Who Dat, Inc. v. Rouse's Enterprises, LLC.

Filing 17

ORDER granting in part and denying in part 10 Motion to Dismiss as set forth in document. Signed by Judge Susie Morgan. (cbn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
WHO DAT, INC.,
Plaintiff

CIVIL ACTION

VERSUS

No. 12-2189

ROUSE’S ENTERPRISES, LLC,
Defendant

SECTION “E”

ORDER AND REASONS
Before the Court is plaintiff Who Dat, Inc.’s (“WDI”) motion to dismiss1 defendant
Rouse’s Enterprises, LLC’s (“Rouse’s”) counterclaims2 pursuant to Federal Rule of Civil
Procedure 12(b)(6). WDI also seeks to have certain of the affirmative defenses asserted by
Rouse’s stricken pursuant to Rule 12(f). Alternatively, WDI seeks a more definite statement
of the counterclaims and affirmative defenses pursuant to Rule 12(e). Rouse’s opposes
WDI’s motion.3 For the reasons set forth below, WDI’s motion to dismiss is denied and
WDI’s motion to strike is denied. WDI’s motion for a more definite statement is granted
in part and denied in part.
BACKGROUND
I.

Background and Relevant Procedural History

This intellectual property dispute arises out of a claim by WDI that Rouse's has
willfully infringed WDI's trademarks of the phrase "Who Dat?" and related phrases (the

1

R. Doc. 10.

2

R. Doc. 6.

3

R. Doc.

1

“marks”) by selling products in Rouse's supermarkets with the marks.4 WDI claims to be
the senior user of the marks, and contends Rouse's sale of infringing products containing
the marks will confuse customers into thinking the Rouse's products are "somehow
affiliated with, approved or sponsored by WDI.”5 According to WDI, it has repeatedly
requested that Rouse's stop selling products with the infringing marks, but Rouse's refuses
to do so.6 On August 31, 2012, WDI filed this trademark infringement action.7
On November 2, 2012, Rouse's filed an answer to WDI's complaint, along with
affirmative defenses and counterclaims.8 WDI now seeks to have certain of the affirmative
defenses stricken and all of the counterclaims dismissed. Specifically, WDI seeks to have
two of the twelve affirmative defenses stricken: the affirmative defense that WDI's claims
are barred because "WDI does not hold an valid or enforceable rights to the phrase 'Who
Dat' or similar phrases,"9 and the affirmative defense that WDI's claims are barred because
WDI's marks are "invalid and unenforceable."10 WDI also seeks to have the following
counterclaims dismissed: (1) the counterclaim for a declaration that WDI's "purported
rights in and to" the marks are invalid and unenforceable;11 (2) the counterclaim for a

4

R. Doc. 1 (Complaint).

5

Id.

6

Id.

7

Id.

8

R. Doc. 6.

9

Id. at ¶ 13 (The fourth affirmative defense asserted by Rouse’s).

10

Id. at ¶ 18 (The ninth affirmative defense asserted by Rouse’s).

11

Id. at ¶ 26 (The first counterclaim by Rouse’s).

2

declaration that WDI does not have common law trademark rights in the phrases "Who
Dat";12 and (3) the counterclaim for a declaration that, even if WDI does possess a valid,
enforceable right to the marks, Rouse's has not infringed those marks or WDI's right to
those marks.13
II.

The Parties’ Arguments
A.

WDI’s Motion to Dismiss

WDI's argument with respect to the affirmative defenses and the counterclaims is
the same; that is, that they are redundant of the complaint and answer and thus "serve no
useful purpose."14 WDI argues that, because Rouse's has denied that WDI has valid,
protectable marks, has denied that WDI is the senior use of the marks, and has claimed that
the use of the phrase "Who Dat" by Rouse’s does not infringe any trademark WDI may have,
Rouse's counterclaims are unnecessary and redundant. WDI argues that, if the Court
determines that WDI has failed to carry its burden of proof on any of its claims, that finding
will render the declaratory judgment counterclaims moot because WDI's claims and the
counterclaims by Rouse’s raise identical legal and factual issues. Likewise, WDI seeks to
have the two affirmative defenses described above stricken because they are redundant of
WDI's complaint and the Rouse's answer to that complaint. Finally, WDI argues that, if the
counterclaims and/or affirmative defenses are allowed to stand, Rouse's must provide a
more definite statement of those counterclaims and affirmative defenses.

