Marten Transport LTD v. Plattform Advertising, Inc.
Filing
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MEMORANDUM AND ORDER granting in part and denying in part defendant's 18 Motion for Partial Dismissal. The motion is granted to the extent that any claim by plaintiff for punitive damages asserted as an independent cause of action is hereby dismissed; the motion is otherwise denied. Signed by District Judge John W. Lungstrum on 1/27/2015. (mg)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
MARTEN TRANSPORT, LTD.,
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Plaintiff,
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v.
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PLATTFORM ADVERTISING, INC.,
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Defendant.
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_______________________________________)
Case No. 14-2464-JWL
MEMORANDUM AND ORDER
This matter comes before the Court on defendant’s motion to dismiss the claims
pleaded by plaintiff in Counts I, II, IV, V, and VII of the complaint (Doc. # 18). For the
reasons set forth below, the motion is granted in part and denied in part. The motion
is granted to the extent that any claim by plaintiff for punitive damages asserted as an
independent cause of action is hereby dismissed; the motion is otherwise denied.
Plaintiff Marten Transport, Ltd. alleges the following facts in its complaint
against defendant Plattform Advertising, Inc. Plaintiff is a motor carrier providing
transportation services, with its headquarters in Wisconsin. Defendant, a Kansas
corporation, operates two websites that advertise open driver positions on behalf of
commercial trucking companies, and interested individuals may submit job applications
for such positions through the sites. From June 2010 through May 2012, plaintiff paid
defendant to advertise job openings, and plaintiff authorized defendant to use its
identifying information and registered trademarks in advertising such openings. Plaintiff
terminated that relationship in May 2012, after which time defendant was no longer
authorized to advertise on plaintiff’s behalf or to use plaintiff’s identifying information
and trademarks. Nevertheless, defendant has continued to use plaintiff’s information and
trademarks on its own websites and on another site. Defendant has not directed any
interested applicants to plaintiff since May 2012, but instead has directed them to
defendant’s own sites.
Plaintiff initiated the present action in September 2014. By its complaint, plaintiff
asserts the following claims against defendant: federal trademark infringe-ment, in
violation of the Lanham Act, 15 U.S.C. § 1114 (Count I); unfair competition, in violation
of the Lanham Act, 15 U.S.C. § 1125(a) (Count II); unauthorized use of identifying
information, in violation of Wisconsin statutes (Count III); common-law trademark
infringement (Count IV); common-law unfair competition (Count V); and tortious
interference with prospective contractual relationships (Count VI). Plaintiff requests
damages, injunctive relief, and attorney fees. In addition, in a separate count plaintiff
asserts a claim for punitive damages under Wis. Stat. § 895.043 (Count VII).
Defendant seeks dismissal of Counts I, II, IV, V, and VII pursuant to Fed. R. Civ.
P. 12(b)(6). The Court will dismiss a cause of action for failure to state a claim only
when the factual allegations fail to “state a claim to relief that is plausible on its face,”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007), or when an issue of law is
dispositive, see Neitzke v. Williams, 490 U.S. 319, 326 (1989). The complaint need not
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contain detailed factual allegations, but a plaintiff’s obligation to provide the grounds of
entitlement to relief requires more than labels and conclusions; a formulaic recitation of
the elements of a cause of action will not do. See Bell Atlantic, 550 U.S. at 555. The
Court must accept the facts alleged in the complaint as true, even if doubtful in fact, see
id., and view all reasonable inferences from those facts in favor of the plaintiff, see Tal
v. Hogan, 453 F.3d 1244, 1252 (10th Cir. 2006). Viewed as such, the “[f]actual
allegations must be enough to raise a right to relief above the speculative level.” Bell
Atlantic, 550 U.S. at 555. The issue in resolving a motion such as this is “not whether
[the] plaintiff will ultimately prevail, but whether the claimant is entitled to offer
evidence to support the claims.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 511 (2002)
(quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).
Defendant seeks dismissal of plaintiff’s claims under the Lanham Act, 15 U.S.C.
§§ 1114, 1125(a). Section 1114 provides for liability if a person without consent uses
in commerce a registered mark “in connection with the sale, offering for sale,
distribution, or advertising of any goods or services” if such use is likely to cause
confusion. See 15 U.S.C. § 1114(1)(a). Section 1125(a) provides for liability of the
following:
Any person who, on or in connection with any goods or services, or any
container of goods, uses in commerce any word, term, name, symbol, or
device, or any combination thereof, or any false designation of origin,
false or misleading description of fact, or false or misleading
representation of fact, which –
(A) is likely to cause confusion, or to cause mistake, or to deceive
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as to the affiliation, connection, or association of such person with
another person, or as to the origin, sponsorship, or approval of his
or her goods, services, or commercial activities by another person,
or
(B) in commercial advertising or promotion, misrepresents the
nature, characteristics, qualities, or geographic origin of his or her
or another person’s goods, services, or commercial activities.
