1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Josephine Brandon, et al., No. CV-25-01538-PHX-DJH
10 Plaintiffs, ORDER
11 v.
12 Vascular Access Certification Corporation, et al., 13 Defendants. 14 15 Before the Court is Josephine Brandon, William Hart, VA-BC Training Center, 16 LLC, and Phoenix Vascular Access’s (collectively “Plaintiffs”) Motion for Leave to 17 Amend their Complaint. (Doc. 24). The Motion is opposed by Vascular Access 18 Certification Corporation (“VACC”). (Doc. 27). VACC also asks that its pending 19 Motion to Dismiss be applied to Plaintiffs’ First Amended Complaint if granted. 20 (Doc. 10). The Court will grant that request and analyze both Plaintiffs’ Motion for 21 Leave to Amend Complaint and VACC’s Motion to Dismiss in tandem. For the reasons 22 set forth below, the Court will grant Plaintiff’s Motion for Leave to Amend Complaint 23 and deny VACC’s Motion to Dismiss. 24 I. Background 25 Plaintiffs, based in Maricopa County, run a vascular training center, or two, to 26 provide certification services to individuals seeking to be credentialed in the vascular 27 industry. (Doc. 24 at ¶¶ 1–4). VACC also runs its own vascular training and certification 28 program. (Doc. 10 at 2). Touting its efforts to provide certification services nationwide, 1 VACC says it has administered over 11,500 exams and 9,833 certifications since it 2 opened. (Id.) To advertise their services, both parties use a certain mark. The mark says 3 “VA-BC” and Plaintiffs’ mark has a heart over the hyphen, while VACC’s mark has a 4 heart shape next to the letter V. (Doc. 24 at ¶ 15; Ex. B). Both parties claim a right to the 5 mark and say that the other is the infringer. According to Plaintiffs, they have been using 6 the mark since at least 2010 and are the first to use the mark. (Doc. 24 at ¶ 17). VACC 7 disputes that and says that not only is it the first to use the mark but also its rightful 8 owner. (Doc. 10 at 4–5). Originally, Plaintiffs had brought the following claims against 9 VACC: trademark infringement and initial interest confusion; unfair competition and 10 false designation of origin; common law trademark infringement and unfair competition; 11 and finally unjust enrichment. (Doc. 1 at 5–8). 12 Now, seeking to amend their original complaint, Plaintiffs bring the following five 13 claims and seek to add a new defendant: (1) trademark infringement and initial interest 14 confusion; (2) contributory trademark infringement (against Association for Vascular 15 Access, “AVA,” only); (3) unfair competition and false designation or origin; (4) 16 deceptive trade practices; (5) common law trademark infringement; and lastly (6) unjust 17 enrichment. (Doc. 24 at 12–19). Because VACC has asked that the Court apply its 18 pending Motion to Dismiss to the First Amended Complaint, the Court will do so. 19 II. Legal Standard 20 Federal Rule of Civil Procedure 15(a)(2) allows a party to amend a pleading at any 21 time with leave of the court or if the opposing party consents, and directs that leave 22 should be freely granted “when justice so requires.” Ninth Circuit case law strongly 23 supports a liberal approach to allowing amendments. Lopez v. Smith, 203 F.3d 1122, 24 1128 (9th Cir. 2000) (“[W]e have repeatedly stressed that the court must remain guided 25 by the underlying purpose of Rule 15 . . . to facilitate decision on the merits, rather than 26 on the pleadings or technicalities.”). Fed. R. Civ. P. 15(a)(2). Rule 15(a), however, gives 27 the district court discretion to deny leave to amend for reasons such as: (1) undue delay, 28 (2) bad faith, (3) prejudice to the opposing party, (4) futility of amendment, and (5) 1 whether plaintiff has previously amended his complaint. Foman v. Davis, 371 U.S. 178, 2 182 (1962); Western Shoshone Nat’l Council v. Molini, 951 F.2d 200, 204 (9th Cir. 3 1991). “Leave to amend need not be given if a complaint, as amended, is subject to 4 dismissal.” Moore v. Kayport Package Exp., Inc., 885 F.2d 531, 538 (9th Cir. 1989). 