Vinluan-Jularbal v. Redbubble, Inc. ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 KAMILLE FAYE VINLUAN- No. 2:21-cv-00573-JAM-JDP JULARBAL, 12 Plaintiff, 13 ORDER DENYING PLAINTIFF’S MOTION v. FOR PRELIMINARY INJUNCTION 14 REDBUBBLE, INC., 15 Defendant. 16 17 Plaintiff Kamille Faye Vinluan-Jularbal (“Plaintiff”) 18 purchased two sweatshirts from Defendant Redbubble (“Defendant”): 19 one with a United Nations symbol and the other with the words 20 “the Dadalorian” which she believes were counterfeit. See First 21 Am. Compl. (“FAC”) ¶¶ 35, 38, ECF No. 7. Plaintiff then brought 22 this class action against Defendant alleging violations of 23 (1) California’s Unfair Competition Law (“UCL”) and 24 (2) California’s Consumer Legal Remedies Act (“CLRA”). See 25 generally FAC. Before the Court is Plaintiff’s Motion for a 26 Preliminary Injunction. See Mot. for Prelim. Inj., ECF No. 16. 27 Defendant opposed this Motion, see Opp’n, ECF No. 36, to which 28 Plaintiff replied. See Reply, ECF No. 39. For the reasons set 1 forth below, Plaintiff’s request for a preliminary injunction is 2 denied.1 3 4 I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND 5 Founded in 2006, Redbubble allows users to upload designs 6 that can be affixed to various products at the request of 7 consumers. FAC ¶¶ 6-7. When a consumer places an order, 8 Redbubble’s software automatically transmits the order to a 9 third-party manufacturer who prints the image onto a blank 10 product to be shipped and delivered to the customer. FAC ¶ 9; 11 Decl. of Daniel Vyrda in Supp of Def.’s Mot. for Prelim. Inj. 12 (“Vydra Decl.) ¶¶ 3, 8, 11-12. Plaintiff made two purchases from 13 Redbubble: the first, a United Nations sweatshirt, the second a 14 Dadalorian sweatshirt. FAC ¶¶ 35, 38. Plaintiff alleges the 15 items were counterfeit. Id. ¶ 43. She claims she was unaware of 16 their infringing nature at the time of purchase and would not 17 have bought them had she known they weren’t genuine. Id. 18 Plaintiff believes a high volume of the images available on 19 Redbubble’s website are counterfeit. Id. This is due in part to 20 the fact Redbubble does not proactively police its website for 21 counterfeit or infringing items. Id. ¶ 18. Rather Plaintiff 22 claims it is Redbubble’s policy to only review items when it 23 receives a takedown notice from or been sued by the rights 24 holder. Id. Further, Redbubble often does not ban an infringing 25 user until they have had several complaints. Id. ¶ 19. 26 27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled 28 for July 27, 2021. 1 Accordingly, Plaintiff brought this class action on behalf 2 of herself and those similarly situated, alleging violations of 3 the UCL and CLRA. Plaintiff, stressing the harm done to both the 4 trademark holders and consumers by such infringement, seeks a 5 preliminary injunction to enjoin Redbubble from selling any 6 counterfeit products on its website pending resolution of this 7 action. See Mot. at 23-25 8 9 II. OPINION 10 A. Judicial Notice 11 Courts may take judicial notice of “a fact that is not 12 subject to reasonable dispute because it: (1) is generally known 13 within the trial court’s territorial jurisdiction; or (2) can be 14 accurately and readily determined from sources whose accuracy 15 cannot reasonable be questioned.” Fed. R. Evid. 201(b). 16 Plaintiff has requested the Court take judicial notice of 17 two Australian Federal Court decisions; two declarations filed 18 in a Northern District of California case; the fact the United 19 Nations Organization logo and wordmark are registered with the 20 United State Patent and Trademark Office; and a jury verdict in 21 a case in the Central District of California. See Pl.’s First 22 Req. for Judicial Notice, ECF No. 17; Pl.’s Second Req. for 23 Judicial Notice, ECF No. 40. The court filings and 24 registrations with the United States Patent and Trademark Office 25 are all proper subjects of judicial notice. See Reyn’s Pasta 26 Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 27 2006) (“We may take judicial notice of court filings and other 28 matters of public record.”); see also Cerner Middle E. Ltd. v. 1 iCapital, LLC, 939 F.3d 1016, 1023 n.8 (9th Cir. 2019) (taking 2 judicial notice of a French trial court decision); Threshold 3 Enter. Ltd. v. Pressed Juicery, Inc., 445 F.Supp.3d 139, 145 4 (N.D. Cal. 2020) (“Materials in the online files of the USPTO 5 and other matters of public record are proper subjects of 6 judicial notice.”) Accordingly, the Court GRANTS Plaintiff’s 7 request. In doing so the Court takes judicial notice only of 8 the existence of these documents, not disputed facts contained 9 within. Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 999 10 (9th Cir. 2018). 11 B. Analysis 12 1. Article III Standing 13 Article III of the Constitution limits the jurisdiction of 14 federal courts to actual “Cases” and “Controversies.” U.S. 15 Const. art. II, § 2. “One element of the case-or-controversy 16 requirement is that plaintiffs must establish that they have 17 standing to sue.” Clapper v. Amnesty Int’l USA, 566 U.S. 398, 18 408 (2013). In order to have standing “[t]o seek injunctive 19 relief, a plaintiff must show that [they are] under threat of 20 suffering [an] ‘injury in fact’ that is concrete and 21 particularized; the threat must be actual and imminent, not 22 conjectural or hypothetical; it must be fairly traceable to the 23 challenged action of the defendant; and it must be likely that a 24 favorable judicial decision will prevent or redress the injury.” 25 Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009). 26 In Davisson v. Kimberley-Clark Corp., 889 F.3d 956 (9th 27 Cir. 2017), the Ninth Circuit held that a “previously deceived 28 consumer may have standing to seek an injunction against false 1 advertising or labeling, even though the consumer now knows or 2 suspects that the advertising was false at the time of the 3 original purchase, because the consumer may suffer an ‘actual 4 and imminent, not conjectural or hypothetical’ threat of future 5 harm.” Id. at 969. In so holding the Court rejected the 6 argument that a plaintiff does not have standing to seek 7 injunctive relief because “plaintiffs who are already aware of 8 the deceptive nature of an advertisement are not likely to be 9 misled into buying the relevant product in the future and, 10 therefore, are not capable of being harmed again in the same 11 way.” Id. at 968 (internal quotation marks and citation 12 omitted). Rather, the Court explained that such plaintiffs 13 still suffer a threat of future harm which in some cases “may be 14 the consumer’s plausible allegations that she will be unable to 15 rely on the product’s advertising or labeling in the future, and 16 so will not purchase the product although she would like to.” 17 Id. at 969-70. 18 Defendant argues Plaintiff does not have standing because 19 she “swears under oath that she will never ‘knowingly support’ 20 Redbubble based on her unsubstantiated beliefs about items 21 available for sale on its Marketplace, and so admits that she 22 will never again purchase anything on the platform in the 23 future.” Opp’n at 10 (citing Pl. Decl. in Supp. Of Mot. ¶ 9, 24 ECF No. 16-1). The Court disagrees. While Plaintiff stated 25 that she “would never knowingly support a company selling 26 illegal products in violation of federal law” that does not mean 27 she faces no risk of future harm. Pl.’s Decl. in Supp. Of Mot. 28 ¶ 9. Because Plaintiff states that she would make further 1 purchases from Redbubble in the future if she could be assured 2 the products were not counterfeits, Pl.’s Decl. in Reply ¶ 4, 3 ECF No. 53-1, Plaintiff suffers a threat of future harm of being 4 “unable to rely on the product’s [authenticity], and so will not 5 purchase the product although she would like to.” See Davisson, 6 889 F.3d at 969-70. Accordingly, the Court finds Plaintiff has 7 standing to seek injunctive relief. 8 2. UCL and CLRA Standing 9 To have standing under the UCL or CLRA, Plaintiff must 10 “(1) establish a loss of deprivation of money or property 11 sufficient to qualify as injury in fact, i.e., economic injury, 12 and (2) show that that economic injury was the result of, i.e., 13 caused by, the unfair business practice or false advertising 14 that is the gravamen of the claim.” Kwikset Corp v. Superior 15 Court, 51 Cal. 4th 310, 322 (2011). 16 Defendant argues Plaintiff has failed to establish standing 17 under the UCL or CLRA as Plaintiff hasn’t shown or offered any 18 convincing evidence that the items she purchased were 19 counterfeit. See Opp’n at 12. Plaintiff argues that she has 20 shown an economic injury as she explains she paid more for the 21 sweatshirt than she would have if she had known it was 22 counterfeit. See Pl.’s Reply at 3. But Plaintiff’s argument 23 fails to address Defendant’s argument that she offers 24 insufficient evidence to support this claim and, instead, asks 25 this Court to simply assume that the items she purchased are 26 counterfeit. See Def.’s Opp’n at 12 (citing Essence Imaging 27 Inc. v. Icing Images LLC, No. 13-cv-5449-CAS(PLAx), 2014 WL 28 1384028 at *2 (C.D. Cal Apr. 9, 2014) (noting that a plaintiff 1 must provide evidence to support a preliminary injunction)). The 2 Court refuses to reach any such conclusion or finding regarding 3 the items purchased by Plaintiff at this early stage of the 4 litigation.2 5 3. Whether Plaintiff is Entitled to Preliminary 6 Injunctive Relief 7 A preliminary injunction is an “extraordinary remedy.” 