United States District Court, D. Arizona
ORDER
Honorable Steven P. Logan United States District Judge
Plaintiff
ABC Water LLC (the “Plaintiff”) filed suit
against APlus Water LLC (the “Defendant”)
alleging multiple causes of action for trademark infringement
and unfair competition, among other claims. (Doc. 1) The
Defendant moves to dismiss the Plaintiff's claims against
it (the “Motion”). (Doc. 12) The Motion was fully
briefed on February 21, 2019. (Docs. 14, 15) Oral argument
was not requested. The Court's ruling is as follows.
I.
Background
The
Plaintiff distributes water softeners, water filters, and
related tools using the “ABCwaters” trademark and
service mark. (Doc. 1 at 2) The Defendant distributes water
softeners and is a competitor of the Plaintiff. (Doc. 1 at 4)
The Plaintiff owns the copyrights for approximately six
images related to its products. (Doc. 1-4; Doc. 1 at 4) Both
the Plaintiff and the Defendant sell their products on
Amazon.com. (Doc. 1 at 2, 5) The Plaintiff alleges that the
Defendant used the Plaintiff's “ABCwaters”
trademark and several of the Plaintiff's copyrighted
images without permission. (Doc. 1 at 7) The Plaintiff
initiated this lawsuit alleging causes of action for
trademark infringement, among other claims (the
“Complaint”). (Doc. 1) The Defendant filed the
Motion seeking dismissal of the Complaint pursuant to Federal
Rule of Civil Procedure 12(b)(6). (Doc. 12)
II.
Legal Standard
To
survive a motion to dismiss, a complaint must contain
“a short and plain statement of the claim showing that
the pleader is entitled to relief” such that the
defendant is given “fair notice of what the . . . claim
is and the grounds upon which it rests.” Bell Atl.
Corp. v. Twombly, 550 U.S. 554, 555 (2007) (quoting
Fed.R.Civ.P. 8(a)(2); Conley v. Gibson, 355 U.S. 41,
47 (1957)). The Court may dismiss a complaint for failure to
state a claim under Federal Rule 12(b)(6) for two reasons:
(1) lack of a cognizable legal theory, and (2) insufficient
facts alleged under a cognizable legal theory. Balistreri
v. Pacificia Police Dep't, 901 F.2d 696, 699 (9th
Cir. 1990).
In
deciding a motion to dismiss, the Court must “accept as
true all well-pleaded allegations of material fact, and
construe them in the light most favorable to the non-moving
party.” Daniels-Hall v. Nat'l Educ.
Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). In
comparison, “allegations that are merely conclusory,
unwarranted deductions of fact, or unreasonable
inferences” are not entitled to the assumption of
truth, and “are insufficient to defeat a motion to
dismiss for failure to state a claim.” Id.;
In re Cutera Sec. Litig., 610 F.3d 1103, 1108 (9th
Cir. 2010). A plaintiff need not prove the case on the
pleadings to survive a motion to dismiss. OSU Student
All. v. Ray, 699 F.3d 1053, 1078 (9th Cir. 2012).
A court
ordinarily may not consider evidence outside the pleadings in
ruling on a Rule 12(b)(6) motion to dismiss. Zemelka v.
Trans Union LLC, 2019 WL 2327813, at 1 (D. Ariz. May 31,
2019) (citing United States v. Ritchie, 342 F.3d
903, 907 (9th Cir. 2003)). “A court may, however,
consider materials-documents attached to the complaint,
documents incorporated by reference in the complaint, or
matters of judicial notice-without converting the motion to
dismiss into a motion for summary judgment.”
Id. Additionally, “[e]ven if a document is not
attached to a complaint, it may be incorporated by reference
into a complaint if the plaintiff refers extensively to the
document or the document forms the basis of the
plaintiff's claim.” Lovelace v. Equifax Info.
Servs. LLC, 2019 WL 2410800, at 1 (D. Ariz. June 7,
2019) (citing Ritchie, 342 F.3d at 908). A plaintiff
need “not explicitly allege the contents of that
document in the complaint” for the court to consider
it, as long as the “plaintiff's claim depends on
the contents of [the] document, the defendant attaches the
document to its motion to dismiss, and the parties do not
dispute the authenticity of the document.” Knievel
v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).
“[T]he district court may treat such a document as part
of the complaint, and thus may assume that its contents are
true for purposes of a motion to dismiss under Rule
12(b)(6).” Ritchie, 342 F.3d at 908.
III.
