OGD Equipment Co. v. Overhead Door Corporation et al

Filing 99

MEMORANDUM ADOPTING 80 REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE. Defendant Overhead Door Corporation's Motion to Dismiss (Dkt. # 51 ) is GRANTED IN PART and DENIED IN PART. Defendant Overhead Door Company of Lubbock, Inc.'s Motion to Dismiss (Dkt. # 55 ) is GRANTED IN PART and DENIED IN PART. Signed by District Judge Amos L. Mazzant, III on 8/12/2019. (rpc, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
OGD EQUIPMENT CO. d/b/a
OVERHEAD GARAGE DOOR, LLC,
Plaintiff,
v.
OVERHEAD DOOR CORPORATION, et al.,
Defendants.

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Case No. 4:17-cv-0898-ALM-KPJ

MEMORANDUM ADOPTING REPORT AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
Came on for consideration the report of the United States Magistrate Judge in this
action, this matter having been heretofore referred to the Magistrate Judge pursuant to 28 U.S.C.
§ 636. On July 15, 2019, the report of the Magistrate Judge (the “Report”) (Dkt. #80) was
entered, containing proposed findings of fact and recommendations that the following motions
be granted in part and denied in part:
1) Defendant Overhead Door Corporation’s (“Overhead”) Rule 12(b)(1) and
12(b)(6) Motion to Dismiss Counts I-IV, and the Trademark-Related Claims in
Counts V-VI and VIII, of Plaintiff’s First Amended Complaint (“Overhead’s
Motion to Dismiss”) (Dkt. #51); and
2) Defendant Overhead Door Company of Lubbock’s (“Overhead-Lubbock”)
Motion to Dismiss Plaintiff’s First Amended Complaint for Lack of Subject
Matter Jurisdiction 12(b)(1), Failure to State a Claim Upon Which Relief Can
be Granted 12(b)(6), and for Judgment on the Pleadings 12(c) (“OverheadLubbock’s Motion to Dismiss”) (Dkt. 55).
Hereinafter, Overhead and Overhead-Lubbock shall be referred to collectively as
“Defendants,” and the above-referenced motions will be referred to collectively as the “Motions

to Dismiss.” Defendants filed objections to the Report (the “Objections”) (Dkts. 85, 87) 1. The
Court has made a de novo review of the Objections and is of the opinion that the findings and
conclusions of the Magistrate Judge are correct and the Objections are without merit as to the
ultimate findings of the Magistrate Judge.

The Court hereby adopts the findings and

conclusions of the Magistrate Judge as the findings and conclusions of the Court.
I.

BACKGROUND

Plaintiff OGD Equipment Company d/b/a Overhead Garage Door, LLC (“OGD”) is a
Texas company, in the business of residential and commercial door repair and installation. See
Dkt. #43 at 3. Defendant Overhead is a national manufacturer, marketer, and distributor of
residential and commercial overhead doors. See id. at 4. Defendant Overhead-Lubbock is a
regional distributor for Overhead, based in Lubbock, Texas. See id.
OGD brings claims for: (Count I) violation of the Sherman Act, 15 U.S.C. § 2; (Count
II) unfair competition under the Lanham Act, 15 U.S.C § 1125(a); (Count III) unfair
competition under Texas common law. See Dkt. #43 at 25–29. OGD also seeks declaratory
relief stating the following: (Count IV) OGD does not infringe under 15 U.S.C. § 1114; (Count
V) OGD does not unfairly compete under 15 U.S.C. § 1125(a); (Count VI) Overhead’s
trademark and trade name is invalid and/or unenforceable as used by Overhead; (Count VII)
Overhead-Lubbock has no trademark and/or trade name rights 2; and (Count VIII) OGD has not
violated state trademark and unfair competition laws. See id. at 30–34.
The Report recommended OGD’s Sherman Act claim against Overhead and OverheadLubbock be dismissed. See Dkt. #80 at 27. The Report further recommended dismissal of

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Overhead-Lubbock filed a motion requesting to join in the objections filed by Overhead (see Dkt. # 86), which
was subsequently granted (see Dkt. #90). Accordingly, the Court treats the Objections filed by Overhead as the
Objections of Defendants jointly.
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OGD subsequently filed a Second Amended Complaint in which OGD dropped Count VII. See Dkt. #81.

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OGD’s Count VII, which seeks declaratory relief regarding Overhead-Lubbock’s trademark
and/or trade name rights. See id. at 28. The Report recommended the Motions to Dismiss be
denied as to all remaining claims. See id. OGD filed no objections to the Report. No objections
were filed to the Report’s recommendation to dismiss Count VII, regarding OverheadLubbock’s trademark and/or trade name rights. No objections were filed to the Report’s
recommendation to dismiss OGD’s Sherman Act claims as pled; however, Defendants’
Objections argue OGD should not have been granted leave to amend its Sherman Act claim. 3
See Dkt. #85; Dkt. #87. Defendants further object to the Report’s recommendation to deny the
Motions to Dismiss as to OGD’s claims for unfair competition under the Lanham Act, unfair
competition under Texas state law, and the remaining declaratory judgment actions regarding
Overhead’s trademark rights. 4 See Dkt. #87.
II. DISCUSSION
Defendants argue: (1) OGD’s requests for declaratory judgment should be dismissed
because there is no justiciable issue as to the status of Overhead Door’s trademarks; (2) OGD’s
unfair competition claim should be dismissed because OGD alleged no acts which give rise to
a claim for unfair competition; and (3) OGD should not have been granted leave to amend its
Sherman Act claim. See Dkt. #85; Dkt. #87.

