TOVEY v. STADLER & CO., INC.
Filing
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ENTRY - granting 42 Motion for Leave to File; denying 23 Motion to Dismiss for Failure to State a Claim. (See Entry.) Signed by Judge William T. Lawrence on 2/4/2015. (RSF)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
TERRE HAUTE DIVISION
PAT TOVEY,
Plaintiff,
vs.
STADLER & CO., INC.,
Defendant.
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Cause No. 2:14-cv-242-WTL-MJD
ENTRY ON DEFENDANT’S MOTION TO DISMISS AND
PLAINTIFF’S MOTION FOR LEAVE TO FILE AMENDED COMPLAINT
This cause is before the Court on the Defendant’s motion to dismiss (Dkt. No. 23) and the
Plaintiff’s motion for leave to file an amended complaint (Dkt. No. 42). The Plaintiff’s motion is
fully briefed, and the Court, being duly advised, GRANTS the motion for leave to file an
amended complaint, for the reasons set forth below. In light of this ruling, the Court construes
the Defendant’s motion to dismiss as against Plaintiff’s amended complaint. That motion is also
fully briefed, and the Court, being duly advised, DENIES the motion to dismiss, for the reasons
set forth below.
I.
MOTION TO AMEND
The Plaintiff, Pat Tovey, moves the Court for leave to file an amended complaint to add
Andrew Stadler (“Andrew”), the Chief Executive Officer and President of Defendant Stadler &
Co., Inc. (“Stadler”), as a defendant in this case. According to Tovey, Andrew “personally
directed and participated in the acts which constitute the basis of [P]laintiff’s claims for the tort
of defamation and trade disparagement under the Lanham Act.” Tovey’s Mot. at ¶ 2. Thus,
Tovey argues that Andrew is personally liable to him. In response, Stadler argues that
the issue . . . is whether Andrew Stadler, when he “directed and participated” in the
production of the television commercials at issue, was acting within the scope of
his employment as the president and CEO of Stadler & Co. If he was, he cannot be
individually liable for the claims raised by Plaintiff. If he was not, and exceeded
the scope of his authority, then Stadler cannot be held vicariously liable for the
individual torts of Andrew Stadler that were beyond the scope of his duties and
president and CEO. . . . Plaintiff cannot have it both ways.
Stadler’s Resp. at 3-4.
It is much too early to determine whether Andrew is personally liable to Tovey. Thus,
Stadler’s arguments are premature and not appropriate at this stage.
The case management plan provided that all motions for leave to amend pleadings and/or
join additional parties were to be filed on or before December 19, 2014. Dkt. No. 18 at 3. Tovey
met this deadline. Finding no other justification for denying Tovey’s motion, such as undue
delay, bad faith, unfair surprise, or prejudice, the Court GRANTS Tovey’s motion to amend.
The Clerk is instructed to docket Tovey’s amended complaint (found at Dkt. No. 42-1) as of
the date of this Entry.
II.
MOTION TO DISMISS
A. Standard
In reviewing a Federal Rule of Civil Procedure 12(b)(6) motion, the Court “must accept
all well pled facts as true and draw all permissible inferences in favor of the plaintiff.” Agnew v.
National Collegiate Athletic Ass’n, 638 F.3d 328, 334 (7th Cir. 2012). For a claim to survive a
motion to dismiss for failure to state a claim, it must provide the defendant with “fair notice of
what the . . . claim is and the grounds upon which it rests.” Brooks v. Ross, 578 F.3d 574, 581
(7th Cir. 2009) (quoting Erickson v. Pardus, 551 U.S. 89, 93 (2007) (omission in original). A
complaint must “contain sufficient factual matter, accepted as true, to state a claim to relief that
is plausible on its face.” Agnew, 638 F.3d at 334 (citations omitted). A complaint’s factual
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allegations are plausible if they “raise the right to relief above the speculative level.” Bell
Atlantic Corp v. Twombly, 550 U.S. 544, 556 (2007).
B. Plaintiff’s Allegations
Tovey is employed full-time as a tax preparer for Wabash Tax Service, Inc. (“Wabash”)
in Terre Haute, Indiana. Tovey has worked as a tax preparer for Wabash for approximately
twenty years. For the past ten years, Tovey has used the nickname “Pat the Tax Man” in his tax
preparation business.
Stadler also provides tax preparation services to customers in Terre Haute. Stadler and its
employees are direct competitors of Wabash and Tovey.
