Prakash v. Altadis U.S.A. Inc.

• Decision Date: 30 March 2012
• Docket Number: CASE NO. 5:10CV0033
• Parties: ROHIT PRAKASH, Plaintiff, v. ALTADIS U.S.A. INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

ROHIT PRAKASH, Plaintiff,

v.ALTADIS U.S.A. INC., et al., Defendants.

CASE NO. 5:10CV0033

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF EASTERN DIVISION

DATED: March 30, 2012

PEARSON, J.

JUDGE BENITA Y. PEARSON

MEMORANDUM OF OPINIONAND ORDER

[Resolving ECF Nos. 26, 27, 28, 29, 30,

31, 32, 33, and 53]

INTRODUCTION

Pending before the Court are motions to dismiss filed by Defendants alleged to have violated various federal and State laws in an effort to take advantage of Pro se Plaintiff by means of, behavior that is best described as anti-competitive or other illegal acts. Defendants contend that the Court does not have subject matter jurisdiction over this action and also lacks personal jurisdiction over fourteen of the fifteen Defendants. In addition, Defendants maintain that several of Plaintiff's causes of action fail to state a claim upon which relief can be granted.

Pro se Plaintiff Rohit Prakash applied to register the mark TREAT for "filter-tipped cigarettes" in International Class 34 in the U.S. Patent and Trademark Office ("PTO"). On January 20, 2006, Defendant Charles W. Grimes sent a cease-and-desist letter (ECF No. 26-3 at 5-6) to Dr. Prakash. See Amended Complaint (ECF No. 3) at ¶ 38; Declaration of Charles W. Grimes (ECF No. 26-3 at 3). The letter notified Dr. Prakash of the DUTCH TREATS trademark registered on April 21, 1970 in International Class 34 and stated that the mark was owned byDefendant Max Rohr, Inc. and used by Defendant Altadis U.S.A. Inc. in the sale of cigars for over 30 years. ECF No. 26-3 at 5. The letter demanded that "you immediately phase out the use of 'TREAT' as a designation on or in connection with your cigarettes and expressly abandon your trademark application." ECF No. 26-3 at 6 (emphasis in original). Litigation was threatened if Dr. Prakash did not comply. Id. On March 9, 2006, Defendant Charles W. Grimes sent a letter (ECF No. 26-3 at 9) in reply to Dr. Prakash's letter, dated February 17, 2006 (ECF No. 26-3 at 7-8). In response to the cease-and-desist letters, Somya Inc.¹ stopped making and selling herbal cigarettes with the TREAT trademark and, apparently, discontinued making and selling its herbal smokes altogether. See Amended Complaint (ECF No. 3) at ¶¶ 41 and 246a.

On February 14, 2006, Defendant Max Rohr, Inc., by and through Defendant Charles W. Grimes, filed in Number 91169175 in the PTO a formal opposition to registration of the mark TREAT for the sale of cigarettes because of the potential for confusion with, or dilution of, the DUTCH TREATS trademark. On March 21, 2006, Dr. Prakash counterclaimed for cancellation of the DUTCH TREATS trademark. On February 16, 2010, as proceedings before the Trademark Trial and Appeal Board neared the trial stage, the matter was suspended at Plaintiff's request pending final determination of the above-entitled action. Trademark Rule 2.117(a).²

On January 7, 2010, Pro se Plaintiff Rohit Prakash filed a Complaint (ECF No. 1). Eight days later, Plaintiff filed a 76-page, 11-count Amended Complaint (ECF No. 3) containing 325 allegations against the following Defendants: Altadis U.S.A. Inc., Cuban Cigar Brands, N.V., Altadis Holdings U.S.A. Inc., Max Rohr, Inc., Imperial Tobacco Group PLC. Gary R. Ellis, Lewis I. Rothman, Grimes & Battersby, LLP, Charles W. Grimes, Ronald O. Perelman, MacAndrews & Forbes Holdings Inc., Theo W. Folz, 800-JR Cigar, Inc., James L. Colucci, George Gershel, and John Does 1-10. Plaintiff filed the Amended Complaint (ECF No. 3) purportedly for himself and as the purported assignee of non-party Somya Inc. ECF No. 3 at ¶ 19. The Amended Complaint (ECF No. 3) sets forth the following 11 federal and state claims for relief:

First - Violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO") - Violation of 18 U.S.C. § 1962(a). (b), (c), and (d):

Second - Antitrust Violations - Sherman Act (15 U.S.C. § 1):

Third - Antitrust Violations - Sherman Act (15 U.S.C. § 2):

Fourth - Antitrust Violations - Clayton Act (15 U.S.C. §§ 12-27):

Fifth -15 U.S.C. § 1125(a) (Section 43(a) of the Lanham Act) - False Representation and Source of Origin;

Sixth - 15 U.S.C. $ 1125(a) (Section 43(a) of the Lanham Act) - Deceptive Advertising;

Seventh - Cancellation of Registrations 15 U.S.C. § 1120 (Section 38 of the Lanham Act);

Eighth - Unfair Competition Under State Law;

Ninth - Violation of Ohio Rev. Code § 4165.02. the Uniform Deceptive Trade Practices Act as adopted in Ohio;Tenth - Interference With Prospective Economic Advantage; and

Eleventh - Derivative Liability Under RICO, Antitrust, Lanham Act, and Aiding and Abetting Under 18 U.S.C. $ 2.³

Plaintiff's intent-to-use application for registration of the mark TREAT was allegedly filed on December 15, 2004. ECF No. 3 at ¶ 32. Plaintiff alleges that Somya Inc. is a company that manufactures and sells "herbal, non-tobacco smokes, designed to be alternative smokes and intended to help smokers treat their habit of smoking tobacco." Id. at ¶ 33. Somya Inc. allegedly used the mark TREAT exclusively to sell herbal nontobacco smokes, beginning in January 2006. Id. at ¶¶ 33 and 42. It is alleged that Plaintiff and Defendants are competitors in the sale of smoking products. Id. at ¶ 44.