5 “Futility of amendment can, by itself, justify the denial of a motion for leave to amend.” 6 Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995). Local Rules of Civil Procedure 7 (“LRCiv”) 15.1(a) provides “[a] party who moves for leave to amend a pleading must 8 attach a copy of the proposed amended pleading as an exhibit to the motion, which must 9 indicate in what respect it differs from the pleading which it amends, by bracketing or 10 striking through the text to be deleted and underlining the text to be added. The proposed 11 amended pleading must not incorporate by reference any part of the preceding pleading, 12 including exhibits.” 13 III. Discussion 14 1. Futility 15 VACC argues that Plaintiff’s amendment is futile, and this is enough for the Court 16 to deny the Motion. The Court disagrees. A proposed amendment is futile if it could not 17 withstand a motion to dismiss under Rule 12(b)(6). To withstand dismissal under Rule 18 12(b)(6), a plaintiff must put forth “enough facts to state a claim to relief that is plausible 19 on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). Plaintiff has plead five 20 claims and put forth enough facts to sustain each of them. 21 a. Trademark Infringement 22 First, Plaintiff has sufficiently pled enough facts, if taken as true, to make a 23 plausible claim for trademark infringement. Trademark infringement under the Lanham 24 Act requires two things: (1) ownership of a valid mark (protectable interest), and (2) that 25 the alleged infringer’s use of the mark is likely to cause confusion, or to cause mistake, or 26 to deceive consumers. Reno Air Racing Ass’n., Inc. v. McCord, 452 F.3d 1126, 1134 (9th 27 Cir. 2006) (citation and internal quotation marks omitted). The second element is subject 28 to an eight-factor test called the Sleekcraft factors. See Pom Wonderful LLC v. Hubbard, 1 775 F.3d 1118, 1125 (9th Cir. 2014) (“We look to the following eight Sleekcraft factors 2 for guidance in assessing the likelihood of consumer confusion: (1) strength of the 3 protected mark; (2) proximity and relatedness of the goods; (3) type of goods and the 4 degree of consumer care; (4) similarity of the protected mark and the allegedly infringing 5 mark; (5) marketing channel convergence; (6) evidence of actual consumer confusion; (7) 6 defendant's intent in selecting the allegedly infringing mark; and (8) likelihood of product 7 expansion.”) The eight sub-factors are not an exhaustive list and are meant to be applied 8 in a flexible manner, with some taking more importance than others depending on the 9 circumstances of the case. Rearden LLC v. Rearden Com., Inc., 683 F.3d 1190, 1209 (9th 10 Cir. 2012). 11 Beginning with the first element of trademark infringement, Plaintiffs allege that 12 they are the “sole and exclusive licensees” of the VA-BC mark. (Doc. 24 at ¶ 16–18). 13 They assert being the first to establish a trademark and develop a market presence for 14 their business and the VA-BC mark. (Id.) Drawing all reasonable inferences in 15 Plaintiffs’ favor, the Court finds that this assertion satisfies the first element of trademark 16 infringement: ownership of a valid mark. Sparrow v.
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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Josephine Brandon, et al., No. CV-25-01538-PHX-DJH
10 Plaintiffs, ORDER
11 v.
