Opinion
CIVIL ACTION FILE NO. 1:20-cv-410-TCB
2021-01-20
D.H. PACE COMPANY, INC., d/b/a Overhead Door Company of Atlanta and Overhead Door Company of Kansas City, Plaintiff, v. OGD EQUIPMENT COMPANY, LLC, Defendant.
Brittany Knutson, Pro Hac Vice, Kilpatrick Townsend & Stockton, LLP, Washington, DC, Jennifer Fairbairn Deal, Richard Charles Henn, Jr., Kilpatrick Townsend & Stockton, LLP, Sarah Edwards Holland, Troutman Sanders, LLP, Atlanta, GA, for Plaintiff. Grant Craig Johnson, Pro Hac Vice, OGD Equipment Co., Fort Worth, TX, Jessica Arnold Caleb, Michael A. Caplan, Timothy Brandon Waddell, Caplan Cobb LLP, Atlanta, GA, Samantha Rose Mandell, Kendall Law Group, LLC, Douglasville, GA, for Defendant.
Brittany Knutson, Pro Hac Vice, Kilpatrick Townsend & Stockton, LLP, Washington, DC, Jennifer Fairbairn Deal, Richard Charles Henn, Jr., Kilpatrick Townsend & Stockton, LLP, Sarah Edwards Holland, Troutman Sanders, LLP, Atlanta, GA, for Plaintiff.
Grant Craig Johnson, Pro Hac Vice, OGD Equipment Co., Fort Worth, TX, Jessica Arnold Caleb, Michael A. Caplan, Timothy Brandon Waddell, Caplan Cobb LLP, Atlanta, GA, Samantha Rose Mandell, Kendall Law Group, LLC, Douglasville, GA, for Defendant.
ORDER
Timothy C. Batten, Sr., United States District Judge
This case comes before the Court on Plaintiff D.H. Pace Company, Inc.'s motion [59] for leave to file a second amended complaint and for judgment on the pleadings.
Also before the Court is Defendant OGD Equipment Company, LLC's motion [69] for leave to file documents into the record; its motion [85] for leave to file a sur-reply; its motion [88] for reconsideration; its motion [92] to amend the protective order; and its motions [77, 97, 102, 113] for leave to file matters under seal. I. Motion for Leave to Amend Complaint and for Judgment on the Pleadings
On September 9, 2020, Pace moved for leave to file a second amended complaint and for judgment on the pleadings as to OGD's counterclaim. The two-pronged motion seeks to clarify the scope of relief sought by Pace—namely, for alleged infringement of two marks: Overhead Door Company of Atlanta and Overhead Door Company of Kansas City. It also argues that judgment on the pleadings is appropriate as to OGD's declaratory-judgment counterclaim because the Court lacks jurisdiction to consider whether the terms "overhead" and "overhead doors" are generic.
On September 10, OGD responded [61], arguing that this Court should deny Pace's motion for leave to file a second amended complaint. It also indicated that it would "separately file an opposition to Pace's ‘facial attack’ on OGD's Counterclaim wherein Pace fails to identify any defect on the face of OGD's pleading." [61] at 23 n.15.
Despite this representation, OGD later moved [85] for leave to file a sur-reply to Pace's motion [59], arguing that Pace represented "for the first time in its Reply that its jurisdictional attack on OGD's Counterclaim [wa]s limited to a facial attack." [85] at 2.
Because OGD plainly acknowledged in its initial briefing that Pace's jurisdictional challenge was a facial one, no valid reason exists for this Court to exercise its jurisdiction in granting the sur-reply. See Fedrick v. MercedesBenz USA, LLC , 366 F. Supp. 2d 1190, 1197 (N.D. Ga. 2005) (requiring a valid reason to justify granting sur-reply). Accordingly, OGD's motion [85] to file a sur-reply will be denied.
On September 22, OGD filed another response [75] to Pace's combined motion to amend and for judgment on the pleadings, this time in response to Pace's requested relief of judgment on the pleadings as to OGD's counterclaim.
On September 24, Pace filed a reply [78] in support of its motion for leave to file a second amended complaint. On October 6, it replied [83] in support of its motion for judgment on the pleadings.
For clarity's sake, the Court will address the two portions of Pace's combined motion separately.
