JFJ Toys, Inc. et al v. Toys "R" Us, Inc. et al

Filing 32

MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 3/25/14. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
JFJ Toys, Inc, d/b/a D&L Co.
and Fred Ramirez

:

v.

:

Civil Action No. DKC 13-793

:
Toys “R” Us-Delaware, Inc.,
and John Does 1-10

:
:

MEMORANDUM OPINION
Presently

pending

and

ready

for

resolution

in

this

trademark infringement case is the motion for leave to file a
third-party complaint filed by Defendant Toys “R” Us-Delaware,
Inc.

(“TRU”).

briefed,

and

necessary.

(ECF
the

No.

court

Local

Rule

23).
now

The

rules,

105.6.

issues
no

For

have

hearing

the

been

being

following

fully
deemed

reasons,

Defendant’s motion will be granted.
I.

Background
The

Company

Plaintiffs
(“D&L”)

in

and

this

Fred

case,

Ramirez

JFJ

Toys,

(“Mr.

Inc.

Ramirez”)

d/b/a

D&L

brought

a

trademark infringement action against TRU and John Does # 1-10.
The facts as alleged in the amended complaint are as follows.
Mr. Ramirez is the sole owner of D&L.

The dispute arises from

TRU’s sale of toy rockets under the names STOMP BLAST ROCKET and
ZOMP

ROCKETZ,

which

Plaintiffs

allege

infringe

on

their

federally registered STOMP and STOMP ROCKET marks.

Plaintiffs

assert that TRU’s STOMP BLAST ROCKET and ZOMP ROCKETZ air rocket
toys are nearly identical to Plaintiffs’ STOMP ROCKET brand air
rocket toys and that “Defendant’s use of Plaintiffs’ Trademarks
in

connection

with

the

manufacturing,

offering,

advertising,

sale and distribution of the STOMP BLAST ROCKET and ZOMP ROCKETZ
is likely to confuse, mislead or deceive consumers as to the
origin

or

Plaintiffs

source
contend

of

Plaintiffs’

that

“John

goods.”
Does

1-10

(Id.
are

¶¶

2-4).1

additional,

unidentified companies who are manufacturers or distributors, in
the U.S. and/or throughout the world, of the STOMPBLAST ROCKET
and ZOMP ROCKETZ.”

(Id. ¶ 11).2

In the amended complaint,

Plaintiffs assert that they sent a cease and desist letter to
TRU on May 3, 2012 and a follow-up letter on June 6, 2012.
TRU’s counsel subsequently stated in a telephone message that
“TRU’s vendor of the STOMP BLAST ROCKET, Manley Toy Quest, would
be in contact.”

(Id. ¶ 34).

Plaintiffs assert that they never

heard from Manley Toy Quest.
1

Plaintiffs also allege that TRU has been a long-time
customer of D&L’s. Specifically, Plaintiffs assert that TRU has
been purchasing from Plaintiffs their STOMP ROCKET brand air
rocket toys in large volumes since 1997. (ECF No. 17 ¶ 47).
2

Plaintiffs aver that on or about June 10, 2013, “counsel
for D&L noticed that the product image used on Defendant’s
website in connection with [the] sale of the ZOMP ROCKETZ
changed from the ZOMP ROCKETZ to the ZOOM ROCKETZ.” (ECF No. 17
¶ 44).
Plaintiffs believe that TRU continues to advertise and
sell the product under the mark ZOMP ROCKETZ, however.
2

Plaintiffs filed a complaint against TRU on March 14, 2013
and later amended the complaint on June 12, 2013.

(ECF No. 17).

Plaintiffs assert claims for trademark infringement and false
designation of origin under the Lanham Act, trademark dilution,
common law trademark infringement, unfair trade practices under
Md.

Code

Com.

Law

§

13-101

et

competition, and unjust enrichment.

seq.,

common

(See id.).

the amended complaint on July 1, 2013.

law

unfair

TRU answered

(ECF No. 18).

The

undersigned originally issued a scheduling order on May 23, 2013
(ECF No. 14), but later granted the parties’ joint motion to
modify the scheduling order (ECF No. 21).
order

set

October

25,

2013

as

the

The new scheduling

deadline

for

moving

joinder of additional parties and amendment of pleadings.
No. 21, at 2).

for
(ECF

On October 25, 2013, TRU moved for leave to file

a third-party complaint against Manley Toys, Ltd. (“Manley”).
(ECF Nos. 23 & 24).

