Ballero v. 727 Inc., et al

Filing 29

ORDER AND REASONS: IT IS ORDERED that Defendants' 8 , 15 motions to dismiss are DENIED WITHOUT PREJUDICE. Signed by Judge Ivan L.R. Lemelle on 2/21/2017. (mmv)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
FRANK W. BALLERO

CIVIL ACTION

VERSUS

NO. 16-16098

727 INC., ET AL.

SECTION “B”(3)
ORDER AND REASONS

Before

the

Court

are

two

motions:

Defendants

727,

Incorporated and 721 Bourbon, Inc.’s “Motion to Dismiss” (Rec.
Doc. 8) and Defendant Crescent Crown, LLC’s “Motion to Dismiss”
(Rec. Doc. 15). The original motion to dismiss (Rec. Doc. 8) was
set for submission on February 1, 2017. Pursuant to Local Rule
7.5, Plaintiff’s memorandum in opposition was due on or before
January 24, 2017. Instead, on January 30, 2017, Plaintiff sought
leave to file an amended complaint. Rec. Doc. 13. Because Plaintiff
had a right to amend his complaint “as a matter of course” within
twenty-one days after service of a motion under Rule 12(b), we
granted leave to file the amended complaint on February 2, 2017.
Rec. Doc. 20 (quoting FED. R. CIV. P. 15(a)(1)(B)). The amended
complaint was ultimately filed into the record on February 3, 2017.
Rec. Doc. 21. Additionally, Plaintiff eventually filed responses
to the motions to dismiss. Rec. Docs. 16, 26. For the reasons
discussed below,
IT IS ORDERED that the motions to dismiss (Rec. Docs. 8, 15)
are DENIED WITHOUT PREJUDICE.

I.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY
This case arises out of the sale of a red ale beer known as

Pirate’s Blood. Rec. Doc. 1 at ¶ 5. Frank W. Ballero (“Plaintiff”)
claims that he invented and began brewing the beer in 2009. Id. He
also developed a “logo and mark” for the beer. Id. The beer was
subsequently sold by various bars, including the Funky Pirate
located at 727 Bourbon Street, New Orleans, Louisiana 70116 and
owned by 727, Incorporated (“Defendant 727”) and Tropical Isle
Bourbon located at 721 Bourbon Street, New Orleans, Louisiana 70116
and owned by 721 Bourbon, Incorporated (“Defendant 721”). Id.; see
also Rec. Doc. 8-1 at 1 n.1.
In March of 2011, Plaintiff stopped producing Pirate’s Blood.
Rec. Doc. 1 at ¶ 6. Yet, the Funky Pirate and Tropical Isle Bourbon
continued to sell a beer called “Pirate’s Blood,” “use the same
exact tap handle bearing [Plaintiff’s] Pirate’s Blood logo and
name,” and tell customers that the beer “is locally brewed and
sold exclusively” at these two bars. Id.
According to Plaintiff, the beer “passing off as Pirate’s
Blood”

is

sold

and

distributed

by

Defendant

Crescent

Crown

Distributing, LLC (“Crescent”). Id. at ¶ 7. Crescent regularly
visits the Funky Pirate and Tropical Isle Bourbon “to maintain and
clean the equipment associated with the product it has sold, i.e.
the beer tap lines,” and therefore is “complicit in the deception.”
Id.
2

Consequently,

on

November

4,

2016,

Plaintiff

filed

suit

requesting injunctive and monetary relief pursuant to § 43(a) of
the Lanham Act, 15 U.S.C. §§ 1125(a), 1116 1117, and the Louisiana
Unfair Trade Practices Act (“LUTPA”), Louisiana Revised Statute §
51:1401-1428.1 On January 9, 2017, Defendants 727 and 721 filed
their motion to dismiss (Rec. Doc. 8) and, on January 31, 2017,
Defendant Crescent filed its motion to dismiss (Rec. Doc. 15).2
II.

THE PARTIES’ CONTENTIONS

In the memorandum in support of their motion to dismiss,
Defendants 727 and 721 argue that Plaintiff failed to state a claim
upon which relief could be granted because Plaintiff “abandoned
use of his alleged ‘Pirate’s Blood” mark five (5) years and eight
(8) months ago and, thus does not own a protectable trademark.”
Rec.

Doc.

8-1

at

1.

Defendant

Crescent

“adopt[ed]

and

incorporate[d] by reference [the] memorandum filed by” Defendants
727 and 721; Crescent essentially reiterated the argument that

Named as Defendants were 727, Crescent, Tropical Isle Beverages, LLC, and
Tropical Isle’s Original Papa Joe’s, Inc. Rec. Doc. 1 at ¶ 2. In its motion to
dismiss, Defendants 727 and 721 explain that they are the owners of the bars at
issue and that Tropical Isle Beverages, LLC and Tropical Isle’s Original Papa
Joe’s, Inc. “have no relationship to the factual allegations in the Complaint.”
Rec. Doc. 8-1 at 1 n.1. Accordingly, those parties were terminated from the
suit.
2 Since the filing of Plaintiff’s amended complaint, Defendants 721 and 727 have
filed another motion to dismiss, set for submission on March 15, 2017. Rec.
Doc. 24. Similarly, Defendant Crescent filed a motion for an extension of time
within which to respond to the amended complaint. Rec. Doc. 23. Defendants did
not move to withdraw the instant motions to dismiss (Rec. Docs. 8, 15), however,
so they will be disposed of herein.
1

