Mueller v. US Pipe & Foundry CV-03-170-JD 10/02/03 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Mueller Co. and Mueller International, Inc.
v. Civil No. 03-170-JD Opinion No. 2003 DNH 168 United States Pipe & Foundry Co.
O R D E R
Mueller Co. ("Mueller") and Mueller International, Inc.
("Mil") have sued United States Pipe & Foundry Co. ("U.S. Pipe")
over its marketing of fire hydrants which allegedly resemble
those manufactured by Mueller. U.S. Pipe seeks dismissal of two
of the nine counts of the amended complaint on the ground that
they fail to state a claim on which relief can be granted.
Standard of Review
During the pendency of its partial motion to dismiss, U.S.
Pipe filed an answer to the amended complaint. As a result, the
court must treat the motion to dismiss as a motion for judgment
on the pleadings. See Fed. R. Civ. P. 12(c). In evaluating this
kind of motion, a "court must accept all of the nonmoving party's
well-pleaded factual averments as true and draw all reasonable
inferences in [its] favor." Feliciano v. Rhode Island, 160 F.3d
780, 788 (1st Cir. 1998). Great specificity is not reguired to survive a motion under Rule 12. "[I]t is enough for a plaintiff
to sketch an actionable claim by means of 'a generalized
statement of facts.'" Garita Hotel Ltd. P'ship v. Ponce Fed.
Bank, 958 F.2d 15, 17 (1st Cir. 1992) (guoting 5A Charles A.
Wright & Arthur R. Miller, Federal Practice and Procedure § 1357
(1990)). On the other hand, a plaintiff cannot rely on "bald
assertions, unsupportable conclusions, and 'opprobrious
epithets.'" Chonqris v. Board of Appeals, 811 F.2d 36, 37 (1st
Cir. 1987) (guoting Snowden v. Hughes, 321 U.S. 1, 10 (1944)).
Ultimately, judgment on the pleadings is not appropriate "'unless
it appears beyond doubt that the plaintiff can prove no set of
facts in support of [its] claim which would entitle [it] to
relief.'" Santiago de Castro v. Morales Medina, 943 F.2d 129,
130 (1st Cir. 1991) (guoting Rivera-Gomez v. De Castro, 843 F.2d
631, 635 (1st Cir. 1988) (further internal citations omitted)).
Background
The following facts are drawn from the plaintiffs' amended
complaint. Since 1933, Mueller has manufactured fire hydrants
with a distinctive trade dress, which includes certain fluting
and beading. These hydrants have enlarged Mueller's reputation
over the years such that "[t]he vast majority of cities and towns
throughout the United States approve or specify Mueller Hydrants
2 for municipal use. . . Mil secured federal registration of
the Mueller Hydrant's trade dress in 1996, and subsequently
licensed its use to Mueller. Mil has its principal place of
business in Portsmouth, New Hampshire.
U.S. Pipe, headquartered in Birmingham, Alabama, also
manufactures fire hydrants, although its products apparently have
not achieved the same level of success as those of Mueller. In
early 2002, the parties were engaged in discussions surrounding
U.S. Pipe's acquisition of Mueller, which were evidently
unsuccessful. Indeed, Mueller relates that "US Pipe
representatives made explicit threats to copy Mueller's fire
hydrants" during these discussions. A year or so later, U.S.
Pipe allegedly began marketing a fire hydrant with a design
"substantially similar to" and "likely to be confused with"
Mueller's trade dress, which the plaintiffs characterize as well-
known to consumers and famous within the industry itself.
Mueller and Mil filed suit against U.S. Pipe in this court
in the spring of 2003. Their complaint consists of nine counts:
(I) trade dress infringement, (II) injury to business reputation
and trade dress dilution under state law, (III) misappropriation,
(IV) conversion, (V) common-law trademark infringement, (VI)
trademark dilution, (VII) unfair competition through false
designation of origin, (VIII) unfair competition under Revised
3 Statutes Annotated ("RSA") 358:A-2, and (IX) palming off. U.S.
Pipe responded by simultaneously filing both an answer and
counterclaim and a partial motion to dismiss counts II, III, and
IX. The plaintiffs then moved to amend their complaint, which
was allowed, mooting U.S. Pipe's motion as to count II. U.S.