A. Leave to File a Second Amended Complaint
1. Legal Standard
Rule 15 provides that a party seeking to amend its complaint outside of the timeframes set forth in Rule 15(a)(1) may do so "only with the opposing party's written consent or the court's leave," which should be "freely" given "when justice so requires." FED. R. CIV. P. 15(a)(2). The Supreme Court has cautioned that amendment should not be permitted if it would work an "undue prejudice to the opposing party," if it results from "undue delay, bad faith or dilatory motive on the part of the movant," or if the amendment would be futile. Foman v. Davis , 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). An amendment is futile when it fails to state a claim upon which relief can be granted. Daewoo Motor Am., Inc. v. Gen. Motors Corp. , 459 F.3d 1249, 1260–61 (11th Cir. 2006).
When, as in this case, "a party's motion to amend is filed after the deadline for such motions, as delineated in the court's scheduling order, the party must show good cause why leave to amend the complaint should be granted." Smith v. Sch. Bd. of Orange Cnty. , 487 F.3d 1361, 1366 (11th Cir. 2007) (citing FED. R. CIV. P. 16(b) ). If Rule 16's good-cause standard is met, the Court then turns to Rule 15's liberal-amendment standard.
2. Discussion
As a preliminary matter, the Court finds that good cause exists pursuant to Rule 16 because Pace acted diligently after the Court granted OGD's motion for reconsideration. It moved to amend its pleading eight days after the Court granted reconsideration. Thus, despite Pace's diligence in litigating this case, the deadline imposed by the Court's scheduling order for amendment of pleadings could not be met, and the Court finds good cause for allowing amendment outside of that time frame.
On July 28, OGD alerted the Court to one of countless discovery disputes in this case. It requested that the Court order the parties to engage in discovery related to Pace's use of the term "overhead door(s)" in both residential and commercial services, nationwide. Pace objected, arguing that its claims were narrowly tailored to residential consumers in Atlanta and Kansas City.
The Court initially sustained Pace's objections. OGD later moved [46] for reconsideration and the Court, although loath to do so, granted [57] the motion.
Turning to application of Rule 15, OGD argues that (1) Pace's motion to amend was filed in bad faith; (2) Pace unduly delayed in seeking to amend its pleading, (3) a second amended complaint would be futile, and (4) it would be prejudiced by the filing of a second amended complaint.
Considering first whether Pace acted in bad faith, OGD argues that Pace's motion is an attempt to circumvent the Court's reconsideration order and avoid the production of harmful evidence. Pace retorts that its motion was brought only to clarify and narrow its claims.
The Court finds no dilatory motive or bad faith in Pace's amendment of its complaint. "Courts liberally allow amendments ... to refine the pleadings to reflect the facts that diligent parties learn during discovery." AT & T Mobility, LLC v. Dig. Antenna, Inc. , No. 09-60639-CIV, 2010 WL 3608247, at *3 (S.D. Fla. Sept. 9, 2010) ; see also Robinson v. Wings of Alpharetta, Inc. , No. 1:11-cv-1579-SCJ-GGB, 2012 WL 13114051, at *12 (N.D. Ga. Mar. 16, 2012) (permitting the plaintiff to file a second amended complaint in order to "correct previous deficiencies and clarify his claims"). Pace is not pursuing a claim previously dismissed by this Court; it is seeking to clarify the scope of claims already brought. This is not bad faith.
Regarding undue delay, OGD argues that Pace has been aware of any shortcomings in its pleading since OGD filed its counterclaim. However, the Court's granting of OGD's motion for reconsideration significantly altered the landscape of this lawsuit. Pace filed its motion for leave to amend eight days thereafter. There was no undue delay.
The Court also finds that amendment would not unduly prejudice OGD. In considering whether an amendment would be prejudicial, courts look to the nature of the amendment, its purpose, and the time when the amendment was filed. See Dannebrog Rederi AS v. M/Y True Dream , 146 F. Supp. 2d 1307, 1316 (S.D. Fla. 2001) ("Examples of situations in which the court might deem an amendment prejudicial are if the opponent would be required to engage in significant new preparation at a late stage of the proceedings, if the defendant would be put to added expense and the burden of a more complicated and lengthy trial, or if the issues raised by the amendment are remote from the other issues in the case."). Here, Pace seeks to amend its complaint not to add allegations or proceed on a new theory of liability, but instead to narrow the scope of issues in this case. This is not the type of circumstance in which prejudice outweighs the Court's liberal policy toward amendment. Duling v. Gristede's Operating Corp. , 265 F.R.D. 91, 101 (S.D.N.Y. 2010) (finding that the fact that the amendment will require a party to expend additional resources in litigation does not demonstrate undue prejudice); see also Bridgeport Music, Inc. v. Universal Music Grp., Inc. , 248 F.R.D. 408 (S.D.N.Y. 2008) (rejecting argument that expenditure of additional time, effort, or money to litigate amendment constituted undue prejudice); see Arena v. Wal-Mart Stores, Inc. , 221 F.R.D. 569 (D. Kan. 2004) (permitting amendment where the plaintiffs sought to "make more particular the allegations of fraud ... [not] change their theories of the case").
