Toolbox Widget Inc. v. Ernst Manufacturing, Inc.

District Court, D. Montana·Decided September 30, 2025·No. 9:24-cv-00148·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA MISSOULA DIVISION TOOLBOX WIDGET INC., CV 24-148-M-KLD Plaintiff,

vs. ORDER

ERNST MANUFACTURING, INC.,

Defendant.

Plaintiff Toolbox Widget Inc. (“TBW”) brings this action against Defendant Ernst Manufacturing, Inc. (“Ernst”). In the complaint, TBW asserts six counts against Ernst, all related to the advertising and marketing of Ernst’s products. (Doc. 1). Before the Court is Ernst’s motion to dismiss for lack of personal jurisdiction and for judgment on the pleadings pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(c). (Doc. 26). For the reasons discussed below, the motion to dismiss is granted with leave for TBW to amend the complaint. I. Background TBW is a Montana corporation that “creates, manufactures, markets and sells tool organizers and accessories.” (Doc. 1 at ¶ 2). TBW’s principal place of business is in Columbia Falls, Montana. (Doc. 1 at ¶ 2). Ernst is an Oregon corporation that similarly manufactures and deals in tool organizers and accessories. (Doc. 12 at ¶ 3). Ernst’s principal place of business is in Sandy, Oregon. (Doc. 12 at ¶ 3).

In some instances, Ernst and TBW sell competing products. For instance, TBW alleges that their “Wrench Organizer – Vertical PRO” is similar to Ernst’s “40 Tool Modular Wrench Pro.” (Doc. 1 at ¶¶ 69-70). TBW alleges that these

products are in direct competition. (Doc. 1 at ¶ 71). TBW further alleges—and Ernst admits—that Ernst has sold and shipped products to customers in Montana through its own website (Doc. 1 at ¶¶ 12-13; Doc. 12 at ¶¶ 12-13). Ernst also sells products through Amazon, and acknowledges that it has also sold products through

that platform to customers in Montana. (Doc. 29-1 at ¶¶ 16-20). The complaint in this matter was filed on October 24, 2024, and includes six counts against Ernst. First, TBW asserts that, by inserting the terms “toolbox

widget” and “tool box widget” into the metadata of its website, Ernst infringed on TBW’s registered design mark “TOOLBOX WIDGET,” in violation of the Lanham Act, 15 U.S.C. § 1114(1). (Doc. 1 at ¶¶ 94-100). Second, TBW asserts that the same conduct constitutes common law trademark infringement under the

Lanham Act, 15 U.S.C. § 1125. (Doc. 1 at ¶ 104-10). Third, TBW asserts that Ernst has engaged in unfair competition and false advertising by incorrectly advertising its products as made in the United States, in violation of 15 U.S.C. §

1125(a)(1)(B). (Doc. 1 at ¶¶ 113-23). Fourth, TBW asserts that Ernst has engaged in unfair competition and false advertising by listing expired patents in promotional materials, in violation of 15 U.S.C. § 1125(a)(1)(B). (Doc. 1 at ¶¶

125-30). Fifth, TBW asserts that Ernst’s “Made in the USA” advertising constitutes false designation of origin, in violation of 15 U.S.C. § 1125(a)(1)(B). (Doc. 1 at ¶¶ 134-140). Finally, TBW asserts that Ernst’s use of “Made in the

USA” violates the Montana Consumer Protection Act, Montana Code Annotated § 30-14-103. (Doc. 1 at ¶¶ 145-146). Attached to TBW’s complaint are two emails sent to Ernst in 2023. (Docs. 1-7, 1-8). The emails appear to have been sent by counsel for TBW, and bear the

letterhead of a law firm presently representing TBW in this matter. Neither email names or mentions TBW or any relationship between TBW and the law firm. The first email (Doc. 1-7), dated June 7, 2023, relates the sender’s belief that certain

magnets used in Ernst’s products are not made in the United States and that therefore the company’s statements that their products are “Made in the USA” are in violation of FTC standards. The email states: If your magnets (or any other component of your products) are made outside of the US, please remove all variations of the unqualified “Made in the USA” claims on your website.” Doing so will avoid consumers deception and ensure that the marketplace is fair for competitors.

(Doc. 1-7 at 1). The second email (Doc. 1-8), dated June 27, 2023, elaborates on the statements in the earlier email, and includes specific demand language and a

request that Ernst cease and desist from marketing its products as made in the United States. [P]lease be aware that failure to complete corrective action by July 27, 2023 for your digital assets and December 27, 2023 for your physical assets is likely to result in the submission of a formal complaint to the FTC regarding your deceptive business practices. It is critical to protect the interests of consumers and ensure a fair and competitive marketplace.

(Doc. 1-8 at 2, emphasis omitted). Ernst filed an answer to the complaint on December 2, 2024. (Doc. 12). In the first paragraph regarding defenses, the answer states “[t]his Court lacks personal jurisdiction over Defendant.” (Doc. 12 at 15 ¶ 1). On January 21, 2025, Ernst filed the instant motion. (Doc. 26). Ernst argues that this case should be dismissed for lack of personal jurisdiction. In the event the court denies the motion, Ernst moves for judgment on the pleadings as to Count IV of TBW’s complaint. (Doc. 26 at 2). The motion is fully briefed and ripe for ruling. II. Legal Standard Federal Rule of Civil Procedure 12(b)(2) authorizes dismissal when a court

lacks personal jurisdiction over the defendant. When a “defendant moves to dismiss a complaint for lack of personal jurisdiction, the plaintiff bears the burden of establishing that jurisdiction is appropriate.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (internal citation omitted). While the plaintiff cannot simply rest on the bare allegations of the complaint, the court must

take uncontroverted allegations in the complaint as true and resolve any conflicts in the affidavits in the plaintiff's favor. Schwarzenegger, 374 F.3d at 800; Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008).

Fed. R. Civ. P. 12(c) provides that, “[a]fter the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings.” “[P]leadings are closed for the purposes of Rule 12(c) once a complaint and answer have been filed, assuming . . . that no counterclaim or cross-claim is made.” Doe v.

U.S., 419 F.3d 1058, 1061 (9th Cir. 2005). “Judgment on the pleadings is properly granted when [, accepting all factual allegations in the complaint as true,] there is no issue of material fact in dispute, and the moving party is entitled to judgment as

a matter of law.” Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012). The “court must determine whether the facts alleged in the complaint, taken as true, entitle the plaintiff to a legal remedy.” Chavez, 683 F.3d at 1108. III. Discussion

The power of the federal court “to exercise personal jurisdiction over a non- resident defendant turns on two independent considerations: whether an applicable state rule or statute potentially confers personal jurisdiction over the defendant, and

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Toolbox Widget Inc. v. Ernst Manufacturing, Inc., (D. Mont. 2025).

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