Analysis
The
Defendant seeks dismissal of the Complaint pursuant to FRCP
12(b)(6). However, throughout the Motion, the Defendant fails
to attack the sufficiency of the allegations pleaded in the
Complaint. Instead, the Defendant asks for the Court to find
that the allegations in the Complaint are not plausible based
on an “Amazon Business Solutions Agreement” (the
“ABS Agreement”), which the Defendant argues
controls the dispute between the parties. (Doc. 12 at 2) In
response, the Plaintiff argues that the Motion is improper
because it seeks dismissal pursuant to an affirmative
defense, and the Court should not properly consider the ABS
Agreement in deciding the Motion. (Doc. 14 at 2) The
Defendant attempts to redeem the Motion by focusing the
arguments made in its reply on the insufficiency of the
allegations made in the Complaint. (Doc. 15)
First,
the Court reiterates that a motion to dismiss pursuant to
FRCP 12(b)(6) focuses on whether or not a plaintiff has
alleged sufficient facts to state a plausible claim for
relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007) (stating “[t]o survive dismissal for failure
to state a claim pursuant to Federal Rule of Civil Procedure
12(b)(6), a complaint must contain more than ‘labels
and conclusions' or a ‘formulaic recitation of the
elements of a cause of action'; it must contain factual
allegations sufficient to ‘raise a right to relief
above the speculative level.'”). In this case, the
Defendant asks the Court to move beyond the sufficiency of
the allegations in the Complaint and focus on contract
interpretation. Specifically, the Defendant requests for the
Court to “interpret the terms of the [ABS Agreement] as
a matter of law, ” and dismiss the Complaint solely
based on the Court's interpretation of the ABS Agreement.
(Doc. 12 at 4) The Court finds that dismissal on the basis of
contract interpretation is not properly addressed through a
FRCP 12(b)(6) motion. Johnson v. KB Home, 720
F.Supp.2d 1109, 1118 (D. Ariz. 2010) (stating that the Court
would decline to interpret a contract on a motion to
dismiss); Seitz v. Rheem Mfg. Co., 544 F.Supp.2d
901, 910 (D. Ariz. 2008) (stating “it would be
premature at the motion to dismiss stage for the Court to
delve into contractual interpretation”).
The
Court also finds that it is inappropriate to consider the
terms of the ABS Agreement in deciding the Motion because the
ABS Agreement was not incorporated in the Complaint.
“When ruling on a Rule 12(b)(6) motion to dismiss, if a
district court considers evidence outside the pleadings, it
must normally convert the 12(b)(6) motion into a Rule 56
motion for summary judgment”. See Fed.R.Civ.P. 12(b);
United States v. Ritchie, 342 F.3d 903, 907-08 (9th
Cir. 2003) (citing Parrino v. FHP, Inc., 146 F.3d
699, 706 n. 4 (9th Cir.1998)). “A court may, however,
consider certain materials-documents attached to the
complaint, documents incorporated by reference in the
complaint, or matters of judicial notice-without converting
the motion to dismiss into a motion for summary
judgment.” Id. The Plaintiff argues that the
ABS Agreement was not attached to the Complaint or referenced
in the Complaint. (Doc. 14 at 3) The Court agrees that there
is no mention of the ABS Agreement in the Complaint, and the
ABS Agreement is not attached to the Complaint.
The
Court also finds that the ABS Agreement is not properly
considered via judicial notice. Generally, a court may not
consider evidence or documents beyond a complaint in the
context of a FRCP 12(b)(6) motion. As exceptions, (i)
“a court may consider documents ‘whose contents
are alleged in a complaint and whose authenticity no party
questions, but which are not physically attached to the
[plaintiffs] pleading, '” and (ii) “a court
may take judicial notice of ‘matters of public record
outside the pleadings.'” Ramirez v. Medtronic
Inc., 961 F.Supp.2d 977, 983 (D. Ariz. 2013). Here, the
contents of the ABS Agreement were not alleged in the
Complaint, and the Plaintiff reserved its right to challenge
the authenticity of the ABS Agreement. (Doc. 14 at 1)
Therefore, the Court declines to consider the ABS Agreement
to resolve the Motion.
Finally,
the Defendant argues in its reply (Doc. 15) that the
allegations in the Complaint are insufficient to state a
claim under FRCP 12(b)(6). It is well settled that a party
cannot rely on arguments made in a reply that are not made in
the original motion. Surowiec v. Capital Title Agency,
Inc.,790 F.Supp.2d 997, 1002 (D. Ariz. 2011) (stating
“[i]t is well established ...