As a final matter, OGD argues that amendment would be futile because it would not effectively limit the scope of litigation in this case.
OGD misunderstands the futility inquiry. "A proposed amendment is futile if the complaint, as amended, would be subject to dismissal." Galindo v. Ari Mut. Ins. Co. , 203 F.3d 771, 777 (11th Cir. 2000). Dismissal is appropriate where the pleading contains "no potentially meritorious claims." Hall v. United Ins. Co. of Am. , 367 F.3d 1255, 1261 (11th Cir. 2004).
Regardless of whether Pace's proposed amendment changes the scope of litigation in this suit, OGD has not shown that Pace "cannot prove a set of facts which would entitle [it] to relief." Thomas v. Town of Davie , 847 F.2d 771, 773 (11th Cir. 1988). Accordingly, amendment is not futile.
Thus, considering all of the Foman factors, there is no substantial reason to deny leave to amend. Accordingly, "the discretion of the district court is not broad enough to permit denial," and Pace's motion [59] will be granted to the extent it seeks leave to amend its complaint. See Espey v. Wainwright , 734 F.2d 748, 750 (11th Cir. 1984) (concluding that a district court lacks discretion to deny leave to amend without a substantial reason (quoting Dussouy v. Gulf Coast Inv. Corp. , 660 F.2d 594, 597 (5th Cir. 1981) )).
B. Judgment on the Pleadings
Pace argues that judgment on the pleadings is appropriate as to OGD's counterclaim seeking declaratory relief because OGD has not sufficiently alleged that the Court has jurisdiction to consider it.
1. Legal Standard
A party may move for judgment on the pleadings "[a]fter the pleadings are closed—but early enough not to delay trial...." FED. R. CIV. P. 12(c). Judgment on the pleadings is appropriate only "when no issues of material fact exist, and the movant is entitled to judgment as a matter of law." Ortega v. Christian , 85 F.3d 1521, 1524 (11th Cir. 1996). When reviewing a motion for judgment on the pleadings, the Court considers only the substance of the pleadings and any judicially noticed facts, and it accepts the facts in the pleadings as true and views them in the light most favorable to the nonmoving party. See Hawthorne v. Mac Adjustment, Inc. , 140 F.3d 1367, 1370 (11th Cir. 1998).
2. Discussion
In its counterclaim, OGD seeks a declaration that the terms "overhead" and "overhead door(s)" are generic.
Pace argues that the Court lacks declaratory-judgment jurisdiction to consider OGD's counterclaim because it seeks to protect only two marks: Overhead Door Company of Atlanta and Overhead Door Company of Kansas City. It contends that it has not asserted rights to the terms "overhead" or "overhead door(s)" and that there is no actual controversy over those terms.
The extent of this Court's jurisdiction is governed by the Declaratory Judgment Act, which provides that "[i]n a case of actual controversy within its jurisdiction ... any court of the United States ... may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." 28 U.S.C. § 2201(a). "The purpose of declaratory judgment actions ... is to resolve outstanding controversies without forcing a putative defendant to wait to see if it will be subjected to suit." Am. Ins. Co. v. Evercare Co. , 699 F. Supp. 2d 1355, 1359 (N.D. Ga. 2010) (citing Sherwin-Williams Co. v. Holmes County , 343 F.3d 383, 398 n.8 (5th Cir. 2003) ).
Traditionally, courts applied a two-prong test in determining whether jurisdiction existed over a claim seeking declaratory relief. SanDisk Corp. v. STMicroelectronics, Inc. , 480 F.3d 1372, 1379 (Fed. Cir. 2007). The first prong considered whether the defendant's conduct created a reasonable apprehension of an infringement suit; the second asked "whether conduct by the declaratory judgment plaintiff amounts to infringing activity or demonstrates concrete steps taken with the intent to conduct such activity." Id.
