Choose Energy, Inc. v. American Petroleum Institute
Choose Energy, Inc. v. American Petroleum Institute
Opinion of the Court
ORDER GRANTING MOTION TO DISMISS AND GRANTING MOTION TO STRIKE
(Re: Docket Nos. 20, 32)
Last October, Plaintiff Choose Energy, Inc. filed this trademark infringement action against Defendant American Petroleum Institute over API’s use of “choose energy” in its pre-election promotional campaign. In the days leading up to the November election, Choose Energy sought a temporary restraining order to require API to take down its website at chooseen-ergy.org. This court denied such relief, finding insufficient likelihood of success on Choose Energy’s claims, particularly in light of Choose Energy’s inability to establish that it competes with API. With the election in the rear view mirror — and the website at issue no longer in operation— API now moves to dismiss Choose Energy’s federal and state law claims and moves to strike Choose Energy’s state law claims under California’s anti-SLAPP statute. Both motions are GRANTED.
I.
The Trademark Act of 1946 (“Lanham Act”) prohibits uses of trademarks,
For over ten years, Choose Energy and its online marketplace have allowed individuals and businesses in deregulated states like California to compare offerings from a diverse group of energy suppliers.
API touts itself as the leading trade association for the petroleum and natural gas industry in the United States.
Last year, API launched a “Choose Energy” project as part of a campaign aimed at educating voters and encouraging them to engage in conversation about energy issues in the 2014 election and to elect officials who support energy initiatives.
After learning about API’s campaign, Choose Energy wrote a letter to API demanding that its use of “Choose Energy” in its campaign stop. After a period of consideration and negotiation, API ultimately declined. API’s response was curt, declaring that the First Amendment right
Choose Energy responded by filing suit in this court. Choose Energy’s complaint alleges that “API has misappropriated Choose Energy’s trademarks for a promotional campaign that is energy biased— extolling the purported benefits of the oil and natural gas industries and presenting a single choice to consumers: continued dependence upon non-renewable fossil fuels regardless of their adverse impact upon the environment.”
Choose Energy sought a temporary restraining order to shut down chooseener-gy.org mere days before last year’s election, which this court denied, finding that the Lanham Act did not apply because Choose Energy and API do not compete and that Choose Energy could not show a likelihood of prevailing on the merits.
II.
This court has jurisdiction under 28 U.S.C. §§ 1331 and 1338. The parties further consented to magistrate judge jurisdiction pursuant to 28 U.S.C. § 636(c) and Fed. R. Civ. P. 72(a).
Under Fed. R. Civ. P. 12(b)(6), “.dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.”
III.
First, Choose Energy has not alleged facts sufficient to state a claim under the Lanham Act. In order for the alleged conduct to fall within the Act’s purview, Choose Energy must allege that API used its mark in connection with goods or services.
To the extent that Choose Energy relies on United We Stand to argue that political activities can be construed as services to trigger liability under the Lanham Act,
While Choose Energy’s complaint is devoid of any allegation that it is in competition with API, Choose Energy’s final attempt to identify such competition in its brief is unavailing. In particular, Choose Energy argues that API and Choose Energy compete as ideological rivals to educate Americans on key energy issues. But this is contrary to Choose Energy’s claims in its own complaint that it “provides a commercial service that is energy unbiased” that allows consumers to make choices about their energy use.
Second, Choose Energy has failed to state a claim on its state law causes of action. In the Ninth Circuit, trademark claims and unfair competition claims under California state law are “substantially congruent” with federal trademark and unfair competition claims.
Third, Choose Energy’s state law claims cannot overcome California’s anti-SLAPP law. In order to prevail on an anti-SLAPP motion, a defendant “must show that the lawsuit arises from exercising his right of free speech under the United States Constitution in connection with a public issue.”
As to API’s initial burden, the antiSLAPP statute protects a defendant’s free speech, including written or oral speech made in a public forum about an issue of public interest.
