`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`29
`30
`31
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page1 of 17
`
`19-2547-cv
`SM Kids, LLC v. Google LLC
`
`In the
`United States Court of Appeals
`For the Second Circuit
`
`August Term 2019
`
`No. 19-2547-cv
`
`SM KIDS, LLC, AS SUCCESSOR-IN-INTEREST TO STELOR
`PRODUCTIONS, LLC,
`
`Plaintiff-Appellant,
`
`v.
`
`GOOGLE LLC, ALPHABET INC., XXVI HOLDINGS INC., JOHN AND/OR
`JANE DOES 1-100, INCLUSIVE,
`
`Defendants-Appellees.*
`
`Appeal from the United States District Court
`for the Southern District of New York
`No. 18-cv-2637,
`Lorna G. Schofield, District Judge, Presiding.
`(Argued March 12, 2020; Decided June 25, 2020)
`
`Before:
`
`PARKER and LOHIER, Circuit Judges, and EATON, Judge.†
`
`* The Clerk of Court is directed to amend the caption to conform to the above.
`† Richard K. Eaton, Judge of the United States Court of International Trade,
`sitting by designation.
`
`CERTIFIED COPY ISSUED ON 06/25/2020
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page2 of 17
`
`Plaintiff-Appellant SM Kids, LLC sued Google LLC and several related
`entities, seeking to enforce a 2008 agreement settling a trademark dispute.
`Defendants-Appellees moved to dismiss for lack of standing, pursuant to Fed. R.
`Civ. P. 12(b)(1), arguing that SM Kids did not own the subject trademark, as it
`had been improperly assigned by SM Kids’ predecessor, which had executed the
`settlement agreement. The United States District Court for the Southern District
`of New York (Schofield, J.) received evidence on the matter, found that the
`trademark assignment was invalid, and dismissed for lack of subject-matter
`jurisdiction. We hold that the validity of the trademark was not a jurisdictional
`matter related to Article III standing but was instead a merits question properly
`addressed on a motion under Fed. R. Civ. P. 12(b)(6), a motion for summary
`judgment, or at trial. Accordingly, we VACATE the judgment of the district
`court and REMAND for further proceedings consistent with this opinion.
`
`
`JOHN M. MAGLIERY (Geoffrey S.
`Brounell, L. Danielle Toaltoan, on the
`brief), Davis Wright Tremaine LLP, New
`York, NY, for Plaintiff-Appellant.
`
`BRENDAN J. HUGHES (Rebecca Givner-
`Forbes, Ian R. Shapiro, on the brief),
`Cooley LLP, Washington, DC, for
`Defendants-Appellees.
`
`
`
`BARRINGTON D. PARKER, Circuit Judge:
`
` SM Kids, LLC appeals from a judgment of the United States District Court
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`
`27
`
`28
`
`for the Southern District of New York (Schofield, J.) dismissing its complaint
`
`29
`
`alleging breach of a settlement agreement for lack of Article III standing. See Fed.
`
`30
`
`R. Civ. P. 12(b)(1). The district court concluded that it lacked jurisdiction because
`
`31
`
`SM Kids had not been validly assigned the trademark that was the subject of the
`
`
`
`2
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page3 of 17
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`settlement by the trademark’s prior owner. We hold that the question of whether
`
`the trademark assignment was valid was a merits and not a jurisdictional
`
`question. Accordingly, we VACATE the judgment of the district court and
`
`REMAND for further proceedings consistent with this opinion.
`
`The facts as found by the district court are as follows.1 In 1995, Steven
`
`Silvers created the Googles brand. Two years later, he registered the Googles
`
`trademark and the internet domain name www.googles.com. The website
`
`launched in 1998 as a children’s education and entertainment website. That year,
`
`the search engine Google adopted the Google name. Subsequently, in 2005,
`
`10
`
`Silvers sued Google for trademark infringement. In February 2007, Silvers
`
`11
`
`assigned all rights in Googles to Stelor Productions, LLC. In December 2008,
`
`12
`
`Google and Stelor settled the trademark infringement litigation.
`
`13
`
`As the trademark infringement litigation unfolded, in 2006 Stephen
`
`14
`
`Garchik invested in Stelor. The company soon defaulted on Garchik’s loans.
