Case 2:18-cv-10758-JFW-RAO Document 48 Filed 05/14/19 Page 1 of 9 Page ID #:284
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`Case No.: 2:18-cv-10758-JFW(RAOx)
`MGA ENTERTAINMENT, INC., a
`California corporation,
`
`STATEMENT OF DECISION
`GRANTING DEFENDANT’S
`MOTION TO DISMISS PURSUANT
`TO FED. R. CIV. P. 12(B)(1)
`
`Plaintiff,
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`vs.
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`LOUIS VUITTON MALLETIER, S.A.,
`a French société anonyme; and DOES 1
`through 10, inclusive,
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`Defendants.
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`Case 2:18-cv-10758-JFW-RAO Document 48 Filed 05/14/19 Page 2 of 9 Page ID #:285
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`STATEMENT OF DECISION GRANTING MOTION TO DISMISS
`PURSUANT TO FED. R. CIV. P. 12(B)(1)
`On April 19, 2019, Defendant Louis Vuitton Malletier, S.A.S. (“Louis
`Vuitton”) filed a Motion to Dismiss Plaintiff MGA Entertainment, Inc.’s (“MGA”)
`First Amended Complaint in its entirety. On April 29, 2019, MGA filed its
`Opposition. On May 6, 2019, Louis Vuitton filed a Reply. After considering the
`moving, opposing, and reply papers, and the arguments therein, the Court rules that
`MGA failed to establish that an actual controversy exists between the parties. As a
`result, the Court hereby dismisses MGA’s First Amended Complaint for lack of
`jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) without leave to amend.
`I.
`BACKGROUND
`On April 5, 2019, MGA filed a First Amended Complaint against Louis
`Vuitton seeking a declaratory judgment that MGA’s toy product in no way violates
`Louis Vuitton’s intellectual property rights. MGA is a California corporation that
`develops and distributes children’s toys, including the “Bratz” dolls and a
`“handbag shaped toy container” referred to as “Pooey Puitton.” (First Am. Compl.
`(Dkt. No. 35) ¶¶ 5, 10, 11, 13.) MGA alleges that on or around December 7, 2018,
`Louis Vuitton filed an action in a French court alleging that the Pooey Puitton
`name (the “Pooey Name”) and product (the “Pooey Product”) infringe upon and
`disparage certain E.U. trademarks owned by Louis Vuitton, and seeking orders
`from the court permitting the seizure of Pooey Products from E.U. businesses that
`had purchased them. (Id. ¶¶ 17, 19.) Louis Vuitton and MGA are now engaged in
`a lawsuit in France in which Louis Vuitton seeks relief in France for MGA’s
`claimed violation of Louis Vuitton’s E.U. trademark rights. (Id. ¶¶ 22–26.) In its
`action here, MGA claims that by filing an action in France alleging violation of its
`E.U. trademarks, Louis Vuitton has asserted claims against MGA and its customers
`in the United States related to U.S. trademarks, which MGA claims are “identical”
`to those asserted in the French proceedings. (Id. ¶ 30.)
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`The First Amended Complaint additionally alleges that there is an actual
`controversy between the parties because Louis Vuitton “has a history of not
`respecting parody rights” and “filing vexatious lawsuits” related to its trademarks.
`(Id. ¶ 60.) MGA refers to three such cases concerning unrelated companies and
`products. (Id. ¶¶ 61–62.) On this basis, MGA concludes that an “actual, present,
`and justiciable controversy has arisen between Plaintiff and Defendants concerning
`their respective rights.” (Id. ¶ 69.)
`MGA asks the Court to declare that: (a) MGA’s use of the Pooey Name and
`the Pooey Product does not infringe or dilute Louis Vuitton’s trademarks; (b) the
`Pooey Name and the Pooey Product are protected as fair use under 15 U.S.C. §
`1125(c)(3)(A); (c) the Pooey Name and the Pooey Product are protected as parody
`under 15 U.S.C. § 1125(c)(3)(A)(ii); and (d) MGA may continue to market and
`distribute the Pooey Product and may continue to use the Pooey Name. (Id. at
`Prayer for Relief.)
`Louis Vuitton now moves to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) on
`the grounds that MGA’s First Amended Complaint fails to plead that an actual
`controversy exists under the laws of the United States sufficient to establish subject
`matter jurisdiction under the Declaratory Judgment Act (“DJA”).
`II.
