Custom Dynamics, LLC v. Radiantz Led Lighting, Inc.

535 F. Supp. 2d 542, 2008 U.S. Dist. LEXIS 4942, 2008 WL 183277
CourtDistrict Court, E.D. North Carolina
DecidedJanuary 18, 2008
Docket5:07-CV-493-D
StatusPublished
Cited by4 cases

This text of 535 F. Supp. 2d 542 (Custom Dynamics, LLC v. Radiantz Led Lighting, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Custom Dynamics, LLC v. Radiantz Led Lighting, Inc., 535 F. Supp. 2d 542, 2008 U.S. Dist. LEXIS 4942, 2008 WL 183277 (E.D.N.C. 2008).

Opinion

ORDER

JAMES C. DEVER III, District Judge.

Plaintiff Custom Dynamics, LLC (“Custom”) moved for both a temporary restraining order and a preliminary injunction (collectively, “preliminary relief’). Defendant Radiantz LED Lighting, Inc. (“Radiantz”) responded in opposition, and Custom replied. For the reasons stated below, plaintiffs motion for preliminary relief is denied.

I.

Custom is a North Carolina limited liability company with its principal place of business in Wake Forest, North Carolina. Verified Compl. ¶ 1. David Pribula (“Pribu-la”), an electrical engineer who made motorcycle lighting accessories in his spare time, founded Custom. Id. at ¶ 8. In January 2003, Pribula left his electrical engineering position to operate Custom full-time. Id. Custom is a retail seller and wholesale distributor of aftermarket motorcycle products, especially lighting accessories constructed using light emitting diodes (“LEDs”). See id.

Radiantz is a California corporation with its principal place of business in Brook-ings, Oregon. Id. at ¶2. Radiantz is a designer and manufacturer of various LED motorcycle lights. Id. at ¶ 9. The sole shareholder of Radiantz is Mitchell Valentine (“Valentine”). Decl. of Mitchell Valentine ¶ 2. Although many material facts are in dispute, it appears that the parties once had a productive business relationship based on an oral contract under which Custom sold various Radiantz products. Compare Verified Compl. ¶ 11 (“Plaintiff became the largest retailer and distributor of Defendant’s products.”) with Decl. of Mitchell Valentine ¶ 4 (noting that “[Radiantz] would have continued to sell to [Custom]” had this dispute not arisen); see *545 Def.’s Mem. of P. & A. in Opp’n to Pl.’s Mot. for TRO 2 [hereinafter “Def.’s Mem.”] (noting that Custom does not dispute that the contract was oral). The parties dispute what caused the relationship to sour and the ensuing litigation.

Custom alleges that Radiantz first approached Custom about selling Radiantz products. See Verified Compl. ¶ 10. In fact, Custom contends that it owes its existence in part to Radiantz. See id. at ¶ 8 (alleging that Custom was formed “in part because of the interest expressed by Defendant Radiantz” in having Custom sell Radiantz products). Custom alleges that it was a highly-valued Radiantz distributor, rising to become both Radiantz’s largest retail seller and largest wholesale distributor. See id. at ¶ 11. According to Custom, because of this success, Radiantz requested that Custom become Radiantz’s exclusive retail seller and its primary wholesale distributor. See id. at ¶ 12. Custom alleges that the parties therefore entered into an oral contract wherein Custom was to be the exclusive retail outlet of Radiantz products for end-users, and the primary (but not exclusive) wholesale outlet of Radiantz products for distributors. See id. at ¶¶ 12-13. Custom alleges that, pursuant to this contract, it agreed to handle all of Radiantz’s warranty claims. Id. at ¶ 14.

However, Custom contends that after Radiantz began outsourcing its manufacturing to China in 2006, the quality of Radiantz’s products rapidly declined, and warranty claims increased. See id. at ¶ 21. Custom alleges that, after “months of attempting to correct the manufacturing inadequacies,” Radiantz simply announced that it was discontinuing an allegedly defective license plate frame and a similar product. See id. Because Radiantz allegedly discontinued these products, Custom states that it could not fill the orders that its customers had placed for these Ra-diantz products. See id. at ¶ 22. Custom allegedly therefore informed Radiantz that it would purchase the license plate frames from another manufacturer so that it could fill its orders for the now-discontinued Ra-diantz products. See id.

According to Custom, Valentine became infuriated at this decision and “suddenly declared” that he would “take out” Custom and put Custom “out of business.” See id. at ¶ 25. Radiantz therefore allegedly disseminated several defamatory statements about Custom to various third parties. See id. at ¶¶ 26-27, 31. Custom also alleges that Radiantz engaged in various unfair practices, such as undercutting Custom’s prices on Radiantz products, refusing to supply the parts necessary for Custom to process warranty claims on Radiantz products, and causing Custom’s name to be deleted from a product review on a popular motorcycle website. See id. at ¶¶ 28, 30, 32. Finally, Custom alleges that Ra-diantz “copied multiple copyrighted images and original text from [Custom]’s website and posted [the images and the text] on [Radiantz]’s website as [Radiantz’s] own original works.” Id. at ¶ 33.

Not surprisingly, Radiantz views the facts very differently. Radiantz contends that Custom came to Radiantz, requesting that Radiantz name Custom the exclusive retail outlet for Radiantz products. See Deck of Mitchell Valentine ¶5. Radiantz alleges that, although it allowed Custom to become a retail seller “on a trial basis,” it did not make Custom its exclusive retail seller. Id. (emphasis removed). Radiantz alleges that Custom also agreed not to carry anything that Radiantz considered “copied products.” Id. at ¶ 6,

Radiantz admits that it began seeing increasing numbers of warranty claims during the parties’ relationship, but blames Custom. See id. at ¶ 8. Radiantz alleges that Custom began fabricating warranty *546 claims so as to strong-arm Radiantz into selling its business to Custom. See id. (“At the time, [Custom] was trying to buy [Radiantz], so this was a ploy to get [Valentine] to sell [Radiantz] cheap out of frustration.”). Radiantz alleges that Custom then began threatening Radiantz in an attempt to get Radiantz to stop doing business with other wholesale distributors, notwithstanding that Custom was never the exclusive wholesale outlet of Radiantz products. See id. at ¶ 9. Radiantz further alleges that Custom began placing orders for Radiantz products, and then refusing to pay for them, so as to sap Radiantz of resources by forcing it to carry an abnormally large inventory. See id. According to Radiantz, Custom threatened to, and later did, engage other manufacturers to create copies of Radiantz products, which Custom then offered for sale. Id. Based on these allegations, Radiantz sued Custom in California state court on December 6, 2007. See Radiantz LED Lighting, Inc. v. Custom Dynamics, LLC, No. 07-CC-12717 (Cal.Super.Ct. Orange County Dec. 6, 2007) (complaint).

On December 18, 2007, Custom sued Radiantz in this court. Custom alleges seven causes of action, including copyright infringement and defamation. See Verified Compl. ¶¶ 34-53. Custom’s verified complaint requests both a temporary restraining order and a preliminary injunction on the copyright infringement and defamation claims. See id. at 19 (prayer for relief A & B).

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Bluebook (online)
535 F. Supp. 2d 542, 2008 U.S. Dist. LEXIS 4942, 2008 WL 183277, Counsel Stack Legal Research, https://law.counselstack.com/opinion/custom-dynamics-llc-v-radiantz-led-lighting-inc-nced-2008.