All Green Corp. v. Wesley
| Decision Date | 29 January 2021 |
| Docket Number | CIVIL ACTION NO. 20-0121 |
| Parties | ALL GREEN CORPORATION, A DELAWARE CORPORATION D/B/A GREEN COUNTRY LAWN AND LANDSCAPE v. BRIAN WESLEY, ET AL. |
| Court | U.S. District Court — Western District of Louisiana |
Before the Court is a Motion for Partial Dismissal (Record Document 19) filed by Defendants Brian Wesley ("Wesley"), Monica Rawls ("Rawls"), Tim Weatherton, Jeriquies "Jay" Smith ("Smith"), Edd Boyd, and Organny Green Lawns, LLC a/k/a Southern Green Lawn Care ("Southern Green").1 Plaintiff, All Green Corporation d/b/a Green Country Lawn and Landscape ("Green Country") opposes the Motion. See Record Document 27. Defendants have filed a reply. See Record Document 32. For the foregoing reasons, Defendants' Motion is GRANTED IN PART and DENIED IN PART.
Green Country is a professional lawn care business with longstanding success in the Ark-La-Tex region spanning over two decades. See Record Document 10 at ¶1. Each of the individual Defendants were employed by Green Country in a variety of positions ranging from technicians to managers. See id. at ¶19. In January 2020, however, all leftthe company virtually simultaneously and began working for Southern Green in direct competition with their former employer. See id. at ¶33.
Green Country alleges Defendants, alongside its former CFO Kreg Culler ("Culler"), started planting seeds for their own business while still employed. In May 2019, Culler and Wesley organized Organny Green Lawns, LLC with the Louisiana Secretary of State. See id. at ¶21. Green Country believes Defendants began using their Customer List and stationery to make overtures to existing Green Country customers shortly before departing, and ultimately downloaded and removed documents to take with them to their new operation in aid of solicitation of new business. See id. at ¶¶35-39. These solicitations included false and disparaging portrayals of Green Country. See id. at ¶40. Finally, Green Country accuses Rawls of canceling at least sixteen pre-paid services with existing customers on the day of her resignation. See id. at ¶44.
According to Green Country, Defendants continued to make use of its Customer List after leaving the company in support of their new business. See id. at ¶45. Southern Green has also sent out familiar advertisements, utilized the same pricing scheme, and created a website with a similar layout to that of Green Country, creating confusion amongst Green Country customers. See id. at ¶¶47-52.
The Court entered a Consent Preliminary Injunction on March 16, 2020, placing various restrictions on Southern Green with respect to its use of Green Country's company property and solicitation of its customers. See Record Document 18. After months in a holding pattern, the instant Motion was filed shortly after Green Country requested dates for a Rule 26(f) conference and expressed its intent to commence discovery. See Record Document 27 at 2.
This lawsuit grows out of alleged improprieties committed by Defendants both while employed by Green Country and after forming Southern Green. Green Country claims nine causes of action against Defendants. See Record Document 10. Defendants' Motion seeks to dismiss Green Country's claims for: (1) trademark infringement, (2) trademark dilution and blurring, (3) fraud, (4) conversion, (5) treble damages pursuant to the Louisiana Unfair Trade Practices Act ("LUTPA"), (6) breach of contract, and (7) unjust enrichment. See Record Document 19. They also seek to remove all conspiracy allegations related to these substantive claims. See id.
In order to survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead "enough facts to state a claim [for] relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974 (2007). A complaint attacked by Rule 12(b)(6) does not need detailed factual allegations but requires more than labels and conclusions. See Twombly, 550 U.S. at 555. Importantly, a "formulaic recitation of the elements of a cause of action will not do." Id. When evaluating a pleading, courts must construe the complaint liberally and accept all factual allegations as true. See In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2009). However, courts need not accept legal conclusions as facts. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949 (2009).
Prior to analyzing the substantive arguments made in Defendants' Motion, the Court must first address a dispute over what documentary evidence it may consider. Although generally courts are not permitted to review materials outside of the pleadings when ruling on a 12(b)(6) motion to dismiss, limited exceptions do exist. See Haygood v. Begue, 2014 WL 1320152 at *1 (W.D. La. Mar. 31, 2014). Specifically, a court may consider documents that are referenced in the plaintiff's complaint and are central to plaintiff's claims. See Scanlan v. Texas A&M University, 343 F.3d 533, 536 (5th Cir. 2003).
