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Gajo v. Chicago Brand

United States District Court, N.D. California

June 8, 2017

ALDEN GAJO, Plaintiff,
v.
CHICAGO BRAND, et al., Defendants.

          ORDER GRANTING DEFENDANTS' MOTION TO DISMISS DOCKET NO. 13

          EDWARD M. CHEN United States District Judge

         Plaintiff Alden Gajo, proceeding pro se, has filed suit against Defendants Chicago Brand, Eva Stone, and Holly Snyder (erroneously sued as “Holly Smith”), asserting claims for, inter alia, breach of contract and violation of various intellectual property rights (e.g., copyright, trademark, and patent). Currently pending before the Court is Defendants' 12(b)(6) motion to dismiss. At a hearing held on June 1, 2017, the Court GRANTED the motion. This order memorializes the rulings made by the Court at that hearing and provides additional analysis, as necessary.

         I. DISCUSSION

         A. False Advertising

         Mr. Gajo has asserted a claim for dissemination of false advertising pursuant to 15 U.S.C. § 52. Section 52 is part of the Federal Trade Commission Act (“FTCA”). Courts have held that consumers and members of the public at large may not maintain a private action to enforce the FTCA. See, e.g., Dreisbach v. Murphy, 658 F.2d 720, 730 (9th Cir. 1981) (stating that “private litigants may not invoke the jurisdiction of the federal district courts by alleging that defendants engaged in business practices proscribed by” 15 U.S.C. § 45(a)(1); “[t]he Act rests initial remedial power solely in the Federal Trade Commission”); Holloway v. Bristol-Myers Corp., 485 F.2d 986, 987 (D.C. Cir. 1973) (“hold[ing] that private actions to vindicate rights asserted under the Federal Trade Commission Act may not be maintained”); Kerr v. Am. Home Mortg. Serv'g, Inc., No. 10-cv-1612 BEN (AJB), 2010 U.S. Dist. LEXIS 100076, at *7 (S.D. Cal. Sep. 22, 2010) (stating that “[i]t is well-established that there is no private right of action for violation of the FTCA; only the Federal Trade Commission has standing to enforce it”). Accordingly, the Court dismisses the claim for false advertising, and with prejudice. Mr. Gajo shall not reassert this claim in any future pleading.

         B. Trafficking of Counterfeit Goods

         Mr. Gajo has also asserted a claim for trafficking of counterfeit goods. See 18 U.S.C. § 2320. As Defendants note, § 2320 is a criminal statute, and criminal statutes generally do not provide a private cause of action. See Kraft v. Old Castle Precast, Inc., No. LA CV 15-00701-VBF1, 2015 U.S. Dist. LEXIS 103440, at *4 (C.D. Cal. Aug. 5, 2015). See, e.g., Cannon v. Univ. of Chicago, 441 U.S. 677, 690 (1979) (noting that “[t]he language in these statutes - which expressly identifies the class Congress intended to benefit - contrasts sharply with statutory language customarily found in criminal statutes”); Cent. Bank, N.A. v. First Interst. Bank, N.A., 511 U.S. 164, 190 (1994) (stating that “[w]e have been quite reluctant to infer a private right of action from a criminal prohibition alone”; adding that “we have not suggested that a private right of action exists for all injuries caused by violations of criminal prohibitions”); Alexander v. Sandoval, 532 U.S. 275, 289 (2001) (noting that “[s]tatutes that focus on the person regulated rather than the individuals protected create 'no implication of an intent to confer rights on a particular class of persons'”). Moreover, in his opposition brief, Mr. Gajo essentially concedes that the cause of action should be dismissed. See Opp'n at 10 (“Plaintiff[] realizes that the Complaint of Trafficking of Counterfeit Goods is a more serious criminal offense beyond the jurisdiction of this civil Court[;] a separate Complaint to the Federal Trade Commission shall be filed for investigation and possible prosecution.”). The Court therefore dismisses the claim for counterfeit trafficking, and with prejudice. Mr. Gajo shall not reassert the claim in any future pleading.

         C. Breach of Contract

         The main claim asserted by Mr. Gajo is that for breach of contract. Because Mr. Gajo's complaint was somewhat confusing with respect to this cause of action, the Court asked Mr. Gajo, at the hearing, to clarify the factual allegations supporting his breach-of-contract claim. In response, Mr. Gajo articulated a breach-of-contract theory that was not pled (at least not clearly) in the complaint. That is, Mr. Gajo asserted that Defendants breached the contract in two ways: (1) because Defendants used K. Fung as the manufacturer for the Alden wrench (instead of finding a new manufacturer)[1] and (2) because (regardless of the manufacturer) Defendants failed to pay royalties on their sales of the Alden wrench.

         Because this breach-of-contract theory was not pled in the original complaint, the Court shall, in the interest of efficiency, dismiss the breach-of-contract claim as currently pled and allow Mr. Gajo to amend the claim so as to make factual allegations consistent with the representations above. In so ruling, the Court does not opine as to whether any amended claim would be subject to, e.g., a statute-of-limitations defense or would otherwise be viable.

         D. Copyright Infringement

         Mr. Gajo has asserted various claims for infringement of intellectual property, including a claim for copyright infringement and a related claim for vicarious infringement. Defendants' motion to dismiss the copyright claims is granted because it is not clear what the copyrighted works are in the first instance and whether they have been registered. The complaint refers generally to photos of the wrench and product descriptions, but both references are vague. To the extent Mr. Gajo has tried to cure that deficiency by submitting a declaration, see Gajo Decl. ¶ 4 & Ex. D (providing a copy “of a violated creative work by [Mr. Gajo]” - “Sample 1 is the original packaging and instructions created by [Mr. Gajo] for A&S” and “Sample 2 is . . . a photograph taken by [Mr. Gajo]”), he cannot do so for purposes of a 12(b)(6) proceeding. See In re Bare Escentuals, Inc. Sec. Litig., 745 F.Supp.2d 1052, 1065 (N.D. Cal. 2010) (stating that, “when resolving a motion to dismiss for failure to state a claim, the court may not generally consider materials outside the pleadings”). Moreover, even if those specific works were named in an amended complaint, Mr. Gajo would still have to plead registration of the works. See Epikhin v. Game Insight N. Am., 145 F.Supp.3d 896, 902 (N.D. Cal. 2015) (noting that, under 17 U.S.C. § 411(a), “'no civil action for infringement of the copyright in any United States work shall be instituted until registration of the copyright claim has been made'”; adding that, “[a]lthough the registration requirement is not jurisdictional, it is a 'precondition to suit'”). Mr. Gajo's suggestion that he is relieved from the registration requirement by virtue of the Berne Act lacks merit.

In 1989, the United States agreed to the Berne Convention, an international copyright treaty that, among other things, prohibits signatories from imposing copyright formalities as a condition to the protection of works of nationals of other member countries. "To meet obligations necessary to adhere to the Convention, the United States eliminated many of the formalities for foreign works, including the registration requirement of § 411(a)."

Crunchyroll, Inc. v. Admiral, No. 11-cv-02334-JCS, 2014 U.S. Dist. LEXIS 47033, at *38 (N.D. Cal. Feb. 10, 2014) (emphasis added); see also Cosmetic Ideas, Inc. v. IAC/InteractiveCorp,606 F.3d 612, 619 n.12 (9th Cir. 2010) (stating that, “[a]s a result of the Berne Convention's mandate that foreign works not be subject to formalities, § 411's pre-suit registration requirement does not apply to non-U.S. works”). There is no ...


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