HOTALING & CO., LLC v. LY BERDITCHEV CORP.

CourtDistrict Court, D. New Jersey
DecidedAugust 26, 2021
Docket2:20-cv-16366
StatusUnknown

This text of HOTALING & CO., LLC v. LY BERDITCHEV CORP. (HOTALING & CO., LLC v. LY BERDITCHEV CORP.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
HOTALING & CO., LLC v. LY BERDITCHEV CORP., (D.N.J. 2021).

Opinion

Not for Publication

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

HOTALING & CO., LLC and SANNITI LLC, Plaintiffs, Civil Action No. 20-cv-16366

v. LY BERDITCHEV CORP., OPINION Defendant.

John Michael Vazquez, U.S.D.J. This case concerns Defendant’s alleged unlawful importation and sale of certain cherries. This matter comes before the Court by way of Defendant’s motion to dismiss. D.E. 9. The Court reviewed the parties’ submissions1 in support and in opposition and decided the motion without oral argument pursuant to Fed. R. Civ. P. 78(b) and L. Civ. R. 78.1(b). For the reasons stated below, Defendant’s motion is denied. I. BACKGROUND Plaintiff Hotaling & Co., LLC (“Hotaling”) is a California limited liability company and is the exclusive United States importer of Luxardo brand food products. D.E. 1 (“Compl.”) ¶ 2. Plaintiff Sanniti LLC (“Sanniti”) is a New Jersey limited liability company and is an authorized distributor of Luxardo brand food products. Id. ¶ 3. Defendant is a New York corporation with its principal place of business at 95 High Street, Passaic, New Jersey 07055. Id. ¶ 4. The parties dispute concerns “LUXARDO ORIGINAL MARACHINO CHERRIES” (the “Brand Cherries”). Id. ¶ 9. The Brand Cherries are “high-end candied cherries manufactured in

1 Defendant’s brief in support of its motion to dismiss, D.E. 9-1 (“Br.”); Plaintiffs’ brief in opposition, D.E. 13 (“Opp.”); and Defendant’s reply brief in further support of its motion to dismiss, D.E. 15 (“Reply”). Italy.” Id. Girolamo Luxardo S.P.A. (“GLS”) manufactures the Brand Cherries and owns all Luxardo trademarks, including U.S. Trademark Registration No. 4460894 covering the design of the Brand Cherries’ front label. Id. ¶ 10. GLS granted Hotaling the exclusive right to import, supply, and market Luxardo Brand Cherries in the United States. Id. ¶ 11. Sanniti, through its relationship with Hotaling, is an authorized distributor of Luxardo Brand Cherries. Id. ¶ 12.

Plaintiffs allege that Defendant has imported, distributed, marketed, and sold large quantities of Brand Cherries not intended or authorized for sale in the United States (the “Unauthorized Brand Cherries”). Id. ¶ 19. Plaintiffs claim the Unauthorized Brand Cherries are materially different from the Brand Cherries. Id. ¶ 21. Specifically, Plaintiffs claim that Brand Cherries authorized for importation and sale in the United States bear a “prominent legend” identifying Hotaling as the importer and display certain required labeling. Id. ¶ 10. Brand Cherries authorized for importation and sale in other markets do not include such labelling. Id. ¶ 15. Plaintiffs indicate that the Unauthorized Brand Cherries “bear Italian-language labels and packaging that do not comply with United States