12

Id. at ¶ 27 (The second counterclaim by Rouse’s).

13

Id. at ¶ 28 (The third counterclaim by Rouse’s).

14

R. Doc. 10.

3

B.

Opposition

In response, Rouse's argues that its counterclaims and affirmative defenses are not
redundant of the complaint or answer, but instead seek distinct relief involving a different
legal standard than WDI's claims.15 Specifically, Rouse's contends that the defenses and
counterclaims request the Court affirmatively find in favor of Rouse’s on certain issues, as
opposed to the Rouse’s general answer to the claims asserted by WDI, which is that WDI
will not be able to carry its burden of proof. Rouse's argues that there is a "qualitative
difference between . . . Rouses [sic] merely rebuffing WDI's claims of infringement and . .
. Rouse's receiving an affirmative declaration that WDI lacks trademark rights in its alleged
marks."16
ANALYSIS
I.

Applicable Law
A.

Rule 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6) provides for dismissal of a claim if the
claimant fails to set forth a factual allegation in support of its claim that would entitle it to
relief (i.e. for "failure to state a claim"). See, e.g. Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007); see also Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007). Those factual
allegations "must be enough to raise a right to relief above the speculative level.” Gonzalez
v. Kay, 577 F.3d 600, 603 (5th Cir. 2009) (quoting Twombly, 550 U.S. at 555)). "To
survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S.
15

R. Doc. 14.

16

Id.

4

662, 678 (2009) (quoting Twombly, 550 U.S. at 570)). “A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged." Id. The Court must accept all
well-pled facts as true and must draw all reasonable inferences in favor of the non-moving
party, Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 239 (5th Cir. 2009), but the Court
need not accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at
678.
B.

Rule 12(f)

Federal Rule of Civil Procedure 12(f) provides that the Court may strike from a
pleading “an insufficient defense or any redundant, immaterial, impertinent, or scandalous
matter.” FED . R. CIV. P. 12(f). An affirmative defense is “subject to the same pleading
requirement as is the complaint,” and a defendant “must plead an affirmative defense with
enough specificity or factual particularity to give the plaintiff ‘fair notice’ of the defense that
is being advanced.”17 Woodfield v. Bowman, 193 F.3d 354, 362 (5th Cir. 1999) (internal
quotation marks and citation omitted). A motion to strike under Rule 12(f) “is a drastic
remedy to be resorted to only when required for the purposes of justice.” Augustus v. Bd.
of Pub. Instruction of Escambia Cnty., Fla., 306 F.2d 862, 868 (5th Cir. 1962) (quoting
Brown v. Williamson Tobacco Corp. v. United States, 201 F.2d 819,822 (6th Cir.1953));
see also Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045,
1057 (5th Cir. 1982). “[E]ven when technically appropriate and well-founded,” motions to

17

Federal Rule of Civil Procedure 8 provides requirements that all pleadings must satisfy, and
subsections (b) and (c) of the Rule govern the pleading requirements for defenses and affirmative
defenses, respectively. Under Rule 8(b) and (c), a defendant must “state in short and plain terms its
defenses to each claim asserted against it” and must “affirmatively state any avoidance or affirmative
defense . . . .” F ED . R. C IV . P. 8(b)(1)(A) and (c)(1).

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strike are not be granted “in the absence of a showing of prejudice to the moving party.”
Abene v. Jaybar, LLC, 802 F. Supp. 716, 723 (E.D. La. 2011) (quoting 5C CHARLES ALAN
WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1381 (3d ed. 2004)).
The decision to grant or deny a motion to strike lies within the sound discretion of the trial
court. Tarver v. Foret, No. 95-1192, 1996 WL 3536, at *1 (E.D. La. Jan. 3, 1996) (Carr, J.).
C.