12 Vascular Access Certification Corporation, et al., 13 Defendants. 14 15 Before the Court is Josephine Brandon, William Hart, VA-BC Training Center, 16 LLC, and Phoenix Vascular Access’s (collectively “Plaintiffs”) Motion for Leave to 17 Amend their Complaint. (Doc. 24). The Motion is opposed by Vascular Access 18 Certification Corporation (“VACC”). (Doc. 27). VACC also asks that its pending 19 Motion to Dismiss be applied to Plaintiffs’ First Amended Complaint if granted. 20 (Doc. 10). The Court will grant that request and analyze both Plaintiffs’ Motion for 21 Leave to Amend Complaint and VACC’s Motion to Dismiss in tandem. For the reasons 22 set forth below, the Court will grant Plaintiff’s Motion for Leave to Amend Complaint 23 and deny VACC’s Motion to Dismiss. 24 I. Background 25 Plaintiffs, based in Maricopa County, run a vascular training center, or two, to 26 provide certification services to individuals seeking to be credentialed in the vascular 27 industry. (Doc. 24 at ¶¶ 1–4). VACC also runs its own vascular training and certification 28 program. (Doc. 10 at 2). Touting its efforts to provide certification services nationwide, 1 VACC says it has administered over 11,500 exams and 9,833 certifications since it 2 opened. (Id.) To advertise their services, both parties use a certain mark. The mark says 3 “VA-BC” and Plaintiffs’ mark has a heart over the hyphen, while VACC’s mark has a 4 heart shape next to the letter V. (Doc. 24 at ¶ 15; Ex. B). Both parties claim a right to the 5 mark and say that the other is the infringer. According to Plaintiffs, they have been using 6 the mark since at least 2010 and are the first to use the mark. (Doc. 24 at ¶ 17). VACC 7 disputes that and says that not only is it the first to use the mark but also its rightful 8 owner. (Doc. 10 at 4–5). Originally, Plaintiffs had brought the following claims against 9 VACC: trademark infringement and initial interest confusion; unfair competition and 10 false designation of origin; common law trademark infringement and unfair competition; 11 and finally unjust enrichment. (Doc. 1 at 5–8). 12 Now, seeking to amend their original complaint, Plaintiffs bring the following five 13 claims and seek to add a new defendant: (1) trademark infringement and initial interest 14 confusion; (2) contributory trademark infringement (against Association for Vascular 15 Access, “AVA,” only); (3) unfair competition and false designation or origin; (4) 16 deceptive trade practices; (5) common law trademark infringement; and lastly (6) unjust 17 enrichment. (Doc. 24 at 12–19). Because VACC has asked that the Court apply its 18 pending Motion to Dismiss to the First Amended Complaint, the Court will do so. 19 II. Legal Standard 20 Federal Rule of Civil Procedure 15(a)(2) allows a party to amend a pleading at any 21 time with leave of the court or if the opposing party consents, and directs that leave 22 should be freely granted “when justice so requires.” Ninth Circuit case law strongly 23 supports a liberal approach to allowing amendments. Lopez v. Smith, 203 F.3d 1122, 24 1128 (9th Cir. 2000) (“[W]e have repeatedly stressed that the court must remain guided 25 by the underlying purpose of Rule 15 . . . to facilitate decision on the merits, rather than 26 on the pleadings or technicalities.”). Fed. R. Civ. P. 15(a)(2). Rule 15(a), however, gives 27 the district court discretion to deny leave to amend for reasons such as: (1) undue delay, 28 (2) bad faith, (3) prejudice to the opposing party, (4) futility of amendment, and (5) 1 whether plaintiff has previously amended his complaint. Foman v. Davis, 371 U.S. 178, 2 182 (1962); Western Shoshone Nat’l Council v. Molini, 951 F.2d 200, 204 (9th Cir. 3 1991). “Leave to amend need not be given if a complaint, as amended, is subject to 4 dismissal.” Moore v. Kayport Package Exp., Inc., 885 F.2d 531, 538 (9th Cir. 1989). 5 “Futility of amendment can, by itself, justify the denial of a motion for leave to amend.” 6 Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995). Local Rules of Civil Procedure 7 (“LRCiv”) 15.1(a) provides “[a] party who moves for leave to amend a pleading must 8 attach a copy of the proposed amended pleading as an exhibit to the motion, which must 9 indicate in what respect it differs from the pleading which it amends, by bracketing or 10 striking through the text to be deleted and underlining the text to be added. The proposed 11 amended pleading must not incorporate by reference any part of the preceding pleading, 12 including exhibits.” 