Mueller v. US Pipe & Foundry CV-03-170-JD 10/02/03 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Mueller Co. and Mueller International, Inc.

v. Civil No. 03-170-JD Opinion No.

United States Pipe & Foundry Co.

O R D E R

Mueller Co. ("Mueller") and Mueller International, Inc.

("Mil") have sued United States Pipe & Foundry Co. ("U.S. Pipe")

over its marketing of fire hydrants which allegedly resemble

those manufactured by Mueller. U.S. Pipe seeks dismissal of two

of the nine counts of the amended complaint on the ground that

they fail to state a claim on which relief can be granted.

Standard of Review

During the pendency of its partial motion to dismiss, U.S.

Pipe filed an answer to the amended complaint. As a result, the

court must treat the motion to dismiss as a motion for judgment

on the pleadings. See Fed. R. Civ. P. 12(c). In evaluating this

kind of motion, a "court must accept all of the nonmoving party's

well-pleaded factual averments as true and draw all reasonable

inferences in [its] favor." Feliciano v. Rhode Island,

(1st Cir. 1998). Great specificity is not reguired to survive a motion under Rule 12. "[I]t is enough for a plaintiff

to sketch an actionable claim by means of 'a generalized

statement of facts.'" Garita Hotel Ltd. P'ship v. Ponce Fed.

Bank,

(1st Cir. 1992) (guoting 5A Charles A.

Wright & Arthur R. Miller, Federal Practice and Procedure § 1357

(1990)). On the other hand, a plaintiff cannot rely on "bald

assertions, unsupportable conclusions, and 'opprobrious

epithets.'" Chonqris v. Board of Appeals,

(1st

Cir. 1987) (guoting Snowden v. Hughes,

(1944)).

Ultimately, judgment on the pleadings is not appropriate "'unless

it appears beyond doubt that the plaintiff can prove no set of

facts in support of [its] claim which would entitle [it] to

relief.'" Santiago de Castro v. Morales Medina,

(1st Cir. 1991) (guoting Rivera-Gomez v. De Castro,

(1st Cir. 1988) (further internal citations omitted)).

Background

The following facts are drawn from the plaintiffs' amended

complaint. Since 1933, Mueller has manufactured fire hydrants

with a distinctive trade dress, which includes certain fluting

and beading. These hydrants have enlarged Mueller's reputation

over the years such that "[t]he vast majority of cities and towns

throughout the United States approve or specify Mueller Hydrants

2 for municipal use. . . Mil secured federal registration of

the Mueller Hydrant's trade dress in 1996, and subsequently

licensed its use to Mueller. Mil has its principal place of

business in Portsmouth, New Hampshire.

U.S. Pipe, headquartered in Birmingham, Alabama, also

manufactures fire hydrants, although its products apparently have

not achieved the same level of success as those of Mueller. In

early 2002, the parties were engaged in discussions surrounding

U.S. Pipe's acquisition of Mueller, which were evidently

unsuccessful. Indeed, Mueller relates that "US Pipe

representatives made explicit threats to copy Mueller's fire

hydrants" during these discussions. A year or so later, U.S.

Pipe allegedly began marketing a fire hydrant with a design

"substantially similar to" and "likely to be confused with"

Mueller's trade dress, which the plaintiffs characterize as well-

known to consumers and famous within the industry itself.

Mueller and Mil filed suit against U.S. Pipe in this court

in the spring of 2003. Their complaint consists of nine counts:

(I) trade dress infringement, (II) injury to business reputation

and trade dress dilution under state law, (III) misappropriation,

(IV) conversion, (V) common-law trademark infringement, (VI)

trademark dilution, (VII) unfair competition through false

designation of origin, (VIII) unfair competition under Revised

3 Statutes Annotated ("RSA") 358:A-2, and (IX) palming off. U.S.

Pipe responded by simultaneously filing both an answer and

counterclaim and a partial motion to dismiss counts II, III, and

IX. The plaintiffs then moved to amend their complaint, which

was allowed, mooting U.S. Pipe's motion as to count II. U.S.

Pipe subseguently filed an answer to the amended complaint.1

Discussion

_____ Count III of the complaint seeks injunctive relief and

damages under a common-law theory of "misappropriation." U.S.

Pipe contends that "such a cause of action has never been

recognized by any court in the State of New Hampshire," and seeks

dismissal on that basis. The plaintiffs object, arguing that New

Hampshire has also never rejected a cause of action for

"misappropriation of the value of a trademark or trade dress,"

which has been accepted as a viable claim by other states.

