4U Promotions, Inc. v. Excellence in Travel, LLC et al

Filing 34

OPINION AND ORDER DENYING 20 and 28 Motions to Dismiss of Defendants Excellence in Travel, LLC and Colleen M. Gaier. Signed by Magistrate Judge Norah McCann King on 2/23/2016. (pes)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION

4U PROMOTIONS,INC.,
Plaintiff,
Civil Action 2:15-cv-1673
Magistrate Judge King

vs.

EXCELLENCE IN TRAVEL, LLC,
et al.,
Defendants.

OPINION AND ORDER
This matter is before the Court on the Motion to Dismiss of
Defendants Excellence in Travel, LLC and Colleen M. Gaier, ECF No. 20
(filed under seal) (“Sealed Motion”), and the Motion to Dismiss of
Defendants Excellence in Travel, LLC and Colleen M. Gaier, ECF No. 28
(“Redacted Motion”) (collectively, “the Motions”).

For the reasons

that follow, the Motions are DENIED.
I.

Factual Allegations and Procedural History
Since 2011, plaintiff 4U Promotions, Inc. (“plaintiff” or “4UP”),

a Tennessee corporation licensed to do business in the State of Ohio,
has promoted and operated an annual cruise using the trademarks
“Decades of Rock & Roll,” “Decades of Rock & Roll Oldies Cruise,” and
substantially similar variations (collectively, “the 4UP Marks”).
Complaint, ECF No. 1 (Redacted), ¶¶ 6, 10 (“Redacted Complaint”);
Exhibit C-1 (copy of certificate of registration of “Decades of Rock &
Roll”), attached thereto.

On June 6, 2013, 4UP filed an action in the

Court of Common Pleas for Greene County, Ohio, Case No. 2013 CV 0451
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(“the state court action”), against defendant Excellence in Travel,
LLC (“EIT”), an Ohio limited liability company based in Fairborn,
Ohio, and Gaier Professional Services, LLC (“GPS”), asserting claims
of breach of contract, unfair competition, intentional interference
with business relationships, and conversion.
7, 24.

EIT filed a counterclaim against 4UP.

Redacted Complaint, ¶¶
See Exhibit I, p. 3

(copy of docket in state court action), attached thereto.

The state

court action involved ownership of certain intellectual property, a
customer list, and contact information of Facebook users who “liked”
4UP’s Decades of Rock & Roll Facebook page.

Id. at ¶ 25.

On June 10, 2014, the parties agreed to terms of settlement of
the state court action, contemplating a limited license in EIT and a
full release of all claims. Id. at ¶ 26.

See “Mediation Agreement,”

Exhibit J (filed under seal), attached to Complaint, ECF No. 13 (filed
under seal) (“Sealed Complaint”). See also “Confidential Settlement
Agreement and Release,” Exhibit A, attached to Sealed Complaint, and
“Consent Agreement,” Exhibit B, attached to Sealed Complaint.
On October 21, 2014, 4UP registered the trademark, “Decades of
Rock & Roll,” U.S. Trademark Registration Number 4, 623,128, in
connection with “cruise ship services; travel, excursion and cruise
arrangement.”

Redacted Complaint, ¶ 11 (internal quotation marks

omitted).
On May 5, 2015, 4UP filed this action under the Lanham Act, 15
U.S.C. § 1125, naming as defendants in the caption of the Redacted
Complaint only EIT and Colleen Gaier (a member of EIT), but including
as a party in the body of the Redacted Complaint Penny Greene (a
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shareholder and officer of 4UP).

Redacted Complaint, ¶ 8. 4UP asserts

claims of infringement of its registered trademarks, “Decades of Rock
and Roll,” “Decades of Rock & Roll Oldies Cruise,” and substantially
similar variations thereof (Count I).

Plaintiff also asserts

supplemental state law claims of breach of contract (Counts III, IV,
V), violation of the Ohio Deceptive Trade Practices Act, O.R.C. §
4165.01 et seq. (“ODTPA”) (Count II), and contempt under O.R.C. §
2705.01 et seq. (Count VI).

4UP invokes this Court’s subject matter

jurisdiction under 15 U.S.C. § 1121(a) and 28 U.S.C. §§ 1338, 1367(a).
Redacted Complaint, ¶¶ 1, 4.
Defendants EIT and Gaier (collectively, “defendants”) filed a
motion to dismiss for lack of subject matter jurisdiction and for
failure to state a claim, which is now fully briefed and ripe for
resolution.

See Motions; Plaintiff’s Brief in Opposition to

Defendants’ Motion to Dismiss, ECF No. 23 (redacted) (“Redacted
Opposition”); Plaintiff’s Brief in Opposition to Defendants’ Motion to
Dismiss, ECF No. 26 (sealed) (“Sealed Opposition”); Reply in Support
of Motion to Dismiss of Defendants Excellence in Travel, LLC and
Colleen M. Gaier, ECF No. 29 (“Reply”).
II.

