The Upper Deck Co. v. Flores
| Decision Date | 08 March 2022 |
| Docket Number | 21CV1182-GPC(KSC) |
| Court | U.S. District Court — Southern District of California |
| Parties | THE UPPER DECK COMPANY, a Nevada corporation, Plaintiff, v. MIGUEL FLORES, an individual, and DOES 1 -100, inclusive,, Defendant. MIGUEL FLORES, an individual, Third Party Plaintiff, v. ROCCO TENAGLIA, an individual, GEM MINT AUTHENTICATION, INC., a Florida corporation, and ALON KARPUCH, an individual,, Third Party Defendants. |
ORDER GRANTING IN PART AND DENYING IN PART THIRD PARTY DEFENDANTS' MOTION TO DISMISS WITH LEAVE TO AMEND [DKT. NO. 26.]
Before the Court is Third Party Defendants Gem Mint Authentication Inc. and Alon Karpuch's motion to dismiss pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(2) and 12(b)(6). (Dkt. No. 26.) An opposition was filed by Third Party Plaintiff Miguel Flores. (Dkt. No. 34.) Third Party Defendants then filed their reply. (Dkt. No. 35.) The Court finds that the matter is appropriate for decision without oral argument pursuant to Local Civ. R. 7.1(d)(1). Based on the reasoning below, the Court GRANTS in part and DENIES in part Third Party Defendants' motion to dismiss with leave to amend.
According to the operative second amended complaint (“SAC”), Plaintiff The Upper Deck Company (“Plaintiff” or “Upper Deck”) is a leading manufacturer of trading cards for over 30 years, has been in the forefront of the trading card industry since 1989, holds exclusive licensing agreements with various professional athletes, including Michael Jordan, and maintains its own trademarked logos, designs and word marks. (Id., SAC ¶¶ 2, 7, 9, 10, 17.) Upper Deck exclusively owns a number of trademarks and tradenames which are collectively referred to as the “Upper Deck Trademarks”, including the “green diamond” logo with the name “Upper Deck.” (Id. ¶ 11.)
Defendant Miguel Flores (“Defendant” or “Flores”) markets products for sale online throughout the United States through eBay. (Id. ¶ 3.) It is alleged that Defendant advertised and sold counterfeit trading cards with the Upper Deck Trademarks and Jordan's likeness in interstate commerce without permission via his eBay store using the seller name “migflo3800”. (Id. ¶¶ 19, 22.) Defendant's products, including the trading cards, are counterfeits that were not created or distributed by or on behalf of Upper Deck and feature Upper Deck Trademarks as well as Jordan's name, image, likeness and/or autograph for which Plaintiff holds a license and assignment related to the use of Jordan's publicity rights on trading cards. (Id. ¶ 24.)
Many of Defendant's products are illegally reprinted versions of authentic trading cards previously produced by Upper Deck that were created without its permission, consent, authority or approval. (Id. ¶ 25.) Even though Defendant's cards were graded as “Facsimile Reprint” by GMA Grading, GMA Grading has recently acknowledged that reprint cards are counterfeits that “appears to use non-licensed images, logos, or likenesses” and has stopped providing grading to these counterfeit cards as of March 13, 2021. (Id.)
Due to Flores' alleged infringing conduct, Upper Deck filed suit alleging seven causes of action in the SAC for 1) false affiliation/endorsement, false advertising, and unfair competition under 15 U.S.C. § 1125(a); 2) trademark dilution under 15 U.S.C. § 1125(c); 3) trademark infringement and counterfeiting under 15 U.S.C. § 1114; 4) deprivation of rights of publicity pursuant to California Civil Code section 3344; 5) commercial misappropriation/violation of rights of publicity under California common law; 6) violation of California's Unfair Competition Law (“UCL”) under California Business & Professions Code section 17200 et seq.; and 7) California common law unfair competition.[1] (Dkt. No. 20, SAC.)