In 2007, the Supreme Court backed away from strict application of the first prong and instructed courts to consider whether "the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." MedImmune, Inc. v. Genentech, Inc. , 549 U.S. 118, 127, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007).
Since MedImmune , the Eleventh Circuit has not considered the scope of district courts' declaratory-judgment jurisdiction with respect to an intellectual property dispute. However, the Federal Circuit has repeatedly applied MedImmune to declaratory judgment actions in the analogous patent context. In SanDisk , 480 F.3d at 1381, the Federal Circuit concluded that declaratory judgment jurisdiction will generally lie
Courts have described patent cases as "sufficiently analogous to those involving trademarks that principles applicable to declaratory judgment actions involving patents are generally applicable with respect to trademarks." Nike, Inc. v. Already, Inc. , 663 F.3d 89, 96 (2d Cir. 2011) (internal punctuation omitted).
where a patentee asserts rights under a patent based on certain identified ongoing or planned activity of another party, and where that party contends that it has the right to engage in the accused activity without license.
Thus, while "reasonable apprehension" of suit is no longer required, "declaratory judgment jurisdiction generally will not arise merely on the basis that a party learns of the existence of a patent owned by another and even perceives such a patent to pose a risk of infringement, without some affirmative act by the patentee." Id. at 1380–81 ; see also 3M Co. v. Avery Dennison Corp. , 673 F.3d 1372, 1377 (Fed. Cir. 2012) (finding that for jurisdiction to lie, "a declaratory judgment plaintiff must allege an affirmative act by the patentee relating to the enforcement of his patent rights").
Importantly, allegations of any affirmative acts by Pace are not dispositive of the justiciability of OGD's counterclaim. Rather, the Court applies MedImmune 's "all the circumstances" test in light of the guidance offered by the Federal Circuit. And OGD, as the declaratory judgment plaintiff, bears the burden of proving subject-matter jurisdiction by a preponderance of the evidence. See Kokkonen v. Guardian Life Ins. Co. of Am. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994).
OGD argues that an actual controversy exists over the genericism of the terms "overhead" and "overhead door(s)" because Pace's complaint alleges infringement of its Overhead Door Company of Atlanta and Overhead Door Company of Kansas City marks. It also argues that even if Pace's complaint did not conclusively establish jurisdiction, the totality of the circumstances shows that Pace intended to assert rights to the terms "overhead" and "overhead door(s)" such that this Court has jurisdiction over OGD's counterclaim.
The Court disagrees on both points. As a preliminary matter, even taking OGD's allegations as true, Pace's complaint does not establish that this Court has jurisdiction over OGD's declaratory-judgment counterclaim.
Pace's complaint asserts rights in the composite marks Overhead Doors of Atlanta and Overhead Doors of Kansas City. OGD argues that because "the declaratory relief sought by OGD relates to the same terms identified by Pace in its affirmative claims," Pace has also asserted rights in the marks "overhead" and "overhead door(s)." See [75] at 20.
But the Court does not have declaratory-judgment jurisdiction over one mark merely because it "relates" to another. See W.L. Gore & Assocs., Inc. v. AGA Med. Corp. , No. 11-539 (JBS-KMW), 2012 WL 924978, at *6 (D. Del. Mar. 19, 2012) (rejecting a declaratory-judgment plaintiff's argument that a substantial controversy existed over one patent because it "relate[d] to" another patent at issue and the defendant "would likely include both patents in future infringement litigation"); see also Vyatek Sports, Inc. v. Ping, Inc. , No. CV-08-970-PHX-DGC, 2008 WL 4462012, at *3 (D. Ariz. Sept. 29, 2008) (finding no actual controversy over a patent "highly relevant" to the invalidity of another patent because "mere relevance to other claims" does not satisfy Article III's case or controversy requirement).