Plaintiffs opposed the motion on November

8, 2013 (ECF No. 28), and TRU replied (ECF No. 29).

Plaintiffs

also moved to stay the scheduling order pending resolution of
the instant motion, which the undersigned granted.
II.

Analysis
A defendant may implead a third-party who “may be liable to

it for all or part of the claim against it.”
14(a)(1).

Fed.R.Civ.P.

A defendant may freely serve a summons and complaint

on a third-party within fourteen (14) days after serving the
3

original

answer;

thereafter,

the

defendant

must

notify

all

parties and seek leave to implead a third-party, as TRU has done
here.

Id.

District courts have broad discretion to grant or

deny a motion under Rule 14.

Noland Co. v. Graver Tank & Mfg.

Co., 301 F.2d 43, 50 (4th Cir. 1962).
Certain

Underwriters

at

Lloyd’s,

As recently noted in

London

v.

R.J.

Wilson

&

Assocs., Ltd., Civil No. CCB-11-1809, 2012 WL 2945489, at *3
(D.Md. July 17, 2012):
“Impleader [under Rule 14] will be liberally
allowed, if it will prevent duplication of
suits based on closely related matters.”
Dishong v. Peabody Corp., 219 F.R.D. 382,
385 (E.D.Va.2003) (citing Noland Co., 301
F.2d at 50).
However, impleader may be
denied where joining the third party “will
introduce
unrelated
issues
and
unduly
complicate the original suit” or “might
prejudice the original plaintiff or the
third-party defendant.” Id.
In addition, impleader is proper “only when
a
right
to
relief
exists
under
the
applicable substantive law.” 6 Charles Alan
Wright & Arthur R. Miller, Federal Practice
and Procedure § 1446 (3d ed.2010).
Thus,
the court may consider “whether the thirdparty complaint states a claim upon which
relief can be granted.” Too, Inc. v. Kohl's
Dept. Stores, Inc., 213 F.R.D. 138, 140
(S.D.N.Y.2003) (citations omitted). But see
Gross v. Hanover Ins. Co., 138 F.R.D. 53, 55
(S.D.N.Y.1991) (noting that “there is some
question as to whether plaintiff may attack
the merits of the proposed third-party
claims at this stage of the proceedings”).
In the motion for leave to implead Manley, TRU argues that
Manley designs, manufactures and sells the STOMP BLAST ROCKET
4

toy.

(ECF No. 24, at 2).

TRU asserts that the STOMP BLAST

ROCKET toy was manufactured by Manley and sold to TRU pursuant
to

the

Master

Purchase

Order

Agreement

(“Master

Agreement”),

dated December 9, 2004, which expressly states that Manley will
defend
claims.

and

indemnify

TRU

against

any

trademark

infringement

Specifically, Manley electronically accepted the terms

of the Master Agreement, which includes the following provision:
[Manley] shall defend, indemnify and hold
harmless [TRU], its affiliates, and their
respective
officers,
directors,
members,
shareholders,
employees,
agents,
representatives, assigns and successors []
and shall hold them harmless against any and
all
alleged,
actual
or
threatened
liabilities, damages, claims, suits, actions
. . . arising out of or alleged to have
arisen
from
a
breach
of
any
of
the
representations, warranties or obligations
of [Manley] under this Agreement (including
any related act or omission by [Manley]), or
in connection with the possession, handling,
use, resale, labeling or return of the
Merchandise . . . including but not limited
to,
patent,
copyright
and
trademark
infringement actions . . . [Manley] shall
undertake and conduct the defense of any
suit so brought against [TRU] by reason of
any of the foregoing, whether meritorious or
not.
(ECF No. 23-1, at 17) (emphasis added).
“Manley

has

a

duty

to

defend

and

Thus, TRU contends that

indemnify

TRU

against

any

lawsuit that includes allegations of trademark infringement in
connection with goods Manley has supplied to TRU, including the
STOMP BLAST ROCKET toy.”

(ECF No. 24, at 2).

5

TRU asserts that

it contacted Manley several times by written correspondence to
remind Manley of its obligation to defend and indemnify TRU with
respect to Plaintiffs’ claims against it.
23-2).

