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Apple Hill Growers v. El Dorado Orchards

United States District Court, E.D. California

November 6, 2019

EL DORADO ORCHARDS, et al., Defendants.


          Troy L. Nunley, United States District Judge

         This matter is before the Court pursuant to Defendants El Dorado Orchards, Mason Visman, Brad Visman, and Kandi Visman's (collectively, “Defendants”) Motion to Dismiss and Motion for Summary Judgment. (ECF No. 5.) Plaintiff Apple Hill Growers (“Plaintiff”) filed an opposition. (ECF No. 6.) For the reasons set forth below, Defendants' Motion to Dismiss is hereby GRANTED in part and DENIED in part, and Defendants' Motion for Summary Judgment is hereby DENIED. (ECF No. 5.)

         I. Factual and Procedural Background

         Plaintiff, a California corporation, licenses the sale and provision of APPLE HILL brand goods and services through its duly licensed and authorized members/growers. (ECF No. 1 at 2.) Plaintiff alleges the public first became exposed to the APPLE HILL Trademark and Service Mark in 1964. (ECF No. 1 at 4.)

         Plaintiff alleges that Defendants Brad Visman and Kandi Visman are corporate officers of Defendant El Dorado Orchards (“EDO”). (ECF No. 1 at 2.) Plaintiff further alleges that Defendants EDO, Brad Visman, and Kandi Visman were members/growers of Plaintiff until 2013, when a dispute arose between Plaintiff and Defendants regarding Defendants' improper use of the APPLE HILL mark, lack of loyalty to Plaintiff, and conflicts of interest. (ECF No. 1 at 6.) Plaintiff revoked Defendants' membership and license to the APPLE HILL mark in early 2014. (ECF No. 1 at 6.)

         Plaintiff alleges Defendants violated federal and state trademark infringement and unfair competition law. (ECF No. 1 at 10-14.) For example, in March of 2014, Plaintiff alleges that Defendant Mason Visman created the internet domain and additional domains associated with, all of which he still owns and operates. (ECF No. 1 at 2-3.) Plaintiff further alleges that Defendant Mason Visman makes unauthorized use of the APPLE HILL mark in his websites and corresponding mobile applications. (ECF No. 1 at 2-8.) Plaintiff also alleges that Defendants Brad Visman, Kandi Visman, and EDO sell goods marked with the term “Apple Hill Family Farm” in violation with Plaintiff's principal register on the term. (ECF No. 1 at 8-9.)

         Finally, Plaintiff alleges Defendants improperly used the APPLE HILL mark in coordination with Defendants' “Twin Apple” logo. (ECF No. 1 at 8.) Plaintiff specifically alleges that in 2017, a large billboard displayed the “Twin Apple” logo next to an APPLE HILL mark. (ECF No. 1 at 8.) Plaintiff alleges similar placement of the two parties' marks on Defendant Mason Visman's websites and online applications. (ECF No. 1 at 8.)

         On October 9, 2017, Plaintiff filed suit against Defendants, alleging five causes of action: (1) trademark infringement under 15 U.S.C. § 1114 against all Defendants; (2) trademark infringement and false designation of origin under 15 U.S.C. § 1125(a) against all Defendants; (3) violation of the Lanham Act's Anti-Cybersquatting Consumer Protection Act (15 U.S.C. § 1125(d)) against Defendant Mason Visman; (4) violation of California Unfair Competition Law (“UCL”) under California Business & Professions Code sections 17200, 17500 et seq. against all Defendants; and (5) violation of California common law unfair competition against all Defendants. (ECF No. 1 at 10-14.)

         II. Analysis

         Defendants first argue the Court should dismiss various claims pursuant to Rule 12(b)(6). (ECF No. 5-1 at 5-11.) Defendants then move for summary judgment as to Plaintiff's fourth and fifth claims based on the statute of limitations. (ECF No. 5-1 at 11-12.) The Court will address each motion in turn.