And as the Supreme Court recently reaffirmed, the protectability of trademarks must be considered "as a whole." U.S.P.T.O. v. Booking.com B.V. , ––– U.S. ––––, 140 S. Ct. 2298, 2304, 207 L.Ed.2d 738 (2020) (pointing out that "for a compound term, the distinctiveness inquiry trains on the term's meaning as a whole, not its parts in isolation"); see also In re Steelbuilding.com , 415 F.3d 1293, 1297 (Fed. Cir. 2005) ("An inquiry into the public's understanding of a mark requires consideration of the mark as a whole."); Lone Star Steakhouse & Saloon, Inc. v. Longhorn Steaks, Inc. , 106 F.3d 355, 362 (11th Cir. 1997) ("The district court properly concluded that the validity of Plaintiff's LONE STAR CAFE mark is to be determined by viewing the trademark as a whole and not just the words ‘Lone Star.’ "); Estate of P.D. Beckwith, Inc. v. Comm'r of Patents , 252 U.S. 538, 545–46, 40 S.Ct. 414, 64 L.Ed. 705 (1920) ("The commercial impression of a trade-mark is derived from it as a whole, not from its elements separated and considered in detail.").
Thus, the Court finds that Pace's assertion of rights in composite marks does not create an actual controversy regarding the individual terms within that mark.
To be clear, the genericism of individual terms within a composite mark is relevant to the genericism of the composite mark. See Liquid Controls Corp. v. Liquid Control Corp. , 802 F.2d 934, 938 (7th Cir. 1986) (concluding that "the principle that the validity of a mark is to be determined by looking at the mark as a whole [does not] preclude[ ] a court from examining the meanings of the component words in determining the meaning of the mark as a whole").
That being said, a trademark's protectability turns on "the primary significance of the term in the minds of the [consuming] public. " Welding Servs., Inc. v. Forman , 509 F.3d 1351, 1358 (11th Cir. 2007) (quoting Am. Television & Commc'ns Corp. v. Am. Commc'n & Television, Inc. , 810 F.2d 1546, 1549 (11th Cir. 1987) ) (emphasis added) (alteration in original); see also Brennan's, Inc. v. Brennan's Rest., L.L.C. , 360 F.3d 125, 132 (2d Cir. 2004) (pointing out that a "plaintiff must demonstrate distinctiveness in the relevant market ....") (emphasis added).
Thus, when considering whether the terms "overhead" and "overhead door(s)" are generic, the operative inquiry is only whether residential consumers in Atlanta and Kansas City believe the terms to be generic. To the extent OGD seeks discovery related to the genericism of the terms "overhead" and "overhead door(s)" in either non-residential markets or outside of Atlanta and Kansas City, that discovery is irrelevant.
OGD also argues that even if Pace's complaint does not conclusively demonstrate that an actual controversy exists, the totality of the circumstances weighs in favor of this Court finding that the controversy here is broader than residential consumers in Atlanta and Kansas City. It points out that (1) the parties compete nationwide in residential and commercial sectors; (2) Pace operates under numerous distributor agreements that authorize it to use "overhead" and "overhead door" standing alone; (3) Pace claimed trademark protection in the term "overhead door" when it advertised Overhead Door™ of Atlanta; (4) Pace demanded that OGD cease use the terms "overhead" and "overhead door(s)"; and (5) OGD has already settled claims with Pace's licensor regarding the genericism of the terms "overhead" and "overhead door(s)."
As a preliminary matter, the fact that Pace and OGD are competitors does not establish jurisdiction over unasserted trademark rights. See Streck, Inc. v. Rsch. & Diagnostic Sys., Inc. , 665 F.3d 1269, 1284 (Fed. Cir. 2012) (" MedImmune does not stand for the proposition that an Article III case or controversy exists automatically whenever a competitor desires to mount a validity challenge.").
And although Pace is licensed to use "overhead" and "overhead door" pursuant to its distributorship agreements, OGD has not shown that Pace asserted its rights to "overhead" and "overhead door" pursuant to those agreements. "The mere existence of a potentially adverse patent does not cause an injury nor create an imminent risk of an injury." Prasco, LLC v. Medicis Pharm. Corp. , 537 F.3d 1329, 1338 (Fed. Cir. 2008).
As for OGD's contention that Pace created a controversy over the "overhead door" term when it advertised Overhead Door™ of Atlanta online, the Court disagrees. Even if Pace's use of the ™ symbol demonstrated its intent to protect that trademark through litigation, jurisdiction will not lie based upon a generalized public assertion of trademark rights. See HSK, LLC v. U.S. Olympic Comm. , 248 F. Supp. 3d 938, 946 (D. Minn. 2017) (finding that media reports threatening legal action against any would-be infringers do not create an actual controversy because they were not directed at the declaratory-judgment plaintiff).
