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Golden Star Wholesale, Inc. v. ZB Importing, Inc.

United States District Court, E.D. Michigan, Southern Division

August 26, 2019

GOLDEN STAR WHOLESALE, INC. Plaintiff,
v.
ZB IMPORTING, INC. and RANI REFRESHMENTS FZCO., Defendant.

          OPINION AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS [14]

          Honorable Laurie J. Michelson Judge

         Float juice is a soft drink consisting of slightly carbonated fruit juice with floating pieces of fruit. Golden Star makes and sells a brand of float juice called Alreef. Rani Refreshments makes, and ZB Importing distributes, a competing brand called Rani. Rani and ZB believe cans of Alreef look too much like cans of Rani. So they threatened Golden Star with potential copyright and trademark infringement claims. In response, Golden Star initiated this declaratory judgment action. Golden Star is diligently attempting to serve Defendant Rani, a Dubai company that is not subject to the Hague convention. But because this has not yet been completed, ZB contends the case should be dismissed for failure to join an indispensable party. For the reasons stated below, ZB's meritless motion is denied.

         I.

         Float juice is a type of soft drink popular in Middle Eastern countries. Float juice gets its name from chunks of fruit that float in the carbonated, fruity beverage. Golden Star Wholesale makes and sells a brand of float juice called Alreef. Rani Refreshments makes a competing float juice called Rani; ZB Importing imports and distributes Rani here in the United States.

         Rani and Alreef float juice cans look like this:

         (Image Omitted)

         (See ECF No. 1, PageID.8.)

         According to Golden Star's complaint, a lawyer for ZB sent Golden Star two letters, each indicating that ZB and Rani were contemplating legal action. (See ECF No. 1-1, 1-2.) The first letter says Rani owns the copyright and trade dress in the Rani can. (ECF No. 1, PageID.18.) Then it says the Alreef cans infringe on Rani's copyright and trade dress. (Id.) And the letter says the Alreef cans so closely imitate the Rani cans that consumer confusion is likely to result. (Id. at PageID.19.) So the letter threatened potential Lanham Act and copyright litigation if Golden Star did not cease sales using its present can. (Id. at PageID.19-20.) The second letter says Golden Star's Alreef can imitates the Rani can such that it interferes with ZB's right to distribute Rani beverages in the United States. (Id. at PageID.23.)

         After receiving the letters, Golden Star filed this lawsuit. Golden Star seeks a declaration that neither ZB nor Rani own trade dress or copyright interests in the Rani can. (ECF No. 1, PageID.16.) And even if ZB and Rani do own trade dress and copyright interests, Golden Star seeks a declaration that its Alreef can does not infringe on those rights. (Id.)

         Despite the fact that Rani is a named party in the process of being served, ZB says the entire case should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(7) because Golden Star has failed to join Rani. (ECF No. 14, PageID.79.) Alternatively, ZB says Golden Star has no viable declaratory judgment claim against ZB. (Id. at PageID.84-85.) Neither claim has merit.

         II.

         “[T]he resolution of the question of joinder under Rule 19, and thus of dismissal for failure to join an indispensable party under Rule 12(b)(7), involves a three-step process.” Keweenaw Bay Indian Cmty. v. Michigan, 11 F.3d 1341, 1345 (6th Cir. 1993). “First, the [C]ourt must determine whether the person or entity is a necessary party under Rule 19(a).” Glancy v. Taubman Ctrs., Inc., 373 F.3d 656, 666 (6th Cir. 2004). “Second, if the person or entity is a necessary party, the [C]ourt must then decide if joinder of that person or entity will deprive the court of subject matter jurisdiction.” Id. “Third, if joinder is not feasible because it will eliminate the [C]ourt's ability to hear the case, the [C]ourt must analyze the Rule 19(b) factors to determine whether the [C]ourt should in equity and good conscience dismiss the case because the absentee is indispensable.” Id. (internal quotations omitted). However, Rule 19 “is not to be applied in a rigid manner but should instead be governed by the practicalities of the individual case.” Local 670 v. International Union, United Rubber, Cork, Linoleum & Plastic Workers, 822 F.2d 613, 618 (6th Cir. 1987). “Simply because some forms of relief might not be available due to the absence of certain parties, the entire suit should not be dismissed if meaningful relief can still be accorded.” Keweenaw Bay Indian Cmty., 11 F.3d at 1346.

         ZB says Rani Refreshments, as owner of the trade dress and copyright at issue in this lawsuit, is an indispensable party as defined by Rule 19. (ECF No. 14, PageID.79-83.) But because Golden Star has yet to serve Rani, ZB thinks Rani is not yet a part of this lawsuit. (Id.) So, says ZB, Golden Star has failed to join an indispensable party and this suit should be dismissed. (Id.)

         ZB's argument jumps the gun. For one, Golden Star's complaint names Rani (See ECF No. 1, PageID.1) and Golden Star is diligently attempting to serve Rani (ECF No. 11, PageID.55; ECF No. 16, PageID.100-102). But Rani is a Dubai company, Dubai is in the United Arab Emirates, and the Emirates are not a party to the Hague Convention. (ECF No. 16, PageID.99-100.) So service on Rani will take more time than normal, a practical reality recognized by the Federal Rules of Civil Procedure. See e.g. Fed. R. Civ. P. 4(m); see also Frederick v. Hydro-Aluminum S.A., 153 F.R.D. 120, 126 (E.D. Mich. 1994). But Golden Star appears to be making progress in its service efforts. (See ECF No. 16, PageID.99-102.)[1] So at this point, ZB's Rule 12(b)(7) motion is, at best, premature, see WM Int'l, Inc. v. 99 Ranch Mkt. #601, 329 F.R.D. 491, 498 (E.D.N.Y. 2019), and, at worst, borderline frivolous. In none of the cases cited by ZB in which the courts required joinder was the intellectual property owner already a named party (or still in the case). See Jaguar Cars, Ltd. v. Manufactures Des Montres Jaguar, S.A., 196 F.R.D. 306 (E.D. Mich. 2000) (finding a party dismissed for lack of personal jurisdiction necessary as to some claims, but not others, and so ordering only a partial dismissal); JTG of Nashville, Inc. v. Rhythm Band, Inc., 693 F.Supp. 623, 627-68 (M.D. Tenn. 1988) (finding unnamed owner of intellectual property a necessary party, but ordering joinder rather than dismissal); see also Keweenaw, 11 F.3d at 1343- 46 (affirming district court's decision that unnamed parties ...


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