8 Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 24 9 (2008). “A plaintiff seeking a preliminary injunction must 10 establish that he is likely to succeed on the merits, that he is 11 likely to suffer irreparable harm in the absence of preliminary 12 relief, that the balance of equities tips in his favor, and that 13 an injunction is in the public interest.” Am. Trucking Ass’ns, 14 Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 15 2009). Alternatively, “serious questions going to the merits’ 16 and a hardship balance that tips sharply towards the plaintiff 17 can support issuance of an injunction, so long as the plaintiff 18 also shows a likelihood of irreparable injury and that the 19 injunction is in the public interest.” All. of the Wild Rockies 20 v. Cottrell, 622 F.3d 1045, 1053 (9th Cir. 2010). 21 A preliminary injunction can take two forms. A prohibitory 22 injunction prohibits a party from taking action and “preserve[s] 23 the status quo pending a determination of the action on the 24 merits.” Chalk v. U.S. Dist. Court, 840 F.2d 701, 704 (9th Cir. 25 2 Defendant also argues that Plaintiff failed to demonstrate causation for claims based on fraud. See Opp’n at 13. However, 26 because Plaintiff’s claims are not based on fraud the Court need 27 not address these arguments. See MGA Ent., Inc. v. Dynacraft BSC, Inc., No. 2:17-cv-08222-ODW-KS, 2018 WL 2448123, at *3 (C.D. 28 Cal. May 30, 2018). 1 1988). A mandatory injunction on the other hand “orders a 2 responsible party to ‘take action.’” Meghrig v. KFC W., 516 3 U.S. 479, 484 (1996). A mandatory injunction “goes well beyond 4 simply maintaining the status quo [p]endente lite [and] is 5 particularly disfavored.” Anderson v. United States, 612 F.2d 6 1112, 1114 (9th Cir. 1980) (internal quotation marks and 7 citation omitted). “In general, mandatory injunctions are not 8 granted unless extreme or very serious damage will result and 9 are not issued in doubtful cases or where the injury complained 10 of is capable of compensation in damages.” Id. at 115. The 11 status quo ante litem “means the last, uncontested status which 12 preceded the pending controversy.” Marlyn Nutraceauticals, Inc. 13 v. Mucos Pharma GmbH & Co., 571 F.3d 873, 879 (9th Cir. 2009) 14 (internal quotation marks and citation omitted). 15 The parties dispute whether the preliminary injunction 16 Plaintiff seeks is prohibitory or mandatory. See Opp’n at 14- 17 15; Reply at 4-5. Plaintiff argues that because in the 18 trademark context, the status quo is the status that existed 19 before the alleged infringer began using the alleging infringing 20 mark, her preliminary injunction is prohibitory in that it would 21 prohibit Redbubble from continuing to use counterfeit marks. 22 See Reply at 4-5. Defendant on the other hand contends that the 23 requested injunction is mandatory as it would require Redbubble 24 to take on the affirmative task of identifying which of its 51 25 million or so third-party product listings may be counterfeit 26 under the Lanham Act and remove them. See Opp’n at 14. 27 While it is true that in the trademark context, the status 28 quo ante litem is the status that existed before the alleged 1 infringement, see GoTo.com, Inc v. Walt Disney Co., 202 F.3d 2 1199, 1210 (9th Cir. 2000), the Court agrees with Defendant that 3 this case is distinguishable from those cited by Plaintiff and 4 the preliminary injunction is mandatory in nature. The 5 trademark cases Plaintiff relies upon involved a single 6 trademark infringement. See Pom Wonderful LLC v. Hubbard, 775 7 F.3d 1118, 1122 (9th Cir. 2014) (involving use of the mark “pom” 8 on a pomegranate-flavored energy drink); CycleBar Franchising, 9 LLC v. StarCycle Franchise, LLC, No. CV 19-9911-DMG (KSx), 2020 10 WL 3840442 (C.D. Cal. Mar. 27, 2020) (involving indoor cycling 11 studios use of the “CycleStars” mark). As such, the requested 12 preliminary injunction specified what marks were infringing and 13 what defendants were prohibited from using. See Pom Wonderful 14 LLC, 775 F.3d at 1122 (“Pom Wonderful moved for a preliminary 15 injunction to enjoin Pur from selling or marketing its ‘pom’ 16 beverage.”); CycleBar Franchising, LLC, 2020 WL 3840442 at *1 17 (“StarCycle seeks an order from this Court preventing CycleBar 18 from using its CycleStars mark ‘in any form or stylization in 19 connection with providing fitness instruction or any goods or 20 services thereto.’”) 