Case Number: 20STCV47489    Hearing Date: March 14, 2023    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

This action arises from a number of different lawsuits between the parties as to disputes relating to the ownership and use of five California registered trademarks (collectively “Big Chief Marks”), including: (i) “Big Chief,” Reg No. 02005307; (ii) “Big Chief Extracts,” Reg. No. 02005329; (iii) “Big Chief’n,” Reg. No. 02005324; (iv) , Reg. No. 02005326; and (v) , Reg. No. 02005328. (See, e.g., LASC Action No. 19STCV37948, the “parallel case.”) The Big Chief Marks are used in relation to pre-filled cannabis vaporizer cartridges, disposable pens containing cannabis extract, cannabis flowers, and related products.

Plaintiffs/Cross-Defendants Samuel Kim and Cali Blue Sky Investment, Inc.’s (“Plaintiffs”) operative December 11, 2020 Complaint sues Defendants United Health and Care Center, JRJS, LLC (also Cross-Defendant), Chango Club, Inc., Jafar Rashid, Vikram Sood, Vibha Patel, Sanjiv Patel, Lorraine Lugo, Mohammed Khalid, and Zahid Butt (“Defendants”), as well as Does 1 through 50, pursuant to claims of (1) Statutory Trademark Infringement/Counterfeiting, (2) Dilution of Famous Mark, (3) Common Law Trademark Infringement, (4) Unfair Competition, and (5) Deceptive Business Practices.

Defendants’ operative July 28, 2021 First Amended Cross-Complaint (“FAXC”) sues Plaintiffs and Roes 1 through 100 pursuant to claims of (1) Declaratory Relief, (2) Trademark Infringement, (3) Cancellation of Registration for Trademark [Assignment], and (4) Cancellation of Registration for Trademark [Abandonment].

On January 13, 2022, the Court heard a demurrer by Plaintiffs against the FAXC’s four causes of action, (1) sustaining the demurrer, with leave to amend, as to the FAXC’s first and third causes of action, (2) sustaining the demurrer, without leave to amend, as to the FAXC’s second cause of action, and (3) overruling the demurrer as to the FAXC’s fourth cause of action. Defendants failed to amend their FAXC, i.e., file a Second Amended Cross-Complaint, for which reason, by operation of law, the only remaining operative claim from the FAXC became its fourth cause of action for Cancellation of Registration for Trademark [Abandonment].

On December 29, 2022, Plaintiffs filed the instant Motion for Summary Adjudication of (1) Plaintiffs’ Complaint’s first and fourth causes of action and (2) Defendants’ FAXC’s fourth cause of action.

On February 27, 2023, the Court denied an ex parte application by Defendants to have the hearing on this summary adjudication motion continued. The minutes specified that any opposition to the summary adjudication motion would need to be filed by Defendants no later than March 1, 2023 and that any reply thereto would need to be filed by Plaintiffs no later than March 10, 2023.

On March 1, 2023, Defendants filed an opposition to Plaintiffs’ motion, arguing, inter alia, that the Court should deny and continue hearing on Plaintiffs’ summary adjudication motion because outstanding discovery issues have foreclosed Defendants’ ability to include facts essential to justify their opposition to Plaintiffs’ motion. The opposition contained a single declaration from defense counsel Jon Atabek and a number of exhibits attached thereto.

On March 3, 2023, Defendants filed an additional three declarations in support of their opposition to the summary adjudication motion.

On March 10, 2023, Plaintiffs filed a reply in favor of their summary adjudication motion, as well as objections to the declarations of Mohammad Khaled and Jon Atakek filed with Defendants’ opposition papers—the former on March 3, 2023, and the former on March 1, 2023.

On March 13, 2023, Plaintiffs filed an untimely supplemental opposition, in which a copy of the deposition of Plaintiff Kim is attached, and which shows that Plaintiff Kim testified to not having used the Big Chief Marks on cannabis products prior to either December 2019 or January 2020.

