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Candyland, Inc. v. Cornfields, Inc.

United States District Court, D. Minnesota

February 5, 2015

Candyland, Inc., Plaintiff,
v.
Cornfields, Inc., Defendant. Candyland, Inc., Plaintiff,
v.
Snyder's-Lance, Inc., Defendant.

Erin O. Dungan, David A. Davenport, Winthrop & Weinstine, P.A., Minneapolis, Minnesota, for Plaintiff Candyland, Inc.

Jonathan S. Parritz, Maslon Edelman Borman & Brand, LLP, Minneapolis, Minnesota, Kevin J. McDevitt, Richard B. Biagi, Neal & McDevitt, LLC, Northfield, Illinois, for Defendant Cornfields, Inc.

Anthony R. Zeuli, Merchant & Gould, P.C., Minneapolis, Minnesota, Ian G. McFarland, Merchant & Gould, P.C., Knoxville, Tennessee, for Defendant Snyder's-Lance, Inc.

MEMORANDUM OPINION AND ORDER

RICHARD H. KYLE, District Judge.

INTRODUCTION

In these actions, Candyland, Inc. ("Candyland") has sued Cornfields, Inc. ("Cornfields") (Civ. No. 14-3119) and Snyder's-Lance, Inc. ("Snyder's-Lance") (Civ. No. 14-3128), alleging trademark infringement and unfair competition through Defendants' use of the trademark "Chicago Mix." Cornfields and Snyder's-Lance have filed counterclaims against Candyland, including for deceptive trade practices in violation of Minn. Stat. § 325D.44, et seq.; unfair competition in violation of the Lanham Act, 15 U.S.C. § 1125(a); and defamation. Candyland now moves to dismiss these counterclaims. For the following reasons, the Motions will be granted in part and denied in part.

BACKGROUND

Candyland is a Minnesota business that sells popcorn, candy, and chocolate. (Compl. ¶ 6.) One product it sells is a mixture of traditional, caramel, and cheddar popcorn called "Chicago Mix." (Id. ¶ 9.) Candyland has registered the trademark "Chicago Mix." (Cornfields Countercl. ¶ 10.) Cornfields, an Illinois company, also sells popcorn called "Chicago Mix, " under its G.H. CRETORS brand. (Id. ¶ 16.) And Snyder's-Lance, a company that sells snack food across the United States, also sells popcorn called "Chicago Mix" under its O-KE-DOKE brand. (Snyder's-Lance Countercl. ¶¶ 9, 19.) Candyland sued Cornfields and Snyder's-Lance in August 2014 because of each company's use of the mark.

Cornfields and Snyder's-Lance responded by asserting nine and eight counterclaims, respectively, against Candyland. Three of each party's counterclaims are at issue in this Motion. According to the Defendants, Candyland made false or misleading statements about them. Specifically, Cornfields and Snyder's-Lance allege Candyland wrote on its website "Chicago mix [sic] Trademark Information" (located at www.chicagomix.com/trademark.html) that they are "corporate sharks' and shameful companies' out to steal the trademark and use it at their discretion, punishing the entire nation with over-priced, bad tasting, unappetizing, tainted mixtures of popcorn.'" (Cornfields Countercl. ¶ 93; Snyders-Lance Countercl. ¶ 57.) On the same website, Cornfields alleges Candyland wrote that Cornfields produces "knock off products' that are infringing' Candyland's alleged rights in Chicago Mix" (Cornfield's Countercl. ¶ 94), and Snyder's-Lance alleges Candyland wrote, "Snyders of Hanover aka Jay's Potato Chips aka Okedoke aka Gross! I mean lets [sic] be honest, is it even popcorn?" (Snyder's-Lance Countercl. ¶ 58). Cornfields also alleges that Candyland 1) accused it of "producing inferior products' that degrade the brand'" in an article on the website twincities.com (Cornfields Countercl. ¶ 95); 2) accused it and others of "stealing the name" "Chicago Mix" in the book Candyland in the Twin Cities (id. ¶ 96); and 3) wrote an email to bloggers that included the following: "We are doing whatever we can to protect the origin, history and integrity of the Chicago Mix® trademark-We are just protecting something that is being stolen from us, as would anyone else!" (id. ¶ 98).

In their counterclaims, Defendants allege these statements are defamatory and violate the Minnesota Deceptive Trade Practices Act (DTPA), Minn. Stat. § 325D.44, et seq., and the Lanham Act, 15 U.S.C. § 1125(a). Candyland then filed the instant Motions to Dismiss these counterclaims. The Motions have been fully briefed and are ripe for disposition.

STANDARD OF DECISION

The Supreme Court set forth the standard for evaluating a motion to dismiss in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009). To avoid dismissal, a complaint (or in these cases, a counterclaim) must include "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 547.[1] A "formulaic recitation of the elements of a cause of action" will not suffice. Id. at 555. "The plausibility standard is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556).

When reviewing a motion to dismiss, the Court "must accept [the] plaintiff[s]'s specific factual allegations as true but [need] not... accept a plaintiff[s]'s legal conclusions." Brown v. Medtronic, Inc., 628 F.3d 451, 459 (8th Cir. 2010) (citing Twombly, 550 U.S. at 556). The counterclaim must be construed liberally, and any allegations or reasonable inferences arising therefrom must be interpreted in the light most favorable to the plaintiffs. Twombly, 550 U.S. at 554-56. A counterclaim should not be dismissed simply because the Court is doubtful the plaintiffs will be able to prove all of the necessary factual allegations. Id. at 556. Accordingly, a well-pleaded counterclaim will survive a motion to dismiss even if it appears recovery is very remote and unlikely. Id . "Finally, the ...


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