Case 2:14-cv-00242-WTL-MJD Document 47 Filed 02/04/15 Page 1 of 10 PageID #: 183
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF INDIANA
`TERRE HAUTE DIVISION
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`PAT TOVEY,
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` Plaintiff,
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` vs.
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`STADLER & CO., INC.,
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` Defendant.
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` Cause No. 2:14-cv-242-WTL-MJD
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`ENTRY ON DEFENDANT’S MOTION TO DISMISS AND
`PLAINTIFF’S MOTION FOR LEAVE TO FILE AMENDED COMPLAINT
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`This cause is before the Court on the Defendant’s motion to dismiss (Dkt. No. 23) and the
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`Plaintiff’s motion for leave to file an amended complaint (Dkt. No. 42). The Plaintiff’s motion is
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`fully briefed, and the Court, being duly advised, GRANTS the motion for leave to file an
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`amended complaint, for the reasons set forth below. In light of this ruling, the Court construes
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`the Defendant’s motion to dismiss as against Plaintiff’s amended complaint. That motion is also
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`fully briefed, and the Court, being duly advised, DENIES the motion to dismiss, for the reasons
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`set forth below.
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`I.
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`MOTION TO AMEND
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`The Plaintiff, Pat Tovey, moves the Court for leave to file an amended complaint to add
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`Andrew Stadler (“Andrew”), the Chief Executive Officer and President of Defendant Stadler &
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`Co., Inc. (“Stadler”), as a defendant in this case. According to Tovey, Andrew “personally
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`directed and participated in the acts which constitute the basis of [P]laintiff’s claims for the tort
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`of defamation and trade disparagement under the Lanham Act.” Tovey’s Mot. at ¶ 2. Thus,
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`Tovey argues that Andrew is personally liable to him. In response, Stadler argues that
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`the issue . . . is whether Andrew Stadler, when he “directed and participated” in the
`production of the television commercials at issue, was acting within the scope of
`his employment as the president and CEO of Stadler & Co. If he was, he cannot be
`individually liable for the claims raised by Plaintiff. If he was not, and exceeded
`the scope of his authority, then Stadler cannot be held vicariously liable for the
`individual torts of Andrew Stadler that were beyond the scope of his duties and
`president and CEO. . . . Plaintiff cannot have it both ways.
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`Stadler’s Resp. at 3-4.
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`It is much too early to determine whether Andrew is personally liable to Tovey. Thus,
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`Stadler’s arguments are premature and not appropriate at this stage.
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`The case management plan provided that all motions for leave to amend pleadings and/or
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`join additional parties were to be filed on or before December 19, 2014. Dkt. No. 18 at 3. Tovey
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`met this deadline. Finding no other justification for denying Tovey’s motion, such as undue
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`delay, bad faith, unfair surprise, or prejudice, the Court GRANTS Tovey’s motion to amend.
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`The Clerk is instructed to docket Tovey’s amended complaint (found at Dkt. No. 42-1) as of
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`the date of this Entry.
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`II. MOTION TO DISMISS
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`A. Standard
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`In reviewing a Federal Rule of Civil Procedure 12(b)(6) motion, the Court “must accept
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`all well pled facts as true and draw all permissible inferences in favor of the plaintiff.” Agnew v.
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`National Collegiate Athletic Ass’n, 638 F.3d 328, 334 (7th Cir. 2012). For a claim to survive a
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`motion to dismiss for failure to state a claim, it must provide the defendant with “fair notice of
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`what the . . . claim is and the grounds upon which it rests.” Brooks v. Ross, 578 F.3d 574, 581
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`(7th Cir. 2009) (quoting Erickson v. Pardus, 551 U.S. 89, 93 (2007) (omission in original). A
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`complaint must “contain sufficient factual matter, accepted as true, to state a claim to relief that
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`is plausible on its face.” Agnew, 638 F.3d at 334 (citations omitted). A complaint’s factual
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`Case 2:14-cv-00242-WTL-MJD Document 47 Filed 02/04/15 Page 3 of 10 PageID #: 185
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`allegations are plausible if they “raise the right to relief above the speculative level.” Bell
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`Atlantic Corp v. Twombly, 550 U.S. 544, 556 (2007).
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`B. Plaintiff’s Allegations
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`Tovey is employed full-time as a tax preparer for Wabash Tax Service, Inc. (“Wabash”)
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`in Terre Haute, Indiana. Tovey has worked as a tax preparer for Wabash for approximately
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`twenty years. For the past ten years, Tovey has used the nickname “Pat the Tax Man” in his tax
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`preparation business.
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`Stadler also provides tax preparation services to customers in Terre Haute. Stadler and its
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`employees are direct competitors of Wabash and Tovey.
