Bill's Birds Inc. et al v. Trademarketing Resources Incorporated et al

Filing 26

MEMORANDUM & ORDER granting in part and denying in part 22 Motion to Dismiss for Failure to State a Claim. SO ORDERED that Defendants' motion to dismiss Plaintiffs' claim for a declaratory judgment regarding the items listed on Exhibit C is denied. Counsel are referred to the Magistrate Judge to proceed with discovery on this limited declaratory judgment claim. Defendants' motion to dismiss Plaintiffs' claim for a declaratory judgment regarding the items listed on Exhibits A and B attached to Plaintiffs' amended complaint, is granted. Defendants' motion to dismiss Counts 2 through 6 of Plaintiffs' amended complaint is hereby granted. Ordered by Judge Leonard D. Wexler on 1/31/2013. (Florio, Lisa)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

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MEMORANDUM AND ORDER

BILL'S BIRDS INC. and
WILLIAM PELINSKY,

cv 11-3888

Plaintiffs,

(Wexler, J.)

-againstTRADEMARKETING RESOURCES
INCORPORATED and CHRYSLER
GROUP LLC,

: , L .: U
IN Cl.Ef'(f S OFFif'F
US OISTR;CTC>)l!RTE-ONY

Defendants.

*

--------------------------------------------------)(

~...• 3 . 2013

*

APPEARANCES:
HAROLD G. FURLOW, ESQ.
Attorney for Plaintiffs
260 Montauk Highway, Suite 10
Bay Shore, New York 11706
KILPATRICK TOWNSEND & STOCKTON LLP
BY: LISA PEARSON, ESQ.
RICHARD POTTER, ESQ.
Attorneys for Defendants
31 West 52"d Street, 14'h Floor
New York, New York 10019
WE)(LER, District Judge:
Plaintiffs Bill's Birds Inc. ("Bill's Birds") and William Pelinsky ("Pelinsky")
(collectively the "Plaintiffs"), bring this action against Defendants seeking a declaratory
judgment and injunctive relief, and claiming unfair trade practices and antitrust violations under
federal and New York state law, in connection with automotive decorative trim pieces Plaintiffs
sell or intend to sell. Defendant Chrysler Group LLC ("Chrysler") and Trademark Resources

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Incorporated ("TRI") (collectively the "Defendants") move to dismiss for lack of subject matter
jurisdiction and for failure to state a claim.
BACKGROUND
The facts outlined here are from Plaintiffs' 39-page amended verified complaint', and the
16-page affidavit of William Pelinsky, the president of Bill's Birds, and the nine (9) exhibits
attached thereto. Bill's Birds is a New York corporation located in Dix Hills, New York and is
in the business of making and selling aftermarket replacement automotive decorative trim pieces.
According to Mr. Pelinsky, his business began in the early 1980s when he could not get a
replacement decorative trim piece from the original car manufacturer after his car was damaged.
He made his own, and over time, this hobby turned into a business. According to Pelinsky, the
original equipment manufacturers ("OEMs") were not interested in making these specialized
parts that demanded relatively low quantities, and so independent sources, such as Pelinsky,
stepped up to fill the void for these aftermarket replacement automobile decorative parts, and it
became profitable.
On November 20, 2009, Bill's Birds circulated a 7-page flyer, attached to Plaintiffs'
amended complaint as Exhibit C, "announcing new product." Each page contains Bill's Birds'
location and contact information and a photo, a description and a price for each item, totaling 7
items, for things such as a trunk lock cover, a radio plate, light surrounds, and three emblems, for
Demon, Swinger and Plymouth.
In November 25, 2009, Mr. Rachuy, a representative of defendant TRI, Chrysler's

