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PopSockets LLC v. Wilcox

United States District Court, D. Colorado

November 4, 2019

POPSOCKETS LLC, Plaintiff,
v.
LORA SUZANNE WILCOX, BRADLEY JAMES WILCOX, and JOHN DOES 1-10, Defendants.

          RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          Michael E. Hegarty United States Magistrate Judge

         Before the Court are Defendants' Motion to Dismiss [ECF 15] and Plaintiff's Motion for Leave to File Sur-Reply [ECF 40]. Pursuant to 28 U.S.C. § 636(b)(1)(B) and D.C. COLO. L.Civ.R. 72.1(c), the motions have been referred to this Court for a report and recommendation.

         For its Complaint, Plaintiff alleges Defendants' sale of PopSocket products through the website, Amazon.com, (1) violates the Lanham Act, 15 U.S.C. § 1114 and 15 U.S.C. § 1125, regarding trademark infringement; (2) violates 15 U.S.C. § 1125(a)(1)(A) regarding unfair competition; (3) violates 15 U.S.C. § 1125(a)(1)(B) regarding false advertising; (4) constitutes common law trademark infringement; (5) constitutes common law unfair competition; (6) is a deceptive trade practice in violation of Colo. Rev. Stat. § 6-1-105; and (7) tortiously interferes with Plaintiff's contract and business relations. See Am. Compl., ECF 15. The matters are briefed to the extent required by law, and the Court finds that oral argument will not assist with the adjudication of the motions. For the reasons that follow, the Court recommends that the Honorable Raymond P. Moore deny Defendants' motion to dismiss and deny as moot Plaintiff's motion for leave to file surreply.

         I. Procedural History

         Defendants filed the present motion to dismiss on May 29, 2019. Defendants proceed pro se in this action and titled the motion, “Defendants['] Motion to Dismiss for Lack of Subject Matter Jurisdiction.” ECF 15. However, the introductory paragraph and the arguments therein seek an order dismissing the complaint “for lack of personal jurisdiction.” Id. at 1. Additionally, during the scheduling conference held June 13, 2019 [ECF 29], the Court clarified with Defendants that they intended to seek dismissal for lack of personal jurisdiction. Furthermore, Defendants' amended reply brief states, “The motion should be properly captioned and corrected to read ‘Defendants [sic] Motion to Dismiss for Lack of Personal Jurisdiction.” See Am. Reply Br., ECF 40. Thus, the motion will be analyzed pursuant to Fed.R.Civ.P. 12(b)(2).

         Additionally, Defendants attack the plausibility of Plaintiff's allegations; although not specifically styled as a motion to dismiss for failure to state a claim, Defendants' plausibility arguments are so evident that Plaintiff inferred from the motion a request to dismiss the complaint for failure to state a claim and addressed Defendants' arguments on that basis. Resp. 8, ECF 27. In light of the Defendants' pro se status, the Court will also construe the motion to include a request to dismiss the complaint for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6).

         After the motion to dismiss was fully briefed, Plaintiff filed the present motion for leave to file surreply on September 4, 2019. Both motions are before the Court and will be addressed in this Recommendation.

         II. Statement of Facts

         The following are relevant factual allegations (as opposed to legal conclusions, bare assertions, or merely conclusory allegations) made by Plaintiff in its Amended Complaint, which are taken as true for analysis under Fed.R.Civ.P. 12(b)(2) pursuant to OMI Holdings, Inc. v. Royal Ins. Co., 149 F.3d 1086, 1091 (10th Cir. 1998) and under 12(b)(6) pursuant to Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         Plaintiff manufactures and sells grips/stands, mounts, and other accessories for mobile devices. Am. Compl. ¶ 7, ECF 8. Plaintiff's brand name and logos are recognized by consumers, and its name is associated with high quality, reliable, and durable products. Id. ¶ 12. Plaintiff sells its products exclusively through its own website and through a network of authorized distributors and resellers. Id. ¶ 8. For the purpose of protecting its respective brand, Plaintiff has registered trademarks with the United States Patent and Trademark Office (“PTO”). Id. ¶ 9. Through its extensive quality control processes, Plaintiff ensures the safety and satisfaction of customers and maintains the integrity of its positive business reputation. Id. ¶ 8. However, the explosion of internet retail sales has made it difficult for Plaintiff to monitor the unauthorized sale of its products through online markets, such as Amazon.com. Id. ¶¶ 16-18. Accordingly, Plaintiff audits its authorized online sellers to ensure they conform to Plaintiff's strict quality control requirements. Id. ¶ 58. For example, to be considered an authorized seller, the genuine products sold are required to have a limited warranty. Id. ¶ 69. Plaintiff asserts that its quality controls and the existence of a warranty are material for consumer satisfaction. Id. ¶¶ 73-74.