(See ECF Nos. 23-1 &

On April 5, 2013, Manley’s attorneys sent a letter to

TRU’s counsel, informing that “Manley will not be defending or
indemnifying Toys “R” Us in light of its material contractual
breaches and conduct with respect to the Aleo matter.
Us should accordingly proceed to defend itself.”3
at 53).

Toys “R”

(ECF No. 23-1,

TRU also asserts that it “does not have the benefit of

the required level of insurance that Manley agreed to provide in
the

Master

Agreement

with

which

against a judgment in this action.”

to

further

protect

itself

(ECF No. 23-1, at 5).

TRU

states that on May 15, 2012, “Manley and its excess insurer,
Colony

National

Insurance

Company

(‘Colony’),

agreed

to

the

rescission of insurance policies procured for the benefit of TRU
as part of a confidential settlement agreement that was entered
into to resolve litigation brought by Colony against Manley.”
(Id.

at

believes

5-6).
are

Due
its

to

Manley’s

contractual

refusal

obligations

to

honor

that

what

TRU

impact

the

underlying litigation with Plaintiffs, TRU asserts six counts
against Manley in the proposed third-party complaint for breach
of contract (count I), breach of the implied covenant of good

3

The Aleo matter appears to be a reference to a separate
dispute between Manley and TRU.
6

faith

and

fair

dealing

(count

II),

express

indemnification

(count IV), implied indemnification (count V), and contribution
(count VI).

(See ECF No. 23-1, at 1-11).

declaratory
indemnify

judgment

and

hold

regarding

TRU

TRU also seeks a

Manley’s

harmless

under

duty

the

to

Master

defend,
Agreement

(count III).
A.

Breach of Contract Claims

Plaintiffs

argue

that

the

breach

of

contract

claims

in

TRU’s proposed third-party complaint are not derivative of the
underlying

lawsuit.

Specifically,

Plaintiffs

assert

that

“Defendant’s contract claims against Manley are precisely the
kind

of

separate

cannot be based.”
TRU’s

contract

and

independent

claims

(ECF No. 28, at 7).

claims

against

on

which

impleader

Plaintiffs contend that

Manley

involve

a

completely

different set of facts than Plaintiffs’ trademark infringement
action against TRU and raise unrelated issues such as Manley’s
duty to carry insurance.
Rule 14(a) requires that the third party’s liability be
secondary

or

derivative

original plaintiff.

to

the

defendant’s

liability

to

the

AIG Europe Ltd. v. Gen. System, Inc., Civil

Action No. RDB-13-0216, 2013 WL 6654382, at *2 (D.Md. Dec. 16,
2013).
cases

Notably, such derivative liability usually arises in
involving

contribution.

indemnification,

joint

tortfeasors,

or

See id. (“Typically, proper third party claims
7

involve one joint tortfeasor impleading another, an indemnitee
impleading

an

indemnitor,

or

a

secondarily

impleading one who is primarily liable.

liable

party

Absent such derivative

liability, a third party claim must fail.”); see also 6 Charles
A. Wright & Arthur R. Miller, Federal Practice and Procedure §
1446 (3d ed. 2010) (“The secondary or derivative liability notion
is central and thus impleader has been successfully utilized
when

the

basis

of

the

third-party

claim

is

indemnity,

subrogation, contribution, express or implied warranty, or some
other theory.”).
will

prevent

matters.”

“Impleader will be liberally allowed, if it

duplication

of

suits

based

on

closely

related

Dishong, 219 F.R.D. at 385 (citing Noland Co., 301

F.2d at 50).

As Judge Nickerson explained in L’Occitane, Inc.

v. Tran Source Logistics, Inc., Civil Action No. WMN-09-2499,
2010 WL 761201, at *4 (D.Md. Mar. 2, 2010):
Courts have also cautioned that, “a third
party claim is not appropriate where the
defendant and putative third party plaintiff
says, in effect, ‘It was him, not me.’ Such
claim is viable only where a proposed third
party plaintiff says, . . . ‘If I am liable
to plaintiff, then my liability is only
technical or secondary or partial, and the
third party defendant is derivatively liable
and must reimburse me for all or part of
anything I must pay plaintiff.’”
[citing
Watergate Landmark Condominium Unit Ownwers’
Assoc. v. Wiss, Janey, Elstner Assoc., Inc.,
117
F.R.D.
576,
578
(E.D.Va.
1987).]
Furthermore, ‘Rule 14(a) does not allow the
defendant
to
assert
a
separate
and
independent claim even though the claim
8

arises out of the same general set of facts
as the main claim.’
Laughlin v. Dell Fin.
Servs., L.P., 465 F.Supp.2d 563, 567 (D.S.C.
2006); see also Watergate Landmark, 117
F.R.D. at 578 (“[Rule 14] cannot be used as
a device to bring into a controversy matters
which
merely
happen
to
have
some
relationship to the original action.”).
TRU

meets

defendant.

the

standard

for

impleading

a

third-party

TRU does not attempt to deflect blame for trademark

infringement onto Manley.