`LEGAL STANDARD
`Article III § 2 of the United States Constitution limits the jurisdiction of
`federal courts to “Cases” and “Controversies” between parties. Therefore, the
`plaintiff must establish that an actual case or controversy exists before a federal
`court can exercise subject matter jurisdiction in any case. See, e.g., Lujan v. Defs.
`of Wildlife, 504 U.S. 555, 560–61 (1992).
`The same rule applies where, as here, the plaintiff seeks a declaratory
`judgment. The DJA states, “[i]n a case of actual controversy within its
`jurisdiction . . . any court of the United States, upon the filing of an appropriate
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`Case 2:18-cv-10758-JFW-RAO Document 48 Filed 05/14/19 Page 4 of 9 Page ID #:287
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`pleading, may declare the rights and other legal relations of any interested party
`seeking such declaration.” 28 U.S.C. § 2201(a) (emphasis added). “[T]he phrase
`‘case of actual controversy’ in the [DJA] refers to the type of ‘Cases’ and
`‘Controversies’ that are justiciable under Article III.” MedImmune, Inc. v.
`Genentech, Inc., 549 U.S. 118, 127 (2007).
`To meet the “actual controversy” standard of the DJA, as required to invoke
`the Court’s jurisdiction, a plaintiff must allege facts showing that there is a dispute
`between the parties that is: “definite and concrete, touching the legal relations of
`parties having adverse legal interests; and that it be real and substantial and admit
`of specific relief through a decree of a conclusive character, as distinguished from
`an opinion advising what the law would be upon a hypothetical state of facts.” Id.
`(internal quotation marks and citation omitted). 1
`The plaintiff bears the burden of establishing that the Court has jurisdiction.
`Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). To invoke
`federal subject matter jurisdiction, a plaintiff “must allege facts, not mere legal
`conclusions” sufficient to establish grounds for the Court’s jurisdiction. Leite v.
`Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014) (citing Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009)).
`A Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction
`“may be facial or factual. In a facial attack, the challenger asserts that the
`allegations contained in a complaint are insufficient on their face to invoke federal
`jurisdiction.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004)
`(internal citation omitted). “The district court resolves a facial attack as it would a
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`1 In addition to an actual controversy, all declaratory judgment actions must have a
`source of federal jurisdiction independent of the DJA. Fiedler v. Clark, 714 F.2d
`77, 79 (9th Cir. 1983) (citing Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S.
`667, 671–74 (1950)). MGA alleges the Court has federal question jurisdiction
`under the Lanham Act. (See First Am. Compl. ¶ 2.)
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`Case 2:18-cv-10758-JFW-RAO Document 48 Filed 05/14/19 Page 5 of 9 Page ID #:288
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`motion to dismiss under Rule 12(b)(6): Accepting the plaintiff’s allegations as true
`and drawing all reasonable inferences in the plaintiff’s favor, the court determines
`whether the allegations are sufficient as a legal matter to invoke the court’s
`jurisdiction.” Leite, 749 F.3d at 1121. But “the Court is not required to accept
`mere conclusory allegations nor does the Court necessarily assume the truth of
`legal conclusions merely because they are cast in the form of factual allegations.”
`Cattie v. Wal-Mart Stores, Inc., 504 F. Supp. 2d 939, 943 (S.D. Cal. 2007).
`Finally, where a motion to dismiss is granted, the Court must decide whether
`to grant leave to amend. While leave to amend should generally be freely granted,
`DeSoto v. Yellow Freight System, Inc., 957 F.2d 655, 658 (9th Cir. 1992), a Court
`need not grant leave to amend in cases where “the pleadings before the court
`demonstrate that further amendment would be futile.” Rutman Wine Co. v. E. & J.
`Gallo Winery, 829 F.2d 729, 738 (9th Cir. 1987).
`III. DISCUSSION
`The allegations of MGA’s First Amended Complaint fail to establish that an
`actual controversy exists under U.S. laws to establish jurisdiction under the DJA.
`A. MGA’s Assertion that a Claim about E.U. Rights is a Claim about
`U.S. Rights is Unsupported.
`MGA argues that by filing an action in France concerning E.U. trademark
`registrations, Louis Vuitton has asserted claims against MGA in the United States
`concerning Louis Vuitton’s U.S. trademark registrations. (First Am. Compl. ¶ 30.)
`The Court disagrees.