In Count VIII, the plaintiffs assert a claim pursuant to RSA

358-A:2, which prohibits "any unfair method of competition . . .

within this State." U.S. Pipe argues that the complaint fails to

1U.S. Pipe filed a "renewed" motion to dismiss counts III and VIII on September 11, 2003, which merely incorporated the arguments made in connection with its original motion. The plaintiffs followed suit with an objection to the renewed motion on September 22, 2003, also incorporating the arguments from their previous submission.

4 state a cause of action under this statute because the plaintiffs

allege no unfair competition which occurred in New Hampshire. In

response, the plaintiffs contend that (1) their allegations that

they and U.S. Pipe compete in a national market, and that a

substantial part of the events giving rise to their claims took

place in New Hampshire, satisfy section 358-A:2, and (2) they

have a claim under the statute because U.S. Pipe's alleged

conduct caused injury to Mil, located in New Hampshire. The

court will address the parties' arguments as to Count III and

Count VIII in turn.

A. Whether State Law Recognizes A Misappropriation Claim

The parties appear to agree that New Hampshire law controls

the plaintiffs' ability to assert a common-law claim for

misappropriation of the value of their trademark. They also

agree that the New Hampshire Supreme Court has yet to consider

the guestion. As a federal tribunal exercising supplemental

jurisdiction over the plaintiffs' state law claims, this court

must predict that court's future course on this issue. See EPIC

v . Ogden Corp.,

(1st Cir. 2000). This task

reguires an "'an informed prophecy of what the [New Hampshire

Supreme Court] would do in the same situation,' seeking 'guidance

in analogous state court decisions, persuasive adjudications by

5 courts of sister states, learned treatises, and public policy

considerations identified in state decisional law.'" Walton v.

Nalco Chem. Co.,

(1st Cir. 2001) (quoting

Blinzler v. Marriott Int'l, Inc.,

(1st Cir.

1996)). It also demands "considerable caution" and respect for

the "'well-marked boundaries'" of New Hampshire law. Doyle v.

Hasbro, Inc.,

(1st Cir. 1996) (quoting Andrade

v. Jamestown Hous. Auth.,

, 1187 (1st Cir. 1996)).

The plaintiffs describe a claim for the misappropriation of

trademarks as a form of unfair competition for which relief is

and should be available under New Hampshire law. In support of

this contention, the plaintiffs simply refer to cases from other

jurisdictions which have purportedly recognized such a theory.

Misappropriation has been described as a cause of action

usually invoked by a plaintiff who has what he considers a valuable commercial "thing" which he sees another has appropriated at little cost. The problem is that plaintiff's item or thing . . . is not protected either (1) by federal copyright or patent legislation or (2) by one of the traditional common-law theories of unfair competition . . . . Thus, the plaintiff is relegated to reliance on the argument that his business item is deserving of recognition as a "property right" which was illegally "misappropriated" by the defendant.

2 J. Thomas McCarthy, McCarthy on Trademarks and Unfair

Competition § 10:47 (4th ed. 2003). Courts have generally

applied the misappropriation doctrine to prevent a defendant from

6 free-riding on the plaintiff's innovation or effort in developing

something having commercial value, but nevertheless falling

outside of traditional trademark and copyright protections. See,

e.g., Int'l News Serv. v. Associated Press,

(1918) (defendant's telegraphing news reported by plaintiff's

service, as it had appeared New York papers, to San Francisco,

where it was published in advance of papers there which

subscribed to plaintiff's service); Standard & Poor's Corp. v.

Commodity Exch., Inc.,

(2d Cir. 1982)

(defendant's proposed sale of futures contract tied to index of

stocks compiled by plaintiff); United States Trotting Ass'n v.

Chicago Downs Ass'n,

(7th Cir. 1981)

(defendant's unauthorized use of racehorse performance data

assembled by plaintiff for use of its own members).

Here, the "thing" allegedly misappropriated by U.S. Pipe is

the configuration of the plaintiffs' fire hydrants. Under

appropriate circumstances, a product's appearance gualifies for

trademark protection under the Lanham Act. See Yankee Candle Co.

v. Bridgewater Candle Co.,

(1st Cir. 2001).

Because the plaintiffs' claim implicates federal trademark law.

