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Priority Design & Service, Inc. v. Gabriel Plaza

United States District Court, W.D. Texas, San Antonio Division

May 15, 2019

PRIORITY DESIGN & SERVICE, INC., Plaintiff,
v.
GABRIEL PLAZA, Defendant.

          Honorable Orlando L. Garcia Chief United States District Judge

          REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          ELIZABETH S. ("BETSY") CHESTNEY UNITED STATES MAGISTRATE JUDGE

         This Report and Recommendation concerns Defendant's Partial Motion to Dismiss Pursuant to Rule 12(b)(6) [#7]. All pretrial matters in this case have been referred to the undersigned for disposition pursuant to Rules CV-72 and 1(c) of Appendix C of the Local Rules of the United States District Court for the Western District of Texas [#17]. The undersigned has authority to enter this recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). For the reasons set forth below, it is recommended that Defendant's Motion [#7] be GRANTED.

         I. Background

         This is an action arising under the Lanham Act, 15 U.S.C. § 1051, et seq. Plaintiff Priority Design & Service, Inc. is a company providing residential and multi-family heating and air-conditioning services in greater San Antonio. (Compl. [#1] at ¶ 4.) Plaintiff's Original Complaint alleges that Defendant Gabriel Plaza d/b/a Priority Air Service is also in the air-conditioning industry and is conducting business in the San Antonio area, making Plaintiff and Defendant direct competitors. (Id. at ¶¶ 5-6.) Plaintiff claims it has been using its name and logo as a trademark since 1999 and 2002, respectively, and has two pending applications with the U.S. Patent and Trademark Office (“USPTO”) for nationwide registration of its “Priority Design & Service” word trademark and its logo design plus word trademark. (Id. at ¶ 6.) Plaintiff alleges Defendant's use of a highly similar name constitutes a violation of its trademark rights. (Id. at ¶¶ 5-6.)

         Plaintiff sues Defendant for the following causes of action arising under federal and Texas law: (I) federal unfair competition and false description in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); (II) federal false advertising in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B); (III) state unfair competition in violation of Chapter 16 of the Texas Business and Commerce Code; (IV) common law trademark infringement; (V) common law unfair competition; (VI) tortious interference with existing business relationships; and (VII) tortious interference with prospective business relationships. Defendant moves to dismiss Counts II, III, VI, and VII of Plaintiff's Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim.

         II. Legal Standard

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “Although a complaint “does not need detailed factual allegations, ” the “allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. The allegations pleaded must show “more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678.

         In reviewing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a court “accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.” Martin K. Eby Const. Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004) (internal quotation omitted). However, it is not bound to accept as true conclusory allegations or allegations that merely restate the legal elements of a claim. See Chhim v. Univ. of Texas at Austin, 836 F.3d 467, 469 (5th Cir. 2016) (citing Iqbal, 556 U.S. at 678). In short, a claim should only be dismissed if a court determines that it is beyond doubt that the claimant cannot prove a plausible set of facts that support the claim and would justify relief. See Twombly, 550 U.S. at 570.

         III. Analysis

         Defendant's motion to dismiss should be granted because Plaintiff has failed to plead essential elements of its claims for false advertising under the Lanham Act, common law unfair competition, and tortious interference with prospective and existing business relations.

         A.False Advertising under the Lanham Act (Count II)

         Plaintiff's false advertising claim (Count II) fails as a matter of law because Plaintiff's Complaint does not allege that Defendant included any literal misrepresentation or misleading statements in its advertising, only that it used a confusingly similar name to ...


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