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Pinkberry, Inc., et al. v. Jec International Corp.

December 7, 2011

PINKBERRY, INC., ET AL.
v.
JEC INTERNATIONAL CORP., ET AL.



The opinion of the court was delivered by: Honorable Philip S. Gutierrez, United States District Judge

CIVIL MINUTES - GENERAL

Dec. 12 hrg off

Present: The Honorable Philip S. Gutierrez, United States District Judge

Wendy K. Hernandez Not Present n/a Deputy Clerk Court Reporter Tape No.

Attorneys Present for Plaintiff(s): Attorneys Present for Defendant(s): Not Present Not Present

Proceedings: (In Chambers) Order GRANTING Motion to Dismiss

Before the Court is Defendants Masako Kawashima and Snola Inc.'s motion to dismiss Plaintiffs Pinkberry, Inc. and Pinkberry Franchising Company's (collectively "Plaintiffs") complaint. See Dkt. #16. The Court finds this matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78; L.R. 7-15. After considering the moving and opposing papers, the Court GRANTS the motion to dismiss the federal claims for lack of subject matter jurisdiction and DISMISSES Plaintiffs' remaining state law claims because it has no discretion to retain supplemental jurisdiction over them.

Background

Plaintiffs and their Defendant counterparts, JEC International Corporation ("JEC"), Snola, Inc. ("Snola"), Masako Kawashima, and Kazuhiko Morioka (collectively "Defendants") are competitors in the low-calorie, fat-free, tart-tasting frozen yogurt business. Compl. 2:1-4, ¶ 25. Plaintiffs are California corporations. Compl. 2:1-2, ¶ 7. Snola's corporate headquarters are in California, JEC has a place of business in Japan but also an office in California, and Masako Kawashima and Kazuhiko Morioka, officers of Snola and JEC, reside in California. Compl. ¶¶ 8-11. Kawashima and Morioka are citizens of Japan. Kawashima Decl. 1:19-25. All of the Defendants share the same business and residential address. Compl. 4:28.

Since January 2005, Plaintiffs have sold frozen yogurt under the name PINKBERRY. See Compl. ¶ 17. Since then, Plaintiffs have registered PINKBERRY as a trademark in the United States and other countries, and have opened or franchised numerous stores, including international locations. See Compl. ¶¶ 17, 20, 21, 23, 24. The PINKBERRY trademark is distinctive, famous, and is widely recognized by consumers. Compl. ¶ 22. For their part, Defendants sell frozen yogurt under the name SNOLA in two stores in California and one in Compl. ¶ 25.

In 2008, Plaintiffs began to invest resources to open a store in Japan. See Compl. ¶ 30. Defendants, however, had already registered an identical PINKBERRY trademark in Japan on August 14, 2006. Compl. ¶ 27. Plaintiffs sought to obtain the trademark from Defendants, but were unsuccessful when they were unwilling to meet Defendants' monetary demands. Compl. ¶¶ 31, 32. Plaintiffs then initiated proceedings before the Japan Patent Office to cancel Defendants' registration of the PINKBERRY trademark. See Wang Decl. ¶ 1. These cancellation proceedings are still pending. Id.

To date, Defendants have made no use of the trademark in Japan. Compl. ¶ 29. Instead, Defendants have intentionally and effectively blocked Plaintiffs' entry into the Japanese market, caused harm to their reputation, and interfered with their business relationships. See Compl. ¶¶ 7, 16, 28-30, 33, 34.

With the registration dispute in Japan still pending, Plaintiffs bring this suit, alleging various causes of action for unfair competition, trademark dilution, and interference with economic and contractual relationships. Plaintiffs seek, inter alia, damages and an order enjoining Defendants from using the PINKBERRY trademark in Japan. Compl. 15:25-16:22. Defendants Masako Kawashima and Snola now move to dismiss the Complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), claiming that subject matter jurisdiction does not exist because the Lanham Act does not extend to Defendants' activities in Japan and because Plaintiffs have failed to state a claim on which relief can be granted. Mot. 1:18-20.

Legal Standard

Federal Rule of Civil Procedure 12(b)(1) authorizes a party to move for dismissal of a claim for lack of subject matter jurisdiction. Because federal courts are courts of limited jurisdiction, the Court presumes lack of jurisdiction, and the party seeking to invoke the Court's jurisdiction bears the burden of proving that subject matter jurisdiction exists. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994). A party challenging the court's jurisdiction under Rule 12(b)(1) may do so by raising either a facial attack or a factual attack. See White v. ,227 F.3d 1214, 1242 (9th Cir. 2000) (citing 2 James W. Moore, Moore's Federal Practice § 12.30 [4] (3d ed. 1999)).

To attack a complaint facially, "the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction." Safe Air for Everyone v. ,373 F.3d 1035, 1039 (9th Cir. 2004). When evaluating a facial attack to jurisdiction, the Court must accept the factual allegations in plaintiff's complaint as true. See Miranda v. Reno, 238 F.3d 1156, 1157 n.1 (9th Cir. 2001). In contrast, when faced with a factual attack, the Court may consider extrinsic evidence. See White, 227 F.3d at 1242.

While they are silent on the distinction, Defendants appear to make both a facial and a factual attack. Defendants argue that dismissal is proper if the facts in the Complaint are taken as true. See Mot. 6:4-6. Defendants also provide extrinsic evidence in the form of a declaration stating that Masako Kawashima and Kazuhiko Morioka are citizens of Japan. Kawashima Decl. 1:19-25.

To the extent that Defendants make a factual attack, Plaintiffs have requested an evidentiary hearing. Opp. 2:19-27. The Court finds an evidentiary hearing is not necessary. See Rosales v. U.S., 824 F.2d 799, 803 (9th Cir. 1987) ("A district court may hear evidence and make findings of fact necessary to rule on the subject matter jurisdiction question") (emphasis added). There are no factual disputes to resolve. Defendants' declaration of Japanese citizenship is not inconsistent with Plaintiffs' allegations that Kawashima and Morioka reside in Los Angeles.*fn1 Furthermore, a hearing is unnecessary ...


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