PetConnect Rescue, Inc. v. Salinas

• Decision Date: 15 February 2023
• Docket Number: 20-CV-00527-RSH-DEB
• Parties: PETCONNECT RESCUE, INC. et al., Plaintiffs, v. DAVID SALINAS et al., Defendants.
• Court: U.S. District Court — Southern District of California

PETCONNECT RESCUE, INC. et al., Plaintiffs,
v.
DAVID SALINAS et al., Defendants.

No. 20-CV-00527-RSH-DEB

United States District Court, S.D. California

February 15, 2023

ORDER (1) DENYING PLAINTIFFS' CROSS MOTION FOR SUMMARY JUDGMENT; (2) GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT; (3) DENYING PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT AGAINST JASON DUHAMMEL; AND (4) OVERRULING DEFENDANTS' EVIDENTIARY OBJECTIONS

[ECF NOS. 224-28, 248, 254, 258]

Hon. Robert S. Huie United States District Judge

This case arises from the alleged importation and sale of non-rescue dogs at California pet stores by Defendants, in violation of California Health & Safety Code § 122354.5. Plaintiffs PetConnect Rescue, Inc. (“PetConnect”), Lucky Pup Dog Rescue.com (“Lucky Pup”), and SCDR, Inc. d/b/a Second Chance Dog Rescue (“SCDR”)

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(collectively, “Organizational Plaintiffs”) are three nonprofit animal rescue organizations that claim Defendants infringed on Plaintiffs' names and marks to disguise the sale of nonrescue dogs and bolster Defendants' reputations. See ECF No. 93 ¶¶ 1-3, 98-116. Plaintiff Sarah Gonzalez is an individual consumer alleging that she was defrauded into purchasing a non-rescue puppy from Defendants. Id. ¶ 147-50.

Defendants Brian Mohrfeld, Select Puppies, Inc., Pet Connect Rescue, Alysia Rothman, Ray Rothman, David Salinas, Veronica Salinas, Richard Pena, Virgo Castro Zusa, Yellow Store Enterprises, LLC, The Puppy Store, LLC, National City Puppy, LLC, The Fancy Puppy, LLC, The Puppy Store Las Vegas, LLC, and SoCal Puppy Adoptions, Inc. (collectively “Moving Defendants”) move for summary judgment on all claims in the Second Amended Complaint as well as on their applicable affirmative defenses. ECF Nos. 225-28. In response, Plaintiffs have filed a Cross Motion for Summary Judgment as to all Defendants remaining in this case. ECF No. 248. These motions have been briefed. See ECF Nos. 253-58, 265-66. Also pending are Plaintiffs' Motion for Default Judgment against Defendant Jason Duhammel (ECF No. 224) and Moving Defendants various evidentiary objections to Plaintiffs' Statement of Facts (ECF No. 254-1; ECF No. 254-2; ECF No. 258-1).

For the reasons discussed below, the Court grants in part and denies in part Moving Defendants' Motions for Summary Judgment; denies Plaintiffs' Cross Motion for Summary Judgment; denies Plaintiffs' Motion for Default Judgment; and overrules Moving Defendants' evidentiary objections.

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I. Procedural History^[1]

On March 20, 2020, Plaintiff PetConnect filed this action against Defendants David Salinas, Veronica Salinas, Richard Robles Pena, The Puppy Store, LLC, Yellow Store Enterprises, LLC, SoCal Puppy Adoptions, Inc., Pet Connect Rescue, Inc., Alysia Rothman, Ray Rothman, Jase Shamore, Critters and Pets/Furry and Feather, LLC; Rickie Gallardo; and 360 Clean N Go, LLC. ECF No. 1 at 2. Plaintiff PetConnect brought three claims for unfair business practices, trade libel, and negligence in its original Complaint, and simultaneously moved ex parte for a temporary restraining order. See ECF Nos. 1, 3.

On April 3, 2020, Defendants moved to dismiss Plaintiff PetConnect's Complaint, claiming that PetConnect failed to satisfy the requirements for diversity jurisdiction. See ECF Nos. 10, 14-15. Shortly thereafter, Plaintiff PetConnect filed an amended complaint, adding Plaintiffs Lucky Pup and Gonzalez, 17 additional Defendants, and federal causes of action under the Lanham Act. ECF No. 16. Because Plaintiffs' First Amended Complaint superseded the original complaint, the Court denied Defendants' motions to dismiss as moot. ECF No. 18 at 2.

In April and May 2020, several Defendants moved to dismiss and/or strike sections of the FAC. See ECF No. 27, 31, 33, 38-44. The Court denied all the motions. ECF No.

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48, 54. On May 20, 2020, the Court also denied Plaintiff PetConnect's request for a temporary restraining order. ECF No. 36.

On November 9, 2020, Plaintiffs moved for, and were granted, leave to file a Second Amended Complaint (“SAC”). See ECF Nos. 85, 91. The SAC, which is the operative pleading, added Plaintiff SCDR and Defendants Brian Mohrfeld, Select Puppies, Inc. (“Select” or “Select Puppies”), Red Rock Enterprises of Utah, Inc., Anita Chavira, and John Duhammel. ECF No. 93. Several Defendants previously named in the FAC were removed.^[2]

The SAC brought nine causes of action for trademark infringement, dilution, and false advertising under the Lanham Act; unfair business practices under California's Unfair Competition Law; violation of California's Consumer Legal Remedies Act (“CLRA”); fraudulent deceit; and trademark infringement, unfair competition, and false advertising under California common law.^[3] Id. On January 20, 2021, several Defendants filed their Answers, each asserting 42 affirmative defenses. ECF Nos. 96-103.

