int'l importers v int'l spirits - r&r
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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA
CASE NO. 10-61856-CIV-JORDAN/OSULLIVAN
INTERNATIONAL IMPORTERS, INC.,
Plaintiff,
v.
INTERNATIONAL SPIRITS & WINES, LLC,and DAQUINO GROUP OF COMPANIES,
Defendants.___________________________________/
REPORT AND RECOMMENDATION
THIS CAUSE comes before the Court on the Defendants, International Spirits &
Wines, LLC and DAquino Group of Companies, Motion to Dismiss Under Rules
12(b)(1), 12(b)(4), 12(b)(5) and 12 (b)(7) and Incorporated Memorandum of Law (DE#
22, 1/25/11) and the Opposition to Motion to Dismiss; Request for Sanctions for
Violation of S.D. Fla. L.R. 7.1.A.3; and Motion to Substitute Real Party in Interest
Pursuant to FED.R.CIV.P.17(a) (DE# 23, 2/8/11) filed by the plaintiff. This matter was
referred to the undersigned by the Honorable Adalberto Jordan, United States District
Court Judge for the Southern District of Florida, pursuant to 28 U.S.C. 636(b). See
Order Referring Matter to Judge OSullivan (DE# 36, 5/20/11). Having reviewed the
applicable filings and law, the undersigned respectfully RECOMMENDS that the
Defendants, International Spirits & Wines, LLC and DAquino Group of Companies,
Motion to Dismiss Under Rules 12(b)(1), 12(b)(4), 12(b)(5) and 12 (b)(7) and
Incorporated Memorandum of Law (DE# 22, 1/25/11) be GRANTED in part and
DENIED in part and that the plaintiffs Opposition to Motion to Dismiss; Request for
Sanctions for Violation of S.D. Fla. L.R. 7.1.A.3; and Motion to Substitute Real Party in
Interest Pursuant to FED.R.CIV.P.17(a) (DE# 23, 2/8/11) be DENIED.
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BACKGROUND
On October 5, 2010, the plaintiff filed the instant action against the defendants
for Trademark Infringement under 15 U.S.C. 1114(1) and 1125(a), Unfair Competition
under 15 U.S.C. 1125(a), Trademark Infringement under the Common Law of the
State of Florida, Unfair Competition under the Common Law of the State of Florida and
Deceptive and Unfair Trade Practices under Fla. Stat. 501.201, et seq. See
Complaint (DE# 1, 10/5/10). The plaintiffs claims stem from the defendants importation
and sale of wine under the mark Wallaby Creek. Id. at 5, 7. The complaint alleges
that defendant DAquino Group of Companies (hereinafter DAquino) imports wine into
the United States for sale and distribution by defendant International Spirits & Wines,
LLC (hereinafter ISW). Id.
On January 25, 2011, the defendants filed the instant motion to dismiss the
complaint. See Defendants, International Spirits & Wines, LLC and DAquino Group of
Companies, Motion to Dismiss Under Rules 12(b)(1), 12(b)(4), 12(b)(5) and 12 (b)(7)
and Incorporated Memorandum of Law (DE# 22, 1/25/11). The plaintiff filed its
response on February 8, 2011. See Opposition to Motion to Dismiss; Request for
Sanctions for Violation of S.D. Fla. L.R. 7.1.A.3; and Motion to Substitute Real Party in
Interest Pursuant to FED.R.CIV.P. 17(a) (DE# 23, 2/8/11). The defendants reply in
support of their motion to dismiss was filed on February 18, 2011. See Reply in Further
Support of Defendants Motion to Dismiss (DE# 29, 2/18/11). On February 24, 2011,
the defendants filed Defendants Memorandum in Opposition to Plaintiffs Motion to
Substitute Real Party in Interest Pursuant to FED.R.CIV.P. 17(a) (DE# 30, 2/24/11). On
March 7, 2011, the plaintiff filed its reply. See Reply to Opposition to Motion to
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Substitute Real Party in Interest (DE# 31, 3/7/11).
The parties presented their arguments before Judge Jordan at a hearing on May
2, 2011. See Order Setting Hearing (DE# 33, 4/26/11). At the May 2, 2011 hearing,
Judge Jordan asked the parties to further brief the issues. On May 16, 2011, the
defendants filed Defendants Supplemental Memorandum in Support of Motion to
Dismiss (DE# 34, 5/16/11) and the plaintiff filed its Supplemental Briefing in Opposition
to Motion to Dismiss (DE# 35, 5/16/11). This matter is ripe for judicial review.
STANDARDS OF REVIEW
The defendants challenge the plaintiffs standing to bring the instant action
pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. See Defendants,
International Spirits & Wines, LLC and DAquino Group of Companies, Motion to
Dismiss Under Rules 12(b)(1), 12(b)(4), 12(b)(5) and 12 (b)(7) and Incorporated
Memorandum of Law (DE# 22 at 2, 1/25/11). Rule 12(b)(1) of the Federal Rules of Civil
Procedure allows for the dismissal of a claim when it is determined that the court lacks
subject-matter jurisdiction. See FED.R.CIV.P.12 (b)(1). [B]ecause a federal court is
powerless to act beyond its statutory grant of subject matter jurisdiction, a court must
zealously insure that jurisdiction exists over a case . . . . Smith v. GTE Corp., 236 F.3d
1292, 1299 (11th Cir. 2001). [W]hen a defendant properly challenges subject matter
jurisdiction under Rule 12(b)(1) the district court is free to independently weigh facts,
and may proceed as it never could under Rule 12(b)(6) or FED.R.CIV.P. 56. Morrison
v. Amway Corp., 323 F.3d 920, 925 (11th Cir. 2003) (quoting Lawrence v. Dunbar, 919
F.2d 1525, 1529 (11th Cir. 1990)).
The defendants also seek to dismiss the plaintiffs complaint pursuant to Rule
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In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc),1
the Eleventh Circuit adopted as binding precedent all decisions handed down by theformer Fifth Circuit before October 1, 1981.
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12(b)(7) on the ground that the plaintiff has failed to join a necessary and indispensable
party under FED.R.CIV.P.19. See Defendants, International Spirits & Wines, LLC and
DAquino Group of Companies, Motion to Dismiss Under Rules 12(b)(1), 12(b)(4),
12(b)(5) and 12 (b)(7) and Incorporated Memorandum of Law (DE# 22 at 6, 1/25/11).
Courts deciding a motion to dismiss under Rule 12(b)(7) undergo a two-step inquiry.
First, they decide whether an absent party is required in the case under Rule 19. See
Molinos Valle del Cibao v. Lama, 633 F.3d 1330, 1344 (11th Cir. 2011). If the party is a
required party, the court must order that the person be made a party. FED.R.CIV.P.
19(a)(2). Second, if the parties cannot join the new party, the court must consider if, in
equity and good conscience, the action should proceed among the existing parties or
should be dismissed. FED.R.CIV.P. 19(b). When making this decision, courts look at
the pleadings and affidavits as well as evidence introduced by the parties. See Estes v.
