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AirWair Int'l Ltd. v. Schultz

United States District Court, N.D. California, San Jose Division

March 23, 2015

AIRWAIR INTERNATIONAL LTD., Plaintiff,
v.
MATTHEW K. SCHULTZ, et al., Defendants

For Airwair International Ltd., a company of the United Kingdom, Plaintiff, Counter-defendant: Marcy J. Bergman, Marcy Jill Bergman, Bryan Cave LLP, LEAD ATTORNEYS, Robert James Esposito, Stephanie Ann Blazewicz, San Francisco, CA.

For Matthew K. Schultz, an individual doing business as Calceus, Defendant: John Karl Buche, LEAD ATTORNEY, Buche & Associates, P.C., La Jolla, CA.

For NPS (Shoes) Ltd., a British limited company, Defendants, Counter-claimant: John Karl Buche, LEAD ATTORNEY, Buche & Associates, P.C., La Jolla, CA; Lindsay Dawn Molnar, Buche and Associates P.C., La Jolla, CA.

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS AND MOTION TO STRIKE

Re: Dkt. No. 52

LUCY H. KOH, United States District Judge.

Before the Court is a motion to dismiss counterclaims and to strike affirmative defenses filed by Plaintiff AirWair International Ltd. (" AirWair" ). ECF No. 52 (" Mot." ). AirWair moves to dismiss all of the counterclaims and to strike some of the affirmative defenses of Defendant NPS (Shoes) Ltd. (" NPS" ). See ECF No. 49 (" Aff. Def." or " Countercl." ). Pursuant to Civil Local Rule 7-1(b), the Court finds this matter appropriate for resolution without oral argument, and hereby VACATES the hearing scheduled for March 26, 2015, at 1:30 p.m. The case management conference, also scheduled for March 26, 2015, at 1:30 p.m, remains as scheduled. Having considered the parties' arguments and the applicable law, the Court GRANTS IN PART AND DENIES IN PART AirWair's motion, for the reasons stated below.

I. BACKGROUND

A. Factual Background

AirWair, a company based in the village of Wollaston, England, designs, manufactures, markets, and sells footwear under the Dr. Martens trademark. ECF No. 28 (" First Am. Compl." ) ¶ ¶ 1, 11. AirWair holds several registrations with the U.S. Patent and Trademark Office for the trade dress of Dr. Martens footwear, including: " the combination of yellow stitching in the welt area and a two-tone grooved sole edge" ( " '751 Mark" ); yellow " welt stitch located around the perimeter of footwear" (" '750 Mark" ); " the design of a sole edge including longitudinal ribbing, and a dark color band over a light color" (" '349 Mark" ); and " longitudinal ribbing and a dark color band over a light color on the outer sole edge, welt stitching, and a tab at the top back heel of footwear" (" '976 Mark" ) (collectively, " Marks" ). Id. ¶ 14. According to AirWair, these trademarks have been in use for 50 years, and have been used in the United States since 1984. Id.

NPS is a British Limited Company also located in Wollaston, England. NPS manufactures, advertises, distributes, and sells footwear under the Solovair brand. Id. ¶ 3. AirWair alleges that several of NPS's Solovair footwear products sold in the United States copy the trade dress of AirWair's Dr. Martens footwear and therefore infringe AirWair's Marks. Id. ¶ ¶ 6, 18--25.

B. Procedural Background

On March 3, 2013, AirWair filed a complaint against NPS and a second defendant, Matthew K. Schultz. ECF No. 1. AirWair alleged that Matthew K. Shultz (doing business under the name Calceus LLC) distributed NPS's infringing footwear in the United States. See id ¶ ¶ 4-5. On July 7, 2014, the Court approved a consent judgment between Plaintiff and defendant Matthew K. Schultz/Calceus.[1] ECF No. 20.

On July 18, 2014, NPS filed a motion to dismiss for lack of personal jurisdiction. ECF No. 23. In response, on July 29, 2014, Plaintiff filed a First Amended Complaint. See First Am. Compl. In its First Amended Complaint, AirWair alleges claims of trademark infringement, federal unfair competition and trademark dilution, all in violation of the Lanham Act; unfair competition under California Business & Professions Code § 17200, et seq.; common law unfair competition; and trademark dilution under California Business & Professions Code § 14330, et seq. Id. ¶ ¶ 49-74. AirWair seeks injunctive relief and monetary damages. Id. at 14-15.

On August 12, 2014, NPS filed a renewed motion to dismiss for lack of personal jurisdiction. ECF No. 30. On November 12, 2014, the Court denied NPS's motion to dismiss. ECF No. 45. NPS subsequently filed its Answer, including affirmative defenses and counterclaims, on November 26, 2014. ECF No. 49.

