LegalForce RAPC Worldwide P.C. v. DeMassa
| Decision Date | 17 August 2020 |
| Docket Number | Case No. 18-cv-00043-MMC |
| Court | U.S. District Court — Northern District of California |
| Parties | LEGALFORCE RAPC WORLDWIDE P.C., Plaintiff, v. CHRIS DEMASSA, Defendant. |
Before the Court is defendant Chris DeMassa's second Motion for Summary Judgment, filed March 23, 2020.1 Plaintiff LegalForce RAPC Worldwide, P.C. has filed opposition, to which defendant has replied. Having read and considered the papers filed in support of and in opposition to the motion, the Court rules as follows.
In the operative complaint, the Second Amended Complaint ("SAC"), plaintiff, a law firm, asserts three Claims for Relief against defendant, who, plaintiff alleges, is "not a licensed attorney" (see SAC ¶ 8) and "operates a number of different trademark preparation websites" (see SAC ¶ 2). According to the SAC, plaintiff and defendant "compete to provide small businesses with affordable access to legal services that allow them to protect their marks through preparation and filing with the U.S. Patent and Trademark Office ['PTO']." (See SAC ¶ 3.) In the First, Second, and Third Claims for Relief, which claims are brought, respectively, under the Lanham Act, California's Unfair Competition Law, and California's False Advertising Law, plaintiff alleges defendant'swebsite contains false and misleading statements, in particular, statements that defendant employs attorneys. In the Second Claim for Relief, plaintiff additionally alleges defendant is engaged in the unauthorized practice of law.
By order filed December 16, 2019, the Court denied defendant's first motion for summary judgment, finding defendant, who at that time was proceeding pro se, had failed to meet his initial burden to show his entitlement to summary judgment.2 Thereafter, the Court appointed counsel to represent defendant, and, as noted, subsequently granted defendant's motion for leave to file a second motion for summary judgment.
Pursuant to Rule 56 of the Federal Rules of Civil Procedure, a "court shall grant summary judgment if the movant shows that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." See Fed. R. Civ. P. 56(a).
The Supreme Court's 1986 "trilogy" of Celotex Corp. v. Catrett, 477 U.S. 317 (1986), Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986), and Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574 (1986), requires that a party seeking summary judgment show the absence of a genuine issue of material fact. A moving party who does not have the "ultimate burden of persuasion at trial" may meet its initial burden to show entitlement to summary judgment by "show[ing] that the nonmoving party does not have enough evidence of an essential element of its claim or defense to carry its ultimate burden of persuasion at trial." See Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000). Put another way, the movant may meet its initial burden "by showing - that is, pointing out to the district court - that there is an absence of evidence to support the nonmoving party's case." See id. at 1105 (internal quotation and citation omitted). Alternatively, the moving party may meet its initial burden by"produc[ing] evidence negating an essential element of the nonmoving party's claim." See id. at 1102.
Where the party moving for summary judgment has met its initial burden to "demonstrate the absence of a material fact," see Celotex Corp., 477 U.S. at 323, the nonmoving party, to defeat the motion, must, by affidavits or other evidence, "designate specific facts showing that there is a genuine issue for trial," see id. at 324 (internal quotation and citation omitted).
Defendant seeks summary judgment on each of plaintiff's Claims for Relief. The Court considers the three Claims, in turn.
In the First Claim for Relief, titled "False Advertising and Unfair Competition [Under] the Lanham Act, 15 U.S.C. § 1125(a)," plaintiff, as noted, alleges defendant has made false and misleading statements on his websites.3
The Lanham Act does not protect a "consumer who is hoodwinked into purchasing a disappointing product," but, rather, an individual or entity, such as a competitor, that incurs "an injury to a commercial interest in reputation or sales." See Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 131-32 (2014). Specifically, a plaintiff must prove the following elements: "(1) a false statement of fact by the defendant in a commercial advertisement about its own or another's product; (2) the statement actually deceived or has the tendency to deceive a substantial segment of its audience; (3) the deception is material, in that it is likely to influence the purchasing decision; (4) thedefendant caused its false statement to enter interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to defendant or by a lessening of the goodwill associated with its products." See Skydive Arizona, Inc. v. Quattrocchi, 673 F.3d 1105, 1110 (9th Cir. 2012).