Plaintiff's central complaint is that Defendants Max Rohr, Inc. and Altadis U.S.A. Inc. objected to the use of the mark TREAT for the sale of cigarettes, and Defendant Max Rohr, Inc. formally objected to the registration of that mark. See, e.g., ECF No. 3 at ¶ 205. Plaintiff also complains about the procurement, use of, and enforcement of the mark DUTCH TREATS, owned by Defendant Max Rohr, Inc., alleging, inter alia, that the use of this mark is a fraudulent attempt "to capitalize on the prestige and desirability of authentic Dutch cigars." See Id. at ¶¶ 196, 252-253, 261-265, 270-275, and 303. He makes a similar complaint about two other marks for cigars that incorporate the term "Dutch", DUTCH MASTERS and DUTCHIES. Id.

Plaintiff alleges that, in connection with seeking to register or record the assignment of the registration for certain trademarks, Defendant Grimes & Battersby, LLP or Defendant CharlesW. Grimes committed mail fraud by knowingly and willfully concealing from the PTO certain material facts. Id. at ¶¶ 141-199. He characterizes the cease-and-desist letters that Defendant Charles W. Grimes sent as extortion. See id. at ¶¶ 205-206. Plaintiff admits, however, that throughout, Individual Defendants⁴ "engaged in the alleged unlawful conduct in [a] representative capacit[y]." Id. at 11312.

In January 2011, the above-entitled action and the within motions were reassigned from Judge Sara Lioi to the undersigned pursuant to General Order 2011-4.

I.

This action is before the Court upon the Joint Motion of All Defendants to Dismiss Counts 1-6 and 8-11 of the Amended Complaint for Lack of Subject Matter Jurisdiction and Failure to State a Claim, and to Dismiss Count 7 for Lack of Subject Matter Jurisdiction (ECF No. 26), filed on April 7, 2010. The Court has reviewed the memorandum in support (ECF No.26-1). memoranda in opposition (ECF Nos. 58 and 61),⁵ and reply memoranda (ECF Nos. 63 and 65).

All Defendants move the Court, pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6). to dismiss Counts 1-6 and 8-11 of the Amended Complaint (ECF No. 3) because Plaintiff has no standing to complain of, or recover for, alleged competitive injury to Somya Inc., and because none of these claims for relief state a claim upon which relief can be granted.

Furthermore, all Defendants move the Court, pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), to dismiss those portions of the seventh claim for relief of the Amended Complaint (ECF No. 3) that relate to trademarks other than DUTCH TREATS, as shown on ECF No. 26-2 because Plaintiff has no standing to complain of the registration of those marks, and to dismiss all but Defendant Max Rohr, Inc. from Count 7.

Finally, Defendants move the Court, pursuant to Fed. R. Civ. P. 12(b)(1), to dismiss the balance of the seventh claim for relief of the Amended Complaint (ECF No. 3), namely, theportion that seeks cancellation of the registration of Defendant Max Rohr, Inc.'s mark DUTCH TREATS, for lack of subject matter jurisdiction.

For the reasons set forth in Section X below, Defendants' motion is granted.

II.

This action is also before the Court upon Defendants Ronald 0. Perelman and MacAndrews & Forbes Holdings Inc.'s Motion to Dismiss for Lack of Personal Jurisdiction and Venue, and for Failure to State a Claim (ECF No. 27), filed on April 7, 2010. The Court has reviewed the memoranda in support (ECF Nos. 27-1 and 26-1). memoranda in opposition (ECF Nos. 59, 60, and 61), and reply memoranda (ECF Nos. 63 and 64).

Defendants Ronald Perelman and MacAndrews & Forbes Holdings Inc. move the Court, pursuant to Fed. R. Civ. P. 12(b)(2) and 12(b)(3). for an order dismissing them for lack of personal jurisdiction and improper venue because they have no connection to Ohio or to the matter of which Plaintiff complains and exercising jurisdiction over them would offend Constitutional notions of fair play and substantial justice.

Furthermore, Defendants Ronald Perelman and MacAndrews & Forbes Holdings Inc. move the Court, pursuant to Fed. R. Civ. P. 12(b)(6), to dismiss the Amended Complaint (ECF No. 3) because it fails to state a claim against them upon which relief can be granted and any such claim is time-barred.

For the reasons set forth in Section XI below, Defendants' Motion is granted.

III.

In addition, this action is before the Court upon Defendant Imperial Tobacco Group PLC's Motion to Dismiss for Lack of Personal Jurisdiction (ECF No. 28), filed on April 7, 2010. The Court has reviewed the memoranda in support (ECF Nos. 28-1 and 26-1), memorandum in opposition (ECF No. 59), and reply memorandum (ECF No. 64).

Defendant Imperial Tobacco Group PLC moves the Court, pursuant to Fed. R. Civ. P. 12(b)(2), for an order dismissing it for lack of personal jurisdiction because...