21 Contrastingly here, the relief Plaintiff seeks is much more 22 sweeping. Plaintiff asks the Court not just to prohibit the 23 sale of the alleged counterfeit United Nations and Dadalorian 24 sweatshirts she purchased but also to prohibit Defendant from 25 selling any counterfeit merchandise. See Mot. at 25 (“Plaintiff 26 respectfully requests that the Court enjoin Redbubble from 27 selling or allowing the sale of counterfeit products on its 28 website.”) While phrased in a prohibitory manner, practically, 1 because Plaintiff has not identified all the items that are 2 allegedly counterfeit, this would require Defendant to take on 3 the affirmative task of identifying which of its third-party 4 product listings may be counterfeit and ensure they are removed. 5 See Opp’n at 14. Accordingly, this case is more akin to Garcia 6 v. Google, Inc., 786 F.3d 733 (9th Cir. 2015). In that case the 7 plaintiff requested a preliminary injunction requiring Google to 8 remove a film that she claimed violated her copyright interest 9 from all of its platforms, including YouTube. Id. at 737. The 10 Ninth Circuit found this was a mandatory injunction because it 11 required Google to take affirmative action—to remove and keep 12 removing the film from YouTube and other sites, whenever and by 13 whomever the film was uploaded. Id. at 740. Similarly here, 14 Plaintiff’s requested injunction would require Defendants to 15 sift through and identify which images uploaded by third-parties 16 may be counterfeit and remove those items. Thus, the 17 preliminary injunction is mandatory in nature. Accordingly, 18 Plaintiff has a greater burden to demonstrate this relief is 19 warranted. See id. 20 Likelihood of Success on the Merits 21 Plaintiff has brought two claims: one under the UCL and one 22 under the CLRA. See generally FAC. The CLRA prohibits the 23 “[passing] off goods or services as those of another.” Cal. 24 Civ. Code § 1770(a)(1). The UCL creates a cause of action for 25 business practices that are (1) unlawful, (2) unfair, or 26 (3) fraudulent. Cal. Bus. & Profs. Code § 17200. The unlawful 27 prong of the UCL prohibits “anything that can properly be called 28 a business practice and that at the same time is forbidden by 1 law.” Cel-Tech Commc’n, Inc. v. Los Angeles Cellular Tel. Co., 2 20 Cal. 4th at 180 (quotation marks and citation omitted). By 3 proscribing “any unlawful” business practice, the UCL permits 4 injured consumers to “borrow” violations of other laws and treat 5 them as unfair competition that is independently actionable. 6 Id. A practice may be unlawful and actionable under the UCL if 7 it violates any “civil, criminal, statutory or judicially made, 8 federal, state or local” law. McKell v. Washington Mutual, 9 Inc., 142 Cal.App.4th 1457, 1474 (Ct. App. 2006). 10 Here, Plaintiff brings a claim under the unlawful prong of 11 the UCL for violations of the Lanham Act. Defendant argues that 12 because Plaintiff would not have statutory standing to bring a 13 claim under the Lanham Act, she cannot bring a UCL claim for 14 such violations. See Opp’n at 17. The Court disagrees. 15 Defendant is correct that Plaintiff as a consumer would not have 16 standing to sue under the Lanham Act itself. See Barrus v. 17 Sylvania, 55 F.3d 468, 470 (9th Cir. 1995) (“As consumers, 18 [plaintiffs] have alleged neither commercial injury nor 19 competitive injury. Therefore [. . .] they lack standing.”) 20 However, this does not preclude her from bringing a claim under 21 the UCL for violations of the Lanham Act. See Ferrington v. 22 McAfee, Inc., No. 10-cv-01455-LHK, 2010 WL 3910169, at *15 (N.D. 23 Cal. Oct. 5, 2010) (finding that plaintiff could assert a Lanham 24 Act claim as the predicate for a UCL claim even though the 25 plaintiff had no standing under the Lanham Act). As the Court 26 in Ferrington explained, California courts have found that “[t]o 27 forestall an action under the unfair competition law, another 28 provision must actually ‘bar’ the action.” Id. (quoting Cel- 1 Tech, 20 Cal. 4th at 183). “Thus, if a statute indicates that 2 exclusive enforcement authority shall lie with