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Goldline, LLC v. Regal Assets, LLC

United States District Court, C.D. California

April 21, 2015

GOLDLINE, LLC, Plaintiff,


DEAN D. PREGERSON, District Judge.

I. Introduction

Goldline, LLC ("Plaintiff") filed a complaint against Regal Assets, LLC ("Regal"), seven named individuals, [1] and doe defendants whose identities have not yet been determined (inclusively, "Affiliate Defendants"). Plaintiff's First Amended Complaint ("FAC") alleges claims against Regal and Affiliate Defendants (collectively, "Defendants") for (1)Trademark Infringement (15 U.S.C. §1125(a)); (2) False Designation of Origin and Unfair Competition (15 U.S.C. §1125(a)); (3) False Advertising (Lanham Act §43(a)(1)(B)); (4) False Advertising in Violation of Cal. Bus. & Prof. Code § 17500; (5) Unfair Competition in Violation of Cal. Bus. & Prof. Code §17200; (6) Common Law Trademark Infringement; (7) Statutory Dilution under Cal. Bus. & Prof. Code §14247;(8) Common Law Unfair Competition;(9) RICO (18 U.S.C. §1962(c)); (10) RICO (18 U.S.C. 1962(a)); (11) Common Law Trade Libel/Commercial Disparagement; and (12) Civil Conspiracy.

Plaintiff alleges that it is the owner of the GOLDLINE and other related registered trademarks.[2] Plaintiff's claims arise out of Regal's promotion of products and services through its "affiliates program." According to the FAC, the program induces Affiliate Defendants to infringe Plaintiff's trademarks; fraudulently disparage Plaintiff and its products and services; and deceptively endorse Regal's products and services.

On July 3, 2014, Regal filed the present Motion to Dismiss Plaintiff's FAC. Pursuant to Federal Rule of Civil Procedure 12(b)(6), Regal challenges all claims set forth in the complaint. For the following reasons, the court grants the motion in part, denies in part, and adopts the following Order.

II. Factual Background

The following facts are alleged in the FAC.

Plaintiff is an interstate dealer of precious metals and numismatic products in the United States. Since 1974, Plaintiff has operated its business under the GOLDLINE and related marks (collectively, "GOLDLINE Marks"). From 1976 through 2011, Plaintiff obtained trademark registrations for these marks. Plaintiff uses the GOLDLINE Marks extensively and prominently in websites, television, print advertising, YouTube video commercials, and word of mouth.

Regal is also an interstate dealer of precious metals and numismatic products, who offers and sells competing products and services. In addition to its website, Regal promotes its products and services through its "affiliates program." Through this program, Regal pays commissions to third parties, including Affiliate Defendants, to operate websites that bear no apparent connection to Regal. According to Plaintiff, Defendants purchase advertising keywords that include the GOLDLINE Marks so their websites will appear when search terms intended for Plaintiff are entered in the search engine. Many of the search results are not identified as ads. The purpose of the affiliates' websites is to divert customers away from Plaintiff and other competitors, toward Regal. To that end, Regal prepares for its affiliates' use, scripts and website materials that purportedly offer objective, independent evaluations and facts related to precious metal dealers. These materials allegedly infringe on the GOLDLINE Marks. The materials also allegedly offer endorsements for Regal; false information and statements about the independent and unbiased views of the reviewer; and false and disparaging information about Plaintiff, including customer complaints, pending litigation, and poor consumer and industry ratings.

On April 29, Plaintiff sent a cease and desist letter to Regal. Regal has refused to remove or correct the websites, or require the Affiliate Defendants to do so.

Plaintiff alleges that, as a result of Defendants' conduct, Plaintiff has suffered, and continues to suffer, damage to its business, reputation, and goodwill. Plaintiff also alleges loss of sales and profits due to Defendants' wrongful acts. By way of its complaint, Plaintiff seeks declaratory judgment; injunctive relief; compensatory and punitive damages; interest; and attorneys fees and costs.

III. Legal Standard

A party may move to dismiss for failure to state a claim upon which relief can be granted under Federal Rule of Civil Procedure ("Rule") 12(b)(6). In deciding a Rule 12(b)(6) motion, the court must assume allegations in the challenged complaint are true, and construe the complaint in the light most favorable to the non-moving party. Cahill v. Liberty Mut. Ins. Co. , 80 F.3d 336, 337-38 (9th Cir. 1996). The court shall not consider facts outside the complaint. Arpin v. Santa Clara Valley Transp. Agency , 261 F.3d 912, 925 (9th Cir. 2001). Dismissal is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. Mendiondo v. Centinela Hosp. Med. Ctr. , 521 F.3d 1097, 1104 (9th Cir. 2008). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, ... a plaintiff's obligation to provide the grounds' of his entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. ...

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