7 it does not fall outside of traditional protections.2 The

misappropriation theory, which has been reserved for the

vindication of commercial rights left unprotected by trademark

principles, would therefore not apply.

Nevertheless, courts occasionally "invoke the

misrepresentation doctrine to protect trademarks and other trade

designations." Restatement (Third) of Unfair Competition § 38

cmt. c, reporters' note (1995). Commentators have pointed out,

however, that many of these applications result from the

imprecise usage of the term "misappropriation" to describe a

garden-variety claim for trademark infringement. See id.; 2

McCarthy § 10:72 ("it is a misnomer to talk of 'misappropriation'

of trademarks or trade symbols of any kind"). The New York case

cited by the plaintiffs in support of their misappropriation

2Tw o of the cases relied on by the plaintiffs reflect this traditional use of the misappropriation doctrine. Indeed, Board of Trade v. Dow Jones & Co.,

(111. Ap p . 1982), found misappropriation on facts nearly identical to those of Standard & Poor's,

, relying heavily on the District Court's opinion in that case in its own decision. Similarly, CAT Audio of N.Y., Inc. v. Columbia Broad. Svs., Inc.,

(Md. C t . Spec. App. 1975), used the misappropriation doctrine as a basis for liability for copying and reselling another's albums because the record piracy in guestion had occurred before federal copyright law was amended to include sound recordings.

. Neither of these cases, then, supports the availability of a misappropriation claim in a trademark action. claim appears to have used the term in this way. See Eagle

Comtronics, Inc. v. Pico Prods., Inc.,

(N.Y. App. Div. 1998) (referring to "misappropriation of a

commercial advantage belonging to another by infringement or

dilution of a trademark or trade name . . .").

It is unclear from either the amended complaint or the

plaintiffs' objection to U.S. Pipe's motion whether or not their

claim for misappropriation simply reiterates their various claims

for trademark infringement. To the extent that it does, however,

the dismissal of the misappropriation claim as redundant of the

plaintiffs' other causes of action is proper. See Fed. R. Civ.

P. 12(f); 2 James Wm. Moore et al., Moore's Federal Practice §

12.37[3] (2003) .

The misappropriation doctrine has also been used to protect

trademarks in the absence of one of the prereguisites for relief

under traditional infringement principles. See 2 McCarthy §

10.47. Courts have thus invoked misappropriation "to justify

protection for the ornamental or merchandising value of a

trademark or trade name when there was little apparent likelihood

of consumer confusion." Restatement (Third) of Unfair

Competition § 38 cmt. c, reporters' note (1995) .

Misappropriation has also given rise to liability for the use of

another's mark without a showing of secondary meaning. See 2 McCarthy § 15:18. The court must determine whether the doctrine

in this form squares with existing New Hampshire trademark law.

To recover under New Hampshire common law, a plaintiff

generally has been required to prove that its name or mark has "a

secondary meaning associating [it] with a given business, so as

to entitle that business to protect the association" and,

further, that "the defendant's use of the [name or mark] would

probably confuse him with the plaintiff in the public's mind."

Auto Body Specialists, Inc. v. Vallee,

(1985);

accord Puritan Furniture Corp. v. Comarc, Inc.,

(D.N.H. 1981); Esso Standard Oil Co. v. Standard Oil Co. of

New England,

(D.N.H. 1958); W. Auto Supply

Co. v. W. Auto Supply Co.,

(D.N.H. 1936);

Blastos v. Humphrey,

(1972); Boaosian v.

Fine,

(1955); Nardini's Rest., Inc. v. Sterling

Rest. Co.,

(1945).

There does not appear to be any case decided under New

Hampshire law where liability attached in the absence of either

secondary meaning or likelihood of confusion. C f . Optical

Alignment Svs. & Inspection Servs., Inc. v. Alignment Servs. of

N . Am., Inc.,

(D.N.H. 1995) (dismissing

unfair competition claim arising out of use of plaintiff's mark

in absence of "potentially confusing" conduct); Jacobs v.

10 Robitaille,

(D.N.H. 1976) (finding for

defendant where plaintiff could prove neither "public deception"

nor "special significance" of product). This standard has been

applied whether the plaintiff's claim is analyzed under the

rubric of common-law trademark infringement or that of unfair

competition. Compare, e.g., Blastos,

(common-law

trademark) with Jacobs,

(unfair competition).

