HAROLD IMPORT CO. INC v. MV. TRADING ONLINE et al
Filing
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MEMORANDUM OPINION. Signed by Magistrate Judge Tonianne J. Bongiovanni on 4/21/2016. (km)
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
HAROLD IMPORT CO. INC.,
Civil Action No. 15-1462 (MAS)
Plaintiff,
v.
MEMORANDUM OPINION
MV TRADING ONLINE, et al.,
Defendants.
BONGIOVANNI, Magistrate Judge
This matter comes before the Court upon Plaintiff Harold Import Co. Inc.’s (“HIC”)
motion to amend its Complaint in order to add the following new defendants: MV Trading, MV
Trading Co., MV Trading Co., Inc., H.R. Supply a/k/a H.R. Supplies, HRSUPPLYCA.COM, JB
ONG, Inc., Sean Kha and Michael Ong, as well as additional allegations against the existing and
new defendants. [Docket Entry No. 26]. Defendants MV Trading Online, Monika Ha and Phat
Ong (collectively, the “MVTO Defendants”) oppose HIC’s motion. The Court has fully
reviewed and considered all arguments made in support of, and in opposition to, HIC’s motion to
amend. The Court considers HIC’s motion without oral argument pursuant to L.Civ.R. 78.1(b).
For the reasons set forth more fully below, HIC’s motion is GRANTED.
I.
Background and Procedural History
On February 27, 2015, HIC filed its initial Complaint for damages and injunctive relief
against MV Trading Online (“MVTO”), Teaheaven (“TH”), TEAHEAVENUSA.COM (“THU”),
Monika Ha, Phat Ong and Ha Ong (collectively, “Defendants”). Through its Complaint, HIC
alleged that Defendants were liable for: (1) trademark infringement, unfair competition, and
false designation of origin under the Lanham Act, 15 U.S.C. §§ 1051 et seq..; (2) trademark
infringement and unfair competition in violation of New Jersey statutory law, N.J.S.A. §§ 56:4-1
and 56:3-13.16; (3) trademark infringement, unfair competition and unjust enrichment in
violation of the common law of the State of New Jersey; (4) trademark dilution under N.J.S.A. §
56.3-13:20; (5) copyright infringement pursuant to 17 U.S.C. § 501 et seq.; and (6) breach of
contract. (Pl. Cmplt. ¶ 1; Docket Entry No. 1).
Despite being served with the Complaint, Defendants failed to answer or otherwise
respond to the Complaint within the time provided by the Federal Rules of Civil Procedure. As a
result, upon HIC’s requests, default was entered against (1) MVTO, TH and THU on April 8,
2015 (Request for Default of 4/7/2015, Docket Entry No. 11; Clerk’s Entry of Default of
4/8/2015); (2) Monika Ha and Phat Ong on April 24, 2015 (Request for Default of 4/24/2015,
Docket Entry No. 13; Clerk’s Entry of Default of 4/24/2015); and (3) Ha Ong on May 18, 2015
(Request for Default of 5/15/2015, Docket Entry No. 15; Clerk’s Entry of Default of 5/18/2015).
On May 11, 2015, after default was entered against MVTO, TH, THU, Monika Ha and
Phat Ong, HIC moved to have a default judgment entered against them. [Docket Entry No. 14].
In response, the MVTO Defendants acquired counsel who made an appearance in this matter.
(See Notices of Appearance of 6/5/2015; Docket Entry Nos. 18 & 19). Thereafter, HIC and the
MVTO Defendants conferred, and HIC agreed to vacate default as to MVTO, Monika Ha and
Phat Ong in the hopes of bringing this matter to a swift resolution. (See Stipulation and Consent
Order of 6/16/2015; Docket Entry No. 20). As a result, default was vacated and the default
judgment motion was terminated as to MVTO, Monika Ha and Phat Ong. These MVTO
Defendants filed an Answer, later amended, on June 26, 2015. (See Docket Entry Nos. 21 & 24).
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After the Answer was filed, the Court scheduled an Initial Conference for August 17, 2015. (See
Scheduling order of 7/6/2015; Docket Entry No. 22).
As a result of the Initial Conference, the Court entered a Scheduling Order in this matter.
