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Infa-Lab, Inc. v. KDS Nail International

January 21, 2009

INFA-LAB, INC., A NEW JERSEY CORPORATION, PLAINTIFF,
v.
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).

II. Discussion

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 ...


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