See 15 U.S.C. § 1125(a)(1). Defendant argues that plaintiff cannot state a claim under
either of these sections because the job opportunities that it advertises do not constitute
goods or services.
The Court rejects this argument. The statutes require use of the information or
mark “in connection with” the sale or advertising of any goods or services, see 15 U.S.C.
§ 1114(1)(a), and “in connection with” any goods or services, see 15 U.S.C. §
1125(a)(1). In this case, plaintiff has alleged that defendant, as its business, matched job
applicants with trucking companies that had open positions, and that defendant used
plaintiff’s information and marks in advertising such openings and plaintiff’s business.
Thus, applying the plain and ordinary meaning of the terms in the statute, the Court
concludes without hesitation that plaintiff has alleged use by defendant in connection
with a service that it provides to applicants and trucking companies. Defendant has not
even attempted to explain why its business does not provide a service in commerce.
Defendant appears to support this argument solely by citation to a single case,
Amin v. SunTrust Bank, 2014 WL 3397256 (N.D. Ill. July 11, 2014). In that case, the
plaintiff responded to an e-mail advertising an independent contractor position; was told
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that he was accepted; followed instructions to deposit checks into and make payments
out of his own bank account; and suffered losses when the checks he received did not
clear. See id. at *1-2. The district court dismissed the plaintiff’s claims under Section
1125(a) of the Lanham Act, reasoning as follows:
[T]he conduct complained of here had nothing to do with a “false
description of goods and their origins.” Rather, [the plaintiff] complains
of a fraudulent scheme involving an opportunity for employment. That is
neither a “good” nor a “service,” and thus does not fall under the
protections of the Lanham Act.
See id. at *3 (citations omitted). That case is easily distinguished from the present case,
however. Amin involved a fraudulent offer of employment, and the court concluded that
such an offer was not a “good” or a “service” under the Act. The present case, on the
other hand, involves the alleged misuse of information in the defendant’s business of
advertising job opportunities. Thus, the alleged misuse here was done in connection
with a service.
Plaintiff has not offered any other rationale or authority supporting this argument.
Accordingly, the Court rejects this basis for dismissal of plaintiff’s Lanham Act claims.
Defendant also appears to argue that plaintiff’s Lanham Act claims are subject to
dismissal because plaintiff and defendant are not direct competitors. There is no such
requirement in either statute, however.
Courts have long held that trademark
infringement and unfair competition may involve related goods or services that do not
directly compete, with the resulting confusion concerning the existence of a relationship
between the parties. See, e.g., Team Tires Plus, Ltd. v. Tires Plus, Inc., 394 F.3d 831,
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833-34 (10th Cir. 2005) (premise that a trademark provides protection only when used
on directly competing products is no longer good law; such protection extends to the use
on non-competing but related goods); see generally J. Thomas McCarthy, McCarthy on
Trademarks and Unfair Competition §§ 24:2, 24:3, 24:6, 24:13, 24:14 (4th ed. 2014).
Defendant cites Utah Lighthouse Ministry v. Foundation for Apologetic Information and
Research, 527 F.3d 1045 (10th Cir. 2008), in which the Tenth Circuit noted that the
Lanham Act is intended “to protect the ability of consumers to distinguish among
competing producers.” See id. at 1053 (quoting Two Pesos, Inc. v. Taco Cabana, Inc.,
505 U.S. 763, 774 (1992)). In that case, however, the court was invoking that notion of
competition in the context of applying the requirement of a commercial use, in
distinguishing the situation in its case involving the use of material on a parody website.
See id. at 1053-54. Thus, the Tenth Circuit stated:
In our view, the defendant in a trademark infringement and unfair
competition case must use the mark in connection with the goods or
services of a competing producer, not merely to make a comment on the
trademark owner’s goods or services.
See id. at 1053. In the present case, plaintiff has alleged infringement and unfair
competition in a commercial context, in which plaintiff advertised job openings as a part
of its business. Moreover, there is an element of competition present here, as plaintiff
has alleged that job applicants were directed to its competitors because of the resulting
confusion. Defendant has not provided any authority suggesting that plaintiff may not
pursue Lanham Act claims under these circumstances. Thus, the Court rejects this basis
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for dismissal.
In its complaint, plaintiff alleges two types of confusion resulting from
defendant’s use of its information and marks: confusion for job applicants, who may
mistakenly believe that defendant is associated with plaintiff and that they may apply for
jobs with plaintiff through defendant; and confusion for other trucking companies, who
may mistakenly believe that plaintiff has contracted with defendant to list plaintiff’s job
openings. Defendant argues that claims based on this latter type of alleged confusion are
precluded by Lexmark International, Inc. v. Static Control Components, Inc., 134 S. Ct.
1377 (2014). In Lexmark, the Supreme Court held that the cause of action created by
Section 1125(a)(1)(B) of the Lanham Act extends only to claims in which (a) the
plaintiff’s interest falls within the zone of interests protected by the statute, and (b) the
plaintiff’s injuries are proximately caused by a violation of the statute. See id. at 138891. Defendant here argues that plaintiff cannot satisfy the proximate cause requirement.
