Island IP Acquisitions, LLC v. Antle

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ISLAND IP ACQUISITIONS, LLC, Plaintiff, v. SPENCER ANTLE, ISLAND COMPANY LLC, and, ISLAND COMPANY RUM, INC. Defendants.

No. 22-81293-BER

United States District Court, S.D. Florida

November 8, 2023

ORDER ON MOTION TO DISMISS AND TO STRIKE [ECF No 44]

BRUCE E. REINHART, UNITED STATES MAGISTRATE JUDGE

Plaintiff Island IP Acquisitions, LLC (“Island IP”) moves to dismiss Defendant Island Company Rum, Inc.'s (“Island Rum”) counterclaims and to strike three affirmative defenses asserted by all Defendants. The Motion is GRANTED IN PART and DENIED IN PART.

Island IP sues for trademark infringement, unfair competition cybersquatting, and conversion. ECF No. 1. In sum, Island IP claims that it purchased certain intellectual property that formerly belonged to Defendant Island Company LLC and that Defendants Antle and Island Rum are now improperly using that intellectual property. The intellectual property in question includes trademarks, social media accounts, and domain names.

Defendants deny these allegations. ECF No. 39. Their Answer asserts 17 affirmative defenses. Affirmative Defense 13 says Island IP lacks standing because it does not have valid trademark rights in the intellectual property. Affirmative Defense 14 says that Island IP has not joined indispensable parties as defendants. Affirmative Defense 17 says Island IP lacks standing to sue for conversion because it does not own some of the social media accounts and domain names in question.

Island Rum also asserts three counterclaims. ECF No. 39. Counterclaim I says that one of the trademark registrations (the ‘378 Mark) should be cancelled because Island IP committed fraud on the U.S. Patent and Trademark Office (USPTO). Counterclaim II says that the registrations for multiple trademarks (including the ‘378 Mark) should be cancelled because those marks were abandoned. Finally Counterclaim III asks to cancel Island IP's pending application for a trademark (the ‘861 Application) because of (1) likelihood of confusion with one of Island Rum's marks, and (2) fraud in connection with the application. ECF No. 39.

Island IP moves to dismiss all three Counterclaims and to strike Affirmative Defenses 13, 14, and 17. ECF No. 44. Island IP says Counterclaims I and II fail to state a claim upon which relief can be granted. It says this Court lacks subject matter jurisdiction over Counterclaim III. It says the affirmative defenses should be stricken because they are not pled with the necessary specificity.

I. LEGAL PRINCIPLES

A. Failure to State a Claim - Rule 12(b)(6)

On a motion to dismiss under Rule 12(b)(6), the Court must view the well-pled factual allegations in a claim in the light most favorable to the non-moving party. Dusek v. JPMorgan Chase & Co., 832 F.3d 1243, 1246 (11th Cir. 2016). Viewed in that manner, the factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the claim are true (even if doubtful in fact). Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). The Supreme Court has emphasized that “[t]o survive a motion to dismiss a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570).

When evaluating a motion to dismiss under Rule 12(b)(6):

[A] court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. 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.

Iqbal, 556 U.S. at 679. With limited exceptions, the Court looks only to the allegations in the complaint, any documents appended to the complaint or incorporated by reference into it, and any judicially-noticed facts. Reed v. Royal Caribbean Cruises Ltd., No. 20-CV-24979-RAR, 2022 WL 3027906, at *6 (S.D. Fla. Aug. 1, 2022) (J. Ruiz). The Court also may consider other documents whose authenticity is undisputed and which are central to the claims in the matter.

Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005). Factually unsupported allegations based “on information and belief” are not entitled to the assumption of truth. See Scott v. Experian Info. Sols., Inc., No. 18-CV-60178, 2018 WL 3360754, at *6 (S.D. Fla. June 29, 2018) (J. Altonaga) (“Conclusory allegations made upon information and belief are not entitled to a presumption of truth, and allegations stated upon information and belief that do not contain any factual support fail to meet the Twombly standard.”).

B. Pleading Fraud - Rule 9(b)

Where a pleading alleges a cause of action sounding in fraud, the allegations must satisfy Federal Rule of Civil Procedure 9(b), which says “a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). Rule 9(b) does not change the elements of the underlying cause of action; it merely requires heightened fact pleading. “[A] plaintiff is required to plead the ‘who, what, when, where, and how' pertaining to the underlying fraud.” Cardenas v. Toyota Motor Corp., 418 F.Supp.3d 1090, 1098 (S.D. Fla. 2019) (J. Moreno) (quoting Garfield v. NDC Health Corp., 466 F.3d 1255, 1262 (11th Cir. 2006)). The purpose of the particularity pleading requirement “is to alert defendants to their precise misconduct and protect them against baseless charges of fraudulent behavior.” Cardenas, 418 F.Supp.3d at 1098 (citing Durham v. Bus. Mgmt. Assocs., 847 F.2d 1505, 1511 (11th Cir. 1988)).