Here, Choose Energy sued API over language — “choose energy” — that reasonably constitutes political speech about a public issue- — energy policy. The complaint references allegedly offending activities such as operating the mid-term election campaign website with the domain name www.chooseenergy.org and using statements such as “I choose energy,” “Choose job growth” and “Choose energy security” on API’s website as part of its political platform.
Choose Energy counters by arguing that API’s use of “choose energy” was a source-identifier and thus not entitled to First Amendment protection.
Both parties rely on the key Ninth Circuit case that is on point here — Bosley Medical Institute, Inc. v. Kremer.
As to the burden shifted to Choose Energy, “[t]he standard for an antiSLAPP motion — probability of prevailing on the merits — presents a higher burden than the plausibility standard applied for a motion to dismiss. If Plaintiffs cannot plead a plausible cause of action under the [Fed. R. Civ. P.] 12(b)(6) standard, then Plaintiffs as a matter of law cannot meet the probability of success on the merits standard [under C.C.P. § 425.16].”
As for whether to grant Choose Energy leave to amend, because the court is not yet persuaded that amendment of the federal claims would be futile,
To remedy this deficiency, within seven (7) days of this order, the parties shall meet and confer about whether’ leave to amend the state law claims also is warranted. If the consensus is yes, the parties shall file an appropriate stipulation within 21 days of this order. If no consensus is reached, within 21 days of this order, each party shall submit up to five (5) pages outlining their position. Choose Energy’s deadline for filing any amended federal claims shall be seven (7) days from the filing of a stipulation or a court order resolving the parties’ dispute.
SO ORDERED.
. See 15 U.S.C§§ 1114, 1125(a).
. Bosley Med. Instit., Inc. v. Kremer, Inc., 403 F.3d 672, 676-77 (9th Cir. 2005) (citing Prestonettes, Inc. v. Coty, 264 U.S. 359, 368, 44 S.Ct. 350, 68 L.Ed. 731 (1924) (“A trade-mark only gives the right to prohibit the use of it so far as to protect the owner’s good will against the sale of another’s product as his.” (emphasis added)); Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S. 203, 205, 62 S.Ct. 1022, 86 L.Ed. 1381 (1942) (explaining that the main purpose of the Lanham Act is to prevent the use of identical or similar marks in a way that confuses the public about the actual source of goods and services).
. See Docket No. 1 at ¶ 12.
. See id. at ¶ 13.
. See id.
. See id.
. See Docket No. 20 at 1.
. See id.
. See id.
. See Docket No. 1 at ¶ 21.
. Docket No. 20 at 3.
. Docket No. 1 at 2 (emphasis in original).
. Id.
. See Docket No. 24.
. See http://www.chooseenergy.org.
. See Docket Nos. 7, 13.
. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990).
. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).
. Ashcroft v. Iqbal, 556 U.S. 662, 663, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).
. See 15 U.S.C. § 1114(l)(a) (the mark must be used “in commerce ... in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in
. See Docket No. 20 at 3 ("It is clear that API’s use of the terms 'Choose Energy' and 'I choose energy' are part of a purely political message intended to encourage voters to make energy a ballot box decision and to educate themselves in assessing candidates’ energy policies.”).
. See Docket No. 1 at ¶¶ 21-29 (generally alleging that API's use of its mark causes customer confusion but neglecting to point to any specific acts or services that might constitute a violation under the Lanham Act).
. See id. at ¶ 21.
. See 15 U.S.C. § 1114(l)(a).
. In any event, Choose Energy’s reliance on API's status as a trade organization and the fact that API promotes the sale of petroleum does not hold water. While API may be financed by or represent — in some capacity— corporations that sell petroleum, Choose Energy can point to no individual statements in API’s political campaign materials that advertise the sale of petroleum to consumers.