Beginning in January 2014, and continuing through April 2014, Stadler ran the following
commercial on the Time Warner Cable systems in and around Terre Haute:
(Commercial opens with a man holding a pipe and looking at a sink.)
Man: (screams as water is spayed in his face from broken plumbing)
Actor portraying “Pat the Tax Man”: Wow, this is going to cost a lot of money
to repair. But the good news is you can use your tax return money you got last
week.
Man: How do you know about my tax refund?
Actor portraying “Pat the Tax Man”: Because it’s me, Pat the Tax Man. (Actor
portraying Pat opens up his shirt to show t-shirt with the words “Pat the Tax Man”
taped onto it.) I did your taxes last week for what half the other guy charges. But if
the IRS calls, don’t give ‘em my name.
Narrator: Don’t trust your taxes to someone like Pat. (The word “Pat” is shown in
large letters on the screen with a red circle and slash through the name.) Call Stadler
& Company – America’s elite tax experts. Call the real licensed tax professionals.
Stadler, the tax pros. (song)
Compl. at ¶ 7.
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Also beginning in January 2014, and continuing through April 2014, Stadler ran a second
“Pat the Tax Man” commercial:
(Commercial opens with a young woman laying on her stomach on a massage table
covered by a sheet. The male actor playing Pat is massaging her bare shoulders.)
Actor portraying “Pat the Tax Man”: So I see you are treating yourself to a
massage with all that money you got back last week on your taxes.
Woman: Oh Yeah, (Close-up of woman’s face) Wait a minute, how do you know
about my refund?
Actor portraying “Pat the Tax Man”: Because it’s me, Pat the Tax Man. (Actor
portraying Pat opens up his shirt to show t-shirt with the words “Pat the Tax Man”
taped onto it.) I did your taxes last week, remember? For half of what the other guy
charged. But don’t call me if the . . . uh, IRS calls.
Narrator: Don’t let just anybody touch your taxes. Call Stadler & Company –
America’s elite tax experts. We are trained professionals and licensed to serve your
tax needs.
Compl. at ¶ 7. The actor in the commercials also bore a striking resemblance to Tovey.
After the commercials aired, Tovey filed suit against Stadler in Vigo County Superior
Court alleging defamation per se and trade disparagement under the Lanham Act, 15 U.S.C. §
1125(a). The matter was removed to this Court on August 8, 2014.
C. Discussion
Stadler argues that both of Tovey’s claims should be dismissed “[b]ecause [as a matter of
law,] the commercials are so exaggerated in their nature, they are considered parody and,
therefore, not actionable.” Stadler’s Br. at 2. Stadler’s specific arguments are discussed in more
detail below.
1. Defamation
The difference between defamation and parody was discussed at length by the Indiana
Court of Appeals in Hamilton v. Prewett, 860 N.E.2d 1234 (Ind. Ct. App. 2007). In that case,
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Paul Hamilton was the owner and operator of Hamilton Water Conditioning. At some point,
Morgan Prewett, developed a website entitled “Paul Hamilten—The World’s Smartest Man.”
The website appeared to be authored by Hamilton and “portrayed [him] as a manipulative
individual both personally and professionally.” Id. at 1238. 1 After Hamilton discovered the
website, he filed suit against Prewett alleging defamation and intentional infliction of emotional
distress. In response, Prewett argued, among other things, that the website “was a form of
comedy, parody, or satire,” and thus not actionable. Id. Citing the Supreme Court case Hustler v.
Falwell, 485 U.S. 46 (1988) and an American Jurisprudence article on libel and slander, the
court reasoned as follows:
The United States Supreme Court provided guidance on parody when it declined to
impose liability on a magazine that portrayed a parodistic depiction of Jerry
Falwell, a popular evangelist, losing his virginity to his mother in an outhouse.
Hustler v. Falwell, 485 U.S. 46, 108 S. Ct. 876, 99 L.Ed.2d 41 (1988). The Court
noted that the parody “could not reasonably be understood as describing actual facts
about respondent or action events in which he participated” and that the trial court
properly dismissed Falwell’s defamation claim. Id. at 57, 108 S.Ct. 876. . . .
Regarding the relationship between defamation and parody, American
Jurisprudence provides:
Defamation is, by its nature, mutually exclusive of parody. By definition,
defamation requires a false statement of fact; parody, to the degree that it is
perceived as parody by its intended audience, conveys the message that it is
not the original and, therefore, cannot constitute a false statement of fact....
