Niagara Bottling, LLC v. CC1 Ltd.

• Decision Date: 14 May 2019
• Docket Number: Civil No. 18-1414 (DRD)
• Citation: 381 F.Supp.3d 175
• Parties: NIAGARA BOTTLING, LLC, Plaintiff, v. CC1 LIMITED PARTNERSHIP d/b/a Coca-Cola Puerto Rico Bottlers, Defendant.
• Court: U.S. District Court — District of Puerto Rico

381 F.Supp.3d 175

NIAGARA BOTTLING, LLC, Plaintiff,

v.CC1 LIMITED PARTNERSHIP d/b/a Coca-Cola Puerto Rico Bottlers, Defendant.

Civil No. 18-1414 (DRD)

United States District Court, D. Puerto Rico.

Signed May 14, 2019

Shylene De Jesus-Rivera, Alexandra C. Casellas-Cabrera, Sarika J. Angulo-Velazquez, Adsuar Muniz Goyco Seda & Perez-Ochoa, PSC, San Juan, PR, for Plaintiff.

Maria Dolores Trelles-Hernandez, Nestor Mendez-Gomez, Mariola Abreu-Acevedo, Pietrantoni Mendez & Alvarez LLC, San Juan, PR, for Defendant.

OPINION AND ORDER

Daniel R. Domínguez, United States District Judge

Pending before the Court is Defendant CC1 Limited Partnership d/b/a Coca-Cola Puerto Rico Bottlers' ("Defendant") Motion to Dismiss and Motion to Strike . See Docket Nos. 12 and 25. Plaintiff Niagara Bottling, LLC ("Plaintiff") opposed. See Docket No. 38. Defendant replied to the opposition. See Docket No. 43. Plaintiff, then, sur-replied. See Docket No. 48. For the reasons stated herein, the Court DENIES Defendant's Motion to Dismiss .

I. PROCEDURAL HISTORY AND RELEVANT FACTUAL BACKGROUND

Plaintiff is the owner of federal trademark registrations for Eco-Air Bottle word mark in International Class 32 and Eco-Air Package work mark in International Cass 16 ("collectively "Eco-Air Marks"); along with common law rights ("Composite Marks"). See Docket No. 15 at 4. Plaintiff alleges that in 2016, the Defendant began selling its water bottle with a "mark confusingly similar" to the one Plaintiff uses. Id. at 6. As a result thereof, Plaintiff sent an initial infringement letter to Defendant, demanding "that [Defendant] cease[s] and desist[s] from continuing infringing its marks." Id. at 8. On January 2, 2017, both parties signed a Settlement Agreement to avoid litigation. The Settlement Agreement stated Defendant would not use "[Plaintiff's] marks, or any mark confusingly similar thereto." Id. They further agreed the Defendant would dispose of all "existing inventory" and not sell inventory with similar marks after October 31, 2016 ("phase-out date"). Id. at 9.

Now, Plaintiff contends that on June 2017, the Defendant "continued to advertise, manufacture, produce, distribute, and offer for sale in Puerto Rico Nikini Products bearing the Infringing Marks after the phase-out date ..." Id. at 9. Accordingly, Plaintiff sent the Defendant a letter as a reminder of the phase-out date, for the remaining "existing inventory." Id. Plaintiff further forewarned the Defendant that if they did not "immediately cease and desist from continuing its deliberate infringement ... within fourteen days ... [Plaintiff] would be forced to seek legal action." Id. The Defendant replied that the "existing inventory" that was being sold was "purportedly manufactured prior to the Settlement Agreement's phase-out date." Id. at 10.

Plaintiff alleges the Defendant had "either actual or constructive knowledge of [Plaintiff's] ownership of rights in its federally registered Eco-Air Marks prior to its adoption and use of the Infringing Mark." Id. at 12. Consequently, the Defendant is incurring in a violation of section 43 of the Lanham Act, 15 U.S.C. § 1125(a) by causing "confusion, mistake, and deceit in the minds of the public by leading the public to believe that [Plaintiff] ha[d] approved, sponsored or otherwise associated itself with [Defendant's] infringing products." Id. at 13.

Furthermore, Plaintiff argues that the Defendant "contractually agreed that it would not manufacture, distribute, sell and/or advertise any of its infringing products after the Settlement Agreement's phase-out date." Id. at 14. Thus, the Defendant "materially breached the Settlement Agreement by continuing to use the Infringing Mark in the advertising of its Nikini products [and] by continuing to manufacture, distribute, and sell products bearing the Infringing Mark" Id. As a result thereof, the Defendant filed a Motion to Dismiss for failure to plead a claim upon which relief can be granted. See Docket No. 25. A careful scrutiny of the underlying legal framework is required in order to rule upon the pending motion.

