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Maverick Whiskey, LLC v. Brewery on Half Moon Bay, Inc.

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

November 12, 2019




         To the Honorable United States District Judge Jason K. Pulliam:

         This Report and Recommendation concerns Defendant's Motion to Dismiss Based on Defective Service and Lack of Personal Jurisdiction [#23]. All non-dispositive pretrial matters in this case have been referred to the undersigned for disposition pursuant to Western District of Texas Local Rule CV-72 and Appendix C [#48] and Defendant's Motion to Dismiss was specifically referred for a report and recommendation [#49]. The undersigned therefore 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 be GRANTED.

         I. Procedural and Factual Background

         Plaintiff Maverick Whiskey, LLC filed this action against Defendant Brewery on Half Moon Bay, Inc. seeking a declaratory judgment regarding its right to use the trademark “Maverick” and an injunction directing the United States Patent and Trademark Office (“USPTO”) to cancel Defendant's trademark registration. Plaintiff alleges that Maverick Whiskey, a company owned by Kenneth Maverick, is named after Kenneth Maverick's great, great, great-grandfather, Samuel Augustus Maverick, a Texas rancher who refused to brand his cattle, made his own whiskey, and is responsible for the origin of the word “maverick” in the English lexicon. (Compl. [#1] at ¶¶ 28-44.) Kenneth Maverick started Maverick Whiskey in 2016 and filed a number of trademark applications, such as “Maverick Whiskey” and “Maverick Bourbon, ” in connection with his business. (Id. at ¶¶ 44-50.) The USPTO denied the applications and refused the registrations because Defendant, a business in Half Moon Bay, California, has owned a trademark registration for “Mavericks” for “beer and ale” and “wine” since 2002 and 2013, respectively. (Id. at ¶¶ 51-53.) Plaintiff alleges that Defendant's marks are named after Mavericks Beach, a surf destination next to Defendant's restaurant and brewery in Half Moon Bay, California-Half Moon Bay Brewing Company. (Id. at ¶¶ 77-82.)

         Plaintiff believes Defendant's trademarks are invalid because Plaintiff was the first user of “Maverick” for whiskey and alleges it has been using the “Maverick” mark on its website, www.maverickwhiskey, com, since at least as early as May 2018 to advertise the sale of its products. (Id. at ¶¶ 61-63.) Plaintiff also contends that Defendant's marks, because they are named for a famous surfing beach adjacent to Defendant's property, are geographically descriptive and therefore prohibited from trademark registration under Section 2(e)(2) of the Trademark Act, 15 U.S.C. § 1052(e)(2) (prohibiting registration of a mark that is primarily geographically descriptive of the goods or services named in the application). (Id. at ¶¶ 76, 85, 93-94.)

         Plaintiff alleges that Defendant has threatened to sue Plaintiff for trademark infringement and unfair competition. (Id. at ¶¶ 56-61.) By this lawsuit, Plaintiff asks the Court to issue a declaratory judgment that Plaintiff's actions do not constitute trademark infringement, counterfeiting, false designation of origin, unfair competition, false advertising, or trademark dilution in violation of the Lanham Act, 15 U.S.C. §§ 1114, 1125(a) or any other violation under state or federal law; that Plaintiff is entitled to the trademark registrations he seeks; and that the USPTO must cancel Defendant's registered marks.

         Plaintiff filed this lawsuit on February 14, 2019. After several attempts at service, service was purportedly returned as executed on May 17, 2019 [#15]. After obtaining an extension of time to respond or otherwise defend this suit, Defendant filed the motion currently before the Court, arguing for the dismissal of Plaintiff's Complaint for lack of effective service and lack of personal jurisdiction. The Honorable Fred Biery referred this case to the undersigned, and the Court granted various extensions to file responses and replies to the motion. The Court set the motion for a hearing; the parties moved for a continuance; and the Court ultimately held a hearing on September 20, 2019, at which both parties appeared through counsel. After the hearing, this case was reassigned to the docket of the Honorable Jason K. Pulliam and referred again to the undersigned.

         After considering Defendant's motion, the responses, replies, and sur-replies thereto [#31, #40, #41, #42], the evidence submitted in support and in opposition to the motion, the arguments of counsel at the hearing, Plaintiff's post-hearing brief on personal jurisdiction [#46], Defendant's objections to Plaintiff's sur-reply and post-hearing brief [#43, #47], and the governing law the undersigned recommends that Defendant's motion to dismiss be granted and this case be dismissed for lack of personal jurisdiction.

         Defendant moves for dismissal on two grounds: improper service and lack of personal jurisdiction. Although service was indeed defective, the undersigned finds it would be futile to reorder service to comply with the Federal Rules of Civil Procedure because Plaintiff has failed to establish a prima facie case of personal jurisdiction over Defendant. Accordingly, this case should be dismissed.

