Audubon Real Estate Associates, L.L.C. v. Audubon Realty, L.L.C.

Filing 15

RULING denying 8 Motion to Dismiss filed by Defendant Audubon Realty, L.L.C. Signed by Judge Shelly D. Dick on 7/7/2015. (LLH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
AUDUBON REAL ESTATE
ASSOCIATES, L.L.C.

CIVIL ACTION

VERSUS

15-115-SDD-SCR

AUDUBON REALTY, L.L.C.
RULING
Before the Court is a Motion to Dismiss1 filed by Defendant, Audubon Realty,
L.L.C., to which is the Plaintiff, Audubon Real Estate Associates, L.L.C., filed a
Memorandum in Opposition2. For the reasons which follow the motion is denied.
I.

FACTUAL BACKGROUND
This case arises from a dispute over the use of the word “Audubon” in connection

with real estate sales and services.

The Defendant, Audubon Realty, L.L.C. is a

Louisiana company whose principal place of business is New Orleans, Louisiana. The
name “Audubon Realty, L.L.C.” is a trade name registered under Louisiana law which
has been in use since 2003.3 Audubon Real Estate Associates, L.L.C., whose principal
place of business is Baton Rouge, Louisiana, was formed in 2014 and assumed the
business activities of what was formerly known as Beau Box Residential Real Estate,
L.L.C. In February of 2015, Audubon Realty, L.L.C. made written demand on Audubon
Real Estate Associates, L.L.C. to cease and desist using the name “Audubon” in
connection with real estate sales and services.

1

Rec. Doc. 8.
Rec. Doc. 10.
3
Rec. Doc.1-2.
2

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Thereafter, Audubon Real Estate

Associates, L.L.C. brought this Declaratory Judgment action seeking a determination of
trademark rights.
Defendant, Audubon Realty, L.L.C., moves to dismiss for lack of subject matter
jurisdiction or, alternatively, for lack of venue.4
II.

LAW AND ANALYSIS
A.

Subject Matter Jurisdiction

The Defendant argues that that there is no federal question jurisdiction pursuant
to 28 U.S.C. § 1331 or 28 U.S.C. 1338.5 Federal Rule of Civil Procedure 12(b)(1)
governs challenges to a court's subject matter jurisdiction.

“A case is properly

dismissed for lack of subject matter jurisdiction when the court lacks the statutory or
constitutional power to adjudicate the case.”6

The plaintiff bears the burden of

demonstrating that subject matter jurisdiction exists. “Courts may dismiss for lack of
subject matter jurisdiction on any one of three bases: (1) the complaint alone; (2) the
complaint supplemented by undisputed facts in the record; or (3) the complaint
supplemented by undisputed facts plus the court's resolution of disputed facts.”7 The
court may consider matters outside the pleadings, such as affidavits, to resolve a factual
challenge to subject matter jurisdiction.
4

Rec. Doc. 8.
The Lanham Act, provides:
The district and territorial courts of the United States shall have original jurisdiction and the courts
of appeal of the United States (other than the United States Court of Appeals for the Federal
Circuit) shall have appellate jurisdiction, of all actions arising under this chapter, without regard to
the amount in controversy or to diversity or lack of diversity of the citizenship of the parties. 15
U.S.C. §1121.
28 U.S.C. § 1338(a) provides:
The district courts shall have original jurisdiction of any civil action arising under any Act of
Congress relating to patents, plant variety protection, copyrights and trade-marks. No State court
shall have jurisdiction over any claims for relief arising under any Act of Congress relating to
patents, plant variety protection, or copyrights.
6
Home Builders Ass'n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir.1998).
7
Clark v. Tarrant County, 798 F.2d 736, 741 (5th Cir.1986) (citing Williamson v. Tucker, 645 F.2d 404,
413 (5th Cir.1981).
5

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Defendant challenges the Court’s subject matter jurisdiction on two grounds.
First, Defendant maintains that because the trade name at issue is not federally
registered there is no Lanham Act case and, thus, no federal jurisdiction under either 28
U.S.C. § 1331 or 28 U.S.C. 1338. Secondly, Defendant maintains that the Complaint is
devoid of allegations of any significant effect on interstate commerce, which is a
necessary element of a Lanham Act cause of action. Because the challenge to the
Court’s jurisdiction presents a question as to the existence of a cause of action under
the Lanham Act, the Court evaluates it as a factual attack.8
The Declaratory Judgment Act provides, “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.”9
As in this case, declaratory judgment actions asserting intellectual property rights
are often brought by potential infringers seeking a declaration of non-infringement or
invalidity.10

Defendant contends that, since there is no cause of action under the

Lanham Act, there is no federal jurisdiction.

Although the Defendant does not

specifically argue the absence of a case or controversy required to support Article III
jurisdiction, it is the ultimate issue to be decided.

