Too Marker Products, Inc. et al v. Creation Supply Inc. et al
Filing
50
OPINION and ORDER: The Court GRANTS Plaintiffs' Motion 36 to Dismiss Defendant's Third Counterclaim for Tortious Interference for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) and DISMISSES Defendant's Third Counterclaim. Signed on 11/28/2012 by Judge Anna J. Brown. See attached 9 page Opinion and Order. (bb)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
TOO MARKER PRODUCTS, INC., and
IMAGINATION INTERNATIONAL, INC.,
3-12-CV-735-BR
Plaintiffs,
OPINION AND ORDER
v.
CREATION SUPPLY, INC.,
Defendant.
________________________________
CREATION SUPPLY, INC.,
Third-Party Plaintiff,
v.
ALPHA ART MATERIALS CO., LTD,
Third-Party Defendant.
TIMOTHY S. DEJONG
JACOB S. GILL
Stoll Berne Lokting & Lachter P.C.
209 S.W. Oak St., Ste 500
Portland, OR 97204
(503) 227-1600
Attorneys for Plaintiffs
1 - OPINION AND ORDER
EDWARD L BISHOP
NICHOLAS S. LEE
RICHARD J. VANGELISTI
Bishop & Diehl, Ltd
1750 East Golf Road
Suite 390
Schaumburg, IL 60173
(847) 969-9124
Attorneys for Creation Supply, Inc.
BYUNG H. WHANG
B.H. Whang & Associates, Ltd
111 Plaza Dr., Ste 755
Schaumburg, Ill 60173
(847) 517-3696
SUSAN D. PITCHFORD
ROBERT H. LYMAN
Chernoff Vilhauer McClung and Stenzel, LLP
601 S.W. Second Ave., Ste 1600
Portland, OR 97201
(503) 227-5631
Attorneys for Alpha Art Materials, Co. LTD
BROWN, Judge.
This matter comes before the Court on Plaintiffs’ Motion
(#36) to Dismiss Defendant’s Third Counterclaim for Tortious
Interference for failure to state a claim under Federal Rule of
Civil Procedure 12(b)(6).
For the following reasons, the Court
GRANTS Plaintiff’s Motion and DISMISSES Defendant’s Third
Counterclaim for Tortious Interference.
The Court also makes
herein a scheduling order for further proceedings.
2 - OPINION AND ORDER
BACKGROUND
Plaintiff Too Marker Products, Inc., is a Japanese
Corporation that manufactures, imports, and sells markers in the
United States.
Plaintiff Imagination International, Inc., is the
exclusive United States distributor of Too Marker’s products.
Defendant Creation Supply, Inc., is an importer of markers
into the United States and the State of Oregon.
Plaintiffs allege Defendant infringed Plaintiffs’ trademark
and engaged in unfair competition in violation of the Lanham Act,
15 U.S.C. § 1051, et seq., and the common law by importing into
the United States and selling markers similar in size and shape
to Plaintiffs’ products with the intent of misleading consumers
into believing they are purchasing Plaintiffs’ products.
Defendant asserts Counterclaims for a Declaratory Judgment
of Non-Infringement of Trademark and Trade Dress (First and
Second Counterclaims) and for Tortious Interference in
Defendant’s business relationship with Dick Blick Art Materials
(Third Counterclaim).
Plaintiffs move to dismiss Defendant’s Third Counterclaim
on the ground that a claim of Tortious Interference based on
allegedly unfounded litigation arises under Oregon law only if
the allegedly unfounded litigation has previously resulted in a
favorable outcome for the claimant, an element Defendant has not
alleged.
3 - OPINION AND ORDER
STANDARDS
To survive a motion to dismiss, a pleading must contain
sufficient factual matter accepted as true to “state a claim to
relief that is plausible on its face.”
550 U.S. 544, 545 (2007).
Bell Atlantic v. Twombly,
A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the opposing party is liable
for the misconduct alleged.
Id. at 556.
“The plausibility
standard is not akin to a ‘probability requirement,’ but it asks
for more than a sheer possibility that a defendant has acted
unlawfully.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)(quoting
Twombly, 550 U.S. at 546).
When a party pleads facts that are
“merely consistent with” an opponent’s liability, the pleading
“stops short of the line between possibility and plausibility of
entitlement to relief.”
Iqbal, 556 U.S. at 678 (citing Twombly,
550 U.S. at 557).
Although the pleading standard under Federal Rule of Civil
Procedure 8 “does not require ‘detailed factual allegations,’ it
demands more than an unadorned, the-defendant-unlawfully-harmedme accusation.”
U.S. at 555).
Iqbal, 556 U.S. at 678 (quoting Twombly, 550
See also Fed. R. Civ. P. 8(a)(2).
“A pleading
that offers ‘labels and conclusions’ or ‘a formulaic recitation
of the elements of a cause of action will not do.’”
U.S. at 678 (citing Twombly, 550 U.S. at 555).
4 - OPINION AND ORDER
Iqbal, 556
Moreover, a
pleading also does not suffice if it tenders “naked assertion[s]”
devoid of “further factual enhancement.” Twombly 550 U.S. at 557.
DISCUSSION
In its Third Counterclaim Defendant alleges Plaintiffs
wrongfully assert their trademark-infringement claims for the
specific purpose of interfering with Defendant’s present and
future business relations and of gaining a prospective economic
advantage by disrupting Defendant’s ongoing marketing and sales
efforts with both Dick Blick, who had a contract with Defendant
to sell the allegedly infringing markers at issue, and with
Third-Party Defendant Alpha Art Materials Co., Ltd., (Alpha),
which is the exclusive distributor of Defendant’s markers in the
United States.