If a parody could be actionable because, while recognizable as a joke, it
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For example, the website stated:
I am a very intelligent, older American male and have my own very
successful business dealing with the water conditioning field. I have a
Master’s Degree in Water Conditioning from Smartass University, a
prestigious mail order college. While I am somewhat attractive, I am known
for my ability to seduce women with my quick wit. I have several methods
of attracting women as well as socializing skills, which are in the book I am
writing . . .
Id. at 1238-39.
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conveyed an unfavorable impression, very few journalistic parodies could
survive. It is not for the court to evaluate a parody as to whether it went too
far, for purposes of a libel claim; as long as it is recognizable to the average
reader as a joke, it must be protected or parody must cease to exist.
50 Am. Jur. 2d Libel and Slander § 156 (2006).
Hamilton, 860 N.E.2d at 1244. The Court of Appeals ultimately concluded that Prewett’s
website was non-actionable parody.
Based on the foregoing case law, Stadler argues that “the commercials . . . cannot support
a defamation claim because no reasonable person could believe the commercials to be true.”
Stadler’s Reply at 3. In response, Tovey points to the following passage from Hamilton:
We do agree with the concurring opinion’s conclusion that “an idea or opinion that
conveys a defamatory imputation of fact, even if couched in humor, can be
actionable.” Op. at 1251. However, “fact” is the key word in that sentence. By
finding parody and defamation to be mutually exclusive, we are not suggesting that
language cannot be defamatory if it is also humorous. A defendant who couches a
defamatory imputation of fact in humor cannot simply avoid liability by dressing
his wolfish words in humorous sheep’s clothing. Instead, parody is another beast
that goes beyond mere humor. As the United States Supreme Court stated, parody
“could not reasonably be understood as describing actual facts....” Hustler, 485 U.S.
at 57, 108 S.Ct. 876.
Hamilton, 860 N.E.2d at 1245. He also cites to the following statements from Section 155 of the
foregoing American Jurisprudence publication:
A defendant cannot escape liability for defamatory factual assertions simply by
claiming that the statements were a form of humor or sarcasm; humor and comedy
do not enjoy constitutional protection.
Caricature and other forms of humor which ridicule may in certain circumstances
convey a defamatory meaning, to be understood in a defamatory sense by those
who received it.
The principal factors distinguishing humorous remarks that are defamatory from
those that are not are whether the statements were intended to injure as well as
amuse and whether they give rise to the impression that they are true.
In determining whether a comedic expression is susceptible of being interpreted as
defamatory, a court must examine the challenged statement in light of its content,
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its effect on its audience, the context in which the statement was published, the
medium by which it was disseminated, and the recipient audience.
50 Am. Jur. 2d Libel and Slander § 155.
First and foremost, Stadler argues that a “reasonable viewer” would not identify Tovey
from the commercials. The Court disagrees and finds that Tovey has alleged sufficient evidence
to show that Stadler attempted to portray Tovey in the commercials. The actor portrayed an
individual named “Pat the Tax Man,” Tovey’s nickname, and the actor looked strikingly similar
to Tovey. 2
Second, the Court agrees with Tovey that the commercials could convey the following
statements of fact to the public: (1) Tovey is not a professional full-time tax preparer, (2) Tovey
cannot be trusted to prepare tax returns, (3) Tovey cannot be trusted to keep tax returns and
refunds secret, (4) Tovey’s customers are unprotected in the event the IRS audits their returns,
and (5) Tovey is an unlicensed or unqualified tax preparer. Although Stadler attempted to use
humor to promote his own business over Tovey’s, Stadler cannot, at this point, hide behind the
humor as a bar to Tovey’s defamation claim. The commercials arguably convey defamatory
statements and reasonable viewers could indeed interpret the foregoing statements of fact as true.
As such, Tovey’s defamation claim will not be dismissed for failure to state a claim under Rule
12(b)(6).
2. Trade Disparagement
“Section 43(a)(1)(B) of the Lanham Act . . . forbids the use of any ‘false or misleading
description of fact, or false or misleading representation of fact, which in commercial advertising
or promotion, misrepresents the nature, characteristics, [or] qualities . . . of [the seller’s] or
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Tovey’s appearance is unique in that he has shoulder-length blonde hair. See Dkt. No.
1-1 at 7. The actor also had shoulder-length blonder hair.
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another person’s goods . . . .’” Schering-Plough Healthcare Prods., Inc. v. Schwarz Pharma,
Inc., 586 F.3d 500, 503 (7th Cir. 2009) (quoting 15 U.S.C. § 1125(a)(1)(B)). Stadler again argues
that, as a matter of law, the commercials are parody and are thus not actionable under the
Lanham Act. The Court is not persuaded by Stadler’s argument.
