Ramirez & Feraud Chili Co. v. Las Palmas Food Company

• Decision Date: 08 November 1956
• Docket Number: No. 19355.,19355.
• Citation: 146 F. Supp. 594
• Court: U.S. District Court — Southern District of California
• Parties: RAMIREZ & FERAUD CHILI CO., a co-partnership composed of Frank Feraud and E. C. Feraud, Plaintiff, v. LAS PALMAS FOOD COMPANY, Inc., a corporation, Pablo Baca Gavaldon, and Ralph Worthington, Defendants.

146 F. Supp. 594

RAMIREZ & FERAUD CHILI CO., a co-partnership composed of Frank Feraud and E. C. Feraud, Plaintiff, v. LAS PALMAS FOOD COMPANY, Inc., a corporation, Pablo Baca Gavaldon, and Ralph Worthington, Defendants.

No. 19355.

United States District Court S. D. California, Central Division.

November 8, 1956.

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Harris, Kiech, Foster & Harris, Ford Harris, Jr., Warren L. Kern, Walton Eugene Tinsley, Los Angeles, Cal., for plaintiff.

Mason & Howard, Paul P. Selvin, Los Angeles, Cal., for defendants.

MATHES, District Judge.

By this action plaintiff seeks an injunction restraining further alleged infringement and unfair competition in the use of plaintiff's trade-mark and trade name "Las Palmas"; also three-fold damages and other equitable relief.

The original jurisdiction of this court is invoked under the Trade-Mark Act of 1946 — the Lanham Act. 60 Stat. 427 (1946), 15 U.S.C.A. §§ 1051-1127; 28 U.S.C. § 1338(a). Pendent jurisdiction of related claims of unfair competition is invoked under 28 U.S.C. § 1338(b). Cf. Hurn v. Oursler, 1933, 289 U.S. 238, 240-243, 248, 53 S.Ct. 586, 77 L.Ed. 1148.

Plaintiff has moved for a preliminary injunction Fed.R.Civ.Proc. Rule 65, 28 U.S.C., and defendants have interposed a motion to dismiss for lack of jurisdiction over the subject matter or, in the alternative, for failure to state a claim upon which relief can be granted. Id. Rule 12(b) (1), (6). Both sides have filed affidavits and counter affidavits in support of and in opposition to the motions.

Jurisdiction is the threshold issue in every case in the federal courts, Mansfield C. & L. M. Ry. v. Swan, 1884, 111 U.S. 379, 382, 4 S.Ct. 510, 28 L.Ed. 462, so the first question is whether the facts exist "upon which the court's jurisdiction depends". Fed.R.Civ.Proc. Rule 8(a); cf. Gibbs v. Buck, 1939, 307 U.S. 66, 59 S.Ct. 725, 83 L.Ed. 1111.

Diversity jurisdiction is not claimed; nor does the requisite diversity of citizenship exist. City of Indianapolis v. Chase National Bank, 1941, 314 U.S. 63, 62 S.Ct. 15, 86 L.Ed. 47. If plaintiff asserts an actionable claim under the Lanham Act for infringement or unfair competition in the use of a trade-mark or trade name, jurisdiction is expressly conferred upon this court "without regard to the amount in controversy or to diversity or lack of diversity of the citizenship of the parties." 15 U.S.C.A. § 1121.

Upon a motion to dismiss for want of jurisdiction, the court may weigh affidavits and other evidence in determining the existence or non-existence of requisite jurisdictional facts. Land v. Dollar, 1947, 330 U.S. 731, 735, note 4, 67 S.Ct. 1009, 91 L.Ed. 1209; see Fed. R.Civ.Proc. Rules 43(a, e), 41(b), 52(a).

Here all issues as to the jurisdictional facts can be resolved by weighing the affidavits along with the allegations of the verified amended complaint. See Williams v. Minnesota Min. & Mfg. Co., D. C.S.D.Cal.1953, 14 F.R.D. 1.

The facts alleged in the amended complaint, and found to be true for the purposes of the pending motion to dismiss, are briefly these:

Plaintiff is owner of the valid and subsisting United States trade-mark "Las Palmas," which in 1940 was registered by plaintiff in the United States Patent Office under the Trade-Mark Act of 1905, and in 1949 republished under the Trade-Mark Act of 1946 pursuant to § 12(c) thereof, 15 U.S.C.A. § 1062(c).

In 1954 the requisite affidavit was timely filed with the Commissioner of Patents, and thereupon plaintiff's registration of the trade-mark "Las Palmas" became incontestable by virtue of § 15 of the Act. Id. § 1065. Plaintiff's registrations of the mark in the United States are No. 379,295 and No. 582,054.

Plaintiff adopted and has long used the registered trade-mark "Las Palmas" for various canned Spanish foods and sauces. Since 1922 plaintiff has employed the mark in the sale of such goods in local and interstate commerce within the United States; and since 1948 in foreign commerce between the United States and the Republic of Mexico.

