United States District Court, D. Arizona
Douglas L. Rayes United States District Judge
Axon Enterprise, Inc. alleges that its competitor, Defendant
Vievu LLC, violated the Lanham Act by using deceptive
advertising and fraudulently concealing defects in its
products to obtain sales contracts. (Doc. 1.) Before the
Court is Defendant's motion to dismiss pursuant to
Federal Rule of Civil Procedure 12(b)(6). (Doc. 14.) The
motion is fully briefed, and the Court heard oral argument on
November 14, 2017. (Docs. 23, 24, 48, 52, 53, 55.) For the
following reasons, Defendant's motion is denied.
case is the third in which Plaintiff has complained about the
manner in which Defendant advertises its products. On
February 27, 2017, Plaintiff filed two lawsuits against
Defendant. Plaintiff filed the first in California Superior
Court and alleged violations of the California Unfair
Competition Law (UCL), Cal. Bus. & Prof. Code §
17200, and the California False Advertising Law (FAL), Cal.
Bus. & Prof. Code § 17500 (“California
Action”). Plaintiff filed the second in Arizona
Superior Court and alleged violations of the Arizona Consumer
Fraud Act (ACFA), A.R.S. §§ 44-1521 et seq., and
the Lanham Act, 15 U.S.C. §1125(a)(1)(B) (“Arizona
26, 2017, Plaintiff dismissed the California and Arizona
actions and filed this case, which raises only a Lanham Act
claim and implicates Defendant's representations in
Arizona, California, Florida, and New York (“Federal
Action”). (Doc. 1 ¶¶ 57-106.) Plaintiff's
actions took place in a matter of minutes-the California
Action was dismissed at 2:48 P.M., the Federal Action was
filed at 2:52 P.M., and the Arizona Action was dismissed at
three actions share the same general allegation that
Defendant made misrepresentations in the sale of its LE4
body-worn cameras. (Doc. 1 ¶ 1; Doc. 14-3 ¶ 1; Doc.
14-4 ¶ 1.) Specifically, Plaintiff alleges that
Defendant misrepresented its camera captures “30 frames
per second” and has a twelve hour battery life, when in
actuality the camera captures fewer frames and has a shorter
battery life. (Doc. 1 ¶ 1.) Plaintiff claims that
Defendant induced city and county entities to purchase its
cameras rather than Plaintiff's by underbidding and
misrepresenting its product. (¶ 57.)
successful Rule 12(b)(6) motion must show that the complaint
lacks a cognizable legal theory or fails to allege facts
sufficient to support such a theory. See Balistreri v.
Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.
1988). Defendant contends that Plaintiff's voluntary
dismissal of the Arizona Complaint operated as an
adjudication on the merits of the Lanham Act claim under
Arizona Rule of Civil Procedure 41(a)(1)(B), and therefore
the Federal Complaint lacks a cognizable legal theory because
it is barred by res judicata.
Arizona's rules of civil procedure, a plaintiff may
voluntarily dismiss an action “by filing a notice of
dismissal before the opposing party serves either an answer
or a motion for summary judgment, ” or “by order
based on a stipulation of dismissal signed by all parties who
have appeared.” Ariz. R. Civ. P. 41(a)(1)(A).
“Unless the notice or order states otherwise, the
dismissal is without prejudice. But if the plaintiff
previously dismissed an action in any court based on or
including the same claim, a notice of dismissal operates as
an adjudication on the merits.” Ariz. R. Civ. P.
41(a)(1)(B). This provision is substantially similar to
Fed.R.Civ.P. 41(a), and commonly is referred to as the
“two dismissal” rule. Commercial Space Mgmt.
Co. v. Boeing Co., 193 F.3d 1074, 1076 (9th Cir. 1999)
(interpreting analogous federal rule). Defendant, as the
party invoking the two dismissal rule, “bears the
burden of proving applicability of the rule by a
preponderance of the evidence.” Randall v. Direct Buy,
Inc., No. 4:09 CV 243 SNLJ, 2009 WL 4030533, at *3 (E.D.
Mo. Nov. 19, 2009).
undisputed that Plaintiff voluntarily dismissed two cases
sharing the same general allegations that Defendant falsely
advertised its LE4 body-worn cameras: first the California
Action, followed by the Arizona Action. It also is
undisputed that the Lanham Act claim at issue in the Federal
Action is identical to the Lanham Act claim that Plaintiff
voluntarily dismissed in the Arizona Action. The dispositive
question is whether the California Action was based on or
included the same Lanham Act claim, such that the voluntary
dismissal of the Arizona Action operated as an adjudication
of the claim on the merits.
Definition of “Same Claim” in Ariz. R. Civ. P.
purposes of Rule 41, “the Court considers whether
Plaintiff's claims are the same as those in the related
actions under the res judicata analysis.” Thomas v.
Wells Fargo Bank, N.A., C-13-02065 JSW, 2013 WL 5313458,
at *2 (N.D. Cal. Sept. 23, 2013); Abrahms v. Hard Drive
Prods., No. C-12-01006 JCS, 2012 WL 5499853, at *3 n.3
(N.D. Cal. Nov. 13, 2012) (“the Ninth Circuit has
analogized the Rule 41(a)(1)(B) two dismissal rule to the res
judicata inquiry”). When determining the preclusive
effect of federal court judgments, federal courts apply the
“transactional test, ” under which claims are
deemed to be the “same” if they arise out of the
same transaction or occurrence and “could conveniently
be tried together.” Mpoyo v. Litton Electro-Optical
Sys., 430 F.3d 985, 987 (9th Cir. 2005) (quotations and
courts look to state law, however, when determining the
preclusive effect of a state court judgment. Intri-Plex
Techs., Inc. v. Crest Grp., Inc., 499 F.3d 1048, 1052
(9th Cir. 2007). When determining the preclusive effect of a
prior judgment, Arizona applies the “same
evidence” test. Phx. Newspapers, Inc. v. Dep't
of Corr., 934 P.2d 801, 804 (Ariz.Ct.App. 1997); see
also Bishara v. U.S. Bank Nat'l Ass'n, No. 1
CA-CV 16-0176, 2017 WL 3484503, at *2 (Ariz.Ct.App. Aug. 15,
2017); Harris v. Ariz. Bd. of Regents, No.
CV-16-04029-PHX-DGC, 2017 WL 3704694, at *3 (D. Ariz. Aug.
28, 2017). Under this “rather restrictive test, ”
a subsequent action is barred “[i]f no additional
evidence is needed to prevail in the second action than that
needed in the first.” Phx. Newspapers, 934
P.2d at 804. “Two causes of action which arise out of
the same transaction or occurrence are not the same for
purposes of res judicata if proof of different or additional
facts will be required to establish them.” E.C.
Garcia and Co.,Inc. v. Ariz. Dep't of
Revenue, 875 P.2d 169, 179 (Ariz.Ct.App. 1993). In this
respect, “[t]he same ...