Olinsky & Associates, PLLC v. Nutting

OLINSKY & ASSOCIATES, PLLC, Plaintiff, v. MATTHEW F. NUTTING, and THE PEOPLE'S REPRESENTATIVE, LLC, Defendants.

MATTHEW F. NUTTING, and THE PEOPLE'S REPRESENTATIVE, LLC, Counter-Plaintiffs, v. HOWARD D. OLINSKY, MEGAN WICKLUND, EDWARD WICKLUND, JOHN MCDONOUGH, KRISTI FANELLI, and OLINSKY & ASSOCIATES, PLLC, Counter-Defendants.

No. 5:20-CV-01142 (MAD/ATB)

United States District Court, N.D. New York

July 2, 2021

BARCLAY DAMON, LLP Attorneys for Plaintiff and Counter-Defendants

LAW OFFICE OF RUI O. SANTOS, ESQ. Attorneys for Defendants

OFFICE OF ROBERT E. PURCELL Attorneys for Defendants

OF COUNSEL: JOHN JOSEPH PELLIGRA, ESQ. MICHAEL A. OROPALLO, ESQ. KAYLA A. ARIAS, ESQ.

RUI OLIVEIRA SANTOS, ESQ. ROBERT E. PURCELL, ESQ.

MEMORANDUM-DECISION AND ORDER

Mae A D'Agostino, U.S. District Judge

I. INTRODUCTION

On September 18, 2020, Plaintiff, Olinsky & Associates, PLLC, (hereinafter "Olinsky") filed this action against Defendants Matthew Nutting and The People's Representative, LLC, (collectively "Defendants"). Dkt. No. 1. Plaintiff asserted claims against Defendants for violations of the Lanham Act, including trademark infringement, unfair competition, dilution, and cybersquatting. Id. Plaintiff also asserted claims for unfair competition, false advertising, and deceptive business practices under New York General Business Law § 349(h) (hereinafter "N.Y. G.B.L."). Id.

On October 12, 2020, Defendants filed an answer to Plaintiff's complaint and asserted four affirmative defenses and four counterclaims. Dkt. No. 9. As affirmative defenses, Defendants asserted acquiescence, equitable estoppel, laches, and illegality. Id. at ¶¶ 125-32. Defendants also asserted claims against Plaintiff and Counter-Defendants Howard D. Olinsky, Megan Wicklund, Edward Wicklund, John McDonough, and Kristi Fanelli (hereinafter "Counter-Defendants"), for violations of the Lanham Act, common law unfair competition, and violations of N.Y. G.B.L. §§ 349, 350. Id. at ¶¶ 139-59. On November 11, 2020, Plaintiff and the Counter-Defendants filed a reply answer asserting the following affirmative defenses, failure to state a claim, lack of standing, improper procedure, lack of confusion, fair use, failure to mitigate damages, lack of damages, and reservation of affirmative defenses. Dkt. No. 12.

On December 18, 2020, Defendants moved to strike Plaintiff and Counter-Defendants' affirmative defenses and filed a motion for summary judgment. Dkt. Nos. 27, 29. That day, Plaintiff filed a motion to dismiss Defendants' counterclaims. Dkt. No. 28. On January 4, 2021, Defendants filed an opposition to Plaintiff's motion to dismiss and Plaintiff and Counter-Defendants filed an opposition to Defendants' motion to strike and motion for summary judgment. Dkt. Nos. 31, 32, 33. On January 8, 2021, Defendants filed a reply to Plaintiff and Counter-Defendants' motion to dismiss, and Plaintiff filed a reply to Defendants' motion to strike and motion for summary judgment. Dkt. Nos. 34, 35, 36.

Currently before the Court are Defendants' motion to strike and motion for summary judgment, and Plaintiff and Counter-Defendants' motion to dismiss. Dkt. Nos. 27, 28, 29. As set forth below, Defendants' motion to strike is denied, Defendants' motion for summary judgment is denied, and Plaintiff and Counter-Defendants' motion to dismiss to granted.

II. BACKGROUND

Plaintiff is a law firm organized as a professional limited liability company. Dkt. No. 1 at ¶¶ 2, 8. Plaintiff specializes in disability law and helps their clients obtain social security disability benefits. Id. at ¶ 3. Plaintiff has advertised its disability legal services since 1997 using the telephone number, 1.888.WIN.SSDI and website domains, www.winssdi.com and www.windisability.com. Id. at ¶¶ 10-11; Dkt. No. 33-2 at 2. Plaintiff no longer advertises the www.winssdi.com domain, but still owns it and has any communications and internet traffic reaching that address forwarded to www.windisability.com. Id. at ¶ 12On July 31, 2020, Plaintiff obtained a New York State Department of State Certificate of Service Mark Registration for the 1.888.WIN.SSDI. Id. at ¶ 14.

Plaintiff employed Defendant Nutting from September 29, 2008 to April 8, 2010. Id. at ¶ 15. During that time, Defendant Nutting worked as an "eligible for direct pay non-attorney." Id. Following his employment with Plaintiff, Defendant Nutting worked for attorney Joseph Stanley. Id. at ¶ 17. Plaintiff asserts that when Defendant Nutting resigned, he took forms, processes, and digital books from Attorney Stanley and began advertising his disability services using confusingly similar domain names and alpha-numeric telephone numbers as Plaintiff's number. Id. at ¶¶ 17-19.

