Case 2:10-cv-03738-ABC -CW Document 68 Filed 12/15/10 Page 1 of 8 Page ID #:680

9 UNITED STATES DISTRICT COURT

10 CENTRAL DISTRICT OF CALIFORNIA

11 WESTERN DIVISION

12
ACADEMY OF MOTION PICTURES ARTS CV 10-3738 ABC (CWx)
13 AND SCIENCES, a California Non-
Profit Corporation; ORDER RE: DEFENDANTS’
14 GODADDY.COM, INC. AND DOMAINS
Plaintiff, BY PROXY, INC.’S MOTION TO
15 DISMISS FIRST AMENDED
v. COMPLAINT, OR, IN THE
16 ALTERNATIVE, TO STRIKE
GODADDY.COM, INC, a Delaware
17 Corporation; THE GODADDY GROUP,
INC., a Delaware Corporation,
18 DOMAINS BY PROXY, INC., a
Delaware Corporation,
19 GREENDOMAINMARKET.COM, an
unknown entity; BDS, an unknown
20 entity; XPDREAMTEAM, LLC, a
California Limited Liability
21 Corporation;
22 Defendants.
23

24 Pending before the Court is a Motion to Dismiss Plaintiff’s First

25 Amended Complaint, or In the Alternative, Motion to Strike (“Motion”),

26 filed by Defendants GoDaddy.com, Inc., and Domains By Proxy, Inc.

27 (“Defendants”), on November 6, 2010. On November 19, 2010, Plaintiff

28 Academy of Motion Pictures Arts and Sciences (“Plaintiff”) filed its

 Case 2:10-cv-03738-ABC -CW Document 68 Filed 12/15/10 Page 2 of 8 Page ID #:681

1 Opposition, and on December 6, 2010, Defendants filed their Reply.

2 The Court finds this Motion appropriate for resolution without oral

3 argument and VACATES the hearing set for December 20, 2010. Fed. R.

4 Civ. P. 78; Local Rule 7-15. For the reasons below, the Motion is

5 DENIED.

7 I. PROCEDURAL BACKGROUND

8 The factual background of this case is set forth at length in the

9 Court’s September 20, 2010 Order (“Order,” docket no. 51) on

10 Defendants’ first Motion to Dismiss. Therein, the Court dismissed

11 certain of Plaintiff’s claims with leave to amend. On October 12,

12 2010, Plaintiff filed its First Amended Complaint (“FAC”) amending its

13 claims under California Business & Professions Code § 17200 et seq.

14 (“UCL”) for unfair conduct and unlawful conduct, claims 2 and 3

15 respectively. In the instant Motion, Defendants argue that these re-

16 pled claims must be dismissed under Fed. R. Civ. P. 12(b)(6) because

17 Plaintiff lacks standing to bring them and, in the alternative, that

18 the unfair conduct claim is otherwise inadequately pled. Defendants

19 also move in the alternative, under Fed. R. Civ. P. 12(f), to strike

20 Plaintiff’s prayer for restitution.

21

22 II. DISCUSSION

23 A. Legal Standard for a Rule 12(b)(6) Motion to Dismiss

24 The Supreme Court has recently clarified the level of pleading

25 necessary to survive a motion to dismiss under Rule 12(b)(6). See

26 Ashcroft v. Iqbal, __ U.S. __, __, 129 S. Ct. 1937, 1950–52 (2009);

27 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557–58 (2007). Federal Rule

28 of Civil Procedure 8(a)(2) requires a “short and plain statement of

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1 the claim showing that the pleader is entitled to relief,” which does

2 not require “detailed factual allegations,” but it “demands more than

3 an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal,

4 __ U.S. at __, 129 S. Ct. at 1949. A claim must be “plausible on its

5 face,” which means that the Court can “draw the reasonable inference

6 that the defendant is liable for the misconduct alleged.” Id.; see

7 Twombly, 550 U.S. at 556, 570. In other words, “a plaintiff’s

8 obligation to provide the grounds of his entitlement to relief

9 requires more than labels and conclusions, and a formulaic recitation

10 of the elements of a cause of action will not do.” Twombly, 550 U.S.

11 at 555 (internal quotations and alterations omitted). Allegations of

12 fact are taken as true and construed in the light most favorable to

13 the nonmoving party. See Newdow v. Lefevre, 598 F.3d 638, 642 (9th

14 Cir. 2010).

15 In analyzing the sufficiency of the complaint, the Court must

16 first look at the requirements of the causes of action alleged. See

17 Iqbal, __ U.S. at __, 129 S. Ct. at 1947. The Court may then identify

18 and disregard any legal conclusions; they are not subject to the

19 requirement that the Court must accept as true all of the allegations

20 contained in the complaint. Id. at __, 129 S. Ct. at 1949. The Court

21 must then decide whether well-pleaded factual allegations, when

22 assumed true, “plausibly give rise to an entitlement to relief.” Id.