`
`15
`
`Following a bankruptcy proceeding, in 2011 Stelor assigned the “entire interest
`
`16
`
`and the goodwill” of the Googles trademark to Garchik, doing business as
`
`
`1 Because Google brought its motion under Rule 12(b)(1), the district court relied
`on materials outside the pleadings and made factual findings. See Makarova v.
`United States, 201 F.3d 110, 113 (2d Cir. 2000). We address a question of law but
`refer to the district court’s findings for relevant background information.
`3
`
`
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page4 of 17
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`Stelpro Loan Investors, LLC. Sp. App’x at 7. By that point, the Googles website
`
`remained operational, but there is some evidence that its content was static and
`
`quickly grew outdated. In January 2013, Garchik transferred the Googles assets
`
`to SJM Partners, a company of which he is the sole owner. Following this
`
`transfer, Garchik replaced the Googles website with a “coming soon” page,
`
`posted a solicitation for joint venture partners, and added some audiovisual
`
`content. Finally, in February 2018, SJM Partners transferred the Googles assets to
`
`Plaintiff-Appellant SM Kids, a newly formed firm owned by Garchik.
`
`In February 2018, SM Kids sued Google LLC, Alphabet Inc., XXVI
`
`10
`
`Holdings Inc., and 100 John and/or Jane Doe defendants (collectively, “Google”)
`
`11
`
`in New York County Supreme Court, alleging that Google had breached the 2008
`
`12
`
`settlement agreement. That agreement prohibited Google from “intentionally
`
`13
`
`mak[ing] material modifications to its [then-]current offering of products and
`
`14
`
`services in a manner that is likely to create confusion in connection with
`
`15
`
`[Googles].” J. App’x at 57-58. More specifically, Google agreed not to “create,
`
`16
`
`develop and publish children’s books, fictional children’s videos, or other
`
`17
`
`fictional children’s related content that have a title of ‘GOOGLE’ or a ‘GOOGLE-‘
`
`18
`
`formative title or mark.” Id. at 58.
`
`
`
`4
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page5 of 17
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`The complaint alleged that Google had breached that agreement by
`
`creating Google Play and YouTube Kids, which publish and distribute children’s
`
`content. SM Kids further objected to Google’s acquisition of several children’s
`
`entertainment businesses, including Launchpad Toys and the “Toontastic”
`
`application.
`
` Google, invoking diversity jurisdiction, removed the lawsuit to the
`
`Southern District of New York, where it moved to dismiss the complaint
`
`pursuant to Rules 12(b)(1) and 12(b)(6). Principally, Google argued that SM Kids
`
`lacked standing to sue because it never validly acquired the Googles trademark,
`
`10
`
`and only the holder of that trademark could enforce the settlement agreement.
`
`11
`
`Before the motion was fully briefed, the district court denied it without prejudice
`
`12
`
`and ordered that discovery be stayed except as to the issues of standing and
`
`13
`
`subject-matter jurisdiction. SM Kids unsuccessfully objected to this procedure on
`
`14
`
`the ground that the validity of the trademark assignment was a merits rather
`
`15
`
`than a jurisdictional question.
`
`16
`
`Google took discovery from SM Kids and then renewed its motion to
`
`17
`
`dismiss, pursuant only to Rule 12(b)(1). Relying on materials outside the
`
`18
`
`complaint that had been generated during discovery, the district court found that
`
`
`
`5
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page6 of 17
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`SM Kids had not shown by a preponderance of the evidence that it had validly
`
`acquired the trademark. The court held that a valid assignment requires that the
`
`mark be used in commerce and found that the mark was not used in commerce
`
`from 2010 to 2018, when it was assigned to SM Kids. Specifically, it found that
`
`the Googles website had not been used to identify goods or services sold to
`
`consumers because it was merely a “coming soon” page. Treating this deficiency
`
`as jurisdictional, the district court granted the motion to dismiss. This appeal
`
`followed.
`
`DISCUSSION
`
`10
`
`A motion to dismiss for lack of Article III standing challenges the subject-
`
`11
`
`matter jurisdiction of a federal court and, accordingly, is properly brought under
`
`12
`
`Fed. R. Civ. P. 12(b)(1). See Carter v. HealthPort Techs. LLC, 822 F.3d 47, 56 (2d Cir.
