SPYDERCO INC v. KEVIN INC

Filing 28

DECISION AND ORDER granting in part 9 Motion to Dismiss for Failure to State a Claim; granting 16 Motion to Amend Complaint. REMINDER: After entry of this Order, if Amending a COMPLAINT, counsel are REQUIRED to separately file the AMENDED COMPLAINT Document. By JUDGE D. BROCK HORNBY. (ccs)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
SPYDERCO, INC.,
PLAINTIFF
V.

KEVIN, INC., D/B/A SHAWMUT
DISTRIBUTORS, D/B/A KITTERY
TRADING POST, AND D/B/A KTP GUN
EXCHANGE,
DEFENDANT AND
THIRD-PARTY PLAINTIFF
V.

JOSEPH CONNORS,
THIRD-PARTY DEFENDANT

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CIVIL NO. 2:17-CV-309-DBH

DECISION AND ORDER ON PARTIAL MOTION TO DISMISS
AND MOTION TO AMEND COMPLAINT
In this trademark case, the defendant moved to dismiss the plaintiff’s state
law and punitive damages claims. The plaintiff resisted the motion and moved
for leave to amend the complaint.

The defendant then argued that the

amendment did not cure the deficiencies. I now GRANT the plaintiff’s motion to
amend its complaint under Fed. R. Civ. P. 15(a)(1). But the amended complaint
fails to state a claim under Maine law for commercial disparagement/slander of
title, and I GRANT the motion to dismiss the Third Claim for Relief. I require
further briefing on the Fourth Claim, the civil conspiracy claim, and therefore
defer ruling on that Claim and the Fifth Claim, a punitive damages claim.

PLEADED FACTS
According to the amended complaint,1 the plaintiff Spyderco, Inc. designs,
manufactures, and distributes knives and knife accessories. Am. Compl. ¶ 11
(ECF No. 16-1). Among its products are what it calls the Military and ParaMilitary knives. Id. ¶¶ 12-16. Spyderco owns a variety of federally registered
and common law trademarks, many of which are visible on or in its products,
including the Military and Para-Military knives. Id. ¶¶ 17-25.
The defendant Kevin, Inc. operates retail stores that buy and sell new and
used sporting goods, including Spyderco products such as the Military and ParaMilitary knives. Id. ¶¶ 26-27. Kevin has sold two knives identified on their price
tags as “CLONE MILITARY” and “CLONE PARAMILITARY,” id. ¶ 28-30, which
bear some of Spyderco’s trademarks. Id. ¶ 33. Based on sale price, metallurgical
testing, and other indicia, Spyderco claims that these are not authentic Spyderco
knives, id. ¶ 31, but counterfeit knives of inferior quality. Id. ¶¶ 32-34.
Spyderco claims that Kevin’s advertising, offering, and selling the Clones
constitutes willful counterfeiting and infringement of its marks under the
Lanham Act (First and Second Claims), and commercial disparagement (Third
Claim) and common law civil conspiracy (Fourth Claim) under Maine law; and
that it is entitled to punitive damages (Fifth Claim). Kevin moved to dismiss the
Third and Fourth Claims and argued that if those state law claims are dismissed,
the punitive damages (Fifth Claim) must also be dismissed, because the only
remaining claims are under the Lanham Act, which does not allow punitive

The amended complaint has not actually been filed yet. I therefore cite the proposed amended
complaint (ECF No. 16-1) that was attached to the motion for leave to amend (ECF No. 16).

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damages.

Kevin also filed a third party complaint against Joseph Connors,

alleging that Connors supplied it with the knives Spyderco complains of. Def.’s
Third-Party Compl. ¶¶ 10-14 (ECF No. 10).
ANALYSIS
Commercial Disparagement/Slander of Title

The amended complaint restyles the commercial disparagement count as
“commercial disparagement by slander of title.” Am. Compl. ¶ 52-57. Kevin
asserts that slander of title does not extend to trademarks and applies only to
interests in real property. Def.’s Reply at 1-2 (ECF No. 19).
Commercial disparagement and slander of title are distinct torts. Slander
of title “protects a person’s property interest against words or conduct which
bring or tend to bring the validity of that interest into question.” Colquhoun v.
Webber, 684 A.2d 405, 409 (Me. 1996) (emphasis added); see also Restatement
(Second) of Torts § 624 (1977). That is, slander of title protects against false
statements that cast doubt on whether someone in fact has a valid property
interest in the relevant property. By contrast, commercial disparagement (also
known as trade libel, belittlement, and slander of goods, FBR v. St. Paul Marine
and Fire Ins. Co., 1999 ME 87, ¶ 10 n.1, 730 A.2d 175, 179) protects against
injurious falsehoods that disparage the quality of the property in question. See
Restatement (Second) of Torts § 626. But this tort is not recognized in Maine.
FBR, 1999 ME 87, ¶ 11 n.2, 730 A.2d at 180; see also Town and Country Motors,
Inc. v. Bill Dodge Automotive Group, Inc., 115 F. Supp. 2d 31, 33 (D. Me. 2000)
(“The Law Court has not adopted the common law tort of trade libel.”).

