Capital Grille Holdings, Inc. v. Historic Hotels of Nashville, LLC

448 F.Supp.3d 819

CAPITAL GRILLE HOLDINGS, INC., Plaintiff,

v.HISTORIC HOTELS OF NASHVILLE, LLC, Defendant.

NO. 3:19-cv-00576

United States District Court, M.D. Tennessee, Nashville Division.

Filed March 23, 2020

Erin Palmer Polly, Butler Snow LLP, Nashville, TN, Holly Hawkins Saporito, Marcos Alvarez, Robert L. Lee, Alston & Bird LLP, Atlanta, GA, Lauren Refinetti Timmons, Alston & Bird LLP, Charlotte, NC, for Plaintiff.

Scott McLean Douglass, Edward D. Lanquist, Jr., Patterson Intellectual Property Law, P.C., Nashville, TN, for Defendant.

MEMORANDUM OPINION

ELI RICHARDSON, UNITED STATES DISTRICT JUDGE

Pending before the Court is Defendant Historic Hotels of Nashville, LLC's Motion to Dismiss (Doc. No. 21), supported by an accompanying brief (Doc. No. 22). Plaintiff Capital Grille Holdings, Inc. filed a response (Doc. No. 25), and Defendant replied (Doc. No. 26). For the below-stated reasons, the Motion will be denied.

ALLEGED FACTS¹

Plaintiff CG Holdings ("Plaintiff") is a subsidiary of Darden Corporation ("Darden"), a full-service restaurant group. (Doc. No. 1 at ¶ 8). Darden's restaurants encompass some of the most recognizable brands in the restaurant industry, including, The Capital Grille®, LongHorn Steakhouse®, The Olive Garden®, Bahama Breeze®, Seasons 52®, Eddie V's®, Cheddar's Scratch Kitchen®, and Yard House®. (Id. at ¶ 9). The first The Capital Grille was opened in 1990 in Providence, Rhode Island. (Id. at ¶ 10). Darden acquired 28 operating The Capital Grille restaurants along with The Capital Grille brand from Rare Hospitality International Inc. in 2007. (Id. ). Today, Darden owns and operates more than fifty-seven The Capital Grille restaurants in the United States, including one restaurant in Memphis, Tennessee, located at 6065 Poplar Avenue, Memphis, Tennessee 38119, that it owns through its subsidiary. (Id. at ¶ 11). Plaintiff has continuously and exclusively used its The Capital Grille trademarks and service marks to promote The Capital Grille restaurants. (Id. at ¶ 12). Several of The Capital Grille marks are the subject of United States trademark and service mark registrations owned by Plaintiff, including:

a. Registration No. 1,644,015 for the design plus word mark THE CAPITAL G · R · I · L · L · E (stylized), registered May 7, 1991, for use in connection with "restaurant services" ("THE CAPITAL GRILLE & Design Mark");

b. Registration No. 3,032,066 for the word mark THE CAPITAL GRILLE, registered December 20, 2005, for use in connection with "restaurant services"; and

c. Registration No. 3,739,935 for the design plus word mark THE CAPITAL G · R · I · L · L · E (stylized), registered January 19, 2010, for use in connection with "restaurant services."

(Id. at ¶ 13). Plaintiff has prominently used and promoted The Capital Grille marks through extensive advertising, marketing, sale of goods, and the provision of services. (Id. at ¶ 16). As a result of Plaintiff's adoption, continuous use, and heavy promotion of The Capital Grille marks, the marks have become invaluable assets of Plaintiff, serving as a symbol of quality goods and services provided by Plaintiff. (Id. at ¶ 17).

In 2016, Plaintiff re-initiated researching the logistics of opening a new The Capital Grille location in Nashville, Tennessee, and has been actively searching for a suitable location for its intended new restaurant since that time. (Id. at ¶ 18). Upon opening a The Capital Grille in Nashville, Plaintiff and Defendant would be in direct competition with one another. (Id. at ¶ 19).

In 1995, Defendant began using the "Capitol Grille" name and mark in connection with the operation of its restaurant located at 231 6th Avenue N. Nashville, Tennessee 37219. (Id. at ¶ 20). Prior to its use of the "Capitol Grille" name and mark, Defendant's restaurant operated under the name and mark "Grille Room." (Id. ). Prior to April 23, 1990, when Plaintiff registered its first mark, Defendant did not own any restaurants that operated under a name or mark consisting in whole or in part of the phrase "The Capital Grille" and was not otherwise known by or using such a name. (Id. at ¶ 21). Defendant's use of the Capitol Grille name and marks occurred after Plaintiff's predecessor adopted the Capital Grille marks and federally registered its the Capital Grille design mark. (Id. at ¶ 22).