With respect to that requirement, the Supreme Court held as follows: “We thus hold that
a plaintiff suing under § 1125(a) ordinarily must show economic or reputational injury
flowing directly from the deception wrought by the defendant’s advertising; and that that
occurs when deception of consumers causes them to withhold trade from the plaintiff.”
See id. at 1391.
The Court rejects the argument that plaintiff cannot establish the requisite
proximate cause with respect to its theory based on confusion of other trucking
companies.
Defendant argues only that the trucking companies, as confused
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“consumers”, did not withhold trade from plaintiff. Viewing all facts and drawing all
reasonable inferences in plaintiff’s favor, as it must at this stage, the Court cannot say
as a matter of law that plaintiff did not suffer damages proximately caused by its
competitors’ confusion. For instance, plaintiff has argued that such confusion could
increase the use of defendant’s websites among plaintiff’s competitors, which could in
turn increase traffic to those sites and reduce traffic to sites listing plaintiff’s openings.
Confused competitors might also mistakenly refer applicants to defendant’s sites in the
belief that the applicant will be able to apply with plaintiff as well. Thus, applicants (the
“trade” in this case) are alleged to have been withheld from plaintiff. Arguments relating
to proximate cause are more appropriately considered at the summary judgment stage
or at trial, when facts have been developed and evidence has been presented.1
Accordingly, the Court rejects this basis for dismissal of one theory of plaintiff’s claim
under Section 1125(a)(1)(B).
Defendant argues that plaintiff’s trucking-company-confusion theory should also
be dismissed because the alleged harm from such confusion would not be of
consequence to those companies, based on the Supreme Court’s statement in Dastar
1
In Lexmark, the Supreme Court held that the plaintiff had pleaded sufficient facts
to satisfy the proximate cause requirement, even though the parties were not direct
competitors and even though the causal chain linking the plaintiff’s injuries to the
confusion was not direct and included an intervening link. See Lexmark, 134 S. Ct. at
1394. The Court stated that although the plaintiff would not be able to obtain relief
without evidence of proximately-caused injury, the plaintiff had at least alleged an
adequate basis to proceed under the Lanham Act and the plaintiff was therefore entitled
to a chance to prove its case. See id.
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Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003), that the Lanham Act
“should not be stretched to cover matters that are typically of no consequence to
purchasers.” See id. at 32-33. Because this argument was raised for the first time in
defendant’s reply brief, however, the Court will not consider it. See, e.g., U.S. Fire Ins.
Co. v. Bunge N. Am., Inc., 2008 WL 3077074, at *9 n.7 (D. Kan. Aug. 4, 2008) (court
will not consider issues raised for first time in reply brief) (citing Minshall v. McGraw
Hill Broadcasting Co., 323 F.3d 1273, 1288 (10th Cir. 2003)).
In seeking dismissal of plaintiff’s common-law infringement and unfair
competition claims, defendant relies on the same arguments that it asserts with respect
to plaintiff’s federal statutory claims. Therefore, for the same reasons, the Court denies
defendant’s motion to dismiss those common-law claims.2
Finally, defendant argues that Count VII of the complaint should be dismissed
because a claim for punitive damages does not present an independent cause of action.
Plaintiff responds that it “intends to pursue punitive damages in this case regardless of
whether it is an independent cause of action or merely a measure of damages that it asks
the trier of fact to award.” Plaintiff has not provided any statutory basis or other
authority, however, that would allow it to assert an independent claim for punitive
damages, without first establishing some other basis for liability. See, e.g., Weather
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Although defendant assumed that such claims were asserted under Kansas law,
plaintiff argued in its response brief that any such claims would be governed by
Wisconsin law. Defendant did not dispute in its reply brief that Wisconsin law would
apply to these claims, but the Court need not decide that issue at this time.
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Central, Inc. v. Reinhart Boerner Van Deuren, S.C., 2009 WL 367694, at *1 (W.D. Wis.
Feb. 10, 2009) (request for punitive damages under Wis. Stat. § 895.043 is not an
independent cause of action under Wisconsin law). Accordingly, to the extent that
plaintiff has asserted an independent cause of action for punitive damages, such cause
of action is hereby dismissed. At the same time, defendant has not argued that plaintiff
may not pursue such damages as a form of relief upon a showing of some other basis for
liability; thus, the Court denies any request by defendant for dismissal of plaintiff’s
punitive damage claim in its entirety.
IT IS THEREFORE ORDERED BY THE COURT THAT defendant’s Motion
for Partial Dismissal (Doc. # 18) is hereby granted in part and denied in part. The
motion is granted to the extent that any claim by plaintiff for punitive damages asserted
as an independent cause of action is hereby dismissed; the motion is otherwise denied.
IT IS SO ORDERED.
Dated this 27th day of January, 2015, in Kansas City, Kansas.
s/ John W. Lungstrum
John W. Lungstrum
United States District Judge
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