Shell Oil Co., 234 F.2d 847, 849 n.5, 850 (5th Cir. 1956); Citizen Band Potawatomi1
Indian Tribe of Okla. v. Collier, 17 F.3d 1292, 1293 (10th Cir. 1994). The moving party
must produce evidence showing that an absent party has an interest that may be
harmed by being absent from the case. See Citizen Band, 17 F.3d at 1293.
Lastly, the defendants seek to dismiss the complaint as to defendant DAquino
for insufficient process and insufficient service of process pursuant to FED.R.CIV.P.
12(b)(4) and (b)(5). Rule 12(b)(4) allows for the dismissal of the complaint based on
insufficient process. Proper service of process requires inclusion of the summons
containing, among other things, the name of the court and the court's seal. Brown v.
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Hillsborough Area Regl Transit, No. 8:08-CV-1465-T-33TBM, 2010 WL 455310, at * 2
(M.D. Fla. Feb. 3, 2010) (citing FED.R.CIV.P. 4(a)(1)). A party objecting to the
sufficiency of process under Rule 12(b)(4) must identify substantive deficiencies in the
summons, complaint or accompanying documentation. Fly Brazil Group, Inc. v. The
Government of Gabon, Africa, 709 F. Supp. 2d 1274, 1279 (S.D. Fla. 2010) (citation
and internal quotation marks omitted).
Rule 12(b)(5) allows for dismissal for insufficient service of process.FED R.CIV.
P. 12(b)(5). The defendant has the initial burden of challenging the sufficiency of
service and must describe with specificity how the service of process failed to meet the
procedural requirements of [FED.R.CIV.P. 4]. Hollander v. Wolf, No. 0980587CIV,
2009 WL 3336012, at *3 (S.D. Fla. Oct. 14, 2009). The burden then shifts to the
plaintiff to prove a prima facie case of proper service of process. Id. If the plaintiff can
establish that service was proper, the burden shifts back to the defendant to bring
strong and convincing evidence of insufficient process. Id. (citation omitted). The
Court may look to affidavits, depositions, and oral testimony to resolve disputed
questions of fact. Id. (citations omitted).
ANALYSIS
At the outset, the undersigned notes that the plaintiff conditionally requested an
evidentiary hearing if there are outstanding factual issues needed to resolve this
motion on Defendants asserted grounds of lack of standing. See Opposition to Motion
to Dismiss; Request for Sanctions for Violation of S.D. Fla. L.R. 7.1.A.3; and Motion to
Substitute Real Party in Interest Pursuant to FED.R.CIV.P. 17(a) (DE# 23 at 13-14,
2/8/11). The undersigned finds that an evidentiary hearing is unnecessary because the
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issues raised in the instant motions can be resolved as matters of law. Accordingly, the
plaintiffs conditional request for an evidentiary hearing is DENIED.
A. Defendants Motion to Dismiss under FED.R.CIV.P.12(b)(1) and (b)(7)
The defendants seek to dismiss the plaintiffs complaint for lack of subject matter
jurisdiction, insufficient process, insufficient service of process and failure to join a party
under FED.R.CIV.P. 19. See Defendants, International Spirits & Wines, LLC and
DAquino Group of Companies, Motion to Dismiss Under Rules 12(b)(1), 12(b)(4),
12(b)(5) and 12 (b)(7) and Incorporated Memorandum of Law (DE# 22, 1/25/11). The
defendants argue that the plaintiff failed to join all owners of the mark at issue in the
instant case. Id. at 4-5. The defendants further argue that the complaint should be
dismissed as to defendant DAquino because it is an umbrella term used to refer to
several separate and distinct Australian companies. Id. at 8.
1. Standing
The defendants argue that the complaint should be dismissed pursuant to FED.
R.CIV.P.12(b)(1) because the plaintiff lacks standing to bring the instant action.
Specifically, the defendants argue that the plaintiff, as a part-owner of the mark, lacks
standing to bring the instant action without joining all other co-owners of the mark. The
case law on standing as it pertains to co-owners of a trademark is scarce. Of note, the
defendants rely on patent cases to support their argument that the plaintiff lacks
standing to bring the instant action. See Defendants, International Spirits & Wines, LLC
and DAquino Group of Companies, Motion to Dismiss Under Rules 12(b)(1), 12(b)(4),
12(b)(5) and 12 (b)(7) and Incorporated Memorandum of Law (DE# 22 at 2-3, 1/25/11).
The Court does not need to rule on the defendants standing argument because the
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alleged standing deficiency will be cured and the argument rendered moot by the
recommendation below that the plaintiff be required to join all other co-owner(s) of the
mark.
2. Failure to Join a Party under FED.R.CIV.P. 19
The defendants argue that the complaint should be dismissed pursuant to FED.
R.CIV.P.12(b)(7) because the plaintiff failed to join a necessary and indispensable
party to this litigation, the co-owner of the mark at issue. See Defendants, International
Spirits & Wines, LLC and DAquino Group of Companies, Motion to Dismiss Under
Rules 12(b)(1), 12(b)(4), 12(b)(5) and 12 (b)(7) and Incorporated Memorandum of Law
(DE# 22 at 3, 1/25/11).
a. The Existence of a Co-owner to the Mark
As a threshold matter, the Court should determine whether there are any co-
owners of the mark. If the plaintiff is the sole owner of the mark, then the Court does
not need to proceed further with a Rule 19 inquiry. If, on the other hand, the Court
determines that the plaintiff is not the sole owner of the mark, the Court will need to
determine whether the co-owner(s) of the mark are required parties under Rule 19. If
the co-owner(s) cannot be joined, the Court must consider if, in equity and good
conscience, the action should proceed among the existing parties or should be
dismissed. FED.R.CIV.P.19(b); see also Molinos Valle del Cibao v. Lama, 633 F.3d
1330, 1344 (11th Cir. 2011).
The existence of any co-owners to the mark is heavily disputed by the parties.
When the defendants filed their motion to dismiss, they argued that Maple Leaf
Distillers (hereinafter Maple) was the co-owner of the mark. See Defendants,
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The defendants argument assumes that Fernbrew cannot be joined as an2
involuntary plaintiff under Fed. R. Civ. P. 19(a)(2).
