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The Hilsinger Co. v. Kleen Concepts, LLC

United States District Court, D. Massachusetts

February 10, 2016

THE HILSINGER COMPANY, Plaintiff,
v.
KLEEN CONCEPTS, LLC, Defendant.

MEMORANDUM AND ORDER ON MOTION TO AMEND THE COMPLAINT

F. Dennis Saylor IV United States District Judge

This is an action for trademark infringement. Plaintiff Hilsinger Company has brought suit against defendant Kleen Concepts, LLC. The complaint alleges that Kleen’s use of the mark “SHIELDME, ” in connection with cleaning products has infringed Hilsinger’s “SHIELD” brand. The complaint alleges claims under the Lanham Act, 15 U.S.C. §§ 1114 and 1125, and for violation of common-law trademark rights.

On January 15, 2016, the deadline to amend the pleadings, Hilsinger moved to amend its complaint for a third time. The proposed third amended complaint (“TAC”) adds a claim for false designation of origin pursuant to 15 U.S.C. § 1125(a) and alleges that Kleen’s “Made in the USA” product labels are false and misleading. Kleen contends that the motion to amend should be denied on the grounds of undue delay, futility, and bad faith by Hilsinger.

For the following reasons, the motion to amend the complaint will be granted.

I. Background

On December 23, 2014, Hilsinger filed its initial complaint against FBW Investments, LLC. The initial complaint alleged five claims: (1) Lanham Act trademark infringement in violation of 15 U.S.C. § 1114; (2) Lanham Act unfair competition in violation of 15 U.S.C. § 1125(a); (3) common-law unfair competition; (4) cancellation of U.S. Registration No. 4, 027, 820; and (5) cancellation of U.S. Registration No. 4, 497, 007. On January 23, 2015, Hilsinger amended the complaint to correct a citation error in the title of Count One.

On February 6, 2015, FBW moved to dismiss Hilsinger’s first amended complaint on the ground that the defendant did not use the challenged marks and did not sell any products. On March 6, 2015, Hilsinger moved to file a second amended complaint to add (1) Kleen as a party defendant; (2) additional allegations relating to its claims for trademark cancellation; and (3) a claim for declaratory judgment. The Court granted that motion on April 2, 2015.

The Court issued a scheduling order setting a deadline of January 15, 2016, for motions to amend the pleadings. On January 15, Hilsinger moved to file a third amended complaint to add a claim for false designation of country of origin in violation of 15 U.S.C. § 1125(a) and to add allegations to support that claim. (See TAC ¶¶ 37-48, 96-103). The proposed third amended complaint alleges that in late 2013 and early 2014 “Kleen [ ] products bearing the ‘Made in USA’ and ‘Made in the USA’ designations began appearing in [ ] stores in close proximity to SHIELD Brand products that Hilsinger has been selling for years.” (TAC ¶ 41). According to the third amended complaint, “statements such as ‘Made in the USA’ are likely to influence consumers’ purchasing decisions.” (TAC ¶ 42). The proposed third amended complaint further alleges that “significant components of Kleen [ ] products bearing [those] designations are manufactured outside of the United States. As a result, upon information and belief, Kleen’s [ ] claim that its products were ‘Made in USA’ is false and misleading to consumers.” (TAC ¶ 44).

II. Legal Standard

Rule 15 of the Federal Rules of Civil Procedure addresses amendments to pleadings.[1]Under Rule 15(a), a party may amend a “pleading” without leave of court in certain relatively narrow circumstances.[2] “In all other cases, a party may amend its pleadings only with the opposing party’s written consent or the court’s leave. The court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). Nonetheless, amendments may be denied on the basis of “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment.” Foman v. Davis, 371 U.S. 178, 182 (1962). In determining whether to grant a motion to amend, the Court must examine the totality of the circumstances and “exercise its informed discretion in constructing a balance of pertinent considerations.” Palmer v. Champion Mortg., 465 F.3d 24, 30-31 (1st Cir. 2006).

III. Analysis

Kleen contends that the motion to amend should be denied for three reasons. First, it contends that the motion should be denied on the ground of undue delay. Second, it contends that the motion is futile because the proposed amended allegations fail to state a plausible claim for false designation of origin in commercial advertising under 15 U.S.C. § 1125(a)(1)(B). Third, it contends that the motion should be denied on the basis of alleged bad faith by Hilsinger. The Court will address each argument in turn.

A. Undue Delay

In the First Circuit, it is well-established that “undue delay in moving to amend, even standing alone, may be . . . an adequate reason [to deny a motion for leave to amend].” In re Lombardo, 755 F.3d 1, 3 (1st Cir. 2014) (citing Foman, 371 U.S. at 182; Acosta-Mestre v. Hilton Int’l of P.R., Inc., 156 F.3d 49, 51-52 (1st Cir. 1998)); accord Calderón-Serra v. Wilmington Trust Co., 715 F.3d 14, 20 (1st Cir. 2013) (“Appreciable delay alone, in the absence of good reason for it, is enough to justify denying a motion for leave to amend.”). “When ‘considerable time has elapsed between the filing of the complaint and the motion to amend, the movant has [at the very least] the burden of ...


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