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`Beginning in January 2014, and continuing through April 2014, Stadler ran the following
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`commercial on the Time Warner Cable systems in and around Terre Haute:
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`(Commercial opens with a man holding a pipe and looking at a sink.)
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`Man: (screams as water is spayed in his face from broken plumbing)
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`Actor portraying “Pat the Tax Man”: Wow, this is going to cost a lot of money
`to repair. But the good news is you can use your tax return money you got last
`week.
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`Man: How do you know about my tax refund?
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`Actor portraying “Pat the Tax Man”: Because it’s me, Pat the Tax Man. (Actor
`portraying Pat opens up his shirt to show t-shirt with the words “Pat the Tax Man”
`taped onto it.) I did your taxes last week for what half the other guy charges. But if
`the IRS calls, don’t give ‘em my name.
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`Narrator: Don’t trust your taxes to someone like Pat. (The word “Pat” is shown in
`large letters on the screen with a red circle and slash through the name.) Call Stadler
`& Company – America’s elite tax experts. Call the real licensed tax professionals.
`Stadler, the tax pros. (song)
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`Compl. at ¶ 7.
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`Also beginning in January 2014, and continuing through April 2014, Stadler ran a second
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`“Pat the Tax Man” commercial:
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`(Commercial opens with a young woman laying on her stomach on a massage table
`covered by a sheet. The male actor playing Pat is massaging her bare shoulders.)
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`Actor portraying “Pat the Tax Man”: So I see you are treating yourself to a
`massage with all that money you got back last week on your taxes.
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`Woman: Oh Yeah, (Close-up of woman’s face) Wait a minute, how do you know
`about my refund?
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`Actor portraying “Pat the Tax Man”: Because it’s me, Pat the Tax Man. (Actor
`portraying Pat opens up his shirt to show t-shirt with the words “Pat the Tax Man”
`taped onto it.) I did your taxes last week, remember? For half of what the other guy
`charged. But don’t call me if the . . . uh, IRS calls.
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`Narrator: Don’t let just anybody touch your taxes. Call Stadler & Company –
`America’s elite tax experts. We are trained professionals and licensed to serve your
`tax needs.
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`Compl. at ¶ 7. The actor in the commercials also bore a striking resemblance to Tovey.
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`After the commercials aired, Tovey filed suit against Stadler in Vigo County Superior
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`Court alleging defamation per se and trade disparagement under the Lanham Act, 15 U.S.C. §
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`1125(a). The matter was removed to this Court on August 8, 2014.
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`C. Discussion
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`Stadler argues that both of Tovey’s claims should be dismissed “[b]ecause [as a matter of
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`law,] the commercials are so exaggerated in their nature, they are considered parody and,
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`therefore, not actionable.” Stadler’s Br. at 2. Stadler’s specific arguments are discussed in more
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`detail below.
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`1. Defamation
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`The difference between defamation and parody was discussed at length by the Indiana
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`Court of Appeals in Hamilton v. Prewett, 860 N.E.2d 1234 (Ind. Ct. App. 2007). In that case,
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`Paul Hamilton was the owner and operator of Hamilton Water Conditioning. At some point,
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`Morgan Prewett, developed a website entitled “Paul Hamilten—The World’s Smartest Man.”
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`The website appeared to be authored by Hamilton and “portrayed [him] as a manipulative
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`individual both personally and professionally.” Id. at 1238.1 After Hamilton discovered the
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`website, he filed suit against Prewett alleging defamation and intentional infliction of emotional
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`distress. In response, Prewett argued, among other things, that the website “was a form of
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`comedy, parody, or satire,” and thus not actionable. Id. Citing the Supreme Court case Hustler v.
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`Falwell, 485 U.S. 46 (1988) and an American Jurisprudence article on libel and slander, the
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`court reasoned as follows:
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`The United States Supreme Court provided guidance on parody when it declined to
`impose liability on a magazine that portrayed a parodistic depiction of Jerry
`Falwell, a popular evangelist, losing his virginity to his mother in an outhouse.
`Hustler v. Falwell, 485 U.S. 46, 108 S. Ct. 876, 99 L.Ed.2d 41 (1988). The Court
`noted that the parody “could not reasonably be understood as describing actual facts
`about respondent or action events in which he participated” and that the trial court
`properly dismissed Falwell’s defamation claim. Id. at 57, 108 S.Ct. 876. . . .
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`relationship between defamation and parody, American
`the
`Regarding
`Jurisprudence provides:
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`Defamation is, by its nature, mutually exclusive of parody. By definition,
`defamation requires a false statement of fact; parody, to the degree that it is
`perceived as parody by its intended audience, conveys the message that it is
`not the original and, therefore, cannot constitute a false statement of fact....