`
`13
`
`2016). When a motion under Rule 12(b)(1) is based solely on the complaint and
`
`14
`
`the attached exhibits, the plaintiff bears no evidentiary burden, and the district
`
`15
`
`court must evaluate whether those documents allege facts that plausibly suggest
`
`16
`
`that the plaintiff has standing to sue. Id. We review the grant of such a motion de
`
`17
`
`novo. Id. However, a motion under Rule 12(b)(1) may also rely on evidence
`
`18
`
`beyond the pleadings. Id. at 57. When a defendant makes such a fact-based
`
`
`
`6
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page7 of 17
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`motion, the plaintiff may respond with evidence of its own. Id. We then review
`
`the district court’s legal conclusions de novo and its factual findings for clear
`
`error. Makarova, 201 F.3d at 113. In this case, the district court relied on evidence
`
`outside the pleadings. Nonetheless, the question we address on review is
`
`exclusively a question of law and, consequently, our review is de novo. See
`
`Kreisler v. Second Ave. Diner Corp., 731 F.3d 184, 187 n.3 (2d Cir. 2013).
`
`I.
`
`Article III, Section 2 of the Constitution limits the subject-matter
`
`jurisdiction of the federal courts to “Cases” and “Controversies.” E.g., Dhinsa v.
`
`10
`
`Krueger, 917 F.3d 70, 77 (2d Cir. 2019). The standing doctrine, which emerges
`
`11
`
`from Article III, is designed “to ensure that federal courts do not exceed their
`
`12
`
`authority as it has been traditionally understood.” Spokeo, Inc. v. Robins, 136 S. Ct.
`
`13
`
`1540, 1547 (2016). The doctrine imposes three requirements: “[t]he plaintiff must
`
`14
`
`have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged
`
`15
`
`conduct of the defendant, and (3) that is likely to be redressed by a favorable
`
`16
`
`judicial decision.” Id.
`
`17
`
`In its motion to dismiss, Google argued that SM Kids lacked Article III
`
`18
`
`standing because it was not the holder of the Googles trademark. More
`
`
`
`7
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page8 of 17
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`specifically, it contended that a trademark is assignable only “with the good will
`
`of the business in which the mark is used,” and the mark must be in “actual use
`
`in the marketplace” and “employed to identify goods or services sold to
`
`consumers in a given market.” 15 U.S.C. § 1060(a)(1); Cross Commerce Media, Inc.
`
`v. Collective, Inc., 841 F.3d 155, 167 (2d Cir. 2016); Berni v. Int’l Gourmet Rests. of
`
`Am., Inc., 838 F.2d 642, 646 (2d Cir. 1988).
`
`Google contended that the Googles mark had not been used in commerce
`
`and, therefore, could not be assigned to SM Kids. Because SM Kids was not the
`
`holder of the mark, Google reasoned, it had no rights under the settlement
`
`10
`
`agreement and did not have a legally protected interest whose impairment could
`
`11
`
`be redressed in a lawsuit. In other words, it had not suffered an injury in fact.
`
`12
`
`The district court agreed and concluded that, because SM Kids lacked Article III
`
`13
`
`standing, the court did not have subject-matter jurisdiction.
`
`14
`
`We do not agree that the validity of the assignment was a question of
`
`15
`
`Article III standing. Instead, the question was one of contractual standing, which
`
`16
`
`asks a different question: whether a party has the right to enforce a contract.
`
`17
`
`Contractual standing is distinct from Article III standing and does not implicate
`
`18
`
`subject-matter jurisdiction. Article III standing speaks to the power of a court to
`
`
`
`8
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page9 of 17
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`adjudicate a controversy; contractual standing speaks to a party’s right to relief
`
`for breach of contract. Although the question of whether Google breached a
`
`contract with SM Kids depends on whether SM Kids enjoyed a contractual
`
`relationship with Google, the existence of such a relationship is not a prerequisite
`
`to a court’s power to adjudicate a breach-of-contract claim.