13 III. Discussion 14 1. Futility 15 VACC argues that Plaintiff’s amendment is futile, and this is enough for the Court 16 to deny the Motion. The Court disagrees. A proposed amendment is futile if it could not 17 withstand a motion to dismiss under Rule 12(b)(6). To withstand dismissal under Rule 18 12(b)(6), a plaintiff must put forth “enough facts to state a claim to relief that is plausible 19 on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). Plaintiff has plead five 20 claims and put forth enough facts to sustain each of them. 21 a. Trademark Infringement 22 First, Plaintiff has sufficiently pled enough facts, if taken as true, to make a 23 plausible claim for trademark infringement. Trademark infringement under the Lanham 24 Act requires two things: (1) ownership of a valid mark (protectable interest), and (2) that 25 the alleged infringer’s use of the mark is likely to cause confusion, or to cause mistake, or 26 to deceive consumers. Reno Air Racing Ass’n., Inc. v. McCord, 452 F.3d 1126, 1134 (9th 27 Cir. 2006) (citation and internal quotation marks omitted). The second element is subject 28 to an eight-factor test called the Sleekcraft factors. See Pom Wonderful LLC v. Hubbard, 1 775 F.3d 1118, 1125 (9th Cir. 2014) (“We look to the following eight Sleekcraft factors 2 for guidance in assessing the likelihood of consumer confusion: (1) strength of the 3 protected mark; (2) proximity and relatedness of the goods; (3) type of goods and the 4 degree of consumer care; (4) similarity of the protected mark and the allegedly infringing 5 mark; (5) marketing channel convergence; (6) evidence of actual consumer confusion; (7) 6 defendant's intent in selecting the allegedly infringing mark; and (8) likelihood of product 7 expansion.”) The eight sub-factors are not an exhaustive list and are meant to be applied 8 in a flexible manner, with some taking more importance than others depending on the 9 circumstances of the case. Rearden LLC v. Rearden Com., Inc., 683 F.3d 1190, 1209 (9th 10 Cir. 2012). 11 Beginning with the first element of trademark infringement, Plaintiffs allege that 12 they are the “sole and exclusive licensees” of the VA-BC mark. (Doc. 24 at ¶ 16–18). 13 They assert being the first to establish a trademark and develop a market presence for 14 their business and the VA-BC mark. (Id.) Drawing all reasonable inferences in 15 Plaintiffs’ favor, the Court finds that this assertion satisfies the first element of trademark 16 infringement: ownership of a valid mark. Sparrow v. United Air Lines, Inc., 216 F.3d 17 1111, 1113 (D.C. Cir. 2000) (citation and internal quotation marks omitted). 18 Moving to the second element of trademark infringement, Plaintiffs allege that 19 their VA-BC mark and VACC’s mark are likely to cause confusion. (Doc. 24 at ¶ 24–26). 20 While Plaintiffs have not outlined all the factors for the Court, they are not required to do 21 so at this stage. What they have shown is that both they and VACC are in the same line of 22 business: vascular access educational/certification services. (Id. at ¶¶ 44–45). Having 23 done so, this provides support for the second Sleekcraft factor of proximity and 24 relatedness of the goods. Rearden LLC, 683 F.3d at 1209. It also bolsters the fourth 25 factor of “similarity of the protected mark and the allegedly infringing mark” because 26 both marks use the same words with a heart above the dash between VA and BC for 27 Plaintiffs and a heart next to the letter V for VACC. Id. (See also Doc. 24 at 24; Ex. A 28 (Plaintiffs’ ‘Trademark Registration with the United States Patent and Trademark 1 Office); Ex. B (VACC’s website and promotional materials)). The Court is hesitant to 2 state that this element of the trademark infringement analysis is futile considering that the 3 Ninth Circuit has stated that even at the motion for summary judgment stage, the 4 Sleekcraft factors rarely favor the grant of summary judgment. Rearden LLC, 683 F.3d at 5 1209. The fact-intensive nature of the factors lends itself to the development of a full 6 record, not expeditious conclusions. VACC’s argument against this first claim alleges 7 that Plaintiffs procured their trademark registration through fraud. (Doc. 10 at 5–6). But 8 this does not attack whether Plaintiffs met the pleading standard outlined by Rule 9 12(b)(6). Further, the Court understands VACC’s point that according to Plaintiffs’ own 10 trademark papers, Plaintiffs have disclaimed any trademarks rights in the following: 11 “VA-BC.” (Id. at 4). However, that is not the only alleged point of consumer confusion 12 between the two marks, and the motion to dismiss standard, while not entirely 13 undemanding, is not an onerous standard. 