the government 3 and explicitly precludes private enforcement, or if a statute 4 expressly provides immunity for the conduct alleged, a plaintiff 5 may not plead around this bar by bringing a claim under the 6 UCL.” Id. Further the court explained that “[t]he Lanham Act 7 permits private enforcement by individuals and businesses who 8 have suffered competitive or commercial injuries, and while the 9 courts have determined that standing is limited to such persons, 10 Defendant cites no authority suggesting that this limitation 11 constitutes an express, absolute bar.” Id. Accordingly, 12 “Plaintiffs may predicate their UCL claim on the Lanham Act, 13 even though they have no independent private right of action 14 under the Act itself.” Id. 15 Having determined that Plaintiff may bring a claim under 16 the unlawful prong of the UCL based on violations of the Lanham 17 Act, the next step is to determine whether Plaintiff has 18 demonstrated she is likely to succeed in showing a violation of 19 the Lanham Act. The Lanham Act prohibits the use of a 20 “reproduction, counterfeit, copy, or colorable imitation” of a 21 registered trademark in such a way as “is likely to cause 22 confusion, or to cause mistake, or deceive.” 15 U.S.C. 23 § 1114(1). There is a similar provision prohibiting the use of 24 “any word, term, name, symbol, or device, or any combination 25 thereof, or any false designation of origin” which “is likely to 26 cause confusion, or to cause mistake, or to deceive.” 15 U.S.C. 27 § 1125(a)(1)(A). For infringement to rise to the level of 28 counterfeiting the defendant (1) must use a non-genuine mark 1 identical to the registered mark; (2) that was registered on the 2 Principal Register for use on the same goods to which defendant 3 applied the mark; (3) the registered mark was in use; and 4 (4) defendant was not authorized to use the mark. See State of 5 Idaho Potato Comm’n v. G & T Terminal Packaging, Inc., 425 F.3d 6 708, 721 (9th Cir. 2005). 7 Plaintiff’s UCL and CLRA claims rest on a theory that the 8 sweatshirts she purchased, as well as other products sold on 9 Redbubble’s website, are counterfeit. See Mot. at 13-20. But 10 Plaintiff asks the Court to conclude at this early stage of the 11 litigation that these items are in fact counterfeit without 12 offering much to support this contention. See Mot. at 13 (“That 13 massive quantities of counterfeit products are sold and offered 14 for sale by Redbubble on www.redbubble.com cannot be seriously 15 disputed.”) While Plaintiff offers evidence that the United 16 Nations Organization has an active registered word mark and 17 logo, see Decl. of Mathew Venezia, ECF No. 16-5., she offers no 18 convincing evidence that the mark on the sweatshirt was not 19 genuine3, that the mark was registered for use on the same goods 20 to which defendant applied the mark (sweatshirts), or that 21 defendant was not authorized to use the mark. See State of 22 23 3 Plaintiff’s declarations from her attorneys that they reviewed the website and thought the items appeared to be counterfeit are 24 insufficient. See Decl. of Phillip Paley in Support of Prelim. Inj. ¶ 3, ECF No. 16-13 (declaration of a paralegal at 25 Plaintiff’s attorney’s firm stating he visited Redbubble’s website and numerous items appeared to be counterfeit); Tseng v. 26 Home Depot USA, Inc., No. C05-0908RSM, 2006 WL 521723, at *3 27 (W.D. Wash. Mar. 2, 2006) (noting that arguments of counsel and “conclusory factual statements [. . .] are improper in support of 28 [a] motion for preliminary injunction.”) eee mm RENE INI III □□□ RENEE NOI II IEEE IE ESI I EO 1 Idaho Potato Comm’n, 425 F.3d at 721. Accordingly, the Court 2 finds Plaintiff has not met her heavy burden of showing a 3 likelihood of success on the merits on either claim. 4 Because Plaintiff has failed to demonstrate a likelihood of 5 success on the merits the Court need not consider the remaining 6 elements. See Garcia v. Google, Inc., 786 F.3d 733, 740 (9th 7 Cir. 2015) (“Because it is a threshold inquiry, when a plaintiff 8 | has failed to show the likelihood of success on the merits, we 9 need not consider the remaining three Winter elements.”) 10 (internal quotation marks and citations omitted). 11 12 IIl. ORDER 13 Because Plaintiff has failed to meet her burden to 14 demonstrate preliminary injunctive relief is warranted, the Court 15 DENIES her Motion for Preliminary Injunction. 16 IT IS SO ORDERED. 17 Dated: September 20, 2021 18 kA 19 teiren staves odermacr 7008 20 21 22 23 24 25 26 27 28 14