OGD's allegation that Pace demanded that it cease use of the terms "overhead" and "overhead door(s)" also fails to show an actual controversy. OGD contends that "Pace claims trade name rights to the term ‘Overhead’ by demanding that OGD be permanently enjoined from using its business name, primary domain name, and logo—none of which use the term ‘overhead door,’ ‘Atlanta,’ or ‘Kansas City.’ " [25-2] ¶ 22.
But Pace's demand letter and prayer for relief do not claim trade name rights in the individual terms "overhead" and "overhead doors"; they urge that OGD's use of the terms "overhead" and "overhead door(s)" confuses customers in violation of Pace's rights to the composite marks.
Moreover, the fact that Pace has in the past filed trademark infringement claims to protect a different trademark from infringement by a different defendant, while relevant to the totality of the circumstances, is insufficient to show an actual controversy here. An "aggressive enforcement strategy is not sufficient per se to establish declaratory judgment jurisdiction." Ontel Prods. Corp. v. Yeti Coolers, LLC , No. 16-5712 (SDW) (LDW), 2017 WL 3033436, at *4 (D.N.J. June 30, 2017) ; see also Innovative Therapies, Inc. v. Kinetic Concepts, Inc. , 599 F.3d 1377, 1382 (Fed. Cir. 2010) (finding that a "history of litigation against others, and general propensity to enforce its legal rights, did not establish an actual controversy").
And Pace's history of protecting other marks does not create an actual controversy over the terms "overhead" and "overhead door(s)." See Innovative Therapies , 599 F.3d at 1382 (finding that "while prior litigation is a circumstance to be considered in assessing the totality of circumstances, the fact that [the plaintiff] had filed infringement suits against other parties for other products does not, in the absence of any act directed toward [the defendant], meet the minimum standard discussed in MedImmune "); Prasco , 537 F.3d at 1341 (concluding that a "prior suit concerning different products covered by unrelated patents is not the type of pattern of prior conduct that makes reasonable an assumption that [the defendant] will also take action against [the declaratory-judgment plaintiff] regarding its new product"); see also Geisha, LLC v. Tuccillo , 525 F. Supp. 2d 1002, 1016 (N.D. Ill. 2007) (rejecting a claim of jurisdiction based on "a mere and distant possibility of potentially infringing activity, rather than a real, immediate, or imminent threat").
The settlement between OGD and Pace's licensor is entitled to even less weight when considering whether Pace has asserted trademark rights. See SanDisk , 480 F.3d at 1381 (requiring an affirmative act by the patentee ); Prasco , 537 F.3d at 1339 (finding that a case or controversy must be based on an injury that is "caused by the defendants").
Separate from its allegations of activity by Pace, OGD argues that it "runs and plans to continue running the same ads that allegedly infringe Pace's rights in every market where the parties compete." [75] at 13.
In determining whether an actual controversy exists, courts consider whether there has been "meaningful preparation to conduct potentially infringing activity." Exide Techs. v. Johnson Controls Battery Group, Inc. , 2012 WL 13013075, at *5 (N.D.Ga. 2012) (quoting Cat Tech LLC v. TubeMaster, Inc. , 528 F.3d 871, 880 (Fed. Cir. 2008) ). But OGD has shown only that "the controversy exists in the mind of only one side"; such allegations do not create an actual controversy. Edmunds Holding Co. v. Autobytel Inc. , 598 F. Supp. 2d 606, 610 (D. Del. 2009) (concluding that no actual controversy existed despite the defendant's "history of bringing patent-infringement claims against other infringers and the defendant's general expression of its intent to enforce its patent rights" because the defendant had not made an express allegation of infringement); see also HSK , 248 F. Supp. 3d at 945 (pointing out that "[t]he mutuality of the perceived controversy also is relevant when analyzing whether an ‘actual controversy’ exists").
In sum, OGD does not adequately allege that Pace affirmatively acted to protect trademark rights in the terms "overhead" and "overhead door(s)," nor does it show a non-speculative threat of future litigation regarding these terms. And OGD's one-sided actions in preparation for litigation are insufficient to show an actual controversy.
