Alzheimer's Found. of America, Inc. v. Alzheimer's Disease & Related Disorders Ass'n, Inc.

• Decision Date: 25 May 2011
• Docket Number: Nos. 10 Civ. 3314,10 Civ. 5013.,s. 10 Civ. 3314
• Citation: 796 F.Supp.2d 458
• Parties: ALZHEIMER'S FOUNDATION OF AMERICA, INC., d/b/a Alzheimer's Foundation, Plaintiff, v. ALZHEIMER'S DISEASE AND RELATED DISORDERS ASSOCIATION, INC., d/b/a Alzheimer's Association and Northern Trust Bank, Defendants.
• Court: U.S. District Court — Southern District of New York

796 F.Supp.2d 458

ALZHEIMER'S FOUNDATION OF AMERICA, INC., d/b/a Alzheimer's Foundation, Plaintiff,

v.ALZHEIMER'S DISEASE AND RELATED DISORDERS ASSOCIATION, INC., d/b/a Alzheimer's Association and Northern Trust Bank, Defendants.

Nos. 10 Civ. 3314

10 Civ. 5013.

United States District Court, S.D. New York.

May 25, 2011.

Fensterstock & Partners LLP, by: Blair C. Fensterstock, Esq., Eugene D. Kublanovsky, Esq., Brooke K. Haley, Esq., New York, NY, Ingber & Gelber, LLP, by: Mark J. Ingber, Esq., Millburn, NJ, for Plaintiff.

McDermott Will & Emery LLC, by: Joseph R. Robinson, Esq., Motty Shulman, Esq., Jack Wilson, Esq., New York, NY, for Defendants.

OPINION

SWEET, District Judge.

These two actions have presented dueling motions to dismiss pursuant to Rule 12(b)(6). In the first filed action, 10 Civ. 3314, the defendants Alzheimer's Disease and Related Disorders Association (the “Association”) and Northern Trust (the “Trust”) have moved to dismiss the Amended Complaint of the Alzheimer's Foundation of Americas, Inc. (the “Foundation”). In the second filed action, 10 Civ. 5013, the Foundation has moved to dismiss the Association's complaint.

These two actions present the competing contentions of the Foundation and Association, both of which seek to alleviate the ravages of Alzheimer's. Efforts to resolve this dispute were unavailing despite the obvious desirability of such an outcome since both the Foundation and the Association purport to be serving the public interest. As set forth below, the motions to dismiss are granted in part and denied in part.

Prior Proceedings10 Civ. 3314

The Foundation filed its complaint against the Association and the Trust on April 20, 2010. The Foundation's Amended Complaint (“FAC”) was filed on July 7, 2010.

The FAC has eight counts alleging misrepresentation/false designation/unfair competition under the Lanham Act (Count I); trademark dilution and unlawful deceptive acts and practices under New York General Business Law (Counts II, III); unfair competition, unjust enrichment, conspiracy and conversion, and tortious interference with prospective business advantage under New York common law (Counts IV, V, VII, VIII); and payments on instruments with unauthorized signatures under New York CLS U.C.C. § 3–404 (Count VI).

The FAC alleges the improper depositing of checks by the Association when the Association accepted and deposited a check for funds from the Harbaugh Trust and three other checks, and thereby held “itself out to the world as the rightful owner of the Foundation's Marks” and implied “to the marketplace that the Association and the Foundation are one and the same” which “resulted in a likelihood of confusion in commerce, whereby numerous ordinary prudent donors have been, and are likely to be, misled into believing that the Association and the Foundation are the same organization.” (FAC ¶¶ 59–61.)

The first check about which Plaintiff complains is the one for the bequest from the Harbaugh Trust which was the subject of a 2007 Virginia state court action. (FAC ¶¶ 31–48.)

The other three checks pleaded are described in the FAC as follows:

Three examples of cancelled checks which were made payable to the Foundation and sent to and deposited by [the Association], are:

(1) A check from Alana Greebel, dated April 19, 2010, in the amount of $20.00;

(2) A check from David Felmly and H. Kristen Leesment, dated April 19, 2010, in the amount of $10.00; and

(3) A check from Sandra G. Horan and Thomas G. Horan, dated March 25, 2010, in the amount of $5.00.

(FAC ¶ 53.)

In count I, the FAC alleges that by accepting and depositing the checks intentionally mailed to the Association by the Foundation's employees and their relatives, and by holding itself out to the world as the owner of the Foundation's Marks, the Association has made misrepresentations and has caused a likelihood of confusion of “ordinary prudent donors” in commerce under Lanham act, Section 43(a), 15 U.S.C. § 1125(a). (FAC ¶ 61.)

Count II for dilution under New York state law alleges that the Association has diluted or blurred the distinctiveness of the Foundation's Marks, most notably by endorsing the aforementioned checks.

Count III alleges unlawful deceptive acts and practices under New York state law based upon a likelihood of or actual confusion in that “[t]he Association's acceptance and conversion of charitable donations made payable to the Foundation, and Northern Trust's acceptance of said charitable donations checks for deposit, is likely to cause and is causing confusion, mistake, and deception among the general public.” (FAC ¶ 71.)