'Following Defendants' request to move against Plaintiffs' complaint, Plaintiffs were
granted leave to file an amended complaint.
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licensing agent, called Bill's Birds and spoke with Pelinsky, saying he had a copy of the flyer and
demanding that all sales of the items contained therein cease, stating that Chrysler retained the
exclusive right to manufacture those trim items, saying "everybody knows that Chrylser owns
everything." Rachuy informed Pelinsky that if Bill's Birds manufactured or sold any of those
items, Chrysler would take criminal and civil action. Pelinsky, on behalf of Bill's Birds, agreed
to stop disseminating the flyer or selling the items, and Rachuy suggested that Bill's Birds apply
for a license to use the Chrysler trademark and manufacture trademarked items.
On February II, 2010, Bill's Birds submitted an application to Chrysler for a license "as
a party with at least some interest in using Chrysler's trademarks" to use some of its products.
The application is attached to the amended complaint as Exhibit E. Though the application does
not list any specific trademarks, it lists Fury, Monaco, Barracuda, Po lara, Belvedere, Savoy and
Demon as "desired products," and projects sales of $5,000 per item for the first year. Though
requested on the application, neither a detailed marketing plan nor a sample of the products were
provided with the application.
The response to the application, an email dated April6, 2010, is attached at Exhibit F. In
that email, Mr Rachuy advised counsel for Bill's Birds that it would not be allowed to produce,
market or sell certain Plymouth, Demon and Swinger emblems, "or any other emblems
containing Chrysler intellectual property such as model names, division brands, etc." The email
does not refer to the other items listed in the application.'
In the emails that followed to clarify Chrysler's rejection of the application and the legal

'Plaintiffs argue that the other items are not enumerated in the application response
because those names- Fury, Barracuda, Polara, Belvedere and Savoy - have been discontinued
as models and abandoned as trademarks, and thus are in the public domain.
3

basis for the decision, Chrysler's counsel reiterated Chrysler's exclusive rights to the Plymouth,
Demon and Swinger marks, and "Chrysler's other heritage models names," through prior use,
customer recognition and licensing of the marks. In the letter, counsel also asserts that Bill's
Birds' continued use of Chrysler's marks is a violation of Section 43 of the Lanham Act, for
which Bill's Birds would be liable. See Exhibits G and H.
This lawsuit followed. Plaintiffs argue that Chrysler's sweeping claim that it has
exclusive rights to "any marks associated with Chrysler," without distinguishing between the
various brands, or specifically responding to the brands listed in Plaintiffs' application, is
improper and warrants a declaratory judgment from the court. In addition to the exhibits outlined
above, Plaintiffs also attached to their amended complaint a list of"Names of Automobile
Models and Divisions Abandoned by Defendant Chrysler" (Ex. A), and a list "Automotive
Decorative Trim Piece Parts that Do Not Include Emblems." (Ex. B).
Plaintiffs allege that Defendant Chrysler has a monopoly in the aftermarket replacement
decorative trim parts market throughout the United States, and that the aftermarket replacement
parts are functionally interchangeable with the parts made originally by Chrysler for new
automobiles.
Plaintiffs' seek: (I) a declaratory judgment that the items listed in Exs. A, B and C are not
the exclusive property of Chrysler; (2) a preliminary injunction and/or permanent injunction
restraining Defendants from seizing Plaintiffs' property or threatening Plaintiffs with civil or
criminal liability; (3) restraining Defendants from threatening Plaintiffs in a manner that restrains
trade in violation of the Sherman Act, 15 U.S.C. §§ 1-2; (4) damages resulting from Defendants'
alleged violation of the Lanham Act, 15 U.S.C. Chapter 22; (5) damages resulting from
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Defendants' alleged conspiracy to restrain trade in violation of 15 U.S.C. §§ I and 2; and (6)
damages resulting from Defendants' alleged violations of New York state law forbidding
restraint of trade, deceptive acts and practices, and unfair competition. Defendants move to
dismiss the complaint in its entirety under Rule 12(b)(l) and 12 (b)(6) of the Federal Rules of
Civil Procedure.
DISCUSSION
I.

Legal Principles
A.

Standards on Motions to Dismiss

In considering a motion to dismiss made pursuant to Rule 12(b)(l), the Court must
construe the complaint liberally, and accept all factual allegations as true, and dismiss when there
is no "statutory or constitutional power to adjudicate" the dispute. Ford v. D.C. 37 Union Local,
579 F.3d 187, 188 (2d. Cir. 2009) (citations omitted). Similarly, when reviewing under Rule 12
(b)( 6), the court must review whether the complaint "contain[s] sufficient factual matter,
accepted as true, to state a claim to relief that is plausible on its face." Absolute Activist Value
Master Fund Limited v. Ficeto, 677 F.3d 60, (2d Cir. 2012), quoting Ashcroft v. Iqbal, 556 U.S.
662,678, 129 S. Ct. 1937, 1949 (2009). A pleading that does nothing more than recite bare legal
conclusions is insufficient to "unlock the doors of discovery." Iqbal, 556 U.S. at 678-679, 129
S.Ct. at 1950. "A complaint does not suffice if it tenders 'naked assertion[s]' devoid of'further
factual enhancement.'" Id., quoting Bell Atlantic Com. V. Twombly, 550 U.S. 544, 557 (2007).
II.