`If a parody could be actionable because, while recognizable as a joke, it
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`1 For example, the website stated:
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`I am a very intelligent, older American male and have my own very
`successful business dealing with the water conditioning field. I have a
`Master’s Degree in Water Conditioning from Smartass University, a
`prestigious mail order college. While I am somewhat attractive, I am known
`for my ability to seduce women with my quick wit. I have several methods
`of attracting women as well as socializing skills, which are in the book I am
`writing . . .
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`Id. at 1238-39.
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`conveyed an unfavorable impression, very few journalistic parodies could
`survive. It is not for the court to evaluate a parody as to whether it went too
`far, for purposes of a libel claim; as long as it is recognizable to the average
`reader as a joke, it must be protected or parody must cease to exist.
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`50 Am. Jur. 2d Libel and Slander § 156 (2006).
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`Hamilton, 860 N.E.2d at 1244. The Court of Appeals ultimately concluded that Prewett’s
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`website was non-actionable parody.
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`Based on the foregoing case law, Stadler argues that “the commercials . . . cannot support
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`a defamation claim because no reasonable person could believe the commercials to be true.”
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`Stadler’s Reply at 3. In response, Tovey points to the following passage from Hamilton:
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`We do agree with the concurring opinion’s conclusion that “an idea or opinion that
`conveys a defamatory imputation of fact, even if couched in humor, can be
`actionable.” Op. at 1251. However, “fact” is the key word in that sentence. By
`finding parody and defamation to be mutually exclusive, we are not suggesting that
`language cannot be defamatory if it is also humorous. A defendant who couches a
`defamatory imputation of fact in humor cannot simply avoid liability by dressing
`his wolfish words in humorous sheep’s clothing. Instead, parody is another beast
`that goes beyond mere humor. As the United States Supreme Court stated, parody
`“could not reasonably be understood as describing actual facts....” Hustler, 485 U.S.
`at 57, 108 S.Ct. 876.
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`Hamilton, 860 N.E.2d at 1245. He also cites to the following statements from Section 155 of the
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`foregoing American Jurisprudence publication:
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`A defendant cannot escape liability for defamatory factual assertions simply by
`claiming that the statements were a form of humor or sarcasm; humor and comedy
`do not enjoy constitutional protection.
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`Caricature and other forms of humor which ridicule may in certain circumstances
`convey a defamatory meaning, to be understood in a defamatory sense by those
`who received it.
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`The principal factors distinguishing humorous remarks that are defamatory from
`those that are not are whether the statements were intended to injure as well as
`amuse and whether they give rise to the impression that they are true.
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`In determining whether a comedic expression is susceptible of being interpreted as
`defamatory, a court must examine the challenged statement in light of its content,
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`its effect on its audience, the context in which the statement was published, the
`medium by which it was disseminated, and the recipient audience.
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`50 Am. Jur. 2d Libel and Slander § 155.
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`First and foremost, Stadler argues that a “reasonable viewer” would not identify Tovey
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`from the commercials. The Court disagrees and finds that Tovey has alleged sufficient evidence
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`to show that Stadler attempted to portray Tovey in the commercials. The actor portrayed an
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`individual named “Pat the Tax Man,” Tovey’s nickname, and the actor looked strikingly similar
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`to Tovey.2
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`Second, the Court agrees with Tovey that the commercials could convey the following
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`statements of fact to the public: (1) Tovey is not a professional full-time tax preparer, (2) Tovey
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`cannot be trusted to prepare tax returns, (3) Tovey cannot be trusted to keep tax returns and
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`refunds secret, (4) Tovey’s customers are unprotected in the event the IRS audits their returns,
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`and (5) Tovey is an unlicensed or unqualified tax preparer. Although Stadler attempted to use
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`humor to promote his own business over Tovey’s, Stadler cannot, at this point, hide behind the
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`humor as a bar to Tovey’s defamation claim. The commercials arguably convey defamatory
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`statements and reasonable viewers could indeed interpret the foregoing statements of fact as true.
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`As such, Tovey’s defamation claim will not be dismissed for failure to state a claim under Rule
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`12(b)(6).
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`2. Trade Disparagement
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`“Section 43(a)(1)(B) of the Lanham Act . . . forbids the use of any ‘false or misleading
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`description of fact, or false or misleading representation of fact, which in commercial advertising
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`or promotion, misrepresents the nature, characteristics, [or] qualities . . . of [the seller’s] or
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`2 Tovey’s appearance is unique in that he has shoulder-length blonde hair. See Dkt. No.
`1-1 at 7. The actor also had shoulder-length blonder hair.
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`another person’s goods . . . .’” Schering-Plough Healthcare Prods., Inc. v. Schwarz Pharma,
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`Inc., 586 F.3d 500, 503 (7th Cir. 2009) (quoting 15 U.S.C. § 1125(a)(1)(B)). Stadler again argues
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`that, as a matter of law, the commercials are parody and are thus not actionable under the
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`Lanham Act. The Court is not persuaded by Stadler’s argument.