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International Spirits & Wines, LLC and DAquino Group of Companies, Motion to
Dismiss Under Rules 12(b)(1), 12(b)(4), 12(b)(5) and 12 (b)(7) and Incorporated
Memorandum of Law (DE# 22 at 5, 1/25/11) (citing Certified Status Copy of the Federal
Registration, Exhibit A (DE# 22-1, 1/25/11)). Maple appears as a co-owner of the mark
at issue in the instant case in U.S. Trademark Registration No. 3064051. See Federal
Registration, Exhibit A (DE# 22-1, 1/25/11). The defendants no longer argue that Maple
is the co-owner of the mark. In their supplemental brief, the defendants explain that
Maples interest in the mark was transferred to non-party Fernbrew Pty Limited
(hereinafter Fernbrew) when Maple went into bankruptcy in Canada in 2006: [i]n
accordance with an agreement dated May 4, 2004 between Maple Leaf and Rex
DAquino (on behalf of Fernbrew), upon Maple Leafs insolvency, Maple Leafs
remaining 25% interest in the trademark registration vested in Fernbrew . . . . Thus,
after Maple Leafs bankruptcy, Fernbrews ownership share in the Wallaby Creek
trademark grew from 25% to 50%. Defendants Supplemental Memorandum in Support
of Motion to Dismiss (DE# 34 at 2, 5-6, 5/16/11) (footnotes omitted). [A]s the trademark
sits today, Plaintiffs 50% co-owner is Fernbrew, a company that has been using the
Wallaby Creek trademark continuously for the past 10 years. Accordingly, Fernbrew is
the indispensable party in this casenot Maple Leaf . . . . Id. at 2. The defendants
argue that because Fernbrew has a 50 percent ownership in the mark, Fernbrew must
agree to join this case as a plaintiff in order for plaintiff International Importers to2
continue the instant action against the defendants. Id. at 8.
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The plaintiff takes issue with the May 4, 2004 letter relied on by the defendants3
as evidence that the mark was transferred from Maple to Fernbrew upon Maplesinsolvency. See May 4, 2004 Letter (DE# 35-15 at 2, 5/16/11). The plaintiff argues that:
An inspection of the document purporting to be the conditional May 4,2004 assignment from [Maple] to Fernbrew demonstrates several glaringerrors. See Exhibit C. First, as of May 4, 2004, [Maple] did not own anyrights in the Mark or the Registration A.V. Imports, Inc. owned the Markat that time and was the applicant seeking to register the Mark with theUSPTO. See Opposition to Motion to Dismiss, Exhibit F. The applicationdid not mature into a Registration until February 28, 2006. Second,Defendants have not produced a written document transferring the Markor Registration along with the goodwill associated with the Mark or theRegistration from [Maple] to Fernbrew, as required by 15 U.S.C. 1060.Third, the document states that the condition for transfer of rights is the
insolvency or bankruptcy, or inability to fulfill the agreement, of either[Maple] or [New World Brands, Inc.]. Under Canadian law, [Maple]sassets vested in the trustee when [Maple] was adjudged bankrupt so[Maple] could not have transferred anything to Fernbrew upon theoccurrence of that event. Ward Dec. at 25. This assignment is at bestan assignment on gross, and fails to constitute strong evidence toestablish an actual assignment from [Maple] to Fernbrew, but rather ismore akin to self-serving testimony by these parties to gain ownership ofthe Mark.
Supplemental Briefing in Opposition to Motion to Dismiss (DE# 35 at 11-12, 5/16/11).
The May 4, 2004 Letter states that [i]n the event that any one of the companies [Mapleand New World Brands, Inc.] become insolvent or unable to fulfill [the] agreement (i[.]e.Sales and marketing of products), the trademark will revert to Fernbrew Pty LimitedCorporation ownership. See May 4, 2004 Letter (DE# 35-15 at 2, 5/16/11). The Letteralso notes Fernbrews 25% interest in the Wallaby Creek trademark. Id. The Court doesnot need to determine whether the transfer upon Maples insolvency of Maple interest inthe mark to Fernbrew was valid because even assuming that it was not a valid transfer,Fernbrew would still have its original 25 percent interest in the mark.
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The plaintiff responds that Fernbrew did not receive Maples interest in the mark
following Maples insolvency because most of Maples assets, including the registration
at issue (U.S. Trademark Registration No. 3064051) were transferred to Angostura
Canada, Inc. (hereinafter Angostura) free and clear of all claims. See Supplemental
Briefing in Opposition to Motion to Dismiss (DE# 35 at 2, 5/16/11). The plaintiff further3
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In 2005, the [p]laintiff succeeded to the trademark rights established by A.V.4
Imports, Inc. in the WALLABY CREEK trademark. Opposition to Motion to Dismiss;Request for Sanctions for Violation of S.D. Fla. L.R. 7.1.A.3; and Motion to SubstituteReal Party in Interest Pursuant to FED.R.CIV.P. 17(a) (DE# 23 at 9 n.8, 2/8/11).
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argues that Angostura is not a co-owner of the mark because it never used the mark in
connection with the sale of wine and spirits in the United States:
Angostura did not and does not own any trademark rights because
Angostura never used the [m]ark in connection with the sale of wine andspirits in the United States; it never licensed rights to use the [m]ark fromor to [the p]laintiff; and it never controlled the quality of goods offered by[the p]laintiff under the [m]ark and never controlled [the p]laintiffs use ofthe [m]ark in the United States.
Id. at 13 (footnote omitted). The plaintiff further argues that [a]ttempting to unwind the
schemes of [Maple], Fernbrew . . . or any other company with regard to allegations of
ownership in the Registration or the [m]ark is unnecessary because no entity other than
[the p]laintiff or its predecessor, New World Brands, Inc., has actually used the [m]ark
on wine and spirits in the United States since 2005 (when A.V. Imports, Inc. transferred
its rights). Id. at 2.4
The undersigned finds that the plaintiff is not the sole owner of the mark at issue.
The plaintiff relies on In re Impact Distributors, Inc., 260 B.R. 48, 53 (Bankr. S.D. Fla.
2001) for the general proposition that: a party that registers or owns [a] mark, without
use, develops no trademark rights under the U.S. trademark laws. Supplemental
Briefing in Opposition to Motion to Dismiss (DE# 35 at 11, 5/16/11) (quoting In re
Impact Distributors, Inc., 260 B.R. at 53) (alteration in original) (emphasis omitted). The
plaintiff reasons that because Fernbrew and Angostura did not use the mark in
connection with wine and spirits in the United States for over three consecutive years
since 2006, they may be presumed to have abandoned any rights they may have had
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A service mark is identical to a trademark in all respects except that it is5
intended to indicate the origin of services, rather than goods. University of Florida v.KPB, Inc., 89 F.3d 773, 776 n.4 (11th Cir. 1996) (per curiam) (citing Restatement(Second) of Unfair Competition 9 cmt. f (1994)).
Terry filed an intervenor complaint one month after the defendants answered6
the complaint. Mears, 2006 WL 1084347 at *1. It does not appear that the defendantsraised any Rule 12(b)(7) arguments. Terry was dismissed with prejudice approximatelytwo and a half years later for failing to participate in the case. Id.
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under the mark. See Natural Answers, Inc. v. SmithKline Beecham Corp. 529 F.3d
1325, 1329-30 (11th Cir. 2008) (stating that [n]onuse for 3 consecutive years shall be
prima facie evidence of abandonment, 15 U.S.C. 1127, which creates a rebuttable
presumption of intent not to resume use.) (citation and internal quotation marks
omitted). The cases relied on by the plaintiff do not address the issue at hand, whether
a mark can be deemed abandoned by an owner where the mark has been
continuously in use by a co-owner.
