Native American Arts, Inc. v. Contract Specialties, Inc.

754 F. Supp. 2d 386, 62 A.L.R. Fed. 2d 759, 2010 U.S. Dist. LEXIS 125451, 2010 WL 4823688
CourtDistrict Court, D. Rhode Island
DecidedNovember 29, 2010
DocketCA. 10-106 S
StatusPublished
Cited by3 cases

This text of 754 F. Supp. 2d 386 (Native American Arts, Inc. v. Contract Specialties, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Native American Arts, Inc. v. Contract Specialties, Inc., 754 F. Supp. 2d 386, 62 A.L.R. Fed. 2d 759, 2010 U.S. Dist. LEXIS 125451, 2010 WL 4823688 (D.R.I. 2010).

Opinion

OPINION AND ORDER

WILLIAM E. SMITH, District Judge.

Before the Court is a motion to dismiss the complaint in this case. For the reasons set forth below, the motion is denied.

I. BACKGROUND

Plaintiff Native American Arts, Inc. (“NAA”) is a wholly Indian-owned organization that manufactures and sells Indian arts and crafts. 1 Defendant Contract Specialties, Inc. (“Specialties”) is a Rhode Island corporation that sells arts and crafts, including those made in an Indian style. NAA has sued Specialties for violations of the Indian Arts and Crafts Act of 1990 and *388 the Indian Arts and Crafts Enforcement Act of 2000 (collectively, the “IACA”), 25 U.S.C. § 305 et seq., which forbids the offer or sale of a good in a manner that falsely suggests it is an Indian-made product. 2

The single-count complaint alleges that from March 15, 2006 onward, Specialties has advertised, marketed, and sold its non-Indian-made products nationwide in a manner that falsely suggests they are Indian-made. These products include charms, barrettes, bracelets, earrings, and various other bibelots and things, some sixty samples of which are recited in the complaint. According to the complaint, Specialties falsely suggested that its non-Indian-made products were in fact Indian-made by, among other things, advertising them using the label “Indian” and names of tribes such as “Apache,” “Navajo,” “Kiowa,” and “Cree.” These terms were used without qualifiers or disclaimers to alert potential buyers that the goods were not really made by Indians or members of these tribes.

According to the complaint, NAA and Specialties compete for the sale of similar products made in an Indian style — NAA’s being authentic and Specialties’ fake — such that NAA “has suffered competitive injuries as a result of’ Specialties’ activities. (Compl. ¶ 22, Mar. 8, 2010, ECF No. 1.) Specifically, Specialties’ marketing and sales of its fake Indian-made products have allegedly eaten away at NAA’s sales, driven down the price of NAA’s products, and damaged NAA’s goodwill and reputation. (Id.) NAA contends that these actions violate the IACA, and seeks injunctive relief and statutory damages.

Specialties moves to dismiss the complaint because (1) NAA lacks standing to sue; (2) NAA has not stated a claim, with requisite particularity, for a violation of the IACA; (3) the IACA runs afoul of the First Amendment; and (4) the IACA contravenes the equal protection clause of the Fifth Amendment. Specialties also disputes NAA’s calculation of damages, and argues that the damages provision in the IACA violates due process.

II. DISCUSSION

A. The Indian Arts and Crafts Act

The IACA is a truth-in-advertising statute aimed at ensuring that products marketed and sold as “Indian” are actually Indian. Congress enacted it in 1990 in response to concerns that a significant portion of the national market for “Indian” products was made up of counterfeit products, and that existing state and federal laws (including a 1935 version of the Act) were ineffective in curbing the flood. H.R. Rep. No. 101-400(1), at 4-5 (1990), 1990 U.S.C.C.A.N. 6382, 6383-84. For example, a 1985 Commerce Department report to Congress “estimated that unmarked import imitations of Indian arts and crafts are siphoning off 10 to 20 percent of the market for genuine handicrafts produced domestically,” then worth an annual $400-$800 million. Id. at 4-5, 1990 U.S.C.C.A.N. 6382, 6383-84. See also S. Rep. No. 106-452, at 1 (2000) (citing estimates that in the one-billion-dollar market for Indian goods, $400-500 million of demand was being satisfied from non-Indian sources). Congress concluded that the influx of fake Indian products had reduced demand for the real thing, driven down the *389 price of authentic Indian wares, tainted consumer confidence in the integrity of the market, and dissuaded young Indians from learning and practicing time-honored ways of artisanship that were an important cultural heritage. S. Rep. No. 106-452, at 1-2. And “[wjith Native communities plagued by unemployment and stagnant economies, the flood of fake Indian arts and crafts is decimating one of the few forms of entrepreneurship and economic development on Indian reservations.” Id.

The IACA, as enacted in 1990, conferred a private right of action on Indian tribes and individual tribe members, who could both sue on behalf of themselves or on behalf of an Indian arts and crafts organization. See Pub.L. No. 101-644, 104 Stat. 4662 (1990). But there was no right of action for an Indian arts and crafts organization itself. See, e.g., Native Am. Arts, Inc. v. J.C. Penney Co., 5 F.Supp.2d 599, 604 (N.D.Ill.1998) (holding that the IACA “prevents Indian arts and crafts organizations from suing in their own right”). In 2000, Congress amended the statute to, among other things, provide for suits “by an Indian arts and crafts organization on behalf of itself.” 25 U.S.C. § 305e(c)(1)(C) (current version at 25 U.S.C. § 305e(d)(l)(D)).

NAA is an “Indian arts and crafts organization” within the meaning of § 305e(d)(l)(D). And it certainly has taken advantage of the statutory private right of action: depending on which party’s numbers one believes, NAA has filed between 90 and 120 IACA actions since 2000. (See Mot. to Dismiss Hr’g Tr. 3:2-3; 27:25-28:3, Aug. 18, 2010.) Almost all of these actions have been brought in the Northern District of Illinois, where NAA is based. This action too was originally commenced there, but the district court held it did not have personal jurisdiction over Specialties, Native Am. Arts, Inc. v. Contract Specialties, Inc. (Specialties I), No. 09-cv-3879, 2010 WL 658864, at *7 (N.D.Ill. Feb. 18, 2010), so NAA brought suit here. This appears to be the first IACA case in the First Circuit.

B. Standing 3

Under Article III of the Constitution, a party does not have standing to sue unless it can demonstrate (1) an injury in fact, (2) fairly traceable to defendant’s challenged conduct, that (3) is likely to be redressed by the requested relief. Friends of the Earth, Inc. v. Laidlaw Envt’l Servs. (TOC), Inc., 528 U.S. 167, 180-81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000). An injury in fact is an “invasion of a legally protected interest” that is both “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (internal citations and quotation marks omitted).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Fontenot v. Hunter
378 F. Supp. 3d 1075 (W.D. Oklahoma, 2019)
Navajo Nation v. Urban Outfitters, Inc.
191 F. Supp. 3d 1238 (D. New Mexico, 2016)

Cite This Page — Counsel Stack

Bluebook (online)
754 F. Supp. 2d 386, 62 A.L.R. Fed. 2d 759, 2010 U.S. Dist. LEXIS 125451, 2010 WL 4823688, Counsel Stack Legal Research, https://law.counselstack.com/opinion/native-american-arts-inc-v-contract-specialties-inc-rid-2010.