labeling laws.” Id. ¶ 22. Further, the Unauthorized Brand Cherries’ labels “do not include the name and contact information for Hotaling.” Id. ¶ 23. Defendant has sold the Unauthorized Brand Cherries at prices “materially lower” than the Brand Cherries. Id. ¶ 20. Plaintiffs claim Defendant’s marketing and sale of the Unauthorized Brand Cherries infringes GLS’s rights and constitutes unfair competition with GLS, Hotaling, Sanniti, and other authorized sellers of the Brand Cherries. Id. ¶ 26. Plaintiffs have used informal efforts to notify Defendant of their objections, id. ¶¶ 28-29, and Plaintiffs indicate that Defendant is aware of Plaintiffs’ rights as exclusive distributors of the Brand Cherries. Id. ¶ 27. On October 20, 2020, Hotaling sent Defendant’s counsel a formal cease and desist letter detailing the alleged unlawful conduct. Id. ¶ 30. Defendant nevertheless continued to market and sell the Unauthorized Brand Cherries. Id. On November 17, 2020, Plaintiffs filed their Complaint, bringing claims for (1) “Federal Unfair Competition Under 15 U.S.C. § 1125(a)” and (2) “Common Law Unfair Competition.” Id. ¶¶ 31-38. The present motion followed; Defendant argues that Plaintiffs lack standing and failed

to join a necessary party. D.E. 9. II. STANDARD OF REVIEW A. Fed. R. Civ. P. 12(b)(1) In deciding a Fed. R. Civ. P. 12(b)(1) motion as to lack of subject-matter jurisdiction, a court must first determine whether the party presents a facial or factual attack because the distinction determines how the pleading is reviewed. A facial attack “contests the sufficiency of the complaint because of a defect on its face,” whereas a factual attack “asserts that the factual underpinnings of the basis for jurisdiction fails to comport with the jurisdictional prerequisites.” Elbeco Inc. v. Nat’l Ret. Fund, 128 F. Supp. 3d 849, 854 (E.D. Pa. 2015) (quoting Moore v. Angie’s

List, Inc., 118 F. Supp. 3d 802, 806 (E.D. Pa. 2015)). As to a facial attack, the 12(b)(1) motion is treated “like a 12(b)(6) motion” and the Court must “consider the allegations of the complaint as true.” T.L. by & through Latisha G. v. Pennsylvania Leadership Charter Sch., 224 F. Supp. 3d 421, 429 (E.D. Pa. 2016) (citing Hartig Drug Co. Inc. v. Senju Pharm. Co., 836 F.3d 261, 268 (3d Cir. 2016)).2 Factual attacks, in contrast, argue that subject-matter jurisdiction is improper

2 Because the standard for a facial challenge under Rule 12(b)(1) is treated “like a Rule 12(b)(6) motion to dismiss,” Mrs. World LLC v. Johnson, No. CV21928JMVJBC, 2021 WL 3400863, at *3 (D.N.J. Aug. 4, 2021) (quoting Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977)), the Court need not resolve the parties’ dispute over whether the standard under Rule 12(b)(1) and Rule 12(b)(6) applies. See Opp. at 5-6. “because the facts of the case . . . do not support the asserted jurisdiction.” Evanston, 2019 WL 1916203, at *2 (quoting Const. Party of Pennsylvania v. Aichele, 757 F.3d 347, 358 (3d Cir. 2014)). As to factual attacks, courts are permitted “to weigh and consider evidence ‘outside the pleadings’ to decide whether subject matter jurisdiction is proper.” Id. Regardless of whether the attack is facial or factual, “the Plaintiff has the burden to prove that the Court has jurisdiction.”

Bd. of Trs. of Trucking Emps of N. Jersey Welfare Fund, Inc. v. Caliber Auto Transfer, Inc., No. 09-6447, 2010 WL 2521091, at *8 (D.N.J. June 11, 2010) (quoting Petruska v. Gannon Univ., 462 F.3d 294, 302 (3d Cir. 2006)). Here, Defendant raises a facial attack.3 B. Fed. R. Civ. P. 12(b)(7) Under Fed. R. Civ. P. 12(b)(7), a court may dismiss an action for “failure to join a party under Rule 19.” Fed. R. Civ. P. 19

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HOTALING & CO., LLC v. LY BERDITCHEV CORP., Counsel Stack Legal Research, https://law.counselstack.com/opinion/hotaling-co-llc-v-ly-berditchev-corp-njd-2021.