Stadler relies on Eveready Battery Co. v. Adolph Coors Co., 765 F. Supp. 440 (N.D. Ill.
1991), a trademark infringement case from the Northern District of Illinois, to support his
argument. In that case, Eveready filed suit against Coors after Coors made a commercial that
spoofed Eveready’s well-known “Energizer Bunny.” In denying Eveready’s request for an
injunction prohibiting Coors from airing the commercial, the court noted as follows:
Coors’ parody defense would likely defeat Eveready’s Lanham Act claim in any
event. Parody has been recognized as a defense to a trademark infringement action.
See Cliffs Notes, Inc. v. Bantam Doubleday Dell Publ. Group, Inc., 886 F.2d 490
(2d Cir.1989); see also Note, Trademark Parody: A Fair Use and First Amendment
Analysis, 72 Va. L. Rev. 1079 (1986) (discussing the use of the parody defense in
trademark infringement and dilution cases). Courts in this district as well have
recognized parody as a legitimate use of another’s mark. See General Mills, Inc. v.
Henry Regnery Co., 421 F. Supp. 359 (N.D.Ill.1976) (denying preliminary
injunction of defendant's cookbook, entitled “Morey Amsterdam’s Betty Cooker
Crock Book For Drunks,” after finding no likelihood of confusion with plaintiff's
registered trademark, “BETTY CROCKER”). In the Cliffs Notes case, the Second
Circuit discussed the need to balance the necessity of imitation in parody with the
trademark owner’s rights in his mark.
Conflict between these two policies is inevitable in the context of
parody, because the keystone of parody is imitation. It is hard to
imagine, for example, a successful parody of Time magazine that
did not reproduce Time’s trademarked red border. A parody must
convey two simultaneous—and contradictory—messages: that it is
the original, but also that it is not the original and is instead a parody.
To the extent that it does only the former but not the latter, it is not
only a poor parody but also vulnerable under trademark law, since
the customer will be confused.
Cliffs Notes, 886 F.2d at 494. As the court discussed above, although the
Coors parody contains similarities to the Eveready mark, it contains
conspicuous and resounding differences as well. To the extent that the
Coors commercial conveys the message “that it is the original,” it
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emphatically conveys “that it is not the original.” Thus, this court construes
the Coors commercial as a permissible parody which does not violate the
provisions of the Lanham Act.
Id. at 450.
In this case, Stadler argues that “there are marked differences that ‘emphatically convey’
that it is not Plaintiff, nor intended to be [the Plaintiff]” in the commercials. Stadler’s Br. at 4.
Thus, it argues that the commercials are clearly parody and not actionable under the Lanham
Act. The Court disagrees. Even assuming the reasoning in Eveready applies to this case, as noted
above, Tovey has alleged sufficient evidence to show that Stadler attempted to portray Tovey in
the commercials.
Regardless, Eveready is not binding on this Court, and it is entirely distinguishable from
the present case. 3 Trademark infringement under the Lanham Act is an altogether different claim
than the trade disparagement claim alleged in this case. Stadler fails to cite any case law or make
any argument that convinces the Court that its attempt at using humor to make (arguably)
defamatory statements about Tovey is permissible under the Lanham Act. As such, Tovey’s
trade disparagement claim will not be dismissed pursuant to Rule 12(b)(6).
The Court thus DENIES Stadler’s motion to dismiss in its entirety.
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The Court also finds that Pernod Ricard USA, LLC v. Bacardi U.S.A., Inc., 653 F.3d
241, 254 (3d Cir. 2011) (finding that rum company did not falsely advertise the origin of its
“Havana Club” rum) and Marriott Corp. v. Ramada Inc., 826 F. Supp. 726, 728 (S.D.N.Y. 1993)
(finding that hotel chain’s advertisements were not false or misleading where ads portrayed
couples with the same last names as their competitor’s hotel chains (e.g., the Marriotts)), cited to
in Stadler’s reply brief, are nonprecedential and distinguishable from the present case.
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III.
CONCLUSION
For the reasons set forth above, the Plaintiff’s motion to amend is GRANTED, and the
Defendant’s motion to dismiss is DENIED.
SO ORDERED: 2/04/15
_______________________________
Hon. William T. Lawrence, Judge
United States District Court
Southern District of Indiana
Copies to all counsel of record via electronic communication.
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