Pipe subseguently filed an answer to the amended complaint.1
Discussion
_____ Count III of the complaint seeks injunctive relief and
damages under a common-law theory of "misappropriation." U.S.
Pipe contends that "such a cause of action has never been
recognized by any court in the State of New Hampshire," and seeks
dismissal on that basis. The plaintiffs object, arguing that New
Hampshire has also never rejected a cause of action for
"misappropriation of the value of a trademark or trade dress,"
which has been accepted as a viable claim by other states.
In Count VIII, the plaintiffs assert a claim pursuant to RSA
358-A:2, which prohibits "any unfair method of competition . . .
within this State." U.S. Pipe argues that the complaint fails to
1U.S. Pipe filed a "renewed" motion to dismiss counts III and VIII on September 11, 2003, which merely incorporated the arguments made in connection with its original motion. The plaintiffs followed suit with an objection to the renewed motion on September 22, 2003, also incorporating the arguments from their previous submission.
4 state a cause of action under this statute because the plaintiffs
allege no unfair competition which occurred in New Hampshire. In
response, the plaintiffs contend that (1) their allegations that
they and U.S. Pipe compete in a national market, and that a
substantial part of the events giving rise to their claims took
place in New Hampshire, satisfy section 358-A:2, and (2) they
have a claim under the statute because U.S. Pipe's alleged
conduct caused injury to Mil, located in New Hampshire. The
court will address the parties' arguments as to Count III and
Count VIII in turn.
A. Whether State Law Recognizes A Misappropriation Claim
The parties appear to agree that New Hampshire law controls
the plaintiffs' ability to assert a common-law claim for
misappropriation of the value of their trademark. They also
agree that the New Hampshire Supreme Court has yet to consider
the guestion. As a federal tribunal exercising supplemental
jurisdiction over the plaintiffs' state law claims, this court
must predict that court's future course on this issue. See EPIC
v . Ogden Corp., 202 F.3d 454, 460-61 (1st Cir. 2000). This task
reguires an "'an informed prophecy of what the [New Hampshire
Supreme Court] would do in the same situation,' seeking 'guidance
in analogous state court decisions, persuasive adjudications by
5 courts of sister states, learned treatises, and public policy
considerations identified in state decisional law.'" Walton v.
Nalco Chem. Co., 272 F.3d 13, 20 (1st Cir. 2001) (quoting
Blinzler v. Marriott Int'l, Inc., 81 F.3d 1148, 1151 (1st Cir.
1996)). It also demands "considerable caution" and respect for
the "'well-marked boundaries'" of New Hampshire law. Doyle v.
Hasbro, Inc., 103 F.3d 186, 192 (1st Cir. 1996) (quoting Andrade
v. Jamestown Hous. Auth., 82 F.3d 1179, 1187 (1st Cir. 1996)).
The plaintiffs describe a claim for the misappropriation of
trademarks as a form of unfair competition for which relief is
and should be available under New Hampshire law. In support of
this contention, the plaintiffs simply refer to cases from other
jurisdictions which have purportedly recognized such a theory.
Misappropriation has been described as a cause of action
usually invoked by a plaintiff who has what he considers a valuable commercial "thing" which he sees another has appropriated at little cost. The problem is that plaintiff's item or thing . . . is not protected either (1) by federal copyright or patent legislation or (2) by one of the traditional common-law theories of unfair competition . . . . Thus, the plaintiff is relegated to reliance on the argument that his business item is deserving of recognition as a "property right" which was illegally "misappropriated" by the defendant.