. United We Stand Am., Inc. v. United We Stand, Am. N.Y., Inc., 128 F.3d 86, 89-90 (2d Cir. 1997):
Since [UWSANY's] incorporation, it has engaged in political organizing; established and equipped an office; solicited politicians to run on the UWSANY slate; issued press releases intended to support particular candidates and causes; endorsed candidates; and distributed partisan political literature. These are the services characteristically rendered by a political party to and for its members, adherents, and candidates. Although not undertaken for profit, they unquestionably render a service. We have no doubt that they satisfy § 1114(l)(a)'s requirement that the mark be used in connection with goods or services.
. See Bosley Med. Inst., 403 F.3d at 679 ("The Second Circuit held in United We Stand ... that the 'use in connection with the sale of goods and services’ requirement of the Lan-ham Act does not require any actual sale of goods and services. Thus, the appropriate inquiry is whether [Defendant] offers competing services to the public.” (emphasis in original)); see also Wash. State Republican Party v. Wash. State Grange, 676 F.3d 784, 795 (9th Cir. 2012) ("At minimum, however, the plaintiff must show that the defendant offers competing services to the public.” (emphasis in original) (internal quotation marks omitted)); see also Stanislaus Custodial Deputy Sheriffs' Assoc. v. Deputy Sheriff s Assoc. of Stanislaus Cnty., Case No. 09-cv-01988, 2010 WL 843131, at *6 (E.D.Cal. Mar. 20, 2010) ("Thus, United W[e] Stand America, at best for plaintiff, stands for the proposition that if an actual sale of goods is not involved, the in-fringer must be engaged in some form of ... competition." (emphasis in original)).
. See Docket No. 24.
. See Docket No. 1 at ¶¶ 12-14.
. See Grupo Gigante S.A. de C.V. v. Dallo & Co., 391 F.3d 1088, 1100 (9th Cir. 2004) (quoting Playboy Enters., Inc. v. Netscape Commc'ns Corp., 354 F.3d 1020 n. 10 (9th Cir. 2004)); Yelp Inc. v. Catron, 70 F.Supp.3d 1082, 1098, 2014 WL 4966706, at *10 (N.D.Cal. 2014).
. C.C.P. § 425.16(b)(1); Tamkin v. CBS Broad., Inc., 193 Cal.App.4th 133, 142, 122 Cal.Rptr.3d 264 (2011).
. Id.
. The anti-SLAPP statute enumerates several kinds of protected speech:
1. any written or oral statement made before a legislative, executive, or judicial proceeding authorized by law;
2. any written or oral statement made in -connection with an issue under consideration or review by a legislative, executive, or judicial body or any official proceeding authorized by law;
3. any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest;
4. any other conduct in furtherance of the exercise of the constitutional right of free speech in connection with a public issue or an issue of public interest. C.C.P. § 425.16(e)( 1) — (4).
. See Kronemyer v. Internet Movie Data Base, Inc., 150 Cal.App.4th 941, 949, 59 Cal.Rptr.3d 48 (2007).
. See, e.g.,. Wong v. Tai Jing, 189 Cal.App.4th 1354, 1366, 117 Cal.Rptr.3d 747 (2010); Wilbanks v. Wolk, 121 Cal.App.4th 883, 895, 17 Cal.Rptr.3d 497 (2004).
. Nygard Inc. v. Uusi-Kerttula, 159 Cal.App.4th 1027, 1043, 72 Cal.Rptr.3d 210 (2008).
. See Docket No. 1 at ¶¶ 21-22.
. See Am. Family Life Ins. Co. v. Hagan, 266 F.Supp.2d 682, 700 (N.D. Ohio 2002).
. See, e.g., id.; Planned Parenthood Fed’n of Am., Inc. v. Bucci, Case No. 97-cv-00629, 1997 WL 133313 (S.D.N.Y. Mar. 24, 1997); United We Stand America, 128 F.3d 86 (2d Cir. 1997); Anheuser-Busch, Inc. v. Balducci Publ’ns, 28 F.3d 769 (8th Cir. 1994); Mutual of Omaha Ins. Co. v. Novak, 836 F.2d 397 (8th Cir. 1987).
. See id.
. 403 F.3d 672 (9th Cir. 2005).
