Trs. of Purdue Univ. v. Vintage Brand, LLC

• Decision Date: 25 May 2021
• Docket Number: Cause No. 4:20-cv-76-RLM-APR
• Parties: THE TRUSTEES OF PURDUE UNIVERSITY, Plaintiff v. VINTAGE BRAND, LLC, Defendant
• Court: U.S. District Court — Northern District of Indiana

THE TRUSTEES OF PURDUE UNIVERSITY, Plaintiff
v.
VINTAGE BRAND, LLC, Defendant

Cause No. 4:20-cv-76-RLM-APR

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF INDIANA HAMMOND DIVISION AT LAFAYETTE

May 25, 2021

OPINION AND ORDER

The Trustees of Purdue University sued defendants Vintage Brand, LLC, and Sportswear Inc. in Indiana state court for various violations of the Lanham Act and related common-law claims. The defendants removed the case to this court asserting federal question and supplemental jurisdiction. Purdue then stipulated to the voluntary dismissal of Sportswear, but the court struck that stipulation and instructed Purdue to instead amend its complaint under Federal Rule of Civil Procedure 15(a), naming Vintage as the only defendant. Purdue did so and Vintage answered, asserting a counterclaim. Before the court is Purdue's motion to remand, or alternatively, dismiss Vintage's counterclaim. For the following reasons, the court GRANTS Purdue's motion [Doc. No. 32] and DISMISSES Vintage's counterclaim.

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I. BACKGROUND

Purdue's amended complaint asserts that Vintage has infringed on several of Purdue's registered trademarks, including the Purdue Seal Design that is the subject of United States Trademark Registration No. 2,023,0151. Vintage's counterclaim seeks to abolish Purdue's rights in the Seal Design by asking the court to cancel Purdue's trademark in the Seal Design pursuant to 15 U.S.C. § 1119. Upon "any action involving a registered mark[,]" Section 1119 empowers a court to (among other things) "order the cancellation of registrations, in whole or in part, . . . and otherwise rectify the [trademark] register with respect to the registrations of any party to the action." Section 1119 doesn't furnish an independent basis for federal jurisdiction; trademark cancellation can only be sought if federal jurisdiction has already been established. RLP Ventures, LLC v. All Hands Instruction NFP, 2020 WL 1330376, at *5 (N.D. Ill. Mar. 23, 2020).

Purdue responds that the Eleventh Amendment to the U.S. Constitution doesn't allow Vintage to bring its counterclaim in federal court, so the court should remand the entire case or dismiss the counterclaim.

II. DISCUSSION

Aside from exceptions that don't apply here, a civil action brought in state court may be removed to federal court if the federal court has original jurisdiction over the action. 28 U.S.C. § 1441(a). District courts have original jurisdiction over cases involving federal questions. 28 U.S.C. § 1331. When district courts have federal question jurisdiction, they also have supplemental jurisdiction over

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all other claims that arise out of the same case or controversy as the claims that establish federal question jurisdiction. 28 U.S.C. 1367(a). "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). "The party seeking removal has the burden of establishing federal jurisdiction, and federal courts should interpret the removal statute narrowly, resolving any doubt in favor of the plaintiff's choice of forum in state court." Schur v. L.A. Weight Loss Centers, Inc., 577 F.3d 752, 758 (7th Cir. 2009).

The Eleventh Amendment to the U.S. Constitution provides that "[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State." U.S. Const. amend XI. "Courts have construed this provision broadly, holding that it confers 'the sovereign immunity that the States possessed before entering the Union.'" Council 31 of the Am. Fed'n of State, Cnty. & Mun. Emps. V. Quinn, 680 F.3d 875, 881 (7th Cir. 2012) (quoting Bd. of Regents v. Phoenix Int'l Software, Inc., 653 F.3d 448, 457 (7th Cir. 2011). "The preeminent purpose of state sovereign immunity is to accord States the dignity that is consistent with their status as sovereign entities." Federal Maritime Comm'n v. South Carolina State Ports Auth., 535 U.S. 743, 760 (2002). "The ultimate guarantee of the Eleventh Amendment is that nonconsenting States may not be sued by private individuals in federal court." Kimel v. Florida Bd. of Regents, 528 U.S. 62, 73 (2000). Purdue University is a state entity for Eleventh Amendment purposes,

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Kashani v. Purdue Univ., 813 F.2d 843, 845 (7th Cir. 1987), and courts draw no distinction between Purdue University and its Board of Trustees, e.g., Tyler v. Trustees of Purdue Univ., 834 F. Supp. 2d 830, 845 (N.D. Ind. 2011).

Vintage argues that Purdue can't assert Eleventh Amendment immunity because (1) cancellation of a federal trademark registration is an in rem proceeding that doesn't implicate sovereign immunity, and (2) even if Purdue had sovereign immunity, they waived it by initiating this lawsuit. Each of these arguments are discussed below.

A. Cancellation of a Federal Trademark isn't an In Rem Proceeding.

Vintage argues that in rem jurisdiction is premised solely on the property in dispute, not on the court's authority over a defendant's person (i.e., in personam jurisdiction). Moreover, in rem judgment is also limited to the property in dispute; courts can't impose a personal obligation on the defendant in favor of the plaintiff. Parties may wish to participate in in rem proceedings and assert economically valuable rights to the property, but they are never compelled to do so. These features of in rem proceedings mean that, apart from a few exceptions that don't apply, in rem actions don't implicate Eleventh Amendment immunity. From those basic principles, Vintage argues that asking a court to exercise its authority under Section 1119 to rectify the register regarding the trademark registrations of a party is an in rem proceeding—that is, a proceeding regarding the disposition of property. As Vintage sees it, it should be allowed to assert its claim against Purdue because Eleventh Amendment immunity doesn't apply.

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Vintage is correct that in rem proceedings affect the interests of all persons in designated property and don't implicate a court's...