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Parts.Com, LLC v. Yahoo! Inc.

United States District Court, S.D. California

June 9, 2014

PARTS.COM, LLC, Plaintiff,
v.
YAHOO! INC., Defendant.

ORDER: (1) GRANTING DEFENDANT'S REQUEST FOR JUDICIAL NOTICE; AND (2) DENYING DEFENDANT'S MOTION TO DISMISS (ECF NO. 24)

JANIS L. SAMMARTINO, District Judge.

Presently before the Court is Defendant Yahoo! Inc.'s ("Yahoo" or "Defendant") Motion to Dismiss ("MTD"). (ECF No. 24.) Also before the Court are Plaintiff Parts.com, LLC's ("Parts.com" or "Plaintiff") Opposition to (ECF No. 25) and Yahoo's Reply in Support of (ECF No. 28) the MTD, as well as Yahoo's Request for Judicial Notice ("RJN") (ECF No. 24-2). The Court vacated the hearing set for February13, 2014 and took the matter under submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). (ECF No. 30.) Having considered the parties' arguments and the law, the Court GRANTS Yahoo's RJN and DENIES Yahoo's MTD.

BACKGROUND

The Court's December 4, 2013 Order provides a thorough summary of the factual and procedural background of this case. ( See Order 1-2, ECF No. 18.) This Order incorporates by reference the background as set forth therein.

On December 18, 2013, Parts.com filed a First Amended Complaint ("FAC") alleging two claims: federal trademark infringement and dilution. (ECF No. 19.) The FAC both adds to and subtracts from Parts.com's original allegations.

Parts.com adds a timeline of its publicity efforts and expenditures. In 1998, the company went public and raised $8 million. (FAC ¶ 8, ECF No. 19.) On January 23, 2000, the parts.com website went live, and Parts.com claims to have since "expended hundreds of thousands of dollars and thousands of hours" promoting the goodwill and brand recognition of the Parts.com mark. ( Id. ¶¶ 8-9.) In the year 2000, Parts.com placed full-page advertisements in a "prominent automotive industry trade publication" circulated to between 40, 000 and 100, 000 people. ( Id. ¶ 10.) That same year, it spent several hundred thousand dollars sponsoring a "prominent NASCAR driver" and hiring employees to help promote the company at NASCAR events. ( Id. ) From November 2010 to November 2011, Parts.com spent $600, 000 on advertising spots with Time Warner Cable, reaching over 24 million homes nationwide. ( Id. ¶ 12.) And most recently, in 2013, Parts.com sponsored Superboat Extreme National Championships, a company that hosts multiple national boat races per year. ( Id. )

Parts.com alleges that its damages are premised at least in part on AutoNation's decision not to renew a multi-million-dollar contract as Parts.com's exclusive distributor, purportedly because of the decline in Parts.com's sales caused by Yahoo's alleged infringement. ( Id. ¶ 11.)

Parts.com also details the company's growth. From 2001 to the present, Parts.com went from having 2, 000 dealership customers representing 34 vehicles lines to 6, 500 dealerships representing 45 vehicle lines. ( Id. ¶ 10.) The website grew from "just a few thousand customers and only a few hundred thousand dollars in revenues" in 2007 to "tens of thousands of customers and over $5 million in annual revenue." ( Id. ¶ 14.) The website also went from having "nominal site traffic" to "hundreds of thousands of page views and tens of thousands of unique site visitors every month." ( Id. )

One notable omission from the original Complaint is Parts.com's allegation that Yahoo has been infringing the Parts.com mark "from 2007 to the present." (Compl. ¶ 18, ECF No. 1.) In its Opposition, Parts.com explains that the 2007 reference was accidentally copied from a complaint in a different action, and that it will not know exactly when infringement began until discovery is conducted.[1] (Opp'n 5, ECF No. 25.)

Yahoo filed the present MTD on January 10, 2014.

REQUEST FOR JUDICIAL NOTICE

Federal Rule of Evidence 201 provides that "[t]he court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." "Judicially noticed facts often consist of matters of public record." Botelho v. U.S. Bank, N.A., 692 F.Supp.2d 1174, 1178 (N.D. Cal. 2010) (citations omitted); see also W. Fed. Sav. & Loan Ass'n v. Heflin Corp., 797 F.Supp. 790, 792 (N.D. Cal. 1992). While "a court may take judicial notice of the existence of matters of public record, such as a prior order or decision, " it should not take notice of "the truth of the facts cited therein." Marsh v. Cnty. of San Diego, 432 F.Supp.2d 1035, 1043 (S.D. Cal. 2006).

Yahoo asks the Court to judicially notice the following two (2) documents, both filed in the present action: (1) Parts.com's Complaint, filed on May 6, 2013 (ECF No. 1); and (2) Parts.com's Opposition to Yahoo! Inc.'s Motion to Dismiss the Complaint, filed on August 15, 2013 (ECF No. 14). ( See RJN, ECF No. 24-2.) Both of these documents are available to the public and are certified and maintained by an official office. Their accuracy cannot therefore be reasonably disputed. Accordingly, the Court GRANTS Yahoo's RJN as to both documents.

MOTION TO DISMISS

I. Legal Standard

Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that the complaint "fail[s] to state a claim upon which relief can be granted, " generally referred to as a motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." Although Rule 8 "does not require detailed factual allegations, '... it [does] demand[] more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, "a plaintiff's obligation to provide the grounds' of his entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). "Nor does a complaint suffice if it tenders naked assertion[s]' devoid of further factual enhancement.'" Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 557).

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U.S. at 570); see also Fed.R.Civ.P. 12(b)(6). A claim is facially plausible when the facts pled "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). That is not to say that the claim must be probable, but there must be "more than a sheer possibility that a defendant has acted unlawfully." Id. Facts "merely consistent with' a defendant's liability" fall short of a plausible entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557). Further, the Court need not accept as true "legal conclusions" contained in the complaint. Id. This review requires context-specific analysis involving the Court's "judicial experience and common sense." Id. at 679 (citation omitted). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not show[n]'-that the pleader is entitled to relief.'" Id.

Where a motion to dismiss is granted, "leave to amend should be granted unless the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency.'" DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th ...


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