Request for Judicial Notice

Plaintiffs’ judicial notice request is DENIED because, as discussed infra, the Court has found grounds to determine that this motion should be continued to permit Defendants the opportunity to gather essential facts from discovery to inform the opposition to Plaintiffs’ motion.

Motion for Summary Adjudication: DENIED Without Prejudice and CONTINUED.

If it appears from the affidavits submitted in opposition to a motion for summary judgment or summary adjudication, or both, that facts essential to justify opposition may exist but cannot, for reasons stated, be presented, the court shall deny the motion, order a continuance to permit affidavits to be obtained or discovery to be had, or make any other order as may be just. (Code Civ. Proc., § 437c, subd. (h).) The application to continue the motion to obtain necessary discovery may also be made by ex parte motion at any time on or before the date the opposition response to the motion is due. (Code Civ. Proc., § 437c, subd. (h).)

In their opposition, Defendants request a denial and continuance of Plaintiffs’ motion on the grounds that (1) “Defendants attempted to obtain critical written and deposition discovery from Plaintiffs and Cross-Defendants necessary to oppose the MSA,” which “efforts included written discovery to one of the most critical witnesses in this action, [Syed] Hussain [a cross-defendant in the parallel action], who [h]as refused to respond to requests directed to defense-critical issues,” (2) “as of the date of this [opposition], none of the other Plaintiffs … have provided any supplemental responses to written discovery directed to the issues, and (3) “all of the Plaintiffs … have, in coordinated fashion, objected to all deposition notices served on them, and refused to appear for deposition on a date prior to Defendants’ deadline to oppose the [Plaintiffs’ motion].” (Opp’n, 11:24-12:7.)

In support of this position, Defendants point to various discovery proceedings ongoing between the parties. For example, the opposition and declaration of Jon Atabek, Defendants’ counsel of record, explains that on January 25, 2023, Defendants propounded discovery—including requests for production—responsive to the arguments and evidence advanced by Plaintiffs in their summary adjudication motion, which responses were received on February 24, 2023—four days before the summary adjudication opposition was due on February 28, 2023—but which were deficient insofar as the responses stated that Plaintiff Kim would produce, for example, documents sought by Defendants’ discovery, but where the documents to be produced were not themselves included in the discovery responses or were represented as destroyed or otherwise lost by Plaintiff Kim. (Opp’n, 5:15-6:23, Atabek Decl., ¶¶ 16-18, 26-28, Exs. 25-28 [responses to Defendants’ discovery requests by Plaintiff Kim].) Some of the documents requested by Defendants but not produced by Plaintiff Kim were documents related to any and all communications and documents related to the “‘‘design and develop[ment] of the bigchiefextracts.com website.’” (Opp’n, 5:23-6:21.) Further, on February 2, 2023, in 19STCV37948—a parallel case to this action—Defendants served three deposition notices, with Plaintiff Kim’s deposition calendared for February 17, 2023. (Opp’n, 7:4-8.)  Based on objections to the depositions, Kim’s deposition was moved to March 8, 2023, i.e., a date after Defendants’ opposition was due in response to Plaintiffs’ summary adjudication motion in this action. (Opp’n, 7:1-23, Atabek Decl., ¶¶ 20-25, Exs. 15-23 [deposition notices for Kim and two other parties in the parallel action, e.g., Syed Hussain, email communications, objections to depositions, and amended deposition notices].) Atabek briefly explains that “Defendants intended to depose these parties on, among other topics, issues of fact discussed in Plaintiffs’ Motion in connection with Defendants’ Opposition thereto.” (Opp’n, ¶¶ 20, 25.)

In reply, Plaintiffs argue that a continuance is not merited because “Defendants have not provided any explanation whatsoever as to why discovery in this action was not taken sooner” and “[e]ven if Defendants had been more diligent in discovery, their Opposition still fails to

meet the threshold need in order to obtain more time to oppose a motion for summary

adjudication” because “Defendants have failed to meet all three of the required elements needed to secure more time for an opposition to Plaintiffs’ MSA under §437c(h),” i.e., “(1) the facts to be obtained are essential to opposing the motion; (2) there is reason to believe such facts may exist; and (3) the reasons why additional time is needed to obtain these facts.” (Reply, 9:11-10:7.)

