Dominguez Family Enters. v. Juanita's Foods

DOMINGUEZ FAMILY ENTERPRISES, INC., an Oregon corporation, Plaintiff, v. JUANITA'S FOODS, a California corporation, Defendant.

No. 3:22-cv-01691-SB

United States District Court, D. Oregon

February 24, 2023

OPINION AND ORDER

HON STACIE F. BECKERMAN, UNITED STATES MAGISTRATE JUDGE

Dominguez Family Enterprises, Inc. (“Plaintiff”) filed this declaratory judgment action against Juanita's Foods (“Defendant”) on November 2, 2022. In its complaint, Plaintiff seek a declaration that its re-branding plan does not breach the parties' Trademark and Trade Name Consent Agreement (the “Consent Agreement”) or violate Defendant's rights under the Lanham Act.

Defendant filed an action against Plaintiff related to the same Consent Agreement on August 25, 2022, in the District Court for the Central District of California (see Juanita's Foods v. Dominguez Fam. Enters., Inc., Case No 2:22-cv-06049-PA-PLA (C.D. Cal. Aug. 25, 2022) (the “California action”), and moves to dismiss transfer, or stay this action under the first-to-file rule. (See Def.'s Mot., ECF No. 21.) Defendant also argues that Plaintiff's claims here are compulsory counterclaims in the California action. (Id. at 21-22.)

The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1331 and 1338(a). For the reasons explained below, the Court grants Defendant's motion to transfer under the first-to-file rule.

BACKGROUND

Plaintiff is an Oregon-based, family-owned manufacturer and seller of “salty snacks and other food offerings,” and is best known for its tortilla chips. (Compl. ¶¶ 2, 7, ECF No. 1.) Juana “Juanita” Dominguez (“Mrs. Dominguez”) and her husband, Antonio Dominguez (“Mr. Dominguez”), co-founded the business in 1977. (Id. ¶ 3.) Since that time, Plaintiff has sold its products under the name “Juanita's,” the “diminutive form” of Mrs. Dominguez's first name. (Id.)

Defendant is a California corporation that also sells “certain Mexican specialty foods,” such as “canned tripe stew,” under the name “Juanita's.” (Id. ¶¶ 4, 8, 20.) In 1988, Defendant sent Plaintiff a letter alleging that its use of Juanita's constituted trademark and tradename infringement. (See id. ¶¶ 4, 16, 18, 22.) Thereafter, the parties executed the Consent Agreement on or about December 31, 1991. (See id. ¶ 16; see also id. Ex. A at 1, 10-11, stating that the agreement was “made as of the 31st day of December, 1991,” but Plaintiff's president and Defendant's general manager did not sign it until January 31, 1992 and April 15, 1992, respectively).

The Consent Agreement covered Defendant's “Juanita's” tradename and three federally registered trademarks, defined “‘Juanita's Mark' . . . as the trademark Juanita's and any confusingly similar variants,” defined “‘Juanita's Tradename' . . . as any tradenames incorporating the word Juanita's in whole or in part, and any confusingly similar variant,” and provided that Plaintiff “will restrict all further sales of food products under the Juanita's mark and tradename to certain types of products and to the [Pacific Northwest] States of Alaska, Idaho, Wyoming, Nevada, Montana, Oregon and Washington[.]” (Id. Ex. A at 1, 3-4) (caps omitted). Specifically, Plaintiff could continue to use the Juanita's trademark and tradename to sell “Mexican bakery and snack food products” in the aforementioned “Pacific Northwest States,” but Plaintiff could not do so with respect to (1) “any food product” outside of the Pacific Northwest States, or (2) “any meat (other than fried por[k] rind snacks), vegetable and sauce products[.]” (Id. at 3-5.)

The Consent Agreement further provided that Defendant may expand its use of the Juanita's trademark and tradename to areas that “overlap with Mexican bakery and snack food products,” Plaintiff would not “file for or solicit a federal registration for the Juanita's Mark in the United States Patent and Trademark Office,” and Plaintiff “expressly consented to [Defendant's] use of the Juanita's Mark and Tradename in the Pacific Northwest States in connection with the latter's sale of Mexican meat, vegetable and sauce products.” (Id. at 2, 5) (caps omitted). Additionally, the Consent Agreement provided that although Plaintiff was “not on constructive notice” of any “prior uses” of the Juanita's trademark and tradename, and the parties were not aware of any “actual confusion, mistake or deception of customers,” the parties would “do whatever is necessary, if anything, to prevent public confusion concerning their respective provision of Mexican food products under the Juanita's Mark and Tradename[.]” (Id. at 2-3, 6) (caps omitted).