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On July 15, 2019, the Magistrate Judge held a telephonic hearing, at which time OGD orally moved to amend its
Amended Complaint. See Dkt. #77. The oral motion was granted in part and denied in part, and OGD was granted
leave to amend its antitrust claim, limited to the Lubbock geographic market. See Dkt. #78. Defendants
subsequently filed objections to the Magistrate Judge’s Order. See Dkt. #91. The objections were overruled and
the Order was affirmed. See Dkt. #97. OGD filed a Second Amended Complaint, in which the antitrust claim was
amended. See Dkt. #81. Thereafter, Defendants filed a Supplemental Motion to Dismiss addressing the merits of
OGD’s amended antitrust claims, which remains pending before the Court. See Dkt. #82.
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Overhead-Lubbock further asserted the Court should have dismissed Counts IV-VI and VIII as to OverheadLubbock. See Dkt. #85. However, as the Magistrate Judge found, OGD does not assert these requests for
declaratory judgment against Overhead-Lubbock. Accordingly, this objection is overruled.

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Defendants argue OGD’s claims for declaratory judgment pursuant to the trademark
rights of the parties should be dismissed. See Dkt. #87 at 2. Defendants’ Objections challenge
the Magistrate Judge’s findings and conclusions that there is a justiciable controversy regarding
the trademark rights belonging to Overhead. See Dkt. #87 at 3. Defendants argue that this is an
“overreading” of the cease-and-desist letters directed to OGD by Overhead. See id. The Court
disagrees. As the Magistrate Judge found, the cease-and-desist letters sent by Overhead to OGD
clearly raise the issue of trademark infringement. See Dkt. #43-9 at 3–5. The Court agrees with
the Magistrate Judge’s findings that the letters are not so clear or narrow as Defendants assert.
To the contrary, the cease-and-desist letters assert the right to use the terms “overhead” and
“overhead door” as both a trade name and mark, and attach Overhead’s trademark registration;
thus, the Court agrees with the Magistrate Judge’s finding that there is a justiciable controversy
between the parties regarding Overhead’s trademark, as well as trade name. See id. at 3–5, 10.
Accordingly, the Court finds no error in the Magistrate Judge’s recommendation not to dismiss
Counts IV, V, VI, or VIII.
Defendants further argue the Magistrate Judge erred by recommending Defendants’
Motions to Dismiss OGD’s claim for unfair competition be denied because the Amended
Complaint uses “shotgun pleadings” to describe the allegations. See Dkt. #85 at 4; Dkt. #87 at
4. As the Report states, “OGD supports its allegations with specific communications by
Defendants in online advertising and marketing and the creation and posting of a specific blog
entry by Overhead-Lubbock.” See Dkt. #80 at 22 (citing Dkt. #43 at 22). At this stage of
proceedings, where the parties have conducted only limited discovery, the Court agrees with
the Report’s findings that OGD’s pleadings are sufficiently definite to state a claim for relief
against each Defendant.

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Defendants also argue that the Report erred by finding OGD pled facts which support
OGD’s unfair competition claim because the Amended Complaint does not allege acts by
Defendants which would attempt to confuse consumers. See Dkt. #85 at 4; Dkt. #87 at 4. Upon
review, the Court agrees with the Magistrate Judge’s conclusion that OGD has sufficiently
alleged its claim for unfair competition to survive the Motions to Dismiss. See Dkt. #80. The
allegations in the Amended Complaint set forth a variety of conduct to support OGD’s claim
for unfair competition, ranging from Defendants’ mischaracterization of OGD’s location,
affiliations, and reputation, to Defendants’ driving consumer confusion about the source of the
parties’ products, services, or businesses. See, for example, Dkt. #43 at 28–29. Moreover, the
Amended Complaint alleges that Defendants’ communications to consumers represent that
Defendants have the exclusive right to use the terms “overhead” and “overhead door” in
connection with the distribution and retail sale of overhead garage doors. See id. at 24. As the
Magistrate Judge concluded, the “parties claim contradictory rights to use the Trade Names to
describe their companies, products, and services.” See Dkt. #80 at 16. Therefore, the Court finds
no error in the Report’s recommendation that the Motions to Dismiss OGD’s unfair competition
claims under the Lanham Act and Texas law be denied. At this stage of proceedings, the Court
declines to wade into the allegations to determine the likelihood of whether consumers were
confused by these acts. See Dkt. #87 at 5. Accordingly, this objection is overruled.
Finally, Defendants argue the Magistrate Judge erred by granting OGD leave to amend
the Sherman Act Claim. As previously addressed in the Court’s Order (Dkt. #97) regarding
Defendants’ Docket #91, the Court finds the Order (Dkt. #78) granting OGD’s Motion for
Leave to Amend is not clearly erroneous. As such, this objection is overruled.

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III.

CONCLUSION

Based on the foregoing, Defendant Overhead Door Corporation’s Motion to Dismiss
(Dkt. #51) is GRANTED IN PART and DENIED IN PART. OGD’s Sherman Act claim
(Count I), as asserted in the Amended Complaint (Dkt. #43), is dismissed. See Dkts. #77, #78,
#80. All other claims asserted against Defendant Overhead Door Corporation (Counts II, III,
IV, V, VI, and VIII) remain.
Defendant Overhead Door Company of Lubbock, Inc.’s Motion to Dismiss (Dkt. #55)
is GRANTED IN PART and DENIED IN PART. OGD’s declaratory judgment claim
regarding Overhead-Lubbock’s trademark and/or trade name rights (Count VII) is dismissed.
. OGD’s Sherman Act claim (Count I), as asserted in the Amended Complaint (Dkt. #43), is
dismissed. See Dkts. #77, #78, #80. All other claims asserted against Overhead-Lubbock
(Counts II and III) remain.
IT IS SO ORDERED.
SIGNED this 12th day of August, 2019.

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AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE

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