These food products have been advertised for the past thirty years in the United States, and for the past five years in Mexico. As a result of advertising and sales in the United States and Mexico, plaintiff has developed a valuable good will associated with the trademark and trade name "Las Palmas" and plaintiff's label as well, both in this country and in Mexico, and more especially in the border towns of Baja California, such as Mexicali, Tijuana and Ensenada.

When in 1953 defendant Las Palmas Food Company, Inc. was incorporated as a California corporation, with a place of business at Los Angeles in this District, defendant Worthington, an American citizen and resident of this District, chose the name Las Palmas with full knowledge of plaintiff's registered United States trade-mark and with the intention of appropriating the good will associated with that mark and that name. Defendant Gavaldon, a citizen of Mexico and resident of this District, and a former customer of plaintiff, also had knowledge of plaintiff's prior use of the mark and name and of the good will associated with both mark and name.

Later in 1953, for the purpose of appropriating to themselves plaintiff's good will in the "Las Palmas" trade-mark in Mexico, defendants caused to be filed an application to register the trade-mark in Mexico under the name of Fernando de La Pena of Tijuana, Baja California, Mexico; which registration issued under No. 76,068 on October 28, 1953, and was thereafter assigned to defendant Gavaldon.

In 1955, using plaintiff's label as a model, defendants caused to be printed within this District a "Las Palmas" label for chili sauce which embodies not only the identical trade-mark, but also the exact colors of plaintiff's label and the same format, style of printing and similar layout and design; and is in effect a deliberate counterfeit of plaintiff's label.

Quantities of this counterfeit label, and of cans and cartons as well, all procured within the territorial jurisdiction of this court, were transported by defendants across the border into Mexico; and defendants then commenced to pack in Mexico a red chili sauce, in cans identical in size and shape to plaintiff's and bearing the counterfeit label with the "Las Palmas" trade-mark; and thereafter sold this product in Mexico, particularly in border towns such as Tijuana and Mexicali, where plaintiff's "Las Palmas" red chili sauce is popular.

It has long been the practice of persons of Mexican origin or descent residing in the border cities on the American side, such as Calexico and San Diego in California, to purchase many of their groceries, including plaintiff's "Las Palmas" products, in the corresponding Mexican border cities of Mexicali and Tijuana, and freely to carry such groceries back to their homes in the United States, where such food products are consumed.

In the language of plaintiff's complaint, "such United States residents or citizens, or some of them, have been deceived in Mexico by defendants' spurious `Las Palmas' products and have carried such spurious products back into the United States for consumption, and there is a substantial likelihood that such purchasers, buying defendants' spurious products in Mexico, will be confused and misled into believing they are buying plaintiff's product; and plaintiff's good will in the United States is thereby placed in jeopardy of any inferiority or impurity in the defendants' spurious product."

Defendants' products are produced and canned in Mexico under comparatively unsanitary conditions, and are inferior in quality to plaintiff's products.

On or about August 30, 1955, defendant Las Palmas Food Company, Inc. sent letters by interstate and foreign mail from Los Angeles in this District, addressed to each of plaintiff's brokers and wholesalers in the United States and Mexico, declaring defendant corporation to be the exclusive owner in Mexico of the "Las Palmas" trade-mark and asserting that any exportation to Mexico of plaintiff's products bearing the trademark "Las Palmas" would be an infringement of defendants' trade-mark registered in Mexico.

This letter was false in at least two particulars: first, in the unqualified assertion that exportation of plaintiff's "Las Palmas" products to Mexico would be an infringement of defendants' mark in Mexico, since the trade-mark laws of Mexico recognize the rights of a prior user in Mexico and provide for the cancellation of a later user's trade-mark upon a prior user's application Mexican Law of Industrial Property, Regulations and Tariff of Fees (published in Diario Oficial of December 31, 1942) Title III, Trademarks, Ch. I, Articles 99, 100, Ch. IX, Articles 200, 201, 208; and second, in the assertion that defendant corporation, rather than defendant Gavaldon, was the owner of the "Las Palmas" trademark registration in Mexico.

As a result of this letter, plaintiff's reputation and good will has suffered among the wholesalers and brokers who formerly purchased plaintiff's products for shipment to and resale in Mexico, and purchases of plaintiff's products in the United States by these buyers have been drastically reduced.

Plaintiff has now filed a petition to cancel defendant Gavaldon's registration of the trade-mark "Las Palmas" under the laws of Mexico. However, such cancellation proceedings normally require at least one year before a final determination can be reached. As a result, plaintiff cannot obtain in Mexico timely relief against defendants, and is suffering and will continue to suffer irreparable injury until final determination of the cancellation proceedings in Mexico, unless defendants are restrained by this court.

Comprehensive statutory remedies are provided in the Lanham Act "for infringement of marks". See 15 U.S.C.A. § 1126(h); S. C. Johnson & Son v. Johnson, 2 Cir., 175 F.2d 176, certiorari denied, 1949, 338 U.S. 860, 70 S.Ct. 103, 94...