Penny Greene
As an initial matter, it is unclear whether 4UP intends to pursue

a claim against Penny Greene.

As noted supra, Ms. Greene is not

included as a named defendant in the caption of the Redacted
Complaint, but she is identified in the body of that pleading as a
party to the action.

The body of the complaint does not specify that

any claims are directed against Ms. Greene.
3

See generally Redacted

Complaint (referring generally to alleged violations and failures of
“defendants”).

See also Redacted Opposition, p. 5 (clarifying that

paragraphs 107-130 and elements K-P of the requested relief are
directed against only EIT).

Moreover, 4UP did not request the

issuance of a summons for Ms. Greene, see ECF Nos. 2, 3, and it does
not appear that Ms. Greene has been served with process. Under these
circumstances, the Court concludes that 4UP has not asserted any
claims against Penny Greene.
III. Counts III through VI as Against Defendant Gaier
4UP has agreed to withdraw its claim for contempt (Count VI) in
its entirety. Redacted Opposition, pp. 4-5.

4UP has also agreed to

withdraw its claims for breach of contract (Counts III, IV, V) as
against defendant Gaier.

Id. at 5-6.

Accordingly, for purposes of

the current Motions, the following claims remain:

trademark

infringement (Count I) and violation of the ODTPA (Count II) against
EIT and defendant Gaier as well as claims for breach of contract
(Counts III, IV, V) against only EIT.
IV.

Rule 12(b)(1)
In moving to dismiss under Rule 12(b)(1), defendants challenge

the Court’s subject matter jurisdiction.

When a motion to dismiss

addresses the Court’s jurisdiction, a plaintiff bears the burden of
establishing jurisdiction in order to survive the motion.

See

Michigan Southern R.R. Co. v. Branch & St. Joseph Counties Rail Users
Ass’n, Inc., 287 F.3d 568, 573 (6th Cir. 2002).

“Specifically, the

plaintiff must show that the complaint ‘alleges a claim under federal
law, and that the claim is substantial.’”

Id. (quoting Musson

Theatrical, Inc. v. Federal Express Corp., 89 F.3d 1244, 1248 (6th
4

Cir. 1996)).

The plaintiff can survive such a motion if it can show

“‘any arguable basis in law’ for the claims set forth in the
complaint.”

Id. (quoting Musson Theatrical, Inc., 89 F.3d at 1248).

Where, as here, the motion to dismiss amounts to a facial attack on
subject-matter jurisdiction, see Redacted Motion, p. 6, a court must
take the allegations in the complaint as true, just as it would with a
motion to dismiss under Rule 12(b)(6).

See Gentek Bldg. Prods., Inc.

v. Sherwin–Williams Co., 491 F.3d 320, 330 (6th Cir. 2007).
In the case presently before the Court, defendants acknowledge
that, pursuant to 11 U.S.C. § 1121(a) and 28 U.S.C. § 1338(a) and (b),
district courts have original jurisdiction over Lanham Act claims.
Redacted Motion, p. 6.

Defendants further recognize that district

courts are vested with “supplemental jurisdiction over all other
claims that are so related to claims in the action within such
original jurisdiction that they form part of the same case or
controversy under Article III of the United States Constitution.”

Id.

(quoting 28 U.S.C. § 1367) (internal quotation marks omitted).
However, defendants contend that the Court should dismiss this case
for lack of subject matter jurisdiction because 4UP’s trademark
infringement claim (Count I), the only federal claim asserted by
plaintiff, is really a state law claim of breach of the Settlement
Agreement in disguise.

Id. at 6-7.

Because the remaining claims are

also state law claims and the parties are not diverse, defendants
argue, this Court lacks subject matter jurisdiction over this action.
Id.
Plaintiff disagrees, citing multiple examples of trademark
infringements identified in the complaint.
5

Redacted Opposition, p. 8

(citing paragraphs 47-80, some of which are sealed, as well as
Exhibits N, O, P, Q, R, S, T, attached to the Redacted Complaint).
Understanding defendants’ argument in this regard as based on the
proposition that trademark infringement claims and breach of contract
claims are mutually exclusive, plaintiff counters that the United
States Court of Appeals for the Sixth Circuit has considered actions
that present both trademark infringement claims and breach of contract
claims.

Id. at 9 (citing La Quinta Corp. v. Heartland Props. LLC, 603

F.3d 327 (6th Cir. 2010); Assurance Comp. of Am. v. J.P. Structures,
Inc., 132 F.3d 32 (6th Cir. 1997)).

Noting its withdrawal of its

breach of contract claims against defendant Gaier, plaintiff also
argues that the trademark infringement claim against this defendant
cannot be disguised as a breach of contract claim.

Id. at 9-10.

See

also Sealed Opposition, p. 10 (detailing redacted argument).
In reply, defendants attempt to distinguish the cases cited by
plaintiff in this regard as cases involving agreements other than
settlement agreements.