Disposition of the Present Motion
Since Defendants move to dismiss all the claims in Plaintiffs' amended complaint, the

court will address each claim individually.
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I.

Declaratory Judgment

Plaintiffs seek a declaratory judgment that the decorative trim parts described and/or
listed in Exhibits A, B & C attached to the amended complaint are in the public domain and
therefore not subject to protection. Defendants argue the court lacks subject matter jurisdiction
under the Declaratory Judgment Act, and the claim should be dismissed under Rule 12(b)(l).
28 U.S.C. § 2201, the Declaratory Judgment Act (the "Act"), states that:
(a) 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.
In Medimmune. Inc. v. Genentech. Inc., 549 U.S. 118 (2007), the Supreme Court
reviewed whether an actual controversy existed in a patent case where one party was paying
royalties to another and thus keeping a lawsuit at bay. The Court reiterated that to be an "actual
controversy" as required by the Act, the dispute must be '"definite and concrete, touching the
legal relations of parties having adverse legal interests'; ... be 'real and substantial' and 'admi[t]
of specific relief through a decree of a conclusive character, as distinguished from an opinion
advising what the law would be upon a hypothetical state of facts."' Id., at 125, quoting Aetna
Life Ins. Co. V. Haworth, 300 U.S. 227,240-241 (1937). The Court stated that each case turns
on "whether the facts alleged, under all the circumstances, show that there is a substantial
controversy ... of sufficient immediacy and reality" to warrant a declaration of interests.
Medlmmune, at 127, quoting Maryland Casualty Co. V. Pactific Coal & Oil Co., 312 U.S. 270,
273 ( 1941 ). To require that a plaintiff "destroy a large building, bet the farm, or (as here) risk
treble damages and the loss of 80 percent of its business before seeking a declaration of its

6

actively contested legal rights finds no support in Article III." Id., at 134.
In Nike. Inc. v. Already. LLC, 663 F.3d 89 (2d Cir. 2011), certiorari granted, 133 S.Ct. 24
(June 25, 2012), the Second Circuit applied the Medlmmune "totality of the circumstances" test to
determine whether the adversity between the parties was "real and substantial." Nike, at 95-96,
citations omitted.' The Court confirmed that while Medlmmune rejected that a reasonable
apprehension of liability was required to create a justiciable controversy, it was still necessary that
the potential infringer had engaged in a course of conduct that put it in an adversarial posture with
the defendant, through an intent and ability to potentially violate the marks. Id., at 96, n. I (2d
Cir. 2011), citing Bruce Winston Gem Crop. v. Harrv Winston. Inc., 2010 WL 3629592
(S.D.N.Y. 201 0). See also Wembley. Inc. v. Superba Cravats, Inc., 315 F.2d 87, 90 (2d Cir.1963)
(there must be a definite intent to take immediate action, as reflected in the complaint, versus a
mere vague and unspecific desire to use a mark); Berni v. Int'l Gourmet Rests. of Am., Inc., 838
F.2d 642, 649 (2d Cir.l988) (no conflicting legal issue where there is no evidence indicating
intention to expand or continue business); Banff. Ltd. v. Federated Dept. Stores. Inc., 841 F.2d
486,493 (2d Cir. 1988) (party's intention and ability to sell goods potentially violative of the
mark created a justiciable controversy); Golden Gulf Com. v. Jordache Entemrises. Inc., 896
F.Supp. 337, 340 (S.D.N.Y. 1995) (no justiciable controversy in light of partes' agreement to not
sell in the United States).
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In that case, the parties had executed a covenant not to sue and the issue was whether
that eliminated the controversy necessary for a declaratory judgment action. The Court found
that in light of the broad nature of the covenant not to sue, covering both past and future sales of
both existing products and colorable imitations, and there being no indication of defendant's
intention to market any shoe that might involve the covenant, there was no justiciable
controversy. Id., at 97.