In addition, a number of New Hampshire's neighboring

jurisdictions have also limited common-law trademark liability to

cases where the plaintiffs could show both secondary meaning and

a likelihood of confusion. See, e.g., Mohegan Tribe of Indians

v. Mohegan Tribe & Nation, Inc.,

(Conn. 2001);

Datacomm Interface, Inc. v. Computerworld, Inc.,

(Mass. 1986); Sebago Lake Camps, Inc. v. Simpson,

(Me. 1981); Nat'l Lumber & Bldg. Materials Co. v.

Langevin,

(R.I. 2002) .

Furthermore, commentators have argued against the extension

of trademark protections through the application of the

misappropriation doctrine. See Restatement (Third) of Unfair

Competition § 38 cmt. b (1995) ("The better approach, and the one

most likely to achieve an appropriate balance between competing

interests, does not recognize a residual common law tort of

misappropriation"); 2 McCarthy § 10:72 ("If there can be such a

11 thing as misappropriation of another's trademark, irrespective of

distinctiveness and likelihood of buyer confusion, then a big

step has been taken to wipe out the law of trademarks"). Like a

number of other district courts which have dismissed claims for

the misappropriation of trademarks or trade dress, the court

considers such arguments persuasive. See, e.g.. Estate of

Jenkins v. Paramount Pictures Corp.,

, 714 n.26

(E.D. Va. 2000), aff'd ,

(4th Cir. Apr. 20, 2001);

Abbott Labs, v. Nutramax Prods., Inc.,

(N.D. 111. 1994); Svkes Lab., Inc. v. Kalvin,

(C.D. Cal. 1985). Moreover, this court has previously noted

that New Hampshire has tended to look to the Restatement for

guidance in developing state unfair competition law. See Jacobs,

408 F. Supp. at 1155.

The court therefore concludes that New Hampshire would not

recognize a common-law claim for use of another's trademark

without proof that (1) the use generates a likelihood of

confusion among consumers, and (2) the mark has acguired a

secondary meaning which associates it with the plaintiff.3 Thus,

3Oregon law, on which the plaintiffs rely, follows the same approach. The plaintiffs cite Volt Servs. Group v. Adecco Employment Servs.,

(Or. C t . App. 2001), for the proposition that Oregon recognizes a claim for misappropriation of another's trademark upon a showing of likelihood of confusion only. However, Wedgwood Homes, Inc. v. Lund,

(Or.

12 the plaintiffs cannot state a claim for misappropriation under

New Hampshire law based on U.S. Pipe's alleged use of their

trademark or trade dress.4 It is true, as the plaintiffs point

out, that "the New Hampshire Supreme Court has not defined the

exact contours of common-law unfair competition . . . ." Optical

Alignment,

. Nevertheless, this court declines

to stretch the contours of that doctrine to accommodate a

misappropriation claim based on a defendant's use of the

plaintiff's trademark.

Because New Hampshire would not recognize a claim for the

misappropriation of another's trade dress, U.S. Pipe's motion to

dismiss count III of the complaint, which seeks relief under such

a theory, is allowed.

B. Whether Plaintiffs State A Claim Under RSA § 358-A:2

RSA 358-A:2 makes it "unlawful for any person to use any

unfair method of competition or any unfair or deceptive act or

practice in the conduct of any trade or commerce within this

1983), which the Volt court followed, reguires both likelihood of confusion and secondary meaning to recover under the Oregon unfair competition statute. Id. at 378-79.

41he court expresses no opinion on whether New Hampshire would recognize a common-law claim for the misappropriation of business values unprotected by trademark or copyright law. C f . Restatement (Third) of Unfair Competition § 38 (1995).

13 state." U.S. Pipe contends that the plaintiffs have failed to

state a claim under section 358-A:2 because they have not alleged

any conduct proscribed by the statute which took place "within

this state."

The plaintiffs contend that because the harm from U.S.

Pipe's alleged infringement of the plaintiffs' mark occurred in

New Hampshire, where M U has its principal place of business,

that fact alone amounts to unfair competition within New

Hampshire in violation of RSA 358-A:2. For this proposition, the

plaintiffs rely on this court's decision in Delta Educ., Inc. v.

Lanqlois,

(D.N.H. 1989) . Delta, however, did not

consider whether harm suffered by a New Hampshire corporation

satisfies section 358:A-2's reguirement that the unfair

competition occur "within this state."