Defendant's Capitol Grille name and marks are similar to Plaintiff's Capital Grille name and marks in sight, sound, connotation, and commercial impression. (Id. at ¶ 23). In light of the heavy promotion and advertising of Plaintiff and its predecessor owners² of The Capital Grille restaurants, Defendant had actual knowledge of Plaintiff's rights in the Capital Grille marks. (Id. at ¶ 24). Prior to its use of the Capitol Grille name and marks, Defendant also had constructive knowledge of Plaintiff's federally registered Capital Grille design mark pursuant to 15 U.S.C. § 1072. (Id. at ¶ 25). Defendant's unauthorized use of the Capitol Grille name and marks is an attempt to trade on the goodwill of Plaintiff's Capital Grille marks, and to falsely imply that Defendant is affiliated or associated with, or sponsored or endorsed by Plaintiff. (Id. at ¶ 26). Defendant has engaged in and is continuing to engage in the above misconduct willfully and deliberately, and with an intent to misappropriate Plaintiff's goodwill in it's the Capital Grille marks. (Id. at ¶ 27).

LEGAL STANDARD

Rule 12(b)(1)

Rule 12(b)(1) "provides for the dismissal of an action for lack of subject matter jurisdiction." Cartwright v. Garner , 751 F.3d 752, 759 (6th Cir. 2014). "Where subject matter jurisdiction is challenged pursuant to Rule 12(b)(1), the plaintiff has the burden of proving jurisdiction in order to survive the motion." Moir v. Greater Cleveland Reg'l Transit Auth. , 895 F.2d 266, 269 (6th Cir. 1990) (citation omitted). There are two types of motions to dismiss for lack of subject-matter jurisdiction: facial and factual attacks. A facial attack on subject-matter jurisdiction, as Defendant has made here, goes to whether the plaintiff has properly alleged a basis for subject matter jurisdiction. See Ohio Nat'l Life Ins. Co. v. United States , 922 F.2d 320, 325 (6th Cir. 1990). Upon facial attack, "the court must take the material allegations of the petition as true and construed in the light most favorable to the nonmoving party." United States v. Ritchie , 15 F.3d 592, 598 (6th Cir. 1994) (citation omitted). "A factual attack, on the other hand, is not a challenge to the sufficiency of the pleading's allegations, but a challenge to the factual existence of subject-matter jurisdiction." Id. Rule 12(b)(6)

For purposes of a motion to dismiss brought pursuant to Rule 12(b)(6), the Court must view all the factual allegations in the complaint as true. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). To survive a motion to dismiss brought pursuant to Rule 12(b)(6), a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Id. 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. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief. Id. at 679, 129 S.Ct. 1937. A legal conclusion, including one couched as a factual allegation, need not be accepted as true on a motion to dismiss, nor are mere recitations of the elements of a cause of action sufficient. Id. at 678, 129 S.Ct. 1937 ; Fritz v. Charter Twp. of Comstock , 592 F.3d 718, 722 (6th Cir. 2010) ; Abriq v. Hall , 295 F. Supp. 3d 874, 877 (M.D. Tenn. 2018). Moreover, factual allegations that are merely consistent with the defendant's liability do not satisfy the claimant's burden, as mere consistency does not establish plausibility of entitlement to relief even if it supports the possibility of relief. Iqbal , 556 U.S. at 678, 129 S.Ct. 1937.

In determining whether a complaint is sufficient under the standards of Iqbal and its predecessor and complementary case, Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), it may be appropriate to "begin [the] analysis by identifying the allegations in the complaint that are not entitled to the assumption of truth." Iqbal , 556 U.S. at 680, 129 S.Ct. 1937. Identifying and setting aside such allegations is crucial, because they simply do not count toward the plaintiff's goal of showing plausibility of entitlement to relief. As suggested above, such allegations include "bare assertions," formulaic recitation of the elements, and "conclusory" or "bald" allegations. Id. at 681, 129 S.Ct. 1937. The question is whether the remaining allegations—factual allegations, i.e. , allegations of factual matter – plausibly suggest an entitlement to relief. Id. If not, the pleading fails to meet the standard of Fed. R. Civ. P. 8 and thus must be dismissed pursuant to Rule 12(b)(6). Id. at 683, 129 S.Ct. 1937.

ANALYSIS

I. Subject-Matter Jurisdiction

Defendant argues that Plaintiff's claims are not ripe and that therefore the Court lacks subject-matter jurisdiction in this case. "The ripeness doctrine is one of several justiciability doctrines ‘drawn both from Article III limitations on judicial power and from prudential reasons for refusing to exercise jurisdiction.’ " Kiser v. Reitz , 765 F.3d 601, 606 (6th Cir. 2014) (quoting Reno v. Catholic Soc. Servs., Inc. , 509 U.S. 43, 57 n.18, 113 S.Ct. 2485, 125 L.Ed.2d 38 (1993) ). "The ripeness doctrine serves to avoid premature adjudication of legal questions and to prevent courts from entangling themselves in abstract debates that may turn out differently in different settings." Warshak...