475 F.Supp.3d 676
E.D. Mich.2020Background
- Plaintiff Ashh, Inc. alleges All About It sold electronic cigarette batteries in packaging that infringed Ashh’s OOZE® trade dress; Ashh sued All About It for trademark infringement and related claims.
- All About It denies liability and filed a third-party complaint against BMZ Partnership, LLC, alleging it purchased 46,656 batteries (with chargers) from BMZ and seeking indemnity and breach-of-contract recovery under M.C.L. § 440.2312(3) (UCC seller warranty against infringement).
- BMZ moved to dismiss under Fed. R. Civ. P. 12(b)(6) arguing All About It’s pleadings are too conclusory and its theory is really an implied-warranty claim; BMZ also initially sought summary judgment asserting the transactions never occurred but later conceded factual disputes prevented early summary judgment.
- All About It opposed dismissal and alternatively sought leave to amend if necessary.
- The Court held that, accepting the pleaded facts as true, All About It plausibly alleged a contract by conduct and a claim under § 440.2312(3); the 12(b)(6) motion was denied and All About It’s request to amend was denied as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether All About It stated a plausible claim for indemnity and breach under M.C.L. § 440.2312(3) | Alleged purchase of infringing batteries from BMZ, BMZ is a merchant dealing in such goods, so BMZ warrants goods free of third‑party infringement | Pleadings are conclusory, lack transactional detail, and the theory is actually an implied‑warranty claim | Court: Denied dismissal; allegations suffice to plausibly state claims under § 440.2312(3) |
| Whether a contract was adequately alleged | Purchase/delivery of goods shows agreement by conduct under UCC § 2‑204 | No specific written contract identified; facts too sparse to show a contract | Court: Allegations of purchase and delivery permit a reasonable inference a contract existed |
| Whether the court should resolve factual dispute by summary judgment that transactions never occurred | Implied argument: documentary/transactional evidence supports existence of sales | BMZ initially argued transactions never occurred (moved for summary judgment) | Court: BMZ conceded factual issues preclude summary judgment now; court stayed evaluation to 12(b)(6) context |
Key Cases Cited
- Directv, Inc. v. Treesh, 487 F.3d 471 (6th Cir. 2007) (pleading construed in plaintiff's favor on motion to dismiss)
- Gregory v. Shelby County, 220 F.3d 433 (6th Cir. 2000) (courts need not accept legal conclusions as true)
- Eidson v. State of Tenn. Dep't of Children's Servs., 510 F.3d 631 (6th Cir. 2007) (legal conclusions masquerading as factual allegations insufficient)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleading)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (clarified plausibility pleading standard)
- LULAC v. Bredesen, 500 F.3d 523 (6th Cir. 2007) (plaintiff must plead facts showing entitlement to relief)
- Gage Prods. Co. v. Henkel Corp., 393 F.3d 629 (6th Cir. 2004) (purchase/shipment/acceptance evidence can create a genuine dispute about contract formation)
- Bassett v. Nat'l Coll. Athletic Ass'n, 528 F.3d 426 (6th Cir. 2008) (court may consider complaint exhibits and public records on a 12(b)(6) motion)