As TRU points out, it “does not seek

to transfer liability to Manley; TRU’s claim is that if it is
liable to Plaintiffs, then [Manley] . . . must reimburse TRU for
all or part of anything it must pay to Plaintiffs.”
29, at 4).

(ECF No.

TRU’s breach of contract and breach of the implied

covenant of good faith and fair dealing claims against Manley
and request for a declaratory judgment are premised on Manley’s
refusal to indemnify TRU for Plaintiffs’ trademark infringement
claims

against

TRU.

See,

e.g.,

Nova

Prods.,

Inc.

v.

Kisma

Video, Inc., 220 F.R.D. 238, 240-41 (S.D.N.Y. 2004) (video store
sued

for

copyright

infringement

could

implead

distributor

as

third party defendant because if store was liable to plaintiff
for

infringement

against

it

would

distributor).

complaint

will

“avoiding

circuity

have

Allowing

achieve
while

the

a

breach

TRU

primary

to

9

file

contract
the

objective

systematically

related matters into one litigation.”

of

claim

third-party

of

dispos[ing]

Rule

14:

of

all

MNC Commercial, Div. of

MNC Credit Corp. v. Park Jensen Co., Inc., Civ. A. No. HAR-901055, 1991 WL 74137, at *6 (D.Md. May 6, 1991); Johns Hopkins
Univ. v. Hutton, 40 F.R.D. 338, 346 (D.Md. 1966) (“[o]ne of the
primary objectives of third-party procedure under Fed.R.Civ.P.
14 is to avoid circuity and multiplicity of actions and needless
and expensive duplication of work.”).

The undersigned finds

persuasive TRU’s argument that “the focal point of TRU’s claims
is Manley’s contract-related duty to defend and indemnify TRU
against Plaintiffs’ allegations of trademark infringement – the
very heart of the underlying action.”
Moreover,

although

Plaintiffs

(ECF No. 29, at 3).
argue

that

impleader

will

introduce factual issues regarding Manley that are unrelated to
Plaintiffs’
injected

trademark

Manley

into

claims,
this

Plaintiffs

litigation.

have

themselves

Specifically,

as

TRU

points out, Plaintiffs’ first set of document requests includes,
inter alia, a request that TRU provide:
[a]ll
[d]ocuments
and
[c]ommunications
between [TRU] and any [p]erson (including
Manley
Toys)
that
[r]elate
to
[y]our
acquisition and sale of the Infringing STOMP
BLAST ROCKET Toy including the design,
development, manufacture, branding, purchase
order, distribution, [a]dvertising, and/or
sale of the [i]nfringing STOMP BLAST ROCKET.
(ECF No. 29-1, at 12) (emphases added).
first

set

of

interrogatories

includes

Similarly, Plaintiffs’
a

request

that

TRU

“[d]escribe Manley Toys’ role in the manufacture and sale of the

10

Infringing STOMP BLAST ROCKET Toy, including its role in the
development, design and name selection of Infringing STOMP BLAST
ROCKET Toy.”

(ECF No. 29-2, at 13); cf. Dishong, 219 F.R.D. at

386 (denying the proposed impleader of a third party because
“[t]he

issues

unrelated

raised

to

those

by

the

presented

third-party
in

complaint

plaintiff’s

[we]re

complaint,

and

almost all of the evidence that would be relevant to the thirdparty

claim

has

(emphasis added).

no

connection

to

the

original

claims.”)

Here, much like in Certain Underwriters, 2012

WL 2945489, at *4, at least some of the evidence that would be
relevant

to

defendants’

third-party

claim

“does

have

a

connection to Plaintiffs’ original claims and could be at issue
in discovery whether or not this motion is granted.”
in original).
regarding

(emphasis

Indeed, Plaintiffs’ own requests for information

Manley’s

possible

involvement

with

the

allegedly

infringing product demonstrates this point and undermines their
position that any claims by TRU against Manley are unrelated to
the

underlying

action.

