United States District Court, D. Idaho
McCALL WEDDINGS, LLC, an Idaho Limited Liability Company; and DELISH CATERING, LLC, an Idaho Limited Liability Company, Plaintiffs,
McCALL WEDDING AND EVENT DIRECTORY, LLC dba MCWED, an Idaho Limited Liability Company; SOIREE, LLC, an Idaho Limited Liability Company; SHERRY SCHELINE, an Individual; and JOHN DOES I-X, Defendants. AND RELATED COUNTERCLAIMS
MEMORANDUM DECISION AND ORDER RE: DEFENDANT SOIREE, LLC'S MOTION FOR SUMMARY JUDGMENT (Docket No. 38) DEFENDANT SOIREE, LLC'S MOTION FOR SANCTIONS PURSUANT TO RULE 11 (Docket No. 37)
RONALD E. BUSH, Magistrate Judge.
Now pending before the Court is Defendant Soiree, LLC's ("Soiree") (1) Motion for Summary Judgment (Docket No. 38), and (2) Motion for Sanctions Pursuant to Rule 11 (Docket No. 37). Having carefully reviewed the record, participated in oral argument, and otherwise being fully advised, the Court enters the following Memorandum Decision and Order:
I. RELEVANT BACKGROUND
Plaintiff McCall Weddings, LLC ("McCall Weddings") provides wedding and event planning services largely through the use of its Internet website, mccallweddings.com. In this lawsuit, McCall Weddings contends that Defendant McCall Wedding and Event Directory, LLC ("McWed") and its principal Sherry Scheline are providing wedding planning services in competition with McCall Weddings and in doing so have infringed upon McCall Weddings's servicemark/trademark, "McCall Weddings." Specifically, McCall Weddings claims that McWed publishes (both "virtually" on its website, mccallwed.com, and in more conventional print format) a wedding and event planning magazine/directory - also called " McWed " - which advertises its services in ways that infringe upon McCall Weddings's marks. See, e.g., Am. Compl., ¶ 23 (Docket No. 5) ("Defendants' wrongful acts have permitted and will permit Defendants to wrongfully attract business in wedding planning and to make advertising sales based upon the strength of Plaintiff's reputation and the substantial goodwill that Plaintiff has built up in its "McCall Weddings" trade name and mark.").
McCall Weddings also alleges that Defendant Soiree, LLC ("Soiree") "has participated directly" in McWed's publication while also engaging in wedding and event planning. As to Soiree, Plaintiffs make four claims: (1) unfair competition and false designation of origin in violation of the Lanham Act ("First Claim"); (2) common law trademark infringement ("Second Claim"); and (3) unfair competition and false advertising in violation of Idaho Code sections 48-603(1) and 48-603(2) ("Fourth Claim" and "Fifth Claim"). Soiree, however, says that it played no part in publishing McWed, and Soiree brings its own counterclaims for declaratory relief and breach of contract based upon an alleged settlement agreement between it and Plaintiffs.
Soiree now seeks summary judgment on all of Plaintiffs' claims and its counterclaims. Soiree contends (1) there is no evidence that it falsely designated any of McCall Weddings's purported marks and, thus, the Lanham Act claim (First Claim) must be dismissed; and (2) without such a claim anchoring the balance of claims asserted against it, the corresponding state law claims (Second, Fourth, and Fifth Claims) must likewise be dismissed. Soiree seeks summary judgment on its counterclaims, arguing that such claims were resolved in a valid and enforceable settlement agreement.
A. Soiree's Motion for Summary Judgment (Docket No. 38)
1. Legal Standard
Summary judgment is appropriate where a party can show that, as to any claim or defense, "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). One of the principal purposes of the summary judgment "is to isolate and dispose of factually unsupported claims...." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). It is "not a disfavored procedural shortcut, " but is instead the "principal tool by which factually insufficient claims or defenses [can] be isolated and prevented from going to trial with the attendant unwarranted consumption of public and private resources." Id. at 327. "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). There must be a genuine dispute as to a material fact - a fact "that may affect the outcome of the case." Id. at 248.
The evidence must be viewed in the light most favorable to the non-moving party, and the Court must not make credibility findings. See id. at 255. Direct testimony of the non-movant must be believed, however implausible. See Leslie v. Grupo ICA, 198 F.3d 1152, 1159 (9th Cir. 1999). On the other hand, the Court is not required to adopt unreasonable inferences from circumstantial evidence. See McLaughlin v. Liu, 849 F.2d 1205, 1208 (9th Cir. 1988).