Defendant argues plaintiff lacks evidence to establish the allegedly false statements were "material," i.e., that his advertising was "likely to influence the purchasing decision" of consumers, and, in addition, that plaintiff lacks evidence to establish defendant's allegedly false advertising "caused any diversion of sales from [plaintiff] to [defendant]." (See Def.'s Mot. at 14:1-10.) As defendant has not offered affirmative evidence to show there is no likelihood of influence and no diversion of sales, defendant, to meet his initial burden, must show plaintiff has no evidence to the contrary. See Nissan Fire & Marine Ins. Co., 210 F.3d at 1106 ().
In that regard, defendant points out that neither of the two expert reports plaintiff has disclosed includes any opinion as to whether the allegedly false advertisements would have influenced consumers or caused consumers to do business with defendant instead of plaintiff (see Kim Decl. Exs. E-F),4 and that he "did not receive a notice of deposition subpoena from [plaintiff] for the deposition of any of [his] customers" (see DeMassa Decl. ¶ 7). Defendant has not shown, however, plaintiff's only way to prove influence and diversion is by an expert opinion or customer testimony, at least in the absence of, for example, an interrogatory response effectively acknowledging a lack of other evidence.5 Consequently, defendant has failed to meet his initial burden to showplaintiff lacks evidence to prove those elements. See Nissan Fire & Marine Ins. Co., 210 F.3d at 1106.
Moreover, as plaintiff points out, where an advertisement is "literally false," courts "assume [those] false statements actually mislead consumers" and such statements "are presumed material." See POM Wonderful LLC v. Purely Juice, Inc., 2008 WL 4222045, at *11 (C.D. Cal. July 17, 2008) (collecting cases). Here, plaintiff claims defendant states on his website he "has a staff of 21, including 5 trademark attorneys" and, in support thereof, has attached to the SAC a printout of a webpage containing the statement. (See SAC ¶ 17, Ex. C.) Defendant has not offered evidence that his staff includes attorneys or that plaintiff lacks evidence to show it does not, nor, at least in the context of the instant motion, has defendant shown the challenged statement is not, as a matter of law, literally false.
Accordingly, defendant has failed to show he is entitled to summary judgment on the issue of liability.
The possible remedies available for a violation of the Lanham Act are injunctive relief, see 15 U.S.C. § 1116(a), damages sustained by the plaintiff, see 15 U.S.C. § 1117(a), and the defendant's profits, see id. Defendant argues plaintiff lacks evidence to establish its entitlement to any of those possible remedies.
With respect to injunctive relief, defendant argues plaintiff has not, either in support of its motion for summary judgment,6 or in any other filing, offered evidence to show it has suffered, or in the absence of an injunction will suffer, irreparable injury. Defendant does not contend, however, there is any filing in which plaintiff made a statement even suggesting it lacks such evidence or from which the Court otherwise could find plaintiff is foreclosed from establishing its entitlement to injunctiverelief.7 Consequently, the absence of such evidence in the current record is not a basis on which summary judgment may be granted. See Nissan Fire & Marine Ins. Co., 210 F.3d at 1105 ().
Accordingly, defendant has failed to show he is entitled to summary judgment on the issue of plaintiff's entitlement to injunctive relief under the Lanham Act.
With respect to damages, defendant submits copies of complaints filed by plaintiff in other actions, in which pleadings plaintiff claimed various advertising practices, unauthorized practices of law, and/or other actions by competitors other than defendant caused plaintiff to lose revenue and incur other losses. (See Kim Decl. ¶¶ Exs. G-M.) Defendant, however, fails to support its contention that plaintiff, by such arguable admissions, is foreclosed from showing defendant caused all or part of the injuries alleged in the instant action. Although, as defendant points out, plaintiff has not, in support of its motion for summary judgment or in any subsequent filing, offered evidence establishing a loss of money or property...
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