United States District Court, W.D. Washington, Seattle
ORDER DENYING SUPPLIERS' MOTION TO
S. Lasnik United States District Judge.
matter comes before the Court on the “Suppliers'
Motion to Dismiss Under Fed.R.Civ.P. 12(b)(6).” Dkt. #
The question for the Court on a motion to dismiss is whether
the facts alleged in the complaint sufficiently state a
“plausible” ground for relief. Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007).
A claim is facially plausible when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged. Plausibility requires pleading facts, as opposed to
conclusory allegations or the formulaic recitation of
elements of a cause of action, and must rise above the mere
conceivability or possibility of unlawful conduct that
entitles the pleader to relief. Factual allegations must be
enough to raise a right to relief above the speculative
level. Where a complaint pleads facts that are merely
consistent with a defendant's liability, it stops short
of the line between possibility and plausibility of
entitlement to relief. Nor is it enough that the complaint is
factually neutral; rather, it must be factually suggestive.
Somers v. Apple, Inc., 729 F.3d 953, 959-60 (9th
Cir. 2013) (internal quotation marks and citations omitted).
All well-pleaded factual allegations are presumed to be true,
with all reasonable inferences drawn in favor of the
non-moving party. In re Fitness Holdings Int'l,
Inc., 714 F.3d 1141, 1144-45 (9th Cir. 2013). If the
complaint fails to state a cognizable legal theory or fails
to provide sufficient facts to support a claim, dismissal is
appropriate. Shroyer v. New Cingular Wireless
Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010).
reviewed the First Amended Complaint and the memoranda
submitted by the parties,  the Court finds as follows:
are coffee farmers in the Kona District of the Big Island of
Hawaii. They allege that moving defendants sell coffee
products throughout the United States and that they falsely
designate the geographic origin of their coffee as
“Kona, ” placing the word Kona prominently on
their packaging and/or promotional materials. Plaintiffs
provide examples of the packaging -and in some instances
promotional materials - used by each of the moving defendants
and allege that the products carrying the Kona label actually
contain little to no coffee from the Kona District.
Plaintiffs further allege that the supplier defendants
deliberately and intentionally mislead consumers into
believing their products contain an appreciable amount of
Kona coffee beans in order to use the reputation and goodwill
of the Kona name to justify higher prices for what is
actually ordinary commodity coffee. Plaintiffs complain that
the suppliers' use of the word Kona not only constitutes
false designation of geographic origin, it damages the
geographic designation itself and the designation's value
to the farmers of authentic Kona coffee from the Kona
District. Plaintiffs have tested packages of the supplier
defendants' coffee products, all of which are marked with
the word Kona, and found that their ratios of various metal
(strontium to zinc, barium to nickel, cobalt to zinc, and
manganese to nickel) are well outside the range of that which
is found in authentic Kona coffee. Plaintiffs expressly
allege that the supplier defendants' designation of Kona
as the origin of the coffee in their “Kona”
products is false. Plaintiffs assert that, even if there were
some Kona coffee in defendants' products, it is not the
meaningful percentage that a consumer would expect based on
on these allegations, plaintiffs assert claims of false
designation of origin, false advertising, and unfair
competition under Section 43(a) of the Lanham Act, 15 U.S.C.
§ 1125(a). The supplier defendants argue that the claims
should be dismissed because they (1) are grounded in fraud
but are not pled with the particularity required under
Fed.R.Civ.P. 9(b) and (2) fail to plausibly allege a false
association claim under Section 43(a)(1)(A).
state a claim under Section 43(a)(1)(A) of the Lanham Act,
plaintiffs must allege that the supplier defendants (1) used
in commerce (2) a word, false designation of origin, and/or
false or misleading representation of fact (3) which is
likely to cause confusion as to the origin of their coffee
and (4) that such use has or is likely to damage plaintiffs.
15 U.S.C. § 1125(a)(1)(A). See Freecycle Network,
Inc. v. Oey, 505 F.3d 898, 902 (9th Cir. 2007). The
supplier defendants' first argument is that plaintiffs
have failed to plead with particularity the what, when, and
where of the intentional falsehoods on which their false
designation of origin claims are based. In the suppliers'
view, plaintiffs merely allege that “unidentified
Defendants sold unidentified coffee products at unknown
locations and times.” Dkt. # 107 at 9. The Court
disagrees. Taking the allegations against L&K Coffee Co.,
LLC, as an example, plaintiffs allege that L&K does
business under the name of Magnum Coffee Roastery and sells
its products throughout the United States using an on-line
store at www.javaboulevard.com and various retail
outlets, including defendants Costco, Amazon, Walmart, T.J.
Maxx, and Marshalls. Dkt. # 81 at ¶ 11. Plaintiffs
allege that L&K prominently marks certain products in its
Magnum Exotics line with the word Kona on the front of the
packaging, but that the designation of origin is false.