On May 3, 2021, the Parties filed a joint motion to dismiss Defendant Rickie Gallardo and 360 Clean N Go, LLC, informing the Court that a settlement had been reached. ECF No. 120. The Court subsequently dismissed these Defendants from the instant action without prejudice. ECF No. 121.

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On September 17, 2021, Defendants Mohrfeld and Select moved to dismiss all claims asserted against them in the SAC. ECF No. 137. After a hearing (see ECF No. 158), the Court denied the motion on November 8, 2021, noting that the arguments presented were better suited for a summary judgment motion when the record is more fully developed. ECF No. 159. Mohrfeld and Select filed their Answer to the SAC on December 7, 2021, asserting 42 affirmative defenses. ECF No. 174.

On February 14, 2022, Plaintiffs Lucky Pup and SCDR moved to dismiss their claims against Mohrfeld and Select. ECF No. 206. The Court granted Plaintiffs' motion. ECF No. 207.

On April 22, 2022, Moving Defendants filed their four pending Motions for Summary Judgment. ECF Nos. 225-28. On May 23, 2022, Plaintiffs filed the pending Cross Motion for Summary Judgment and Combined Opposition to Defendants' Summary Judgment Motions. ECF No. 248.

On January 12, 2023, the Court held a hearing (the “Hearing”) on the pending Motions for Summary Judgment and Cross-Motion for Summary Judgment. See ECF No. 281. The motions were then taken under submission. Id.

II. Background

A. Organizational Plaintiffs

Plaintiff PetConnect, a Maryland nonprofit 501(c)(3) organization, was founded in the wake of Hurricane Katrina in 2005 to rescue pets and reunite them with their families. ECF No. 225-4 at pp. 28-29. It has since been operating as an animal rescue organization for over 16 years, serving Washington, D.C., Maryland, and Virginia. Id. at pp. 28-30. Throughout this time, Plaintiff PetConnect marketed itself through various channels, including the radio, television, newspapers, magazines brochures, and merchandise. Id. at pp. 38-39. Plaintiff PetConnect has also gained a social media presence through its accounts on Facebook, Instagram, and Twitter. Id. at p. 43.

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Plaintiff PetConnect's founder and board member, Lizette Chanock, oversees the primarily volunteer-based organization. Id. at pp. 23-24.^[4] In her deposition, Chanock testified that Plaintiff PetConnect has rescued and placed thousands of animals locally, but she could not recall that it ever placed any dogs in California. Id. at p. 34. Plaintiff PetConnect began receiving numerous calls from individuals complaining about Defendant Pet Connect, believing the two corporations to be the same. See id. at pp. 68-70. Chanock testified that she “found out about the whole thing” because individuals were contacting Plaintiff PetConnect based on information they saw or received at certain pet stores. Id. at p. 68. Some callers expressed anger toward Plaintiff PetConnect for selling dogs from breeders. See id. at 69-70. Chanock's testimony distinguishes Plaintiff PetConnect's practice of “rescu[ing] dogs and cats from shelters that are high risk of euthanasia” from animals provided by “puppy mills.”^[5] See id. at 24-25, 65.

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Plaintiff PetConnect owns three of the federal trademarks at issue in this case: a standard character mark for “PETCONNECT RESCUE WHERE ANIMALS ARE ONE STEP CLOSER TO HOME” (Reg. No. 6040306) registered on April 28, 2020; a standard character mark for “PETCONNECT RESCUE” (Reg. No. 6581377) registered on December 7, 2021; and a logo incorporating the name “PETCONNECT RESCUE” (Reg. No. 6581378) registered on December 7, 2021.^[6] ECF No. 226-5 at p. 95; ECF Nos. 248-14, Exs. 38-39.

Plaintiff Lucky Pup, a California nonprofit 501(c)(3) organization founded in 2010, rescues dogs from high-kill shelters in Southern California. ECF No. 248-8 ¶ 2. Lucky Pup used the names “Lucky Pup Dog Rescue” and “Lucky Pup Dog Rescue of San Diego” in its mailings, communications, and website. Id. ¶ 6. Defendant SoCal Puppy Adoptions, Inc. (“SoCal Puppy”) listed “Lucky Pup Dog Rescue of San Diego” as one of the organizations SoCal Puppy supported with donations. Id. ¶ 5. According to founder and board member Christine Haslet, Lucky Pup has never received donations from SoCal Puppy or any of the other Defendants. Id. ¶ 15.

Plaintiff SCDR is a California nonprofit 501(c)(3) organization founded in 2008 that rescues, rehabilitates, and rehomes dogs from local shelters and from Baja California, Mexico. ECF No. 248-4 ¶ 2. SCDR's Board President, Linda Acosta, stated in a declaration that SCDR used its name and mark (“Second Chance Dog Rescue”) for over 14 years. Id. ¶ 7.

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B. Plaintiff Gonzalez

On December 15, 2019, Plaintiff Gonzalez purchased a puppy for her family from a pet store called “Town Puppies” in Temecula, California for $2,000.27.^[7] ECF No. 248-6 ¶ 2. The puppy, later named Charlie, was a pug-beagle mix (also known as a “puggle”). ECF No. 225-4, Ex. E (Gonzalez Dep.) at pp. 159-60. Gonzalez testified that an employee of Town Puppies told her that...