Rule 12(e)

Federal Rule of Civil Procedure 12(e) provides that, if a pleading is “so vague or
ambiguous that the [opposing] party cannot reasonably prepare a response,” the opposing
party may move for a more definite statement of that pleading. FED . R. CIV. P. 12(e). A
district court's order pursuant to Rule 12(e) will not be reversed absent an abuse of
discretion. Old Time Enters., Inc. v. Int'l Coffee Corp., 862 F.2d 1213, 1217 (5th Cir. 1989).
D.

The Declaratory Judgment Act

The Declaratory Judgment Act provides that:
In a case of actual controversy within its jurisdiction . . . any
court of the United States, upon the filing of an appropriate
pleading, may declare the rights and other legal relations of any
interested party seeking such declaration, whether or not
further relief is or could be sought.
28 U.S.C. § 2201(a). The Declaratory Judgment Act "is an enabling act, which confers
discretion on the courts rather than an absolute right on a litigant." Wilton v. Seven Falls
Co., 515 U.S. 277, 287 (1995) (quoting Public Serv. Comm'n of Utah v. Wycoff Co., 344 U.S.
237, 241 (1952)). "The Declaratory Judgment Act has been understood to confer on federal
courts unique and substantial discretion in deciding whether to declare the rights of
litigants." Wilton, 515 U.S. at 286. "In the declaratory judgment context, the normal
principle that federal courts should adjudicate claims within their jurisdiction yields to
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considerations of practicality and wise judicial administration." Id. at 289.18
The United States Court of Appeals for the Fifth Circuit has established guidelines
for a district court to follow when considering whether to consider or dismiss a declaratory
judgment action:
When considering a declaratory judgment action, a district
court must engage in a three-step inquiry. First, the court must
determine whether the declaratory action is justiciable.
Typically, this becomes a question of whether an "actual
controversy" exists between the parties to the action. . .
Second, if it has jurisdiction, then the district court must
resolve whether it has the "authority" to grant declaratory relief
in the case presented . . . . Third, the court has to determine
how to exercise its broad discretion to decide or dismiss a
declaratory judgment action.19
Orix Credit Alliance, Inc. v. Wolfe, 212 F.3d 891, 895 (5th Cir. 2000).
II.

WDI’s Rule 12(b)(6) Attack on the Counterclaims

The counterclaims by Rouse’s are not redundant of its answers to WDI’s claims or
a “mirror image” of WDI’s complaint. Instead, and as noted by Rouse’s in opposition to the
motion to dismiss, the counterclaims seek affirmative relief that is “qualitatively different”
from a finding that WDI has not met its burden of proving its claims. As explained by the
United States Supreme Court, “[a] party seeking a declaratory judgment of invalidity

18

In W ilton, the United States Supreme Court resolved a circuit split, holding that the district
court's decision to decide or dismiss a declaratory judgment action is discretionary. 515 U.S. at 289-90;
compare Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (1942) with Colo. River W ater Conserv. Dist. v.
United States, 424 U.S. 800 (1976). The W ilton case held that the Brillhart standard, giving the district
court more discretion to determine whether to hear a declaratory judgment action, applies in cases such as
the one currently before the Court.
19

W DI does not contend that the declaratory counterclaims are non-justiciable, nor does it
contend the Court lacks authority to grant the declaratory judgments sought by Rouse’s. As such, the
Court will focus on the third step in the Orix inquiry - how the Court should exercise its discretion to hear
or to dismiss the declaratory judgment counterclaims.