C. Subject Matter Jurisdiction - Rule 12(b)(1)

A party can challenge the Court's subject matter jurisdiction either facially or factually. “Facial attacks challenge subject matter jurisdiction based on the allegations in the complaint, and the district court takes the allegations as true in deciding whether to grant the motion. Factual attacks challenge subject matter jurisdiction in fact, irrespective of the pleadings.” Morrison v. Amway Corp., 323 F.3d 920, 925 n. 5 (11th Cir. 2003). In evaluating a factual challenge, Courts may consider extrinsic evidence such as testimony and affidavits. Id. The parties have a qualified right to jurisdictional discovery to develop the factual record, if they make a timely request and jurisdictional facts are genuinely in dispute. See ACLU v. City of Sarasota, 859 F.3d 1337, 1341 (11th Cir. 2017) (“[W]hen facts that go to the merits and the court's jurisdiction are intertwined and genuinely in dispute, parties have a ‘qualified right to jurisdictional discovery.'”) (citations omitted).

Even if a party has not raised the issue, a federal court has an independent obligation to ensure its own subject matter jurisdiction. United States v. Hays, 515 U.S. 737, 742 (1995); Wilson v. Minor, 220 F.3d 1297, 1303 n. 11 (11th Cir. 2000) (“Of course, a federal court has an independent obligation to ensure that it has jurisdiction over any claim brought before it even if jurisdictional questions are not raised by either party.”); Fed.R.Civ.P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”).

D. Striking Affirmative Defenses - Rule 12(f)

Federal Rule of Civil Procedure 8(c) requires a Defendant to “affirmatively state any avoidance or affirmative defense.” Fed.R.Civ.P. 8(c)(1). An affirmative defense “admits to the complaint, but avoids liability, wholly or partly, by new allegations of excuse, justification or other negating matter.” ECB USA, Inc. v. Chubb Ins. Co. of New Jersey, No. 20-20569-CIV, 2021 WL 4973579, at *2 (S.D. Fla. June 29, 2021) (J. Torres) (citations omitted). In contrast, a defense that points out a defect in the Plaintiff's ability to prove a prima facie case is a denial. E.g., In re Rawson Food Serv., Inc., 846 F.2d 1343, 1349 (11th Cir. 1988). An affirmative defense under Rule 8(c) does not have to meet the same pleading requirements as a complaint under Rule 8(a). Laferte v. Murphy Painters, Inc., No. 17-CIV-60376, 2017 WL 2537259, at *2 (S.D. Fla. June 12, 2017) (J. Bloom); Tsavaris v. Pfizer, Inc., 310 F.R.D. 678, 682 (S.D. Fla. 2015) (J. Moore). The responsive pleading is sufficient if it provides fair notice of the defense being asserted. Ramnarine v. CP RE Holdco 2009-1, LLC, No. 12-61716-CIV, 2013 WL 1788503, at *3 (S.D. Fla. Apr. 26, 2013) (J. Rosenbaum) (“Therefore, so long as Defendants' affirmative defenses give Plaintiffs notice of the claims Defendants will litigate, the defenses will be appropriately pled under Rules 8(b) and (c)”); Losada v. Norwegian (Bahamas) Ltd., 296 F.R.D. 688, 691 (S.D. Fla. 2013) (J. King) (The purpose of an affirmative defense is to give the opposing party notice of issues to be litigated.).

Rule 12(f) permits the Court to strike a legally insufficient defense. Fed.R.Civ.P. 12(f). “‘[A]n affirmative defense must be stricken when the defense is comprised of no more than bare-bones, conclusory allegations' or is ‘insufficient as a matter of law.' An affirmative defense is insufficient as a matter of law where: ‘(1) in the face of the pleadings, it is patently frivolous, or (2) it is clearly invalid as a matter of law.'” Northrop & Johnson Holding Co., Inc. v. Leahy, No. 16-CV-63008, 2017 WL 5632041, at *3 (S.D. Fla. Nov. 22, 2017) (internal citations omitted) (J. Bloom).

II. COUNTERCLAIMS

A. Counterclaim I

On February 11, 2022, Island IP filed a Combined Declaration of Use and Incontestability (“Declaration”) for the ‘378 Mark under Sections 8 an...