1 2 3 4 5 6 7 8 9 10 IN THE UNITED STATES DISTRICT COURT 11 FOR THE NORTHERN DISTRICT OF CALIFORNIA 12 13 AMARTE USA HOLDINGS, INC., Case No. 22-cv-08958-CRB

14 Plaintiff,

ORDER DENYING MOTIONS FOR

15 v.

LEAVE TO AMEND COMPLAINT

16 KENDO HOLDINGS INC., et al., 17 Defendants.

18 Plaintiff Amarte USA Holdings, Inc. (“Amarte”) brings this action for trademark 19 infringement against Kendo Holdings, Inc., Marc Jacobs International LLC, Sephora USA, 20 Inc., and The Neiman Marcus Group LLC (together, “Original Defendants”), for selling 21 the Marc Jacobs “EYE-CONIC” eyeshadow palette, allegedly infringing on Amarte’s 22 “EYECONIC” trademark for its eye cream. See Compl. (dkt. 1). Amarte moves to amend 23 its complaint twice: First to add seven “interested corporate parent parties,” (together, 24 “Parent Defendants”) and next to add ten “retailers of goods bearing the infringing EYE- 25 CONIC trademark” (together, “Retailer Defendants”). First Mot. (dkt. 52) at 1; Second 26 Mot. (dkt. 66) at 3.1 27 1 Finding this matter suitable for resolution without oral argument pursuant to Civil 2 Local Rule 7-1(b), as explained below, the Court vacates the hearing scheduled for August 3 25, 2023 and DENIES Amarte’s motion for leave to amend. 4 I. LEGAL STANDARD 5 A court should “freely give leave” to amend “when justice so requires.” Fed. R. 6 Civ. P. 15(a)(2). The Ninth Circuit has instructed that the policy favoring amendment 7 “should be applied with ‘extreme liberality.’” United States v. Webb, 655 F.2d 977, 979 8 (9th Cir. 1981) (quoting Rosenberg Brothers & Co. v. Arnold, 283 F.2d 406, 406 (9th Cir. 9 1960) (per curiam)). However, leave to amend “is not to be granted automatically.” In re 10 W. States Wholesale Nat. Gas Antitrust Litig., 715 F.3d 716, 738 (9th Cir. 2013) (quoting 11 Jackson v. Bank of Haw., 902 F.2d 1385, 1387 (9th Cir. 1990)). A court typically 12 considers five factors to assess whether to grant leave to amend: “[1] undue delay, [2] bad 13 faith or dilatory motive on the part of the movant, [3] repeated failure to cure deficiencies 14 by amendment previously allowed, [4] undue prejudice to the opposing party by virtue of 15 allowance of the amendment, [and] [5] futility of amendment.” Leadsinger, Inc. v. BMG 16 Music Publ’g, 512 F.3d 522, 532 (9th Cir. 2008) (quoting Foman v. Davis, 371 U.S. 178, 17 182 (1962)). However, “[f]utility alone can justify the denial of a motion for leave to 18 amend.” Nunes v. Ashcroft, 375 F.3d 805, 808 (9th Cir. 2004). 