14 Again, drawing all reasonable inferences in Plaintiffs’ favor, the Court finds the 15 trademark infringement claim provided by Plaintiffs in their Amended Motion can 16 withstand a motion to dismiss, and is therefore, not futile. Usher v. City of Los Angeles, 17 828 F.2d 556, 561 (9th Cir. 1987). 18 b. Contributory Trademark Infringement 19 Turning to the second claim1 in Plaintiffs’ Amended Motion, the Court finds that 20 this claim is not futile. Contributory trademark infringement requires a plaintiff to show 21 that the defendant continued to provide its services to an infringer of the trademark, and 22 the defendant knew or had reason to know the infringer was engaging in the infringing 23 action. Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854 (1982). When the 24 infringement involves services instead of just a product, the plaintiff must also show that 25 there was direct control over the means of infringement used by a third party. Lockheed 26 Martin Corp. v. Network Solutions, Inc., 194 F.3d 980, 984 (9th Cir. 1999). 27 Here, the services being offered by VACC, according to Plaintiffs, are educational 28 1 Plaintiffs only bring this claim against AVA. 1 and certification services in the vascular access industry. (Doc. 24 at ¶ 21). To plead that 2 AVA knew about the infringing actions of VACC and exerted some degree of control 3 over the instrumentality of infringement—mainly the online presence of both AVA and 4 VACC and their promotional materials—Plaintiffs allege that AVA had shared leadership 5 and shared governance over their operations. (Id. at ¶ 29). Another way AVA exerted 6 control was through purchasing and renewing the domain name vacert.org and actively 7 promoting VACC’s activities and offerings. (Id. at ¶ 31–33). At least for now, the Court 8 finds that Plaintiffs have pled enough facts to stave off a motion to dismiss on the 9 contributory trademark infringement claim. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 10 570 (2007). 11 c. Unfair Competition2 and False Designation of Origin 12 Plaintiffs’ third claim for unfair competition and false designation of origin also 13 fares well against a motion to dismiss. To prevail on a claim of false designation of 14 origin, a plaintiff must show that “(1) defendant uses a designation (any word, term, 15 name, device, or any combination thereof) or false designation of origin; (2) the use was 16 in interstate commerce; (3) the use was in connection with goods or services; (4) the 17 designation or false designation is likely to cause confusion, mistake, or deception as to 18 (a) the affiliation, connection, or association of defendant with another person, or (b) as 19 to the origin, sponsorship, or approval of defendant's goods, services, or commercial 20 activities by another person; and (5) the plaintiff has been or is likely to be damaged by 21 these acts.” United Tactical Sys., LLC v. Real Action Paintball, Inc., 143 F. Supp. 3d 982, 22 1015 (N.D. Cal. 2015). 23 In making their claim for false designation of origin, Plaintiffs states that VACC 24 and AVA used a mark that was remarkably like Plaintiffs’ own mark and did so to 25 confuse the public about the origin of the mark. (Doc. 24 at ¶ 69). Plaintiffs further 26 allege that they have been damaged by Defendants’ use because they have suffered and