2 J. Thomas McCarthy, McCarthy on Trademarks and Unfair
Competition § 10:47 (4th ed. 2003). Courts have generally
applied the misappropriation doctrine to prevent a defendant from
6 free-riding on the plaintiff's innovation or effort in developing
something having commercial value, but nevertheless falling
outside of traditional trademark and copyright protections. See,
e.g., Int'l News Serv. v. Associated Press, 248 U.S. 215, 240
(1918) (defendant's telegraphing news reported by plaintiff's
service, as it had appeared New York papers, to San Francisco,
where it was published in advance of papers there which
subscribed to plaintiff's service); Standard & Poor's Corp. v.
Commodity Exch., Inc., 683 F.2d 704, 711 (2d Cir. 1982)
(defendant's proposed sale of futures contract tied to index of
stocks compiled by plaintiff); United States Trotting Ass'n v.
Chicago Downs Ass'n, 665 F.2d 781, 787 (7th Cir. 1981)
(defendant's unauthorized use of racehorse performance data
assembled by plaintiff for use of its own members).
Here, the "thing" allegedly misappropriated by U.S. Pipe is
the configuration of the plaintiffs' fire hydrants. Under
appropriate circumstances, a product's appearance gualifies for
trademark protection under the Lanham Act. See Yankee Candle Co.
v. Bridgewater Candle Co., 259 F.3d 25, 37-38 (1st Cir. 2001).
Because the plaintiffs' claim implicates federal trademark law.
7 it does not fall outside of traditional protections.2 The
misappropriation theory, which has been reserved for the
vindication of commercial rights left unprotected by trademark
principles, would therefore not apply.
Nevertheless, courts occasionally "invoke the
misrepresentation doctrine to protect trademarks and other trade
designations." Restatement (Third) of Unfair Competition § 38
cmt. c, reporters' note (1995). Commentators have pointed out,
however, that many of these applications result from the
imprecise usage of the term "misappropriation" to describe a
garden-variety claim for trademark infringement. See id.; 2
McCarthy § 10:72 ("it is a misnomer to talk of 'misappropriation'
of trademarks or trade symbols of any kind"). The New York case
cited by the plaintiffs in support of their misappropriation
2Tw o of the cases relied on by the plaintiffs reflect this traditional use of the misappropriation doctrine. Indeed, Board of Trade v. Dow Jones & Co., 439 N.E.2d 526, 534-35 (111. Ap p . 1982), found misappropriation on facts nearly identical to those of Standard & Poor's, 683 F.2d 704, relying heavily on the District Court's opinion in that case in its own decision. Similarly, CAT Audio of N.Y., Inc. v. Columbia Broad. Svs., Inc., 340 A.2d 736 (Md. C t . Spec. App. 1975), used the misappropriation doctrine as a basis for liability for copying and reselling another's albums because the record piracy in guestion had occurred before federal copyright law was amended to include sound recordings. Id. at 745. Neither of these cases, then, supports the availability of a misappropriation claim in a trademark action. claim appears to have used the term in this way. See Eagle
Comtronics, Inc. v. Pico Prods., Inc., 682 N.Y.S.2d 505, 506
(N.Y. App. Div. 1998) (referring to "misappropriation of a
commercial advantage belonging to another by infringement or
dilution of a trademark or trade name . . .").
It is unclear from either the amended complaint or the
plaintiffs' objection to U.S. Pipe's motion whether or not their
claim for misappropriation simply reiterates their various claims
for trademark infringement. To the extent that it does, however,
the dismissal of the misappropriation claim as redundant of the
plaintiffs' other causes of action is proper. See Fed. R. Civ.
P. 12(f); 2 James Wm. Moore et al., Moore's Federal Practice §
12.37[3] (2003) .
The misappropriation doctrine has also been used to protect
trademarks in the absence of one of the prereguisites for relief
under traditional infringement principles. See 2 McCarthy §
10.47. Courts have thus invoked misappropriation "to justify
protection for the ornamental or merchandising value of a
trademark or trade name when there was little apparent likelihood
of consumer confusion." Restatement (Third) of Unfair
Competition § 38 cmt. c, reporters' note (1995) .
