Knuth v. Cap Patrol, LLC Ohio

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 DEAN L. KNUTH, Case No. 23-cv-1676-BAS-DEB

12 Plaintiff, ORDER 13 v. 1. DENYING MOTION TO DISMISS (ECF No. 33); 14 CAP PATROL, LLC OHIO; CAP 2. GRANTING IN PART, PATROL, LLC KENTUCKY; GEORGE 15 DENYING IN PART MOTION E. THURNER, III, TO STRIKE (ECF No. 33); 16 Defendants. 3. DENYING MOTION FOR 17 RECONSIDERATION (ECF No. 38) 18

19 20 In this case, Plaintiff has already filed a Complaint (ECF No. 1) and an Amended 21 Complaint as a matter of right (ECF No. 4). The Court dismissed the Amended Complaint 22 with leave to amend, outlining very specific deficiencies in the Amended Complaint, 23 including those related to standing, personal jurisdiction, venue, and failure to allege a 24 claim under Rule 12(b)(6). (ECF No. 21.) Plaintiff filed a Second Amended Complaint 25 (“SAC”) (ECF No. 22), but the Court again dismissed the SAC in part for failure to allege 26 standing, personal jurisdiction over the corporate defendants, and failing to state a claim. 27 (ECF No. 30.) Specifically, the Court dismissed the second, fourth, and fifth causes of 28 action with prejudice, but gave the Plaintiff one last opportunity to amend to add sufficient 1 allegations of personal jurisdiction against the corporate Cap Patrol defendants for the first 2 and third causes of action. (Id.) 3 Plaintiff has filed a Third Amended Complaint (“TAC”). (ECF No. 31.) Plaintiff’s 4 TAC brings allegations against Defendants George E. Thurner, III (“Thurner”), Cap Patrol, 5 LLC Ohio (“Cap Patrol Ohio”), and Cap Patrol, LLC Kentucky (“Cap Patrol-KY”) for 6 “violation of common law and Cal. Code. §3344a” and “misappropriation of Plaintiff’s 7 sandbagging systems based on California common law.” (Id.) 8 Defendant again moves to dismiss and moves to strike Plaintiff’s request for 9 punitive damages and attorneys’ fees (ECF No. 33), which Plaintiff opposes (ECF No. 34), 10 and Defendant replies (ECF No. 37). In addition, after briefing on the Motion to Dismiss 11 was completed, Plaintiff filed a Motion for Reconsideration under Rule 60(b), asking the 12 Court to reconsider its prior dismissal of the second and fifth causes of action with 13 prejudice. (ECF No. 38). Defendant opposes (ECF No. 34) and Plaintiff replies (ECF No. 14 37). 15 The Court finds this motion suitable for determination on the papers submitted and 16 without oral argument. See CivLR 7.1(d)(1). For the reasons stated below, the Court 17 DENIES the Motion to Dismiss (ECF No. 33), GRANTS in part and DENIES in part the 18 Motion to Strike (ECF No. 33), and DENIES the Motion for Reconsideration. (ECF No. 19 38). 20 I. BACKGROUND 21 The facts leading to this dispute have been summarized in earlier orders. Of note to 22 this Motion, Plaintiff now adds allegations with respect to both of the Cap Patrol 23 Defendants. With respect to Cap Patrol-KY Plaintiff now alleges that it “operates an 24 interactive website . . . that promotes Plaintiff’s Sandbagging Systems” throughout the 25 world, including California and this District. (TAC ¶ 21). This interactive website “invites 26 contact from prospective customers, including customers located in California and this 27 District.” (Id. ¶ 22.) Cap Patrol-KY “promotes and advertises” the website “to golfers and 28 golf clubs in California, and specifically in this District.” (Id. ¶ 28.) And finally, Cap 1 Patrol-KY has “contacted golf clubs and golfers within California, and specifically within 2 this District, to advertise, promote and sell Plaintiff’s Sandbagging Systems . . . .” (Id. 3 ¶ 34.) 4 With respect to Cap Patrol, Ohio LLC (“Cap Patrol-OH”), Plaintiff additionally 5 alleges that Cap Patrol-OH has four golf club customers in San Diego and fifty-seven golf 6 customers in California. (Id. ¶ 36.) And Plaintiff similarly alleges that Cap Patrol-OH has 7 “contacted golf clubs and golfers within California, and specifically within this District, to 8 advertise, promote and sell Plaintiff’s Sandbagging Systems . . . .” (Id. ¶ 44.) 9 II. LEGAL STANDARD 10 Pursuant to Rule 12(b)(6), a defendant may move to dismiss an action for failure to 11 make sufficient factual allegations to “state a claim to relief that is plausible on its face.” 12 Bell Atl. v. Twombly, 550 U.S. 544, 570 (2007). In evaluating the sufficiency of these 13 factual allegations, the court “accept[s] factual allegations in the complaint as true and 14 construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek 15 v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). 