According to same, any motion to amend the pleadings or to add parties had to be filed by
September 25, 2015. (See Scheduling Order of 8/18/2015; Docket Entry No. 25).
Since the Initial Conference, HIC claims to have discovered that Defendants’ infringing
activities involve an elaborate network of interrelated companies, websites and individuals. As a
result, HIC filed the instant motion to amend in order to add the originally unnamed companies
and individuals – MV Trading, MV Trading Co., MV Trading Co., Inc. (collectively, “MVT”),
H.R. Supply a/k/a H.R. Supplies, HRSUPPLYCA.COM (collectively “H.R. Supply”), JB ONG,
Inc. (“JBO”), Sean Kha and Michael Ong – as defendants in this lawsuit. In accordance with the
Scheduling Order, HIC’s motion was filed on September 25, 2015.
II.
Analysis
A. Standard of Review
Pursuant to Fed.R.Civ.P.15(a)(2), leave to amend the pleadings is generally granted
freely. See Foman v. Davis, 371 U.S. 178, 182 (1962); Alvin v. Suzuki, 227 F.3d 107, 121 (3d
Cir. 2000). Nevertheless, the Court may deny a motion to amend where there is “undue delay,
bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of
the amendment, [or] futility of the amendment.” Id. However, where there is an absence of
undue delay, bad faith, prejudice or futility, a motion for leave to amend a pleading should be
liberally granted. Long v. Wilson, 393 F.3d 390, 400 (3d Cir. 2004).
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Here, the MVTO Defendants focus their opposition to HIC’s motion to amend on the
alleged futility of HIC’s proposed amendments, arguing:
The proposed Amended Complaint interjects a plethora of printouts, photographs and screen shots and then proceeds to
conclusively state that all “Defendants” are responsible for the
alleged the [sic] harm because “[u]pon information and belief” all
of the corporate and Individual Defendants are one and the same.
Despite the voluminous nature of the proposed Amended
Complaint, no new allegations are offered regarding Plaintiff’s
underlying claims. Simply adding parties to the litigation coupled
with the phrase “on information and belief” does nothing to
nudge[] [its] claims across the line from conceivable to plausible . .
. .” Bell Atl. Corp., 550 U.S. at 570. The theoretical possibility
that all of these Defendants are interrelated does not convert itself
to “plausible” by simply reducing it to paper.
***
If Plaintiff’s motion is granted, the Amended Complaint will be
immediately ripe for dismissal as to the newly added Defendants
for failure to meet the standard of plausibility expounded in Bell
Atl. Corp., nor does it contain anything more than conclusory
allegations. See Schiano, 2013 U.S. Dist. LEXIS 81440 at *60-62
(noting that the proposed amended complaint was conclusory and
that “It is improper to add a party as a defendant in a matter merely
in order to obtain discovery from that party.”)
(MVTO Defs. Opp. Br. at 3-4; Docket Entry No. 29). As a result, the Court, herein, also
focuses on the purported futility of HIC’s motion. 1
A motion to amend is properly denied where the proposed amendment is futile. An
amendment is futile if it “is frivolous or advances a claim or defense that is legally insufficient on
its face.” Harrison Beverage Co. v. Dribeck Imp., Inc., 133 F.R.D. 463, 468 (D.N.J. 1990) (internal
quotation marks and citations omitted). To evaluate futility, the Court uses “the same standard of
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The MVTO Defendants also suggest that HIC’s proposed amendments would be prejudicial and have been
brought in bad faith, claiming that HIC’s proposed amendments would exponentially increase discovery and
prolong the lifecycle of this case without changing the underlying claims or the alleged roles of Defendants, and
that HIC only moved to amend to expand its potential recovery pool and artificially create settlement leverage
over the Individual Defendants. (See MVTO, Monika Ha and Phat Ong Opp. Br. at 3-4). The Court, however, finds
these arguments to be unsupported. Further, as explained, herein, the Court finds that Plaintiff, through its
proposed amended pleading, has asserted non-futile claims against the new defendants.