8

“Where the defendant's challenge to the court's jurisdiction is also a challenge to the existence of a
federal cause of action, the proper course of action for the district court (assuming that the plaintiff's
federal claim is not immaterial and made solely for the purpose of obtaining federal jurisdiction and is not
insubstantial and frivolous) is to find that jurisdiction exists and deal with the objection as a direct attack
on the merits of the plaintiff's case.” Williamson v. Tucker, 645 F.2d 404, 415 (5th Cir. 1981).
9
28 U.S.C. § 2201(a).
10
See, e.g., Lang v. Pac. Marine & Supply Co., Ltd., 895 F.2d 761, 763 (Fed.Cir.1990); Young v.
Vannerson, 612 F. Supp. 2d 829, 838 (S.D. Tex. 2009).

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Trademark11 infringement claims are governed by the Lanham Act, 15 U.S.C. §§
1051 et seq.12 Under the Lanham Act, a trademark may be “any word, name, symbol,
or device, or any combination thereof” that is used or intended to be used “to identify
and distinguish” a person's goods “from those manufactured or sold by others and to
indicate the source of the goods, even if that source is unknown.”13 “The protectability
of unregistered marks is governed generally by the same principles that qualify a mark
for registration under the Lanham Act”, and “[t]he key is whether the mark is ‘capable of
distinguishing the applicant's goods from those of others.’”14

Contrary to the

Defendant’s contention, a mark need not be registered in order to obtain protection
under the Lanham Act because ownership of trademarks is established by use, not by
registration.15

The Defendant maintains that the name or mark “Audubon Realty,

L.L.C.” has been in continual use since 2003.16
It is undisputed that the Defendant demanded that Plaintiff cease and desist its
use of the name in dispute.17 The cease and desist demand states “[y]our activity is
actionable under federal and state law and causes you to be liable for . . . unfair
competition, trademark infringement, trademark dilution, false designation of origin and
unfair trade practices”18, most, if not all, of which are actionable under the Lanham Act.
Defendant is correct in its assertion that the cease and desist letter does not create
11

As used herein the terms ‘trademark’ or ‘mark’ are synonymous with trade name.
Amazing Spaces, Inc. v. Metro Mini Storage, 608 F.3d 225, 235 (5th Cir.2010).
13
Board of Supervisors for Louisiana State University Agricultural and Mechanical College v. Smack
Apparel Co., 550 F.3d 465, 475 (5th Cir. 2008).
14
Bd. of Supervisors for Louisiana State Univ. Agric. & Mech. Coll. v. Smack Apparel Co., 550 F.3d 465
(5th Cir. 2008), citing Two Pesos, Inc. v. Taco Cabana, Inc. 505 U.S. 763, 768, 112 S.Ct. 2753, 2757, 120
L.Ed.2d 615 (1992).
15
Lanham Act, § 1 et seq., 15 U.S.C.A. § 1051 et seq.; Union Nat. Bank of Texas, Laredo, Tex. v. Union
Nat. Bank of Texas, Austin, Tex., 909 F.2d 839, 842 (5th Cir. 1990).
16
Rec. Doc. 1-2.
17
Rec. Doc. 1-2.
18
Rec. Doc. 1-2.
12

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jurisdiction. However, the facts alleged in the Complaint substantiate subject matter
jurisdiction as a case and controversy arising under federal law, namely the Lanham
Act. The United States Supreme Court’s reasoning in the MedImmune19 case informs
this Court’s decision. The dispute in this case is “definite and concrete”.20 The Plaintiff
has taken “significant, concrete steps to conduct [allegedly] infringing activity.”21 The
Plaintiff is currently using a close derivation of the name in dispute. The trademark at
issue need not be registered to give rise to a claim under the Lanham Act.22

A

justiciable case or controversy exists “where the defendant takes a position that puts the
declaratory judgment plaintiff in the position of either pursuing arguably illegal behavior
or abandoning that which he claims he has the right to do.”23

In the context of

trademarks, the purpose of a suit for declaratory judgment is to allow a person uncertain
of his rights to avoid the risks attendant to delayed adjudication.24
The Defendant further argues that subject matter jurisdiction is lacking for the
reason that “plaintiff has not alleged any facts showing a substantial effect on
interstate commerce.”25 Under the terms of the Lanham Act, the alleged infringing
activity must occur “in commerce.” The Act provides that:
“Any person who shall, without the consent of the registrant-(a) use in commerce any reproduction, counterfeit, copy, or colorable
imitation of a registered mark in connection with the sale, offering for
19

MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 136, 127 S. Ct. 764, 777, 166 L. Ed. 2d 604
(2007).
20
Id at 126.
21
Young v. Vannerson, 612 F. Supp. 2d 829, 842 (S.D. Tex. 2009), applying the analysis set forth in
MedImmune.
22
Lanham Act, § 1 et seq., 15 U.S.C.A. § 1051 et seq.; Union Nat. Bank of Texas, Laredo, Tex. v. Union
Nat. Bank of Texas, Austin, Tex., 909 F.2d 839, 842 (5th Cir. 1990).
23
SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372, 1381 (Fed.Cir.2007).
24
MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 136, 127 S. Ct. 764, 777, 166 L. Ed. 2d 604
(2007); Young v. Vannerson, 612 F. Supp. 2d 829, 841 (S.D. Tex. 2009). See also, SanDisk Corp. v.
STMicroelectronics NV, 480 F.3d 1372, 1381 (Fed.Cir.2007).
25
Rec. Doc. 8-1, p. 4.

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sale, distribution, or advertising of any goods or services on or in
connection with which such use is likely to cause confusion, or to cause
mistake, or to deceive . . . shall be liable in a civil action.”...26

“A substantial effect on interstate commerce is present when the trademark owner's
reputation and good will, built up by use of the mark in interstate commerce, are
adversely affected by an intrastate infringement.”27

The affidavit of the Plaintiff’s

manager, Beau J. Box, reveals that the Plaintiff conducts business interstate under the
allegedly infringing trade name.28 The Complaint, exhibits, and affidavit suffice to show
that the allegedly infringing trade name has been used by the Plaintiff “in commerce . . .
in connection with the sale, offering for sale, distribution, or advertising of any goods or
services”29 thereby giving rise to a cause of action under the Lanham Act and
jurisdiction of this Court pursuant to 28 U.S.C. § 1338(a). Therefore, the Defendant’s
Motion to Dismiss30 for lack of subject matter jurisdiction shall be denied.
B.

Venue

The Defendant also moves to dismiss the Complaint on the grounds of improper
venue or, alternatively, to transfer the case to any district in which it could have been
brought.

Neither the Lanham Act nor the Declaratory Judgment Act contains any

special venue provisions. Plaintiff contends that a “substantial part of the events or
omissions giving rise to the claim occurred" in the Middle District making venue proper
under 28 U.S.C. § 1391(b)(2).31

26

15 U.S.C. 1114(1)(a).
Coca-Cola Co. v. Stewart, 621 F.2d 287, 290 (8th Cir. 1980), citing, Franchised Stores of New York,
Inc. v. Winter, 394 F.2d 664, 668 (2d Cir. 1968).
28
Rec. Doc. 10-1
29
15 U.S.C. 1114(1)(a).
30
Rec. Doc. 8.
31
Rec. Doc. 10, p. 5.
27

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“On a Rule 12(b)(3) motion to dismiss for improper venue, the court must accept
as true all allegations in the complaint and resolve all conflicts in favor of the plaintiff.”32
“The court may look outside of the complaint and its attachments and review the
complaint supplemented by the undisputed facts evidenced in the record or by
undisputed facts plus the court's resolution of disputed facts.”33
“ ‘[S]ubstantiality’ for venue purposes is ‘more a qualitative than a quantitative
inquiry, determined by assessing the overall nature of the plaintiff's claims and the
nature of the specific events or omissions in the forum, and not by simply adding up the
number of contacts.’”34 “Although the chosen venue does not have to be the place
where the most relevant events took place, the selected district's contacts still must be
substantial.”35 Courts have generally held the “substantial part of events” inquiry is
resolved by looking to the locale of the alleged acts or omissions.36 This is a dispute
over intellectual property rights - specifically, whether Plaintiff is infringing upon
Defendant’s trademark. “Courts have observed that ‘[i]ntellectual property infringement
suits often focus on the activities of the alleged infringer, its employees, and its
documents; therefore, the location of the alleged infringer's principal place of business is

32

Braspetro Oil Services Co. v. Modec (USA), Inc., 240 Fed.Appx. 612, 615 (5th Cir.2007) (citing Murphy
v. Schneider National, Inc., 362 F.3d 1133, 1138 (9th Cir.2004)).
33
Ambraco, Inc. v. Bossclip B.V., 570 F.3d 233, 238 (5th Cir.2009), cert. denied, 558 U.S. 1111, 130
S.Ct. 1054, 175 L.Ed.2d 883 (2010).
34
Miller Masonry, Inc. v. EMB Quality Masonry, LLC, No. CIV.A. 13-6737, 2014 WL 5340747, at *2 (E.D.
La. Oct. 20, 2014); citing, Univ. Rehab. Hosp., Inc. v. Int'l Co-op. Consultants, Inc., No. 05–1827, 2006
WL 1098905 (W.D.La. Apr. 24, 2006) (quoting Daniel v. Am. Bd. of Emergency Med., 428 F.3d 408, 432–
33 (2d Cir. 2005).
35
McClintock v. Sch. Bd. E. Feliciana Parish, 299 F. App'x 363, 365 (5th Cir.2008); Miller Masonry, Inc. v.
EMB Quality Masonry, LLC, No. CIV.A. 13-6737, 2014 WL 5340747, at *2 (E.D. La. Oct. 20, 2014).
36
See, Duke Energy Intern., L.L.C. v. Napoli, 748 F.Supp.2d 656, at 681 (S.D.Tex. 2010); CIT
Group/Commercial Services, Inc. v. Romansa Apparel, Inc., 2003WL169208, at *3 (N.D.Tex. Jan. 21,
2003);; see also, Taylor & Francis Group, PLC v. McCue, 145 F.Supp.2d 627, 630 (E.D.Pa. 2001); Gary
Scott Intern., Inc. v. Baroudi, 981 F.Supp. 714, 718 (D.Mass. 1997).