Defendants filed an untimely supplemental opposition on March 13, 2023.  Ordinarily, the Court would be justified in not considering such an untimely pleading.  However, in the context of potentially granting summary adjudication and ruling on a request for a continuance, the Court reviewed the filing.  Defendants provide a copy of the deposition of Plaintiff Kim, in which Plaintiff Kim testified to not having used the Big Chief Marks in relation to cannabis products—marketing or sale thereof—until December 2019 or January 2020, i.e., after the alleged infringement of Big Chief Marks by Defendants allegedly began, taking place between June 2019 and January 2021. (Supp. Opp’n, 2:9-12, Ex. 1 at pp. 162:24-163:4, 239:24-240:11 [Plaintiff Kim testifying to first use of Big Chief Marks in relation to cannabis products in January 2020 and marketing therefore in December 2019]; see Mot., Kim Decl., ¶ 12, Ex. 9 [June 28, 2019 letter from Plaintiff Kim to Defendant UHCC demanding UHCC and JRJS do not sell cannabis products bearing Big Chief Marks]; see also Mot., RJN, Ex. 9 [superior court ruling dated January 8, 2021 granting permanent injunction against Defendants and restraining their ability to use Big Chief Marks on cannabis products].)

Under California common law, to state a claim for trademark infringement a plaintiff must allege: “[1] existence of prior and continuous use of a trade name in such a way that a secondary meaning is acquired, [2] subsequent use of a confusingly similar trade name by the defendant, and [3] likelihood of confusion in the minds of the public of the defendant’s business as that of, or as one affiliated with, the plaintiff.” (Sunset House Distributing Corp. v. Coffee Dan’s, Inc. (1966) 240 Cal.App.2d 748, 753.)

If Plaintiff Kim’s deposition is credited as presented, there is a possibility that Plaintiffs’ evidence on summary adjudication cannot establish a prior and continuous use of Big Chief Marks on cannabis products specifically prior to Defendants’ use of the same marks in 2019, which would be anathema to Plaintiffs’ trademark infringement claim, and perhaps fatal to Plaintiffs’ relief on summary adjudication as to the SAC’s fourth cause of action and the FAXC’s fourth cause of action. (Supp. Opp’n, 2:32-3:4 [citing to Brookfield Communications, Inc. v. West Coast Entertainment Corp. (9th Cir. 1999) 174 F.3d 1036, 1047 for proposition “[t]he first to use a mark is deemed the ‘senior’ user and has the right to enjoin ‘junior’ users from using confusingly similar marks in the same industry and market or within the senior user’s natural zone of expansion” (emphasis in supplemental opposition)].)

Moreover, because Defendants did not have access to the deposition of Plaintiff Kim until March 8, 2023 (see Supp. Opp’n, Atabek Decl., Ex. 1)—i.e., a full week after Defendants’ opposition to the summary adjudication motion was due on March 1, 2023 (see 2/27/23 Ex Parte Minutes, p. 1)—it is apparent that Defendants lacked essential facts to justify their opposition to Plaintiffs’ summary adjudication when Defendants filed their opposition on March 1, 2023.

The Court finds that these grounds are sufficient for the Court to CONTINUE the hearing on this motion until such a later date as Defendants can complete necessary discovery and provide an updated opposition.

Conclusion

Plaintiffs/Cross-Defendants Samuel Kim and Cali Blue Sky Investment, Inc.’s Motion for Summary Adjudication is DENIED Without Prejudice and CONTINUED to permit Defendants sufficient time to complete discovery as to essential facts supporting their opposition to Plaintiffs’ summary adjudication motion.

The Court will discuss possible dates at the hearing so as to be able to consider both counsel’s availability, as well as to review the trial and final status conference dates.