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`Stadler relies on Eveready Battery Co. v. Adolph Coors Co., 765 F. Supp. 440 (N.D. Ill.
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`1991), a trademark infringement case from the Northern District of Illinois, to support his
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`argument. In that case, Eveready filed suit against Coors after Coors made a commercial that
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`spoofed Eveready’s well-known “Energizer Bunny.” In denying Eveready’s request for an
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`injunction prohibiting Coors from airing the commercial, the court noted as follows:
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`Coors’ parody defense would likely defeat Eveready’s Lanham Act claim in any
`event. Parody has been recognized as a defense to a trademark infringement action.
`See Cliffs Notes, Inc. v. Bantam Doubleday Dell Publ. Group, Inc., 886 F.2d 490
`(2d Cir.1989); see also Note, Trademark Parody: A Fair Use and First Amendment
`Analysis, 72 Va. L. Rev. 1079 (1986) (discussing the use of the parody defense in
`trademark infringement and dilution cases). Courts in this district as well have
`recognized parody as a legitimate use of another’s mark. See General Mills, Inc. v.
`Henry Regnery Co., 421 F. Supp. 359 (N.D.Ill.1976) (denying preliminary
`injunction of defendant's cookbook, entitled “Morey Amsterdam’s Betty Cooker
`Crock Book For Drunks,” after finding no likelihood of confusion with plaintiff's
`registered trademark, “BETTY CROCKER”). In the Cliffs Notes case, the Second
`Circuit discussed the need to balance the necessity of imitation in parody with the
`trademark owner’s rights in his mark.
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`Conflict between these two policies is inevitable in the context of
`parody, because the keystone of parody is imitation. It is hard to
`imagine, for example, a successful parody of Time magazine that
`did not reproduce Time’s trademarked red border. A parody must
`convey two simultaneous—and contradictory—messages: that it is
`the original, but also that it is not the original and is instead a parody.
`To the extent that it does only the former but not the latter, it is not
`only a poor parody but also vulnerable under trademark law, since
`the customer will be confused.
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`Cliffs Notes, 886 F.2d at 494. As the court discussed above, although the
`Coors parody contains similarities to the Eveready mark, it contains
`conspicuous and resounding differences as well. To the extent that the
`Coors commercial conveys the message “that it is the original,” it
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`emphatically conveys “that it is not the original.” Thus, this court construes
`the Coors commercial as a permissible parody which does not violate the
`provisions of the Lanham Act.
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`Id. at 450.
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`In this case, Stadler argues that “there are marked differences that ‘emphatically convey’
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`that it is not Plaintiff, nor intended to be [the Plaintiff]” in the commercials. Stadler’s Br. at 4.
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`Thus, it argues that the commercials are clearly parody and not actionable under the Lanham
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`Act. The Court disagrees. Even assuming the reasoning in Eveready applies to this case, as noted
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`above, Tovey has alleged sufficient evidence to show that Stadler attempted to portray Tovey in
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`the commercials.
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`Regardless, Eveready is not binding on this Court, and it is entirely distinguishable from
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`the present case.3 Trademark infringement under the Lanham Act is an altogether different claim
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`than the trade disparagement claim alleged in this case. Stadler fails to cite any case law or make
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`any argument that convinces the Court that its attempt at using humor to make (arguably)
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`defamatory statements about Tovey is permissible under the Lanham Act. As such, Tovey’s
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`trade disparagement claim will not be dismissed pursuant to Rule 12(b)(6).
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`The Court thus DENIES Stadler’s motion to dismiss in its entirety.
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`3 The Court also finds that Pernod Ricard USA, LLC v. Bacardi U.S.A., Inc., 653 F.3d
`241, 254 (3d Cir. 2011) (finding that rum company did not falsely advertise the origin of its
`“Havana Club” rum) and Marriott Corp. v. Ramada Inc., 826 F. Supp. 726, 728 (S.D.N.Y. 1993)
`(finding that hotel chain’s advertisements were not false or misleading where ads portrayed
`couples with the same last names as their competitor’s hotel chains (e.g., the Marriotts)), cited to
`in Stadler’s reply brief, are nonprecedential and distinguishable from the present case.
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`III.
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`CONCLUSION
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`For the reasons set forth above, the Plaintiff’s motion to amend is GRANTED, and the
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`Defendant’s motion to dismiss is DENIED.
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`SO ORDERED: 2/04/15
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`Copies to all counsel of record via electronic communication.
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` _______________________________
` Hon. William T. Lawrence, Judge
` United States District Court
` Southern District of Indiana