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often the critical and controlling consideration’ in adjudicating transfer of venue
motions.”37 That principle guides the Court in this case.
The commencement of the alleged infringement is unclear. The Complaint
alleges Audubon Real Estate Associates (“AREA”) filed its organizational documents
with the Louisiana Secretary of State on January 18, 2011.38 However, the affidavit of
AREA’s manager attests that, “[o]n November 14, 2014, the name of Beau Box
Residential Real Estate, L.L.C. was officially changed to Audubon Real Estate
Associates, L.L.C. ("AREA")”.39 Yet, the affidavit attests as to the details of numerous
real estate transactions by AREA which occurred prior to the November 2014 name
change.

Hence, the duration and commencement of the alleged infringement is

unclear.

What is clear is that the majority of AREA’s transactions, some of which

involve out of state buyers or sellers, involve property within the Middle District. The
Complaint alleges that:
Plaintiff, Audubon Real Estate Associates, L.L.C., is a real estate broker
that sells real estate in the city of Baton Rouge and the parishes
surrounding Baton Rouge including East Baton Rouge, West Baton
Rouge, East Feliciana, Iberville, Livingston, Pointe Coupee, St Helena,
West Baton Rouge, West Feliciana, St Tammany, and Tangipahoa.40

From the allegations of the Complaint, which are taken as true, and the affidavit
of AREA’s manager, the Court concludes that the alleged infringing conduct occurred
substantially in the Middle District. Finally, the authority relied upon by the Defendant
yields the same conclusion. As argued by Defendant, “the tortious wrong of trademark
37

Houston Trial Reports, Inc. v. LRP Publ'ns, Inc., 85 F.Supp.2d 663, 668 (S.D.Tex.1999) (Rosenthal, J.)
(quoting Habitat Wallpaper and Blinds, Inc. v. K.T. Scott Ltd. P'ship, 807 F.Supp. 470 (N.D.Ill.1992);
Anadigics, Inc. v. Raytheon Co., 903 F.Supp. 615 (S.D.N.Y.1995). Spiegelberg v. Collegiate Licensing
Co., 402 F. Supp. 2d 786, 791-92 (S.D. Tex. 2005).
38
Rec. Doc. 1, p. 2, ¶ 7.
39
Rec. Doc. 10-1, p. 2.
40
Rec. Doc. 1, p. 2, ¶ 6.

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infringement occurs in the location where sales or advertising takes place such that
customers are likely to be deceived and confused.”41 On the record before it, the Court
finds that the real estate sales brokered or transacted by AREA occurred substantially in
the Middle District.

Accordingly, the Defendant’s Motion to Dismiss42 for improper

venue shall be denied.
C.

Transfer Venue

The Defendant also alternatively moves to transfer venue. However, because the
Court has found that venue is proper in this district, the only grounds for transfer are
pursuant to 28 U.S.C. § 1404(a). The Defendant does not move for transfer on the
grounds of forum non conveniens. Accordingly, the Defendant’s alternative motion for
transfer of venue shall be denied.
III.

CONCLUSION
For the foregoing reasons;
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the Defendant’s

Motion to Dismiss43 is DENIED.
Signed in Baton Rouge, Louisiana, on July 7, 2015.

S

JUDGE SHELLY D. DICK
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

41

McCarthy on Trademarks and Unfair Competition, Fourth Edition, Procedure in Trademark Infringement
and Unfair Competition Litigation § 32:63, citing Vanity Fair Mills v. T. Eaton Co., 234 F.2d 633, 642 (2nd
Cir.1956), cert. denied, 352 U.S. 871, 77 S.Ct. 96, 1 L.Ed.2d 76 (1956) and Nuttall v. Juarez, 984 F.
Supp. 2d 637, 642 (N.D. Tex. 2013).
42
Rec. Doc. 8.
43
Rec. Doc. 8.

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