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Gerawan Farming, Inc v. Rehrig Pacific Company

May 9, 2013


The opinion of the court was delivered by: Lawrence J. O'Neill United States District Judge


On April 16, 2013, the parties submitted a joint pretrial statement. The joint pretrial statement revealed that the parties sharply disagree on the scope and viability of the two claims remaining in this case: (1) unfair competition under California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200, et seq.; and (2) unfair competition under California common law. After reviewing the parties' authorities and positions in the joint pretrial statement, the Court requested further briefing on why these claims should not be disposed of. The Court stated that it had no intention of proceeding to trial if the claims lacked merit.

The parties filed their briefing as follows: on April 24, 2013, Plaintiff Gerawan Farming, Inc. ("Plaintiff" or "Gerawan") filed its initial brief; on April 26, 2013, Defendant Rehrig Pacific Company ("Defendant" or "Rehrig") filed its response; and on May 3, 2013, Plaintiff filed a final response. The Court has reviewed the parties' submissions and rules as follows.


A. Unfair Competition -- Common Law

Plaintiff avers that Defendant engaged in unfair competition in violation of California common 4 law by developing and selling the Second Generation Harvest Tote based on Plaintiff's Harvest Tote 5 design without Plaintiff's authorization and without paying Plaintiff royalties. (Doc. 23 ¶¶ 36-37.) In 6 its briefing, Plaintiff explains that this claim is grounded on a traditional theory of "passing off" goods. 7

(Doc. 23 ¶¶ 36-37.) 8

Unfair competition under California common law supports a claim premised on allegations of 9 passing off. See Bank of the West v. Superior Court, 2 Cal. 4th 1254, 1263 (1994) ("The common law tort of unfair competition is generally thought to be synonymous with the act of 'passing off'[.]"); see also Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137, 1153 (9th Cir. 2008). Passing off is the practice of selling one person's product or services under the name or mark of another. Lamonthe v. Atlantic Recording Corp., 847 F.2d 1403, 1406 (9th Cir. 1988). The harm embodied in passing off is the use of consumer deception to obtain the customers of others; the consumer is led to believe that he is purchasing goods or services originating or affiliated with one person or company when in fact they are not. Thus, a necessary ingredient to a claim of passing off is the likelihood of consumer confusion as to the source or affiliation of a product or service. See Toho Co. v. Sears, Roebuck & Co., 645 F.2d 788, 793 (9th Cir. 1981) ("California courts have construed the tort of passing off to require likelihood of consumer confusion as to source or sponsorship").

Plaintiff does appear to have evidence that could lead a trier of fact to conclude that there was a likelihood of consumer confusion as to Plaintiff's affiliation with the Second Generation Harvest Tote. Plaintiff has produced a memorandum written from one of its employees to another in which there is some indication that customers were aware of Plaintiff's affiliation and involvement with the Harvest Tote. (Doc. 162, Ex. V.) There is also evidence in the record showing that Defendant referred to and sold the Second Generation Harvest Tote under the name "Harvest Tote," a name created by Plaintiff. Taking this together, a jury might conclude that consumers were tricked into believing that the Second Generation Harvest Tote, like the original Harvest Tote, was affiliated with or sponsored by Plaintiff in some way. In the end, the record is simply too cloudy for the Court to enter summary judgment sua sponte in Defendant's favor at this time. See Thane International, Inc. v. Trek Bicycle Corp., 305 F.3d 2

894, 901-02 (9th Cir. 2002) ("[D]istrict courts should grant summary judgment motions regarding the 3 likelihood of confusion sparingly, as careful assessment of the pertinent facts that go into determining 4 likelihood of confusion usually requires a full record."). 5

Defendant argues, and on first impression it appeared to the Court, that any claim premised on

6 allegations of "passing off" was dismissed with prejudice in connection with Plaintiff's claim under 7 the Lanham Act. This is not true. Plaintiff's Lanham Act claim was based on allegations of "reverse 8 passing off" and the origin of the Harvest Tote and Second Generation Harvest Tote. Reverse passing 9 off occurs when the defendant takes another party's product, removes the party's mark, and sells the product under the defendant's own name or mark. See Lamonthe, 847 F.2d at 1406. Although reverse passing off and passing off share the same underlying concern -- the deception of consumers as to the source or sponsorship of a product -- the method in which consumer confusion is accomplished under reverse passing off is distinct from that of passing off. Therefore, the Court's dismissal of Plaintiff's allegations of reverse passing off and deception as to the origin of the Harvest Tote products did not necessary preclude all allegations of passing off in this case.

However, with that said, the Court acknowledges that Defendant may have been led to believe that passing off was not a viable legal theory in this case. In dismissing Plaintiff's Lanham Act claim with prejudice, the Court stated that amendment of the claim would be futile. This language could be taken to suggest that even if Plaintiff asserted a passing off-type theory of liability, it would fail. If this is Defendant's position, and Defendant represents that it is now unprepared to defend against this claim, the Court will entertain a motion (or stipulation)*fn1 to reopen discovery and ...

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