United States District Court, D. South Carolina, Charleston Division
PATRICK MICHAEL DUFFY, District Judge.
This matter is before the Court on Defendants Charleston Black Cab Company ("CBCC") and Sam Mustafa's ("Mustafa") (collectively "Defendants") Motion to Dismiss (ECF No. 11). The present action is also before the Court on Plaintiff Dao Travels, LLC's ("Plaintiff") Motion for Preliminary Injunction (ECF No. 17). The pending motions have been fully briefed, and the Court held a hearing on January 20, 2015. At the conclusion of the hearing, the Court denied Defendants' Motion to Dismiss; however, the Court reserved ruling on Defendants' argument that Plaintiff's Complaint fails to state a claim against Mustafa. The Court also deferred ruling on Plaintiff's Motion for Preliminary Injunction to allow the Parties to conduct expedited discovery. This Order is intended to supplement and, where necessary, amend the pronounced Order of the Court. For the reasons set forth herein, the Court denies Defendants' Motion to Dismiss as to Plaintiff's claims against Mustafa. As for Plaintiff's request for preliminary injunctive relief, the Court amends its oral ruling deferring formal action pending discovery and instead denies the Motion for Preliminary Injunction without prejudice and with leave to renew and refile upon the completion of discovery.
Accepting the truth of the allegations in Plaintiff's Complaint and viewing all inferences in the light most favorable to Plaintiff, e.g., E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011), the facts, for purposes of ruling on Defendants' Motion to Dismiss, are as follows. Plaintiff is a South Carolina limited liability company providing transportation and taxi services in the Charleston area under the name of Charleston Black Cab Company. Plaintiff brought this suit against CBCC, a local competitor in the taxicab business, as well as Mustafa, who Plaintiff alleges is an officer of CBCC, asserting three causes of action related to Defendants' purported trademark infringement.
Plaintiff claims ownership of a common law trademark right in the mark "Charleston Black Cab Company" (the "Mark"). Plaintiff alleges that it purchased the Mark and its associated goodwill from Yellow Cab Company of Charleston on or about January 23, 2014, by way of a Trademark Assignment, a copy of which is attached to the Complaint. Plaintiff contends that since that time it has used the Mark for marketing purposes in both print and electronic forms, as well as on its website, www.charlestonblackcabcompany.com. Plaintiff further alleges that since 2005, Plaintiff and its predecessors in the Mark have used the Mark in print and electronic marketing and on the same website domain name mentioned above in association with transportation and taxi services rendered in the Charleston area. According to Plaintiff, consumers have come to recognize the Mark as associated with Plaintiff and its services. Through its use of the Mark, and that of its predecessors, Plaintiff asserts ownership of common law rights in the Mark.
Plaintiff alleges that, under the direction of Mustafa, CBCC has used and continues to use the same or similar mark-Charleston Black Cab Company, Charleston Black Cab Co., or both-within the same Charleston market in connection with its transportation and taxicab services. Plaintiff contends that CBCC operates a website, www.charlestonblackcabco.com, and that through that website and nearly identical domain names, CBCC markets and promotes its transportation and taxicab services with the same or similar mark. Plaintiff further alleges that its first use of the Mark, through its predecessors, predates CBCC's use of the same or similar mark.
Plaintiff filed its Complaint on May 16, 2014, asserting that this Court has subject matter jurisdiction over the present matter pursuant to 28 U.S.C. §§ 1331 and 1338 because this action arises under the Lanham Act, 15 U.S.C. § 1051 et seq. Plaintiff's Complaint alleges three causes of action against CBCC and Mustafa: (1) false designation of origin and unfair competition, in violation of 15 U.S.C. § 1125(a); (2) cybersquatting, in violation of 15 U.S.C. § 1125(d); and (3) violation of the South Carolina Unfair Trade Practices Act, SC Code Ann. § 39-5-10-20(a) et seq. ("SCUTPA"). Plaintiff demands a jury trial and seeks both injunctive relief and money damages, "including Defendants' profits, Plaintiff's lost sales, the costs of the action[, ] and attorneys' fees." (Pl.'s Compl. 9, ECF No. 1).
On August 22, 2014, Defendants filed a Motion to Dismiss pursuant to Rule 12(b)(1), (6), and (7) of the Federal Rules of Civil Procedure. Plaintiff filed its Response in Opposition to Defendants' Motion to Dismiss on September 4, 2014, arguing, inter alia, that Defendants have asked the Court to consider matters and materials outside of the Complaint, thereby converting portions of their Motion to Dismiss into a motion for summary judgment under Rule 12(d). Accordingly, Plaintiff contends that Defendants' Motion to Dismiss must be evaluated under both the corresponding Rule 12 standards and under Rule 56's summary judgment standard. On September 12, 2014, Defendants filed an inflammatory, six-page Reply that failed to cite a single legal authority. Clearly frustrated, Plaintiff filed a Sur-Reply on September 15, 2014.
On September 18, 2014, Plaintiff filed a Motion for Preliminary Injunction pursuant to Rule 65 of the Federal Rules of Civil Procedure, seeking to enjoin Defendants from using the Mark or any confusingly similar variation thereof. On October 6, 2014, Defendants filed a Response in Opposition to Plaintiff's Motion for Preliminary Injunction. On October 15, 2014, Plaintiff filed a Reply in Support of its Motion for Preliminary Injunction. More recently, on January 16, 2015, Plaintiff filed a Supplemental Declaration of Toan Dao, Plaintiff's owner, in support of its Motion for Preliminary Injunction.
As noted above, on January 20, 2015, the Court held a hearing on the pending motions. Following extensive argument by the Parties and after careful consideration, the Court denied Defendants' Motion to Dismiss on all grounds and as to all arguments asserted therein, with the sole exception of Defendants' contention that Plaintiff's Complaint fails to state a claim against Mustafa. Because the Parties' briefing did not adequately address this point, the Court reserved ruling on the issue. Additionally, as detailed further below, the Court deferred ruling on Plaintiff's Motion for Preliminary Injunction to allow the Parties to conduct expedited discovery. This Order is intended to memorialize, supplement, and amend the Court's oral rulings.
I. Rule 12(b)(6) of the Federal Rules of Civil Procedure
A motion to dismiss pursuant Rule 12(b)(6) for failure to state a claim upon which relief can be granted "challenges the legal sufficiency of a complaint." Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009) (citations omitted); see also Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) ("A motion to dismiss under Rule 12(b)(6)... does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses."). To be legally sufficient a pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2).
In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the Supreme Court "articulated a two-pronged approach' to assessing the sufficiency of a complaint." Robertson v. Sea Pines Real Estate Cos., 679 F.3d 278, 288 (4th Cir. 2012) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). First, the complaint must "contain factual allegations in addition to legal conclusions." Id. Under Rule 8's pleading standard, "a formulaic recitation of the elements of a cause of action will not do, " id. (quoting Twombly, 550 U.S. at 555) (internal quotation marks omitted), and "naked assertion[s]' devoid of further factual enhancement'" will not suffice, Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557). Second, the complaint must "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U.S. at 570). "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." Id. (citing Twombly, 550 U.S. at 556). More specifically, the complaint must demonstrate that the plaintiff's right to relief is more than a ...