Industrial Models Inc v. SNF Inc et al
Filing
23
Memorandum Opinion and Order: The court ORDERS that defendants' motion to dismiss be, and is hereby, granted in part, and plaintiff's claims asserted under Counts I-III and VII be, and are hereby, dismissed. The court further ORDERS that the motion to dismiss be, and is hereby, otherwise denied. re 5 Dismiss for Failure to State a Claim filed by SNF Inc, BrandFX LLC, BrandFX Holdings LLC (Ordered by Judge John McBryde on 9/23/2015) (mem)
l'.S. DISTRICT COUH
NORTHER\ OISTRICT OF TEXAS
IN THE UNITED STATES DISTRI
NORTHERN DISTRICT OF TE
FORT WORTH DIVISION
INDUSTRIAL MODELS,
INC.,
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Plaintiff,
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vs.
SNF
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I
INC .
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ET AL .
NO. 4:15-CV-689-A
§
I
§
Defendants.
§
MEMORANDUM OPINION AND ORDER
Came on for consideration the motion of defendants, SNF,
Inc.
("SNF"), BrandFX Holdings, LLC, and BrandFX, LLC d/b/a
BrandFX, to dismiss for failure to state a claim upon which
relief can be granted. The court, having considered the motion,
the response of plaintiff,
Industrial Models, Inc., the reply,
the record, and applicable authorities, finds that the motion
should be granted in part.
I.
Background
On July 8, 2015, plaintiff filed its original complaint in
this action in the Dallas Division of the court. By order signed
September 14, 2015, the case was transferred to the Fort Worth
Division. The judge to whom the action was assigned, having taken
senior status, requested that the case be reassigned, and it was
assigned to the docket of the undersigned.
At the time of the transfer, the motion to dismiss had been
pending for some time and was ripe for ruling.
II.
Plaintiff's Complaint
Plaintiff's complaint is a rambling thirty page document
that basically asserts that defendants-described as the
~FXBrand
Entities"-have threatened plaintiff that its use of certain molds
for fiberglass utility bodies for trucks would infringe rights of
defendants. In March 2013, SNF filed a lawsuit against plaintiff
for trade dress infringement and obtained a default judgment and
permanent injunction against plaintiff. The default was set aside
on appeal for failure to prove proper service of process. And,
ultimately, SNF filed a notice of nonsuit. Consequently,
plaintiff has refrained from using the molds and has been unable
to compete with defendants.
Plaintiff asserts claims against defendants for violation of
Sections 1 and 2 of the Sherman Act, 15 U.S.C. §2, Section 4 of
the Clayton Act, 15 U.S.C. § 15, the Lanham Act, 15 U.S.C. §§
1051-1141n, the Patent Act, 35 U.S.C. §§ 1-376, and the Copyright
Act, 17 U.S.C. §§ 101-1332. Plaintiff also seeks declaratory
relief under the Declaratory Judgment Act, 28 U.S.C. §§ 2201-02,
and asserts a claim for tortious interference with prospective
economic advantage.
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III.
Grounds of the Motion
Defendants assert that plaintiff has failed to state a claim
upon which relief can be granted. They say that:
(1} defendants' actions are protected under the NoerrPennington doctrine;
(2} defendants are legally incapable of engaging in
concerted action under antitrust laws based on the Copperweld
doctrine;
(3) plaintiff's allegations affirmatively negate the
existence of any agreement to restrain trade, a necessary element
of a claim under
§
1 of the Sherman Act;
(4) plaintiff has failed to plead facts to show concerted
action as necessary to support its claims for Sherman Act
violations based on concerted action; and
(5) plaintiff has failed to plead facts to show that it is
entitled to declaratory relief.
IV.
Standard of Review
Rule 8(a) (2) of the Federal Rules of Civil Procedure
provides, in a general way, the applicable standard of pleading.
It requires that a complaint contain "a short and plain statement
of the claim showing that the pleader is entitled to relief,"
3
Fed. R. Civ. P. 8(a) (2),
"in order to give the defendant fair
notice of what the claim is and the grounds upon which it rests,"
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)
quotation marks and ellipsis omitted) .
