UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA
January 21, 2009
INFA-LAB, INC., A NEW JERSEY CORPORATION, PLAINTIFF,
KDS NAIL INTERNATIONAL, ALIAS KDS COMPANY, ALIAS KDS LAB, ALIAS KDS, AN UNINCORPORATED ASSOCIATION, FORM UNKNOWN; DAT V. MA, ALIAS DAT VINH MA, ALIAS VINH MA DAT, ALIAS DANIEL V. MA, ALIAS DANIEL MAR, INDIVIDUALLY AND DOING BUSINESS AS TEXCHEM CO. AND/OR TEXCHEM CHEMICAL AND PLASTIC COMPANY AND/OR KDS LAB; AND DOES 1 THROUGH 10, INCLUSIVE, DEFENDANTS.
MEMORANDUM AND ORDER RE: MOTION FOR SUMMARY JUDGMENT
Plaintiff Infa-Lab Inc. sued defendant Daniel Ma dba KDS Nail International for violations of the Lanham Act, 15 U.S.C. §§ 1051-1129; California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200-17210; and California's law prohibiting false advertising, id. §§ 17500-17594. Defendant now moves for summary judgment pursuant to Federal Rule of Civil Procedure 56(c).*fn1
I. Factual and Procedural Background
Plaintiff manufactures a line of cosmetic products under the trademark "Magic Touch." (Compl. ¶ 7.) One of these products is a liquid styptic product called "Skin Protector," which is used by manicurists to treat minor nicks and cuts. (Id. ¶ 8.) Plaintiff markets this product with a "trade dress" consisting of a "nonfunctional stylized label, bottle configuration, and color scheme." (Id.)
Defendant allegedly sells an imitation of this product called "Radical Touch." (Id. ¶ 10.) Plaintiff contends that the marketing of Radical Touch constitutes trade dress infringement, false designation of origin, and false advertising under the Lanham Act, 15 U.S.C. § 1125(a), as well as a violation of the UCL and California's law prohibiting false advertising. (Id. ¶¶ 14-15, 21, 27.) Defendant's activities also allegedly violate the UCL and California's law prohibiting false advertising because Radical Touch "is labeled falsely and unlawfully, in direct violation of federal regulations applicable to [over-the-counter] skin protectant astringent drug products." (Id. ¶ 11.)
Plaintiff filed its Complaint on June 27, 2007 (Docket No. 1), and the parties completed discovery on October 31, 2008 (Mar. 4, 2008 Status (Pretrial Scheduling) Order 2-3). Presently before the court is defendant's motion for summary judgment pursuant to Federal Rule of Civil Procedure 56(c).
A. Plaintiff's Claims under the Lanham Act Plaintiff has filed a statement of non-opposition to defendant's motion for summary judgment as to plaintiff's claims of trade dress infringement, false designation of origin, and false advertising under the Lanham Act, 15 U.S.C. § 1125(a). (Docket No. 29). Accordingly, the court will grant defendant's motion for summary judgment with respect to these claims. See, e.g., Estate of Byrd v. Teater, No. 06-900, 2008 WL 4104309, at *1 (E.D. Cal. Sept. 2, 2008) (Wanger, J.).
B. Voluntary Dismissal of Plaintiff's State Law Claims
Pursuant to Federal Rule of Civil Procedure 41(a)(2), plaintiff has sought leave to dismiss its state law claims in order to re-file them in state court "on the strength of amended allegations." (Pl.'s Stmt. of Non-Opp'n 2.) Rule 41(a)(2) provides that, once a defendant files an answer or motion for summary judgment, "an action may be dismissed at the plaintiff's request only by court order, on terms that the court considers proper." Although the Ninth Circuit has instructed that Rule 41(a) "governs dismissals of entire actions, not of individual claims," Hells Canyon Pres. Council v. U.S. Forest Serv., 403 F.3d 683, 687 (9th Cir. 2005), the court recognizes that in light of plaintiff's concession of its claims under the Lanham Act, the dismissal of plaintiff's state law claims would effectively result in the dismissal of the entire action.
