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Gilliam v. Galvin

United States District Court, D. Hawaii

December 10, 2019



          Jill A. Otake United States District Judge.

         Plaintiff William Gilliam (“Plaintiff”) initiated this action based on Defendants Joan Cherise Krussel (“Krussel”), Matthew Aaron Cote (“Cote”) and Mike Galvin's (“Galvin”) (collectively “Defendants”) concerted effort to rent his condominium unit in order to gain access and post a false and injurious review on Airbnb. Krussel and Cote move to dismiss the Second Amended Complaint (“SAC”), ECF No. 37, for lack of subject matter jurisdiction and failure to state a claim. Galvin seeks dismissal for failure to state a claim and/or for summary judgment.

         For the following reasons, the Court GRANTS IN PART AND DENIES IN PART Defendants' motions.


         I. Factual History

         Plaintiff and Galvin own units in the Kuhio Shores at Poipu on Kaua‘i. SAC ¶ 4. According to Plaintiff, Galvin created a website to market Galvin's properties. See Id. ¶ 8. Instead of using Galvin's website to market his unit in competition with Galvin, Plaintiff opted to list his unit with Airbnb in 2015. See id.

         Plaintiff alleges that in March 2015, Defendants, acting in concert, rented Plaintiff's unit for one night through Krussel's Airbnb account for the purpose of publishing “a malicious, harmful and injurious review on the [] Airbnb website, with [] worldwide reach in perpetuity.” Id. ¶ 10. Plaintiff claims that Krussel contacted him by telephone within minutes after arriving at the unit, falsely stating that it contained hidden cameras. Id. ¶ 10.b. In an effort to resolve Krussel's complaint, and per Airbnb's Terms of Service, Plaintiff arranged to meet Krussel at the unit within an hour. Id. ¶ 10.e. However, Defendants had already vacated the unit. Id. ¶ 10.f. Plaintiff alleges that during their short time at the unit, Defendants took hundreds of photos and contacted Airbnb to falsely report the presence of hidden cameras. Id. Without contacting Plaintiff and absent verification, Airbnb refunded Defendants. Id. ¶ 10.g. Krussel then posted a review on Airbnb stating that she found hidden cameras, two-way mirrors, and had received a refund from Airbnb. Id. ¶ 10.h.

         Plaintiff claims to have suffered more than $75, 000.00 in damages. Id. ¶ 11.

         II. Procedural History

         Plaintiff initiated this action on March 11, 2019 and filed a First Amended Complaint (“FAC”), ECF No. 26, on July 8, 2019. On August 6, 2019, the Court issued an Order Granting Defendants' Motions to Dismiss with Leave to Amend (“Order”). ECF No. 35. The Court concluded that Plaintiff failed to assert a plausible Lanham Act claim but granted leave to amend. Id. at 8-9.

         Plaintiff filed his SAC on September 6, 2019. He asserts the following claims: (1) violation of the Lanham Act, 15 U.S.C. § 1125; (2) unfair and deceptive trade practices in violation of Hawai‘i Revised Statutes (“HRS”) sections 480-2 and 480-13; (3) unfair and deceptive trade practices in violation of Revised Code of Washington section 19.86; (4) tortious interference with past, present, future relationship; (5) fraud; (6) defamation and false light; and (7) declaratory judgment as to Krussel pursuant to 28 U.S.C. § 2201, Federal Rule of Civil Procedure (“FRCP”) 57, and Hawai‘i Rule of Civil Procedure (“HRCP”) 60. Plaintiff identifies the following jurisdictional bases for this action: federal question, diversity of citizenship, and pendant jurisdiction.

         On September 20, 2019, Krussel and Cote filed a Motion to Dismiss under Fed.R.Civ.P. 12(b)(1) and 12(b)(6). ECF No. 39. On September 23, 2019, Galvin filed his Motion to Dismiss and/or for Summary Judgment. ECF No. 40. Krussel and Cote substantively joined in Galvin's Motion. ECF No. 42.

         Plaintiff asked the Court to defer consideration of Defendants' motions pursuant to FRCP 56(d). The Court granted in part and denied in part the request. ECF No. 60. It declined to defer ruling on Krussel and Cote's Motion because it is a motion to dismiss, and elected to wait until the hearing to decide whether discovery is required to oppose Galvin's Motion. Id.


         I. Rule 12(b)(1)

         Under FRCP 12(b)(1), a district court must dismiss a complaint if it lacks subject matter jurisdiction to hear the claims alleged in the complaint. Fed.R.Civ.P. 12(b)(1). A jurisdictional attack pursuant to FRCP 12(b)(1) may be facial or factual. See Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004) (citation omitted). A facial attack challenges the sufficiency of the allegations contained in a complaint to invoke federal jurisdiction, while a factual attack “disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction.” Id. District courts may review evidence beyond the complaint to resolve a factual attack on jurisdiction without converting a motion to dismiss into a motion for summary judgment. See Id. (citation omitted). In such instances, courts “need not presume the truthfulness of the plaintiff's allegations.” Id. (citation omitted); see also Courthouse News Serv. v. Planet, 750 F.3d 776, 780 (9th Cir. 2014) (“A factual challenge ‘rel[ies] on affidavits or any other evidence properly before the court' to contest the truth of the complaint's allegations.” (alteration in original) (citation omitted)). “Once the moving party has converted the motion to dismiss into a factual motion by presenting affidavits or other evidence properly brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction.” Safe Air, 373 F.3d at 1039 (citation omitted).

         II. Rule 12(b)(6)

         FRCP 12(b)(6) authorizes dismissal of a complaint that fails “to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). On a Rule 12(b)(6) motion to dismiss, “the court accepts the facts alleged in the complaint as true, ” and “[d]ismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged.” UMG Recordings, Inc. v. Shelter Capital Partners LLC, 718 F.3d 1006, 1014 (9th Cir. 2013) (alteration in original) (quoting Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988)). However, conclusory allegations of law, unwarranted deductions of fact, and unreasonable inferences are insufficient to defeat a motion to dismiss. See Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001) (citation omitted); Nat'l Ass'n for the Advancement of Psychoanalysis v. Cal. Bd. of Psychology, 228 F.3d 1043, 1049 (9th Cir. 2000) (citation omitted). Furthermore, the court need not accept as true allegations that contradict matters properly subject to judicial notice. See Sprewell, 266 F.3d at 988 (citation omitted).

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Facial plausibility exists “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). The tenet that the court must accept as true all of the allegations contained in the complaint does not apply to legal conclusions. See Id. As such, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Id. at 679 (quoting Fed.R.Civ.P. 8(a)(2)) (some alterations in original). If dismissal is ordered, the plaintiff should be granted leave to amend unless it is clear that the claims could not be saved by amendment. See Swartz v. KPMG LLP, 476 F.3d 756, 760 (9th Cir. 2007) (citation omitted).


         Defendants argue that the SAC still fails to state a violation of the Lanham Act. Krussel and Cote also contend that because the evidence suggests that Plaintiff is not a citizen of Hawai‘i, subject matter jurisdiction is lacking, and the Court should decline to exercise supplemental jurisdiction. Galvin asserts that with the elimination of the Lanham Act claim, the Court should decline to exercise supplemental jurisdiction.

         I. Lanham Act (Count 1)

         Plaintiff alleges that Defendants violated § 1125 by:

12. . . . [C]aus[ing] a false or misleading description of act or false or misleading representation of fact likely to cause confusion or mistake; and, of the approval by Airbnb to their malicious, defamatory lie; and, to injure the commercial activities of plaintiff; and, defendants in their commercial advertising published with Airbnb in the guise of an “honest” guest review repeating their ...

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