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Digby Adler Group LLC v. Image Rent A Car


March 16, 2011




Before the Court is a Motion by Plaintiff Digby Adler Group LLC ("Plaintiff") for leave to file a first amended complaint. ECF No. 66 ("Mot."). Defendants Image Rent A Car, Inc. ("Image"), and Van Rental Co., Inc. ("Van Rental") (collectively, "Defendants") 19 filed an Opposition, and Plaintiff filed a Reply. ECF Nos. 80 ("Opp'n"), 81 ("Reply"). For the following reasons, the Court GRANTS Plaintiff's Motion.


Plaintiff is a California limited liability company headquartered in San Francisco that rents cars and vans, with a focus on long-term rentals to touring music groups. ECF No. 1 ("Compl.") ¶¶ 4, 10. Plaintiff operates rental locations in California, New Jersey, Illinois, and Oregon, and provides van rentals for use throughout the United States. Id. ¶ 11. Since 2003, Plaintiff has done business under the service mark "Bandago" ("the Mark"). Id. ¶ 12. Plaintiff filed an application to 4 register the Mark with the U.S. Patent and Trademark Office in 5

In 2003, Plaintiff registered the Internet domain name 7 and has since used it in connection with its van rental business.

On February 11, 2010, Plaintiff brought this action against Defendants, alleging cybersquatting, unfair competition, and false advertising under the Lanham Act, as well as common law trademark 12 infringement and violation of Section 17200 of California's

Business and Professions Code. See Compl. Plaintiff alleges that 14 in August 2008, Van Rental, as an agent of Image, registered the

Internet domain name Id. ¶¶ 18-21. Plaintiff claims 16 that Defendants created a website at that redirects 17 visitors to Id. ¶¶ 18-21. Plaintiff alleges 18 that Defendants had never before used the "Bandago" name in 19 commerce, and that Defendants used solely to divert 20

Plaintiff's customers to Defendant. Id. ¶¶ 24, 25. Plaintiff 21 claims it has received calls from confused customers, and claims 22 that some customers have used Defendants' services rather than 23

On March 4, 2010, Defendants moved to dismiss the action for lack of jurisdiction. ECF No. 8. The Court denied this motion on 26 the basis that Defendants, who are both corporate entities, were 27 not represented by counsel in violation of Civil Local Rule 3-9(b).

ECF No. 9. On March 12, 2010, Defendants filed an almost identical

2008, but a Certificate of Registration has not yet issued. Id.

Id. ¶¶ 13-14. 9

Plaintiff's. Id. ¶ 28. 24

motion to dismiss, which the Court again denied. ECF Nos. 10, 14.

Defendants moved for two extensions of time to respond to the

Complaint; the Court denied the first because Defendants had yet to 4 associate with counsel and granted the second. ECF Nos. 10, 17, 18, 20. After associating with counsel, Defendants filed a third 6 motion to dismiss for lack of jurisdiction, which the Court denied.

On July 29, 2010, Plaintiff served Defendants with its first set of discovery requests; on November 3, 2010, Plaintiff filed a 10 motion to compel, claiming Defendants had failed to respond to these requests. Reply at 2. Defendants began to serve responses 12 on December 3, 2010. Id. 13

Plaintiff's intent to amend its complaint, seeking a stipulation 15 from Defendants. Plaintiff filed the current Motion on January 26, 2011. See Mot. Plaintiff alleges that through Defendants' 17 discovery responses, it learned that two individuals, Shneior 18 Defendants' alleged misconduct, and that Defendants also infringed 20 on Plaintiff's copyright. Id. Plaintiff alleges that discovery 21 responses and documents produced by third parties revealed that

Image and Van Rental had not adhered to basic corporate 23 formalities; that Image and Van Rental operate as alter egos, 24 working at the same address, using the same e-mail account and 25 websites, employing the same personnel, and using the same 26 financial and office resources; that Zilberman and Sebag registered 27 and used the domain name; that Defendants bid on

Plaintiff's Bandago trademark in the Google AdWords service; and

ECF Nos. 21, 37. 8

On January 20, 2011, Plaintiff notified Defendants' counsel of Zilberman ("Zilberman") and Gad Sebag ("Sebag"), directed that Defendants infringed Plaintiff's copyright. Mot. at 2.

Plaintiff seeks to add Zilberman and Sebag as defendants and add 3 additional copyright and trademark claims. Id. 4 was due, Defendants filed a motion for additional time to respond 6 to Plaintiff's Motion. ECF No. 73. Defendants sought a two-month 7 extension, citing a recent illness of Defendant's counsel. Id.

Defendants' counsel to delay proceedings. ECF No. 74. The Court 10 granted the motion in part, giving Defendants two additional weeks to file its Opposition. ECF No. 77. 12 13

A party may amend its pleadings with leave of the court, and "[t]he court should freely give leave when justice so requires." 16 "extreme liberality." Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003). However, district courts may deny 19 amendments that would cause undue prejudice to another party, that 20 would cause undue delay, that are sought in bad faith, or that are 21 futile. Bowles v. Reade, 198 F.3d 752, 757-58 (9th Cir. 1999).

Not all of these factors merit equal weight, as "it is the 23 consideration of prejudice to the opposing party that carries the 24 greatest weight." Eminence Capital, 316 F.3d at 1052 (citations 25 omitted). "The party opposing amendment bears the burden of 26 showing prejudice." DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987).

On February 11, 2010, the date before Defendants' Opposition Plaintiff opposed the motion, alleging it was one of many acts by


Fed. R. Civ. P. 15(a)(2). This policy should be applied with Plaintiff is permitted to amend its Complaint, alleging that 4 because there are "but a few months left in discovery," Defendants 5 would not have enough time to "properly conduct discovery to defend 6 against these claims." Opp'n at 1. Defendants also allege that

Plaintiff knew these claims existed well before its filing of this

In response, Plaintiff refers to the above timeline of proceedings in this action as evidence that Defendants, not


Defendants argue that they will be unduly prejudiced if Plaintiff unduly delayed in bringing this Motion, arguing that Motion. Id.

Plaintiff, are responsible for delay in this action by failing to 13 respond to discovery requests and seeking a continuance of this

Motion. Reply at 2-3. Plaintiff also disputes Defendants' 15 allegation that it knew of its additional claims before filing its 16 motion, stating: "While Plaintiff knew that Sebag and Zilberman 17 were employees of Defendants, Plaintiff did not know of their 18 individual misconduct until Plaintiff received documents from

Defendants, Google, and Network Solutions." Id. at 4. Plaintiff 20 alleges that while it knew Defendants had engaged in some copyright 21 infringement before January 2011, it believed the infringement was 22 de minimis, and "[o]nly after Plaintiff spent considerable time 23 reviewing the thousands of pages comprising Defendants' websites, 24 did Plaintiff discover significant and chronic copyright 25 infringement." Id. 26

this circuit's liberal rules for amendment, the Court finds for

Plaintiff. Defendants have not shown that allowing Plaintiff to Upon consideration of the above arguments and in light of amend its Complaint to include Zilberman and Sebag as Defendants 2 and add new trademark and copyright claims would cause undue 3 prejudice or delay proceedings, or that Plaintiff's Motion was 4 brought in bad faith. 5 6


For the foregoing reasons, the Court GRANTS Plaintiff Digby Adler Group LLC's Motion for Leave to File a First Amended 9 Complaint. Plaintiff must file its amended complaint within ten (10) days of this Order.




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