Roor International BV v. Stinky's Smoke Shop, LLC

District Court, E.D. Texas·Decided December 30, 2020·No. 4:18-cv-00735·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION

ROOR INTERNATIONAL BV and SREAM, § INC., §

§ Plaintiffs, §

§ Civil Action No.: 4:18-cv-00735-KPJ v. §

§ STINKY’S SMOKE SHOP, LLC AND § ANDREW WHITELEY, §

§ Defendants.

MEMORANDUM OPINION AND ORDER Pending before the Court is Defendants’ Motion to Dismiss Under Rule 12(b)(1) (“Defendants’ Motion”) (Dkt. 75), to which Plaintiffs filed a response (Dkt. 76). Also pending before the Court is Plaintiffs’ Motion to Dismiss Without Prejudice as to Plaintiff Roor International BV and to Dismiss Stream Inc.’s Counts I and II (“Plaintiffs’ Motion”) (Dkt. 87), to which Defendants filed a response (Dkt. 89) and Plaintiffs filed a reply (Dkt. 91). On December 8, 2020, the Court held a hearing on Defendants’ Motion (Dkt. 75) and Plaintiffs’ Motion (Dkt. 87), along with other pending issues (the “Hearing”). See Dkt. 115. Following the Hearing, the Court ordered Defendants to file additional briefing related to the issue of dismissal. See Dkt. 117 at 1–2. Defendants filed a Brief in Response to Court Order (“Defendants’ Supplemental Brief”) (Dkt. 131). I. BACKGROUND Plaintiffs RooR International BV (“Roor”) and Sream, Inc. (“Sream”) filed suit on October 15, 2018, asserting claims of trademark counterfeiting and infringement and false designation of origin and unfair competition against Defendants Stinky’s Smoke Shop, LLC (“Stinky’s”) and Andrew Whiteley. See Dkt. 2. Trademark Registration Nos. 3,675,839; 2,307,176 and 2,235,638 constitute the trademarks at issue (the “Roor Trademarks”). See id. at 4. Plaintiffs asserted three claims against Defendants on behalf of both Roor and Sream: Federal Trademark Counterfeiting and Infringement pursuant to 15 U.S.C. § 1114 (“Count I”); Federal Trademark Counterfeiting

pursuant to 15 U.S.C. § 1116(d) (“Count II”); and Federal False Designation of Origin and Unfair Competition pursuant to 15 U.S.C. § 1125(a) (“Count III”). See Dkt. 2 at 11–17. Plaintiffs present that all rights to the Roor Trademarks were transferred to Republic Technologies (NA), LLC (“Republic”) on August 20, 2019, pursuant to the Trademark Assignment Agreement (the “Assignment”) (Dkt. 67-1). Plaintiffs did not notify the Court or Defendants immediately after such transfer of the Roor Trademarks. To the contrary, on October 31, 2019, the Court held a hearing on several pending motions. See Dkt. 62. At the hearing, Plaintiffs notified neither the Court nor Defendants that the Roor Trademarks had been assigned to an unnamed party in the litigation, and hence, Roor no longer held the rights to the Roor Trademarks. Moreover, Defendants deposed Plaintiffs’ corporate representative, Bryan Malamut,

on October 31, 2019, and it is uncontested that even though over three months had passed since the reassignment of the Roor Trademarks, Roor’s corporate representative did not indicate that Roor no longer held the rights to the Roor Trademarks. See Dkt. 68 at 2. Approximately six months later, on February 8, 2020, Plaintiffs filed a Motion to Substitute Party Plaintiff Due to Transfer of Interest (the “Motion to Substitute”) (Dkt. 67). Plaintiffs failed to provide support for their Motion to Substitute, and thus, the Court denied the request. See Dkt. 69. Plaintiffs filed the present Motion to Dismiss on September 11, 2020—more than six months after the Motion to Substitute and one year after transfer of the Roor Trademarks. See Dkt. 87. II. LEGAL STANDARD A. RULE 12(b)(1) A party may seek dismissal in a pretrial motion based on any of the defenses set out in Rule 12(b) of the Federal Rules of Civil Procedure. FED. R. CIV. P. 12(b); see also Albany Ins. Co. v.

Almacenadora Somex, 5 F.3d 907, 909 (5th Cir. 1993). Dismissal for lack of Article III standing is brought under Rule 12(b)(1). See Harold H. Huggins Realty, Inc. v. FNC, Inc., 634 F.3d 787, 795 n.2 (5th Cir. 2011) (citing Blanchard 1986, Ltd. v. Park Plantation, LLC, 553 F.3d 405, 409 (5th Cir. 2008)). Article III standing—also called constitutional standing—is a “threshold jurisdictional question” in any federal lawsuit. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 102 (1998). To establish Article III standing, a plaintiff must show, at a minimum, that he “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” See Spokeo Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992); Friends of the Earth,

Inc. v. Laidlaw Env’t Servs. (TOC), Inc., 528 U.S. 167, 180–81 (2000)). When a defendant challenges a plaintiff’s Article III standing solely on the complaint, the plaintiff is protected by safeguards similar to a Rule 12(b)(6) motion to dismiss for failure to state a claim. See Williamson v. Tucker, 645 F.2d 404, 412 (5th Cir. 1981). That is, the Court must treat the factual allegations in the complaint as true. Id. However, when the defendant challenges Article III standing by introducing facts outside of the complaint, the Court has more latitude with respect to disputed facts: “It is elementary that a district court has broader power to decide its own right to hear the case than it has when the merits of the case are reached. Jurisdictional issues are for the court—not a jury—to decide.” Id. at 413. Accordingly, if the defendant introduces disputed facts relating to subject matter jurisdiction, the district court has the power to resolve them. See Lane v. Halliburton, 529 F.3d 548, 557 (5th Cir. 2008) (citation omitted). But in resolving them, the Court must be mindful that, at the pleading stage, “general factual allegations of injury resulting from the defendant's conduct

may suffice.” Lujan, 504 U.S. at 561 (quoting Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 889 (1990)). As such, the Court presumes that “general allegations embrace those specific facts that are necessary to support the claim.” Id. B. RULE 41 Federal Rule of Civil Procedure 41(a)(1) provides that a plaintiff may voluntarily dismiss an action without court order in one of two ways: (1) a plaintiff may dismiss an action under Rule 41(a)(1)(A)(i) by filing “a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment.” FED. R. CIV. P. 41(a)(1); or (2) a plaintiff may dismiss an action under Rule 41(a)(1)(A)(ii) by filing “a stipulation of dismissal signed by all parties who have appeared.” Id.

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Roor International BV v. Stinky's Smoke Shop, LLC, (E.D. Tex. 2020).

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