United States District Court, N.D. California
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS’ MOTION TO DISMISS RE: DKT. NO. 33
NATHANAEL M. COUSINS United States Magistrate Judge.
move to dismiss Petersen-Dean’s Lanham Act claims, RICO
claims, and all claims against Wendi Zubillaga. Petersen-Dean
alleges that defendants copied, retained, and are currently
using material from Petersen-Dean’s corporate hard
drives, and that this material is protected by copyright and
trademark laws. Defendants are former employees of
Petersen-Dean who have formed a competing business. The
defendants’ motion to dismiss is GRANTED in part and
DENIED in part.
2009, Petersen-Dean purchased Old Country Roofing and Solar
(“OCR”), from defendant, Dieter Folk. Dkt. No. 1,
Complaint ¶ 16. Petersen-Dean alleges that Dieter Folk
established a sole proprietorship called JAJ Roofing in 1992
or earlier, which was the registered owner of a California
contractor’s license. Compl. ¶ 17. JAJ Roofing was
the supervising contractor for OCR’s jobs. Compl.
¶ 17. The purchase agreement between OCR and
Petersen-Dean includes the sale of all of OCR’s assets,
including trade secrets, Case No. 15-cv-05522-NC trademarks,
copyrights and intellectual property. Compl. ¶ 16.
However, it does not explicitly refer to JAJ Roofing name.
Keegan Decl. at ¶ 4, Exh. B.
Dieter Folk, Jeffrey Maxfield and Bryce Robicheau were OCR
employees, and they joined Petersen-Dean after the sale.
Compl. ¶ 18. Dieter Folk signed an initial five-year
term employment contract with Petersen-Dean running through
January 15, 2014. Compl. ¶ 18. The employment agreement
contained a non-competition clause valid until January 15,
2014, and a non-disclosure clause, which barred Folk from
disclosing Petersen-Dean’s confidential information
until January 15, 2019 (five years after the employment
period ended). Compl. ¶ 20. Petersen-Dean and Folk
entered into an extension of Folk’s employment
agreement in December 2013, for another five years. Compl.
alleges that in January 2015, defendants began contacting
Petersen-Dean’s employees, customer, vendors, and other
contacts and conveyed incorrect statements about
Petersen-Dean’s financial status. Compl. ¶ 22. On
April 9, 2015, Petersen-Dean terminated Wendi
Zubillaga’s employment. Compl. ¶ 7. From April 9,
2015, to June 1, 2015, defendants each resigned from
Petersen-Dean. Compl. ¶ 23. On May 7, 2015, JAJ Roofing
Inc. was registered with the California Secretary of State.
Compl. ¶ 24.
alleges that defendants took a large amount of copyrighted
material in both electronic and hard copy formats and some
electronic hardware before they resigned. Compl. ¶ 25.
Citadel, the name defendants’ new business operates
under, used the JAJ Roofing sole proprietorship’s
contractor’s license number on its commercial
advertisement. Compl. ¶ 59. Petersen-Dean alleges that
Citadel misled potential customers, and built up its
competing business through use of Petersen-Dean’s
trademark and copyrighted materials. Compl. ¶¶ 40,
December 2, 2015, Petersen-Dean filed this lawsuit alleging a
variety of claims against Citadel and individual defendants
Folk, Maxfield, Robicheau, and Zubillaga. The complaint
includes six causes of actions: (1) willful copyright
infringement; (2) contributory copyright infringement; (3)
Computer Fraud and Abuse Act (“CFAA”) violation,
18 U.S.C. §1030; (4) Lanham Act § 43(a), 15 U.S.C.
§ 1125(a) Violations; (5) aiding and abetting federal
law violations; and (6) Racketeer Influenced and Corrupt
Organization Act (“RICO”), 18 U.S.C. § 1962
(c). Prior to this lawsuit, the parties were engaged in a
parallel state action in Alameda County Superior Court.
Compl. ¶ 28. On December 15, 2015, defendants moved to
dismiss Petersen-Dean’s Lanham Act claims, RICO claims,
and all claims against individual defendant Wendi Zubillaga.
Dkt. No. 33.
parties have consented to the jurisdiction of a magistrate
judge. Dkt. No. 20, 13.
motion to dismiss for failure to state a claim under Rule
12(b)(6) tests the legal sufficiency of a complaint.
Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001).
On a motion to dismiss, all allegations of material fact are
taken as true and construed in the light most favorable to
the non-movant. Cahill v. Liberty Mut. Ins. Co., 80
F.3d 336, 337-38 (9th Cir. 1996). The Court, however, need
not accept as true “allegations that are merely
conclusory, unwarranted deductions of fact, or unreasonable
inferences.” In re Gilead Scis. Secs. Litig.,
536 F.3d 1049, 1055 (9th Cir. 2008).
a complaint need not allege detailed factual allegations, it
must contain sufficient factual matter, accepted as true, to
“state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007). A claim is facially plausible when it
“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 (2009).
court grants a motion to dismiss, leave to amend should be
granted unless the pleading could not possibly be cured by
the allegation of other facts. Lopez v. Smith, 203
F.3d 1122, 1127 (9th Cir. 2000).
move to dismiss Petersen-Dean’s (A) Lanham Act claim;
(B) RICO claim; and (C) claims against defendant Wendi
Zubillaga. The Court will address each in turn.
Lanham Act Claims
allege trademark infringement, Petersen-Dean must allege: (1)
that it has a valid, protectable trademark, and (2) that
defendant’s use of the mark is likely to cause
confusion. Applied Info. Scis. Corp. v. eBay, Inc., 511
F.3d 966, 969 (9th Cir. 2007). Defendants argue (1) that
JAJ Roofing cannot be a valid trademark because it contains
personal marks; (2) JAJ Roofing was ...