27 2 “[T]he courts have uniformly held that common law and statutory trademark infringement are merely specific aspects of unfair competition.” Hokto Kinoko Co. v. 28 Concord Farms, Inc., 810 F.Supp.2d 1013, 1031 (C.D.Cal.2011) (citing New West Corp. v. NYM Co. of California, Inc., 595 F.2d 1194, 1201 (9th Cir.1979)). 1 will continue to suffer “irreparable harm to their business, reputation, and goodwill . . .” 2 (Id. at ¶ 71). As a counter to Plaintiffs’ argument, VACC offers the following: “Here, the 3 Complaint fails to allege any facts that Defendant VACC used a false designation of 4 origin or made any misleading representation about the source of Plaintiffs’ goods or 5 services.” (Doc. 10 at 7). However, when taken as true, the factual allegations that have 6 been alleged by Plaintiffs, are enough to survive a motion to dismiss. Sparrow v. United 7 Air Lines, Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000). 8 d. Deceptive Trade Practices under A.R.S. § 44-15223 9 As to Plaintiffs’ fourth claim about deceptive trade practices, the Court finds that 10 the claim can withstand a motion to dismiss and is therefore not futile. A claim under 11 this statute is established by showing (1) “a false promise or misrepresentation made in 12 connection with the sale or advertisement of merchandise” and (2) a “consequent and 13 proximate injury.” Thomas v. Ally Bank, 2017 WL 6616620, at *2 (Ariz. Ct. App. 14 Dec. 28, 2017). Notably, the statute does not require that anyone actually be misled or 15 deceived. See A.R.S. § 44-1522. 16 Advancing their argument that Defendants engaged in deceptive trade practices, 17 Plaintiffs argue that Defendants misrepresented to the public that they were two 18 independent organizations, when in fact they were operating as a collective enterprise. 19 (Doc. 24 at ¶¶ 75–80). Specifically, Plaintiffs argue that Defendants lied to the public 20 about their credentials, incorporation status in various jurisdictions, and testing dates that 21 never came to fruition. (Id.) To address the second prong of the two-prong test, 22 Plaintiffs state “[a]s a direct and proximate result of AVA’s deceptive trade practices, 23 Plaintiffs and the public have suffered damages, including widespread confusion about 24 the legitimacy of VA-BC credentials and undermining of public trust in credentialing 25 systems (particularly vascular access credentialing systems).” (Id. at 81). Because 26 detailed factual allegations are not necessary at the motion to dismiss stage, just sufficient 27 3 Because VACC asked that its Motion to Dismiss apply to Plaintiffs’ First Amended 28 Complaint, and this claim is a new addition, VACC has not offered any argument against this claim. 1 factual matter, taken as true, to state a claim for relief, the Court finds that Plaintiffs’ 2 claim for deceptive trade practices can go forward. Twombly, 550 U.S. at 555–56. 3 e. Common Law Trademark Infringement and Unfair Competition 4 Plaintiffs’ claim for common law trademark, like Plaintiffs’ other claims thus far, 5 thwarts a motion to dismiss. To establish enforceable common law trademark rights in a 6 geographical area, a plaintiff must prove that, in that area, (1) it is the senior user of the 7 mark, and (2) it has established legally sufficient market penetration. See, e.g., Credit 8 One Corp. v. Credit One Financial, Inc., 661 F.Supp.2d 1134, 1138 (C.D.Cal.2009) (“A 9 party asserting common law rights must not only establish that it is the senior user, it 10 must also show that it has ‘legally sufficient market penetration’ in a certain geographic 11 market to establish those trademark rights.”) (quoting Glow Indus. Inc. v. Lopez, 252 12 F.Supp.2d 962, 983 (C.D.Cal.2002))).4 Plaintiffs allege that they have been “secured the 13 trademark, brand identity, and market presence of/for the VA-BC Mark before any other 14 organization entered the space.” (Doc. 24 at ¶ 18). This is an allegation that they are the 15 senior user of the mark. Going further, Plaintiffs argue that they have expended 16 considerable resources in building goodwill around their business and that they are a 17 recognized provider of the services associated with them. (Id. at ¶ 19). They also say 18 their mark has acquired secondary meaning within the relevant market and even broader 19 U.S. market. (Id. at ¶ 85). VACC opposes these allegations by stating that it is the senior 20 user of the VA-BC mark, not Plaintiffs. (Doc. 10 at 8). The statements made by 21 Plaintiffs, however, are “enough to raise a right to relief above the speculative level.” 22 Twombly, 550 U.S. at 555–56. Therefore, the claim for common law trademark 23 infringement survives and is not futile. 24 25
