Opinion
02 Civ. 4090 (JSM).
March 10, 2003
MEMORANDUM OPINION AND ORDER
This action was commenced when Plaintiffs Societe Des Hotels Meridien, Meridien S.A., Meridien Hotels, Inc., MHI Leasco Dallas, Inc., and MHI Leasco New Orleans (together, "Meridien") brought a motion to temporarily restrain and preliminarily enjoin Defendants LaSalle Hotel Operating Partnership, L.P., LHO New Orleans LM, L.P., LHO New Orleans Financing, Inc., LHO Financing Partnership I, L.P., LHO Financing Inc., LaSalle Partners Limited, LRP Dallas Hotel Limited Partnership, LaSalle Hotel Properties, Inc., Michael D. Barnello, Jon Bortz, Hans Weger (together "LaSalle"), and Starwood Hotels and Resorts Worldwide, Inc. ("Starwood") from publishing advertisements and other publications that falsely designated hotel properties at 614 Canal Street in New Orleans and 650 North Pearl Street in Dallas as part of the Starwood hotel group. This Court in an August 16, 2002 opinion denied that motion.
Currently before the Court is Defendants' motion to dismiss. The facts and details of the related litigations surrounding this case have been detailed in the Court's earlier opinion and will not be repeated here.
Discussion
Starwood has moved to dismiss Plaintiffs' claims for unfair competition/reverse palming off and false advertising. LaSalle has moved to dismiss Plaintiffs' claims for contributory unfair competition/reverse palming off and contributory false advertising and both Starwood and LaSalle have moved to dismiss the claims for common law unfair competition under New York state law.
When considering a motion to dismiss for failure to state a claim, the Court must accept the factual allegations in the complaint as true, construing the complaint in the light most favorable to Plaintiffs. See Target Adver., Inc. v. Miller, 2002 WL 999280, *5 (S.D.N.Y. May 15, 2002). Dismissal is proper only when it is apparent that Plaintiffs can prove no set of facts in support of their claim which would entitle them to relief. Id. Plaintiff must, however, make specific factual allegations and cannot rely on conclusory statements. See Cecere v. R.J. Reynolds Tobacco Co., 1998 WL 665334, *3 (S.D.N.Y. Sept. 28, 1998).
I. Unfair Competition/Reverse Palming Off and Contributory Unfair Competition
Plaintiffs claim that Starwood's use of the picture of the LaSalle building in the "2002 Starwood Hotels Resorts Worldwide Directory" "constitutes the use, in interstate commerce, of a word, term, name, symbol or device, . . . which is likely to cause confusion . . . as to the nature and extent of the affiliation, connection, or association of Starwood with Meridien," First Amended Compl. § 37, in violation of § 43(a) of the Lanham Act's prohibition against unfair competition.
Plaintiffs point out that Starwood did not have to use Meridien's trademark in order for Meridien to have a claim. While this is true, it does not address the fundamental fact that Meridien must be able to prove a set of facts that would show a "false designation of origin of the product" and a likelihood of consumer confusion. Target Adver., Inc., 2002 WL 999280, *6.
Plaintiffs rely heavily on the Target case, but fail to address the clear distinctions from the instant case. In the Target case, the parties accused of the Lanham Act violations were former employees of Target Advertising who left their company and proceeded to pose as their employer company. These former employees stole files, information about business accounts and e-mail accounts. There was no question as to confusion because these individuals were pretending to be Target.
Starwood published a directory with a picture of a building they had a contract to manage during the year in which the directory was in effect. This building is not owned by Meridien. As it turns out, Meridien has not vacated the building and is the current manager. Starwood is not pretending otherwise. If you call the number listed in the directory, a consumer will reach a Meridien operator. If you drive past the hotel you will see a Meridien sign. As discussed in this Court's analysis of the Polaroid factors in the earlier opinion, the likelihood of confusion is small, and whatever confusion exists benefits Meridien and not Starwood. Accordingly, Meridien cannot show harm and Meridien's claim for unfair competition and reverse palming off must be dismissed. Because Plaintiffs are unable to sustain their claim of unfair competition, the claim for contributory unfair competition must also be dismissed.
II. False Advertising and Contributory False Advertising
Plaintiffs' have also failed to state a false advertising claim. In order to state a claim under § 43(a) of the Lanham Act, "a plaintiff must prove that the defendant misrepresented an 'inherent quality or characteristic' of the defendant's product." Nat'l Assoc. of Pharm. Mfg. v. Ayerst Lab., 850 F.2d 904, 917 (2d Cir. 1988).
Plaintiffs have alleged no facts that could be used to make that showing. Defendants have done nothing to misrepresent the quality of a Meridien hotel. Plaintiffs do not own that building, and if a consumer chooses to stay in that building they will receive the quality of service that is provided by Plaintiffs. A false advertising claim is designed to prevent a competitor from falsely disparaging the quality of a competitor's product. There is nothing in the Starwood Directory that does that. Therefore, Plaintiffs claims for false advertising and contributory false advertising are dismissed.
III. Common Law Unfair Competition
Having dismissed the federal claims, all that remains is Plaintiffs' claim that Defendants have unfairly competed in violation of New York State's common law. This Court declines to exercise supplemental jurisdiction over the state law claims. See 28 U.S.C. § 1367(c)(3).
For the foregoing reasons, Plaintiffs' case is dismissed.