23 at __, 129 S. Ct. at 1950. In doing so, the Court may not consider

24 material beyond the pleadings, but may consider judicially noticeable

25 documents, documents attached to the complaint, or documents to which

26 the complaint refers extensively or which form the basis of the

27 plaintiff’s claims in the complaint. See United States v. Ritchie,

28 342 F.3d 903, 908 (9th Cir. 2003).

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2 B. The FAC’s Allegations Are Sufficient to Confer Standing on

Plaintiff to Bring Its UCL Claims.
3
Defendants argue that Plaintiff has pled insufficient facts to
4
demonstrate that it has standing to pursue its second and third
5
claims, for unfair conduct and unlawful conduct respectively, under
6
the UCL. To have standing to bring a UCL claim, a plaintiff must
7
allege that it (1) “has suffered injury in fact,” and (2) “has lost
8
money or property as a result of the unfair competition.” Cal. Bus. &
9
Prof. Code § 17204; Californians For Disability Rights v. Mervyn’s,
10
LLC, 39 Cal. 4th 223, 228 (2006). The Court incorporates by reference
11
its discussion of the UCL’s standing requirement from its September
12
20, 2010, Order. See Order, pp. 16-21.
13
Here, Plaintiff asserts two distinct injuries: (2) dilution of
14
its trademarks, and (2) costs incurred to police Defendants’ alleged
15
misuse of the trademarks. FAC ¶¶ 25, 37. Defendants contend that,
16
even assuming these are “injuries in fact,” Plaintiff has not alleged
17
how these injuries were caused “as a result of” the alleged
18
misconduct.
19
Having reviewed the FAC, the Court finds that Plaintiff has pled
20
facts sufficient to show standing. Specifically, Plaintiff alleges
21
that “Defendants’ illegal activities result in advertising related to
22
the Academy’s marks being placed on numerous parked pages that have no
23
actual relationship to the Academy, thereby causing dilution of
24
Plaintiff’s interest in legally protected trademarks.” FAC ¶ 45
25
(emphasis added). Similarly, “Plaintiff has expended significant time
26
and expense, including in connection with the retention of counsel, in
27
identifying these infringing pages and sending the cease-and-desist
28

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1 letters.” FAC ¶ 45. As to the latter injury, Plaintiff clearly

2 alleges that it has incurred the expense of monitoring Defendants’ use

3 of its marks because that use was unauthorized. See also FAC ¶¶ 37,

4 44.

5 Defendants assert that Plaintiff’s FAC contains insufficient

6 detail because, for example, it fails to identify specific domain name

7 registrations that were the targets of Plaintiff’s cease-and-desist

8 letters and fails to assert that all such expenses were the result of

9 policing Defendants’ “parking” activity as opposed to it protected

10 registration activity. (Mot. 6:1-11.) However, such detail is not

11 required at the pleading stage; at this point, a plaintiff need only

12 make sufficient – as opposed to comprehensive – factual allegations,

13 and need not proffer evidence. Accordingly, Plaintiff has pled that

14 it has lost money or property as a result of the unfair and unlawful

15 conduct alleged in its FAC. Plaintiff therefore has standing to

16 pursue its UCL claims.

17 C. Plaintiff’s UCL Claim for Unfair Conduct Is Sufficiently Pled.

18 In its previous Order, the Court rejected Defendants’ argument

19 that Plaintiff’s UCL claim for unfair conduct was insufficiently pled.

20 In that motion, Defendants argued that although the definition of

21 “unfair” is unsettled, Plaintiff failed to allege facts satisfying any

22 definition of “unfair.” In rejecting this argument, the Court noted

23 that Defendants raised it a cursory manner, and concluded that the

24 Complaint satisfied either standard for “unfair.” (Order 22:3-22.)

25 Defendants now assert a variation on their previous argument:

26 emphasizing the distinction between unfair conduct claims brought by

27 competitors as opposed to those brought by consumers, Defendants

28 contend that Plaintiff brings its claim as a competitor, but has

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1 failed to allege that Defendants’ conduct is tantamount to a violation