Id. at ¶ 11 and ¶ 99. Plaintiffs also
allege that L&K uses deceptive taglines, slogans, and
imagery in its marketing and packaging that imply, falsely,
that the coffee in its “Kona” products originated
in the Kona District: examples of the offending text and
imagery are provided. Id. at ¶ 99. Plaintiffs
provide an image of the front of one of L&K's
products, Magnum Exotics Kona Blend Coffee, as an example
showing the use of the word Kona and associated tropical
imagery. Id. at ¶ 100.
have adequately alleged intentional falsehood on
L&K's part. They identify the who, what, when, where,
and how of the allegedly false statements. L&K
(“the who”) is accused of using the word Kona and
other text and imagery that implies that the coffee in the
package originated from the Kona District (the
“what”) on the packaging of certain Magnum
Exotics products (the “where”) that are
distributed to consumers as part of L&K's business
through specified channels and outlets (the
“when” and “how”). The fact that
plaintiffs specifically identified one or two products from
each supplier as examples of the alleged fraud - providing an
image of the packaging and test results confirming the
absence of Kona coffee in the packages -does not invalidate
or make unclear the allegation that all of L&K's
products marked with the word Kona contain a false
designation of origin. The allegations adequately “inform
each defendant separately of the allegations surrounding
[its] alleged participation in the fraud.” Swartz
v. KPMG LLP, 476 F.3d 756, 764-65 (9th Cir. 2007).
Plaintiffs have met the Rule 9(b) pleading requirement.
supplier defendants' second argument is that plaintiffs
have failed to allege a plausible claim of false association
under Section 43(a)(1)(A) because there is no indication that
defendants falsely linked their products with the plaintiff
farmers or their businesses. Claims arising under Section
43(a)(1)(A) are generically described as “false
association” claims (see Lexmark Int'l, Inc. v.
Static Control Components, Inc., 572 U.S. 118, 122
(2014)), but the plain language of the subsection prohibits
more than just a false association with a particular producer
or manufacturer. Section 43(a)(1)(A) provides a federal cause
of action when a person's use of a word or symbol in
commerce is likely to cause confusion “as to the . . .
association of such person with another person, or
as to the origin . . . of his goods . . . .” 15 U.S.C.
§ 1125(a)(1)(A) (emphasis added). The suppliers conflate
the two by omitting the word “or” and arguing
that Section 43(a)(1)(A) requires a showing of confusion
regarding the association of their goods with plaintiffs, as
opposed to confusion regarding the association of the goods
with a particular locality or region. Correcting the error
shows, however, that this provision applies where a
person's use of a word or symbol would likely cause
consumer confusion regarding the origin of the goods.
“Origin, ” in this context, has long been
understood to include the geographic origin of the good or
service. See Dastar Corp. v. Twentieth Century Fox Film
Corp., 539 U.S. 23, 29-30 (2003).
supplier defendants further argue that a trademark
infringement claim under Section 43(a)(1)(A) requires a
protectable ownership interest in the mark and that
plaintiffs concede that “Kona” is not a
protectable mark. It is undoubtedly true that, in order to
allege infringement of a trademark, a plaintiff must have a
protectable interest in the mark. Plaintiffs, however, are
using Section 43(a) to challenge what they consider unfair
competition, namely the false designation of geographic
origin. The Supreme Court has expressly held that Section
43(a) of the Lanham Act goes beyond trademark protection and
makes actionable unfair competition claims such as that
brought by plaintiffs.
The Lanham Act was intended to make “actionable the
deceptive and misleading use of marks, ” and “to
protect persons engaged in ... commerce against unfair
competition.” 15 U.S.C. § 1127. While much of the
Lanham Act addresses the registration, use, and infringement
of trademarks and related marks, § 43(a), 15 U.S.C.
§ 1125(a) is one of the few provisions that goes beyond
trademark protection. As originally enacted, § 43(a)
created a federal remedy against a person who used in
commerce either “a false designation of origin, or any
false description or representation” in connection with
“any goods or services.” 60 Stat. 441. . . .
Although a case can be made that a proper reading of §
43(a), as originally enacted, would treat the word
“origin” as referring only “to the
geographic location in which the goods originated, ”
Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763,
777 (1992) (STEVENS, J., concurring in judgment), the Courts
of Appeals considering the issue, beginning with the Sixth
Circuit, unanimously concluded that it “does not merely
refer to geographical origin, but also to origin of source or
manufacture, ” Federal-Mogul-Bower Bearings, Inc.
v. Azoff, 313 F.2d 405, 408 (6th Cir. 1963), thereby
creating a federal cause of action for traditional trademark
infringement of unregistered marks. See 4 McCarthy
§ 27:14; Two Pesos, supra, at 768. . .
. The Trademark Law Revision Act of 1988 made clear that
§ 43(a) covers origin of production as well as
Dastar Corp. v. Twentieth Century Fox Film Corp.,
539 U.S. 23, 28-30 (2003) (internal footnotes omitted). Thus,
Section 43(a) provides a federal remedy for “a false
designation of origin” - a phrase that has always been
construed as encompassing false statements regarding the
geographic origin of the product - without regard to the
existence of a protectable trademark. See also Belmora
LLC v. Bayer Consumer Care AG, 819 F.3d 697, 706 (4th
Cir. 2016) (“Significantly, the plain language of
§ 43(a) does not ...