(internal
Although a complaint need
not contain detailed factual allegations, the "showing"
contemplated by Rule 8 requires the plaintiff to do more than
simply allege legal conclusions or recite the elements of a cause
of action.
Twombly, 550 U.S. at 555 & n.3.
Thus, while a court
must accept all of the factual allegations in the complaint as
true, it need not credit bare legal conclusions that are
unsupported by any factual underpinnings.
556 U.S. 662, 679 (2009)
See Ashcroft v. Igbal,
("While legal conclusions can provide
the framework of a complaint, they must be supported by factual
allegations.").
Moreover, to survive a motion to dismiss for failure to
state a claim under Rule 12(b) (6), the facts pleaded must allow
the court to infer that the plaintiff's right to relief is
plausible.
Igbal, 556 u.s. at 678.
To allege a plausible right
to relief, the facts pleaded must suggest liability; allegations
that are merely consistent with unlawful conduct are
insufficient. Id. In other words, where the facts pleaded do no
more than permit the court to infer the possibility of
misconduct, the complaint has not shown that the pleader is
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entitled to relief. Id. at 679. "Determining whether a complaint
states a plausible claim for relief .
[is]
a context-specific
task that requires the reviewing court to draw on its judicial
experience and common sense."
Id.
In considering a motion under Rule 12(b) (6), the court may
refer to matters of public record. Davis v. Bayless, 70 F.3d 367,
372 n.3
(5th Cir. 1995); Cinel v. Connick, 15 F.3d 1338, 1343 n.6
(5th Cir. 1994). This includes taking notice of pending judicial
proceedings. Patterson v. Mobil Oil Corp., 335 F.3d 476, 481 n.1
(5th Ci r . 2 0 0 3 ) .
V.
Analysis
A.
Noerr-Pennington Doctrine
A court may dismiss an action if a successful affirmative
defense appears on the face of the pleadings. Love Terminal
Partners, L.P. v. City of Dallas, 527 F. Supp. 2d 538, 549 (N.D.
Tex. 2007). One such defense is Noerr-Pennington immunity. Id. at
549-50. Defendants allege that they are entitled to this immunity
as to the claims asserted in Counts I-III and VII of plaintiff's
complaint.
The Noerr-Pennington doctrine allows individuals or
businesses to petition the government, free of the threat of
antitrust liability, for action that may have anti-competitive
5
consequences, even if motivated by anti-competitive intent.
Greenwood Utils. Comm'n v. Miss. Power Co., 751 F.2d 1484, 1497
(sth
Cir. 1985). The doctrine is named for the first two cases in
which the Supreme Court ruled that no liability could attach
under the Sherman Act for conspiring to lobby for allegedly anticompetitive legislation. Eastern R.R. Presidents Conf. v. Noerr
Motor Freight, Inc., 365 U.S. 127, 134-35 (1961); United Mine
Workers of Am. v. Pennington, 381 U.S. 657, 669-72
(1965). The
right to access the courts is one aspect of the right to
petition. California Motor Transp. Co. v. Trucking Unlimited, 404
U.S.508, 510
(1972). The right to petition includes those acts
reasonably and normally attendant thereto, such as sending demand
or cease-and-desist letters. Coastal States Mktg., Inc. V. Hunt,
6 9 4 F . 2 d 13 58 , 13 6 7 ( 5th Ci r . 19 8 3 ) .
An exception to the Noerr-Pennington doctrine exists where
it can be shown that the underlying litigation and related
activities were a sham. City of Columbia v. Omni Outdoor Advert.,
Inc., 499 U.S. 365, 379-82
(1991). To establish the sham
exception, plaintiff must first show that the underlying
litigation was objectively baseless in the sense that no
reasonable litigant could conclude that the suit was reasonably
calculated to elicit a favorable outcome and then show that
defendants subjectively intended the prosecution of their claims
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to interfere directly with plaintiff's business through the
pursuit of the litigation (as opposed to its outcome) .
Professional Real Estate Inv'rs, Inc. v. Columbia Pictures
Indus., Inc., 508 U.S. 49, 60-61 (1993) i Omni Outdoor, 499 U.S.
at 379-82. "[A]n objectively reasonable effort to litigate cannot
be a sham regardless of subjective intent.n Prof'l Real Estate
Inv'rs, 508 U.S. at 57.