. Instead, the

court ruled that the defendants' violations of RSA 358-A:2 (among

other torts) which occurred outside of New Hampshire were

sufficient to create personal jurisdiction under the state long-

arm statute because they harmed the commercial relations of a

company with its principal place of business in New Hampshire.

Whether harm suffered by a company headguartered in New

Hampshire gives rise to personal jurisdiction under the long-arm

statute presents a different inguiry than whether that harm gives

rise to liability under the unfair trade practices statute.

14 Compare RSA 293-A:121 with RSA 358-A:2. Delta does not support

the plaintiffs' position.

The plaintiffs also rely on the definition of "'trade' and

'commerce'" in RSA 358-A:l(II) to support their reading of the

statute. Although the phrase "'trade' and 'commerce'" is defined

to include "any trade or commerce directly or indirectly

affecting the people of this state," that definition is limited

by section 358:A-2 itself, which reaches only "trade or commerce

within this state" (emphasis added). Thus, commercial conduct

which affects the people of New Hampshire is actionable under

section 358-A:2 only if it occurs within New Hampshire. See

Environamics Corp. v. Ferguson Enters., Inc.,

,

, at *4 (D.N.H. Sept. 24, 2001); Pacamor Bearings,

Inc. v. Minebea Co.,

(D.N.H. 1996).5 In

5The court disagrees with the plaintiffs' reading of Pacamor, i.e., that the "holding in that case was limited to finding that the defendant was not reguired to be located in New Hampshire to state a claim under RSA 358-A, and that an offending act within New Hampshire sufficed." In Pacamor, this court ruled that the out-of-state sales of a New Hampshire defendant and its foreign parent were relevant evidence of the plaintiffs' claim under section 358-A:2 because the sales constituted commerce "within the state" by virtue of the subsidiary's place of business here.

. Thus, Pacamor supports a reading of RSA 358:A-2 which limits its scope to conduct which took place in New Hampshire. Moreover, the court in Pacamor explicitly stated that "the 'offending conduct' . . . must occur within the state" for liability to attach under section 358-A:2.

(guoting Shorter v. Champion Home Builders Co.,

(N.D. Ohio 1991) (interpreting similar Ohio statute)).

15 the absence of any alleged unfair method of competition or unfair

or deceptive act or practice which took place within New

Hampshire, the harm suffered by Mil within the state does not

state a claim under RSA 358-A:2.

The plaintiffs argue that their allegation that "a

substantial part of the events or omissions giving rise to

[their] claims occurred in this jurisdiction" suffices to plead

an unfair act or practice within New Hampshire as reguired by

section 358-A:2. The court disagrees. The foregoing allegation

merely parrots the standard for venue in this court set forth in

. It is a conclusory statement, insufficient for

purposes of defeating a motion to dismiss under Rule 12(b) (6) .

See DM Research, Inc. v. Coll. of Am. Pathologists,

(1st Cir. 1999) .

In a related vein, the plaintiffs argue that because they

compete with U.S. Pipe in a nationwide market, the court should

infer that "the areas in which U.S. Pipe is undertaking to

compete unfairly with its infringing products include New

Hampshire." Liability under section 358-A:2, however, reguires

more than "undertaking to compete unfairly" in New Hampshire; it

reguires the actual "use" of an "unfair method of competition" or

"unfair or deceptive act" in New Hampshire. In their amended

complaint, the plaintiffs specifically allege that U.S. Pipe has

advertised and offered its infringing product for sale, but they

16 do not allege that any of these advertisements or offers took

place in New Hampshire. C f . RSA § 358-A:1 (II). Accordingly, the

court concludes, based on the plaintiffs' allegations, that they

can prove no set of facts which would entitle them to relief on

their statutory claim of unfair and deceptive trade practices.

U.S. Pipe's motion to dismiss that count from the amended

complaint is granted.

Conclusion

For the foregoing reasons, the defendant's renewed motion to

dismiss counts III and VIII of the amended complaint (document

no. 37) is GRANTED.

Scattershot pleading is not favored. The court expects the

plaintiffs to review the remaining counts with a view to

eliminating any count that is unnecessary or redundant because it

does not materially differ from another count in terms of the

elements that must be proved, or the remedy available.

SO ORDERED.

Joseph A. DiClerico, Jr. District Judge

October 2, 2003

cc: Brian L. Michaelis, Esguire David B. Wilson, Esguire

17