United States District Court, D. Kansas
MEMORANDUM AND ORDER.
MURGUIA United States District Judge.
Ezfauxdecor, LLC, and Amber Shank filed the instant lawsuit
against defendants Appliance Art Incorporated, Instant One
Media, Inc., Alison Smith, and Easy Home Renewals for claims
of false advertising and unfair competition under the Lanham
Act, tortious interference with a contract, commercial
disparagement and unfair competition, declaration of
trademark rights, and cancellation of trademark registration.
(Doc. 1.) All of the claims were related to a dispute
involving plaintiffs' and defendants' products. In
response, defendants filed counterclaims against plaintiffs
(Doc. 40) and a third-party complaint (Doc. 49) against
third-party defendants Digital Consulting KC, LLC, Alexandre
J. Abi-Mikhael, Teresa Nobrega, Teresa S. Clough, and
Chereese A. Voise for deceptive trade practices under the
Georgia Uniform Deceptive Trade Practices Act
(“GUDTPA”) and conspiracy to commit deceptive
trade practices under GUDTPA. Before the court is third-party
defendants' motion to dismiss the third-party
complaint pursuant to Fed.R.Civ.P. 12(b)(6). (Doc. 63.) For
the reasons set forth below, the court denies the motion.
center of this litigation is a dispute over trademark rights.
Plaintiffs claim that since 2003, they have been in the
business of marketing and selling self-adhesive films
imprinted with patterns of stainless steel, marble, and
granite used to cover appliances and countertops for
decorative uses. Plaintiffs allege that defendants began
copying and selling their products using deceptive
representations. On June 25, 2015, plaintiffs filed their
complaint against defendants for various claims involving the
product dispute. Defendants filed their answer on March 3,
2016, and denied liability on plaintiffs' claims. (Doc.
40.) Defendants also asserted counterclaims against
plaintiffs for deceptive trade practices under GUDTPA and
conspiracy to commit deceptive trade practices under GUDTPA.
On March 3, 2016, defendants also filed a third-party
complaint (Doc. 41) against third-party defendants for
similar claims under GUDTPA.
March 9, 2016, plaintiffs and defendants moved to stay all
deadlines in the case for 90 days. (Doc. 42.) Third-party
defendants had not yet been served with the third-party
complaint. Magistrate Judge Kenneth Gale granted the motion
to stay and ordered that all deadlines would be reset after
third-party defendants were served and had the opportunity to
respond to the third-party complaint. (Doc. 43.)
and defendants attempted to mediate the case on June 2, 2016,
however no settlement was reached. (Doc. 47.) Defendants then
voluntarily dismissed the third-party complaint without
prejudice and refiled it on June 6, 2016. (Docs. 48 and 49.)
The refiled third-party complaint is identical to the
original third-party complaint. Service of the complaint was
executed on third-party defendants on June 14, 2016.
defendants filed their motion to dismiss the third-party
complaint on August 1, 2016. (Doc. 63.) Third-party
defendants state four grounds for dismissal: 1) the
third-party complaint was improperly filed under Rule 14 of
the Federal Rules of Civil Procedure, 2) the allegations in
the third-party complaint are not derivative of or dependent
upon plaintiffs' claims against defendants, 3) the
third-party complaint fails to state a claim because there is
no basis for applying Georgia law, and 4) neither Kansas nor
Georgia recognize the cause of action stated in the
third-party complaint. The motion is thus based on both
procedural and substantive grounds for dismissal.
Procedural Bases for Dismissal
defendants argue the third-party complaint should be
dismissed for procedural defects, more specifically that the
third-party complaint was not properly brought under Rule 14
of the Federal Rules of Civil Procedure.
Fed.R.Civ.P. 14(a)(1), a defendant may implead a third party
“who is or may be liable to it for all or part of the
claim against it.” This standard contemplates that a
third-party claim is derivative of an original claim in the
action. King Fisher Marine Serv., Inc. v. 21st Phoenix
Corp., 893 F.2d 1155, 1158 n.1 (10th Cir. 1990);
Admin. Comm. of the Wal-Mart Assocs. Health & Welfare
Plan v. Willard, 216 F.R.D. 511, 513 (D. Kan. 2003). It
is insufficient that the third-party claim is based on the
same factual background or otherwise related to the original
claim. Bethany Med. Ctr. v. Harder, 641 F.Supp. 214,
217 (D. Kan. 1986) (citing 6 Wright & Miller, Federal
Practice & Procedure § 1446, at 257 (1971)). Rather,
as a general rule, the alleged liability of the third-party
must depend on the outcome of the original claim, or the
third-party defendant must be secondarily liable to the
impleading party. Willard, 216 F.R.D. at 513.
defending party has 14 days after serving its original answer
to implead a third-party defendant. Fed.R.Civ.P. 14(a)(1).
The defendant must move the court for leave to file a
third-party complaint if outside the 14 day deadline.
Id. The purpose of Rule 14 is to “expedite the
final determination of the rights and liabilities of all the
interested parties in one suit.” Baicker-McKee, et al.,
Federal Civil Rules Handbook, at 529 (2017 ed.); see
also, Nat'l Fire Ins. Co. of Hartford v.
Nat'l Cable Television Coop., Inc., No. 10-2532-CM,
2011 WL 1430331, at *1 (D. Kan. Apr. 14, 2011) (“Rule
14(a) strives to promote judicial efficiency by reducing
multiplicitous litigation.”). Courts construe Rule
14(a) liberally, but can exercise their discretion to strike,
sever, or separately try third-party claims. See
Nat'l Fire Ins. Co. of Hartford, 2011 WL 1430331, at
*1, Fed.R.Civ.P. 14(a)(4).
defendants assert that the third-party complaint should be
dismissed because defendants did not obtain leave from the
court before filing the complaint, as mandated by the rule.
Third-party defendants also argue the claims in the
third-party complaint are not properly brought under Rule 14
because they are not derivative of the claims asserted by
plaintiffs against defendants. Instead, the claims in the
third-party complaint relate directly to the counterclaims,
not the original claim brought by plaintiffs.
their response, defendants concede that under Rule 14,
third-party claims “must be derivative of, and
dependent upon the success of the plaintiff's claim
against the defendant.” (Doc. 66 at 19.) Defendants,
however, argue that third-party defendants' motion to
dismiss is based more on form over substance, and the court
should instead interpret the third-party complaint as an