United States District Court, D. Nevada
FAN FI INTERNATIONAL, INC. et al. Plaintiffs,
INTERLINK PRODUCTS INTERNATIONAL, INC., Defendant.
C. JONES UNITED STATES DISTRICT JUDGE
Lanham Act case arises out of alleged false advertising.
Pending before the Court is a motion to dismiss for failure
to state a claim.
FACTS AND PROCEDURAL HISTORY
The New Jersey Actions
February 29, 2016, Interlink Products International, Inc.
(“Interlink”) sued Fan Fi International, Inc.
(“Fan Fi”) for patent infringement in the U.S.
District Court for the District of New Jersey, alleging that
Fan Fi's sale of certain dual showerhead products
violated U.S. Patent No. 7, 299, 510. (See Compl.,
ECF No. 1 in D.N.J. Case No. 2:16-cv-1142). Interlink amended
the complaint on June 23, 2016 to add ETL, LLC as a
defendant. (See Am. Compl., ECF No. 14 in D.N.J.
Case No. 2:16-cv-1142).
March 4, 2016, Interlink again sued Fan Fi in the U.S.
District Court for the District of New Jersey, this time for
trademark infringement and unfair competition under both
federal and state law, based on Fan Fi's use of the
“POWER SPA” mark. (See Compl., ECF No. 1
in D.N.J. Case No. 2:16-cv-1244). Interlink amended the
complaint on June 23, 2016 to add ETL, LLC as a defendant.
(See Am. Compl., ECF No. 13 in D.N.J. Case No.
2:16-cv-1244). On July 29, 2016, Fan Fi and ETL
counterclaimed for a declaration of non-infringement and
cancellation of the mark. (See Answer &
Countercl., ECF No. 23 in D.N.J. Case No. 2:16-cv-1244).
August 2, 2016, Interlink sued Fan Fi and ETL for a third
time in the U.S. District Court for the District of New
Jersey for false advertising under the Lanham Act and several
related state law causes of action based on advertising
claims Fan Fi and ETL made in relation to their showerhead
products. (See Compl., ECF No. 1 in D.N.J. Case No.
September 28, 2016, the three New Jersey Actions were
consolidated in that district, with the ‘1142 Case as
the lead case. On November 17, 2016, Fan Fi and ETL moved to
transfer the New Jersey Actions to this District under 28
U.S.C. § 1404(a). As of February 6, 2017, the motion is
fully briefed but no hearing has been set, and a settlement
conference has been set for February 23, 2017.
The Present Action
November 16, 2016 (the day before they moved to transfer the
New Jersey Actions to this District), Plaintiffs Fan Fi and
ETL sued Defendant Interlink in this Court for false
advertising under the Lanham Act and deceptive trade
practices and unfair competition under state law. Plaintiffs
allege that certain of Defendant's showerheads violate
federal regulations because they permit a flow of greater
than 2.5 gallons per minute (“gpm”) at 80 psi
when the flow restrictor is removed and that the flow
restrictors can be removed with less than eight pounds of
force. Plaintiffs allege that Defendant's advertising
claims that its showerheads comply with federal law are
therefore false. Defendant has moved to dismiss for failure
to state a claim.
Rule of Civil Procedure 8(a)(2) requires only “a short
and plain statement of the claim showing that the pleader is
entitled to relief” in order to “give the
defendant fair notice of what the . . . claim is and the
grounds upon which it rests.” Conley v.
Gibson, 355 U.S. 41, 47 (1957). Federal Rule of Civil
Procedure 12(b)(6) mandates that a court dismiss a cause of
action that fails to state a claim upon which relief can be
granted. A motion to dismiss under Rule 12(b)(6) tests the
complaint's sufficiency. See N. Star Int'l v.
Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir.
1983). When considering a motion to dismiss under Rule
12(b)(6) for failure to state a claim, dismissal is
appropriate only when the complaint does not give the
defendant fair notice of a legally cognizable claim and the
grounds on which it rests. See Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). In considering
whether the complaint is sufficient to state a claim, the
court will take all material allegations as true and construe
them in the light most favorable to the plaintiff. See NL
Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir.
1986). The court, however, is not required to accept as true
allegations that are merely conclusory, unwarranted
deductions of fact, or unreasonable inferences. See
Sprewell v. Golden State Warriors, 266 F.3d 979, 988
(9th Cir. 2001).
formulaic recitation of a cause of action with conclusory
allegations is not sufficient; a plaintiff must plead facts
pertaining to his own case making a violation
“plausible, ” not just “possible.”
Ashcroft v. Iqbal, 556 U.S. 662, 677-79 (2009)
(citing Twombly, 550 U.S. at 556) (“A claim
has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.”). That is, under the modern interpretation of
Rule 8(a), a plaintiff must not only specify or imply a
cognizable legal theory (Conley review), he must
also allege the facts of his case so that the court can
determine whether he has any basis for relief under the legal
theory he has specified or implied, assuming the facts are as
he alleges (Twombly-Iqbal review). Put differently,
Conley only required a plaintiff to identify a major
premise (a legal theory) and conclude liability therefrom,
but Twombly-Iqbal requires a plaintiff additionally
to allege minor premises (facts of the plaintiff's case)
such that the syllogism showing liability is complete and
that liability necessarily, not only possibly, follows
(assuming the allegations of fact are true).
a district court may not consider any material beyond the
pleadings in ruling on a Rule 12(b)(6) motion. However,
material which is properly submitted as part of the complaint
may be considered on a motion to dismiss.” Hal
Roach Studios, Inc. v. Richard Feiner & Co., 896
F.2d 1542, 1555 n.19 (9th Cir. 1990) (citation omitted).
Similarly, “documents whose contents are alleged in a
complaint and whose authenticity no party questions, but
which are not physically attached to the pleading, may be
considered in ruling on a Rule 12(b)(6) motion to
dismiss” without converting the motion to dismiss into
a motion for summary judgment. Branch v. Tunnell, 14
F.3d 449, 454 (9th Cir. 1994). Moreover, under Federal Rule
of Evidence 201, a court may take judicial notice of
“matters of public record.” Mack v. S. Bay
Beer Distribs., Inc., 798 F.2d 1279, 1282 (9th Cir.