`It is a fundamental tenet of trademark law that “a trademark has a separate
`legal existence in each country and receives the protection afforded by the laws of
`that country.” Am. Circuit Breaker Corp. v. Or. Breakers Inc., 406 F.3d 577, 582
`(9th Cir. 2005) (internal citation omitted); see also Person’s Co., Ltd. v.
`Christman, 900 F.2d 1565, 1568–69 (Fed. Cir. 1990). Because of the
`jurisdictionally bound nature of trademarks, a foreign court’s determination
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`Case 2:18-cv-10758-JFW-RAO Document 48 Filed 05/14/19 Page 6 of 9 Page ID #:289
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`whether a product infringes trademarks registered under that country’s laws has no
`relevance to or effect on whether a product infringes U.S. trademarks.
`Calzaturificio Rangoni S.p.A. v. U.S. Shoe Corp., 868 F. Supp. 1414, 1418
`(S.D.N.Y. 1994). For the same reason, “when trade-mark rights within the United
`States are being litigated in an American court, the decisions of foreign courts
`concerning the respective trade-mark rights of the parties are irrelevant and
`inadmissible.” Fuji Photo Film Co, Inc. v. Shinohara Shoji Kabushiki Kaisha, 754
`F.2d 591, 599 (5th Cir. 1985) (internal citation omitted).
`Here, MGA alleges that “[a]s a result of Louis Vuitton’s filing of the French
`Action, . . . Louis Vuitton has asserted claims against MGA and its customers in
`the United States based upon its identical registrations for the LV Word Mark and
`LV Design Mark in the United States, and with the USPTO.” (First Am. Compl.
`¶ 30.) By law, however, E.U. and U.S. trademark rights are separate and distinct.
`Am. Circuit Breaker, 406 F.3d at 582. What may constitute impermissible action
`by MGA under E.U. trademark law may be permissible in the U.S. or vice versa.
`Furthermore, any determination that the French court may make regarding Pooey
`Puitton and Louis Vuitton’s E.U. trademark rights has no relevance to any question
`of U.S. law, U.S. trademark registrations, or the parties’ U.S. rights. Fuji Photo,
`754 F.2d at 599. Accordingly, an assertion of E.U. trademark rights is not an
`assertion of U.S. trademark rights. The fact that the E.U. marks and U.S. marks
`may appear visually similar or identical does not eliminate this distinction.
`In addition, MGA fails to plead facts that Louis Vuitton has asserted its U.S.
`trademark rights. MGA does not allege that Louis Vuitton is seeking to enforce its
`U.S. marks in the French proceedings. The First Amended Complaint does not
`allege that Louis Vuitton has ever communicated with MGA about the U.S. marks,
`claimed infringement or dilution of the U.S. marks, threatened or filed litigation
`asserting the U.S. marks, or taken any concrete action at all related to the Pooey
`Product and the Pooey Name in the U.S. and Louis Vuitton’s U.S. marks. In its
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`Opposition, MGA references post-complaint meet-and-confer discussions between
`the parties where Louis Vuitton stated it does not intend to bring suit in the United
`States related to the Pooey Puitton product and argues that this statement shows an
`actual controversy. (Opposition (Dkt. No. 42) at 8.) This argument does not
`follow, and in any event, consideration of such post-complaint events is improper
`in determining subject matter jurisdiction here. Innovative Therapies, Inc. v.
`Kinetic Concepts, Inc., 599 F.3d 1377, 1383–84 (Fed. Cir. 2010).
`B.
`The Foreign Action Does Not Show an Actual Controversy.
`Numerous courts have ruled that a claim pending elsewhere of violation of
`foreign intellectual property rights standing alone does not support the finding of
`an actual controversy between the same parties related to U.S. intellectual property
`rights. See, e.g., Avon Prods., Inc. v. Moroccanoil, Inc., 2013 WL 795652, *3–4
`(S.D.N.Y. Mar. 4, 2013); Schutte Bagclosures Inc. v. Kwik Lok Corp., 48 F. Supp.
`3d 675, 691–93 (S.D.N.Y. 2014); San DiskCorp. v. Audio MPEG, Inc., No. C-06-
`02655 RMW, 2007 WL 30598, *3 (N.D. Cal. Jan. 3, 2007); Studex Corp. v.
`Blomdahl Med. Innovation AB, 355 F. Supp. 2d 3, 8–9 (D.D.C. 2004).
