Hemlock Hats Company, Inc. v. Diesel Power Gear LLC

District Court, S.D. California·Decided November 25, 2020·No. 3:19-cv-02422·Unknown

Opinion

HEMLOCK HAT COMPANY, INC., Case No.: 19-cv-02422-AJB-AHG Plaintiff, ORDER:

v. (1) GRANTING DEFENDANTS’ DIESEL POWER GEAR, LLC, DIESEL MOTION TO DISMISS, (Doc. No. 11); SELLERZ, LLC, 4X4 ANYTHING, LLC, SPARKS MOTORS, LLC, DAVID (2) GRANTING PLAINTIFF’S W. SPARKS, DAVID KILEY, JOSHUA MOTION FOR LEAVE TO AMEND STUART, AND KEATON HOSKINS, COMPLAINT, (Doc. No. 14) Defendants.

Diesel Power Gear, LLC (“DPG”), DIESELSellerz.com, LLC (“DIESELSellerz”), 4X4 Anything, LLC (“4X4 Anything”), Sparks Motors, LLC (“Sparks Motors”), David W. Sparks (“Sparks”), David Kiley (“Kiley”), Joshua Stuart (“Stuart”), and Keaton Hoskins (“Hoskins”) (collectively referred to as “Defendants”) move to dismiss with prejudice Hemlock Hat Company, Inc.’s (“Plaintiff”) Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. (See Doc. No. 11.) Plaintiff filed an opposition to Defendants’ motion to dismiss. (See Doc. No. 14.) Defendants filed a reply in support of the motion. (See Doc. No. 17.) Pursuant to Civil Local Rule 7.d.1, the Court finds the matter suitable for determination on the papers and without oral argument. For the reasons discussed herein, the Court GRANTS Defendants’ motion to dismiss and GRANTS Plaintiff’s motion for leave to amend. Plaintiff was formed in 2016 to design, market, and sell specialty headwear and apparel. (Doc. No. 1-2 at 3.) Plaintiff is a company located in Southern California that “sells various hats throughout the country via its website www.hemlockhatco.com, 2000+ brick and mortar retail locations, amazon.com[,] and other well-known retail channels.” (Id.) According to Plaintiff, its company is distinguished in the headwear industry because of “its fashionable and unique straw hats featuring under brim designs.” (Doc. No. 14 at 2.) Defendants are best known for their reality television show, “Diesel Brothers,” which “airs on Discovery Channel and features diesel trucks being modified for recreational use.” (Doc. No. 11 at 5.) Plaintiff alleges that “Defendants were/are manufacturing, producing, marketing, distributing, and/or offering for sale a straw hat” similar to one of Plaintiff’s straw hat designs. (Doc. No. 1-2 at 4.) Plaintiff claims that Defendants intentionally copied the American flag inspired design, where “instead of the parallel white-red strip combo, Hemlock’s design has a red background with white stripes crossing and overlapping over each other[,]” (alleged copyrighted “Design”). (Doc. No. 14 at 2.) Aside from the “near- identical under the brim design,” Plaintiff adds there are numerous other similarities like the “distinctive 6-sided patch on the front of the hat, the color scheme of the patch[,] and the overlap of the under-brim design on the top of the hat[.]” (Doc. No. 1-2 at 4.) On July 26, 2019, Plaintiff sent a cease and desist letter to Defendant DPG. (Id. at 5.) Plaintiff asserts Defendants are aware that they do not own the design, but still “attempt[s] to pass it off as their own.” (Id. at 5.) Plaintiff asserts two claims against Defendants for (1) common law copyright infringement under Cal. Civ. Code § 980, and (2) unfair business practices under California’s Unfair Competition Law (“UCL”), Cal. Bus. Prof. Code § 17200 et seq. // // On November 12, 2019, Plaintiff filed its Complaint against Defendants in the Superior Court of California, County of San Diego, alleging claims for common law copyright infringement and unfair competition. (Doc. No. 1-2.) On December 17, 2019, Defendants filed a notice of removal of this action to the United States District Court for the Southern District of California. (Doc. No. 1 at 1.) Then on March 5, 2020, Defendants filed a motion to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). (Doc. No. 11.) Plaintiff opposed the motion, and Defendants replied. (Doc. Nos. 14–17.) This order follows. A. Motion to Dismiss for Failure to State a Claim Defendants seek Rule 12(b)(6) dismissal of the Complaint on the grounds that Plaintiff does not possess a common law copyright, and that this action is preempted by the Copyright Act (17 U.S.C. § 1 et seq.). (Doc. No. 11 at 8.) A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of the complaint. See Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief. . . .” Fed. R. Civ. P. 8(a)(2). Plaintiffs must also plead, however, “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The plausibility standard thus demands more than a formulaic recitation of the elements of a cause of action or naked assertions devoid of further factual enhancement. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Instead, the complaint “must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of all factual allegations and must construe them in the light most favorable to the nonmoving party. See Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 1996). The court need not take legal conclusions as true “merely because they are cast in the form of factual allegations.” Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987) (quoting W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)). Similarly, “conclusory allegations of law and unwarranted inferences are not sufficient to defeat a motion to dismiss.” Pareto v. Fed. Deposit Ins. Corp., 139 F.3d 696, 699 (9th Cir. 1998). B. Motion for Leave to Amend the Complaint Plaintiff requests leave to file its First Amended Complaint to (1) add other causes of action (i.e., trade dress infringement and business tort where competitor steals the design of a competitor) and (2) add facts arising out of Defendants’ fraudulent conduct. (Doc. No. 14 at 9.) Federal Rule of Civil Procedure 15 mandates that leave to amend “be freely given when justice so requires.” Fed. R. Civ. P. 15(a). “[T]he grant or denial of an opportunity to amend is within the discretion of the District Court . . . .” Foman v. Davis, 371 U.S. 178, 182 (1962). The Court considers five factors when granting leave to amend: bad faith, undue delay, prejudice to the opposing party, futility of amendment, and whether the plaintiff has previously amended the complaint. See Johnson v. Buckley, 356 F.3d 1067, 1077 (9th Cir. 2004). In applying the factors, “[n]ot all factors merit equal weight.” Eminence Capital, LLC v. Aspeon, Inc.,

Hemlock Hats Company, Inc. v. Diesel Power Gear LLC, (S.D. Cal. 2020).

Hemlock Hats Company, Inc. v. Diesel Power Gear LLC (Hemlock Hats Company, Inc. v. Diesel Power Gear LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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