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presents a claim independent of the patentee’s charge of infringement.” Cardinal Chem.
Co. v. Morton Int’l, Inc., 508 U.S. 83, 92 (1993); see also Altvater v. Freeman, 319 U.S. 359,
364 (1943). Likewise, “a counterclaim questioning . . . enforceability of a patent raises
issues beyond the initial claim for infringement that are not disposed of by a decision of
non-infringement.” Fort James Corp. v. Solo Cup Co., 412 F.3d 1340, 1348 (Fed. Cir.
2005). A declaratory judgment counterclaim in the trademark context is also a claim
independent of the trademark user’s charge of infringement. See Dominion Electrical Mfg.
Co. v. Edwin L. Wiegand Co., 126 F.2d 172, 173-74 (6th Cir. 1942); see also Starter Corp.
v. Converse, Inc., 84 F.3d 592, 596 (2d Cir. 1996) (“Declaratory judgment actions involving
trademarks are analogous to those involving patents . . . and principles applicable to
declaratory judgment actions involving patents are generally applicable with respect to
trademarks.”) (internal citations omitted), abrogated on other grounds by MedImmune,
Inc. v. Genentech, Inc., 549 U.S. 118 (2007).
The Dominion court explained the unique role declaratory judgment claims play in
intellectual property litigation:
[M]ere dismissal of a plaintiff's bill does not always adjudicate
every aspect of the controversy or give the defendant all the
relief to which he may be entitled. To illustrate: It frequently
happens that the court, in a patent or trademark infringement
suit, finding the defendant innocent of infringement, deems it
unnecessary to determine issues of title, validity, or the scope
of the patent claims. One defendant exonerated of infringement
may be content with such adjudication- another may not. . . .
[M]ere exoneration from infringement does not always meet
the necessities of a wrongfully accused defendant. He wishes
to be freed from the restrictions of an invalid patent or
trademark, and he represents not only himself, but, in a sense,
also the public which is likewise excluded from the field of
monopoly.

8

Dominion, 126 F.2d at 174-75. The Dominion court goes on to state that “[t]he Declaratory
Judgment Act furnishes [the plaintiff] with the means of escape. We see no reason why it
should not be available to him as a counterclaim when circumstances would have permitted
a separate suit.” Id. at 175. This Court finds the Sixth Circuit’s reasoning in Dominion
persuasive and applicable to WDI’s motion to dismiss. Because the declaratory judgment
counterclaims seek more than just a finding that WDI has failed to carry its burden of proof,
those counterclaims will not be rendered moot even if WDI fails to carry that burden.
Instead, the counterclaims involve a distinct set factual and legal issues. It would be
inappropriate for the Court to dismiss those counterclaims at this stage in the proceedings
without giving Rouse’s an opportunity to prosecute those counterclaims.
Finally, the Court notes that while some courts, including those in the cases cited by
WDI in its motion to dismiss,20 have exercised their discretion to dismiss declaratory
judgment complaints because they are “mirror images” of the claims in the complaint, none
of those courts involve patent or trademark litigation.21 As explained above, intellectual

20

See, e.g. Mille Lacs Band of Chippewa Indians v. Minn., 152 F.R.D. 580 (D. Minn. 1993);
W aller v. DB3 Holdings, Inc., No. 07-491, 2008 W L 373155 (N.D. Tex. Feb. 12, 2008); Kougl v. Xspedius
Management Co. of Dallas/Fort W orth, L.L.C., No. 04CV2518-D, 2005 W L 1421446 (N.D. Tex. 2005);
Resolution Trust Corp. v. Ryan, 801 F. Supp. 1545 (S.D. Miss. 1992).
21

W hile this Court’s research has not revealed an intellectual property case from the Fifth Circuit
in which a declaratory judgment counterclaim was at issue, other courts consistently hold that declaratory
judgment counterclaims for invalidity, non-infringement, etc. are sufficiently independent of claims for
infringement so as to avoid dismissal under Rules 12(b)(6) and a strike under 12(f). See, e.g. Innovation
Ventures, LLC v. N2G Dist., Inc., 779 F. Supp. 2d 671, 682-83 (E.D. Mich. 2011) (citing Dom inion and
refusing to dism iss declaratory judgm ent counterclaims); Baroness Sm all Estates, Inc. v. BJ’s Rests., Inc.,
No. SACV 11-468-JST, 2011 W L 3438873, at *2, 4-5 (C.D. Cal. Aug. 5, 2011) (Stanton Tucker, J.) (citing
Cardinal Chem ical and refusing to dismiss declaratory judgment counterclaim and refusing to strike
counterclaims and affirmative defenses); Castaline v. Aaron Mueller Arts, No. C 09-2543 CRB, 2010 W L
583944, at *2 (N.D. Cal. Feb. 16, 2010) (Breyer, J.) (citing Cardinal Chemical and Dom inion and refusing
to strike or dism iss declaratory judgm ent counterclaims); cf. Stickrath v. Globalstar, Inc., No. C07-1941
THE, 2008 W L 2050990, at *4 (N.D. Cal. May 13, 2008) (Henderson, J.) (striking unfair competition
defendant’s counterclaims as redundant, but noting that, in accordance with Cardinal Chemical and
Dom inion, patent and trademark infringement cases present a situation in which a declaratory judgment