On November 26, 2021, Defendant Flores filed his answer and a third party complaint (“TPC”) against Rocco Tenaglia (“Tenaglia”), the seller of the cards at issue in the SAC, Gem Mint Authentication, Inc. (“GMA”), the appraiser, authenticator and grader of the cards at issue in the SAC, and Alon Karpuch (“Karpuch”), the alleged owner and sole employee and grader of GMA. (Dkt. No. 21-1, Third Party Complaint (“TPC”) ¶¶ 3, 4, 17.) The TPC alleges six causes of action for 1) breach of the warranty of title; 2) inducement; 3) violation of California Business & Professions Code section 21672(a); 4) violation of California Civil Code section 1739.7; 5) breach of contract/breach of the covenant of good faith and fair dealing; and 6) declaratory judgment. (Dkt. No. 21-1, TPC.) Flores describes his TPC as seeking equitable apportionment, contributory indemnity and damages in impleader. (Dkt. No. 34 at 3.[2]) While the TPC does not specifically identify which cause of action is alleged against which defendant, in his opposition, Flores asserts that the first, second, fifth and sixth causes of action are alleged against GMA and Karpuch and all causes of action except the fifth one are alleged against Tenaglia.[3] (Dkt. No. 34 at 3-4.)
GMA and Karpuch move to dismiss the TPC for lack of personal jurisdiction as to Karpuch under Rule 12(b)(2), and failure to state a claim under Rule 12(b)(6) and Rule 9(b) and is fully briefed.
“When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that the court has jurisdiction.” In re Western States Wholesale Natural Gas Antitrust Litig. v. Oneok, Inc., 715 F.3d 716, 741 (9th Cir. 2013). In this case, where the motion is based on written materials rather than an evidentiary hearing, the plaintiff need only make “a prima facie showing of jurisdictional facts to withstand the motion to dismiss.” Bryton Purcell LLP v. Recordon & Recordon, 575 F.3d 981, 985 (9th Cir. 2009). In such a case, “we only inquire into whether [the plaintiff's] pleadings and affidavits make a prima facie showing of personal jurisdiction.” Caruth v. Int'l Psychoanalytical Ass'n, 59 F.3d 126, 128 (9th Cir. 1995). On a prima facie showing, the court resolves all contested facts in favor of the non-moving party. In re Western States, 715 F.3d at 741; AT&T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996) (). “The plaintiff cannot simply rest on the bare allegations of its complaint, but uncontroverted allegations in the complaint must be taken as true.” Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011) (quotation marks and citation omitted).
“Where, as here, no federal statute authorizes personal jurisdiction, the district court applies the law of the state in which the court sits.” Id. (citations omitted). California's long-arm statute is “coextensive with the outer limits of due process under the state and federal constitutions, as those limits have been defined by the United States Supreme Court.” Republic Int'l Corp. v. Amco Eng'rs, Inc., 516 F.2d 161, 167 (9th Cir. 1976) (quoting Threlkeld v. Tucker, 496 F.2d 1101, 1103 (9th Cir. 1974)). As such, the Court need only consider the requirements of due process. Due process requires that nonresident defendants have “minimum contact” with the forum state “such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Personal jurisdiction can be either “general” or “specific.” See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-16 (1984).
Federal Rule of Civil Procedure (“Rule”) 12(b)(6) permits dismissal for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police Dep't., 901 F.2d 696, 699 (9th Cir. 1990). Under Federal Rule of Civil Procedure 8(a)(2), the plaintiff is required only to set forth a “short and plain statement of the claim showing that the pleader is entitled to relief, ” and “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
A complaint may survive a motion to dismiss only if, taking all well-pleaded factual allegations as true, it contains enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. “In sum, for a complaint to survive a motion to dismiss, the non-conclusory factual content, and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quotations omitted). In reviewing a Rule 12(b)(6) motion, the Court accepts as true all facts alleged in the complaint, and draws all reasonable inferences in favor of the plaintiff. al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009).
Where a motion to dismiss is granted, “leave to amend should be granted ‘unless the court determines that the...
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