int'l importers v int'l spirits - r&r

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    UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA

    CASE NO. 10-61856-CIV-JORDAN/OSULLIVAN

    INTERNATIONAL IMPORTERS, INC.,

    Plaintiff,

    v.

    INTERNATIONAL SPIRITS & WINES, LLC,and DAQUINO GROUP OF COMPANIES,

    Defendants.___________________________________/

    REPORT AND RECOMMENDATION

    THIS CAUSE comes before the Court on the Defendants, International Spirits &

    Wines, LLC and DAquino Group of Companies, Motion to Dismiss Under Rules

    12(b)(1), 12(b)(4), 12(b)(5) and 12 (b)(7) and Incorporated Memorandum of Law (DE#

    22, 1/25/11) and the Opposition to Motion to Dismiss; Request for Sanctions for

    Violation of S.D. Fla. L.R. 7.1.A.3; and Motion to Substitute Real Party in Interest

    Pursuant to FED.R.CIV.P.17(a) (DE# 23, 2/8/11) filed by the plaintiff. This matter was

    referred to the undersigned by the Honorable Adalberto Jordan, United States District

    Court Judge for the Southern District of Florida, pursuant to 28 U.S.C. 636(b). See

    Order Referring Matter to Judge OSullivan (DE# 36, 5/20/11). Having reviewed the

    applicable filings and law, the undersigned respectfully RECOMMENDS that the

    Defendants, International Spirits & Wines, LLC and DAquino Group of Companies,

    Motion to Dismiss Under Rules 12(b)(1), 12(b)(4), 12(b)(5) and 12 (b)(7) and

    Incorporated Memorandum of Law (DE# 22, 1/25/11) be GRANTED in part and

    DENIED in part and that the plaintiffs Opposition to Motion to Dismiss; Request for

    Sanctions for Violation of S.D. Fla. L.R. 7.1.A.3; and Motion to Substitute Real Party in

    Interest Pursuant to FED.R.CIV.P.17(a) (DE# 23, 2/8/11) be DENIED.

    Case 0:10-cv-61856-AJ Document 37 Entered on FLSD Docket 07/26/2011 Page 1 of 30

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    BACKGROUND

    On October 5, 2010, the plaintiff filed the instant action against the defendants

    for Trademark Infringement under 15 U.S.C. 1114(1) and 1125(a), Unfair Competition

    under 15 U.S.C. 1125(a), Trademark Infringement under the Common Law of the

    State of Florida, Unfair Competition under the Common Law of the State of Florida and

    Deceptive and Unfair Trade Practices under Fla. Stat. 501.201, et seq. See

    Complaint (DE# 1, 10/5/10). The plaintiffs claims stem from the defendants importation

    and sale of wine under the mark Wallaby Creek. Id. at 5, 7. The complaint alleges

    that defendant DAquino Group of Companies (hereinafter DAquino) imports wine into

    the United States for sale and distribution by defendant International Spirits & Wines,

    LLC (hereinafter ISW). Id.

    On January 25, 2011, the defendants filed the instant motion to dismiss the

    complaint. See Defendants, International Spirits & Wines, LLC and DAquino Group of

    Companies, Motion to Dismiss Under Rules 12(b)(1), 12(b)(4), 12(b)(5) and 12 (b)(7)

    and Incorporated Memorandum of Law (DE# 22, 1/25/11). The plaintiff filed its

    response on February 8, 2011. See Opposition to Motion to Dismiss; Request for

    Sanctions for Violation of S.D. Fla. L.R. 7.1.A.3; and Motion to Substitute Real Party in

    Interest Pursuant to FED.R.CIV.P. 17(a) (DE# 23, 2/8/11). The defendants reply in

    support of their motion to dismiss was filed on February 18, 2011. See Reply in Further

    Support of Defendants Motion to Dismiss (DE# 29, 2/18/11). On February 24, 2011,

    the defendants filed Defendants Memorandum in Opposition to Plaintiffs Motion to

    Substitute Real Party in Interest Pursuant to FED.R.CIV.P. 17(a) (DE# 30, 2/24/11). On

    March 7, 2011, the plaintiff filed its reply. See Reply to Opposition to Motion to

    Case 0:10-cv-61856-AJ Document 37 Entered on FLSD Docket 07/26/2011 Page 2 of 30

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    Substitute Real Party in Interest (DE# 31, 3/7/11).

    The parties presented their arguments before Judge Jordan at a hearing on May

    2, 2011. See Order Setting Hearing (DE# 33, 4/26/11). At the May 2, 2011 hearing,

    Judge Jordan asked the parties to further brief the issues. On May 16, 2011, the

    defendants filed Defendants Supplemental Memorandum in Support of Motion to

    Dismiss (DE# 34, 5/16/11) and the plaintiff filed its Supplemental Briefing in Opposition

    to Motion to Dismiss (DE# 35, 5/16/11). This matter is ripe for judicial review.

