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Bais Yaakov of Spring Valley v. Varitronics, LLC

United States District Court, D. Minnesota

April 3, 2015

Bais Yaakov of Spring Valley, on behalf of itself and all others similarly situated, Plaintiff,
v.
Varitronics, LLC, Defendant.

Aytan Yehoshua Bellin, Esq., Bellin & Associates LLC, White Plains, NY, and Brant D. Penney, Esq., Reinhardt Wendorf & Blanchfield, St. Paul, MN, on behalf of Plaintiffs.

Jonathan M. Bye, Esq., Lindquist & Vennum LLP, Minneapolis, MN, on behalf of Defendant.

MEMORANDUM OPINION AND ORDER

ANN D. MONTGOMERY, District Judge.

I. INTRODUCTION

On March 18, 2015, the undersigned United States District Judge heard oral argument on Defendant Varitronics, LLC's ("Varitronics") Motion to Dismiss [Docket No. 22]. Plaintiff Bais Yaakov of Spring Valley ("Bais Yaakov") opposes the motion. For the reasons set forth below, Varitronics' motion is denied.

II. BACKGROUND

In November 2013, Bais Yaakov, a religious corporation with its principal place of business in Monsey, New York, received the first unsolicited fax advertisement at issue here. Compl. ¶¶ 7, 10. Over the next three months, Bais Yaakov received seven additional unsolicited facsimile transmissions (the "Fax Advertisements") that are the subject of this litigation. Id . ¶ 10. The Fax Advertisements promote the sale of visual learning tools such as poster makers, printers, and laminators. Id . Ex. A. Bais Yaakov alleges the Fax Advertisements violate the Telephone Consumer Protection Act, 47 U.S.C. § 227 (the "TCPA") and New York General Business Law § 396-aa. Compl. ¶ 1.

With one exception, the Fax Advertisements identify R&M Letter Graphics, Inc. ("R&M") as the company selling the products being advertised. Seven of the eight Fax Advertisements feature an R&M logo emblazoned at the top with R&M's contact information- telephone number, email address, and web site-also prominently displayed. One of the Fax Advertisements does not have R&M's logo or any other obvious R&M identifiers, but R&M is listed on the bottom in small print as the party to contact to be removed from future notifications, and the fax number to order products is the same fax number listed for R&M in the seven other Fax Advertisements.

The products in the Fax Advertisements are sold under the name "VariQuest, " a product line of Varitronics. Id . ¶ 8. Varitronics is a Minnesota corporation with its principal place of business in Plymouth, Minnesota. Id . Variquest products are only sold through dealers authorized by Varitronics. Id . R&M is the sole authorized dealer of Variquest products in a number of New York State counties and R&M is listed as an "Authorized VariQuest Dealer" on the www.variquest.com website. Id . ¶¶ 21-25.

The relationship of Varitronics and R&M that is relevant here is governed by one of two Dealership Agreements (collectively, the "Dealership Agreements"). Id . ¶ 22; Exs. A ("Second Agreement"), B ("First Agreement"). The First Agreement was executed on August 1, 2006, and remained in force until January 14, 2014. Grey Decl. [Docket No. 25] ¶¶ 2-3. Bais Yaakov received five of the eight Fax Advertisements while the First Agreement was in force. Id . ¶ 3. The Second Agreement was executed on January 14, 2014, and remains in force. Id . ¶ 2. Bais Yaakov received three of the eight Fax Advertisements while the Second Agreement has been in force.

The Dealership Agreements set forth, among other things, R&M's obligation to "[e]xercise its best efforts to promote the sale of the Products within the territory." First Agreement ¶ 8; Second Agreement ¶ 8. The Dealership Agreements further permit R&M to "[u]se [Varitronics'] trade designations (including trademarks) only in the manner authorized by [Varitronics]" and obligate R&M to comply with Varitronics' "[i]nternet and trade show policies and not advertise or sell the Products outside of the Territory." Id.

Varitronics' Advertising, Trade Show and Internet Policy (the "Advertising Policy") specifies R&M's obligations and restrictions for the promotion of Varitronics' products. These obligations and restrictions govern R&M's promotion of "[p]roducts through its own website(s), trade shows, or through advertising." Id . 6. In relevant part, the Advertising Policy states: "[R&M] uses Varitronics trade names and registered trademarks only as prescribed by Varitronics" and "[R&M] promotes Products properly, accurately, and professionally as determined by Varitronics." Id . As defined in Appendix A to the Second Agreement, "Products" is defined as "All VariQuest® Visual Learning Tools, Software*, Supplies, and Content."[1] Second Agreement 7.

Bais Yaakov filed suit individually and as the representative of similarly-situated persons in United States District Court for the Southern District of New York on April 30, 2014. Named as defendants were Varitronics, R&M, and R&M's Chief Executive Officer. See Bais Yaakov v. Varitronics, et al., No. 14-3083 (S.D.N.Y. April 30, 2014). On October 22, 2014, Varitronics was dismissed from the New York action pursuant to a stipulation.[2] This action was filed on December 18, 2014. Bais Yaakov purports to represent three ...


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