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Solar Reflections, LLC v. Solar Reflections Glass Tinting, LLC

United States District Court, N.D. Alabama, Southern Division

June 13, 2017

SOLAR REFLECTIONS, LLC, Plaintiff,
v.
SOLAR REFLECTIONS GLASS TINTING, LLC, et al., Defendants.

          MEMORANDUM OPINION

          T. MICHAEL PUTNAM UNITED STATES MAGISTRATE JUDGE

         The above-styled cause is before the court on the Motions to Dismiss filed by defendants Solar Reflections Glass Tinting, LLC (“SRGT”), Jeffrey L. Terry, and Travis Gutherie (together “defendants”). (Docs. 9, 10).[1] The parties consented to dispositive jurisdiction by the undersigned in accordance with 28 U.S.C. § 636(c). (Doc. 13).

         I. BACKGROUND

         The plaintiff, Solar Reflections, LLC (“Solar Reflections”), filed the above-styled cause in this court on October 24, 2016, alleging that the defendants have engaged and continue to engage in trademark infringement, trademark dilution, false designation of origin, and deceptive trade practices. (Doc. 1). The plaintiff raises its claims of trademark infringement and trademark dilution under both the Lanham Act, 15 U.S.C. § 1051, et seq., and Alabama's Trademark Act, Alabama Code § 8-12-1, et seq. The plaintiff's claim of false designation of origin arises from 15 U.S.C. §§ 1114 and 1116. Finally, the plaintiff's deceptive trade practices claim arises from Alabama Code § 8-19-1, et seq.

         The plaintiff filed a motion for entry of default and a motion for default judgment on November 29, 2016. (Docs. 7, 8). The court denied the motions as moot on January 24, 2017, after the defendants appeared and filed the instant motions on December 5, 2016. (Doc. 15). On October 27, 2016, the plaintiff filed a Motion for Preliminary Injunction, accompanied by a brief in support of the motion. (Docs. 4, 5). The plaintiff filed a “Notice of No Opposition” to the motion, arguing that the defendants' failure to respond to the motion by the date set by the court indicated that the defendants did not object to the preliminary injunction. (Doc. 18). The defendants responded on February 13, 2017, asserting that the defendants' Motions to Dismiss filed on December 5, 2016, should be construed as the response to the motion for preliminary injunction. (Doc. 21). The plaintiff filed a motion to strike the response, which was denied by the court. (Docs. 23, 26).

         Defendants filed their Motions to Dismiss on December 5, 2016.[2] (Docs. 9, 10). The plaintiff responded on December 13, 2016. (Doc. 12). The defendants filed a joint reply on February 6, 2017. (Doc. 17). On the same day, the plaintiff filed a motion to strike the reply or, in the alternative, moved for leave to file a surreply. (Doc. 19). The court granted the motion in part, allowing the plaintiff to file a surreply. (Doc. 27). The plaintiff's surreply was filed on March 22, 2017. (Doc. 29). The court will first address the defendants' Motions to Dismiss because, should the motions be granted, the need for the court to address the plaintiff's motion for preliminary injunction would be obviated.

         II. FACTS

         Assuming the well-pleaded facts and reasonable inferences alleged in the complaint to be true, the facts at issue in the above-styled action are as follows. The plaintiff, Solar Reflections, is an Alabama company based in Jasper, Alabama, with its primary place of business in Birmingham, Alabama, but does business across the state. Solar Reflections has been doing business under that name since 2010, and it registered “Solar Reflections” as its trade name with the Alabama Secretary of State in October of 2014. Defendant SRGT is an Alabama company that primarily does business in Jasper, Alabama, but also does business across the state.

         Plaintiff Solar Reflections sells window tinting products and provides installation services to residential and commercial customers. It has established a reputation in the local industry for high-quality services and products. Solar Reflections also is the only licensed dealer in the state for Hüper Optik window film, a premium line of patented window films. Defendant SRGT opened a store in Jasper, Alabama, in August of 2014 under the name Solar Reflections Glass Tinting. SRGT's products are nearly identical to the plaintiff's, including window tinting film for commercial and residential structures.

         Defendant SRGT did not seek the plaintiff's permission to use the name “Solar Reflections” as part of its name. Beginning shortly after SRGT's store opened, the plaintiff requested multiple times that SRGT cease using the name “Solar Reflections.” SRGT refused. The plaintiff filed suit against SRGT in the Circuit Court of Walker County, Alabama, on December 9, 2014, citing trademark infringement, intentional trademark infringement, and unlawful trade practices under Alabama law. That case remains pending and awaiting trial.