Misappropriation has also given rise to liability for the use of
another's mark without a showing of secondary meaning. See 2 McCarthy § 15:18. The court must determine whether the doctrine
in this form squares with existing New Hampshire trademark law.
To recover under New Hampshire common law, a plaintiff
generally has been required to prove that its name or mark has "a
secondary meaning associating [it] with a given business, so as
to entitle that business to protect the association" and,
further, that "the defendant's use of the [name or mark] would
probably confuse him with the plaintiff in the public's mind."
Auto Body Specialists, Inc. v. Vallee, 127 N.H. 382, 385 (1985);
accord Puritan Furniture Corp. v. Comarc, Inc., 519 F. Supp. 5 6,
60 (D.N.H. 1981); Esso Standard Oil Co. v. Standard Oil Co. of
New England, 170 F. Supp. 71, 73 (D.N.H. 1958); W. Auto Supply
Co. v. W. Auto Supply Co., 13 F. Supp. 525, 527 (D.N.H. 1936);
Blastos v. Humphrey, 112 N.H. 352, 353-54 (1972); Boaosian v.
Fine, 99 N.H. 340, 345 (1955); Nardini's Rest., Inc. v. Sterling
Rest. Co., 93 N.H. 364, 369-70 (1945).
There does not appear to be any case decided under New
Hampshire law where liability attached in the absence of either
secondary meaning or likelihood of confusion. C f . Optical
Alignment Svs. & Inspection Servs., Inc. v. Alignment Servs. of
N . Am., Inc., 909 F. Supp. 58, 61-62 (D.N.H. 1995) (dismissing
unfair competition claim arising out of use of plaintiff's mark
in absence of "potentially confusing" conduct); Jacobs v.
10 Robitaille, 406 F. Supp. 1145, 1155 (D.N.H. 1976) (finding for
defendant where plaintiff could prove neither "public deception"
nor "special significance" of product). This standard has been
applied whether the plaintiff's claim is analyzed under the
rubric of common-law trademark infringement or that of unfair
competition. Compare, e.g., Blastos, 112 N.H. at 353 (common-law
trademark) with Jacobs, 406 F.Supp. at 1154 (unfair competition).
In addition, a number of New Hampshire's neighboring
jurisdictions have also limited common-law trademark liability to
cases where the plaintiffs could show both secondary meaning and
a likelihood of confusion. See, e.g., Mohegan Tribe of Indians
v. Mohegan Tribe & Nation, Inc., 769 A.2d 34, 36-37 (Conn. 2001);
Datacomm Interface, Inc. v. Computerworld, Inc., 489 N.E.2d 185,
193 (Mass. 1986); Sebago Lake Camps, Inc. v. Simpson, 434 A.2d
519, 521 (Me. 1981); Nat'l Lumber & Bldg. Materials Co. v.
Langevin, 798 A.2d 429, 433 (R.I. 2002) .
Furthermore, commentators have argued against the extension
of trademark protections through the application of the
misappropriation doctrine. See Restatement (Third) of Unfair
Competition § 38 cmt. b (1995) ("The better approach, and the one
most likely to achieve an appropriate balance between competing
interests, does not recognize a residual common law tort of
misappropriation"); 2 McCarthy § 10:72 ("If there can be such a
11 thing as misappropriation of another's trademark, irrespective of
distinctiveness and likelihood of buyer confusion, then a big
step has been taken to wipe out the law of trademarks"). Like a
number of other district courts which have dismissed claims for
the misappropriation of trademarks or trade dress, the court
considers such arguments persuasive. See, e.g.. Estate of
Jenkins v. Paramount Pictures Corp., 90 F. Supp. 2d 706, 714 n.26
(E.D. Va. 2000), aff'd , 2001 WL 401320 (4th Cir. Apr. 20, 2001);
