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DONINI INTERNATIONAL v. SATEC

July 12, 2004.

Donini International, S.P.A. Plaintiff,
v.
Satec (U.S.A.) LLC and Cleaners Family, Inc. Defendants.



The opinion of the court was delivered by: CHARLES HAIGHT, District Judge

MEMORANDUM OPINION AND ORDER

In this suit brought under the Lanham Act, 15 U.S.C. § 1125(a), plaintiff moves for a preliminary injunction. Defendants oppose plaintiff's motion, and have filed separate motions to dismiss the complaint or, in the alternative, for change of venue. This Memorandum Opinion and Order resolves these outstanding motions.

BACKGROUND

  Plaintiff is an Italian corporation that specializes in the manufacture, sale, and distribution of commercial dry cleaning equipment. Defendant Satec LLC ("Satec") is a New Jersey corporation that sells and distributes commercial dry cleaning equipment manufactured by non-party Satec GMBH, a German corporation. According to the Memorandum of Law filed by Satec in support of its motion ("Satec's Motion"), the "two members of" Satec are Abraham Cho and Esther Cho. Satec's Motion at 4. Neither Abraham Cho nor Esther Cho is a party to the present suit. Defendant Cleaners Family, Inc. ("Cleaners Family"), a New Jersey corporation, publishes a trade magazine that caters to the dry cleaning and laundry industry. Cleaners Family is a sole proprietorship of Abraham Cho and Esther Cho. Satec's Motion at 4. Cleaners Family is, however, under the day-to-day charge of Jung Chull Choi, who is also not party to the present suit. Id.

  Plaintiff was a presenter at an April 2002 trade show for the dry cleaning industry held in the Netherlands. Complaint at para. 26. In particular, plaintiff had on display its model known as the "Swing T320." Id. During a demonstration of the machine on April 6, 2002, a section of glass on the door of the machine broke, allowing some solvents previously contained in the machine to leak out. Id. What caused the glass to break and how extensive was the damage to the machine are disputed issues of fact. Plaintiff claims that the break was minor and due entirely to a defect in the glass. Defendants claim that the machine exploded, ejecting pieces of broken glass some distance from the machine and precipitating the release of noxious fluid and gas.

  Defendant Cleaners Family reported its version of these events in a June 2003 article in Cleaners Family magazine dealing principally with the potential dangers of hydrocarbon dry cleaning machines. Complaint at paras. 19-25. Specifically, this article included a picture or what was purported to be the Swing T320 machine on display at the April 2002 show with its door "completely exploded and broken." Complaint at para. 23. The article went on to provide commentary critical of the manufacture and safety of Donini dry cleaning machines. Complaint at para. 24. Plaintiff, through counsel in Italy, contacted Satec and Satec GMBH via letter on July 3, 2003. Complaint at paras. 39-41. In that letter, plaintiff contested the accuracy of the June 2003 article in Cleaners Family magazine and requested that Satec and Satec GMBH publish a correction in the next edition of Cleaners Family magazine. Plaintiff did not receive a response to this request. Id.

  Another article critical of the manufacture and safety of Donini products appeared in the November 2003 edition of Cleaners Family magazine. Complaint at paras. 18-19, 36. This article also referred to events at the April 2002 trade show, again alleging that the Swing T320 had exploded during a demonstration.

  Plaintiff filed the present law suit with the Clerk of the Southern District of New York on November 26, 2003. In the Complaint plaintiff asserted that Satec and Cleaners Family conspired to harm plaintiff's reputation, business prospects, and trademark by publishing false, misleading, and libelous statements about Donini and Donini products in the June 2003 and November 2003 editions of Cleaners Family magazine, in violation of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B). Plaintiff has also asserted subject matter jurisdiction under 28 U.S.C. § 1332 (a)(2). The Complaint also contains New York statutory and common law claims under the principle of supplemental jurisdiction, 28 U.S.C. § 1367(a).

  On December 23, 2003 plaintiff moved for a preliminary injunction to prevent defendants from "using and diluting the Donini trade name and service mark." On December 23, 2003 I issued an Order to Show Cause on the motion and scheduled its return for January 9, 2004. On the consent of counsel for all parties the hearing scheduled for January 9, 2004 was adjourned until March 1, 2004. This adjournment provided the defendants with sufficient time to file the present motions, which include oppositions to plaintiff's request for an injunction.

  I conducted a hearing on the motion for preliminary injunction on March 1, 2004. I heard testimony from Joseph Reuter, a sales and export manager working for Satec GMBH, who was present at the trade show on April 6, 2002, and Ati Winters, who was present and working at the Donini display on April 6, 2002. At the end of the hearing I reserved decision on the motion for preliminary injunction, granted plaintiff additional time to respond to defendants' motions, and provided defendants additional time to reply. All parties have made their submissions. Upon a review of the record before me and for reasons set forth below, I grant defendant Satec's motion to dismiss, grant in part and deny in part defendant Cleaners Family's motions, and decline to issue plaintiff's requested preliminary injunction.

  DISCUSSION

  Defendants' Motions to Dismiss

  The Court will first address defendants' motions to dismiss the complaint pursuant to Rule 12(b)(6), Fed.R. Civ. P., for failure to state a claim upon which relief can be granted.

  For the purposes of "a 12(b)(6) motion a court must treat as true the pleading's factual allegations," Toussie v. Powell, 323 F.3d 178, 180 (2nd Cir., 2003), and draw all reasonable inferences from those facts in favor of the plaintiff. See Gant v. Wallingford Board of Education, 69 F.3d 669, 673 (2d Cir. 1995). The Court must not dismiss the action "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Frasier v. G.E. Co., 930 F.2d 1004, 1007 (2d Cir. 1991). However, "[c]onclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss," 2 James Wm. Moore, Moore's Federal Practice § 12.34[1][b] (3d ed. 2001). See also Electronics Communications Corp. v. Toshiba America ...


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