`
`SM Kids produces content under the name Googles, and it alleges that
`
`Google confusingly produces similar content under its own name, in breach of a
`
`contract. SM Kids plausibly alleges that the availability of Google’s content—
`
`which allegedly violates the settlement agreement—has injured the popularity of
`
`10
`
`Googles content and thereby caused it economic injury. That injury could be
`
`11
`
`redressed by injunctive or monetary relief. As a result, the three requirements of
`
`12
`
`Article III standing are satisfied.
`
`13
`
`Whether Google might have a defense based on trademark or contract law
`
`14
`
`does not change this result. A contest between a plausibly alleged claim and a
`
`15
`
`defense exists in many, if not most, breach-of-contract lawsuits, and typically,
`
`16
`
`one party wins and the other loses. Under Google’s approach, courts would lack
`
`
`
`9
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page10 of 17
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`jurisdiction in most instances where a breach-of-contract plaintiff failed to prove
`
`the existence of a contract.2
`
`The Supreme Court has confirmed that a challenge does not implicate
`
`Article III standing when it “simply presents a straightforward issue of contract
`
`interpretation.” Perry v. Thomas, 482 U.S. 483, 492 (1987). Whether the elements of
`
`breach of contract, including the existence of a contract, are satisfied, that Court
`
`has said, goes to the merits, not to a court’s power to resolve the controversy. In
`
`Perry, the petitioners invoked federal jurisdiction to compel arbitration. The
`
`respondent contended that two of the petitioners lacked standing because they
`
`10
`
`were not parties to the arbitration agreement. The Court rejected the contention
`
`11
`
`that resolving that issue was a prerequisite to Article III standing. Constitutional
`
`12
`
`standing, the Court reasoned, was not the threshold inquiry when a litigant’s
`
`13
`
`contention was that his opponents were not parties to an agreement. Because
`
`14
`
`contractual standing goes to the merits, and “[o]ur threshold inquiry into
`
`
`2 Under Fed. R. Civ. P. 12(h)(3), “[i]f the court determines at any time that it lacks
`subject-matter jurisdiction, the court must dismiss the action.” “Where a court
`lacks subject matter jurisdiction, it also lacks the power to dismiss with
`prejudice.” Hernandez v. Conriv Realty Assocs., 182 F.3d 121, 123 (2d Cir. 1999).
`Treating contract formation as jurisdictional would therefore call into question a
`federal court’s ability to issue a claim-preclusive judgment that a contract did not
`exist.
`
`
`
`10
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page11 of 17
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`standing ‘in no way depends on the merits of the [plaintiff’s] contention that
`
`particular conduct is illegal,’” contractual standing is not a matter of
`
`constitutional standing. Whitmore v. Arkansas, 495 U.S. 149, 155 (1990) (quoting
`
`Warth v. Seldin, 422 U.S. 490, 500 (1975)); see also Bond v. United States, 564 U.S.
`
`211, 219 (2011) ( “[T]he question whether a plaintiff states a claim for relief ‘goes
`
`to the merits’ in the typical case, not the justiciability of a dispute . . . .” (quoting
`
`Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 92 (1998))).
`
`Our cases reach the same conclusion. In Carver v. City of New York, 621 F.3d
`
`221, 226 (2d Cir. 2010), we held that “[t]he standing question is distinct from
`
`10
`
`whether [a plaintiff] has a cause of action.” We have cautioned against
`
`11
`
`arguments that “would essentially collapse the standing inquiry into the merits,”
`
`12
`
`Baur v. Veneman, 352 F.3d 625, 642 (2d Cir. 2003), and attempts to “conflate the
`
`13
`
`threshold question of [the plaintiff’s] standing under Article III . . . with the
`
`14
`
`question of whether [he] has a valid claim on the merits,” Lerman v. Bd. of
`
`15
`
`Elections, 232 F.3d 135, 143 n.9 (2d Cir. 2000).3 This body of law means that a
`
`
`3 The other circuits are in accord that contractual standing goes to the merits of a
`claim rather than to the existence of subject-matter jurisdiction. Rocky Mountain
`Helium, LLC v. United States, 841 F.3d 1320, 1324-25 (Fed. Cir. 2016); Cotton v.