Abbott Labs, v. Nutramax Prods., Inc., 844 F. Supp. 443, 447
(N.D. 111. 1994); Svkes Lab., Inc. v. Kalvin, 610 F. Supp. 849,
855 (C.D. Cal. 1985). Moreover, this court has previously noted
that New Hampshire has tended to look to the Restatement for
guidance in developing state unfair competition law. See Jacobs,
408 F. Supp. at 1155.
The court therefore concludes that New Hampshire would not
recognize a common-law claim for use of another's trademark
without proof that (1) the use generates a likelihood of
confusion among consumers, and (2) the mark has acguired a
secondary meaning which associates it with the plaintiff.3 Thus,
3Oregon law, on which the plaintiffs rely, follows the same approach. The plaintiffs cite Volt Servs. Group v. Adecco Employment Servs., 35 P.3d 329, 338 (Or. C t . App. 2001), for the proposition that Oregon recognizes a claim for misappropriation of another's trademark upon a showing of likelihood of confusion only. However, Wedgwood Homes, Inc. v. Lund, 659 P.2d 377 (Or.
12 the plaintiffs cannot state a claim for misappropriation under
New Hampshire law based on U.S. Pipe's alleged use of their
trademark or trade dress.4 It is true, as the plaintiffs point
out, that "the New Hampshire Supreme Court has not defined the
exact contours of common-law unfair competition . . . ." Optical
Alignment, 909 F. Supp. at 61. Nevertheless, this court declines
to stretch the contours of that doctrine to accommodate a
misappropriation claim based on a defendant's use of the
plaintiff's trademark.
Because New Hampshire would not recognize a claim for the
misappropriation of another's trade dress, U.S. Pipe's motion to
dismiss count III of the complaint, which seeks relief under such
a theory, is allowed.
B. Whether Plaintiffs State A Claim Under RSA § 358-A:2
RSA 358-A:2 makes it "unlawful for any person to use any
unfair method of competition or any unfair or deceptive act or
practice in the conduct of any trade or commerce within this
1983), which the Volt court followed, reguires both likelihood of confusion and secondary meaning to recover under the Oregon unfair competition statute. Id. at 378-79.
41he court expresses no opinion on whether New Hampshire would recognize a common-law claim for the misappropriation of business values unprotected by trademark or copyright law. C f . Restatement (Third) of Unfair Competition § 38 (1995).
13 state." U.S. Pipe contends that the plaintiffs have failed to
state a claim under section 358-A:2 because they have not alleged
any conduct proscribed by the statute which took place "within
this state."
The plaintiffs contend that because the harm from U.S.
Pipe's alleged infringement of the plaintiffs' mark occurred in
New Hampshire, where M U has its principal place of business,
that fact alone amounts to unfair competition within New
Hampshire in violation of RSA 358-A:2. For this proposition, the
plaintiffs rely on this court's decision in Delta Educ., Inc. v.
Lanqlois, 719 F. Supp. 42 (D.N.H. 1989) . Delta, however, did not
consider whether harm suffered by a New Hampshire corporation
satisfies section 358:A-2's reguirement that the unfair
competition occur "within this state." Id. at 48. Instead, the
court ruled that the defendants' violations of RSA 358-A:2 (among
other torts) which occurred outside of New Hampshire were
sufficient to create personal jurisdiction under the state long-
arm statute because they harmed the commercial relations of a
company with its principal place of business in New Hampshire.
Id. Whether harm suffered by a company headguartered in New
Hampshire gives rise to personal jurisdiction under the long-arm
statute presents a different inguiry than whether that harm gives
rise to liability under the unfair trade practices statute.
14 Compare RSA 293-A:121 with RSA 358-A:2. Delta does not support
the plaintiffs' position.