19 II. DISCUSSION 20 To determine whether an amendment is futile, courts apply the same standard 21 applied to a motion to dismiss under Rule 12(b)(6). See Miller v. Rykoff–Sexton, Inc., 22 845 F.2d 209, 214 (9th Cir. 1988).2 Accordingly, Amarte must proffer “enough facts to 23 24 amended complaint in this order. However, the Court has read and considered the parties’ arguments in their briefing on both motions. 25 2 Amarte contends that the substantive standard applied in Miller—“a proposed amendment is 26 futile only if no set of facts can be proved under the amendment to the pleadings that would constitute a valid and sufficient claim or defense”—remains good law. Second Mot. at 11; Miller, 27 845 F.2d at 214. But Miller applied the 12(b)(6) standard as stated in Conley v. Gibson, 355 U.S. 41, 45–46 (1957), which was abrogated by Twombly and Iqbal. In accord with other courts to 1 state a claim to relief that is plausible on its face,” Bell Atl. Corp. v. Twombly, 550 U.S. 2 544, 570 (2007), by “plead[ing] factual content that allows the court to draw the reasonable 3 inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 4 U.S. 662, 678 (2009). The Court addresses whether Amarte’s proposed second amended 5 complaint has done so, first as to the seven Parent Defendants, and then as to the ten 6 Retailer Defendants. 7 A. Parent Defendants 8 Amarte’s allegations that the Parent Defendants themselves infringed the 9 “EYECONIC” trademark are sparse. Amarte alleges that each holding company 10 “direct[s], own[s], and control[s]” one of the original defendants. Proposed SAC (dkt. 66- 11 1) ¶¶ 42, 44, 46, 49. Additionally, Amarte alleges that all Defendants (original defendants, 12 holding companies, and retailers alike) “advertise, market, promote, distribute, sell, and 13 otherwise offer” the allegedly infringing “EYE-CONIC” product, or “were involved in 14 starting, participating in, and/or managing a for profit commercial enterprise that 15 advertises, markets, promotes, distributes, sells, and otherwise offers” the same. Id. ¶¶ 37, 16 40. 17 Because parent companies are not liable for the acts of their subsidiaries except in 18 narrow circumstances seemingly not present here, United States v. Bestfoods, 524 U.S. 51, 19 61–63 (1998), the Court cannot conclude that these allegations plausibly plead direct 20 infringement by the Parent Defendants. All allegations going to direct infringement (as 21 opposed to ownership, control, or direction of other defendants) apply to all twenty-one 22 defendants without regard to the individual acts of each, which plainly does not meet the 23 requirements of Rule 8. See Amarte USA Holdings, Inc. v. G.L.E.D Cosmetics US Ltd., 24 No. 20-CV-768-CAB-AGS, 2020 WL 10322586, at *2 (S.D. Cal. Dec. 15, 2020) 25