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In this case, Plaintiffs' complaint reflects that, at least as to the items outlined in Exhibit
C, which is the flyer that was disseminated and caught the attention ofTRI, there is an "actual
controversy" between the parties. Plaintiffs clearly had the intention and ability to sell and market
those particular items, as reflected by the flyers themselves, which contain a picture of the item
and provide a price and contact information to make a purchase. Indeed, Pilensky's affidavit
reflects that Bill's Birds had been marketing them for some time, and that he stopped all sales
once he received the call from TRI. Thus, the court finds that an actual controversy exists as to
these items, and defendants' motion to dismiss for lack of subject matter jurisdiction regarding
Exhibit C is denied.
The analysis of those items or names listed on Exhibits A and B lead to a different result.
Neither the amended complaint, nor attachments thereto, provide any indication of the immediacy
or ability to manufacture or sell particular items reflected in those exhibits. Exhibit A is a list of
automobile models and divisions allegedly abandoned by Chrysler, and Exhibit B is a list of
different types of automotive decorative trim pieces -- for example, handles, knobs, trim --that
Plaintiffs assert do not include emblems or distinct elements of trade. While Mr. Pelinsky says he
has been "making decorative parts for years," no detail is provided regarding specific intention or
ability to make or sell the specific examples of items related to Exhibits A and B. While some of
the names included on Exhibit A are included in the list contained in the license application to
Chrysler, no specific business plan or potential sales information was provided as part of the
application or to this court.
The amended complaint merely asserts that Chrysler abandoned those brand names, and
that non-emblem, non-distinct decorative parts are in the public domain, and that Chrysler's
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inability or refusal to specifY which items are available for manufacture by independent sources
such as Bill's Birds warrants clarification from the court. Yet, more is required to get a
declaratory judgment. The courts finds that Plaintiffs' intention to market and sell items
connected to Exhibit A and B is very attenuated, and that the amended complaint reflects a mere
desire to one day do so, as opposed to a definite intent or ability to take immediate action, and
thus an actual controversy is not yet ripe. Thus, the court does not have subject matter
jurisdiction, and Defendants' motion to dismiss Plaintiffs' claim for a declaratory judgment for
those brand or items listed in Exhibits A and B is granted.
2.

Preliminarv and/or Permanent Injunction

Plaintiffs' second count seeks a "preliminary and/or permanent injunction" to restrain
Defendants from charging or taking action against Plaintiffs' for alleged trademark infringement.
Yet, as Defendants argue, an injunction is a remedy; it is not a separate cause of action. Reuben
H. Donnelly Corp. v. Mark I Marketing Corp., 893 F.Supp. 285, 293 (S.D.N.Y. 1995).
Yet, even if Plaintiffs' complaint could be construed to seek the remedy, as opposed to
alleging a cause of action for, injunctive relief, the claim fails. To obtain a permanent injunction,
a plaintiff must satisfY four factors: "(I) that it has suffered an irreparable injury; (2) that remedies
available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that,
considering the balance of hardships between the plaintiff and the defendant, a remedy in equity is
warranted; and (4) that the public interest would not be disserved by a permanent injunction."
eBay. Inc. v. MercExchange. LLC, 547 U.S. 388,391 (2006). The Second Circuit has held "that
eBay applies with equal force (a) to preliminary injunctions (b) that are issued for alleged

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copyright infringement." Salinger v. Colting, 607 F.3d 68, 77 (2d Cir. 2010).

4

Plaintiffs' amended complaint fails to allege how they satisfY these factors. While the
thrust of Plaintiffs' complaint is that they have been injured by Chrysler preventing them from
selling their parts, there are no allegations showing how this injury is irreparable, that a remedy at
law would not be adequate, or that the balance of hardship tips in their favor. Plaintiffs' fail to
provide any guidance in opposition to Defendants' motion on these points. They argue generally
that the public is disserved by Chrysler allegedly illegally preventing others from entering the
automotive decorative trim pieces market, yet this is insufficient for injunctive relief. As a result,
Defendants' motion to dismiss count 2 is granted.
3.

Federal Antitrust Claims

Counts 3 and 5 of Plaintiffs' amended complaint claim federal antitrust violations by
Defendants. Count 3 alleges the Defendants have contracted or conspired to restrain Plaintiffs'
trade and seeks to restrain Defendants from interfering with Plaintiffs' business, and count 5
claims Defendants have contracted or conspired to monopolize the aftermarket decorative trim
piece part market, both in violation of the Sherman Act, 15 U.S.C. §§ 1-2.
a.