    STANDARDS OF REVIEW

    The defendants challenge the plaintiffs standing to bring the instant action

    pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. See Defendants,

    International Spirits & Wines, LLC and DAquino Group of Companies, Motion to

    Dismiss Under Rules 12(b)(1), 12(b)(4), 12(b)(5) and 12 (b)(7) and Incorporated

    Memorandum of Law (DE# 22 at 2, 1/25/11). Rule 12(b)(1) of the Federal Rules of Civil

    Procedure allows for the dismissal of a claim when it is determined that the court lacks

    subject-matter jurisdiction. See FED.R.CIV.P.12 (b)(1). [B]ecause a federal court is

    powerless to act beyond its statutory grant of subject matter jurisdiction, a court must

    zealously insure that jurisdiction exists over a case . . . . Smith v. GTE Corp., 236 F.3d

    1292, 1299 (11th Cir. 2001). [W]hen a defendant properly challenges subject matter

    jurisdiction under Rule 12(b)(1) the district court is free to independently weigh facts,

    and may proceed as it never could under Rule 12(b)(6) or FED.R.CIV.P. 56. Morrison

    v. Amway Corp., 323 F.3d 920, 925 (11th Cir. 2003) (quoting Lawrence v. Dunbar, 919

    F.2d 1525, 1529 (11th Cir. 1990)).

    The defendants also seek to dismiss the plaintiffs complaint pursuant to Rule

    Case 0:10-cv-61856-AJ Document 37 Entered on FLSD Docket 07/26/2011 Page 3 of 30

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    In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc),1

    the Eleventh Circuit adopted as binding precedent all decisions handed down by theformer Fifth Circuit before October 1, 1981.

    4

    12(b)(7) on the ground that the plaintiff has failed to join a necessary and indispensable

    party under FED.R.CIV.P.19. See Defendants, International Spirits & Wines, LLC and

    DAquino Group of Companies, Motion to Dismiss Under Rules 12(b)(1), 12(b)(4),

    12(b)(5) and 12 (b)(7) and Incorporated Memorandum of Law (DE# 22 at 6, 1/25/11).

    Courts deciding a motion to dismiss under Rule 12(b)(7) undergo a two-step inquiry.

    First, they decide whether an absent party is required in the case under Rule 19. See

    Molinos Valle del Cibao v. Lama, 633 F.3d 1330, 1344 (11th Cir. 2011). If the party is a

    required party, the court must order that the person be made a party. FED.R.CIV.P.

    19(a)(2). Second, if the parties cannot join the new party, the court must consider if, in

    equity and good conscience, the action should proceed among the existing parties or

    should be dismissed. FED.R.CIV.P. 19(b). When making this decision, courts look at

    the pleadings and affidavits as well as evidence introduced by the parties. See Estes v.

    Shell Oil Co., 234 F.2d 847, 849 n.5, 850 (5th Cir. 1956); Citizen Band Potawatomi1

    Indian Tribe of Okla. v. Collier, 17 F.3d 1292, 1293 (10th Cir. 1994). The moving party

    must produce evidence showing that an absent party has an interest that may be

    harmed by being absent from the case. See Citizen Band, 17 F.3d at 1293.

    Lastly, the defendants seek to dismiss the complaint as to defendant DAquino

    for insufficient process and insufficient service of process pursuant to FED.R.CIV.P.

    12(b)(4) and (b)(5). Rule 12(b)(4) allows for the dismissal of the complaint based on

    insufficient process. Proper service of process requires inclusion of the summons

    containing, among other things, the name of the court and the court's seal. Brown v.

    Case 0:10-cv-61856-AJ Document 37 Entered on FLSD Docket 07/26/2011 Page 4 of 30

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    Hillsborough Area Regl Transit, No. 8:08-CV-1465-T-33TBM, 2010 WL 455310, at * 2

    (M.D. Fla. Feb. 3, 2010) (citing FED.R.CIV.P. 4(a)(1)). A party objecting to the

    sufficiency of process under Rule 12(b)(4) must identify substantive deficiencies in the

    summons, complaint or accompanying documentation. Fly Brazil Group, Inc. v. The

    Government of Gabon, Africa, 709 F. Supp. 2d 1274, 1279 (S.D. Fla. 2010) (citation

    and internal quotation marks omitted).

    Rule 12(b)(5) allows for dismissal for insufficient service of process.FED R.CIV.

    P. 12(b)(5). The defendant has the initial burden of challenging the sufficiency of

    service and must describe with specificity how the service of process failed to meet the

    procedural requirements of [FED.R.CIV.P. 4]. Hollander v. Wolf, No. 0980587CIV,

    2009 WL 3336012, at *3 (S.D. Fla. Oct. 14, 2009). The burden then shifts to the

    plaintiff to prove a prima facie case of proper service of process. Id. If the plaintiff can

    establish that service was proper, the burden shifts back to the defendant to bring

    strong and convincing evidence of insufficient process. Id. (citation omitted). The

    Court may look to affidavits, depositions, and oral testimony to resolve disputed

    questions of fact. Id. (citations omitted).

    ANALYSIS

    At the outset, the undersigned notes that the plaintiff conditionally requested an

    evidentiary hearing if there are outstanding factual issues needed to resolve this

    motion on Def