16 In ruling on a motion to dismiss, a court may consider only “the complaint, materials 17 incorporated into the complaint by reference, and matters [subject to] judicial notice.” 18 UFCW Loc. 1500 Pension Fund v. Mayer, 895 F.3d 695, 698 (9th Cir. 2018) (citation 19 omitted). Mere “conclusory allegations of law and unwarranted inferences are insufficient 20 to defeat a motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004) 21 (citations omitted); accord Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (“[T]he tenet that a 22 court must accept a complaint’s allegations as true is inapplicable to threadbare recitals of 23 a cause of action’s elements, supported by mere conclusory statements.”). 24 III. ANALYSIS 25 Defendants make several arguments in their Motion to Dismiss. First, Defendants 26 argue that Plaintiff still fails to allege personal jurisdiction with respect to the two Cap 27 Patrol defendants. Defendants claim that Plaintiff’s sole allegations of a website, a 28 1 YouTube channel, and mobile app are insufficient to show purposeful availment with 2 respect to the allegations in the Complaint.1 3 Second, Defendants argue that the remaining causes of action are preempted by 4 patent law. And, finally, Defendant requests that the damages requested under California 5 Civil Code § 3426.3 be stricken. (ECF No. 33.) The Court considers each argument in 6 turn, after which it analyzes Plaintiff’s Motion for Reconsideration. 7 A. Motion to Dismiss 8 1. Personal Jurisdiction 9 “Where a defendant moves to dismiss a complaint for lack of personal jurisdiction, 10 the plaintiff bears the burden of demonstrating that jurisdiction is appropriate.” 11 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). If the court 12 considers the motion on written materials alone, rather than a full-blown evidentiary 13 hearing, the plaintiff need make only a “prima facie showing” of personal jurisdiction to 14 survive the motion. Id. Whichever allegations in the complaint are uncontroverted, the 15 court must take as true. Id. Any conflict between the parties as to these facts must be 16 resolved in the plaintiff’s favor. Id. (citing Bancroft & Masters, Inc. v. Augusta Nat. Inc., 17 223 F.3d 1082, 1087 (9th Cir. 2000), holding modified by Yahoo! Inc. v. La Ligue Contre 18 Le Racisme Et L'Antisemitisme, 433 F.3d 1199 (9th Cir. 2006) (“Because the prima facie 19 jurisdictional analysis requires us to accept the plaintiff’s allegations as true, we must adopt 20 [the plaintiff’s] version of events . . . .”). 21 The Ninth Circuit employs a three-part test to determine whether a defendant’s 22 contacts with the forum state are sufficient to subject it to specific jurisdiction. Ballard v. 23 Savage, 65 F.3d 1495, 1498 (9th Cir. 1995). Under this three-part inquiry, specific 24 jurisdiction exists only if: (1) the out-of-state defendant purposefully availed itself of the 25

26 1 Defendant Cap Patrol-KY also argues the Plaintiff abandoned his claim against it, agreeing that Cap Patrol-KY is not a separate legal entity. Plaintiff replies that it just received additional information 27 that Cap Patrol-KY is, in fact, a separate legal entity. Since Plaintiff has filed the Third Amended Complaint adding Cap Patrol-KY back in as a defendant, the Court denies the Defendant’s argument to 28 1 privilege of conducting activities in the forum, thereby invoking the benefits and 2 protections of the forum’s laws, (2) the cause of action arose out of the defendant’s forum- 3 related activities, and (3) the exercise of jurisdiction is reasonable. Myers v. Bennett L. 4 Offs., 238 F.3d 1068, 1072 (9th Cir. 2001). 5 The plaintiff bears the burden of satisfying the first two prongs of this specific 6 jurisdiction test. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 7 2004). “‘Bare bones’ assertions of minimum contacts with the forum or legal conclusions 8 unsupported by factual allegations will not satisfy a plaintiff’s pleading burden.” Swartz 9 v. KPMG, LLP, 476 F.3d 756, 766 (9th Cir. 2007). “But uncontroverted allegations [in the 10 complaint] must be taken as true” and any conflicts between the parties should be resolved 11 in the plaintiff’s favor. Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015). 12 An interactive website alone is insufficient to show purposeful availment. Herbal 13 Brands, Inc. v. Photoplaza, Inc., 72 F.4th 1085, 1091 (9th Cir. 2023), cert. denied, 144 S. 14 Ct. 693 (2024). “But operating a[n interactive] website ‘in conjunction with something 15 more—conduct directly targeting the forum—is sufficient’ to satisfy the express aiming 16 prong.” Id. at 1092 (quoting Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1229 17 (9th Cir. 2011)). The Court should look at “whether the site had a forum-specific focus or 18 the defendant exhibited an intent to cultivate an audience in the forum.” Id. 19 “If the plaintiff succeeds in satisfying both of the first two prongs, the burden then 20 shifts to the defendant to ‘present a compelling case’ that the exercise of jurisdiction would 21 not be reasonable.” Id. “If any of the three requirements is not satisfied, jurisdiction in the 22 forum would deprive the defendant of due process of law.” Pebble Beach Co. v. Caddy, 23 453 F.3d 1151, 1155 (9th Cir. 2006). 24 In this case, Plaintiff alleges Cap Patrol-KY operated an interactive website. (TAC 25 ¶¶ 21, 22.) The “something more” alleged by Plaintiff is that Cap Patrol-KY “has contacted 26 golf clubs and golfers” within this district “to advertise, promote and sell Plaintiff’s 27 Sandbagging System.” (Id. ¶ 34.) With respect to Cap Patrol-OH, Plaintiff similarly 28 alleges that it “has contacted golf clubs and golfers” within this district “to advertise, 1 promote and sell Plaintiff’s Sandbagging System” and promotes its systems through direct 2 adds to golf clubs in San Diego County. (Id. ¶¶ 34, 35.) Additionally, Plaintiff alleges Cap 3 Patrol-OH has licensed misappropriated systems to two golf clubs in San Diego and has 4 four golf clubs in San Diego as customers. (Id. ¶¶ 36, 40, 42.) 5 Although it is a close call, the Court finds these allegations, assuming they are true, 6 as the Court must, are sufficient to show both Defendants purposely availed themselves of 7 the privilege of conducting business in this forum. Plaintiff alleges Defendants were 8 specifically targeting golf clubs in this district and, with respect to Cap Patrol-OH, this 9 targeting bore four golf club customers within the district. This evidences an intent to 10 cultivate customers in this forum. In addition, since the allegations involve unauthorized 11 use of Plaintiff’s name when marketing this system in this forum, and misappropriation of 12 Plaintiff’s Sandbagging System, which was marketed within this forum, the Court finds 13 these claims arose out of forum-related activities. 14 The burden then shifts to Defendants to show that the exercise of jurisdiction would 15 be unreasonable. Since Defendants make no arguments about unreasonableness, the Court 16 finds Defendants have failed to meet this burden. 17 Accordingly, Defendants’ motion to dismiss for lack of personal jurisdiction is 18 DENIED. 19 2. Preemption 20 Defendants argue Plaintiff’s remaining claims of unauthorized use of name in 21 violation of California Civil Code § 3344 and misappropriation of the Sandbagging system 22 are preempted by federal law. A district court may dismiss a complaint when its allegations 23 “give rise to an affirmative defense that clearly appears on the face of the pleading.” 24 Boquist v. Courtney, 32 F.4th 764, 774 (9th Cir. 2022). “Preemption, on which the 25 defendant bears the burden, . . . can be such a defense.” Pardini v. Unilever U.S., Inc., 65 26 F.4th 1081, 1084 (9th Cir. 2023) (citation omitted). 27 The federal Copyright Act defines the rights of copyright holders. See Laws v. Sony 28 Music Ent., Inc., 448 F.3d 1134, 1137 (9th Cir. 2006). Courts have adopted a two-part test 1 to see whether a state law claim is preempted by this Act: (1) does the subject matter of the 2 state law claim fall within the subject matter of the copyright as described in the Federal 3 Copyright Act? And, (2) assuming it does, are the rights asserted under state law equivalent 4 to the rights in the Federal Copyright Act that articulates the exclusive rights of copyright 5 holders? Id. at 1137–38. 