26 4 The distinction between trademark infringement and common law trademark infringement is subtle but exists. The first occurs when an infringer uses a federally 27 registered mark. Optimal Pets, Inc. v. Nutri-Vet, LLC, 877 F. Supp. 2d 953, 958 (C.D. Cal. 2012). Underlying common law trademark infringement, however, is that there is a 28 senior user in a certain geographic area, and not necessarily one who has a federally registered trademark. Id. 1 f. Unjust Enrichment5 2 The last claim for unjust enrichment also survives a motion to dismiss. To prevail 3 on an unjust enrichment claim, a plaintiff must allege: “(1) an enrichment; (2) an 4 impoverishment; (3) a connection between the enrichment and the impoverishment; (4) 5 absence of justification for the enrichment and the impoverishment; and (5) an absence of 6 a remedy provided by law.” Perez v. First Am. Title Ins. Co., 810 F. Supp. 2d 986, 991 7 (D. Ariz. 2011) (quoting Freeman v. Sorchych, 245 P.3d 927 (Ariz. Ct. App. 2011)). 8 Thus, a plaintiff must demonstrate that the defendant “received a benefit, that by receipt 9 of that benefit the defendant was unjustly enriched at the plaintiff's expense, and that the 10 circumstances were such that in good conscience the defendant should provide 11 compensation.” Id. 12 The enrichment Plaintiffs are alleging is the use of the VA-BC mark, which 13 Plaintiffs allege is likely to confuse customers and route them to Defendants’ services 14 instead of Plaintiffs. (Id. at 47). The allegation applies to the impoverishment element of 15 the unjust enrichment claim because if customers give their business to Defendants, they 16 are not giving it to Plaintiffs. Connecting the enrichment and the impoverishment, 17 Plaintiffs allege that Defendants use of the infringing mark and the consequent profit 18 from that mark is sufficient to connect the two. (Id. at 41–42). The Court agrees. To 19 sweep in the last two elements in their pleading Plaintiffs state that the use of the mark is 20 an infringement, meaning there is no justification, and that there is “[n]o adequate 21 remedy at law.” (Id. at 45, 49, 50 & 94–96). VACC offers that Plaintiffs, not VACC, are 22 the ones unjustly enriched because VACC is the senior user of the mark. (Doc. 10 at 9). 23 Because at the motion to dismiss stage, a pleading can survive even if “recovery is very 24 remote and unlikely,” as long as the facts alleged are “enough to raise a right to relief 25 above the speculative level,” the Court finds that the unjust enrichment claim can 26 survives a motion a dismiss. Twombly, 550 U.S. at 1965. 27 5 VACC also argues that Plaintiffs cannot bring both an infringement claim under the 28 Lanham Act and an unjust enrichment claim. However, pleading in the alternative, especially at this stage, is allowed. See Fed. R. Civ. P. 8(d)(2). 1 2 2. Undue Delay 3 While undue delay on its own is insufficient to deny a motion to amend a 4 complaint, courts consider this factor in determining whether amendment should be 5 granted. Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1999). “Relevant to evaluating the 6 delay issue is whether the moving party knew or should have known the facts and 7 theories raised by the amendment in the original pleading.” Jackson v. Bank of Hawaii, 8 902 F.2d 1385, 1388 (9th Cir. 1990). Also relevant is if the amended pleading will refine 9 and clarify the issues before the court. Cuevas v. City of San Luis, Ariz., 2008 WL 10 4820113, at *2 (D. Ariz. Nov. 3, 2008). 11 Plaintiffs assert that their proposed amendments “seek[] to add further detail and 12 clarity to Plaintiffs’ claims of direct trademark infringement and deceptive practices 13 against AVA” and that “[g]ranting leave to amend will allow the Court to address the 14 complete factual and legal landscape of this case, ensuring justice is served.” (Doc. 24 15 at 2). Because no discovery has yet commenced in this case and because leave to amend 16 should be liberally granted, the Court finds that there was no undue delay on the part of 17 Plaintiffs in amending their Complaint. Owens v. Kaiser Found. Health Plan, Inc., 244 18 F.3d 708, 712 (9th Cir. 2001) (quoting Morongo Bank of Mission Indians v. Rose, 893 19 F.2d 1074, 1079 (9th Cir. 1990)). 20 3. Bad faith 21 A showing of bad faith is supported when it can be demonstrated that plaintiff’s 22 motives for amending the complaint were for an improper purpose. Eminence Cap., LLC 23 v. Aspeon, Inc., 316 F.3d 1048, 1053 (9th Cir. 2003). VACC, in its Response to the 24 Motion to Amend states that Plaintiffs are showing bad faith by moving to amend. 