In Mears v. Montgomery, No. 02 Civ. 0407 (MHD), 2006 WL 1084347, at
*9 (S.D. N.Y. Apr. 24, 2006), the court addressed the issue of abandonment where
there were joint owners of a service mark. The mark at issue, The Intruders, had5
been used in connection with musical performances by two bands: the Mears Band and
the Montgomery Band. Id. at *3. The prior owner of the mark transferred ownership of
the mark to Fred Daughtry (hereinafter co-owner) and Phil Terry as joint tenants with6
a right of survivorship. Approximately five and a half years later, the co-owner passed
away. [The p]laintiff argue[d] that Terry abandoned his rights in the Mark by doing
nothing to use it in commerce for at least seven years. Id. at *8. The court rejected the
plaintiffs argument. In determining that Terry had not abandoned his rights to the mark,
the court reasoned as follows:
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First, [the co-owner]'s use of the Mark c[ould] be imputed to Terry.The purpose of the use requirement is to maintain the public'sidentification of the mark with the proprietor. Stetson[ v. Howard D. Wolf& Associates], 955 F.2d [847,] 851 [(2d Cir. 1992)] (citing Silverman [v.CBS Inc.], 870 F.2d [40,] 48 [(2d Cir. 1989)]). Therefore, as long as [the
co-owner], Terry's co-proprietor, was actively using the name TheIntruders for his own band, there was no danger of improperidentification of the owner of the Mark by the public, and Terry hadno reason to take additional steps to use or protect the Mark.
Second, Terry testified that he knew about, and tacitly approved of, theMontgomery Band, and that he was at least aware of and approved [theco-owner]'s plans to start his own band. As he understood his role as a
joint owner of the Mark, his obligation was to protect the Mark frommisuse. Terry had no obligation to take any action against either bandperforming as the Intruders, so long as he viewed each of the bands as an
appropriate user of the name. See, e.g., Defiance Button Machine Co. v.C & C Metal Products Corp., 759 F.2d 1053, 1060-61 (2d Cir.1985);Saratoga Spring Co. v. Lehman, 625 F.2d 1037, 1044 (2d Cir.1980)(permitting another to use a mark constitutes use in the context of a claimof abandonment). . . .
Finally, after [the co-owner]'s death, Terry did take steps to shut down theMears Band, including telling Mears to stop using the name TheIntruders . . . and intervening in this lawsuit. Although Terry ultimatelyelected not to have his rights in the Name adjudicated by participating inthis ligation, these actions are consistent with a lack of an intent by Terry
to abandon the Mark. In sum, we find that Terry did not abandon his rightsin the Mark.
Id. at 10 (emphasis added) (citations to the record omitted).
Under the Lanham Act, a certificate of registration of a trademark is prima facie
evidence that the person or entity registering the mark is its owner, and that the mark is
valid. 15 U.S.C. 1057(b). Here, the Certificate of Registration shows that the instant
mark was owned by Maple and the plaintiff. See U.S. Trademark Registration (DE# 22-
1, 1/25/11). Thus, Maple would be the presumptive co-owner of the mark. The plaintiff
argues that it has rebutted this presumption of ownership with evidence of Maples non-
use of the mark. See Supplemental Briefing in Opposition to Motion to Dismiss (DE# 35
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The plaintiff states that illegal uses do not result in trademark rights.7
Supplemental Briefing in Opposition to Motion to Dismiss (DE# 35 at 3, 5/16/11)
(emphasis omitted). However, the plaintiff acknowledges that its predecessor, A.V.Imports, Inc., legally used the brand. See Opposition to Motion to Dismiss; Request forSanctions for Violation of S.D. Fla. L.R. 7.1.A.3; and Motion to Substitute Real Party inInterest Pursuant to FED.R.CIV.P. 17(a) (DE# 23 at 8, 2/8/11) (stating that the recordsof the Alcohol and Tobacco Tax and Trade Bureau (TTB) of the Department of theTreasury . . . show that no entities other than A.V. Imports, Inc. and Plaintiff havelegally used the brand name WALLABY CREEK in connection with wines and spiritsin the United States since 2001.) (emphasis added) (footnote omitted).
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at 2-3, 5/16/11). However, the mark has been continuously in use in the United States
for approximately 10 years by a co-owner of the mark the plaintiff or its predecessor.
See Exhibit A, Declaration of Rex DAquino (DE# 34-1 at 5, 5/16/11) (stating that
[w]ine bearing the trade mark "WALLABY CREEK" has been sold in the United Stales
for around a decade . . . . Wine bearing the trade mark ''WALLABY CREEK" was
initially Imported Into the United Slates by A.V. Imports, Inc., and later by [the
plaintiff].). In Mears, discussed supra, the court found that one co-owners use of the7
mark could be attributed to the other co-owner. Mears, 2006 WL 1084347, at *9.
Similarly here, the plaintiffs use of the mark can be imputed on Maple, its co-owner.
Thus, the plaintiff has not rebutted Maples presumptive co-ownership of the mark
through non-use. Upon its insolvency, Maple, as the co-owner of the mark, transferred
its interest in the mark to Fernbrew pursuant to the May 4, 2004 Letter. See May 4,
2004 Letter (DE# 35-15 at 2, 5/16/11). The marks abstract of title shows an assignment
of interest of 25 percent from Maple to Fernbrew dated May 4, 2004. See Exhibit F
(DE# 23-6 at 1, 2/8/11). The May 4, 2004 Letter also evidences a preexisting 25%
interest in the mark by Fernbrew independent of any transfer of ownership by Maple.
See May 4, 2004 Letter (DE# 35-15 at 2, 5/16/11). Alternatively, Maples interest in the
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The schedule of Trademarks, Brands and Formulas attached to the Purchase8
Agreement between Maples receiver and Angostura lists Fernbrew under the columnowner for the Wallaby Creek wines. See Schedule (DE# 35-7 at 50, 5/16/11).
Additionally, one of the notations corresponding to the notes column states Receiver
does not know how this will affect Maple Leafs interest in the trademark/brands inquestion. Thus, whether Maple transferred its interest in the mark to Angostura duringthe bankruptcy proceedings is not as clear as the plaintiff would like it to be.
Additionally, on May 3, 2006, Maple assigned its entire interest in 17 trademarkproperties to Angostura. See Trademark Assignment Details (DE# 34-1 at 42-43,5/16/11). Wallaby Creek is not one of the 17 marks listed. This omission would beconsistent with Maples prior assignment of its interest in the Wallaby Creek mark toFernbrew.