6 Use of another’s name for purposes of advertising or selling or soliciting under 7 §3344 “seeks to prevent commercial exploitation of an individual’s identity without that 8 person’s consent.” Maloney v. T3Media, Inc., 853 F.3d 1004, 1010 (9th Cir. 2017). Thus, 9 “a publicity-right claim is not preempted when it targets non-consensual use of one’s name 10 or likeness on merchandise or in advertising.” Id. (emphasis omitted). 11 In addition, although the federal Copyright Act “preempts all state copyright law, it 12 does not preempt all state common law protecting intellectual property.” U.S. Golf Ass’n 13 v. Arroyo Software Corp., 69 Cal. App. 4th 607, 621 (1999) (emphasis omitted). “[S]tate 14 common law claims seeking to protect subject matter not copyrightable under the Act are 15 not preempted.” Id. at 622. Therefore, since “processes” and “systems” do not fall within 16 the category of copyrightable material, allegations of misappropriation of these systems 17 are not preempted by copyright law. Id. 18 Plaintiff’s TAC alleges that Defendants used his name to promote their sandbagging 19 systems without his permission. (TAC ¶¶ 134–62 (Claim I).) Since this claim is targeting 20 Defendants’ non-consensual use of his name in advertising, the claim does not fall within 21 the subject matter of the Federal Copyright Act and is not preempted. 22 Similarly, Plaintiff’s TAC alleges Defendants misappropriated his processes or 23 systems. The Court previously found this did not fall within the category of copyrightable 24 material. Hence, it does not fall within the subject matter of the Federal Copyright Act, 25 and the state law claim is not preempted. Defendants’ Motion to Dismiss on preemption 26 grounds is DENIED. 27 28 1 B. Motion to Strike 2 Defendants move under Rule 12(f) to strike Plaintiff’s request for punitive damages 3 and attorney’s fees under California Civil Code § 3426.3. The Court may strike any 4 material that is “redundant, immaterial, impertinent or scandalous.” Fed. Rules Civ. P., 5 Rule 12(f). “Motions to strike are generally regarded with disfavor because of the limited 6 importance of pleading in federal practice.” Houston Casualty Co. v. Forster Ins. Co., No. 7 1:16-1-cv-535-LJO-EPG, 2016 WL 449444, at *3 (E.D. Cal. Aug. 25, 2016); Rees v. 8 P.N.C. Bank, N.A., 308 F.R.D. 266, 271 (N.D. Cal. 2015). “‘The function of a 12(f) motion 9 to strike is to avoid the expenditure of time and money that must arise from litigating 10 spurious issues by dispensing with those issues prior to trial.’” Whittlestone, Inc. v. Handi- 11 Craft Co., 618 F.3d 971, 973 (9th Cir. 2010) (quoting Fantasy, Inc. v. Fogerty, 984 F.2d 12 1524, 1527 (9th Cir. 1993)), rev’d on other grounds by Fogerty v. Fantasy, Inc., 510 U.S. 13 517 (1994)). Although federal pleading requires notice to the defendants of what relief 14 plaintiff is seeking, the cause of action should not be dismissed “for imperfect statement of 15 the legal theory supporting the claim asserted.” Johnson v. City of Shelby, Miss., 574 U.S. 16 10, 11 (2014). 17 In this case, Plaintiff provides notice to Defendants that, as a result of the conduct 18 alleged, he will be seeking punitive damages and attorneys’ fees. (TAC ¶ 179.) Plaintiff 19 then adds “See California Sections 3426.3 and 3426.4.” (Id.) Defendants argue, and 20 Plaintiff does not seem to dispute, that these code sections refer to damages for trade 21 secrets. Because Plaintiff alleges no causes of action for a violation of trade secrets, the 22 reference to the code sections is “immaterial” and “impertinent.” Hence, the Court will 23 strike the reference to the California Civil Code sections 3426.3 and 3426.4. However, 24 since Plaintiff need not assert the legal theory on which his claim is based at this stage of 25 the proceedings, the Court declines to strike the reference to the damages Plaintiff is 26 seeking, that is, punitive damages and attorney’s fees. Whether Plaintiff is entitled to those 27 damages for the causes of action he alleges is a decision for another time. See Whittlestone, 28 at 975 (motion to strike inappropriate where Defendant argues punitive damages are 1 precluded as a matter of law); Rees, 308 F.R.D. at 273 (“in federal court, a plaintiff may 2 include a short and plain prayer for punitive damages that relies entirely on unsupported 3 and conclusory allegations of malice or fraudulent intent.” (citation modified)). Hence, the 4 Court GRANTS in part and DENIES in part, Defendants’ request to strike. 