9

property cases present a unique opportunity for a defendant to seek affirmative relief in the
form of declaratory judgment counterclaims, and, because the cases cited by WDI do not
involve this type of litigation, they hold little persuasive value. For these reasons, the Court,
in its discretion, declines to dismiss the counterclaims. WDI’s motion to dismiss is denied.
III.

WDI’s Rule 12(f) and Rule 12(e) Attack on the Affirmative
Defenses and Counterclaims

Just as the declaratory judgment counterclaims present a justiciable controversy
distinct from the Court’s resolution of WDI’s trademark infringement claims, the
affirmative defenses asserted by Rouse’s are not redundant of its answers to those claims.
Instead, the affirmative defenses present distinct legal reasons why WDI’s claim may not
succeed on the merits, which Rouse’s should be afforded the opportunity to present in this
case. As a result, the Court will not employ the drastic remedy of striking these affirmative
defenses, especially not at this early stage in litigation and in the absence of any showing
of prejudice on the part of WDI. The Court, in its discretion, declines to strike these two
affirmative defenses. WDI’s motion to strike is denied. Furthermore, the affirmative
defenses meet the requirements of Rule 12(e). Affirmative defenses are subject to the
pleading standard contained in Rules 8(b) and 8(c), which require a pleader to provide, at
a minimum, enough “specificity or factual particularity” to give the plaintiff “fair notice” of
the defense. See Woodfield, 193 F. 3d at 362. This requirement is met for both affirmative

counterclaim should be allowed to stand, because “a court may find a defendant has no liability for
infringement without adjudicating the validity of the underlying intellectual property. . . . [and thus a]
defendant in a patent case has som ething to gain from a counterclaim declaration of invalidity -it can go
on to develop its products without fear of infringing the invalid patent. . . . Accordingly, courts should
decline to dismiss counterclaims that seek a declaration that the patent or trademark is invalid.”) (internal
quotation marks and citations omitted).

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defenses at issue. WDI’s motion for a more definite statement is denied with respect to the
fourth and ninth affirmative defenses asserted by Rouse’s.
Counterclaims, however, are subject to the pleading standard contained in Rule
8(a)(2), which requires a pleader to provide a “short and plain statement” of its claim. See
Lee v. Morial, 37 F. App’x 88, at *4 n.10 (5th Cir. 2001) (unpublished) (citing Schultea v.
Wood, 47 F.3d 1427, 1433 (5th Cir. 1995)). Rouse’s has provided no factual support for its
counterclaims. The Court, in its discretion, finds that a more definite statement of the
counterclaims is appropriate in this case. To comply with Rule 8, Rouse’s must amend its
counterclaims. WDI’s motion for a more definite statement is granted with respect to the
Rouse’s counterclaims.
CONCLUSION
Accordingly, IT IS ORDERED that WDI’s motion to dismiss the counterclaims by
Rouse’s be and hereby is DENIED.
IT IS FURTHER ORDERED that WDI’s motion to strike the fourth and ninth
affirmative defenses asserted by Rouse’s be and hereby is DENIED.
IT IS FURTHER ORDERED that WDI’s motion for a more definite statement be
and hereby is GRANTED, with respect to the counterclaims by Rouse’s, and DENIED,
with respect to the affirmative defenses asserted by Rouse’s.
IT IS FURTHER ORDERED that Rouse’s shall file a motion for leave to amend
its counterclaims no later than fourteen (14) days after the entry of this Order.

31st
New Orleans, Louisiana, this ____ day of January, 2013.
_____________________________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE
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