         A. Motion to Dismiss

         Defendants present three grounds for dismissal, which the Court will address separately. First, Defendants move the Court to dismiss Brad Visman and Kandi Visman as individual Defendants. (ECF No. 5-1 at 5-6.) Second, Defendants move the Court to dismiss the first, second, fourth, and fifth claims against Defendant Mason Visman. (ECF No. 5-1 at 6-11.) Third, Defendants move the Court to dismiss the first, second, fourth, and fifth claims against Defendants El Dorado Orchards, Brad Visman, and Kandi Visman to the extent they are based on the “Twin Apple” logo. (ECF No. 5-1 at 11.)

         i. Standard of Law

         A 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). Federal Rule of Civil Procedure 8(a) requires that a pleading contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). Under notice pleading in federal court, the complaint must “give the defendant fair notice of what the claim . . . is and the grounds upon which it rests.” Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). “This simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002).

         On a motion to dismiss, the factual allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322 (1972). A court is bound to give plaintiff the benefit of every reasonable inference to be drawn from the “well-pleaded” allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). A plaintiff need not allege “‘specific facts' beyond those necessary to state his claim and the grounds showing entitlement to relief.” Twombly, 550 U.S. at 570. “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.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. 544, 556 (2007)).

         Nevertheless, a court “need not assume the truth of legal conclusions cast in the form of factual allegations.” United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, “it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678. A pleading is insufficient if it offers mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555; see also Iqbal, 556 U.S. at 678 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”). Moreover, it is inappropriate to assume that the plaintiff “can prove facts that it has not alleged or that the Defendants have violated the . . . laws in ways that have not been alleged.” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).

         Ultimately, a court may not dismiss a complaint in which the plaintiff has alleged “enough facts to state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 697 (quoting Twombly, 550 U.S. at 570). Only where a plaintiff has failed to “nudge[] [his or her] claims . . . across the line from conceivable to plausible, ” is the complaint properly dismissed. Id. at 680. While the plausibility requirement is not akin to a probability requirement, it demands more than “a sheer possibility that a defendant has acted unlawfully.” Id. at 678. This plausibility inquiry is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679.

         If a complaint fails to state a plausible claim, “[a] district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (en banc) (quoting Doe v. United States, 58 F.3d 484, 497 (9th Cir. 1995)); see also Gardner v. Marino, 563 F.3d 981, 990 (9th Cir. 2009) (finding no abuse of discretion in denying leave to amend when amendment would be futile). Although a district court should freely give leave to amend when justice so requires under Rule 15(a)(2), “the court's discretion to deny such leave is ‘particularly broad' where the plaintiff has previously amended its complaint.” Ecological Rights Found. v. Pac. Gas & Elec. Co., 713 F.3d 502, 520 (9th Cir. 2013) (quoting Miller v. Yokohama Tire Corp., 358 F.3d 616, 622 (9th Cir. 2004)).

         ii. Motion to Dismiss Defendants Brad Visman and Kandi Visman

         Plaintiff sues Defendants Brad Visman and Kandi Visman in their individual capacities as corporate officers of EDO and co-owners of Boa Vista Wines and Boa Vista Vineyards. (ECF No. 1 at 2.) Defendants move to dismiss Brad Visman and Kandi Visman, arguing Plaintiff fails to demonstrate they were personally involved in the allegedly infringing conduct or knowingly and substantially participated in such conduct. (ECF No. 5-1 at 6.)

         In opposition, Plaintiff notes that it alleges Defendant EDO does business under the fictitious business names of Boa Vista Orchards and Boa Vista Winery, as well as the fact that Brad Visman and Kandi Visman jointly own these fictitious business names. (ECF No. 6 at 7.) Based on their joint ownership of the fictitious business names and their corporate roles for Defendant EDO, Plaintiff contends that it is “reasonable to infer” Defendants have ...

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