. Id. at 682 (emphasis omitted); see also Name.Space, Inc. v. Network Solutions, Inc., 202 F.3d 573, 585 (2d Cir. 2000) (''[d]omain names ... per se are neither automatically entitled to nor excluded from the protections of the First Amendment, and the appropriate inquiry is one that fully addresses particular circumstances presented with respect to each domain name.”).
. Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1327 (9th Cir. 1998).
. Xu v. Yamanaka, Case No. 13-cv-03240, 2014 WL 342271, at *4 (N.D.Cal. Jan. 30, 2014); see also Tuchscher Dev. Enters., Inc. v. San Diego Unified Port Dist., 106 Cal.App.4th 1219, 1236, 132 Cal.Rptr.2d 57 (2003) (Plaintiff must be able to show that its claims have merits based on “competent and admissible evidence."); Bernardo v. Planned Parenthood Federation of Am., 115 Cal.App.4th 322, 359, 9 Cal.Rptr.3d 197 (2004) (If a plaintiff fails to state a legally sufficient claim, the court must dismiss the action under the anti-SLAPP statute.).
. See Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (quoting Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)).
. See Verizon Delaware, Inc. v. Covad Comm’ns Co., 377 F.3d 1081, 1091 (9th Cir. 2004) (cautioning that when anti-SLAPP motions are brought in federal court to strike state law claims, "procedural state laws [cannot be] used in federal court if to do so would result in a direct collision with a Federal Rule of Civil Procedure” (quoting Metabolife Int’l v. Wornick, 264 F.3d 832, 845-46 (9th Cir. 2001))).
. Fed. R. Civ. P. 15(a); see Eminence Capital, LLC, 316 F.3d at 1051-52 (9th Cir. 2003) ("Generally, Rule 15 advises the court that 'leave shall be freely given when justice so requires.' This policy is 'to be applied with extreme liberality.’ ” (quoting Fed. R. Civ. P. 15(a); Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001))).
. See United States ex. Rel. Newsham v. Lockheed Missiles & Space Co., 190 F.3d 963, 973 (9th Cir. 1999).
. See, e.g., Metabolife Int’l, Inc. v. Wornick, 264 F.3d 832, 845 (9th Cir. 2001) (holding that the “discovery-limiting aspects” of the anti-SLAPP statute do not apply in federal court); see also Makaeff v. Trump Univ., LLC, 715 F.3d 254, 275 (9th Cir. 2013) (Kozinski, J., concurring) ("After Metabolife, the federal court special motion is a far different (and
. Verizon Delaware, Inc., 377 F.3d at 1091.
. See, e.g., Choyce v. SF Bay Area Indep. Media Ctr., Case No. 13-cv-01842, 2013 WL 6234628, at *11 (N.D.Cal. Dec. 2, 2013) (finding that Verizon Delaware requires that "when dismissing a claim pursuant to the anti-SLAPP statute, a plaintiff should be granted leave to amend and re-assert the stricken claims, although with the proviso that the newly amended complaint would then also be subject to yet another anti-SLAPP motion”); Art of Living Found. v. Does, Case No. 10-cv-05022, 2011 WL 2441898, at *9 (N.D.Cal. June 15, 2011) (following Verizon Delaware and finding that "because it is not clear that leave to amend would be futile, and this is Plaintiff's initial complaint, striking Plaintiff’s initial Complaint would 'directly collide' with Rule 15's liberal amendment policy”).
. Harper v. Lugbauer, Case No. 11-cv-01306, 2012 WL 1029996, at *6 (N.D.Cal. Mar. 15, 2012) (quoting Smith v. Santa Rosa Democrat, Case No. 11-cv-02411, 2011 WL 5006463, at *7 (N.D.Cal. Oct. 20, 2011)).
. Only after the court resolves this dispute shall API pursue any fee or cost award.
Reference
- Full Case Name
- CHOOSE ENERGY, INC. v. AMERICAN PETROLEUM INSTITUTE
- Status
- Published