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legal sufficiency” as applied to a motion to dismiss under Rule 12(b)(6) (Shane v. Fauver, 213
F.3d 113, 115 (3d Cir. 2000)) and considers only the pleading, exhibits attached to the pleading,
matters of public record, and undisputedly authentic documents if the party’s claims are based
upon same. See Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d
Cir. 1993).
To determine if a complaint would survive a motion to dismiss under Rule 12(b)(6), the
Court must accept as true all the facts alleged in the pleading, draw all reasonable inferences in
favor of the plaintiff, and determine if “under any reasonable reading of the complaint, the plaintiff
may be entitled to relief[.]” Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008).
“[D]ismissal is appropriate only if, accepting all of the facts alleged in the [pleading] as true, the
p[arty] has failed to plead ‘enough facts to state a claim to relief that is plausible on its face[.]’”
Duran v. Equifirst Corp., Civil Action No. 2:09-cv-03856, 2010 WL 918444, *2 (D.N.J. March
12, 2010) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d
929 (2007)). Put simply, the alleged facts must be sufficient to “allow[] the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 129
S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009).
Although a pleading does not need to contain “detailed factual allegations,” a party’s
“obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do[.]”
Twombly, 550 U.S. at 555 (citation omitted). Thus, the “[f]actual allegations must be enough to
raise a right to relief above the speculative level.” Id. Additionally, in assessing a motion to
dismiss, although the Court must view the factual allegations contained in the pleading at issue as
true, the Court is “not compelled to accept unwarranted inferences, unsupported conclusions or
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legal conclusions disguised as factual allegations.” Baraka v. McGreevey, 481 F.3d 187, 211 (3d
Cir. 2007).
B. Discussion
Here, the Court finds that HIC has alleged sufficient facts to state plausible claims against
the new proposed defendants. Despite the MVTO Defendants’ characterization to the contrary,
HIC has not simply added new parties to its Complaint coupled with the phrase “on information
and belief.” Instead, HIC has asserted numerous facts showing the interconnectedness (i.e.,
shared physical addresses, related trademarks / trade dress, related websites, shared principals,
etc.) between the existing and proposed new defendants.
Indeed, HIC has supplied significant
evidence of the interrelatedness of the various entities (MVT, MVTO, TH, THU, JBO and H.R.
Supply) and their officers and principals (Sean Kha, Phat Ong, Ha Ong, Michael Ong and
Monika Ha). (See Proposed Amended Cmplt. ¶¶ 43-54, 59; Docket Entry No. 27-1). The Court
finds that these facts more than adequately support HIC’s claim that “MVT, MVTO, TH, THU,
JBO, and HRS are agents, affiliates, officers, directors, managers, principals, and/or alter-egos of
each other, and each entity participated in, directed, and benefited from the infringing sales made
by each of the other entities.” (Id. ¶ 54). Further, when these facts are coupled with HIC’s
allegations and evidence of Defendants’ sale of infringing goods, they are sufficient to raise
HIC’s claims for relief above the speculative level. (See Id. ¶¶ 34-36, 40-44, 55, 58 and Exs. BC, F-I, L).
The fact that HIC’s proposed claims are supported by allegations pled on “information
and belief” has no impact on the Court’s conclusion that HIC’s proposed amendments are viable.
The MVTO Defendants have provided no legal support in furtherance of their suggestion that
allegations made on “information and belief” are implausible and therefore futile. Moreover, the
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Court notes that HIC’s original Complaint, which the MVTO Defendants answered, was also
largely pled on “information and belief.”
Finally, in light of the fact that the Court has determined that HIC’s proposed
amendments are not futile, the Court also finds that permitting HIC to join all of the allegedly
responsible, interconnected parties in one litigation represents the most economic and efficient
manner of proceeding. Far from prejudicing the MVTO Defendants, allowing HIC’s
amendments will streamline HIC’s claims and should reduce the expenditure of duplicative
resources that would result from forcing HIC to pursue one or more simultaneous, separate
lawsuits against the proposed new defendants.
III.
Conclusion
For the reasons set forth above, HIC’s Motion to Amend is GRANTED. An appropriate
Order follows.
Dated: April 21, 2016
s/ Tonianne J. Bongiovanni
HONORABLE TONIANNE J. BONGIOVANNI
UNITED STATES MAGISTRATE JUDGE
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