§ I of the Sherman Act

15 U.S.C. §§I deems illegal "[e]very contract, combination in the form of a trust or
otherwise, or conspiracy, in restraint of trade or commerce among the several States ... " To make
a claim under this section of the Sherman Act, a plaintiff must "produce evidence sufficient to

4

In Salinger, the Court stated that there was "no reason" that the same standard would not
apply with equal force to an injunction in any case. !d., at 78, n.7 See U.S. Polo Ass'n. Inc. V.
PRL USA Holdings, Inc., 800 F.Supp.2d 515, 539 (S.D.N.Y. 2011) (Salinger suggests that the
eBay analysis would apply to trademark cases as well).
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show: (1) a combination or some form of concerted action between at least two distinct economic
entities; and (2) such combination or conduct constituted an unreasonable restraint of trade either
per se or under the rule of reason." Tops Market, Inc. v. Quality Markets, Inc., 142 F.3d 90, 9596 (2d Cir. 1998), citing Capital Imaging Associates, P.C. v. Mohawk Valley Medical Associates,
Inc., 996 F.2d 537, 542 (2d Cir. 1993), cert. denied, 510 U.S. 947, 114 S.Ct. 388 (1993)
(unilateral conduct by one single person or enterprise falls outside the purview of§ 1)(citations
omitted).
The essence of a § 1 violation is the concerted action, or conspiracy between "separate
entities." Copperweld Cor;p. v. Independence Tube Com., 467 U.S. 752,769, 104 S.Ct. 2731,
2740-41 (1984). Employees or officers of the same firm cannot combine or conspire to violate§
1, since acting to "implement a single, unitary firm's policies does not raise the antitrust dangers
that § I was designed to police. The officers of a single firm are not separate economic actors
pursuing separate economic interests, so agreements among them do not suddenly bring together
economic power that was previously pursuing divergent goals." Id.,(emphasis added) (a parent
and its wholly owned subsidiary are a single economic entity and cannot conspire to violate § 1).
See also Capital Imaging Associates, 996 F.2d 537, 542 (2d Cir. 1993) (doctors with their own
private practices who joined an independent practice association were separate economic entities
capable of conspiring to violate § 1).
Here, Plaintiffs' amended complaint alleges that TRI is a licensing agent of Chrysler, and
that neither has an ownership interest in the other. The question is whether they are sufficiently
distinct economic entities able to conspire, as proscribed by § I. The Second Circuit addressed
this issue in the context of a principal/agent relationship in Fuchs Sugars & Svrups, Inc. V.
II

Amstar Com., 602 F.2d I 025 (2d Cir. 1979), cert. denied, 444 U.S. 91 (1979). There, the Court
reviewed whether sugar brokers were capable of conspiring with a sugar refiner, and stated that
whether "two actors constitute distinct economic entities for purposes of the Sherman Act is
determined by the economic realities of their relationship." Id., at 1031, fn. 5 (citations omitted).
The relevant factors in the context of a principal/agent relationship are: whether the agent
performs a function on behalf of his principal other than securing an offer from a buyer, the
degree to which the agent can exercise discretion, and whether use of the agent is a separate step
in the distribution process. Id. Indeed, the Court found that the broker in that case acted solely as
a conduit through which the refiner would negotiate its distribution of sugar, and found there was
no economic independence. Id. See also Belfiore v. New York Times Co., 826 F.2d 177, 182 (2d
Cir. 1987) (in addition to the Fuchs factors, when considering capacity to conspire, courts should
also consider the number and nature of the agents' functions, whether the agent acts in its own
interests, and whether the alleged conspirators are, in reality, under the control of one entity).
Assuming the facts alleged in Plaintiffs' amended complaint to be true, review of the
factors outlined in Fuchs and Belfiore dictates that TRI is not an independent, separate economic
entity from Chrysler. All evidence shows that TRI acted consistently to further the interests of
Chrylser, and not its own. There is no allegation or indication that TRI had any decision-making
capacity, and was merely the conduit of communication between Chrylser and its licensees or
potential licensees. There is no allegation that TRI had any input in whether and under what
terms a license would be granted, and indeed it appears that Chrysler alone was in full control of
the licensing arrangements. As a result, the court finds that the economic realities of this
principal/agent relationship indicate that TRI was not a separate economic entity from Chrysler,
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and therefore there was no capacity to conspire to violate § I. Therefore, the claims based on
alleged violations of 15 U.S.C § I are dismissed.'
b.