26 amendment is identical to the one used when considering the sufficiency of a pleading challenged 27 under Rule 12(b)(6).” Miller, 845 F.2d at 214 (citing 3 J. Moore, Moore’s Federal Practice ¶ 15.08 (2d ed. 1974)); see also, e.g., Stonebrae, L.P. v. Toll Bros., No. C-08-0221 EMC, 2010 WL 1 (“Ultimately, without factual allegations related to the specific role either GLED US or 2 RIYO played in the infringement alleged in the FAC, the FAC does not satisfy Federal 3 Rule of Civil Procedure 8.”); In re iPhone Application Litig., No. 11-MD-02250-LHK, 4 2011 WL 4403963, at *8 (N.D. Cal. Sept. 20, 2011) (“Plaintiffs’ failure to allege what role 5 each Defendant played in the alleged harm makes it exceedingly difficult, if not 6 impossible, for individual Defendants to respond to Plaintiffs’ allegations.”); Williams v. 7 Cnty. of Los Angeles Dep’t of Pub. Soc. Servs., No. CV 14-7625 JVS (JC), 2016 WL 8 8730914, at *5 (C.D. Cal. May 2, 2016) (“Conclusory allegations that an indistinguishable 9 group of defendants essentially engaged in identical misconduct . . . are insufficient to 10 show that plaintiff is entitled to relief from any individual defendant.”), report and 11 recommendation adopted, No. CV 14-7625 JVS(JC), 2016 WL 8737230 (C.D. Cal. May 12 20, 2016). 13 Additionally, as Defendants point out, Amarte’s allegations of personal jurisdiction 14 as to the Parent Defendants are similarly bare. Amarte alleges that each Parent Defendant 15 has “an office in California and conducts business in and around San Francisco, 16 California,” though none are incorporated in California. Proposed SAC ¶¶ 9–15. Amarte 17 further alleges generally that all twenty-one defendants, including the Parent Defendants, 18 “have directed tortious acts at Amarte in this judicial district” including by “advertis[ing], 19 market[ing], distribut[ing], and sell[ing] goods in the State of California, and in this 20 judicial district, that bear the infringing trademark at issue in this case, or have done so in 21 the past.” Id. ¶ 29. 22 These allegations, standing alone, do not support personal jurisdiction as to the 23 Parent Defendants. First, Amarte’s allegations are plainly insufficient to support general 24 jurisdiction, only available when the defendant is “essentially at home” in the forum state, 25 typically its place of incorporation or principal place of business. Ford Motor Co. v. 26 Montana Eighth Jud. Dist. Ct., 141 S. Ct. 1017, 1024 (2021). Second, Amarte’s 27 allegations are also insufficient to support specific jurisdiction, which requires that the 1 International, Inc., 874 F.3d 1064, 1069 (9th Cir. 2017) (quoting Washington Shoe Co. v. 2 A-Z Sporting Goods Inc., 704 F.3d 668, 673 (9th Cir. 2012)). Putting aside the conclusory 3 and vague allegations of “direct[ing] tortious acts,” Amarte only alleges, at best, that 4 Defendants caused injury in California through the sales and marketing of their 5 subsidiaries and not that the Parent Defendants themselves “committed an intentional act . 6 . . expressly aimed at the forum state.” Axiom Foods, 874 F.3d at 1069 (emphasis added); 7 see also G.L.E.D. Cosmetics, 2020 WL 10322586, at *3 (“[T]here are no well-pleaded 8 allegations in the FAC . . . that the website specifically targets or leads to substantial sales 9 from California residents.”). 10 Accordingly, Amarte’s claims against the Parent Defendants as stated in the 11 proposed second amended complaint are futile. 12 B. Retailer Defendants 13 The allegations against the Retailer Defendants fare no better. Amarte alleges that 14 these defendants “sell, advertise, market, and promote the Infringing Goods bearing 15 Defendants’ EYE-CONIC Mark on their respective websites, social media platforms, other 16 advertising media, in their retail locations nationwide, including retail stores in this judicial 17 district, or otherwise direct their infringing activities in this judicial district, or have done 18 so in the past.” Proposed SAC ¶ 51. While pleading theories in the alternative is certainly 19 allowed, “[t]he right to plead alternatively . . . does not sanction deviations from the basic 20 obligation to plead comprehensibly,” § 1282 Alternative and Hypothetical Pleading, 5 Fed. 21 Prac. & Proc. Civ. § 1282 (4th ed.), nor loosen the requirement to plead “sufficient factual 22 matter, accepted as true, to state a claim to relief that is plausible on its face.” Iqbal, 556 23 U.S. at 678. And even if these allegations were sufficient to plausibly plead direct 24 infringement by the Retailer Defendants, for the same reasons discussed above, the 25 allegations in the proposed second amended complaint also fail to support personal 26 jurisdiction as to the Retailer Defendants. See Proposed SAC ¶¶ 16–25, 29; G.L.E.D. 27 Cosmetics, 2020 WL 10322586, at *3. 1 The Court offers no conclusion as to whether Amarte might be able amend its 2 |} complaint in the future to plead facts that support direct infringement or personal 3 || jurisdiction as to each of the proposed defendants.? But “threadbare recitals of the 4 || elements of a cause of action, supported by mere conclusory statements, do not suffice.” 5 || Iqbal, 556 U.S. at 678. For that reason, Amarte’s motions for leave to amend are DENIED 6 || without prejudice. 7 IT ISSO ORDERED. iE 8 Dated: August 21, 2023

CHARLES R. BREYER

9 United States District Judge 10 11 12 E 13

15

16 5 17 18 19 20 21 22 23 24 25 26 27 Ws Further, because the Court decides Amarte’s motion on futility grounds alone, see Nunes v. 7g || Ashcroft, 375 F.3d at 808, it need not address the other factors discussed in the parties’ briefing, including bad faith and undue delay.