United States District Court, D. Nevada
M. NAVARRO, DISTRICT JUDGE
before the Court is the Partial Motion to Dismiss
(“Motion to Dismiss”), (ECF No. 19), filed by
Defendants Uptime Institute, LLC (“Uptime”) and
Uptime Institute Professional Services, LLC (“Uptime
IPS”) (collectively, “Defendants”).
Plaintiff Switch, Ltd. (“Plaintiff”) filed a
Response, (ECF No. 30), and Defendants filed a Reply, (ECF
No. 31). For the reasons discussed below, the Partial Motion
to Dismiss is GRANTED in part and
DENIED in part.
case arises from Defendants' allegedly fraudulent
representations in connection with their data center
certification business. Defendant Uptime, through its
affiliate Defendant Uptime IPS, offers data center
certification services. (First Am. Compl. (“FAC”)
¶¶ 22-23, ECF No. 15). Defendants employ an
allegedly proprietary four-“tier” classification
standard to certify the quality of the design, construction,
and/or operations of their customers' data centers.
(Id. ¶¶ 23-27). The United States Patent
and Trademark Office (“USPTO”) awarded Defendants
federal service mark registrations for the
“tiers” of certification that Defendants issue to
their customers. (Id. ¶¶ 15, 54-55,
71-77). Defendants represent that their certifications
provide substantial value. (Id. ¶¶ 28-30,
is a corporation that primarily designs, constructs, and
operates data centers. (Id. ¶ 16). Based on
Defendants' representations, Plaintiff paid Defendants
over $225, 000 to certify its SuperNap 8 Data Center's
operations and over $260, 000 to certify its SuperNap 9 Data
Center's design, facility, and operations. (Id.
¶¶ 34-38). Despite receiving Defendants'
highest “Tier IV” design, “Tier IV”
facility, and “Tier IV Gold” certifications,
Plaintiff alleges that the certifications have provided
little value because Defendants' classification system
misleads consumers shopping for data center services.
(Id. ¶¶ 39-53).
argues that Defendants' certification scheme is
inherently misleading. (Id.) The First Amended
Complaint explains that Defendants certify a data
center's design before the client builds the data center.
(Id. ¶ 43). As a result of this certification
scheme, Plaintiff alleges that some of Defendants'
clients have received Tier IV design certifications like
Plaintiff, but, unlike Plaintiff, they have built their data
centers to plans of lower quality than the plans Defendants
certified. (Id. ¶¶ 43, 45-46).
Although these customers would not receive Tier IV facilities
or operations certifications, they tout themselves as
certified Tier IV data centers. (Id.) Compounding
the confusion, Defendants' website allegedly promotes its
customers' design certifications in a manner that leads
consumers to believe that the value of design certifications
is akin to that of facilities or operations certifications.
(Id. ¶ 44). Despite Plaintiff's repeated
complaints to Defendants that Defendants' customers were
misleading consumers by passing off their design
certifications as facilities or operations certifications
that they had not earned, Defendants took no action to police
their service marks. (Id. ¶¶ 45-48, 50).
alleges that Defendants damaged Plaintiff's business by
misleading Plaintiff's customers into believing there is
no distinction between Defendants' design, facilities,
and operations certifications. (Id. ¶¶ 47,
50). To that end, Plaintiff argues that Defendants'
certification scheme has deprived Plaintiff of business by
causing its prospective consumers to believe competitors with
inferior data center operations and facilities offer services
of equal quality. (Id. ¶ 51). Relatedly,
Plaintiff alleges that its customers demand lower prices
because its competitors who pass themselves off as equally
certified offer lower rates. (Id. ¶ 52).
the First Amended Complaint asserts claims for: (1) breach of
contract; (2) deceptive trade practices; (3) fraudulent
procurement of Defendants' service marks; (4) abandonment
of Defendants' service marks; and (5) a declaratory
judgment that it has not infringed Defendants'
marks. (Id. ¶¶ 95-133).