`Certain Underwriters at Lloyd’s of London, 831 F.3d 592, 594-96 (5th Cir. 2016);
`Cornhusker Cas. Co. v. Skaj, 786 F.3d 842, 851 (10th Cir. 2015); Lindsey v. Starwood
`11
`
`
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page12 of 17
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`party that alleges harm due to another’s breach of a contract has a justiciable
`
`controversy with the other party and that the courts have jurisdiction to resolve
`
`the controversy. See United States v. Cambio Exacto, S.A., 166 F.3d 522, 528 (2d Cir.
`
`1999).
`
`II.
`
`Additional support for this conclusion comes from the Supreme Court’s
`
`decisions cautioning lower courts from reading jurisdictional limitations into
`
`substantive statutory provisions. The relevant provision of the Lanham Act on
`
`trademark assignments, 15 U.S.C. § 1060, provides that a trademark is assignable
`
`10
`
`only “with the good will of the business in which the mark is used.” It requires
`
`11
`
`that the mark be used in commerce. Cross Commerce Media, 841 F.3d at 167. As
`
`12
`
`noted, the district court treated this section as a jurisdictional hurdle. It reasoned
`
`13
`
`that because the Googles mark was not used in commerce, SM Kids could not
`
`14
`
`have been validly assigned the trademark and consequently the court lacked
`
`15
`
`subject-matter jurisdiction.
`
`
`Hotels & Resorts Worldwide Inc., 409 F. App’x 77, 78 (9th Cir. 2010) (memorandum
`opinion); Novartis Seeds, Inc. v. Monsanto Co., 190 F.3d 868, 871 (8th Cir. 1999).
`
`
`
`
`12
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page13 of 17
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`But § 1060 does not mention jurisdiction. The Supreme Court has
`
`emphasized that federal courts should not treat statutory provisions as
`
`jurisdictional thresholds when they do not speak in jurisdictional terms. Zipes v.
`
`Trans World Airlines, Inc., 455 U.S. 385, 394 (1982). Arbaugh v. Y&H Corp., for
`
`example, held that an element of a statutory claim was not jurisdictional when
`
`the plaintiff pleaded “a colorable claim ‘arising under’ the Constitution or laws
`
`of the United States,” absent a contrary indication of congressional intent.4 546
`
`U.S. 500, 513 (2006). A statutory requirement should be treated as jurisdictional,
`
`the Court went on to say, only when Congress “clearly states” as much and
`
`10
`
`“duly instruct[s]” courts and litigants that the issue is jurisdictional. Id. at 515. If
`
`11
`
`this language is not present, and Congress does not rank a statutory limitation as
`
`12
`
`jurisdictional, courts should treat the restriction as nonjurisdictional in character.
`
`13
`
`This rule is designed to be a “readily administrable bright line” test. Id. at 516.
`
`14
`
`Nothing in § 1060 suggests that Congress intended to limit the broad grant of
`
`15
`
`federal question jurisdiction in § 1331 and diversity jurisdiction in § 1332 as to
`
`
`4 This result does not change because this case arises under diversity, rather than
`federal question, jurisdiction. Arbaugh articulates the general rule that “statutory
`limitations should not be understood to limit the subject matter jurisdiction of
`the courts unless that is the ‘clearly’ stated intention of the statute.” United States
`v. Prado, 933 F.3d 121, 135 (2d Cir. 2019). Congress must clearly state such an
`intention anytime it imposes a jurisdictional limitation.
`13
`
`
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page14 of 17
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`exclude cases where trademarks were assigned without accompanying good
`
`will. See Fed. Treasury Enter. Sojuzplodoimport v. Spirits Int’l N.V., 623 F.3d 61, 71
`
`(2d Cir. 2010) (holding that when claims arise under the Lanham Act,
`
`“jurisdiction exists not only over the infringement claims but also over the
`
`antecedent issue of the validity of the assignment”); Berni, 838 F.2d at 645-46
`
`(treating “standing” under the Lanham Act as nonjurisdictional); cf. Reed Elsevier,
`
`Inc. v. Muchnick, 559 U.S. 154, 161-62 (2010) (citing Arbaugh in holding that the
`
`Copyright Act’s registration requirement is not jurisdictional).
