
contradicted by exhibits attached to the pleading, a court need
not treat the factual allegations as true for purposes of
resolving a motion to dismiss. Endemann v. Liberty Insurance
Corp., 390 F. Supp. 3d 362, 370 (N.D.N.Y. 2019).
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again persuasively argues that plaintiffs have failed to state a
claim. 3
There are no factual allegations in the SAC relevant to the
likelihood of confusion, and the exhibits attached to
plaintiffs’ opposition to Meta’s motion to dismiss hurt
plaintiffs’ cause rather than help it. 4
Exhibits One and Three
depict people wearing jewelry, a hat, and sweatpants.
No. 67 at 6, Ex. 1, Ex. 3.
See ECF
Plaintiffs describe these clothes as
“goods,” and suggest that because plaintiff Confidence Empire
also sells such goods, there is a likelihood of consumer
confusion.
But the exhibits themselves make clear that none of
the pages are selling the clothes or jewelry appearing in the
photographs.
See id.
Likewise, Exhibit Two shows a banner that
reads “new products coming soon,” but there is nothing in either
Meta also argues that Confidence Empire does not have standing
to pursue a trademark infringement claim because it does not own
the trademark at issue. ECF No. 60-1 at 17 (citing Brooklyn
Bottling of Milton, N.Y., Inc. v. Ecuabeverage Corp., 2008 WL
577288, at *1 (S.D.N.Y. March 3, 2008) (“Only the owner of the
trademark is granted standing to assert a claim of trademark
infringement.”)). Plaintiffs do not seem to contest this point.
See ECF No. 67 at 5-6.
4 Some of the exhibits are duplicates of those attached to the
FAC. Meta argues that I should disregard the rest. ECF No. 68
at 5 (citing Madu, Edozie & Madu, P.C. v. SocketWorks Ltd.
Nigeria, 265 F.R.D. 106, 122–23 (S.D.N.Y. 2010) (“Courts in this
Circuit have made clear that a plaintiff may not shore up a
deficient complaint through extrinsic documents submitted in
opposition to a defendant’s motion to dismiss.”)). But the SAC
falls far short of stating a claim for trademark infringement
with or without the newly attached exhibits.
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the Exhibit or plaintiffs’ opposition that explains what
products are “coming soon,” and whether they will be similar to
any products plaintiffs sell.
See id. Ex. 2.
The state law claim also fails because the SAC fails to
allege that either plaintiff owns a trademark registered under
Connecticut state law, as is required by the statute.
See Conn.
Gen. Stat. § 35-11i (providing remedy only for infringement of
“a mark registered under this chapter”).
e. Count Five: Connecticut Unfair Trade Practices Act
Finally, plaintiffs allege Meta violated the Connecticut
Unfair Trade Practices Act (“CUTPA”).
CUTPA prohibits unfair or
deceptive acts or practices in the conduct of trade or commerce.
See Conn. Gen. Stat. §42-110a et. seq.
Plaintiffs’ CUTPA count
merely incorporates the rest of the allegations in the complaint
and then alleges “[t]he actions of the Defendant as aforesaid
which are continuing and ongoing constitute a violation of CUTPA
for which the Plaintiffs has suffered damages which are or may
be unquantifiable in that its actions have created confusion in
the market place.”
ECF No. 57 at 6 ¶ 17.
Plaintiffs seem to
concede that their CUTPA claim is entirely derivative of their
other claims.
See ECF No. 67 at 6-7 (“If the Plaintiffs
establish that the Defendant has violated their trademark rights
it is axiomatic that there is a CUTPA violation”).
Because the
other claims must be dismissed, so must the CUTPA claim.
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IV.
Conclusion
Accordingly, the action is dismissed with prejudice.
The
clerk may enter judgment in favor of defendant and close the
case.
So ordered this 31st day of March 2022.
_____/s/ RNC____________
Robert N. Chatigny
United States District Judge
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