A court should permit a plaintiff to dismiss an action under Rule 41(a)(2) unless the defendant will suffer some "plain legal prejudice" as a result. Smith v. Lenches, 263 F.3d 972, 975 (9th Cir. 2001); see Stevedoring Servs. of Am. v. Armilla Int'l B.V., 889 F.2d 919, 921 (9th Cir. 1989) (providing that the purpose of Rule 41(a)(2) is "to permit a plaintiff to dismiss an action without prejudice so long as the defendant will not be prejudiced... or unfairly affected by dismissal"). Legal prejudice is "prejudice to some legal interest, some legal claim, some legal argument." Westlands Water Dist. v. United States, 100 F.3d 94, 97 (9th Cir. 1996).
To support dismissal, plaintiff alludes to "violations of state law not present in this action" (Pl.'s Stmt. of NonOpp'n 3) but neglects to provide any additional detail. Rather, plaintiff simply asserts that it should be permitted to re-file the action in state court "without concern that defendant will argue claim or issue preclusion." (Id.) The same argument could be made in any case where the plaintiff, after discovery has closed, seeks to dismiss his claims without prejudice after defendant has made a meritorious motion for summary judgment, whether plaintiff seeks to re-file in state or federal court. This court expresses no opinion on whether any future claims plaintiff may seek to file would be barred by claim or issue preclusion; the court finds only that plaintiff's desire to refile does not justify allowing it to voluntarily dismiss its claims at this stage of this proceeding.
Under these circumstances, the court finds that defendant would suffer plain legal prejudice by plaintiff's voluntary dismissal. Defendant has expended considerable effort to defend against this action, and dismissal at this late stage of the litigation would improperly circumvent his pending dispositive motion. See White v. Donley, No. 05-7728, 2008 WL 4184651, at *3 (C.D. Cal. Sept. 4, 2008) ("[T]he mere temporary avoidance of a claim-dispositive motion is not a legitimate reason to seek dismissal... indeed, the avoidance of an adverse ruling is an abusive reason to seek dismissal." (citing Terravona v. Kincheloe, 852 F.2d 424, 429 (9th Cir. 1988)); see also Maxum Indem. Ins. Co. v. A-1 All Am. Roofing Co., No. 07-55396, 2008 WL 4833004, at *1 (9th Cir. Nov. 3, 2008) ("A district court may consider whether the plaintiff is requesting a voluntary dismissal only to avoid a near-certain adverse ruling." (citing Terrovona, 852 F.2d at 429)); Helio, LLC v. Palm, Inc., No. 06-7754, 2007 WL 1063507, at *2 (N.D. Cal. Apr. 9, 2007) (citing authorities "supporting the proposition that a voluntary dismissal may not be appropriate where the sole reason for the plaintiff's request for dismissal is apprehension regarding a possible adverse ruling on a pending post-trial or dispositive motion").
Alternatively, if the court were to construe plaintiff's request for voluntary dismissal as the withdrawal of individual state claims, the court would reach the same conclusion under Federal Rule of Civil Procedure 15. See Gen. Signal Corp. v. MCI Telecomms. Corp., 66 F.3d 1500, 1513 (9th Cir. 1995) ("[W]e have held that Rule 15, not Rule 41, governs the situation when a party dismisses some, but not all, of its claims.").
Rule 15 provides that leave to amend the pleadings "'shall be freely given when justice so requires.'" Bowles v. Reade, 198 F.3d 752, 757 (9th Cir. 1999) (quoting Fed. R. Civ. P. 15(a)). However, "[o]nce the district court ha[s] filed a pretrial scheduling order pursuant to Federal Rule of Civil Procedure 16[,] which establishe[s] a timetable for amending pleadings[,] that rule's standards control." Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-08 (9th Cir. 1992). Under Rule 16(b), a party seeking leave to amend must demonstrate "good cause." "Rule 16(b)'s 'good cause' standard primarily considers the diligence of the party seeking the amendment." Johnson, 975 F.2d at 609.
In this case, the court issued two Status (Pretrial Scheduling) Orders on August 29, 2007, and March 4, 2008, each of which provided that "[n]o further... amendments to [the] pleadings [would be] permitted except with leave of court, good cause having been shown under Fed. R. Civ. P. 16(b)." (Docket Nos. 12, 18.) In its motion, however, plaintiff provides no explanation as to why it could not make its "amended allegations" at an earlier stage in this litigation. Rather, plaintiff concedes that "the time to amend the [C]omplaint has long passed." (Pl.'s Stmt. of Non-Opp'n 2-3.)