See

Certain

Underwriters,

2012

WL

2945489, at *4 (“whether or not the court grants this motion,
discovery in this case may overlap with discovery in the [thirdparty case].”).
Plaintiffs

argue

that

TRU’s

third-party

claims

against

Manley require proof of issues unrelated to the instant lawsuit
such as its duty to insure.

A similar argument was rejected in
11

Certain Underwriters, 2012 WL 2945489, at *4, where plaintiff
argued that “the tortious interference claim in the proposed
third-party complaint would require trial on scienter elements
not

at

issue

in

[plaintiff’s]

original

suit.”

Judge

Blake

rejected plaintiff’s argument, holding that:
While this may be true, the tortious
in[ter]ference claim would also require
evidence of many of the same facts that will
be at issue in this case.
Defendants have
signaled
their
intent
to
raise
NiiS’s
actions as part of their defense in the
original suit. Thus, even if the court does
not grant the motion for leave to file a
third-party complaint, discovery in the
present case would likely address questions
regarding
the
exact
nature
of
NiiS’s
actions, whether the actions were improper,
and whether they caused damages to either
defendants or to [plaintiff].
The above logic is equally persuasive in the context of this
case,

as

evidenced

by

Plaintiffs’

discovery

requests.

Accordingly, TRU’s breaches of contract claims in the proposed
third-party

complaint

provide

a

sound

basis

for

impleading

Manley.
B.

Indemnification and Contribution Claims

Plaintiffs
indemnification

contend
and

that

“Defendant’s

contribution

for

claims

Plaintiffs’

for

federal

trademark infringement causes of action may not be asserted as a
matter of law.”

(ECF No. 28, at 5).

Specifically, Plaintiffs

assert that “[b]ecause neither the Lanham Act nor the federal

12

trademark law expressly provides a right to indemnification or
contribution,

no

indemnification

right

may

be

of

action

implied

for

contribution

therefrom.”

As

noted

and

above,

impleader is proper “only when a right to relief exists under
the applicable substantive law.”

Certain Underwriters, 2012 WL

2945489, at *3 (citing 6 Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1446 (3d ed. 2010)).

Thus, the

court may consider “whether the third-party complaint states a
claim upon which relief can be granted.”
Dept.

Stores,

Inc.,

213

F.R.D.

138,

Too, Inc. v. Kohl’s
140

(S.D.N.Y.

2003).

Plaintiffs cite Zero Tolerance Entertainment, Inc. v. Ferguson,
254 F.R.D. 123 (C.D.Cal. 2008), for the proposition that no
right to indemnification or contribution exists under the Lanham
Act.

Plaintiffs are correct to note that several courts outside

of this district have held that indemnification and contribution
claims are unavailable for Lanham Act violations.

Id. at 127;

see also Getty Petroleum Corp. v. Island Transp. Corp., 862 F.2d
10, 16 (2d Cir. 1988) (“No express right of contribution exists
under

the

Lanham

Act,

and

[the

district

court]

correctly

concluded that it was inappropriate to imply such a right.”);
Santana
F.Supp.2d

Prods.,
678,

Inc.
681

v.

Bobrick

(M.D.Pa.

1999)

Washroom
(“there

Equip.,
is

no

Inc.,

69

right

to

contribution for violations of the Lanham Act[,]” and “there is
no federal common law right to indemnification and Congress has
13

not

explicitly

indemnification

or

implicitly

under

.

.

provided
.

the

such

Lanham

a

right

Act.

to

Thus,

indemnification with respect to violations of federal law is
foreclosed.”);

Elsevier,

Inc.

v.

Comprehensive

Microfilm

&

Scanning Services, Inc., No. 3:10-cv-2513, 2012 WL 727943, at *4
(M.D.Pa. Mar. 6, 2012) (“[t]he Lanham Act was not designed to
protect trademark violators by allowing them to mitigate the
effects of their wrongdoing by invoking equitable principles in
an effort to distribute blame.”).
Judge

Blake’s

analysis

in

Certain

Underwriters,

2012

WL

2945489, is instructive on the issue of whether to allow TRU to
implead Manley where some of the claims in the proposed thirdparty complaint may not be viable.

In Certain Underwriters, the

proposed third-party complaint included claims for indemnity,
contribution, and tortious interference.