The plaintiffs also rely on the definition of "'trade' and
'commerce'" in RSA 358-A:l(II) to support their reading of the
statute. Although the phrase "'trade' and 'commerce'" is defined
to include "any trade or commerce directly or indirectly
affecting the people of this state," that definition is limited
by section 358:A-2 itself, which reaches only "trade or commerce
within this state" (emphasis added). Thus, commercial conduct
which affects the people of New Hampshire is actionable under
section 358-A:2 only if it occurs within New Hampshire. See
Environamics Corp. v. Ferguson Enters., Inc., 2001 DNH 175, 2001
WL 1134727, at *4 (D.N.H. Sept. 24, 2001); Pacamor Bearings,
Inc. v. Minebea Co., 918 F. Supp. 491, 504 (D.N.H. 1996).5 In
5The court disagrees with the plaintiffs' reading of Pacamor, i.e., that the "holding in that case was limited to finding that the defendant was not reguired to be located in New Hampshire to state a claim under RSA 358-A, and that an offending act within New Hampshire sufficed." In Pacamor, this court ruled that the out-of-state sales of a New Hampshire defendant and its foreign parent were relevant evidence of the plaintiffs' claim under section 358-A:2 because the sales constituted commerce "within the state" by virtue of the subsidiary's place of business here. 918 F. Supp. at 504. Thus, Pacamor supports a reading of RSA 358:A-2 which limits its scope to conduct which took place in New Hampshire. Moreover, the court in Pacamor explicitly stated that "the 'offending conduct' . . . must occur within the state" for liability to attach under section 358-A:2. Id. (guoting Shorter v. Champion Home Builders Co., 776 F. Supp. 333, 339 (N.D. Ohio 1991) (interpreting similar Ohio statute)).
15 the absence of any alleged unfair method of competition or unfair
or deceptive act or practice which took place within New
Hampshire, the harm suffered by Mil within the state does not
state a claim under RSA 358-A:2.
The plaintiffs argue that their allegation that "a
substantial part of the events or omissions giving rise to
[their] claims occurred in this jurisdiction" suffices to plead
an unfair act or practice within New Hampshire as reguired by
section 358-A:2. The court disagrees. The foregoing allegation
merely parrots the standard for venue in this court set forth in
28 U.S.C. § 1391. It is a conclusory statement, insufficient for
purposes of defeating a motion to dismiss under Rule 12(b) (6) .
See DM Research, Inc. v. Coll. of Am. Pathologists, 170 F.3d 53,
55-56 (1st Cir. 1999) .
In a related vein, the plaintiffs argue that because they
compete with U.S. Pipe in a nationwide market, the court should
infer that "the areas in which U.S. Pipe is undertaking to
compete unfairly with its infringing products include New
Hampshire." Liability under section 358-A:2, however, reguires
more than "undertaking to compete unfairly" in New Hampshire; it
reguires the actual "use" of an "unfair method of competition" or
"unfair or deceptive act" in New Hampshire. In their amended
complaint, the plaintiffs specifically allege that U.S. Pipe has
advertised and offered its infringing product for sale, but they
16 do not allege that any of these advertisements or offers took
place in New Hampshire. C f . RSA § 358-A:1 (II). Accordingly, the
court concludes, based on the plaintiffs' allegations, that they
can prove no set of facts which would entitle them to relief on
their statutory claim of unfair and deceptive trade practices.
U.S. Pipe's motion to dismiss that count from the amended
complaint is granted.
Conclusion
For the foregoing reasons, the defendant's renewed motion to
dismiss counts III and VIII of the amended complaint (document
no. 37) is GRANTED.
Scattershot pleading is not favored. The court expects the
plaintiffs to review the remaining counts with a view to
eliminating any count that is unnecessary or redundant because it
does not materially differ from another count in terms of the
elements that must be proved, or the remedy available.
SO ORDERED.
Joseph A. DiClerico, Jr. District Judge
October 2, 2003
cc: Brian L. Michaelis, Esguire David B. Wilson, Esguire