14
mark was transferred to Angostura through the bankruptcy proceeding.8
The plaintiff further argues that Maple, Fernbrew and Angostura have
abandoned any interest in the mark. See Supplemental Briefing in Opposition to Motion
to Dismiss (DE# 35 at 11-13, 5/16/11). There are two elements to a claim of
abandonment: that the [owner] has ceased using the mark in dispute, and that he has
done so with an intent not to resume its use. Cumulus Media, Inc. v. Clear Channel
Communications, 304 F.3d 1167, 1173-74 (11th 2002) (footnote omitted). Here, the
plaintiff has not established the first element - non-use of the mark. As noted above,
one co-owners use of the mark can be imputed on the other co-owner. Mears, 2006
WL 1084347, at *9. The plaintiff has also failed to establish the second element - intent
not to resume use. In determining whether a mark has been used or abandoned, a trier
of fact must take into account the trademark holders occupation or business. Mears,
2006 WL 1084347 at *9 (citing Stetson, 955 F.2d at 851). Here, Fernbrew has
continuously produced Wallaby Creek brand wine, including all such wine that was sold
by the [p]laintiff. Defendants Supplemental Memorandum in Support of Motion to
Dismiss (DE# 34 at 4, 5/16/11) (capitalizations omitted) (citing DAquino Declaration
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Fernbrew has either a 25 percent ownership interest or a 50 percent ownership9
interest in the mark, depending on whether the transfer by Maple was valid. See May 4,2004 Letter (DE# 35-15 at 2, 5/16/11).
15
(DE# 34-1 at 3-4)). Fernbrew is a wine producer. Id. Fernbrews wines are sold
through distributors including the plaintiff and defendant ISW. See DAquino Declaration
(DE# 34-1 at 6-7); Complaint (DE# 1 at 7, 10/5/10) (stating that Defendant
D'Aquino imports wine into the United States for distribution and sale by Defendant ISW
under the mark WALLABY CREEK.). Given Fernbrews role as a wine producer, the
Court cannot infer an intent to abandon the mark from Fernbrews non-use of the mark
in connection with the sale of wine and spirits in the United States. The parties have not
provided the Court with sufficient information regarding Angosturas business to make
the same determination. Because the plaintiff has failed to show Fernbrew abandoned
its ownership interest in the mark, the plaintiff has not shown that it is the sole owner of9
the instant mark.
b. Whether the Co-Owner of the Mark is a Required Party underRule 19(a)
Having determined that the plaintiff is not the sole owner of the mark at issue,
the undersigned will now address whether the co-owner of the mark is a required party
to the instant action. Rule 19(a) of the Federal Rules of Civil Procedure provides as
follows:
(a) Persons Required to Be Joined if Feasible.
(1) Required Party. A person who is subject toservice of process and whose joinder will notdeprive the court of subject-matter jurisdictionmust be joined as a party if:
(A) in that person's absence, the courtcannot accord complete relief among
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existing parties; or
(B) that person claims an interest relating tothe subject of the action and is so situated thatdisposing of the action in the person's absence
may:
(i) as a practical matter impair orimpede the person's ability toprotect the interest; or
(ii) leave an existing party subjectto a substantial risk of incurringdouble, multiple, or otherwiseinconsistent obligations becauseof the interest.
FED.R.CIV.P. 19(a)(1)(A)-(B) (emphasis added). Courts deciding a motion to dismiss
under Rule 12(b)(7) undergo a two-step inquiry. First, they decide whether an absent
party is required in the case under Rule 19(a). See Molinos Valle del Cibao v. Lama,
633 F.3d 1330, 1344 (11th Cir. 2011). If the party is a required party, the court must
order that the person be made a party. FED.R.CIV.P.19(a)(2). Second, if the parties
cannot join the new party, the court must consider if, in equity and good conscience,
the action should proceed among the existing parties or should be dismissed. FED.R.
CIV.P. 19(b).
A party is required if in [the] persons absence, the court cannot accord
complete relief among existing parties. FED.R.CIV.P.19(a)(1)(A). A party is also
required if the party has an interest in the action and resolution of the action may
either as a practical matter impair or impede the persons ability to protect the interest
or leave an existing party subject to a substantial risk of incurring double, multiple, or
otherwise inconsistent obligations. FED.R.CIV.P.19(a)(1)(B). Here, the co-owner(s) of
the mark have interests in the action. The resolution of this case may affect those
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Fernbrew is part of the DAquino Group of Companies. See Exhibit A,10
Declaration of Rex DAquino (DE# 34-1 at 1, 5/16/11). Thus, it is highly unlikely thatFernbrew would file suit against the other companies referred to under the umbrellaterm DAquino Group. Nonetheless, Angostura or any successors to Angosturasinterest could sue the defendants for infringement.
17
interests. For example, if the trial ends with an invalidation of the registered mark,
Fernbrews interest in the mark may be damaged. Moreover, the defendants may be at
risk of multiple obligations. The jury could find that the defendants did not infringe the
Wallaby Creek trademark. That judgment would only be binding on the plaintiff. It
would not bar Maples successors from suing the defendants for infringement of the10
instant mark. Of note, courts have found that trademark owners constitute required
parties under Rule 19. See, e.g., Lisseveld v. Marcus, 173 F.R.D. 689, 694 (M.D. Fla.
1997); May Apparel Grp., Inc. V. Ava Import-Export, Inc., 902 F. Supp. 93, 96 (M.D.
N.C. 1995); JTG of Nashville, Inc. v. Rhythm Band, Inc., 693 F. Supp. 623, 626 (M.D.
Tenn. 1988); Marrero Enters. of Palm Beach, Inc. v. Estefan Enters. Inc., No. 06-cv-
81036, 2007 WL 4218990, at *2 (S.D. Fla. Nov. 29, 2007); Jaguar Cars Ltd. v. Mfrs.
Des Montres Jaguar, S.A., 196 F.R.D. 306, 308 (E.D. Mich. 2000) (Courts that have
faced the issue have treated trademark owners as indispensable for Rule 19 purposes
in infringement actions.) (citations omitted). Because the outcome of this dispute may
affect the trademark co-owner(s) rights and because the defendants may face multiple
lawsuits, the undersigned concludes that the co-owner(s) of the mark are necessary
parties. Accordingly, the plaintiff must join its fellow co-owner(s), including Fernbrew,
which at the very least owns a 25 percent interest in the trademark.
c. Whether the Co-owner of the Mark Can Feasibly Be Joined
The next step in the Rule 19 analysis is to decide whether joinder of the co-
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Curiously, Fernbrew may already be a defendant in the instant lawsuit as part11
of defendant DAquino Group of Companies. Mr. DAquinos declaration states thatFernbrew . . . is part of the DAquino Group of Companies. See Exhibit A, Declarationof Rex DAquino (DE# 34-1 at 1, 5/16/11). However, because defendant DAquinoGroup of Companies is not a legal entity with the capacity to be sued, the undersignedwill recommend that it be dismissed from this lawsuit. See discussion, infra.
18
owner(s) is feasible. Neither party offers much assistance in making this determination.