3

Plaintiff abandoned his use of the mark and therefore cannot assert
a claim upon which relief could be granted. Rec. Doc. 15-2 at 1.
III. LAW AND ANALYSIS
Under Rule 12(b)(6) of the Federal Rules of Civil Procedure,
a party can move to dismiss a complaint for failure to state a
claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6);
see also Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). Such
motions are viewed with disfavor and rarely granted. Lowrey v.
Tex. A & M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997) (quoting
Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc.,
677 F.2d 1045, 1050 (5th Cir. 1982)). Nonetheless, “[t]o 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. 662, 678 (2009)
(internal quotation marks omitted). A claim is facially plausible
“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. Further, when reviewing a motion to
dismiss, courts must accept all well-pleaded facts as true and
view them in the light most favorable to the non-moving party. See
Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996).
According to Defendants, to file a claim for federal and
common law trademark infringement, false designation of origin,
federal

unfair

competition,

and
4

unfair

competition

under

the

LUTPA, Plaintiff must have a valid protectable trademark. Rec.
Doc. 8-1 at 3 (citing Am. Rice, Inc. v. Producers Rice Mill, Inc.,
518 F.3d 321, 329 (5th Cir. 2008) (“To recover on a claim of
trademark infringement, a plaintiff must first show that the mark
is legally protectable and must then establish infringement by
showing a likelihood of confusion. To be protectable, a mark must
be

distinctive,

either

inherently

or

by

achieving

secondary

meaning in the mind of the public”) (internal citations omitted);
Action Ink, Inc. v. Anheuser-Busch, Inc., 959 F. Supp. 2d 934, 948
(E.D. La. 2013), aff’d sub nom. Action Ink, Inc. v. N.Y. Jets,
L.L.C., 576 F. App’x 321 (5th Cir. 2014)(“A showing of likelihood
of confusion presupposes the existence of a valid mark”) (citing
La. World Exposition, Inc. v. Logue, 746 F.2d 1033, 1039-40 (5th
Cir. 1984))).
Yet, “[o]wnership of trademarks is established by use,
not by registration.” Union Nat'l Bank of Tex., Laredo,
Tex. [v. Union Nat’l Bank of Tex., Austin, Tex.], 909
F.2d [839,] 842 [(5th Cir. 1990)]; see also 15 U.S.C. §
1127 (defining a trademark as a “word, name, symbol, or
device . . . used by a person, or which a person has a
bona fide intention to use in commerce,” and in turn
defining “use in commerce” as “the bona fide use of a
mark in the ordinary course of trade, and not made merely
to reserve a right in a mark” (emphasis added)). And
under the Lanham Act, even if a registrant has owned the
mark at one time—indeed, even if the trademark
registration has become inconstestable—an opposing party
may successfully defend against an infringement claim by
showing that the registrant has abandoned the mark. See
15 U.S.C. § 1115(b)(2). A mark is deemed abandoned if
“its use has been discontinued with an intent not to
resume such use.” 15 U.S.C. § 1127.

5

Action Ink, 959 F. Supp. 2d at 942. Similarly an action for false
designation

of

origin

under

the

Lanham

Act

or

for

unfair

competition under either the Lanham Act or the LUTPA may be
defended against by demonstrating that the plaintiff abandoned his
or her use of the mark. Id. at 948 (citing Riggs Mktg. Inc. v.
Mitchell, 993 F. Supp. 1301, 1305 (D. Nev. 1997)).
In his original complaint, Plaintiff admits that he “ceased
production of Pirate’s Blood in March of 2011.” Rec. Doc. 1 at ¶
6. Thus, it appears from the face of the original complaint that
Plaintiff’s use of the mark was “discontinued with an intent not
to resume such use.” However, in his amended complaint, Plaintiff
states that he “met with various persons and companies in 2012,
2013, 2014, and 2015 regarding the production and sale of Pirate’s
Blood. [Plaintiff] fully intended/intends to continue brewing and
selling Pirate’s Blood under its trademarked name and logo.” Rec.
Doc. 21 at ¶ 6(A). The 2009 Advisory Committee Notes to Federal
Rule of Civil Procedure 15 recognize that “[a] responsive amendment
may avoid the need to decide the motion.” Here, Plaintiff’s amended
complaint appears to allege that he intended to continue to use
and/or resume using his mark and therefore alleges that he did not
abandon the mark. Arguments to the contrary will be considered in
conjunction with the pending motion to dismiss filed by Defendants
721 and 727 on February 16, 2017 and set for submission on March
15, 2017. Rec. Doc. 24. Accordingly,
6

IT IS ORDERED that Defendants’ motions to dismiss (Rec. Docs.
8, 15) are DENIED WITHOUT PREJUDICE.
New Orleans, Louisiana, this 21st day of February, 2017.

___________________________________
SENIOR UNITED STATES DISTRICT JUDGE

7