§ 2 of the Sherman Act

15 U.S.C § 2 prohibits monopolization, attempts to monopolize and conspiracy to
monopolize. Critical to the determination of whether there is a monopoly or attempt to
monopolize is whether there is monopoly power. Monopoly power is the "'power to control
prices and exclude competition."' PepsiCo. Inc. v. Coca-Cola Co., 315 F.3d 101, 107 (2d Cir.
2002), quoting United States v. E.L duPont de Nemours & Co., 351 U.S. 377,391 (1956). This is
also referred to as having a "high degree of 'market power."' Heerwagen v. Clear Channel
Communications, 435 F.3d 219,226 (2d Cir. 2006), quoting Tops Market. Inc. v. Qualitv Mkts ..
Inc., 142 F.3d 90,97 (2d Cir. 1998). Determination of the correct relevant market is critical to
determine whether there is market power, and thus an ability to effect competition or control
prices. Citv ofNew York v. Group Health Inc., 649 F.3d 151, !55 (2d Cir. 2011); Heerwagen,
435 F.3d at 226-227, citing PepsiCo., 315 F.3d at I 08; id., at 229 ("a plaintiff claiming
monopolization is obligated to establish the relevant market because the power to control prices or
exclude competition only makes sense with reference to a particular market.")
When alleging the relevant market in its complaint, a plaintiff must follow the rules of
interchangeability and cross-elasticity of demand, and include in its market all interchangeable
substitutes. See City ofNew York v. Group Health Inc., 649 F.3d at 155-156; Chapman v. New
'Plaintiffs argue in their opposition papers that~ 65 of the amended complaint alleges that
Chrysler used its licensees, and thus conspired with these licensees, to restrain Plaintiffs' trade.
Merely asserting these conclusory allegations of conspiracy, without more, is insufficient to
survive a motion to dismiss. Bell Altantic Com. v. Twombly, 550 U.S. 544, 556-557, 127 S.Ct.
1955, 1966 (2007).
13

York State Division for Youth, 546 F.3d 230, 238 (2d Cir. 2008), cert. denied, 130 S.Ct. 552
(2009). Interchangeability and cross-elasticity of demand are driven by whether the consumer
would use the products interchangeably. Chapman, 546 F.3d at 238 (citations omitted); see also
In rePayment Card Interchange Fee and Merchant Discount Litigation, 562 F.Supp.2d 392, 399
(E.D.N.Y. 2008), quoting PepsiCo, Inc., 315 F.3d at 105 ("[c]ompanies should be treated as
competitors in a market if- considering consumer price, use, and qualities - consumers treat their
products as acceptable substitutes for the purposes for which the products were intended").
Cross-elasticity also includes the geographic scope of the market, meaning where consumer can
tum, as a practical matter, for a substitute. Heerwagen, 435 F.3d at 227; All Star Carts and
Vehicles, Inc. V. BFI Canada Income Fund, eta!., 596 F.Supp.2d 630,641 (E.D.N.Y. 2009).
Plaintiffs' amended complaint alleges that the relevant market for purposes of proving its
monopoly claim is the aftermarket replacement decorative trim parts market for cars originally
manufactured by Chrysler throughout the United States. See Amended Complaint, '11'11 56-59 (the
"Amend. Comp."). Yet, beyond stating that "the aftermarket replacement parts are functionally
interchangeable with the parts made originally for the new automobiles," (Amend. Comp., '1[58),
Plaintiffs fail to include interchangeability or cross-elasticity of demand in its definition of the
relevant market. While Plaintiffs argue that its products are functional substitutes for Chryslers'
original trim pieces, Plaintiffs fail to allege how these products are interchangeable from the
consumer's perspective. Indeed, Plaintiff William Pelinsky avers that he originally entered this
business because he could not obtain replacement parts from Chrysler. Plaintiffs' products are
substitutes for Chrysler's products once the Chrysler piece needs to be replaced; there is no
allegations that these products compete in the same market. Nor does the amended complaint
14

provide any evidence that Chrysler maintains a monopoly in that market. Since Plaintiffs have
failed to allege a plausible relevant market or the existence of any monopoly power, Defendants'
motion to dismiss the antitrust claims under § 2 of the Sherman Act is granted.
4.