II. STANDARD OF REVIEW FOR MOTION TO DISMISS

Federal Rule of Civil Procedure 8(a) requires plaintiff to provide "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Under Bell Atlantic v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), a plaintiff must "provide the grounds of his entitlement [with] more than labels and conclusions." See Ocasio-Hernandez v. Fortuño-Burset , 640 F.3d 1, 12 (1st Cir. 2011) ("in order to ‘show’ an entitlement to relief a complaint must contain enough factual material ‘to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).’)(quoting Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ) (citation omitted). Thus, a plaintiff must, and is now required to, present allegations that "nudge [his] claims across the line from conceivable to plausible" in order to comply with the requirements of Rule 8(a). Id. at 570, 127 S.Ct. 1955 ; see e.g. Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

When considering a motion to dismiss, the Court's inquiry occurs in a two-step process under the current context-based "plausibility" standard established by Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929, and Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868. "Context based" means that a Plaintiff must allege enough facts that comply with the basic elements of the cause of action. See Iqbal , 556 U.S. at 677-679, 129 S.Ct. 1937 (concluding that plaintiff's complaint was factually insufficient to substantiate the required elements of a Bivens claim, leaving the complaint with only conclusory statements). First, the Court must "accept as true all of the allegations contained in a complaint" discarding legal conclusions, conclusory statements and factually threadbare recitals of the elements of a cause of action. Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. "Yet we need not accept as true legal conclusions from the complaint or ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ " Maldonado v. Fontanes , 568 F.3d 263, 268 (1st Cir. 2009) (quoting Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ) (quoting Twombly , 550 U.S. at 557, 127 S.Ct. 1955 ).

Under the second step of the inquiry, the Court must determine whether, based upon all assertions that were not discarded under the first step of the inquiry, the complaint "states a plausible claim for relief." Iqbal , 556 U.S. at 679, 129 S.Ct. 1937. This second step is "context-specific" and requires that the Court draw from its own "judicial experience and common sense" to decide whether a plaintiff has stated a claim upon which relief may be granted, or, conversely, whether dismissal under Rule 12(b)(6) is appropriate. Id.

Thus, "[i]n order to survive a motion to dismiss, [a] plaintiff must allege sufficient facts to show that he has a plausible entitlement to relief." Sanchez v. Pereira-Castillo , 590 F.3d 31, 41 (1st Cir. 2009). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not ‘show[n]’ ‘that the pleader is entitled to relief.’ " Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 (quoting Fed. R. Civ. P. 8(a)(2) ). Furthermore, such inferences must be at least as plausible as any "obvious alternative explanation." Id. at 679-80, 129 S.Ct. 1937 (citing Twombly , 550 U.S. at 567, 127 S.Ct. 1955 ). "A plaintiff is not entitled to ‘proceed perforce’ by virtue of allegations that merely parrot the elements of the cause of action." Ocasio-Hernandez , 640 F.3d at 12, (citing Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 ).

The First Circuit has cautioned against equating plausibility with an analysis of the likely success on the merits, affirming that the plausibility standard assumes "pleaded facts to be true and read in a plaintiff's favor" "even if seemingly incredible." Sepúlveda-Villarini v. Dep't of Educ. of P.R. , 628 F.3d 25, 30 (1st Cir. 2010) (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ); Ocasio-Hernandez , 640 F.3d at 12 (citing Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 ); see Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ("[A] well-pleaded complaint may proceed even if it appears that a recovery is very remote and unlikely.")(internal quotation marks omitted); see Ocasio-Hernandez , 640 F.3d at 12 (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 )("[T]he court may not disregard properly pled factual allegations, ‘even if it strikes a savvy judge that actual proof of those facts is improbable.’ "). Instead, the First Circuit has emphasized that "[t]he make-or-break standard ... is that the combined allegations, taken as true, must state a plausible, [but] not a merely conceivable, case for relief." Sepúlveda-Villarini , 628 F.3d at 29.

However, a complaint that rests on "bald assertions, unsupportable conclusions, periphrastic circumlocutions, and the like" will likely not survive a motion to dismiss. Aulson v. Blanchard , 83 F.3d 1, 3 (1st Cir. 1996). Similarly, unadorned factual assertions as to the elements of the cause of action are inadequate as well. Penalbert-Rosa v. Fortuno-Burset , 631 F.3d 592 (1st Cir. 2011). "Specific information, even if not in the form of admissible evidence, would likely be enough at [the motion to dismiss] stage; pure speculation is not." Id. at 596 ; see Iqbal , 556 U.S. at 681, 129 S.Ct. 1937 ("To be clear, we do not reject [ ] bald allegations on the ground that they are unrealistic or nonsensical.... It is the conclusory nature of [the] allegations, rather than their extravagantly fanciful nature, that disentitles them to the presumption of truth."); see Mendez Internet Mgmt. Servs. v. Banco Santander de P.R. , 621 F.3d 10, 14 (1st Cir. 2010) (The Twombly and Iqbal standards require District Courts to "scree...