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Motwani v. Wet Willies Management Corp.

United States District Court, E.D. Louisiana

August 2, 2017

AARON MOTWANI
v.
WET WILLIES MANAGEMENT CORP.

         SECTION "B"(5)

          ORDER AND REASONS

         Before the Court is “Defendant Wet Willie's Management Corp.'s Motion to Dismiss Claims IV, V & VI of the First Amended Complaint.” Rec. Doc. 12. Plaintiff timely filed an opposition memorandum. Rec. Doc. 16. Defendant then requested, and was granted, leave to file a reply memorandum. Rec. Doc. 24. For the reasons outlined below, IT IS ORDERED that the motion to dismiss (Rec. Doc. 12) is DENIED.

         I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         This case arises out of Aaron Motwani's (“Plaintiff”) operation of six restaurants known as “WILLIE'S CHICKEN SHACK.” Rec. Doc. 1 at ¶¶ 13-15. He alleges that he owns the common law marks “WILLIE'S CHICKEN SHACK” (the word mark) and “WILLIE'S CHICKEN SHACK DAIQUIRIS COLD BEER” (the design mark). Id. at ¶¶ 17-19. On July 22, 2016, he filed two federal applications to register these marks and these applications are currently pending in the United States Patent and Trademark Office (“USPTO”). Id. at ¶¶ 21-23. Examining Attorney Matthew C. Kline searched for prior registrations containing similar terms and, on November 2, 2016, stated that he had “found no conflicting marks that would bar registration” of either mark. Id. at ¶¶ 28, 30-31, 36. On December 7, 2016, after determining that the marks were distinctive and not likely to be confused with any pre-existing registration, the USPTO issued notices of publication as to both marks, recognizing that they appeared to be entitled to registration. Id. at ¶¶ 32-35, 38-40. On December 27, 2016, Plaintiff's applications were published in the Trademark Official Gazette. Id. at ¶ 41.

         Wet Willie's Management Corp. (“Defendant”) previously registered several marks, including “WET WILLIE'S A BAR A PARTY AN INSTITUTION” (Defendant's design mark), “WEAK WILLIE” (Defendant's word mark for a frozen non-alcoholic daiquiri-flavored drink), “WET WILLIE'S” (Defendant's word mark), “NAKED WILLIE” (Defendant's word mark for a frozen alcoholic daiquiri drink). Rec. Doc. 1 at ¶¶ 42-46. Defendant “is in the business of licensing these marks to franchisees for use in connection with operating daiquiri shops throughout the United States.” Id. at ¶ 48.

         On January 27, 2017, Plaintiff's counsel received a demand letter from Defendant's counsel accusing Plaintiff of infringing on Defendant's marks by using the terms “WILLIE” and “WILLIE'S” in connection with restaurants that specialize in frozen daiquiris. Rec. Doc. 1 at ¶¶ 49-50. Defendant insisted that Plaintiff file an express abandonment of the marks, cease and desist from further use of the marks, cancel any corporate name registrations, abandon any domain name registrations, and execute a written agreement not to use or register any similar trademarks, corporate names, or domain names. Id. at ¶¶ 74-79. Defendant also filed a notice of opposition with the USPTO to the registration of Plaintiff's marks, arguing that the marks are likely to lead to confusion or otherwise dilute its marks pursuant to 15 U.S.C. §§ 1052(d), 1125(c). Id. at ¶¶ 54-58.

         Consequently, on March 10, 2017, Plaintiff filed the instant suit pursuant to the Declaratory Judgment Act (28 U.S.C. §§ 2201(a), 2202) seeking a declaratory judgment of trademark non-infringement, non-dilution, and unenforceability under the federal Lanham Act (15 U.S.C. § 1051). Rec. Doc. 1 at ¶ 1. Plaintiff alleges that the term “WILLIE'S” is commonly used in connection with the operation of bars and/or restaurants and that the USPTO nevertheless registers the use of marks containing the terms “WILLIE, ” “WILLY, ” and/or “WILLEY.” Id. at ¶¶ 59-60. He further argues that his marks are sufficiently dissimilar from Defendant's marks and that the services provided under these marks are not likely to cause confusion. Id. at ¶¶ 65-68. Finally, Plaintiff alleges that Defendant's marks are not famous, such that Plaintiff's marks cannot “dilute” them. Id. at ¶¶ 69-70. Based on these allegations, Plaintiff asserted that he is entitled to a declaratory judgment of (1) trademark non-infringement under 15 U.S.C. § 1114 (Rec. Docs. 1 at ¶¶ 89-93; 7 at ¶¶ 132-36) and (2) non-dilution under 15 U.S.C. § 1125(c) (Rec. Docs. 1 at ¶¶ 94-98; 7 at ¶¶ 137-41).