`Here, MGA claims that Louis Vuitton’s French lawsuit against MGA
`regarding E.U. trademark rights establishes an actual controversy exists concerning
`the Pooey Product and Pooey Name and Louis Vuitton’s U.S. marks. But, as the
`cases cited above establish, litigation concerning foreign rights standing alone does
`not support the finding of an actual controversy here, and the Court will not find
`otherwise.
`C. MGA’s Decision-Making and Contractual Agreements Do Not
`Evidence an Actual Controversy.
`MGA’s allegations that it makes decisions about the Pooey Name and Pooey
`Product in the United States and in the Central District of California, and that its
`agreements with customers are governed by California and U.S. law, do not change
`the fact that the only outstanding dispute between the parties is one pending in a
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`French court concerning E.U. trademark rights. That action has no connection to
`Louis Vuitton’s U.S. trademarks, which are MGA’s only claimed basis for the
`Court’s subject matter jurisdiction in this case. (See First Am. Compl. ¶ 2.)
`MGA’s contracts with its customers are similarly irrelevant to whether there is an
`actual controversy in the United States between MGA and Louis Vuitton, as those
`contracts have no connection to a claimed dispute between the parties here.
`MGA also argues in Opposition that there may be a “chilling effect” on its
`actions in the United States based on Louis Vuitton’s institution of an action in
`France. (Opposition at 10.) But this subjective concern on MGA’s part does not
`evidence that the parties have taken “adverse positions” regarding Louis Vuitton’s
`U.S. trademarks, or that their “conflict of interests” regarding Louis Vuitton’s U.S.
`trademarks are “real and immediate,” such that an actual controversy exists as to
`those trademarks. Societe de Conditionnement en Aluminium v. Hunter Eng’g Co.,
`Inc., 655 F.2d 938, 943 (9th Cir. 1981).
`D. MGA’s Allegations about Other Cases, Companies, and Products
`are Irrelevant.
`MGA’s attempt to create a controversy between the parties by alleging that
`Louis Vuitton has a “history of not respecting parody rights in the United States
`and filing vexatious lawsuits against such protected parody,” First Am. Compl. ¶
`60, is similarly unavailing. See SanDisk, 2007 WL 30598, at *5 (contentions that
`Defendant was “litigious” did not support finding actual case or controversy).
`Rather than looking at past behavior concerning other unrelated companies and
`products to determine whether there is an actual controversy here, the Court need
`look only to the fact that Louis Vuitton has not sued MGA based on its trademark
`rights in the U.S., while it has initiated proceedings in France. These past events
`do not support the finding of a case or controversy.
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`E. MGA Seeks an Impermissible Advisory Opinion.
`MGA’s First Amended Complaint is also improper in that it seeks a broad
`advisory order that is not limited to the Louis Vuitton trademarks identified in the
`First Amended Complaint, nor to a decision regarding MGA’s rights in relation to
`Louis Vuitton. (See First Am. Compl. at Prayer for Relief.) Instead, by, among
`other things, asking for a judgment that “MGA may continue to market and
`distribute its Pooey Product, and may continue to use the Pooey Name in associate
`with the Pooey Product” (id. at Prayer for Relief, ¶ D), MGA seeks a judicial
`endorsement of its product against legal challenges of any kind. The requested
`relief is an example of an advisory opinion that courts will not allow. See Veoh
`Networks, Inc. v. UMG Recordings, Inc., 522 F. Supp. 2d 1265, 1270 (S.D. Cal.
`2007). Though MGA disclaims in its Opposition that it intended to seek such
`broad relief (Opposition at 11–12), the plain language of the First Amended
`Complaint speaks for itself.
`IV. CONCLUSION
`MGA’s First Amended Complaint fails to allege sufficient facts to establish
`that an actual controversy exists between the parties as required for jurisdiction
`under the Declaratory Judgment Act. Because there are no additional facts that
`could be alleged that would cure the defects in the First Amended Complaint, no
`leave to amend is granted. Doe v. U.S., 58 F.3d 494, 497 (9th Cir. 1995).
`Good cause appearing thereof, IT IS HEREBY ORDERED THAT:
`1. Louis Vuitton’s Motion to Dismiss MGA’s First Amended Complaint is
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`GRANTED without leave to amend; and
`2. All claims for relief against Louis Vuitton are hereby DISMISSED with
`prejudice.
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`DATED: May 14, 2019
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`_______________________________________
`JOHN F. WALTER
`UNITED STATES DISTRICT JUDGE
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