         II. Improper Service

         Defendant contends that service was not sufficient or proper in this case because neither of the two summonses at issue was “directed to the defendant” as required by Rule 4(a)(1)(B). The record reflects that one of the summonses was directed to Christine Mendonca; the other was directed to Leonard Mendonca. (Summons [#14] at 1, 3.) Although both of these individuals are affiliated with Defendant, the address listed on the summonses is the personal address of the Mendoncas and not the address of Defendant, and the summonses do not indicate that either Christine Mendonca or Leonard Mendonca were served as representatives of Defendant. (See id.) The summonses are directed at the Mendoncas as individuals. (See id.) Defendant asks the Court to conclude that process was insufficient under the Federal Rules of Civil Procedure and that the time for proper service has expired under Rule 4(m). See Fed. R. Civ. P. 4(m) (requiring service within 90 days of filing complaint).

         Rule 12(b)(4) of the Federal Rules of Civil Procedure permits a defendant to move to dismiss an action for defects in the form of the process. Such a motion “is proper only to challenge noncompliance with the provisions of Rule 4(b) or any applicable provision incorporated by Rule 4(b) that deals specifically with the content of the summons.” 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure, § 1353 (3d ed.). Rule 4(b) provides:

On or after filing the complaint, the plaintiff may present a summons to the clerk for signature and seal. If the summons is properly completed, the clerk must sign, seal and issue it to the plaintiff for service on the defendant. A summons-or a copy of a summons that is addressed to multiple defendants-must be issued for each defendant to be served.

Fed. R. Civ. P. 4(b). Pursuant to Rule 4(a)(1), a summons must: (A) name the court and the parties and (B) be directed to the defendant, among other requirements. Id. at 4(a)(1). “Thus, process may be insufficient if the summons and complaint refer to a party in the wrong name.” Bowman v. Sanofi-Aventis U.S., No. A-09-CA-192-SS, 2009 WL 5083431, at *1 (W.D. Tex. Apr. 16, 2009). Plaintiff, as the serving party, bears the burden of proving the validity of service or good cause for failure to effect timely service. See Sys. Signs Supplies v. U.S. Dep't of Justice, 903 F.2d 1011, 1013 (5th Cir. 1990); Familia De Boom v. Arosa Mercantil, S.A., 629 F.2d 1134, 1139 (5th Cir. 1980).

         Plaintiff's response to Defendant's motion to dismiss does not dispute that the summonses at issue were directed at the Mendoncas individually and not to Defendant. Yet Plaintiff maintains that directing the summonses to the Mendoncas, who are the founders of Defendant and current board members (as well as Christine Mendonca being Defendant's registered agent for service), was the only way to notice Defendant of this lawsuit, as Plaintiff's initial three attempts to serve summonses directed to “The Brewery on Half Moon Bay, Inc.” and various corporate officers on behalf of Defendant at the address listed with the Secretary of State for California were unsuccessful. (See Summons [#4] at 1 (directing service at The Brewery on Half Moon Bay, Inc. at 390 Capistrano Road); Summons [#7] at 1 (directing service at Craig Carroll for the Brewery on Half Moon Bay, Inc. at 390 Capistrano Road); Summons [#8] at 1 (directing service at Ken Pearlman for The Brewery on Half Moon Bay, Inc. at 390 Capistrano Road).) The Texas Secretary of State returned these three summonses as unexecuted for the stated reason: “Return to Send, Attempted-Not Known, Unable to Forward.” (Ltr. [#9] at 1.) Plaintiff accuses Defendant of intentionally dodging service by illegally redirecting their mail to a U.S. Post Office Box, where the summonses were never claimed, in violation of California law. (Resp. [#31] at 2-3.)

         Regardless of whether Defendant could legally designate a P.O. Box as its mailing address under California law, Plaintiff concedes that it did not direct the summonses that were ultimately served on the Mendoncas to Defendant as required by Rule 4(a)(1)(B). When process is insufficient, the Court has broad discretion to dismiss an action. Coleman v. Bank of N.Y. Mellon, 969 F.Supp.2d 736, 744 (N.D. Tex. 2013). Nonetheless, defects in the summons should generally not be a basis for dismissal unless the defects caused actual prejudice to the defendant. Id. Plaintiff argues there has been no prejudice to Defendant, as Defendant received actual notice of this lawsuit upon service to the Mendoncas, despite any defect in the summonses. Plaintiff therefore asks the Court to extend the time for service and order amended service under Rules 4(a)(2) and 4(m). Were it not for the issue of personal jurisdiction, discussed infra, the undersigned would be inclined to order replacement service as requested. However, because there is no personal jurisdiction over Defendant in this Court, reordering service would be futile and therefore is not recommended.

         III. ...

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