Steer Mach. Tool & Die Corp. v. SS Niles Bottle Stoppers, LLC
Steer Mach. Tool & Die Corp. v. SS Niles Bottle Stoppers, LLC
Opinion of the Court
Before the court is a motion to dismiss three counts of plaintiff's complaint filed by Defendant SS Niles Bottle Stoppers, LLC and Defendant Ruth Niles. The parties have briefed the matter and it is ripe for disposition. For the reasons articulated below, we will deny the defendants' motion.
Background
This case comes before the court as a trademark and breach of contract dispute. Plaintiff Steer Machine Tool & Die Corporation (hereinafter "Steer Machine") manufactures, among other things, stainless steel bottle stoppers.
Notably, this is not the first time that these parties are before this court on a business dispute relating to their bottle stoppers. In 2016, SS Niles sued Steer Machine alleging, inter alia , trademark infringement. (See SS Niles Bottlestoppers, LLC v. Steer Machine Tool & Die Corp., Case No: 3:16-CV-0032). On October 4, 2016, SS Niles notified the court that the case had settled by way of a settlement agreement between the parties. The settlement agreement described the parameters of what was the proprietary trademark and patents of the respective parties, and noted how the parties would continue to conduct their businesses in the future.
After receiving notice of the settlement agreement, the Clerk of Court closed the case. Over a year later, on November 20, 2017, Steer Machine filed a motion to reopen the case and a motion for contempt, arguing that SS Niles had failed to comply with the settlement agreement. Because the agreement being contested was strictly between the parties and was never entered by the court, we denied Steer Machine's motions and concluded that we no longer had jurisdiction to enforce the settlement agreement.
Two months later, on January 30, 2018, Steer Machine (hereinafter "plaintiff") filed the instant action against SS Niles and Ruth Niles, president of SS Niles (hereinafter collectively "defendants"). Plaintiff Steer Machine contends that from the time the parties entered into the settlement agreement in October 2016 through the summer of 2017, the defendants repeatedly made derogatory and disparaging posts on social media about the plaintiff, in violation of the parties' settlement agreement. (Doc. 1, Compl. ¶ 21). In addition, on more than one occasion, the defendants posted images of mandrels, bottle stoppers, and other manufactured items on their social media accounts. (Id. ¶¶ 22, 23). According to the plaintiff, the defendants portrayed these images to be their own manufactured creations, when in reality, the images were custom images of the plaintiff, copied from the plaintiff's website. (Id. ¶ 24). Plaintiff's complaint further alleges that the defendants posted inappropriate and inflammatory messages about the plaintiff through the website www.nilesbottlestoppers.com. (Id. ¶¶ 26, 27, 28).
Plaintiff's counsel eventually sent the defendants a cease and desist letter. (Id. ¶ 33). Defendant Ruth Niles advised the plaintiff that she agreed to cease and desist. (Id. ) Nevertheless, plaintiff alleges that the defendants' conduct continued. Thus, plaintiff filed the instant five count complaint. (Doc. 1). The complaint raises the following causes of action: Count I: Federal Trademark Infringement in violation of
On April 2, 2018, the defendant filed a motion to dismiss what we construe to be Counts I, II, and V of plaintiff's complaint. (Doc. 11). The parties then briefed the motion, bringing this case to its present posture.
Jurisdiction
The court has federal question jurisdiction over this case that alleges violations of the United States Trademark Act of 1946, *432
Discussion
As noted above, plaintiff's complaint raises five causes of action. Presently, the defendants seek to dismiss Counts I, II, and V. We will begin our analysis with plaintiff's claims filed under the Lanham Act.
I. Lanham Act Claims-Counts I and II
The defendants move to dismiss plaintiff's Lanham Act claims: Count I, Federal Trademark Infringement in violation of
To prevail on a claim for trademark infringement and unfair competition under the Lanham Act, a plaintiff must establish the following three elements: 1) that the mark is valid and legally protectable; 2) that the plaintiff owns the mark; and 3) that the defendant's use of the mark is likely to cause confusion. Kos Pharms., Inc. v. Andrx Corp.,
As noted above, the defendants here argue that the plaintiff has failed to establish a violation of the Lanham Act because it did not show that its injury was proximately caused by the defendants' actions. The Court in Lexmark, however, did not address how to establish a violation of the Lanham Act. Rather, the Court granted certiorari in Lexmark to decide "the appropriate analytical framework for determining a party's standing to maintain an action for false advertising under the Lanham Act." (
*433"Article III of the Constitution limits the judicial power of the United States to the resolution of Cases and Controversies, and Article III standing enforces the Constitution's case-or-controversy requirement." Hein v. Freedom From Religion Found., Inc.,
The Court found that in order to come within the zone of interest in a suit for false advertising under
At this juncture, we now consider whether the narrow question of whether the plaintiff in the case before us has adequately demonstrated that it has standing to pursue its false advertisement claim under the Lanham Act.
