Uniters N. Am. v. Serveco Int'l

• Decision Date: 26 September 2022
• Docket Number: 8:21-cv-2381-CEH-AAS
• Parties: UNITERS NORTH AMERICA, LLC and UNITERS S.P.A., Plaintiffs, v. SERVECO INTERNATIONAL, INC., SERVECO NORTH AMERICA, LLC, FURNITURE PROTECTION CONNECTIONS, INC., FURNITURE SOLUTIONS NETWORK, LLC and UNITERS GROUP, LLC, Defendants.
• Court: U.S. District Court — Middle District of Florida

UNITERS NORTH AMERICA, LLC and UNITERS S.P.A., Plaintiffs,
v.
SERVECO INTERNATIONAL, INC., SERVECO NORTH AMERICA, LLC, FURNITURE PROTECTION CONNECTIONS, INC., FURNITURE SOLUTIONS NETWORK, LLC and UNITERS GROUP, LLC, Defendants.

No. 8:21-cv-2381-CEH-AAS

United States District Court, M.D. Florida, Tampa Division

September 26, 2022

ORDER

Charlene Edwards Hpneywell United States District Judge

This cause comes before the Court upon the Motions to Dismiss Counterclaims filed by Counter-Defendants Uniters NA, Uniters S.P.A., and Uniters Group (Docs. 23, 27) and the Responses in Opposition filed by Counter-Plaintiff Serveco North America, LLC (“SNA”) (Docs. 35, 36). Also before the Court is a Motion to Dismiss filed by Defendant Furniture Solutions Network (“FSN”) (Doc. 40) and SNA's Response in Opposition (Doc. 43). The Uniters entities and FSN each assert several grounds for dismissal.

Upon review and consideration, for the reasons set forth below, the Court will grant-in-part and deny-in-part all three motions. FSN's motion to dismiss is granted for lack of personal jurisdiction. The Uniters entities' motions are granted to the extent

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that Counterclaim I is dismissed for failure to state a claim upon which relief may be granted. The motions are otherwise denied.

I. BACKGROUND^[1]

Uniters Group, LLC (“UG”), is a global manufacturer of home care and repair products and related services. Doc. 1 ¶ 11. It operates in the United States through Uniters North America (“UNA”), a limited liability company, and in Europe through Uniters SpA (“USpA”), an Italian joint stock company. Id. ¶¶ 11, 6, 5. UG produces a leather stain remover called INK LIFTER, which has been trademarked since 2001. Id. ¶¶ 13-14.

In October 2021, UNA and USpA filed a lawsuit against ServeCo International, Inc., SNA, and Furniture Protection Connections, Inc. (“FPC”), its competitors in the furniture protection field. Id. ¶ 15. Both SNA and FPC, a corporation that is now dissolved, are affiliated with ServeCo International. Id. ¶¶ 7-9. UNA and USpA assert that the ServeCo entities knowingly sell a kit that bears a counterfeit INK LIFTER mark on its packaging and contains a leather cleaning product bearing the same

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counterfeit mark. Id. ¶¶ 16, 17. They allege claims of trademark infringement, false representation of origin, false representations under the Lanham Act, and a state law claim of unfair competition. Id. ¶¶ 33-66.

SNA filed a Counterclaim on December 23, 2021, which it amended on January 11, 2022. Docs. 10, 14. In the Amended Counterclaim, SNA brings claims of cybersquatting and trademark infringement against several entities: UNA, UG, and Furniture Solutions Network (“FSN”). Id.^[2] FSN, a direct competitor of SNA, is a wholly owned subsidiary of UG. Id. ¶¶ 6, 15, 20. SNA alleges that FSN is in partnership with UNA. Id.

SNA conducts its furniture repair business through the domain name www.serveco.com. Id. ¶ 12. It contends that its name, SERVECO, is a protected mark that is “well known and distinctive” and has gained secondary meaning through exclusive and continuous use in commerce during the last five years. Id. ¶¶ 13-14, 38.

An unknown entity registered the domain name www.serveco.net on July 4, 2018. Id. ¶ 16. From that date until the time SNA filed its counterclaims, the domain name automatically redirected to www.fsnpro.com, which is the website through which FSN conducts business. Id. ¶¶ 15, 17-19. SNA asserts that FSN, UG, and UNA registered and used the domain name with a bad faith intent to profit through its

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commercial use. Id. ¶¶ 21-24. They have caused significant damage to SNA by redirecting customers looking for SNA to their own website that sells competing services. Id. ¶¶ 21, 26. In Counterclaim I, SNA asserts that they have violated the Anticybersquatting Protection Act (“ACPA”), 15 U.S.C. § 1125(d); in Counterclaim II, SNA asserts that they are liable for a violation of 15 U.S.C. § 1125(a).

UNA, UG, and FSN now move to dismiss both counts of the Amended Counterclaim. Docs. 23, 27, 40. UNA and UG^[3] contend that SNA lacks standing to assert the counterclaims against them, that it has failed to state a claim for either counterclaim, and that the Court should not exercise supplemental jurisdiction to hear the counterclaims, which are permissive rather than compulsory. FSN asserts that this Court does not have personal jurisdiction over it, that venue is improper and the counterclaims have been misjoined, and that extrinsic evidence proves dismissal is warranted under Rule 12(b)(6). FSN also echoes the other Counter-Defendants' argument regarding permissive counterclaims. Each of these arguments will be addressed in turn.