         On May 10, 2017, Plaintiff filed an amended complaint to add claims for a permanent injunction and damages in accordance with Federal Rule of Civil Procedure 15(a)(1)(A). Rec. Doc. 7 at 1.[1] He specifically alleged that the demand letter “effectively demanded Plaintiff cease the development and operation of his . . . restaurants throughout New Orleans, Louisiana, that specialize in the service of fried chicken and include a full-service bar” and that these demands were made in bad faith to discourage competition as Defendant attempts to enter the New Orleans market. Id. at ¶¶ 95, 97-105. Due to Defendant's opposition, Plaintiff claims that he has suffered anti-competitive harm, as evidenced by an email in which an unknown party states that they cannot move forward with franchising opportunities until the trademark dispute is resolved. Id. at ¶¶ 108-28. Based on these allegations, Plaintiff added the following claims in his amended complaint: (3) a declaratory judgment of non-violation of unfair competition statutes, including 15 U.S.C. § 1125(a) (id. at ¶¶ 142-46); (4) an injunction, damages, attorney fees, and costs to address Defendant's anti-competition actions under the Sherman Act, 15 U.S.C. § 2, and Clayton Act, 15 U.S.C. § 15 (id. at ¶¶ 147-51); (5) an injunction, damages, attorney fees, and costs to address Defendant's unfair competition actions under the Louisiana Unfair Trade Practices Act (“LUTPA”), La. Rev. Stat. Ann. § 51:1405 (id. at ¶¶ 152-56); and (6) an injunction, damages, attorney fees, and costs to address Defendant's negligent interference under Louisiana law, La. Civ. Code art. 2315 (id. at ¶¶ 157-60).

         II. THE PARTIES' CONTENTIONS

         Defendant filed the instant motion pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss claims 4-6, Plaintiff's Sherman Act, LUTPA, and negligent interference claims. Rec. Doc. 12 at 1. It specifically argues that these claims are barred by the Noerr-Pennington doctrine and that Louisiana does not recognize negligent interference claims. Rec. Doc. 12-1 at 2.

         Plaintiff responds that its claims are subject to the “sham” exception to the Noerr-Pennington doctrine, based on facts explicitly detailed in the amended complaint, and that the Louisiana Supreme Court does not bar, per se, claims for negligent interference. Rec. Doc. 16-1 at 2, 4.

         III. LAW AND ANALYSIS

         Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a party can move to dismiss a complaint for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). Such motions are viewed with disfavor and rarely granted. Lowrey v. Tex. A & M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997) (quoting Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982)). Nonetheless, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Further, when reviewing a motion to dismiss, courts must accept all well-pleaded facts as true and view them in the light most favorable to the non-moving party. See Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996).

         A. THE NOERR-PENNINGTON DOCTRINE

         The Noerr-Pennington doctrine provides “that parties who petition the government for governmental action favorable to them cannot be prosecuted under the antitrust laws even though their petitions are motivated by anticompetitive intent.” Video Int'l Prod., Inc. v. Warner-Amex Cable Commc'ns, Inc., 858 F.2d 1075, 1082 (5th Cir. 1988) (citing E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961); United Mine Workers of Am. v. Pennington, 381 U.S. 657 (1965)). Accordingly, “‘petitions' made to the executive or judicial branches of government, e.g., in the form of administrative or legal proceedings, are exempt from antitrust liability even though the parties seek ultimately to destroy their competitors through these actions.” Id. Pre-suit threats to litigate, such as cease-and-desist letters, made in good faith are similarly exempt. Coastal States Mktg., Inc. v. Hunt, 694 F.2d 1358, 1367 (5th Cir. 1983) (“it would be absurd to hold that it does not protect those acts reasonably and normally attendant upon effective litigation. The litigator should not be protected only when he strikes without warning. If litigation is in good faith, a token of that sincerity is a warning that it will be commenced and a possible effort to compromise the dispute”) (footnote and citations omitted); Constr. Cost Data, LLC v. Gordian Grp., Inc., No. 16-114, 2017 WL 2266993, at *4 (S.D. Tex. Apr. 24, 2017), report and recommendation adopted, 2017 WL 2271491 (S.D. Tex. May 22, 2017) (citations omitted); Wolf v. Cowgirl Tuff Co., No. 15-1195, 2016 WL 4597638, at *7 (W.D. Tex. Sept. 2, 2016); Indus. Models, Inc. v. SNF, Inc., No. 15-689, 2015 WL 5606384, at *2 (N.D. Tex. Sept. 23, 2015); Source Network Sales & Mktg., LLC v. Ningbo Desa Elec. Mfg. Co., No. 14-1108, 2015 WL 2341063, at *8 (N.D. Tex. May 15, 2015); Credit Counseling Ctrs. of Am. v. Nat'l Found. for Consumer Credit, Inc., No. 94-1855, 1997 WL 160180, at *4 (N.D. Tex. Apr. 1, 1997).

         “Although the Noerr-Pennington doctrine initially arose in the antitrust field, ” this Circuit has “expanded it to protect [F]irst [A]mendment petitioning of the government from claims brought under federal and state laws, including section 1983 and common-law tortious interference with contractual relations.” Video Int'l, 858 F.2d at 1084 (citations omitted) (holding that the doctrine extends to protect petitioning ...


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