General Motors LLC v. KAR Auto Group of Decorah, Inc.

District Court, N.D. Iowa·Decided September 8, 2020·No. 6:20-cv-02039·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF IOWA EASTERN DIVISION

GENERAL MOTORS LLC,

Plaintiff, No. 20-CV-2039-CJW-KEM vs. MEMORANDUM OPINION AND ORDER KAR AUTO GROUP OF DECORAH, INC., d/b/a DECORAH CHEVROLET CADILLAC, Defendant. __________________________ I. INTRODUCTION This matter is before the Court on defendant’s partial motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) or, in the alternative, motion for a more definite statement under Rule 12(e). (Doc. 22). In its motion, defendant seeks dismissal or, alternatively, a more definitive statement of plaintiff’s claim for trademark infringement. (Id., at 1–3). Plaintiff timely resisted and, in the alternative, requested leave to amend its amended complaint. (Doc. 23). Defendant timely replied to plaintiff’s resistance. (Doc. 25). The Court considers this matter fully submitted. For the following reasons, defendant’s partial motion to dismiss is granted, defendant’s alternative request for a more definite statement is denied as moot, and plaintiff’s request for leave to amend is denied. II. BACKGROUND The following relevant facts are taken from plaintiff’s amended complaint. (Doc. 14). Plaintiff is a manufacturer and distributor of motor vehicles. (Id., at 2). Defendant is an automobile dealer in Decorah, Iowa. (Id., at 1-2). The parties entered into two dealer agreements (the “Agreements”) which allowed defendant to sell plaintiff’s vehicles, namely Chevrolet and Cadillac vehicles, at its General Motors (“GM”) dealership (the “GM dealership”). (Id., at 2). The Agreements limited the extent defendant could use plaintiff’s trademarks and trade names (the “GM Marks”), including the names ‘Chevrolet’ and ‘Cadillac’ and their respective logos, vehicle lines, and ancillary marks. (Id., at 4). Defendant formerly operated a separate automobile dealership adjacent to its GM dealership which sold Chrysler, Dodge, Jeep, and Ram (“CDJR”) vehicles manufactured by Fiat Chrysler (“the CDJR dealership”). (Id., at 5). On February 1, 2020, the entity operating the CDJR dealership merged into defendant. (Id.). On June 10, 2020, defendant merged its CDJR operations into the GM dealership operations. (Id., at 8). The practice of selling vehicles from two different manufacturers at a single dealership is called “dualing” in the car dealership industry. (Id., at 8 n.2). Plaintiff filed its complaint on June 9, 2020, (Doc. 1) and amended its complaint on July 1, 2020 (Doc. 14). Plaintiff’s amended complaint asserts two breach of contract claims, one for specific performance and one for damages, as well as a claim of trademark infringement under Title 15, United States Code, Section 1125(a). (Id., at 16–21). As for its trademark infringement claim, plaintiff asserts defendant has improperly commingled plaintiff’s GM Marks with CDJR trademarks and trade names by dualing its sales, services, and dealership operations. (Id., at 20). Plaintiff argues that, as a result of the unauthorized dualing, consumers will be confused, make mistakes, or be deceived as to the “source, affiliation, or sponsorship” of the GM Marks. (Id.). III. APPLICABLE LAW Under Federal Rule of Civil Procedure 8, a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Rule 8 does not require “detailed factual allegations.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Nevertheless, it “demands more than an unadorned, the-defendant- unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint that relies on “naked assertion[s]” devoid of “further factual enhancement,” “labels and conclusions,” or “a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555, 557. Before filing an answer, a defendant may move to dismiss a complaint for “failure to state a claim upon which relief can be granted” under Federal Rule of Civil Procedure 12(b)(6). To survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain sufficient factual matter . . . to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (citation omitted). “[W]hen ruling on a defendant’s motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint.” Erickson v. Pardus, 551 U.S. 89, 94 (2007). The Court must also grant “all reasonable inferences” from the pleadings “in favor of the nonmoving party.” Crumpley-Patterson v. Trinity Lutheran Hosp., 388 F.3d 588, 590 (8th Cir. 2004) (citation omitted). “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.” Iqbal, 556 U.S. at 678. Plausibility is not equivalent to probability, but it is something “more than a sheer possibility that a defendant has acted unlawfully.” Id. “The question . . . is not whether [a plaintiff] might at some later stage be able to prove [its claims]; the question is whether [a plaintiff] has adequately asserted facts (as contrasted with naked legal conclusions) to support his claims.” Whitney v. Guys, Inc., 700 F.3d 1118, 1129 (8th Cir. 2012). IV. ANALYSIS The Court will first address defendant’s partial motion to dismiss before considering defendant’s alternative request for a more definite statement and plaintiff’s alternative request to amend its amended complaint. A. Partial Motion to Dismiss Section 1125(a)(1) of the Lanham Act states: (1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which— (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. Thus, the Lanham Act “creates two distinct bases of liability: false association, § 1125(a)(1)(A), and false advertising, § 1125(a)(1)(B).” Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 112 (2014). Generally, “[t]he Lanham Act prohibits the use of a mark in connection with goods or services in a manner that is likely to cause confusion as to the source or sponsorship of the goods or services.” Davis v. Walt Disney Co., 430 F.3d 901, 903 (8th Cir. 2005).1 Indeed, “the core element of trademark infringement law is whether an alleged trademark infringers’ use of a mark creates a likelihood that the consuming public will be confused as to who makes what product.” Sensient Techs. Corp. v. SensoryEffects Flavor Co.,

General Motors LLC v. KAR Auto Group of Decorah, Inc., (N.D. Iowa 2020).

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