II. DISCUSSION

A. UNA's and UG's Challenge to Standing is Denied Without Prejudice.

First, UNA and UG argue that SNA lacks standing to bring its counterclaims and dismissal is required for lack of subject matter jurisdiction under Rule 12(b)(1) of

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the Federal Rules of Civil Procedure. Doc. 23 at 8-13.^[4] According to UNA and UG, SNA has failed to establish that it has suffered an injury in fact because its mark was not distinctive at the time the challenged domain was registered. Doc. 23 at 10. Further, they assert that SNA has not established a plausible connection between any alleged conduct by UNA or UG and the alleged harm to SNA with respect to either counterclaim. Id. at 10-13. In fact, the domain was registered before FSN became a subsidiary of UG. Id. at 11. UNA and UG also cite to the attached Declarations of Claude Bonvouloir, the executive vice president of both entities, who affirms that neither entity used the domain name itself nor was connected to FSN's alleged use of the name. Docs. 23-1, 28. UNA and UG assert that the declarations provide “incontrovertible evidence” that defeats standing. Doc. 23 at 11-13.

SNA responds that it does have standing to sue UNA and UG. It suffered an injury in fact because its mark is inherently distinctive under trademark law. Doc. 35 at 5-6. With respect to causation, its pleadings establish enough of a relationship between FSN, UNA, and UG for the latter two entities to be either jointly or vicariously liable for FSN's misconduct. Id. at 6-10. SNA contends that it should be provided the opportunity to take discovery on outstanding questions regarding the relationship between the three entities and their respective liability in response to the Counter-Defendants' factual challenges. Id. at 7, 9-10.

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Standing to bring a lawsuit is a component of a federal court's subject matter jurisdiction. See Clapper v. Amnesty Intern. USA, 568 U.S. 398, 408 (2013). The plaintiff bears the burden of proving standing, which requires a three-part showing that: (1) the plaintiff suffered or will imminently suffer an injury-in-fact; (2) a causal connection exists between this injury and the defendant's conduct; and (3) the plaintiff's injury is likely to be redressed by a favorable decision. Mulhall v. UNITE HERE Local 355, 618 F.3d 1279, 1286 (11th Cir. 2010) (overruled on other grounds by Janus v. American Federation of State, Cnty., and Mun. Employees, Council 31, 138 S.Ct. 2448 (2018)).

Attacks on subject matter jurisdiction under Rule 12(b)(1), including regarding standing, may be facial or factual. A facial attack on subject matter jurisdiction “requires [] the court merely to look and see if [the] plaintiff has sufficiently alleged a basis of subject matter jurisdiction, and the allegations in his complaint are taken as true for the purposes of the motion.” Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990) (citations omitted). A factual attack, on the other hand, permits the court to consider matters outside of the pleadings. See Garcia v. Copenhaver, Bell & Associates, M.D.'s, P.A., 104 F.3d 1256, 1261 (11th Cir. 1997). “[N]o presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluation for itself the merits of jurisdictional claims.” Lawrence, 919 F.2d at 1529 (citations and quotation marks omitted). “In a factual challenge, the district court must provide the plaintiff with an opportunity for discovery and for a hearing that is appropriate to the nature of the motion to dismiss.”

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Rance v. D.R. Horton, Inc., 316 Fed.Appx. 860, 863 (11th Cir. 2008), quoting Williamson v. Tucker, 645 F.2d 404, 414 (5th Cir. 1981).^[5]

In cases where the defendant's factual attack on subject matter jurisdiction also implicates an element of the cause of action, however, “the proper course of action.. .is to find that jurisdiction exists and deal with the objection as a direct attack on the merits of the plaintiff's case” under Rule 56. Lawrence, 919 F.2d at 1529. Moreover, as the Eleventh Circuit has recognized, “a plaintiff must offer more to support its standing at each successive stage of the litigation,” with a “more demanding approach” to standing not required at the motion to dismiss stage. Tokyo Gwinnet, LLC v. Gwinnett Cnty., 940 F.3d 1254, 1266 (11th Cir. 2019). Accordingly, where a factual challenge to standing raises factual disputes that implicate the merits of a claim, some courts have deferred the issue to the summary judgment stage in order to allow the parties to complete discovery. In In re Mednax Servs., Inc., Customer Data Sec. Breach Litig., 21-md-02994-RAR, 2022 WL 1468057, *11 (S.D. Fla. May 10, 2022), for example, the court determined that a factual challenge to the causation element of standing actually constituted an attack on the merits of the plaintiff's case, and that a factual dispute existed as to the issues raised. The court therefore denied the motion to dismiss while waiting to resolve the remaining standing questions until “the summary judgment stage after both parties are afforded the opportunity to conduct

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discovery.” Id.; see also Houston v. 7-Eleven, Inc....