         Defendants have sold Plaintiff's products through their online marketplace on Amazon.com under the storefront names “Planoseller 2” and “TexasDeals2.” Id. ¶ 106. Defendants are not authorized sellers, and the products they sell are not subject to Plaintiff's quality control system and do not come with a warranty. Id. ¶¶ 108-109. However, through Amazon.com, Defendants advertise the products they are selling as “new.” Id. ¶ 139. “New” products on Amazon.com are required to come with the “original manufacturer's warranty.” Id.

         Consumers of Plaintiff's products have submitted numerous negative reviews on Amazon.com, and Plaintiff attributes at least some of the negative reviews to Defendants' sales.[1]Id. ¶¶ 34-52. These negative reviews have caused damage to Plaintiff's reputation and sales. Id. ¶ 55. Plaintiff sent multiple cease and desist letters informing Defendants that their conduct was harming Plaintiff in Colorado. Id. ¶¶ 143-144. Plaintiff's attempts to resolve this matter prior to filing this suit were unsuccessful. Id. ¶ 148.

         III. Legal Standards

         A. Dismissal Pursuant to Fed.R.Civ.P. 12(b)(2)

         “Jurisdiction to resolve cases on the merits requires ... authority over the parties (personal jurisdiction), so that the court's decision will bind them.” Gadlin v. Sybron Int'l Corp., 222 F.3d 797, 799 (10th Cir. 2000) (quoting Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 577 (1999)). When no evidentiary hearing is held “the plaintiff need only make a prima facie showing that jurisdiction exists.” Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995); see also Old Republic Ins. Co. v. Continental Motors, Inc., 877 F.3d 895, 900 (10th Cir. 2017). “The plaintiff may make this prima facie showing by demonstrating, via affidavit or other written materials, facts that if true would support jurisdiction over the defendant.” OMI Holdings, Inc., 149 F.3d at 1091 (10th Cir. 1998); see also Old Republic Ins. Co., 877 F.3d at 900.

The allegations in the complaint must be taken as true to the extent they are uncontroverted by the defendant's affidavits. If the parties present conflicting affidavits, all factual disputes must be resolved in the plaintiff's favor, and the plaintiff's prima facie showing is sufficient notwithstanding the contrary presentation by the moving party. However, only the well pled facts of plaintiff's complaint, as distinguished from mere conclusory allegations, must be accepted as true.

Wenz, 55 F.3d at 1505 (citations and internal quotation marks omitted). “[T]o defeat a plaintiff's prima facie showing of jurisdiction, a defendant must present a compelling case demonstrating that the presence of some other considerations would render jurisdiction unreasonable.” OMI Holdings, Inc., 149 F.3d at 1091 (citation and internal quotations omitted).

         B. Dismissal Pursuant to Fed.R.Civ.P. 12(b)(6)

         The purpose of a motion to dismiss under Fed.R.Civ.P. 12(b)(6) is to test the sufficiency of the plaintiff's complaint. Sutton v. Utah State Sch. For the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 2008). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility, in the context of a motion to dismiss, means that the plaintiff pled facts which allow “the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Twombly requires a two-prong analysis. First, a court must identify “the allegations in the complaint that are not entitled to the assumption of truth, ” that is, those allegations which are legal conclusions, bare assertions, or merely conclusory. Id. at 679. Second, the Court must consider the factual allegations “to determine if they plausibly suggest an entitlement to relief.” Id. at 681. If the allegations state a plausible claim for relief, such claim survives the motion to dismiss. Id. at 680.

         Plausibility refers “to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs have not nudged their claims across the line from conceivable to plausible.” S.E.C. v. Shields, 744 F.3d 633, 640 (10th Cir. 2014) (quoting Khalik v. United Air Lines, 671 F.3d 1188, 1191 (10th Cir. 2012)). “The nature and specificity of the allegations required to state a plausible claim will vary based on context.” Safe Streets All. v. Hickenlooper, 859 F.3d 865, 878 (10th Cir. 2017) (quoting Kan. Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1215 (10th Cir. 2011)). Thus, while the Rule 12(b)(6) standard does not require that a plaintiff establish a prima facie case in a complaint, the elements of each alleged cause of action may help to determine whether the plaintiff has set forth a plausible claim. Khalik, 671 F.3d at 1191.

         However, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. The complaint must provide “more than labels and conclusions” or merely “a formulaic recitation of the elements of a cause of action, ” so that “courts ‘are not bound to accept as true a legal conclusion couched as a factual allegation.'” Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). “Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, ” the complaint has made an allegation, “but it has not shown that the pleader is entitled to relief.” Id. (quotation marks and citation omitted).

         C. Treatment of a Pro Se Party's Filings

         If Defendants are proceeding without counsel, the Court must construe the pleadings and other filings liberally. See Haines v. Kerner, 404 U.S. 519, 520-21 (1972); Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). Additionally:

Federal courts sometimes will ignore the legal label that a pro se litigant attaches to a motion and recharacterize the motion in order to place it within a different legal category .... to create a better correspondence between the substance of a pro se motion's claim and its underlying legal basis.

Castro v. United States, 540 U.S. 375, 381-82 (2003).

         IV. ...


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