Now, decades after executing the Consent Agreement, Plaintiff has “an imminent and impending plan to re-brand and honor both of its co-founders by providing [its food offerings] under designations based on a portmanteau of ‘Juanita' and ‘Antonio': Juantonio's[.]” (Id. ¶ 3) (caps omitted). Plaintiff, however, alleges that Defendant is “currently threatening [it] with legal proceedings in connection with the [Juantonio's re-branding plan],” because Defendant believes that such a plan is a breach of the Consent Agreement and violates the Lanham Act. (Id. ¶¶ 4-5.)

Despite alleging that Defendant has “threatened in written communications to initiate legal proceedings” regarding the Juantonio's re-branding plan, Plaintiff acknowledges that in the already pending California action, Defendant alleges that Plaintiff breached the Consent Agreement and violated the Lanham Act in other respects. (Id. ¶¶ 5, 26.) Notably, Plaintiff also acknowledges that less than a week before it filed suit here, Defendant informed Plaintiff that it believed that Juantonio's was “confusingly similar” to Juanita's and violated the Consent Agreement and trademark law, and that it planned to file a motion to enjoin Plaintiff's use of Juantonio's, and modify the injunction already in place, in the California action. (Id. ¶¶ 29-30, 34; see also Ex. C at 3-4, making a “good faith attempt to begin the meet and confer process”).

On November 2, 2022, Plaintiff filed this action against Defendant. Defendant's motion to dismiss, transfer, or stay followed on December 9, 2022, and the Court heard argument on February 21, 2023.

DISCUSSION

I. PRELIMINARY MATTERS

A. Non-Dispositive Matter

1. Applicable Law

The Ninth Circuit has held that “a motion to transfer a case from one federal district court to another is a non-dispositive matter.” CPC Patent Techs. Pty Ltd v. Apple, Inc., 34 F.4th 801, 808 (9th Cir. 2022) (citing In re U.S. Dep't of Educ., 25 F.4th 692, 699 (9th Cir. 2022)). In so holding, the Ninth Circuit explained that the magistrate judge's “order . . . merely transferred the action to another federal court and did not affect the viability of a claim or defense or the federal appellate courts' ability to correct errors.” In re U.S. Dep't of Educ., 25 F.4th at 699. Consequently, the “transfer order was nondispositive, and the magistrate judge had jurisdiction to enter it.” Id.

2. Analysis

For the reasons explained below, the Court exercises its discretion to transfer this case to the Central District of California under the first-to-file rule. The Court may transfer this action without the full consent of the parties to proceed before a U.S. magistrate judge, because the transfer to another federal district court is a non-dispositive matter. See In re U.S. Dep't of Educ., 25 F.4th at 699; see alsoOr. Cath. Press v. Ambrosetti, No. 3:19-cv-01397-AC, 2020 WL 12769032, at *1-4 (D. Or. July 6, 2020) (denying a motion to lift a stay under first-to-file rule after addressing the factors of chronology of the lawsuits, the similarity of the parties, and the similarity of the issues).

B. Judicial Notice

1. Applicable Law

In considering a motion under the first-to-file rule, a district court may take judicial notice of the record from the first-filed action because such proceedings have a direct relation to matters at issue (i.e., the chronology of the lawsuits and the similarity of parties and issues). See Jiangmen Kinwai Furniture Decoration Co. Ltd v. Int'l Mkt. Ctrs., Inc., 719 Fed.Appx. 556, 558 (9th Cir. 2017) (rejecting the plaintiff's argument that the Nevada court “violated the hearsay rule when it considered the [North Carolina district court's] record as a basis for dismissing [the plaintiff's] suit” under the first-to-file rule, and explaining that “[d]istrict courts are permitted to take judicial notice of other courts' proceedings, particularly where, ‘those proceedings have a direct relation to matters at issue'”) (citation omitted); see also In re Bozic, 888 F.3d 1048, 1051 n.1 (9th Cir. 2018) (addressing a case that was “the third of its kind” because “two related putative class actions were already pending in California,” taking judicial notice of “three minute orders” from the two pending actions, and noting that courts “may take judicial notice of records in other court proceedings” (citing United States v. Howard, 381 F.3d 873, 876 n.1 (9th Cir. 2004))).

2. Analysis

The parties ask the Court to take judicial notice of (1) several filings from the California action (pleadings, motion papers and declarations, and courts orders, including minute and scheduling orders), (2) an application “taken from the website for the U.S. Pat[ent] and Trademark Office,” (3) a printout from the Oregon Secretary of State's website, and (4) a return of service from the Court's docket (see ECF No. 12, which Plaintiff identified as ECF No. 13 in its request). (See Def.'s Req Judicial Notice (“Def.'s Req.”) at 1-6, ECF No. 23; Pl.'s Req. Judicial Notice (“Pl.'s Req.”) at 1-10, ECF No. 26; Def.'s Suppl. Req. Judicial Notice (“Def.'s Suppl. Req.”) at 1-3, ECF No. 29.) Plaintiff has also raised evidentiary...