Thus, consideration of OGD's declaratory-judgment counterclaim would require the Court to render "an opinion advising what the law would be upon a hypothetical state of facts." MedImmune , 549 U.S. at 127, 127 S.Ct. 764. This the Court cannot do. See U.S. Dep't of the Treasury v. Official Comm. of Unsecured Creditors of Motors Liquidation Co. , 475 B.R. 347, 359 (S.D.N.Y. 2012) ("The mere fact that there is a dispute over some question ... is not dispositive; if it were, the Declaratory Judgment Act could be invoked to answer any and every hypothetical question. Our constitutional system gives courts no such power."); Applera Corp. v. Mich. Diagnostics, LLC , 594 F. Supp. 2d 150, 160 (D. Mass. 2009) ("[I]t is far from clear that any dispute actually exists .... [I]t may fairly be said that [the declaratory plaintiff] is essentially seeking an advisory opinion. There is no jurisdiction for that essay.").
Accordingly, Pace's motion [59] will be granted with respect to OGD's counterclaim other than as it relates to residential consumers in Atlanta and Kansas City.
As a final matter, OGD argues that it is entitled to amend its allegations, should the Court conclude that it lacks jurisdiction to consider the counterclaim.
Before dismissing a complaint due to a pleading defect, district courts are instructed to give plaintiffs "one opportunity to amend the complaint and to cure the pleading defect," unless "amendment would be futile." Stevens v. Premier Cruises, Inc. , 215 F.3d 1237, 1239–40 (11th Cir. 2000) (internal citations omitted). "A proposed amendment is futile if the complaint, as amended, would be subject to dismissal." Jefferson Cnty. Sch. Dist. No. R-1 v. Moody's Inv'rs Servs., Inc. , 175 F.3d 848, 859 (10th Cir. 1999).
Pace argues that amendment to include allegations of Pace's enforcement efforts against competitors in other markets would be futile. The Court agrees. Even if OGD were to amend its complaint to include allegations of threats of infringement against other industry participants, as it proposes it would do, see [75] at 25 (representing that it would plead additional facts "such as those set forth in Section II.d"), it would nevertheless fail to state a claim. The Court has considered the weight of Pace's alleged threats of infringement against competitors; even with additional allegations of such, the totality of the circumstances would still weigh in favor of finding that the actual controversy here does not extend beyond residential consumers in Atlanta and Kansas City. Accordingly, OGD's request to amend will be denied.
II. Motion for Reconsideration
On September 24, OGD alerted the Court to a discovery dispute in this case involving Pace's president. OGD sought to compel Pace to include its president as a custodian for document production. Pace objected, arguing that inclusion of its president as a custodian would be unduly burdensome.
In its order [81], the Court sustained Pace's objections upon the filing of an affidavit by Pace's president attesting to the factual representations made by Pace in its discovery response and emails.
On October 19, OGD moved [88] for reconsideration of that order. It urges the Court to
enter an order (1) reconfirming OGD's entitlement to discovery concerning commercial consumers and markets outside of Atlanta and Kansas City; (2) compelling Pace to include Mr. Pascuzzi as a custodian; and (3) compelling Pace to complete its production ... of documents responsive to discovery served by OGD.
[88] at 2.
Motions for reconsideration are made pursuant to Local Rule 7.2(E). Such motions are not to be filed "as a matter of routine practice," but only when "absolutely necessary." LR 7.2(E), NDGa. A party may move for reconsideration only when at least one of the following three conditions exist: (1) the discovery of new evidence; (2) an intervening development or change in controlling law; or (3) the need to correct a clear error or manifest injustice. Pres. Endangered Areas of Cobb's History, Inc. v. U.S. Army Corps of Eng'rs , 916 F. Supp. 1557, 1560 (N.D. Ga. 1995).
OGD has failed to demonstrate to the Court that any of the conditions justifying reconsideration exist.
First, OGD attacks at length the reasoning of the underlying order, repeatedly arguing that it produced evidence showing the importance of the discovery sought. However, motions for reconsideration are "not an opportunity for the moving party ... to instruct the court on how the court ‘could have done it better’ the first time." Id. A party "may not employ a motion for reconsideration as a vehicle to present new arguments or evidence that should have been raised earlier, introduce novel legal theories, or repackage familiar arguments to test whether the Court will change its mind." Brogdon ex rel. Cline v. Nat'l Healthcare Corp. , 103 F. Supp. 2d 1322, 1338 (N.D. Ga. 2000) ; see also Godby v. Electrolux Corp. , Nos. 1:93-cv-353-ODE, 1:93-cv-126-ODE, 1994 WL 470220, at *1 (N.D. Ga. May 25, 1994) ("A motion for reconsideration should not be used to reiterate arguments that have previously been made ... [It is an improper use of] the motion to reconsider to ask the Court to rethink what the Court [has] already thought thoroughly—rightly or wrongly." (some alterations in original) (citations omitted) (quoting Above the Belt, Inc. v. Mel Bohannan Roofing, Inc. , 99 F.R.D. 99, 101 (E.D. Va. 1983) )).