First, the plaintiff's alleged injuries are precisely the sorts of commercial interests the Lanham Act protects. The plaintiff contends that from the time the parties entered into a settlement agreement in October 2016 through the summer of 2017, the defendants repeatedly made derogatory and disparaging posts on social media and elsewhere about the plaintiff. (Doc. 1, Compl. ¶ 21). On several occasions, the defendants posted images of the plaintiff's mandrels, bottle stoppers, and other manufactured products on the defendants' social media accounts, pretending that the products were theirs. (Id. ¶ 23). Plaintiff's complaint further alleges that the defendants continued to post inappropriate and inflammatory messages about the plaintiff through the website www.nilesbottlestoppers.com. (Id. ¶¶ 26, 27, 28).
Based on these pleadings, we find that the plaintiff is suing "not as a deceived consumer, but as a 'perso[n] engaged in' 'commerce within the control of Congress' whose position in the marketplace has been damaged by the defendants' false advertising." Lexmark,
We further find that the plaintiff sufficiently alleged that its injuries were *434proximately caused by the defendants' misrepresentations. Unlike the parties in Lexmark, the parties in the instant case are direct competitors of each other. Both the plaintiff and the defendants engage in the business of manufacturing and selling bottle stoppers. The arrangement before us is "the 'classic Lanham Act false-advertising claim' in which 'one competito[r] directly injur[es] another by making false statements about his own goods [or the competitor's goods] and thus inducing customers to switch.' "
As such, we conclude that the plaintiff has alleged an adequate basis to proceed on its false advertisement claim under § 1125(a). The defendants' motion to dismiss Count II will be denied.
II. Breach of Contract-Count V
The defendants also move to dismiss Count V, plaintiff's breach of contract claim. As noted above, the parties had a prior business dispute which lead to a previous case in this district, SS Niles Bottle Stoppers, LLC v. Steer Machine Tool & Die Corporation, Case No: 3:16-CV-0032. This litigation was resolved by way of a settlement agreement. Now, the plaintiff alleges that the defendant has violated parts of that settlement agreement.
A. Legal Standard
The defendants filed their motion to dismiss Count V of plaintiff's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). The court tests the sufficiency of the complaint's allegations when considering a Rule 12(b)(6) motion. All well-pleaded allegations of the complaint must be viewed as true and in the light most favorable to the non-movant to determine whether, " 'under any reasonable reading of the pleadings, the plaintiff may be entitled to relief.' " Colburn v. Upper Darby Twp.,
The federal rules require only that plaintiff provide "a short and plain statement of the claim establishing that the pleader is entitled to relief," a standard which "does not require detailed factual allegations," but a plaintiff must make "a showing, rather than a blanket assertion, of entitlement to relief that rises above the speculative level."
*435McTernan v. N.Y.C.,
B. Analysis
The defendants argue that Count V should be dismissed because the plaintiff "fails to provide specific instances of which parts of the agreement, if any, were violated." (Doc. 13, Def.'s Br. in Supp. at 3). In response, the plaintiff points us to the complaint, which it argues is ripe with very specific allegations of breach. We agree with the plaintiff.
The twenty-page complaint before us contains seventy paragraphs of allegations. In reviewing, more specifically, Paragraph 17 through Paragraph 35, we find eighteen paragraphs of allegations that pertain directly to violations of the settlement agreement. These paragraphs detail, in many cases, to the exact date, instances of the defendants' interference with the plaintiff's business. For example, in Paragraph 21 the plaintiff alleges that on August 14, 2017, the defendants posted on social media a new mandrel that the defendants were selling. The defendants' posting claimed that "the knock-off guys [were] selling them so [the defendants] will too." (Doc. 1, Comp. ¶ 21). The defendants depicted this "new mandrel," however, with a custom photo of the plaintiff's mandrel that was taken from the plaintiff's webpage.
The plaintiff has included a copy of the settlement agreement as an exhibit to the complaint. According to the settlement agreement submitted by the plaintiff, the parties agreed to "not in any way ... disparage the other Party ... regarding their products, Patents, prior business relations, past conduct during their affiliation with each other, or the matters described within the Lawsuit." (Doc. 1-1, Settlement Agreement ¶ 8).
As such, we find that, with respect to Count V breach of contract, the plaintiff has sufficiently stated a claim upon which relief maybe granted.
Conclusion
For the reasons set forth above, we find that the plaintiff has standing to raise its false advertising claim. Further, the defendants have raised no convincing arguments regarding dismissal of the Federal Trademark Infringement claim, and plaintiff has adequately plead a breach of contract claim. Accordingly, we will deny the defendants' motion to dismiss. An appropriate order follows.
A bottle stopper is an accessory used to close leftover bottles of wine, olive oil, balsamic vinegar, bath oil, liquors, and other decorative herb bottles.
Because the holding in Lexmark relates only to plaintiff's Federal Unfair Competition claim pursuant to
Reference
- Full Case Name
- STEER MACHINE TOOL & DIE CORPORATION v. SS NILES BOTTLE STOPPERS, LLC and Ruth Niles
- Cited By
- 4 cases
- Status
- Published