Reply, p. 2.

Defendants concede that “[t]he

specific issue in this case — whether a claim for breach of a
settlement agreement that set forth terms upon which the trademark
could be used can coexist with a trademark infringement action – has
not been decided by any court.”

Id.

Relying on Affiliated Hosp.

Prods. v. Merdel Game Mfg., 513 F.2d 1183 (2nd Cir. 1975) (“The 1967
agreement controls the right of the respective parties in the use of
the word Carom; and preliminary to any claim of trademark
infringement, Affiliated must demonstrate conduct by Merdel
sufficiently grave to warrant rescission of that agreement.”),
6

defendants argue that 4UP should be limited to the assertion of a
breach of contract action unless 4UP “can show [that] the contract
should be rescinded.

If no trademark infringement action is

appropriate at this stage, then the Court does not have subject matter
jurisdiction to hear the state law claims.”

Reply, p. 3.

Finally,

defendants contend that any alleged misuse of the 4UP Marks by
defendant Gaier, the sole member of EIT, is “really an extension of
EIT’s alleged misuse governed by the Settlement Agreement.”
Defendants’ arguments are not well-taken.

Id.

4UP has invoked this

Court’s jurisdiction under 15 U.S.C. § 1121(a) and 28 U.S.C. § 1338.
Section 1121(a) confers upon district courts jurisdiction over all
actions arising under the Lanham Act.

District courts are also vested

with original jurisdiction over any civil action arising under an Act
of Congress relating to, inter alia, trademarks as well as any civil
action asserting a claim of unfair competition when joined with a
substantial and related claim under, inter alia, trademark laws.
U.S.C. § 1338(a), (b).

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In order to state a claim for trademark

infringement, “a plaintiff must allege facts establishing that: (1) it
owns the registered trademark; (2) the defendant used the mark in
commerce; and (3) the use was likely to cause confusion.”

Hensley

Mfg. v. ProPride, Inc., 579 F.3d 603, 609 (6th Cir. 2009) (citing 15
U.S.C. § 1114(1)).
In the case presently before the Court, defendants do not
specifically argue that 4UP has failed to allege facts necessary to a
trademark infringement claim.

See generally Redacted Motion; Reply.

Indeed, as discussed supra, the Court must accept 4UP’s allegations as
7

true at this stage of the proceedings.
491 F.3d at 330.
10-23, 30-89.

See Gentek Bldg. Prods., Inc.,

See also Redacted Complaint and Sealed Complaint, ¶¶

Instead, defendants take the position that the

trademark infringement claim is really a breach of contract claim
masquerading as a federal claim.

See supra.

However, and as even

defendants appear to concede, Reply, p. 2 (the precise issue presented
in this case “has not been decided by any court.”), this Court cannot
conclude that there is no arguable basis in law for this federal
claim.

See, e.g., Michigan Southern R.R. Co., 287 F.3d at 573.

Defendants’ reliance on Affiliated Hospital Products does not
militate a different result.

As an initial matter, that decision by

the Court of Appeals for the Second Circuit is not binding on this
Court.

Moreover, the excerpt upon which defendants rely relates to

the Second Circuit’s discussion of rescission of an agreement, see
Affiliated Hosp. Prods., 513 F.2d at 1186, and not to the issues
presented in this action.

In short, the Court is not persuaded that

Affiliated Hospital Products precludes 4UP from invoking this Court’s
subject matter jurisdiction over its federal trademark infringement
claim.1
Finally, the remaining state law claims, which include breach of
contract and violation of the ODTPA, are based on the same facts
underlying the federal trademark infringement claim.
Redacted Complaint, ¶¶ 99-130.

See, e.g.,

Because this Court concludes that it

1

Having concluded that there exists jurisdiction under 28 U.S.C. § 1338(a),
the Court need not address at this time whether diversity jurisdiction also
exists. The Court also does not address whether dismissal based on Rule
12(b)(6) is appropriate because that request was directed to Counts Three
through Six against defendant Gaier, which 4UP has now withdrawn.

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has jurisdiction over plaintiff’s federal claim, this Court also
concludes that plaintiff has properly invoked the Court’s supplemental
jurisdiction over the remaining state law claims.

See 28 U.S.C. §

1367(a).
WHEREUPON, in light of plaintiff’s withdrawal of Counts III, IV,
and V against defendant Gaier and the withdrawal of Count VI in its
entirety, Counts III, IV, and V are DISMISSED against defendant
Gaier, and Count VI is DISMISSED in its entirety. In all other
respects, the Motion to Dismiss of Defendants Excellence in Travel,
LLC and Colleen M. Gaier, ECF No. 20, and the Motion to Dismiss of
Defendants Excellence in Travel, LLC and Colleen M. Gaier, ECF No. 28,
are DENIED.

February 23, 2016

s/Norah McCann King
Norah McCann King
United States Magistrate Judge

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