In their motion, the defendants argued that Maple . . . is a Canadian corporation, over
which this [C]ourt does not have jurisdiction, and which has not voluntarily joined with
[the p]laintiff in bringing this action. Defendants, International Spirits & Wines, LLC and
DAquino Group of Companies, Motion to Dismiss Under Rules 12(b)(1), 12(b)(4),
12(b)(5) and 12 (b)(7) and Incorporated Memorandum of Law (DE# 22 at 6, 1/25/11).
The defendants now argue that Fernbrew has 50 percent ownership of the mark.
Defendants Supplemental Memorandum in Support of Motion to Dismiss (DE# 34 at 2,
5-6, 5/16/11). Presumably, the defendants would also make the argument that the
Court has no jurisdiction over Fernbrew. Fernbrew is an Australian company.11
However, Fernbrews citizenship does little to further the inquiry of whether the Court
has personal jurisdiction over this corporation. See Lisseveld, 173 F.R.D. at 695 (stating
that th[e] Courts jurisdiction over [New Zealand] corporation [in trademark infringement
action] w[ould] depend on an analysis under Floridas long-arm statute and [the] due
process requirements of the Fourteenth Amendment). Fernbrews likely unwillingness
to join the instant action is also not dispositive because Rule 19 contemplates the
involuntary joinder of parties in certain instances. See FED.R.CIV.P.19(a)(2) (stating
that [a] person who refuses to join as a plaintiff may be made either a defendant or, in
a proper case, an involuntary plaintiff.). The defendants do not address the feasibility
of joining Angostura. The record is insufficient to determine whether the Court would
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have personal jurisdiction over or whether Angostura would voluntarily join the instant
lawsuit as a plaintiff.
For its part, the plaintiff argues that personal jurisdiction over Maple would exist
and has filed an affidavit noting that it purchased Maples products in Florida in 2005.
See Opposition to Motion to Dismiss; Request for Sanctions for Violation of S.D. Fla.
L.R. 7.1.A.3; and Motion to Substitute Real Party in Interest Pursuant to FED.R.CIV.P.
17(a) (DE# 23 at 6, 2/8/11); Declaration of Mark A. Weber in Support of Opposition to
Defendants Motion to Dismiss under FED.R.CIV.P. 12(b)(1), 12(b)(4), 12(b)(5) and
12(b)(7) (DE# 23-4 at 9, 2/8/11). Mr. Webers affidavit neglects to mention how many
products the plaintiff purchased or how those products reached Florida. Like the
defendants, the plaintiff does not address the feasibility of joining Fernbrew or
Angostura. As a result, the parties offer little help in determining whether it is feasible to
join the other trademark owner(s).
It is clear that Fernbrew and any other co-owner(s) of the mark are required
parties in this litigation. However, there is insufficient evidence on this record to
determine the feasibility of joining the co-owner(s) of the mark in the instant action. In
Lisseveld, the defendants established that the possible owner of a trademark was a
necessary party for a trademark infringement action. Lisseveld, 173 F.R.D. at 695.
However, there [wa]s insufficient evidence to determine the feasibility of joinder. Id. In
that case, the district court denied the motion to dismiss but required the plaintiff to
amend the complaint within 60 days to include the necessary party. Id. at 701. The
undersigned recommends this course of action in the instant case. The defendants
motion should be GRANTED in part and DENIED in part and the plaintiff should be
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Generally, the Court would not proceed to a Rule 19(b) inquiry, unless joinder12
of the nonparty is unfeasible. See Focus on the Family v. Pinellas Suncoast TransitAuth., 344 F.3d 1263, 1280 (11th Cir. 2003) (stating that the court need not resolve thequestion of whether [the nonparty] is indispensable or merely necessary under Rule19(b) where the nonparty can be joined in the action) (citations omitted); see alsoTemple v. Synthes Corp., Ltd., 498 U.S. 5, 8 (1990) (per curiam) (no inquiry underRule 19(b) is necessary, because the threshold requirements of Rule 19(a) have notbeen satisfied.). However, in the instant case, it cannot be determined whether the
joinder of the co-owner(s) of the mark is feasible. If the plaintiff is unable to join the co-owner(s), the defendants would likely renew their motion to dismiss under Rule 12(b)(7)and the Court would have to revisit the issue. Conducting the Rule 19(b) inquiry nowwould save the parties from additional briefing and conserve the Courts limitedresources.
20
given an opportunity to amend its complaint to add Fernbrew and any other co-owners
of the mark as co-plaintiffs or involuntary plaintiffs. SeeFED.R.CIV.P.19(a)(2);
Lisseveld, 173 F.R.D. at 69495, 700; 5CCHARLESALAN WRIGHT,ARTHUR R.MILLER &
EDWARD H.COOPER,FEDERAL PRACTICE AND PROCEDURE 1359 (3d ed. 1998) (stating
that in some contexts, the court may make the grant of a motion to dismiss conditional
on the nonmoving partys failure to cure the defect by joining certain interested
outsiders as parties.). Because it is possible that the plaintiff may not be able to join
the co-owner(s) of the mark within the time allotted by the Court, the undersigned will
now undertake the second part of the Rule 19 analysis in the interest of judicial
economy.12
d. Whether in Equity and Good Conscience the Instant Action
Should Proceed among the Existing Parties or Be Dismissed
Having determined that Fernbrew is a required party and assuming, arguendo
that Fernbrews joinder in the instant action is not feasible, the undersigned will now
determine whether in equity and good conscience, the action should proceed among
the existing parties or should be dismissed. FED.R.CIV.P. 19(b). Rule 19(b) provides a
list of factors the Court should consider in making this inquiry. The factors are: (1) the
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extent to which a judgment rendered in the person's absence might prejudice that
person or the existing parties; (2) the extent to which any prejudice could be lessened
or avoided by protective provisions in the judgment, shaping the relief, or other
measures; (3) whether a judgment rendered in the person's absence would be
adequate and (4) whether the plaintiff would have an adequate remedy if the action
were dismissed for non-joinder. FED.R.CIV.P.19(b). These four factors are not
exclusive. Republic of Philippines v. Pimentel, 553 U.S. 851, 862 (2008). Rule 19 allows
courts to weigh pragmatic considerations as well. See Molinos Valle del Cibao, 633
F.3d at 1344.
i. The Extent to Which a Judgment Rendered in the Co-Owner(s) Absence Might Prejudice the Co-Owner(s) or
the Existing Parties
The first factor looks to whether any party would be exposed to a new action by
the required party, whether a judgment might harm a required partys interest and the
likelihood of either occurrence. See Molinos Valle del Cibao, 633 F.3d at 1344. As
noted above, a verdict in favor of the defendants would not necessarily prevent another
lawsuit by a co-owner of the trademark. Additionally, trial may result in the invalidation
of the registered trademark. The ease with which the plaintiff seeks to divest its co-
owner(s) of their interests in the mark suggests to the undersigned that the co-owner(s)
interests would not be adequately protected in the instant case. See Brown v. Reed
Elsevier, Inc., No. 08-81574-CIV, 2009 WL 3064751, at *3 (S.D. Fla. Sept. 22, 2009)
([corporation w]as not a necessary party if its interests could be adequately protected
by the existing parties.). These possibilities could constitute substantial prejudice to the
co-owner(s) or the defendants. The likelihood of either scenario is unknown at this early
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juncture.
ii. The Extent to Which Any Prejudice Could Be Lessenedor Avoided by ProtectiveProvisions in the Judgment,
Shaping the Relief, or Other Measures
The second factor is the extent to which any prejudice could be lessened or
avoided by protective provisions in the judgment, shaping the relief, or other measures.
