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HSK, LLC v. United States Olympic Committee

United States District Court, D. Minnesota

April 4, 2017

HSK, LLC d/b/a Zerorez MN, Plaintiff,
v.
United States Olympic Committee, The Defendant.

          ORDER GRANTING DEFENDANT'S MOTION TO DISMISS AND GRANTING PLAINTIFF'S MOTION FOR AN EXTENSION OF TIME

          Wilhelmina M. Wright United States District Judge

         In this declaratory-judgment action against Defendant The United States Olympic Committee (USOC), Plaintiff HSK, LLC d/b/a Zerorez MN (Zerorez) seeks a declaration that it may use its corporate social media accounts to discuss the Olympic Games without violating USOC's trademark rights. USOC moves to dismiss for lack of subject-matter jurisdiction, asserting that a concrete dispute does not exist between the parties. (Dkt. 18.) Also before the Court are USOC's motion to strike Zerorez's untimely responsive brief, (Dkt. 26), and Zerorez's motion for an extension of time to file its responsive brief, (Dkt. 34), both of which are related to Zerorez's untimely filing of its response to USOC's motion to dismiss. Because Zerorez's late filing was the result of excusable neglect, Zerorez's motion for an extension of time is granted and USOC's motion to strike Zerorez's responsive brief is denied as moot. And because there is no concrete dispute between Zerorez and USOC over the use of Olympics-related trademarks, USOC's motion to dismiss for lack of subject-matter jurisdiction is granted.

         BACKGROUND

         Zerorez initiated this lawsuit the day before the 2016 Olympic Games commenced in Rio de Janeiro, Brazil. Zerorez alleges that it had planned to discuss the 2016 Olympic Games through Zerorez's corporate social media accounts. But USOC's U.S. Olympic and Paralympic Brand Usage Guidelines provide that “commercial entities [other than official Team USA sponsors] may not post about the Games on their corporate social media accounts. This includes the use of USOC trademarks in hashtags such as #RIO2016 or #TeamUSA.” The Brand Usage Guidelines also state that “[f]ederal law . . . allows the USOC to file a lawsuit against any entity using USOC trademarks, imagery or terminology for commercial purposes without express written consent.” Zerorez alleges that USOC warned other commercial entities against posting comments about the Olympics through their social media accounts in advance of the 2016 Olympic Games. And certain media outlets, including The Guardian and ESPN, reported in July 2016 that USOC was threatening to enforce its trademark rights against businesses that are not official Team USA sponsors. Rather than risking legal action from USOC, Zerorez, which is not an official sponsor of Team USA, refrained from discussing the Olympics through its corporate social media accounts and filed this declaratory-judgment action. Zerorez seeks a determination of its rights to discuss on social media the 2016 Olympic Games and future Olympic events.

         Specifically, Zerorez seeks a ruling that its proposed social media posts about the Olympics would not violate USOC's trademark rights or USOC's rights under the Ted Stevens Olympic and Amateur Sports Act, 36 U.S.C. § 220506. Zerorez also seeks declarations that USOC cannot preclude businesses that are not official Team USA sponsors from discussing the Olympics on social media and that, among other actions, USOC has “exaggerated the strength of its legal rights.” In support of its motion to dismiss Zerorez's claims for lack of subject-matter jurisdiction, USOC argues that there is no concrete dispute between the parties because Zerorez has not alleged that USOC threatened to enforce its trademark rights against Zerorez. USOC also contends that the declaratory relief Zerorez seeks is not sufficiently specific to support the Court's exercise of declaratory-judgment jurisdiction.

         Because Zerorez filed its opposition to USOC's motion one month late, USOC moved to strike Zerorez's untimely responsive brief. Zerorez responded with a motion to extend the time to file its responsive brief under Federal Rule of Civil Procedure 6(b)(1).