To the extent OGD contends that this Court committed clear error by failing to conduct a balancing test pursuant to Federal Rule of Civil Procedure 26, it is incorrect. That rule provides that "[o]n [a] motion to compel discovery or for a protective order, the party from whom the discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause ...." FED. R. CIV. P. 26(b)(2)(B). If "the burden or expense of the proposed discovery outweighs its likely benefit," courts may limit its production. Id. at (C)(iii). Courts have significant discretion in determining whether to grant a motion to compel. See Hastings v. N.E. Indep. Sch. Dist. , 615 F.2d 628, 631 (5th Cir. 1980).
Here, Pace demonstrated specifically how the objected-to request was unduly burdensome—it described its internal "bulk collection" data system and the disproportionate burden that would result for its president, were it compelled to search documents from him that are largely duplicative of those available from other custodians. See [81-1].
Thus, this was not a circumstance in which the Court denied the motion to compel without considering application of Rule 26. Instead, the Court thoroughly considered the two-pronged approach under Rule 26 and concluded that the burden on Pace outweighed the supposed benefit of production. Doing so was neither clear error nor an application of the wrong legal standard.
Accordingly, OGD's motion [88] for reconsideration is denied.
III. Motion to Amend the Protective Order
In the interest of judicial economy, the Court will entertain this matter. However, it cautions the parties that they are bound to comply with this Court's standing order, which requires that the parties submit a one-page email summarizing their dispute prior to filing any motion related to discovery.
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On November 2, OGD moved [92] to amend the protective order to add language permitting non-party Overhead Door Corporation ("ODC") to produce certain identified documents with a more protected designation—Outside Counsel Only. It also requested that the Court decline to modify the parties' existing protective order to permit Pace to use the Outside Counsel Only designation as well.
Pace requests use of the Outside Counsel Only designation for three categories of documents:
(1) profit-and-loss data, profit margins, pricing analyses, marketing budgets/spend, and expense ratios;
(2) agreements or communications between Pace and Overhead Door Corporation that disclose costs of products, discounts, pricing, or margins; and
(3) documents from June 1, 2019 or later containing detailed and forward-looking business or marketing plans and strategies, including expansion plans.
[98] at 12.
OGD argues that these categories of documents are so broad as to invite Pace to protect from view "nearly every document relevant to this case." [92-1] at 5. It asserts that Pace is attempting, in bad faith, to prevent OGD's counsel from actively continuing to participate in this matter, and points out that it offered to compromise by accommodating Pace's request for specific documents to which it would need to apply the proposed heightened designation.
Pace responds that its proposed categories of more protected documents are narrowly tailored. It contends that good cause exists to prevent any inadvertent disclosures that might arise, were OGD's in-house counsel permitted to view these three categories of documents without restriction.
Under the circumstances, the Court finds that Pace has not demonstrated good cause to amend the protective order such that an Outside Counsel Only designation is permitted for the parties with respect to broad categories of documents. That being said, Pace will be permitted to identify specific , individual documents for which it believes the Outside Counsel Only designation is appropriate. Accordingly, OGD's motion [92] to amend will be granted. IV. Conclusion
For the foregoing reasons, Pace's motion [59] to amend and for judgment on the pleadings is granted in part. It is granted to the extent Pace seeks leave to file a second amended complaint. The motion is also granted as to those portions of OGD's declaratory-judgment counterclaim beyond residential consumers in Atlanta and Kansas City.
OGD's motion [69] for leave to file documents in the record is denied as moot. Its motion [85] for leave to file a sur-reply is also denied, as is its motion [88] for reconsideration.
OGD's motions [77, 97, 102, 113] for leave to file matters under seal are granted, as is its motion [92] to amend the protective order. The parties are directed to file a stipulated amended protective order that reflects the Court's ruling on OGD's motion.
IT IS SO ORDERED this 20th day of January, 2021.