The moving party bears the initial burden of demonstrating the absence of a genuine dispute as to material fact. See Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001). To carry this burden, the moving party need not introduce any affirmative evidence, but may simply point out the absence of evidence to support the nonmoving party's case. See Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 532 (9th Cir. 2000). This then shifts the burden to the non-moving party to produce evidence sufficient to support a jury verdict in her favor. See Devereaux, 263 F.3d at 1076. The non-moving party must go beyond the pleadings and show "by her  affidavits, or by the depositions, answers to interrogatories, or admissions on file" that a genuine dispute of material fact exists. Celotex, 477 U.S. at 324.
2. There is no Genuine Issue of Material Fact to Support a Claim that Soiree Has Violated the Lanham Act
Section 43(a) of the Lanham Act provides in relevant part:
Any person who, on or in connection with any goods or services..., uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person... shall be liable in a civil action by any person who believes that he or she is likely to be damaged by such act.
15 U.S.C. § 1125(a)(1)(A).
Plaintiffs allege infringement of their "McCall Weddings" mark by McWed's use of various advertising/social media mechanisms, including (1) mccallwed.com, (2) email@example.com, (3) facebook.com/mccallwed, (4) twitter.com/mccallwed, and (5) #mccallweddings - Plaintiffs essentially argue that McWed's use of these platforms represents an infringing use of Plaintiffs' "McCall Weddings" mark and is likely to cause consumer confusion in violation of the Lanham Act. See generally Mem. in Supp. of Mot. for Prelim. Inj. (Docket No. 25); see also First Am. Compl., ¶ 20 (Docket No. 5). According to Plaintiffs, this is particularly evident through McWed's use of the above marks throughout its magazine/directory, McWed. These allegations pertain to McWed to be sure; however, Plaintiffs allege they implicate Soiree insofar as Soiree had a hand in McWed's publication too. See First Am. Compl., ¶¶ 7, 15, 38, & 48 (Docket No. 5). This is reflected in Plaintiffs' counsel's letter to Soiree's counsel at the action's outset:
Attached to this letter please find a Complaint my clients has filed against your company, Soiree... and Sherry Scheline and McWed. The gist of the Complaint is that you are liable for the trademark infringement and unfair competition arising from trademark infringement in the McWed magazine as well as the misleading use of photographs of my clients' coordinated weddings that are presented as though you and/or McWed and/or Sherry Scheline coordinated and/or planned the weddings. In sum, the use of the infringing material throughout this magazine has been directing business away from my clients and to your company, McWed, and Sherry Scheline. You have been functioning directly as an operator of the magazine through your direct contributions throughout the magazine as an editor as well as your participation as a "partner, " thus legally my clients are of the opinion that your company is responsible for the infringement and unfair competition in addition to Sherry Scheline and her company.
8/19/14 Ltr., attached as Ex. B to Schossberger Aff. (Docket No. 37, Att. 17). It is against this setting that Plaintiffs' Lanham Act claim against Soiree is framed.
Plaintiffs agree that proof of a false designation of origin claim against Soiree requires that they establish that (1) the terms in question are valid and protectable trademarks; (2) Plaintiffs own these marks as trademarks; (3) Plaintiffs used these marks in commerce; and (4) Soiree used false or misleading descriptions of fact or "terms or designs similar to [Plaintiffs'] marks without the consent of [Plaintiffs] in a manner that is likely to cause confusion among ordinary purchasers as to the source of the goods [or services].'" See Dr. JKL Ltd. v. HPC IT Educ. Ctr., 749 F.Supp.2d 1038, 1049 (N.D. Cal. 2010) (citing 15 U.S.C. § 1125(a); Chimney Safety Inst. of Am. v. Chimney King, 2004 WL 1465699, *2 (N.D. Cal. 2004)). At issue here is this last element - whether Soiree improperly used or falsely designated any of Plaintiffs' claimed marks. See Reply in Supp. of MSJ, p. 3 (Docket No. 59).