         ANALYSIS

         I. USOC's Motion to Strike and Zerorez's Motion for an Extension of Time

         USOC moves to strike Zerorez's brief in response to USOC's motion to dismiss because the brief was filed approximately one month late. After USOC moved to strike Zerorez's responsive brief, Zerorez moved for an extension of time to file its responsive brief. Counsel for Zerorez attests that he miscalculated the filing deadline and that he prepared and filed the brief as soon as he realized his error.

         Federal Rule of Civil Procedure 6(b)(1) permits a district court to extend the time for a party to act “on a motion made after the time has expired if the party failed to act because of excusable neglect.” Four factors inform this decision: (1) the possibility of prejudice to the opposing party; (2) the length of delay and the possible impact of the delay on judicial proceedings; (3) the party's reasons for delay, including whether the delay was within the party's “reasonable control”; and (4) whether the party acted in good faith. Chorosevic v. MetLife Choices, 600 F.3d 934, 946 (8th Cir. 2010) (internal quotation marks omitted). Miscalculation of a filing deadline can constitute excusable neglect, even though failure to comply with a deadline is within the party's own control. See Sugarbaker v. SSM Health Care, 187 F.3d 853, 856 (8th Cir. 1999).

         Here, each factor weighs in favor of granting Zerorez's motion. USOC experienced no prejudice, and these proceedings were not delayed as USOC had ample time to file its reply brief in advance of the hearing. Although the miscalculation clearly was within Zerorez's control and Zerorez's counsel should have exercised greater care in calculating the filing deadline, the late filing is excusable. Nothing in the record indicates that the late filing was made in bad faith. Consequently, Zerorez's motion for an extension of time to file its responsive brief is granted. USOC's motion to strike therefore is denied as moot, and the Court considers the arguments raised in Zerorez's opposition brief in deciding USOC's motion to dismiss.

         II. USOC's Motion to Dismiss for Lack of Subject-Matter Jurisdiction

         USOC seeks dismissal of Zerorez's claims for lack of subject-matter jurisdiction on the ground that there is no case or controversy between the parties. Under Article III of the United States Constitution, the jurisdiction of federal courts extends only to actual cases and controversies. U.S. Const. art. III, § 2, cl. 1; Neighborhood Transp. Network, Inc. v. Pena, 42 F.3d 1169, 1172 (8th Cir. 1994). When deciding a motion to dismiss for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), a district court “must distinguish between a ‘facial attack' and a ‘factual attack.' ” Osborn v. United States, 918 F.2d 724, 729 n.6 (8th Cir. 1990). When a facial attack is asserted, the court looks only at the pleadings to determine whether the plaintiff's allegations provide a sufficient basis for subject-matter jurisdiction; the non-moving party receives the same protections as if the court were deciding a motion under Federal Rule of Civil Procedure 12(b)(6). Id.; accord Branson Label, Inc. v. City of Branson, Mo., 793 F.3d 910, 914 (8th Cir. 2015). But when a factual attack is asserted, the court considers matters outside the pleadings, and the non-moving party does not benefit from Rule 12(b)(6) safeguards. Osborn, 918 F.2d at 729 n.6; accord Branson Label, 793 F.3d at 914-15. Here, USOC asserts a facial challenge to the Court's subject-matter jurisdiction. Even if Zerorez's allegations are true, USOC argues, no controversy exists between the parties to satisfy the requirements of Article III or the Declaratory Judgment Act. Accordingly, when deciding this motion, the Court accepts the factual allegations in the complaint as true and draws all reasonable inferences in favor of Zerorez.[1]

         The Declaratory Judgment Act limits the issuance of declaratory judgments to cases involving an “actual controversy.” 28 U.S.C. § 2201(a). This requirement “refers to the type of ‘Cases' and ‘Controversies' that are justiciable under Article III.” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007). In this context, an actual controversy requires a concrete dispute between parties with adverse legal interests, and the plaintiff must seek “specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.” Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 241 (1937); accord Maytag Corp. v. Int'l Union, United Auto., Aerospace & Agric. Implement Workers of Am., 687 F.3d ...


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