Similar to Plaintiffs

here, plaintiff in Certain Underwriters argued that the court
should deny defendants’ motion for leave to file a third-party
complaint because defendants would be barred under Maryland law
from bringing actions for indemnity or contribution against the
third-party defendant.

In rejecting plaintiff’s argument and

granting the motion for leave to file a third-party complaint,
Judge Blake reasoned:
Underwriters does not argue that the claim
for tortious interference would be similarly
barred.
As a result, at least as to the
14

claim for tortious interference, impleader
under these circumstances properly raises a
claim
under
substantive
law,
will
not
introduce unrelated issues, will not unduly
complicate the original suit, and will not
prejudice
[plaintiff]
or
[third-party
defendant, NiiS].
The court need not,
therefore, reach the question of whether
defendants’ claims for indemnification or
contribution
are
properly
pleaded.
Defendants’ motion [for leave to file a
third-party complaint] may be granted on the
basis of the claim for tortious interference
alone.
2012 WL 2945489, at *4 (emphasis added).

In so concluding,

Judge Blake also noted that “the court does not hold that each
or any of the three counts necessarily states a claim under the
pleading standards of Rule 12(b)(6). . . .

[the proposed third-

party defendant], once served, may bring a motion to dismiss
pursuant to Rule 12.”

Id.; see also Fed.R.Civ.P. 14(a)(2)(A)

(noting person served with a third-party complaint may “assert
any defense against the third-party plaintiff’s claim under Rule
12.”).

The same logic applies here.

Although Plaintiffs have

posited other reasons for rejecting TRU’s breach of contract
claims, they have not argued that the breach of contract claims
would be barred under Maryland law.
the

undersigned

need

not

reach

Accordingly, at this stage,

the

question

of

whether

the

indemnification or contribution claims against Manley – premised

15

on federal and state law trademark infringement claims – would
ultimately prevail.4
C.

Undue Complication and Prejudice

Lastly, Plaintiffs argue that “[i]mpleading Manley would
seriously complicate and delay this action, activity that would
substantially

prejudice

Plaintiffs.”

(ECF

No.

28,

at

8).

“Impleader should be denied if joining the third-party would
unduly complicate the original suit, introduce unrelated issues,
or

if

the

third-party

complaint

is

obviously

unmeritorious.”

Haak Motors, LLC v. Arangio, Civil No. WDQ-09-1887, 2010 WL
4117034,

at

*2

(D.Md.

Oct.

19,

2010).

Relevant

factors

in

determining whether to grant leave to implead include whether:
“(1)

the

defendant

deliberately

delayed

or

was

derelict

in

filing the motion; (2) impleading the third-party would delay or
unduly complicate the trial; (3) impleading would prejudice the
4

Plaintiffs also argue that “[t]o the extent that Defendant
seeks contribution and indemnity based on Plaintiffs’ unfair
competition
and
unfair
trade
practices
claims
or
state
contribution or indemnification statutes, those claims rise and
fall with Plaintiffs’ substantially congruent federal trademark
claims.” (ECF No. 28, at 6). TRU asserts that indemnification
and contribution may be available for Plaintiffs’ trademark
claims that arise under state law and points to holdings from
other jurisdictions that support this position.
See, e.g.,
Elsevier, 2012 WL 727943, at *4 (“[p]laintiffs’ claim against
Defendants for unfair competition arising under state common law
permits Defendants to state claims for contribution and
indemnification against the [t]hird-[p]arty [d]efendants.”).
For the reasons cited supra, at this stage, the undersigned need
not
determine
the
merits
of
TRU’s
indemnification
and
contribution claims against Manley – under either federal or
state trademark law.
16

non-movant

and

third-party

defendant;

(4)

the

third-party

complaint states a claim upon which relief can be granted; and
(5) the issues in the third-party complaint are similar to those
in the original complaint.”

Xquisite Transp., LLC v. Travelers

Indem. Co., Civil No. WDQ-08-2905, 2009 WL 3246960, at *2 (D.Md.
Oct. 2, 2009).
Here,

TRU

timely

moved

for

leave

to

implead

prescribed by the amended scheduling order.
Plaintiffs

point

to

the

fact

that

Manley

as

(See ECF No. 21).