In this case, despite plaintiff's conclusory allegations
about the "bad-faith Texas lawsuit,n the only conclusion to be
drawn is that the lawsuit was not objectively baseless. Even
though the judgment obtained was eventually set aside, it was for
want of proof of service of process. More importantly,
plaintiff's own actions-in refraining from using the molds
despite its contention that they are non-infringing- show that
plaintiff apparently believed the letters and lawsuit to have a
legitimate basis.
Plaintiff now urges that the underlying lawsuit only
addressed trade dress and not patent or copyrighti therefore, not
all of its antitrust-related claims are barred. However, the only
facts alleged to support the antitrust-related claims are the
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sending of the demand/cease and desist letters and the filing of
the lawsuit. 1 Therefore, the claims will be dismissed.
B.
Copperweld Doctrine and Concerted Action
As alternate grounds for dismissal of plaintiff's concerted
action claims (Count I and part of Count III), defendants urge
that plaintiff has not pleaded sufficient facts to show concerted
action and, in any event, has not shown that defendants are
separate actors. Under Copperweld Corp. v. Independence Tube
Corp., 467 U.S. 752, 777 (1984), and its progeny, parties that
have a unity of interests and common control cannot engage in
concerted action within the meaning of the Sherman Act. Plaintiff
has alleged that defendants are engaged in a common enterprise.
More importantly, it has not alleged any independent action by
BrandFX Holdings, LLC, or BrandFX, LLC. Rather, it has pleaded
that SNF acted on behalf of all defendants. 2 As the Supreme Court
has noted, the key to concerted action is "separate economic
actors pursuing separate economic interests" such that the
agreement "deprives the marketplace of independent centers of
decisionmaking." American Needle, Inc. v. Nat'l Football League,
1
The remainder of the allegations in this regard are conclusory and would not support antitrust
claims. Moreover,the alleged communication to Badger Truck appears to be of a type that would fall
under Noerr-Pennington. The "monopoly via acquisition" argument plaintiff makes is not supported by
its pleadings.
2
For the same reasons, plaintiff has failed to plead sufficient facts to show that defendants
entered into an agreement to restrain trade in violation of§ I of the Sherman Act.
8
560
u.s.
183, 195 (2010) (citation omitted). Plaintiff's complaint
makes clear that defendants do not compete with each other and,
thus, do not engage in concerted action. See Abraham & Veneklasen
Joint Venture v. Am Quarter Horse Ass'n, 776 F.3d 321, 327-28
(5th cir. 2 015) .
c.
Declaratory Judgment
Finally, defendants urge that plaintiff's claims for
declaratory judgment must be dismissed because plaintiff has
failed to show that there is a substantial, immediate, and
present justiciable controversy between the parties. Orix Credit
Alliance, Inc. v. Wolfe, 212 F.3d 891, 895
(5th Cir. 2000). That
is, plaintiff has not pleaded that there is a substantial
likelihood that it will suffer injury in the future unless relief
is granted. Bauer v. Texas, 341 F.3d 352, 358
(5th Cir. 2003).
Giving plaintiff the benefit of the doubt, as the court
must, plaintiff has identified a justiciable controversy between
it and defendants. As stated, supra, plaintiff apparently
believed or believes defendants' claim to possess certain rights
that might be infringed by plaintiff's use of the molds at issue.
Plaintiff has sought clarification from defendants regarding the
particular rights they are claiming, but they have refused to
identify such rights. Given the previous lawsuit, plaintiff has a
legitimate reason to believe that it will be sued if it goes
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forward with production of fiberglass truck bodies using the
molds at issue. Therefore, the court is denying the motion as to
the requests for declaratory judgment.
V.
Order
The court ORDERS that defendants' motion to dismiss be, and
is hereby, granted in part, and plaintiff's claims asserted under
Counts I-III and VII be, and are hereby, dismissed. The court
further ORDERS that the motion to dismiss be, and is hereby,
otherwise denied.
SIGNED September 23, 2015.
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