Pursuant to its claims for relief, Plaintiff seeks damages
and cancellation of Defendants' marks. (Id.
their Partial Motion to Dismiss, Defendants request that the
Court dismiss all of Plaintiff's claims, excluding the
breach of contract claim. (Partial Mot. to Dismiss
(“MTD”) 1:3-5, ECF No. 19). Defendants allege
that: (1) Plaintiff has not pleaded its deceptive trade
practices and fraudulent procurement of service mark claims
with particularity as required under Federal Rule of Civil
Procedure (“FRCP”) 9(b); (2) the Court does not
have subject matter jurisdiction over Plaintiff's claim
for cancellation due to abandonment; and (3) Plaintiff cannot
sufficiently plead a claim for declaratory judgment because
there is no actual controversy or immediate threat of injury
since Defendants have not brought an action for infringement.
may dismiss a plaintiff's complaint for “failure to
state a claim upon which relief can be granted.”
Fed.R.Civ.P. 12(b)(6). A properly pled complaint must provide
“a short and plain statement of the claim showing that
the pleader is entitled to relief.” Fed.R.Civ.P.
8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555 (2007). While Rule 8 does not require detailed
factual allegations, it demands “more than labels and
conclusions” or a “formulaic recitation of the
elements of a cause of action.” Twombly, 550
U.S. at 555. In assessing the sufficiency of a complaint, a
district court must accept as true all well-pled factual
allegations in the complaint; however, legal conclusions are
not entitled to the assumption of truth. Ashcroft v.
Iqbal, 556 U.S. 662, 679 (2009). The court must then
consider whether the factual allegations in the complaint
allege a plausible claim for relief. Id. When the
claims in a complaint have not crossed the line from
conceivable to plausible, plaintiff's complaint must be
dismissed. Twombly, 550 U.S. at 570.
“[i]n alleging fraud or mistake, a party must state
with particularity the circumstances constituting fraud or
mistake.” Fed.R.Civ.P. 9(b). The rule requires that
claims of fraud be accompanied by the “who, what, when,
where, and how” of the conduct charged, Vess v.
Ciba-Geigy Corp., USA, 317 F.3d 1097, 1106 (9th Cir.
2003) (quoting Cooper v. Pickett, 137 F.3d 616, 627
(9th Cir. 1997)), so that the complaint may not simply
“lump multiple defendants together.” Destfino
v. Reiswig, 630 F.3d 952, 958 (9th Cir. 2011). In other
words, the complaint “must include ‘an account of
the time, place, and specific content of the false
representations as well as the identities of the parties to
the misrepresentations.'” Depot, Inc. v. Caring
for Montanans, Inc., 915 F.3d 643, 668 (9th Cir. 2019)
(quoting Swartz v. KPMG, LLP, 476 F.3d 756, 764 (9th
Cir. 2007) (per curiam)) (internal quotations omitted). Rule
9(b)'s particularity requirement ensures that the
defendants are on “notice of the particular misconduct
. . . so that they can defend against the charge and not just
deny that they have done anything wrong.”
Vess, 317 F.3d at 1106 (internal quotations
12(b)(1) of the Federal Rules of Civil Procedure
(“FRCP” or “Rules”) permits motions
to dismiss for lack of subject matter jurisdiction.
Fed.R.Civ.P. 12(b)(1). When subject matter jurisdiction is
challenged, the burden of proof is placed on the party
asserting that jurisdiction exists. Scott v.
Breeland, 792 F.2d 925, 927 (9th Cir. 1986) (holding
that “[t]he party seeking to invoke the court's
jurisdiction bears the burden of establishing that
jurisdiction exists”). Accordingly, the court will
presume lack of subject matter jurisdiction until the
plaintiff proves otherwise in response to the motion to
dismiss. Kokkonen v. Guardian Life Ins. Co. of Am.,
511 U.S. 375, 377 (1994).