25 (Doc. 27 at 1). However, nothing in Plaintiffs’ pleadings suggests that to be true. If 26 anything, as Plaintiffs stated, they were seeking to clarify and further define their claims. 27 VACC’s other argument that Plaintiffs are simply seeking to dodge a pending motion to 28 dismiss, is, as stated by another court in response to the same argument, “mere 1 conjecture.” Cuevas v. City of San Luis, Ariz., 2008 WL 4820113, at *3 (D. Ariz. Nov. 3, 2 2008). Finding no bad faith, the Court will move on to the prejudice factor. 3 4. Prejudice 4 Prejudice to the opposing party carries the greatest weight in determining whether 5 leave to amend should be granted, despite its liberal applicability. DCD Programs, Ltd. v. 6 Leighton, 833 F.2d 183, 185 (9th Cir.1987). Prejudice to the opposing party is the 7 “touchstone of the inquiry under Rule 15(a).” Lone Star Ladies Inv. Club v. Schlotzsky’s 8 Inc., 238 F.2d 363 368 (5th Cir. 2001); Howey v. United States, 481 F.2d 1187, 1190 (9th 9 Cir. 1973) (stating that “the crucial factor is the resulting prejudice to the opposing 10 party”). The burden of proving prejudice is on the party opposing the motion. DCD 11 Programs, LTD., 833 F.2d at 187. 12 VACC argues that it will be unduly prejudiced by the amendment because of the 13 increased time and money that VACC would have to expend to defend against this 14 lawsuit. (Doc. 27 at 3–4). Additionally, VACC argues that the new claims and theories 15 are not tied to the original complaint and are being introduced after a motion to dismiss 16 has already been filed. (Id.) 17 Contrary to VACC’s arguments, a party cannot claim added expense and costs as a 18 reason to establish prejudice. Hale v. Lloyd’s, London, 2020 WL 262820, at *5 (D. Haw. 19 Jan. 17, 2020). And the amendment will not cause VACC to rethink its defense and 20 litigation strategy because the new claims are all essentially related to the claims pled in 21 the original complaint. (Doc. 24 at 14–15). See Hale, 2020 WL 262820, at *5. In fact, in 22 apparent recognition of the similarity, VACC asked that its pending Motion to Dismiss be 23 applied to the First Amended Complaint. Thus, the fact that the Motion to Amend was 24 filed while a fully briefed motion to dismiss was pending is not a basis for the Court to 25 find prejudice here. Cuevas v. City of San Luis, Ariz., 2008 WL 4820113, at *2 (D. Ariz. 26 Nov. 3, 2008) (“If the Court were to accept this argument, it would essentially close the 27 door to the possibility of future plaintiffs filing motions for leave to file an amended 28 complaint subsequent to defendants filing a motion to dismiss.”). Therefore, the Court finds that this factor does not weigh against granting the Motion to Amend. 2 5. Whether plaintiff has previously amended the complaint 3 When a plaintiff has repeatedly failed to cure deficiencies by previously allowed 4|| amendments, this generally weighs in favor of not granting a motion to amend. Eminence Cap., LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). Because this is the 6|| Plaintiffs’ First Amended Complaint, and there have not been repeated attempts to amend, this factor favors allowing the amendment. IV. Motion to Dismiss 9 In VACC’s Response in Opposition to Plaintiffs’ Leave to Amend, VACC asks || the Court to apply its existing pending Motion to Dismiss to the Amended Complaint. || (Doc. 27 at 4). It was VACC’s position that mooting their Motion to Dismiss would || result in duplicative briefing and that judicial economy would be better served by 13 || avoiding more motions practice. Ud.) The Court agrees, and because the Court has already done the motion to dismiss analysis above, under the futility prong of the Motion to Amend, the Court will not repeat itself here except to say that VACC’s pending 16 || Motion to Dismiss is denied in its entirety. 17 Accordingly, 18 IT IS ORDERED that Plaintiffs’ Motion for Leave to Amend (Doc. 24) is granted. 20 IT IS FURTHER ORDERED that Defendants’ Motion to Dismiss (Doc. 10) is denied. 22 Dated this 3rd day of December, 2025. 23 24 oC. . pve □ 25 norable' Diang/J. Humetewa 26 United States District Judge 27 28
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