Soiree says there is no such evidence; Plaintiffs disagree, pointing to McWed's allegedly infringing references to their marks and Soiree's involvement with McWed's publication. Compare Mem. in Supp. of MSJ, pp. 9-11 (Docket No. 38, Att. 1), with Resp. to MSJ, pp. 3-6 (Docket No. 45). Plaintiffs loosely claim that Soiree, McWed, and Ms. Scheline were/are partners - apparently in some sort of "legal" sense - in the magazine's publication. To this end, Plaintiffs argue that: (1) Ms. Scheline solicited Soiree's owner, Brandi Reiland, to be her "business partner" in McWed; (2) Soiree advertises in McWed and Ms. Reiland contributes written content to McWed; (3) Soiree "controls" McWed by coordinating and designing McWed's appearance and layout; (4) Soiree benefits from its relationship with McWed and Ms. Scheline; and (5) Soiree expresses control over the content that appears in McWed. See Resp. to MSJ, pp. 3-6 (Docket No. 45). However, neither the purported facts nor the argument laid down upon such facts by Plaintiffs, suffice to create a genuine issue of material fact as to whether there existed such a "partnership" that could then be argued to create a legal partnership between Soiree, McWed, and Ms. Scheline, so as to impose direct or vicarious liability upon Soiree for McWed 's content.
a. Ms. Scheline's E-Mail to Ms. Reiland
On February 11, 2014, Ms. Scheline e-mailed Ms. Reiland about McWed's vision, seeking input from Ms. Reiland about McWed's anticipated McWed magazine. Plaintiffs maintain that this e-mail describes a new partnership relationship between Soiree, McWed, and Ms. Scheline. The e-mail reads in relevant part:
Hi Brandi! I decided to e-mail you and just share my thoughts so that you could offer me feedback and hopefully mentor me a little bit....
So, nearly a year ago I listened to a bride in tears telling me how hard it was to plan a wedding in McCall when she lived in Boise. I had to censor my response because I live in McCall. For Boise brides and brides from around the globe who choose McCall it is difficult because you have an added question to every vendor discussion[:] Do you go to McCall and how much extra is it? You know as well as I do that even if the bride is a multi-billionaire they still care about that "how much extra?"
I wanted to create a guide that first and foremast featured LOCAL vendors. Vendors that live and operate right here in Valley County. I also wanted a complete venue guide so that others can see that there are many beautiful location spots. I began the forming of McCall Wedding and Event Directory. We have coined McWED "WED" wedding and event directory.
The last few months I have taken marketing classes and such to know how to sell my product (i.e. ad space). I have begun to known my audience and have networked with vendors from Boise to Riggins. I know this area very well and can effectively market the guide once it is produced. I am ready to go. Everything will be done here locally, the printing etc.... I did choose to hire out for branding and for logo creation and for putting together the website. I have solicited Heidi from Ira & Lucy to partner with me on that end of the marketing aspect. I felt she was a wise choice because I appreciate her sense of style and her husband in my opinion is incredibly web savvy. They are working on that end I am moving forward on this end.
I need support from your end. I have analyzed the market place backwards and forwards. You have successfully gained respect of all those in the industry. You have no negative reviews and I have not heard a negative word spoken about you. I want to feature "local" but I need to make sure I raise the bar of success and feature services that are above standard. I need my first issue to set the standard. I need it to become the premiere resource guide to EVERY EVENT in Valley County. I can't fail out of the gate. I need you on board. I would like each addition to feature an editorial of a "real wedding" from an event coordinator. Advice editorial, color editorial, top 10 wedding don'ts, whatever it be. I am willing to open it up to you. I can't pay you for this first edition. I however can give you a quarter page ad and a free listing Plus the advertising from the editorial itself. I need the face of Brandi Reiland to be part of the magazine. I know I can make it successful I just need some faces attached.
Locally there is McCall Weddings which was a failing company that Shannon purchased in December. I don't want to contribute to gossip or speak ill and so that matter is left at that. I do hope to solicit Boise vendors for ad space for event coordination. I however hope you recognize that our friendship will certainly give you choice in advertisement placement. I want to work with you the best I can. I realize that after the magazine's success you perhaps will need me more than I you. I however currently need you more than you do me.:) That being said I am soliciting you to be my business partner and write my first editorial. The first edition is all about Idaho. Idaho weddings, Idaho Proud, Idaho Vendors. Future articles I can tap into some of my national ...