         Since June 2015, the plaintiff has documented from Jefferson County, Alabama, at least nineteen instances when customers or potential customers were confused by the similarity of the names of the two businesses. As a result, customers have blamed the plaintiff for poor service actually provided by SRGT. Individuals working with SRGT, including defendants Jeffrey Terry and Travis Gutherie, misrepresented their qualifications, references, credentials, and personnel information to convince potential customers that SRGT actually is the plaintiff business, Solar Reflections, trading on community goodwill tied to the plaintiff's trade name. This has resulted in damage to the plaintiff's goodwill and reputation as well as monetary damages, all of which is ongoing.

         III. DISCUSSION

         The defendants argue in support of their motions that the complaint filed in this court should be dismissed because plaintiff already commenced and has pending another case in the Circuit Court of Walker County, Alabama, arising out of the same facts, and because the plaintiff's case filed in this court is barred by the applicable statute of limitations.[3] Alternatively, the defendants argue that this court should abstain from hearing this case due to the potential for conflicting judgments or that the court should stay the case pending resolution of the state-court case.

         A. Case Pending in Alabama State Court

         The defendants argue that the complaint should be dismissed because a substantially similar case is currently pending in state court. The plaintiff filed a lawsuit arising out the same underlying facts in the Circuit Court for Walker County, Alabama, on December 9, 2014, almost two years earlier than the filing-date of this case. The defendants argue that this court is precluded from exercising jurisdiction over this case by Alabama Code § 6-5-440, which states:

No plaintiff is entitled to prosecute two actions in the courts of this state at the same time for the same cause and against the same party. In such a case, the defendant may require the plaintiff to elect which he will prosecute, if commenced simultaneously, and the pendency of the former is a good defense to the latter if commenced at different times.

         The defendants contend that this statute applies equally to federal and state courts.

         The defendants are correct that, within the statute, the phrase “courts of this state” includes both the state and federal courts located within the state's borders. See Clark v. Wells Fargo Bank, N.A., 24 So.3d 424, 427 (Ala. 2009). However, the Supremacy Clause dictates that the defendants' argument-that an Alabama statute deprives this federal court of jurisdiction over the above-styled action- must fail. Furthermore, the Alabama statute cited by the defendants was not intended by the state to circumvent the Supremacy Clause, and even if such was the intent, it cannot do so. Instead, the statute was intended to provide guidance to the state courts and to prevent state courts from adjudicating a case that previously was filed in a federal court located in Alabama. The Supreme Court of Alabama acknowledged as much in a detailed opinion written by Alabama Supreme Court Justice Shaw in 2009. Justice Shaw, citing decades-old Alabama precedent, explained:

Because Clark's state-court action is considered to have been filed before the action in the federal court, § 6-5-440 does not apply.
“Unquestionably, the statutory and case law of this state stands for the proposition that a person cannot prosecute two suits at the same time, for the same cause against the same party. The purpose of the rule is to avoid multiplicity of suits and vexatious litigation. Title 7, § 146, Code; Foster v. Napier, 73 Ala. 595 (1883); Sessions v. Jack Cole Co., 276 Ala. 10, 158 So.2d 652 (1963). The rule had been applied where one suit is filed in federal court and another is filed in state court, and this Court has held that a state court action can be abated if there is pending a federal court action involving the same cause against the same party. Fegaro v. South Central Bell, 287 Ala. 407, 252 So.2d 66 (1971); Watson v. Mobile & O. RR., 233 Ala. 690, 173 So. 43 (1937). It should be noted, however, that in Fegaro and Watson, the state suit was filed after the federal suit was filed. In other words, to quote Alabama's statute, ‘the pendency of the former (federal suit) is a good defense to the latter (state suit).' We are faced with the opposite situation here. The question is: Does the rule of Fegaro and Watson apply? We think not.
“Had Brown Service and Liberty National attempted to get the second suit in federal court abated, they would have failed. The federal rule is summarized in Ermentrout v. Commonwealth Oil Co., 220 F.2d 527 (5th Cir. 1955):
“ ‘. . . [T]he pendency of a state court action in personam is no ground for abatement or stay of a like action in the federal court, although the same issues are being tried and the federal action is subsequent to the state court action. The federal court may not abdicate its authority or ...

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