5 C. Motion for Reconsideration 6 Plaintiff moves for reconsideration of the Court’s earlier order of dismissal under 7 Federal Rule of Civil Procedure (“Rule”) 60(b). Under Rule 60(b) a court may grant a 8 motion for reconsideration for “mistake, inadvertence, surprise, or excusable neglect,” 9 fraud by the opposing party, or “any other reason that justified relief.” When reviewing 10 such motions, courts must consider the “compelling interest in the finality of judgments, 11 which should not be lightly disregarded.” Sierra Club, Haw. Chapter v. City & County of 12 Honolulu, 486 F. Supp. 2d 1185, 1188 (D. Haw. 2007); see also Steverson v. 13 GlobalSantaFe Corp., 508 F.3d 300, 305 (5th Cir. 2007) (“[F]inal judgments should not 14 lightly be disturbed.”). “Mere disagreement with a previous order” is insufficient and 15 “reconsideration may not be based on evidence and legal arguments that could have been 16 presented at the time of the challenged decision.” Id. 17 Other than disagreeing with the Court’s previous order dismissing several causes of 18 action, Plaintiff appears primarily to argue that the Court’s dismissal of two of the causes 19 of action (copyright and trademark infringement) without leave to amend resulted in a 20 manifest injustice. 21 However, in the first order dismissing these causes of action, the Court gave very 22 specific guidance to Plaintiff as to what must be alleged to avoid further dismissal. With 23 respect to the allegation of copyright infringement, the Court explained: 24 “[I]t is unclear from the FAC what [plaintiff] has copyrighted.” . . . [G]olf handicap systems are “not the type of subject matter for which copyright 25 protection is available.” In any Amended Complaint, Plaintiff must explain 26 what literary, graphic, artistic description, explanation or illustration of this system he is relying on to claim a copyright. To the extent Plaintiff is claiming 27 that Defendants have copied the text of his Tournament Point System, there 28 must be allegations supporting this claim. Instead, Plaintiff alleges 1 Defendants infringed on his “systems.” Such a claim is not cognizable under 7 copyright law.” 3 || (ECF No. 21 at 15 (citation omitted).) 4 With respect to trademark infringement, the Court explained: “Missing, however, 5 || are factual allegations that plausibly show consumers in the relevant marketplace would be 6 || confused by” the part of Defendants’ website that claims its product incorporates Plaintiffs 7 ||system. (/d. at 17.) “Plaintiff must plausibly allege consumers would have believed 8 || Plaintiff sponsored or endorsed Defendants’ service. ... Any amended complaint must 9 || include sufficient allegations to support consumer confusion.” (/d. at 18.) And yet, despite, 10 || this very specific guidance, Plaintiff filed a SAC with virtually the same allegations. The 11 |}Court was forced to conclude that Plaintiff did so because he could not allege sufficient 12 || facts to support these two causes of action. 13 Notably absent from the Motion for Reconsideration are any additional alleged facts 14 would lead the Court to conclude that Plaintiff could have alleged additional facts in 15 amended complaint. Although Plaintiff argues dismissal without leave to amend 16 |/resulted in a manifest in justice, he fails to explain what he would allege in any amended 17 || complaint that would lead to a different result. 18 Hence, the Motion for Reconsideration is DENIED. 19 || IV. CONCLUSION 20 For the reasons stated above, Defendants’ Motion to Dismiss is DENIED. (ECF No. 21 |{33.) Defendants’ Motion to Strike is granted in part: any reference to California Civil 22 ||Code sections 3426.3 and 3426.4 is stricken, but otherwise, the Motion to Strike is 23 || DENIED. (ECF No. 33.) And Plaintiff's Motion for Reconsideration is DENIED. (ECF 24 ||No. 38.) Defendants are hereby ORDERED to file an answer to the Third Amended 25 Complaint no later than August 18, 2025. 26 IT IS SO ORDERED. 27 ~ 28 || DATED: August 1, 2025 yatta Bahan Hon. Cynthia Bashant, Chief Judge _1n. United States District Court