Manley

is

a

Hong

Kong

corporation, stating that “[t]o add to this litigation a noncooperative

party

that

world,

whose

relevant

nearly

and

10,000

miles

is

located

on

evidence

away,

the

and

will

other

side

witnesses

surely

put

of

are

a

the

housed

strain

on

Plaintiffs’ – and the Court’s – time and energy and materially
complicate

the

Plaintiffs

assert

involve

complicated

a

jurisdiction
matter.

discovery
that

issues

Plaintiffs

process.”

impleading
service

that
also

may

of

(ECF

a

contend

foreign

process

delay

No.

trial

that

at

corporation

and
in

the

28,

raise

8).
will

personal

the

underlying

Master

Agreement

between TRU and Manley includes a forum-selection clause and
identifies New Jersey as the governing law, which may require
the undersigned to apply New Jersey law to resolve the thirdparty action.

(See ECF No. 23-1, at 20).

17

In

terms

of

Plaintiffs’

personal

jurisdiction

argument,

although this argument may be meritorious, deferring ruling on
the issue is appropriate until the third-party defendant over
whom personal jurisdiction is asserted raises it.

To the extent

Plaintiffs believe that interpretation of New Jersey law – if it
is later determined that New Jersey law in fact controls any
issues

in

dispute

–

would

complicate

the

matter,

routinely interpret laws from other jurisdictions.

courts

See, e.g.,

Chubb & Son v. C&C Complete Servs., LLC, 919 F.Supp.2d 666, 676
(D.Md. Jan. 23, 2013) (applying New Jersey law in interpreting a
contract).5

Plaintiffs also argue that “there are waves of bad

blood between Defendant and Manley – blood which would certainly
wash

into

and

upset

the

present

litigation,

complicating issues, and prejudicing Plaintiffs.”
at 9).

causing

delay,

(ECF No. 28,

But as TRU points out, it is not surprising that a

prospective

third-party

plaintiff

and

third-party

defendant

would disagree about liability.

5

Moreover, in the recent case of Atlantic Marine
Construction Co. v. United States District Court for the Western
District of Texas, 134 S.Ct. 568 (2013), the Supreme Court of
the United States clarified how district courts are to treat
forum selection clauses. The Supreme Court noted that venue is
not “improper” simply because the suit was filed in a court
other than that specified in the forum selection clause. Thus,
at this juncture, it is not appropriate to deny TRU’s motion for
leave to file a third-party complaint based on the forum
selection clause in the Master Agreement between TRU and Manley.
18

Moreover,

the

underlying

relatively early stages.

litigation

is

still

in

the

On November 6, 2013, Plaintiffs moved

to stay the scheduling order pending resolution of the instant
motion, and the undersigned granted the motion the next day.
(ECF Nos. 26 & 27).
See,

e.g.,

No dispositive motions have yet been filed.

Xquisite

Transp.,

LLC,

2009

WL

3246960,

at

*2-3

(granting motion for leave to file third-party complaint where
defendant argued that additional costs in time and discovery
requests

are

inherent

in

all

impleaders);

cf.

DTM

Research,

L.L.C. v. AT&T Corp., 179 F.R.D. 161, 162 (D.Md. 1998) (denying
motion

for

leave

to

file

a

third-party

complaint

where

the

proposed impleader “would entail significant delay, entailing a
new wave of discovery (undoubtedly attended by the same sort of
discovery disputes that have characterized this litigation) and
almost

certainly

another

round

of

dispositive

motions.”);

Handlos v. Litton Indus., Inc., 51 F.R.D. 300 (E.D.Wis. 1970)
(refusing to allow impleader where trial would already not occur
until two and a half years after commencement of suit and the
underlying events were already more than three years old).

Much

like the plaintiff in Xquisite Transp., LLC, Plaintiffs here
have

not

shown

that

complicate” this case.
Plaintiffs’

trademark

the

third-party

claims

will

“unduly

TRU’s claims against Manley arise from
infringement

claims

against

TRU.

On

balance, the interest in promoting efficiency by trying related
19

claims outweighs the potential danger of delay or complication.
See, e.g., Certain Underwriters, 2012 WL 2945489, at *4 (“to the
extent that impleading NiiS here prevents yet another lawsuit
from being filed, judicial economy will be served and prejudice
to [plaintiff] limited”) (emphasis in original).
III. Conclusion
For the foregoing reasons, TRU’s motion to file a thirdparty complaint against Manley will be granted.

A separate

order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge

20