2 of antitrust law, as required pursuant to the seminal case Cel-Tech

3 Communications, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163

4 (1999). In Cel-Tech, the Court stated that “[w]hen a plaintiff who

5 claims to have suffered injury from a direct competitor’s ‘unfair’ act

6 or practice invokes section 17200, the word ‘unfair’ in that section

7 means conduct that threatens an incipient violation of an antitrust

8 law, or violates the policy or spirit of one of those laws because its

9 effects are comparable to or the same as a violation of the law, or

10 otherwise significantly threatens or harms competition.” Cel-Tech, 20

11 Cal 4th at 187.

12 However, the Cel-Tech court qualified this reference to antitrust

13 law, stating “[t]his case involves an action by a competitor alleging

14 anticompetitive practices. Our discussion and this test are limited

15 to that context. Nothing we say relates to actions by consumers or by

16 competitors alleging other kinds of violations of the unfair

17 competition law such as ‘fraudulent’ or ‘unlawful’ business practices

18 or ‘unfair, deceptive, untrue or misleading advertising.’” Id. at 187

19 fn. 12.

20 Furthermore, as Plaintiff points out, the distinction between

21 competitor claims and consumer claims has no bearing in trademark

22 cases. In Academy of Motion Picture Arts and Sciences v. Creative

23 House Promotions, Inc., 944 F.2d 1446, 1457 (9th Cir. 1991) a case

24 involving an Oscar trademark, the Ninth Circuit reversed the district

25 court’s dismissal of claim for unfair competition. Citing Ball v.

26 American Trial Lawyers Ass’n, 14 Cal. App. 3d 289 (1971), the Court

27 stated that “[a]n action for unfair competition under [the UCL] is

28 ‘substantially congruent’ to a trademark infringement claim under the

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1 Lanham Act. [] Under both, the ultimate test is whether the public is

2 likely to be deceived or confused by the similarity of the marks.

3 [E]ven if the parties are not competitors, injury is established

4 [under the UCL] if the public is likely to confuse or associate the

5 source of the goods.” Creative House, 944 F.2d at 1457 (emphasis

6 added).

7 Here, the gravamen of Plaintiff’s FAC – including the UCL claim

8 for unfair conduct – is that, without Plaintiff’s authorization,

9 Defendants are registering, trafficking in, licensing, and using

10 Plaintiff’s trademarks in internet domain names to generate revenue

11 for themselves. (FAC ¶¶ 1-2.) Plaintiff further alleges that “[b]y

12 diverting consumers from Plaintiff’s website to websites accessible

13 from the infringing [domains, Defendants] create[] a likelihood of

14 confusion as to the source, sponsorship, affiliation, or endorsement

15 of the infringing [] websites.” (FAC ¶ 61.) In so alleging that the

16 public is likely to be confused by Defendants’ conduct, the FAC states

17 a claim for “unfair” conduct under the UCL.

18 D. The Court Denies Defendants’ Rule 12(f) Motion to Strike.

19
Finally, Defendants urge the Court to strike Plaintiff’s prayer
20
for restitution as a remedy for the alleged UCL violations. See FAC
21
¶¶ 75 & 81, Prayer for Relief (e)(2).1 Defendants urge that the prayer
22
for restitution be stricken because it is inadequately pled.
23
The removal of inadequately pled material is not a proper purpose
24
for a motion to strike. Rather, Rule 12(f) provides that “the court
25

26
1
27 The Court notes that Plaintiff has abandoned its separate
claim for unjust enrichment and instead merely seeks restitution as a
28 remedy.

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1 may order stricken from any pleading any insufficient defense or any

2 redundant, immaterial, impertinent, or scandalous matter.” Fed. R.

3 Civ. Proc 12(f). Plaintiff’s prayer for restitution cannot be

4 considered “redundant, immaterial, impertinent, or scandalous matter.”

5 Indeed, restitution is, in general, an available remedy for UCL

6 violations. See, e.g., MGA Entertainment, Inc. v. Mattel, Inc., 2005

7 WL 5894689, *9 (C.D. Cal. 2005) (denying motion to strike prayer for

8 restitution for a UCL violation, and stating that, more important than

9 the fact that the remedy would otherwise remain in the complaint under

10 other causes of action, is the fact the restitution and disgorgement

11 can be appropriate remedies under the UCL); and Korea Supply Co. v.

12 Lockheed Martin Corp., 29 Cal.4th 1134, 1148-1149 (Cal. 2003)

13 (discussing restitution as a remedy for a UCL violation). Plaintiff’s

14 prayer for restitution for its UCL claims therefore survives

15 Defendants’ motion.

16

17 III. CONCLUSION
18
For the foregoing reasons, Defendants’ Motion to Dismiss
19
Plaintiff’s First Amended Complaint, or In the Alternative, Motion to
20
Strike, is DENIED.
21
IT IS SO ORDERED.
22

23

24 DATED: December 15, 2010 __________________________

25 AUDREY B. COLLINS
CHIEF UNITED STATES DISTRICT JUDGE
26

27

28