Few practical ways exist to lessen the prejudice to the co-owner(s) and to the
defendants. The Court could limit the plaintiff to monetary relief, thus protecting the
defendants from the threat of multiple injunctions with (possibly) different conditions.
This option would not protect the defendants from the threat of multiple lawsuits.
Similarly, if the Wallaby Creek mark is invalidated, it will have been done so without
the co-owner(s) participation.
iii. Whether a Judgment Rendered in the Co-owner(s)
Absence Would Be Adequate
The third factor is inapplicable to the instant case. This provision[] come[s] into
play when . . . litigants seek specific relief such as an injunction. Molinos Valle, 633
F.3d at 1344. Although the plaintiff seeks injunctive relief in the instant case, this
provision concerns a situation where a court cannot direct a party responsible for the
plaintiffs woes because it is not present. Id. That is not the situation here. If the
defendants are infringing on the plaintiffs mark, the Court could enjoin the defendants.
iv. Whether the Plaintiff Would Have an Adequate Remedy
If the Action Were Dismissed for Non-joinder
As to the fourth factor, the plaintiff argues, without citing any Canadian law, that
Canadian courts will refuse to hear a dispute over an American trademark. See
Opposition to Motion to Dismiss; Request for Sanctions for Violation of S.D. Fla. L.R.
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7.1.A.3; and Motion to Substitute Real Party in Interest Pursuant to FED.R.CIV.P. 17(a)
(DE# 23 at 13, 2/8/11). The plaintiff thus concludes that it has no other adequate forum
in which to seek relief. Id. The plaintiffs argument assumes that it cannot sue, alone,
for common-lawtrademark infringement. The defendants do not fare any better. They
offer only a conclusory statement: [the p]laintiff would have an adequate remedy by
brin[g]ing [an] action in an appropriate forum along with . . . any successors in interest,
but it cannot simply ignore the fact that, at most, it can allege only an incomplete partial
interest in the trademark it seeks to enforce. See Defendants, International Spirits &
Wines, LLC and DAquino Group of Companies, Motion to Dismiss Under Rules
12(b)(1), 12(b)(4), 12(b)(5) and 12 (b)(7) and Incorporated Memorandum of Law (DE#
22 at 8, 1/25/11). The burden falls squarely on the defendants to demonstrate the
applicability of the Rule 19(b) factors. See Molinos Valle, 633 F.3d at 1347 (the movant
carries the burden to demonstrate which Rule 19(b) factors required dismissal in
equity and good conscience.). The undersigned concludes that it is unclear whether
the plaintiff has no other avenues of redress.
The considerations set forth in subdivision (b) are nonexclusive, as made clear
by the introductory statement that [t]he factors for the court to consider include.
Republic of Philippines v. Pimentel, 553 U.S. 851, 862 (2008) (citing Fed. Rule Civ.
Proc. 19(b)). One important pragmatic consideration is the court systems interest in
having this dispute settled once, with all interested parties involved.
There is no prescribed formula for determining in every case whether a person
is an indispensable party since that matter can be determined only in the context of
particular litigation. Barow v. OM Fin. Life Ins. Co., No. 8:11cv00159T33TBM,
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The plaintiffs state law claims and claim for unfair competition under the13
Lanham Act are addressed below.24
2011 WL 2649987, at *2 (M.D. Fla. July 6, 2011) (citing Provident Tradesmens Bank &
Trust Co. v. Patterson, 390 U.S. 102, 11819 (1968)). When considering all of these
factors, the undersigned concludes that, if the trademark co-owner(s) do not join as
plaintiffs, this case should be dismissed. See, e.g., Jaguar Cars Ltd. v. Mfrs. Des
Montres Jaguar, S.A., 196 F.R.D. 306, 308 (E.D. Mich. 2000) (Courts that have faced
the issue have treated trademark owners as indispensable for Rule 19 purposes in
infringement actions.) (citations omitted).
In sum, the plaintiff is not the sole owner of the mark at issue. The co-owner(s) of
the mark are required parties. The co-owner(s) have a strong interest in participating in
adjudications that may affect their ownership rights over the mark. The defendants also
have an interest in avoiding multiple lawsuits over the instant mark. Lastly, the Court
has an interest in promoting complete, consistent and efficient relief. Because the
record does not allow the Court to determine whether joinder of the co-owner(s) is
feasible, the undersigned recommends that the plaintiff be provided with an opportunity
to amend the complaint to add Fernbrew and any other co-owner(s) of the mark as co-
plaintiffs or involuntary plaintiffs.13
B. Defendants Motion to Dismiss under 12(b)(4) and (b)(5) and PlaintiffsMotion to Substitute Real Party in Interest
The defendants further argue that the complaint should be dismissed as to
defendant DAquino pursuant to FED.R.CIV.P. 12(b)(4) and (b)(5) because the
summons is faulty and the plaintiff delivered the process to the wrong entity. According
to the defendants, DAquino is an umbrella term used to refer to several separate and
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distinct Australian companies. Defendants, International Spirits & Wines, LLC and
DAquino Group of Companies, Motion to Dismiss Under Rules 12(b)(1), 12(b)(4),
12(b)(5) and 12 (b)(7) and Incorporated Memorandum of Law (DE# 22 at 8, 1/25/11).
The plaintiff responds that it had a good faith basis to believe that Mr. DAquino was
conducting business in Florida as DAquino Group of Companies. Opposition to Motion
to Dismiss; Request for Sanctions for Violation of S.D. Fla. L.R. 7.1.A.3; and Motion to
Substitute Real Party in Interest Pursuant to FED.R.CIV.P. 17(a) (DE# 23 at 4, 2/8/11).
The plaintiff further seeks leave to substitute the real party in interest for Defendant
DAquino Group of Companies, once Plaintiff can establish which legal entity should be
named. Id. at 6 (footnote omitted). The defendants correctly note that Rule 17 is not
the proper vehicle for substituting a party defendant. See Defendants Memorandum in
Opposition to Plaintiffs Motion to Substitute Real Party in Interest Pursuant to FED.R.
CIV.P. 17(a) (DE# 30 at 2, 2/24/11). Rule 17 allows courts to substitute the proper party
to prosecute a case. This rule applies to plaintiffs, not defendants. See Salazar v.