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Slander of title is recognized in Maine. It has four elements, the first of
which is that there must have been “a publication of a slanderous statement
disparaging claimant’s title.” Colquhoun, 684 A.2d at 409.2 Even if slander of
title applies to trademarks,3 Spyderco has not alleged any statements by Kevin
that cast doubt on Spyderco’s ownership of its trademarks or that otherwise
disparage its title to them. The amended complaint’s Third Claim for Relief is
therefore DISMISSED.
Civil Conspiracy

Kevin now recognizes that Spyderco has adequately alleged two or more
conspirators, Def.’s Reply at 3, but argues that the amended complaint does not
adequately allege the specifics of an illegal agreement between Kevin and
Connors. It also points out that Kevin “has sued Connors for deceiving it with
respect to the provenance of the knives.” Id. at 4. What Kevin states in its third

The other requirements are that “(2) the statement was false; (3) the statement was made with
malice or made with reckless disregard of its falsity; and (4) the statement caused actual or
special damages.” Id.
3 Kevin argues that it does not. Def.’s Reply at 2 (ECF No. 19). I find it unnecessary to reach
this issue. The Restatement view is that slander of title covers “[a]ny kind of legally protected
interest in land, chattels or intangible things” so long as “the interest is transferable and therefore
. . . capable of profitable disposal,” including “the right to use a trademark or trade name.”
Restatement (Second) of Torts § 624 cmt. c. Colquhoun, the leading Maine case on slander of
title, quotes this portion of the Restatement, but stops just short of the sentence mentioning
trademarks. 684 A.2d at 409. Colquhoun itself addressed whether title by adverse possession
is sufficient to maintain a slander of title action. Id. In deciding that it was, Colquhoun did not
take the Restatement view as determinative. Id. at 409-10 (noting that the Restatement view is
not unanimous and deciding the question based on Maine precedents). A later Law Court case,
however, characterized Colquhoun as “adopting” comment c.
Lougee Conservancy v.
CitiMortgage, Inc., 2012 ME 103, ¶ 17, 48 A.3d 774, 781. It is true that the vast majority of Law
Court cases discussing slander of title concern interests in real property. At least one involved
a counterclaim of slander of title to personal property, but the Law Court did not analyze the
claim except to affirm sanctions on the counterclaimant for interposing all his affirmative
defenses and counterclaims for delay. Fraser Emps. Fed. Credit Union v. Labbe, 1998 ME 71,
¶¶ 3 n.5, 8-9, 708 A.2d 1027, 1028-30.
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party complaint does not affect my assessment of whether Spyderco’s amended
complaint is itself adequate.
But the parties have not addressed another requirement of Maine’s civil
conspiracy law—that civil conspiracy in Maine “is not a separate tort but rather
a rule of vicarious liability.” Vincent v. Town of Scarborough, No. 02-239-PH,
2003 WL 22757940 (D. Me. Nov. 20, 2003) (quoting McNally v. Mokarzel, 386
A.2d 744, 748 (Me. 1978)); see also Cohen v. Bowdoin, 288 A.2d 106, 111 (Me.
1972) (“Although . . . Maine law generally denies that there is a separate and
independent tort of ‘civil conspiracy,’ allegations of concerted action do [result
in] all of the named defendants averred to have acted in combination [being]
vicariously liable to plaintiff for its commission.”); Franklin v. Erickson, 146 A.
437, 438 (Me. 1929) (“Conspiracy is a convenient form of declaration against two
or more joint tort-feasors.

The averment of conspiracy adds nothing to the

nature or gravity of the offense charged. It is but a convenient mode of declaring
for a joint tort against two or more persons.”). As far as I can tell from the
amended complaint, Spyderco has not asserted vicarious liability against anyone
based upon the alleged conspiracy. It has sued only Kevin, and has not asserted
that Kevin is liable via conspiracy for someone else’s tortious conduct.4 Put
simply, the civil conspiracy count does not seem to do any work. See Fiacco v.
Sigma Alpha Epsilon Fraternity, 484 F. Supp. 2d 158, 176 (D. Me. 2007) (“[I]f
any of the tort claims survive . . . that tort, and not civil conspiracy, will serve as
Civil conspiracy “fails as the basis for the imposition of civil liability absent the actual
commission of some independently recognized tort,” except in “extraordinary circumstances” not
alleged here, such as where there is coercion or undue influence. Cohen, 288 A.2d at 110 & n.4;
see also Whatley v. Diversified Corp. Resources, Inc., No. 99-284-B, 2000 WL 761797 at *1 n.2
(D. Me. Mar. 28, 2000).
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the basis for liability. Consequently, summary judgment in favor of [the movant]
is appropriate on [the civil conspiracy count].”). I direct the parties to address
this issue before I rule on the adequacy of the Fourth Claim of the amended
complaint. Kevin shall file its legal memorandum by December 29, 2017, and
Spyderco shall respond by January 12, 2018. The Fourth Claim’s survival will
determine whether the punitive damages claim can remain because punitive
damages are not available under the Lanham Act. Elec. Corp. of America v.
Honeywell, Inc., 358 F. Supp. 1230, 1234-35 (D. Mass. 1973), aff’d, 487 F.2d
153 (1st Cir. 1973); 5 McCarthy on Trademarks and Unfair Competition § 30:97
(5th ed.); Restatement (Third) of Unfair Competition § 36 cmt. n (1995) (“Punitive
damages are not available in actions under the Lanham Act.”).
CONCLUSION
For all these reasons, I GRANT Spyderco’s motion for leave to amend its
complaint. I GRANT Kevin’s motion to dismiss the Third Claim for Relief and
RESERVE RULING on the Fourth and Fifth Claims for Relief.
SO ORDERED.
DATED THIS 12TH DAY OF DECEMBER, 2017
/S/D. BROCK HORNBY
D. BROCK HORNBY
UNITED STATES DISTRICT JUDGE

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