`
`In La Quinta Worldwide LLC v. Q.R.T.M., S.A. de C.V., 762 F.3d 867 (9th Cir.
`
`10
`
`2014), the court considered a “use in commerce” provision of the Lanham Act,
`
`11
`
`which is similar to the requirement of use in commerce in § 1060, the “good will”
`
`12
`
`provision at issue here. The court held that this provision was an element of a
`
`13
`
`Lanham Act claim rather than a jurisdictional requirement. Id. at 873. The court
`
`14
`
`explained that because the “use in commerce” element of claims under Sections
`
`15
`
`32 and 43(a) of the Act was not structurally connected to the statute’s
`
`16
`
`jurisdictional grant, 15 U.S.C. § 1121, “use in commerce” was a substantive
`
`17
`
`element and not a jurisdictional issue. La Quinta, 762 F.3d at 873. Section 1060
`
`18
`
`similarly lacks a structural connection to § 1121 and mentions no limitation on
`
`
`
`14
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page15 of 17
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`the availability of jurisdiction under 28 U.S.C. § 1331 or § 1332. Consequently, it
`
`is not jurisdictional. Cf. Spokeo, 136 S. Ct. at 1549 (emphasizing that whether a
`
`plaintiff has a cause of action under a statute does not determine whether it
`
`possesses Article III standing); Lexmark Int’l, Inc. v. Static Control Components, Inc.,
`
`572 U.S. 118, 128 (2014) (same).
`
`III.
`
`Google urges us that any error in the procedures used by the district court
`
`was harmless because it reached a correct result. Maybe so, maybe not: but we
`
`are not now at that point. Because the court resolved Google’s motion as a fact-
`
`10
`
`based motion under Rule 12(b)(1), it considered evidence beyond the complaint.
`
`11
`
`It also placed on SM Kids the burden of proving subject-matter jurisdiction. Had
`
`12
`
`the district court treated the motion as one under Rule 12(b)(6), its review would,
`
`13
`
`of course, have been limited to the complaint, to documents attached to the
`
`14
`
`complaint or incorporated by reference, and to documents of which the district
`
`15
`
`court could have taken judicial notice. In addition, the facts alleged in the
`
`16
`
`complaint would have been accepted as true and all factual inferences drawn in
`
`17
`
`SM Kids’ favor. SM Kids, on the other hand, would have been required to plead
`
`
`
`15
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page16 of 17
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`only a plausible claim to relief and the burden to show otherwise would have
`
`fallen on Google. See Lerner v. Fleet Bank, N.A., 318 F.3d 113, 128 (2d Cir. 2003).
`
`In the alternative, if the district court received and elected not to exclude
`
`matters outside the pleadings, Rule 12(d) presented it with only two options:
`
`exclude the additional material or convert the motion to one for summary
`
`judgment. See Palin v. N.Y. Times Co., 940 F.3d 804, 810-11 (2d Cir. 2019). At that
`
`point, Google would have borne the burden under Rule 56(a) of demonstrating
`
`the absence of a genuine issue of material fact.
`
`We have no doubt that the able district judge’s approach was animated by
`
`10
`
`entirely understandable concerns of efficiency intended to save the time and
`
`11
`
`resources of the parties and the court. But rules matter, and procedural regularity
`
`12
`
`and evenhandedness matter, as well. “[D]espite the flexibility that is accorded
`
`13
`
`district courts to streamline proceedings and manage their calendars, district
`
`14
`
`courts are not free to bypass rules of procedure that are carefully calibrated to
`
`15
`
`ensure fair process to both sides.” Id. at 812.
`
`16
`
` Suffice it to say, we do not speculate about what results procedures not
`
`17
`
`followed might have yielded. Nor do we reach the questions of validity of the
`
`
`
`16
`
`
`
`Case 19-2547, Document 109, 06/25/2020, 2870499, Page17 of 17
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`assignment of the Googles mark and whether SM Kids possesses contractual
`
`standing. Instead, we remand to the district court.
`
`CONCLUSION
`
`For the foregoing reasons, the judgment of the district court is VACATED,
`
`and the case is REMANDED for further proceedings consistent with this
`
`opinion.
`
`
`
`17
`
`