Allstate Tex. Lloyds, Inc., 455 F.3d 571, 573 (5th Cir. 2006) (stating that [b]y its terms .
. . rule 17(a) applies only to plaintiffs). DAquino is not prosecuting the instant case.
Having failed to substantively challenge DAquinos motion to dismiss under Rule
12(b)(4) and (b)(5), the plaintiff has failed to show that service of process on DAquino
was appropriate. Accordingly, the undersigned recommends that the complaint be
DISMISSED as to DAquino and that the plaintiffs request for leave under FED.R.CIV.
P. 17(a) be DENIED.
C. Plaintiffs State Law Claims and Claim for Unfair Competition under the
Lanham Act
The plaintiff argues that the complaint should not be dismissed in its entirety
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because the plaintiff can still maintain its state law claims and its claim of unfair
competition under the Lanham Act against the defendants:
Defendants motion addresses only Plaintiffs claim for infringement of a
Federally registered trademark under the Lanham Act, 15 U.S.C. 1114but does not provide any basis for dismissing Plaintiffs remaining claimsfor infringement of common law trademark rights and unfair competitionunder the Lanham Act, 15 U.S.C. 1125; trademark infringement andunfair competition under the common law of Florida; and deceptive andunfair trade practices under Fla. Stat. 501.201 et. seq.
Opposition to Motion to Dismiss; Request for Sanctions for Violation of S.D. Fla. L.R.
7.1.A.3; and Motion to Substitute Real Party in Interest Pursuant to FED.R.CIV.P. 17(a)
(DE# 23 at 6, 2/8/11). The plaintiffs claim of unfair competition under the Lanham Act
suffers from the same infirmity as the plaintiffs other federal claims: the plaintiff is not
the sole owner of the mark. A review of the complaint shows that the plaintiffs claim of
unfair competition under the Lanham Act does not allege separate facts from the
plaintiffs federal trademark claims.
The plaintiffs state law claims should also be dismissed for lack of subject
matter jurisdiction. The complaint alleges federal question jurisdiction and supplemental
jurisdiction. See Complaint (DE# 1 at 8-9, 10/5/10). The complaint does not assert
diversity jurisdiction. Thus, the Court would have to exercise supplemental jurisdiction
over the plaintiffs state law claims. Section 1367(c), United States Code, Title 28 states
as follows:
(c) The district courts may decline to exercise supplemental jurisdictionover a claim under subsection (a) if--
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim orclaims over which the district court has original jurisdiction,
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(3) the district court has dismissed all claims over whichit has original jurisdiction, or
(4) in exceptional circumstances, there are other compellingreasons for declining jurisdiction.
28 U.S.C. 1367(c) (emphasis added). The exercise of supplemental jurisdiction is
discretionary. Once all federal claims have been dismissed, a district court may choose
not to exercise its supplemental jurisdiction over state law claims. 28 U.S.C. 1367(c).
In determining whether to retain jurisdiction or decline jurisdiction, the Court must weigh
the considerations of economy, convenience, fairness, and comity. CarnegieMellon
Univ. v. Cohill, 484 U.S. 343, 350 (1988). The plaintiff has failed to address these
factors and state why the Court should exercise supplemental jurisdiction over the
remaining state law claims. Declining to exercise supplemental jurisdiction is particularly
appropriate in the instant case where the litigation is still in its early stages and the
Court has not set this matter for trial. As the Supreme Court noted: [w]hen the single
federal law claim in the action [is] eliminated at an early stage of the litigation, the
district court [has] a powerful reason to choose not to continue to exercise jurisdiction.
Id. at 351. Additionally, the Court has an interest in having this dispute settled once,
with all interested parties involved. For these reasons, the undersigned recommends
that the Court provide the plaintiff with an opportunity to join all co-owner(s) of the mark.
If the plaintiff is unable to join the co-owner(s), the Court should dismiss the complaint
in its entirety pursuant to Fed. R. Civ. P. 12(b)(7).
D. Plaintiffs Request for Sanctions
The plaintiff seeks sanctions against the defendants for failure to confer with the
plaintiff prior to filing the instant motion to dismiss pursuant to Local Rule 7.1(a)(3). See
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should be dismissed in its entirety. Defendant DAquino must be dismissed because it
is not a legal entity under Australian law. Rather, it is a umbrella name used to describe
a group of separate and distinct Australian companies. The plaintiff has not shown
entitlement to sanctions and its request for leave to substitute the real party in interest
should be denied. Based on the foregoing, the undersigned respectfully recommends
that the Defendants, International Spirits & Wines, LLC and DAquino Group of
Companies, Motion to Dismiss Under Rules 12(b)(1), 12(b)(4), 12(b)(5) and 12 (b)(7)
and Incorporated Memorandum of Law (DE# 22, 1/25/11)be GRANTED in part and
DENIED in part. The plaintiffs Opposition to Motion to Dismiss; Request for Sanctions
for Violation of S.D. Fla. L.R. 7.1.A.3; and Motion to Substitute Real Party in Interest
Pursuant to FED.R.CIV.P.17(a) (DE# 23, 2/8/11) should be DENIED.
RECOMMENDATION
In accordance with the foregoing, the undersigned respectfully recommends that
the Defendants, International Spirits & Wines, LLC and DAquino Group of Companies,
Motion to Dismiss Under Rules 12(b)(1), 12(b)(4), 12(b)(5) and 12 (b)(7) and
Incorporated Memorandum of Law (DE# 22, 1/25/11)be GRANTED in part and
DENIED in part and that the plaintiffs Opposition to Motion to Dismiss; Request for
Sanctions for Violation of S.D. Fla. L.R. 7.1.A.3; and Motion to Substitute Real Party in
Interest Pursuant to FED.R.CIV.P.17(a) (DE# 23, 2/8/11) be DENIED. The Court
should dismiss defendant DAquino Group of Companies and provide the plaintiff with
an opportunity to join the co-owner(s) of the mark. If the plaintiff is unable to join the co-
owner(s) of the mark, the Court should dismiss the complaint in its entirety.
The parties have fourteen (14) days from the date of receipt of this Report and
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Recommendation within which to serve and file written objections, if any, with the
Honorable Adalberto Jordan, United States District Court Judge. Failure to file timely
objections shall bar the parties from attacking on appeal the factual findings contained
herein. See LoConte v. Dugger, 847 F.2d 745 (11th Cir. 1988); RTC v. Hallmark
Builders, Inc., 996 F.2d 1144, 1149 (11th Cir. 1993).
RESPECTFULLY SUBMITTED at the United States Courthouse, Miami, Florida
this 26th day of July, 2011.
JOHN J. OSULLIVAN
UNITED STATES MAGISTRATE JUDGE
Copies furnished to:United States District Judge Jordan
All Counsel of Record
Case 0:10-cv-61856-AJ Document 37 Entered on FLSD Docket 07/26/2011 Page 30 of 30
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