Accordingly, since dismissal of plaintiff's state claims would be improper under either Rule 41 or 15, the court will proceed to adjudicate defendant's motion for summary judgment.
C. Summary Judgment on Plaintiff's State Law Claims
Summary judgment is proper "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law."
Fed. R. Civ. P. 56(c). A material fact is one that could affect the outcome of the suit, and a genuine issue is one that could permit a reasonable jury to enter a verdict in the non-moving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Id. at 256. On issues for which the ultimate burden of persuasion at trial lies with the nonmoving party, the moving party bears the initial burden of establishing the absence of a genuine issue of material fact and can satisfy this burden by presenting evidence that negates an essential element of the nonmoving party's case or by demonstrating that the nonmoving party cannot produce evidence to support an essential element of its claim or defense. Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir. 2000).
Once the moving party carries its initial burden, the nonmoving party "may not rely merely on allegations or denials in its own pleading," but must go beyond the pleadings and, "by affidavits or as otherwise provided in [Rule 56,] set out specific facts showing a genuine issue for trial." Fed. R. Civ. P. 56(e); accord Celotex Corp., 477 U.S. at 324; Valandingham v. Bojorquez, 866 F.2d 1135, 1137 (9th Cir. 1989). On those issues for which it will bear the ultimate burden of persuasion at trial, the nonmoving party "must produce evidence to support its claim or defense." Nissan Fire, 210 F.3d at 1103.
In its inquiry, the court must view any inferences drawn from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The court also may not engage in credibility determinations or weigh the evidence, for these are jury functions. Anderson, 477 U.S. at 255.
Having filed a statement of non-opposition to defendant's motion for summary judgment as to all claims under the Lanham Act, plaintiff concedes that its state law claims are now "solely premised on... violations of [Food and Drug Administration ("FDA")] labeling regulations and other provisions of the Food, Drug[,] and Cosmetic Act [("FDCA")]." (Pl.'s Stmt. of Non-Opp'n 3.) Specifically, plaintiff alleges that defendant's product "is labeled falsely and unlawfully, in direct violation of federal regulations applicable to [over-the-counter] skin protectant astringent drug products" because the product's label "omits required warnings, active ingredients[,] and manufacturer identification." (Compl. ¶ 11.)
"[C]laims that require direct interpretation and application of the FDCA are not properly recognized because such matters are more appropriately addressed by the FDA, especially in light of Congress's intention to repose in that body the task of enforcing the FDCA." Cottrell, Ltd. v. Biotrol Int'l, Inc., 191 F.3d 1248, 1255 (10th Cir. 1999) (quoting Braintree Labs., Inc. v. Nephro-Tech, Inc., No. 96-2459, 1997 WL 94237, at *6 (D. Kan. Feb. 26, 1997)); see Sandoz Pharms. Corp. v. Richardson-Vicks, Inc., 902 F.2d 222, 231 (3d Cir. 1990) (holding, with respect to FDA regulations, that it is inappropriate "to determine preemptively how a federal administrative agency will interpret and enforce its own regulations"); Cytosport, Inc. v. Nature's Best, Inc., No. 06-1799, 2007 WL 1345379, at *2 (E.D. Cal. May 8, 2007) (Levi, J.) (observing that "courts have dismissed... claims that necessarily require interpreting and applying the FDCA or FDA regulations").
Here, plaintiff's state law claims are squarely premised on violations of FDA regulations and provisions of the FDCA. Because these claims are "merely vehicles for claims under the FDCA or FDA regulations," their adjudication "would force the [c]court to rule directly on the legality of [defendant's] conduct before the FDA has had a chance to do so." Summit Tech., Inc. v. High-Line Med. Instruments, Co., 933 F. Supp. 918, 934, 943 (C.D. Cal. 1996) (internal quotation marks omitted). This the court cannot do. See id. at 943 n.21 ("[A] [p]laintiff may not bring a § 17200 claim that is, in fact, an attempt to state a claim under the federal FDCA."). Accordingly, since plaintiff cannot prevail on its state law claims as a matter of law, the court will grant defendant's motion for summary judgment with respect to these claims.*fn2
IT IS THEREFORE ORDERED that defendant's motion for summary judgment be, and the same hereby is, GRANTED.