In dispute are two affidavits from customers of Green Country attached to Plaintiff's opposition memorandum. See Record Documents 27-3 & 27-6. Neither affidavit—nor particular customer name—is referenced in Plaintiff's complaint. Therefore, the Court cannot consider these attached exhibits in evaluating the instant Motion. The Court can and will consider all other attached documents to both Defendants' Motion and Plaintiff's opposition, as these exhibits were referenced in Plaintiff's complaint and are key to specific claims.
To prevail on a claim of federal trademark infringement under the Lanham Act, 15 U.S.C. § 1125(a), a plaintiff must show (1) ownership of a legally protectable mark and (2) a likelihood of confusion created by an infringing mark.2 See Nola Spice Designs, LLC v. Haydel Enters., Inc., 783 F.3d 527, 536 (5th Cir. 2015). A legally protectable mark mustbe distinctive either (1) inherently or (2) through an acquired secondary meaning. See Am. Rice, Inc. v. Producers Rice Mill, Inc. 518 F.3d 321, 329 (5th Cir. 2008). Registration of a mark with the U.S. Patent and Trademark Office is "prima facie evidence that the mark is inherently distinctive." Nola Spice Designs, 783 F.3d at 537.
Acquired distinctiveness through secondary meaning "occurs when, in the minds of the public, the primary significance of a mark is to identify the source of the product rather than the product itself."3 Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 210-11, 120 S.Ct. 1339 (2000). The Fifth Circuit has articulated seven factors courts must consider when evaluating a mark for secondary meaning. These factors include: (1) length and manner of use of the mark, (2) volume of sales, (3) amount and manner of advertising, (4) nature and use of the mark in newspapers and magazines, (5) consumer-survey evidence, (6) direct consumer testimony, and (7) the defendant's intent in copying the mark. See Pebble Beach Co. v. Tour 18 I Ltd., 155 F.3d 526, 541 (5th Cir. 1998).
Green Country believes Southern Green has unlawfully infringed upon the "Green Country" name by using its name on envelopes, its stationery, its pricing strategy, and its longstanding likeness and brand recognition. See Record Document 10 at ¶58. Southern Green argues Green Country fails to make sufficient factual allegations in demonstration of an acquired secondary meaning. See Record Document 19-1 at 4. They further argue Green Country does not own the intellectual property rights for its pricing scheme, and therefore cannot claim infringement of this strategy. See id. at 5.
The existence of secondary meaning—and trademark infringement claims generally—is a highly fact-intensive inquiry relying heavily upon evidence produced during discovery. See New York State Elec. & Gas Corp. v. U.S. Gas & Elec., Inc., 697 F.Supp.2d 415, 428 (W.D.N.Y. Mar. 19, 2010) (citing Igloo Products Corp. v. Brandtex, Inc., 202 F.3d 814, 818 (5th Cir. 2000)). Consequently, the vast majority of case law pertaining to these types of actions takes place at the summary judgment stage and consists of a factor-by-factor analysis. See e.g., Board of Supervisors of Louisiana State University v. Smack Apparel Co., 438 F. Supp.2d 653 (E.D. La. July 18, 2006). However, at the 12(b)(6) stage, the inquiry remains one of plausibility and courts recognize that evidence on all seven factors may not be present. See id. at 429. Thus, several circuits have held long-term, exclusive use of a mark to be significant evidence of secondary meaning. See Int'l. Bancorp, LLC v. Societe des Bains de Mer et du Cercle des Estrangers a Monaco, 329 F.3d 359, 370 (4th Cir. 2003); Thomas & Betts Corp. v. Panduit Corp., 138 F.3d 277, 295 (7th Cir. 1998); Stuart Hall Co., Inc. v. Ampad Corp., 51 F.3d 780, 789 (8th Cir. 1995).
In support of an acquired secondary meaning of its mark, Green Country repeatedly stresses its longstanding success within the Ark-La-Tex community spanning over two decades. See Record Document 10 at ¶¶1, 15, 16, 56. Green Country emphasizes that customers throughout the region have come to know and trust their name when looking for reliable and quality lawn care services. See id. at ¶16. Green Country also states that its marketing strategy, particularly its use of its color scheme, is designed in aid of creating secondary meaning for its brand for Ark-La-Tex customers, and further discusses the specifics of this design scheme in terms of its trade dressclaims. See id. at ¶¶18, 67-70. Lastly, its pleading details many of the steps taken by Defendants to appropriate Green Country customers, charging that many of their initial business decisions were intended to capitalize on Green Country's success and reputation in the community by tying Southern Green to Green Country.4 See id. at ¶33, 35-37.
Defendants attempt to equate...
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