Count IV of the FAC alleges common law unfair competition by the “bad faith usage of the Foundation's Marks and goodwill, and the conversion of the Foundation's property,” i.e., the checks. (FAC ¶ 71.)

Count V alleges unjust enrichment and Count VIII alleges tortuous interference based upon the allegation that the Association “wrongfully used the Foundation's Marks, reputation, and goodwill” and upon allegations of conversion. (FAC ¶ 101.)

Plaintiff's Count VI alleges a U.C.C. claim for payment on an instrument with an unauthorized signature.

Count VII alleges conversion or conspiracy in that “defendants have exercised unlawful dominion over the funds intended to be donated to the Foundation.” (FAC ¶ 94.)

10 Civ. 5013

The Association filed its complaint on June 28, 2010 and its Amended Complaint (“AAC”) on July 30, 3010 naming the Foundation and Eric J. Hall (“Hall”), Alana Greebel (“Greebel”), David Felmly (“Felmly”), H. Kristen Leesment (“Leesment”), Sandra Horan (“S. Horan”) and Thomas Horan (“T. Horan”) as individual defendants. The AAC alleges 16 claims, (1) trademark infringement pursuant to Lanham Act Section 32, 15 U.S.C. § 1114(1)(a); (2) trademark infringement pursuant to Lanham Act Section 32, 15 U.S.C. § 1114(1)(b); (3) libel; (4) injurious falsehood/trade libel; (5) false designation, false description and false representation of fact pursuant to Lanham Act Section 43(a), 15 U.S.C. § 1125(a)(1)(A); (6 & 7) false designation, false description and false representation of fact pursuant to Lanham Act Section 43(a), 15 U.S.C. § 1125(a)(1)(B); (8) dilution pursuant to Lanham Act Section 43(c), 15 U.S.C. § 1125(c); (9) fraud; (10) tortious interference with prospective economic advantage; (11) injury to business reputation pursuant to N.Y. Gen. Bus. Law § 360–1; (12) dilution pursuant to N.Y. Gen. Bus. Law § 360–1; (13) unfair competition; (14) unjust enrichment; (15) deceptive acts and practices pursuant to N.Y. Gen. Bus. Law § 349; and (16) conspiracy.

The motions by the Association and the Foundation to dismiss the FAC and the AAC were heard on October 13, 2010.

The Relevant Standard

On a motion to dismiss pursuant to Rule 12, all factual allegations in the complaint are accepted as true, and all inferences are drawn in favor of the pleader. Mills v. Polar Molecular Corp., 12 F.3d 1170, 1174 (2d Cir.1993). To survive a motion to dismiss pursuant to Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Plaintiffs must allege sufficient facts to “nudge[ ] their claims across the line from conceivable to plausible.” Twombly, 550 U.S. at 570, 127 S.Ct. 1955. Though the court must accept the factual allegations of a complaint as true, it is “not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955).

The Motions To Dismiss The Lanham Act, Dilution And Unfair Competition Claims Are Denied

The Lanham Act “serves to protect the holders of trademarks from the promotion and sale of competing products likely to confuse consumers as to their source.” Philip Morris USA Inc. v. U.S. Sun Star Trading, Inc., 2010 WL 2133937, at *4 (E.D.N.Y. Mar. 11, 2010) report and recommendation adopted, 2010 WL 2160058 (E.D.N.Y. May 27, 2010) (internal quotation marks and citations omitted). Lanham Act § 43(a), 15 U.S.C. § 1125(a), prohibits a person from using “any word, term, name, symbol, or device, or any combination thereof ... which is likely to cause confusion ... as to the origin, sponsorship or approval of his or her goods ....” In order to prevail under 15 U.S.C. § 1125(a), a plaintiff must show that it owns a mark deserving of protection, and that the mark is used in such a way as to create a “likelihood of confusion” as to the source or sponsorship of the defendant's goods or services. Louis Vuitton Malletier v. Dooney & Bourke, Inc., 454 F.3d 108, 115 (2d Cir.2006).

The elements of a cause of action of unfair competition under New York common law mirror the requirements of claims stated under the Lanham Act and similarly require that a party demonstrate a valid, protectable mark and a likelihood of confusion between the marks of the alleged infringer and the charging party. See ESPN, Inc. v. Quiksilver, Inc., 586 F.Supp.2d 219 (S.D.N.Y.2008). In addition, a common law claim for unfair competition requires that the plaintiff show actual confusion in an action for damages or a likelihood of confusion in an action for equitable relief. Id.

Non-profit and public service organizations are entitled to the use and protection of their trademarks. See United We Stand Am., Inc. v. United We Stand, Am. New York, Inc., 128 F.3d 86, 89–90 (2d Cir.1997) (“The right to enjoin infringement of a trade or service mark ‘is as available to public service organizations as to merchants and manufacturers.’ ”) (quoting N.A.A.C.P. v. N.A.A.C.P. Legal Defense and Educ. Fund, 559 F.Supp. 1337, 1342 (D.D.C.1983) (subsequent history omitted)); see also Planned Parenthood Fed'n of Am., Inc. v. Bucci, No. 97 Civ. 0629, 1997 WL 133313, at...