On December 17, 2014, AirWair filed the instant motion to dismiss and motion to strike. ECF No. 52. AirWair also concurrently filed a request for judicial notice. ECF No. 53. On December 31, 2014, NPS filed an opposition to AirWair's motion. ECF No. 55 (" Opp'n" ). On January 7, 2015, AirWair filed a reply in support of its motion. ECF No. 56 (" Reply" ).

II. LEGAL STANDARD

A. Motion to Dismiss

A motion to dismiss a counterclaim brought pursuant to Federal Rule of Civil Procedure 12(b)(6) is evaluated under the same standard as a motion to dismiss a plaintiff's complaint. See, e.g., Boon Rawd Trading Inter'l v. Paleewong Trading Co., 688 F.Supp.2d 940, 947 (N.D. Cal. 2010). Under Rule 12(b)(6), a pleading may be dismissed as a matter of law due to lack of a cognizable legal theory, or insufficient facts to support a cognizable legal claim. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984). A complaint must contain " a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). If a plaintiff fails to plead " enough facts to state a claim to relief that is plausible on its face," the complaint may be dismissed for failure to state a claim upon which relief may be granted. Bell A. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); Fed.R.Civ.P. 12(b)(6). " A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). " The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (internal quotation marks omitted). For purposes of ruling on a Rule 12(b)(6) motion, a court " accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). If a motion to dismiss is granted, a court should " freely" give leave to amend when justice so requires. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003); Fed.R.Civ.P. 15(a).

B. Motion to Strike

Federal Rule of Civil Procedure 8(b)(1) requires a party to " state in short and plain terms its defenses to each claim asserted against it." Rule 8(c) similarly requires that a party " affirmatively state any avoidance or affirmative defense." Rule 12(f) permits a court to " strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." A Rule 12(f) motion to strike serves " to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial." Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983); see also Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), rev'd on other grounds, 510 U.S. 517, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994). A defense may be stricken as insufficient if it fails to give plaintiff " fair notice" of the defense. Wyshak v. City Nat'l Bank, 607 F.2d 824, 827 (9th Cir. 1979); see generally Fed.R.Civ.P. 8. A court may also strike from an answer matter that is immaterial, i.e., " that which has no essential or important relationship to the claim for relief or the defenses being plead," or matter that is impertinent, i.e., that which does not pertain, and is not necessary, to the issues in question. Fantasy, 984 F.2d at 1527.

This Court, as well as the vast majority of district courts, has held that the heightened pleading standard for complaints articulated in Twombly and extended to all civil complaints in Iqbal applies to affirmative defenses. See Perez v. Gordon & Wong Law Group, P.C., No. 11-CV-03323-LHK, 2012 WL 1029425, at *8 (N.D. Cal. March 26, 2012) (collecting cases). " This standard 'serve[s] to weed out the boilerplate listing of affirmative defenses which is commonplace in most defendants' pleadings where many of the defenses alleged are irrelevant to the claims asserted.'" Id. (quoting Barnes v. AT& T Pension Benefit Plan-Nonbargained Program, 718 F.Supp.2d 1167, 1172 (N.D. Cal. 2010)). " This standard is also consistent with Iqbal 's admonition that fair notice pleading under Rule 8 is not intended to give parties free license to engage in unfounded fishing expeditions on matters for which they bear the burden of proof at trial." Id. (citing Iqbal, 556 U.S. at 678-79). Therefore, " [w]hile a defense need not include extensive factual allegations in order to give fair notice, bare statements reciting mere legal conclusions may not be sufficient." Id. (internal quotation marks omitted). In order to satisfy Rule 8, " a defendant's pleading of affirmative defenses must put a plaintiff on notice of the underlying factual bases of the defense." Id. at *8 (citing Dion v. Fulton Friedman & Gullace LLP, No. 11-2727 SC, 2012 WL 160221, at *2 (N.D. Cal. Jan.17, 2012)).

III. DISCUSSION

A. Judicial Notice

The Court first addresses AirWair's request for judicial notice. ECF No. 53. In general, a court may take judicial notice of matters that are either " generally known within the trial court's territorial jurisdiction" or " can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201(b). Matters which are appropriate subjects of judicial notice include " matters of public record." Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). Here, AirWair requests judicial notice of court records in other related federal cases. See ECF No. 53, at 5-6. These are matters of public record, and a court may take judicial notice of records or proceedings in other cases. See Holder v. Holder, 3 ...


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