Defendants advertise the number 1.833.WIN.SSDI in connection with their disability services, which differs only by two digits from Plaintiff's. Id. at ¶ 19. Defendants also use the website www.winssd.com, differing by only one letter from Plaintiff's website www.winssdi.com. Id. at ¶¶ 21, 23. Plaintiff asserts that Defendants generate over $600, 000 annually through their business. Id. at ¶ 24.

Plaintiff claims that it sent Defendants a cease and desist letter and Defendants agreed to change their phone number, but only did so on their website. Id. at ¶¶ 25-26. Plaintiff asserts that Defendants also advertise their services in such a way that potential clients would think that Defendant Nutting is a lawyer. Id. at ¶ 22. Plaintiff argues that Defendants' telephone number and website are virtually identical to its marks^[1] and the use of them in advertisements is likely to cause consumer confusion. Id. at ¶¶ 30-33.

III. DISCUSSION

A. Defendants' Motion to Strike

"Federal Rule of Civil Procedure 12(f) provides that a court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Cognex Corp. v. Microscan Sys., Inc., 990 F.Supp.2d 408, 418 (S.D.N.Y. 2013) (quoting Burck v. Mars, Inc., 571 F.Supp.2d 446, 456 (S.D.N.Y. 2008)) (internal quotation marks omitted). "It is well-established in this Circuit that '[a] motion to strike an affirmative defense under Rule 12(f) ... for legal insufficiency is not favored.'" Id. (quoting Estee Lauder, Inc. v. Fragrance Counter, Inc., 189 F.R.D. 269, 271 (S.D.N.Y. 1999)), vacated on other grounds, 478 U.S. 1015 (1986)).

"'Federal courts have discretion in deciding whether to grant motions to strike.'" Town & Country Linen Corp. v. Ingenious Designs LLC, 18-CV-5075, 2020 WL 3472597, *5 (S.D.N.Y. June 25, 2020) (quoting Allocco v. Dow Jones & Co., Inc., 2002 WL 1484400, *1 (S.D.N.Y. July 10, 2002)). "'[C]ourts have recognized the inherent imprecision involved in the assertion of affirmative defenses, such that the cautious pleader is fully justified in setting up as affirmative defenses anything that might possibly fall into that category, even though that approach may lead to pleading matters as affirmative defenses that could have been set forth in simple denials." Id. (quoting Orientview Techs. LLC v. Seven For All Mankind, LLC, No. 13 CIV. 0538, 2013 WL 4016302, *3 (S.D.N.Y. Aug. 7, 2013)).

When considering a motion to strike, the court must examine first whether the affirmative defense has met the pleading requirements of Twombly. GEOMC Co. v. Calmare Therapeutics Inc., 918 F.3d 92, 98 (2d Cir. 2019) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). However, "applying the plausibility standard to any pleading is a 'context-specific' task." Id. The Second Circuit has noted that, unlike the pleader of a complaint, "the pleader of an affirmative defense has only the 21-day interval to respond to an original complaint." Id. "In addition, the relevant context will be shaped by the nature of the affirmative defense." Id.

Second, the moving party must show that "the allegations have no bearing on the issues in the case." Id. at 97-98 (quoting S.E.C. v. McCaskey, 56 F.Supp.2d 323, 326 (S.D.N.Y. 1999)). And, third, the moving party must show that they "would be prejudiced by inclusion of the defense," which "will normally depend on when the defense is presented." Id.

In Plaintiff and Counter-Defendants' reply answer, they assert ten affirmative defenses: failure to state a claim, lack of standing, improper procedure, no private right of action, non-use, lack of confusion, fair use, failure to mitigate damages, lack of damages, and "reservation of affirmative defenses." Dkt. No. 12 at ¶¶ 67-76. Defendants advance no argument in support of their motion to strike except, "each affirmative defense is insufficiently [pled] under the Twombly/Iqbal standard. ..." Dkt. No. 27-1 at 3. Rather, Defendants merely cite the motion to strike standard articulated in Grimmel Industries and then state that the Second Circuit requires more than bald assertions without supporting facts. Id. at 2-3 (citing United States v. Grimmel Indus., LLC, No. 1:16CV1103, 2018 WL 3730856, *1 (N.D.N.Y. Aug. 6, 2018); GEOMC, 918 F.3d at 98).

Plaintiff and Counter-Defendants assert that the Court should reject Defendants' motion to strike as it is improperly pled and alleges no substantive arguments. Dkt. No. 32. Defendants argue that simply stating "'Each of the affirmative defenses is insufficiently plead [sic]'" and citing case law directing the Court to the standard of review for a motion to strike is sufficient to allow the Court to engage in review of their motion. Dkt. No. 35 at 2 (quoting Dkt. No. 27-1 at 3). The Court disagrees.

While the Court agrees that the Second Circuit has held that the pleading standards of Twombly and Iqbal apply to affirmative defenses, the extent to which they apply is "context-specific." GEOMC, 918 F.3d at 98. Each affirmative...