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Red River Bancshares, Inc. v. Red River Employees Federal Credit Union

United States District Court, W.D. Louisiana, Shreveport Division

September 26, 2019

RED RIVER BANCSHARES, INC., ET AL.
v.
RED RIVER EMPLOYEES FEDERAL CREDIT UNION

          MAGISTRATE JUDGE HORNSBY

          MEMORANDUM RULING

          S. MAURICE HICKS, JR., CHIEF JUDGE UNITED STATES DISTRICT COURT

         Before the Court is Defendant Red River Employees Federal Credit Union’s (“Defendant”) Motion to Dismiss[1] pursuant to Federal Rule of Civil Procedure 12(b)(6). See Record Document 27. Plaintiffs Red River Bancshares, Inc. (“Bancshares”) and Red River Bank, LSCB (“RRB”) (collectively “Plaintiffs”) oppose the motion. See Record Document 31. For the reasons set forth below, Defendant’s Motion is GRANTED IN PART AND DENIED IN PART.

         I. BACKGROUND

         Bancshares and its licensee, RRB, are Louisiana entities engaged in banking and financial services throughout Louisiana. See Record Document 26 at 1–2. Since 1999, Bancshares, through RRB, has used the service mark “RED RIVER BANK” in connection with its banking services. Id. at 2. As such, Bancshares and RRB assert that the name and service mark “Red River Bank” have become associated with Bancshares and RRB by consumers in Louisiana, especially in Caddo and Bossier Parish. Id.

         Bancshares is the owner of United States Trademark No. 2, 418, 600 for “The Red River Logo” issued on January 9, 2001. Id. Bancshares is also the owner of United States Trademark No. 4, 586, 878 for the mark “RED RIVER BANK” issued on August 19, 2014. Id. at 2–3. Bancshares also owns a Louisiana Trademark for “Red River Bank” and corresponding logo. See id. at 3.

         Defendant traditionally provided credit union services in and around the Texarkana, Texas and Texarkana, Arkansas areas and did not provide services in Caddo or Bossier Parish. See id. Around 2008, Defendant adopted the “Red River Credit Union” logo. Id. Prior to 2017, Plaintiffs and Defendant coexisted in their respective markets without confusion among their members, customers, or the general public. See Id . However, on October 2, 2017, Defendant purchased branches from the now liquidated Shreveport Federal Credit Union, including branches in Caddo and Bossier Parish. See id. Since that time, Defendant has been operating branches in Caddo and Bossier Parish. See id. Plaintiffs allege that Defendant is targeting members and potential members in the same geographical areas served by RRB, and that Defendant is aware of Bancshares and/or RRB’s longstanding use of RED RIVER BANK in connection with banking services in Louisiana. See id. at 4.

         Plaintiffs’ original complaint asserted the following claims against Defendant: (1) trademark infringement under Section 32 of the Lanham Act (15 U.S.C. § 1114); (2) unfair competition under Section 43(a) of the Lanham Act (15 U.S.C. § 1125(a)); (3) Louisiana trademark infringement under Louisiana Revised Statutes Section 51:211 et seq.; and (4) Louisiana unfair trade practices under the Louisiana Unfair Trade Practices Act (“LUTPA”), La. R.S. 51:1401 et seq. See Record Document 1. Defendant responded by filing a Motion to Dismiss. See Record Document 11. Therein, Defendant argued that Bancshares is the exclusive owner of the trademark in question and that RRB, a mere licensee of Bancshares, lacks standing to assert claims under either the Lanham Act or Louisiana’s trademark infringement statute. See id. In addition, Defendant argued that as a federally insured financial institution, it is exempt from the LUTPA pursuant to Louisiana Revised Statutes Section 51:1406(1). See id.

         Plaintiffs responded by filing an Amended Complaint that removed their LUTPA claims. See Record Document 13 at 6. Further, the Amended Complaint asserted that RRB is the “exclusive licensee” of Bancshares. Id. at 2. On the same day, Plaintiffs also filed an opposition to Defendant’s Motion to Dismiss, arguing that as an exclusive licensee, RRB has standing to assert trademark claims. See Record Document 14 at 1. RRB also contends that as an exclusive licensee of Bancshares, it should be allowed to remain in the litigation as a co-plaintiff with Bancshares. See id.

         Thereafter, Defendant filed a reply brief asserting that its Motion to Dismiss was not moot because the Amended Complaint contained the same defect as the original complaint-RRB’s lack of standing. See Record Document 15 at 3. In the Court’s previous Memorandum Ruling regarding this motion, the Court denied the Motion to Dismiss and ordered Plaintiffs to file a Second Amended Complaint with the licensing agreement attached in order for the Court to determine whether RRB has standing as an “exclusive licensee.” Record Document 24 at 8. Plaintiffs later complied with this order by filing its Second Amended Complaint with the agreement attached, see Record Document 26, after which Defendant refiled its Motion to Dismiss, see Record Document 27.

         On March 12, 2019, after granting an unopposed Motion for Oral Argument filed by Plaintiffs, the Court held a motion hearing on Defendant’s Motion to Dismiss regarding several issues raised in the parties’ briefing. See Record Document 34 at 1; see also Record Document 35.[2]

         II. LAW AND ANALYSIS

         A. Pleading and 12(b)(6) Motion to Dismiss Standards

         Rule 8(a)(2) of the Federal Rules of Civil Procedure governs the requirements for pleadings that state a claim for relief, requiring that a pleading contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” The standard for the adequacy of complaints under Rule 8(a)(2) is now a “plausibility” standard found in Bell Atlantic Corp. v. Twombly and its progeny. 550 U.S. 544, 127 S.Ct. 1955 (2007). Under this standard, “factual allegations must be enough to raise a right to relief above the speculative level . . . on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. at 555–56, 127 S.Ct. at 1965. If a pleading only contains “labels and conclusions” and “a ...


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