Lanham Act Claims

Count 4 of Plaintiffs' complaint alleges that Defendants violated§ 43(a) of the Lanham
Act, 15 U.S.C § 1125 by deceiving Plaintiffs regarding the trademark rights ofthe goods
described in Exhibit C (the sales flyers) and Exhibit E (the trademark application). Plaintiffs
allege that these decorative trim pieces, both emblem or non-emblem, were either not registered
trademarks, or if they were, there has not been continued use of the trademarks and/or they have
been abandoned. Plaintiffs claim that Defendants, by "deceptively asserting ownership and rights
ofapproval"overthesetrirnparts, violated 15 U.S.C. § 1125 (a)(l)(A).
Section 43(a) of the Lanham Act, provides a civil remedy for anyone who claims to be
damaged by a person who "uses in commerce any word, term, or name ... or false and misleading
description ... or misrepresentation of fact, which ... (A) is likely to cause confusion, or cause
mistake, or to deceive as to affiliation, connection or association of such person with another
person, or as to origin, sponsorship, or approval of his or her goods, services of commercial
activities by another person." 15 U.S.C. § 1!25(a)(l)(A).
The Supreme Court has stated that "Section 43(a) of the Lanham Act prohibits actions like
trademark infringement that deceive consumers and impair a producer's good will. It forbids, for
example, the Coca-Cola Company's passing off it product as Pepsi-Cola or reverse passing off
Pepsi-Cola as its product. The words of the Lanham Act should not be stretched to cover matters
that are typically of no consequence to purchasers." Dastar Com. v. Twentieth Century Fox Film
15

~.

539 U.S. 23, 32 (2003). See also Associated Press v. All Headline News Com., 608

F.Supp.2d 454,463 (S.D.N.Y. 2009) (Lanham Act prohibits actions that deceive consumers);
Licata & Co .. v. Goldberg, 812 F.Supp. 403,408 (S.D.N.Y. 1993) (the Lanham Act's antideception provision, 15 U.S.C. § 1125(a), is designed to bar misleading commercial advertising,
and would be "trivialized" if applied to statements between a salesperson and individual
customer).
Plaintiffs' alleged violations of the Lanham Act do not involve anything of consequence to
consumers. The allegedly deceptive communications are those from TRI and /or Chrysler that
assert trademarks rights that Plaintiffs argue do not exist. These purported deceptions and
misrepresentations did not deceive or confuse consumers, and do not constitute a Lanham Act
violation. See Dastar, 539 U.S. at 33-34 (the Lanham Act is not intended to "overextend" into
areas normally occupied by patent or copyright law). Therefore, Defendants' motion to dismiss
Count 4 is granted.
5.

State Law Claims

Count 6 asserts that Defendants have violated the New York State General Business Laws
§§ 340 and 349 for restraint of trade and unfair competition. The Second Circuit has stated that
the Donnelly Act, N.Y. Gen. Business Law§ 340, was modeled on the Sherman Act and the same
standards apply. Venture Technology. Inc. v. National Fuel Gas Co., 685 F.2d 41,42 n. I (2d Cir.
1982). Therefore, the reasoning outlined above dismissing Plaintiffs' Sherman Act claims applies
to the Donnelly Act claim as well, which is also hereby dismissed. Plaintiffs' state law claim
under N.Y. General Business Law§ 349 requires that the challenged act or misrepresentation be
consumer-oriented. Maurizio v. Goldsmith, 230 F.3d 518,521 (2d Cir. 2000) (to state a claim
16

under §349, the defendants' deceptive acts must be directed at consumers); Vitolo v. Mentor H/S,
Inc., 213 Fed.Appx. 16 (2d Cir. 2007) (the misrepresentation, if it did occur, had no impact on
consumers at large). Plaintiffs have fails to make any such allegation, and therefore, this claim is
also dismissed.
CONCLUSION
For the foregoing reasons, Defendants' motion to dismiss Plaintiffs' claim for a
declaratory judgment regarding the items listed on Exhibit C is denied. Counsel are referred to
the Magistrate Judge to proceed with discovery on this limited declaratory judgment claim.
Defendants' motion to dismiss Plaintiffs' claim for a declaratory judgment regarding the items
listed on Exhibits A and B attached to Plaintiffs' amended complaint, is granted. Defendants'
motion to dismiss Counts 2 through 6 of Plaintiffs' amended complaint is hereby granted.
SO ORDERED

s/ Leonard D. Wexler
\..._LEONARD D. WEXLER
I -UNITED STATES DISTRicT JUDGE
Dated: Central Islip, New York
January-3{, 2013

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