Plaintiffs move to dismiss Defendant’s Third Counterclaim on
the ground that reliance on allegedly unfounded litigation as the
basis for asserting a claim for tortious interference with
prospective business advantage is insufficient to state a claim
under Oregon law unless the claimant previously prevailed in
the subject litigation.
Moreover, Plaintiffs point out there
has not been any finding or a verdict that Plaintiffs wrongfully
interfered with Defendant’s business relationships with Blick and
Alpha.
5 - OPINION AND ORDER
Defendant, nevertheless, contends the allegations in its
Counterclaim are sufficient standing alone to withstand
Plaintiffs’ Motion to Dismiss.
The parties each rely on Oregon Court of Appeals decisions
to support their positions.
This Court must interpret and apply
Oregon law as the Oregon Supreme Court would apply it.
Kekauoha-Alisa, 674 F.3d 1083, 1087-88 (9th Cir. 2012).
See In re
When
“interpreting state law, [federal courts] are bound by the
decision of the highest state court.”
If there is not a decision
by the Oregon Supreme Court to guide the Court's interpretation
of state law, the Court must predict how the Oregon Supreme Court
would decide the issue by using intermediate appellate court
decisions, decisions from other jurisdictions, statutes,
treatises, and restatements as guidance.
See Hawthorne Savings
F.S.B. v. Reliance Ins. Co. of Illinois, 421 F.3d 835, 853-54
(9th Cir. 2005)(citing Vestar Dev. II, LLC v. Gen. Dynamics
Corp., 249 F.3d 958, 960 (9th Cir. 2001)).
If there is relevant
precedent from the state's intermediate appellate court, however,
“the federal court must follow the state intermediate appellate
court decision unless the federal court finds convincing evidence
that the state's supreme court likely would not follow it."
Ryman v. Sears, Roebuck and Company, 505 F.3d 993, 995 (9th Cir.
2007)(citing Vestar, 249 F.3d at 960).
6 - OPINION AND ORDER
Defendant relies on Employer’s Fire Insurance Company v.
Love It Ice Cream Company, 64 Or. App. 784 (1983), in which the
court held the defendant’s counterclaim that its insurer filed
unfounded litigation knowing it would result in a delay in the
payment of the insured’s claim was sufficient to state a claim
for interference with business relationships through improper
means.
The court did not address whether such a claim was barred
by an absolute litigation privilege.
Plaintiffs rely on Mantia v. Hanson, 190 Or. App. 412
(2003), review denied, 336 Or. 615 (2004), in which the Oregon
Court of Appeals reviewed its earlier decision in Employer’s and
similar cases decided in the interim.
The court pointed out that
none of those earlier decisions addressed whether there was an
absolute litigation privilege that might bar a claim arising from
allegedly unfounded litigation.
The court, however, held an
absolute privilege exists, and, accordingly, the “prosecution of
[a tortious interference claim relating to] unfounded litigation”
by the use of “improper means” is actionable only if
(1) the plaintiff in the antecedent
proceedings lacked probable cause to
prosecute those proceedings; (2) the primary
purpose of those proceedings was something
other than to secure an adjudication of the
claims asserted there; and (3) the antecedent
proceedings were terminated in favor of the
party now asserting the tortious interference
claim.
Emphasis added.
Id. at 429.
7 - OPINION AND ORDER
The court applied the absolute
privilege, which, in turn, precluded any claim for tortious
interference because the third condition (i.e., a favorable
result for the party asserting the claim) “had not yet, and might
never occur.”
Id.
Although in Mantia the tortious interference lawsuit was
asserted against a client’s lawyer rather than the client as in
this case, the court specifically held “the absolute privilege
for statements in the course of or incident to such proceedings
. . . applies equally to parties to [the] proceedings and to
their attorneys.”
190 Or. App. at 417.
The Court concludes the Oregon Court of Appeals decision
in Mantia rather than its earlier holding in Employers controls
the Court’s resolution of Plaintiffs’ pending Motion.
Accordingly, the Court also concludes Plaintiffs’ actions that
allegedly gave rise to Defendant’s Counterclaim for Tortious
Interference are not actionable in the absence of an actual prior
adjudication that Plaintiffs interfered with Defendant’s business
relationships with Blick and Third-Party Defendant Alpha.
In light of this ruling, the Court need not address
Plaintiffs’ other arguments regarding the insufficiency of the
allegations in Defendant’s Third Counterclaim.
Because it does
not appear Defendant can cure this pleading deficiency under the
circumstances, there is not any present basis to grant Defendant
leave to replead its Third Counterclaim.
8 - OPINION AND ORDER
The parties should now confer and prepare for the Court a
jointly proposed case-management plan suggesting a reasonable
schedule to complete discovery, to present any dispositive
motions, and to complete pretrial proceedings as well as to
propose a trial schedule.
This joint proposal is due no later
than 12/7/2012, after which the Court will schedule a Rule 16
Conference.
CONCLUSION
For these reasons, the Court GRANTS Plaintiffs’ Motion
(#36) to Dismiss Defendant’s Third Counterclaim for Tortious
Interference for failure to state a claim under Federal Rule
of Civil Procedure 12(b)(6) and DISMISSES Defendant’s Third
Counterclaim.
IT IS SO ORDERED.
DATED this 28th day of November, 2012.
/s/ Anna J. Brown
ANNA J. BROWN
United States District Judge
9 - OPINION AND ORDER
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