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Encore Furniture Thrifts and More, LLC v. Doubletap, Inc.

United States District Court, M.D. Tennessee, Nashville Division

December 18, 2017

DOUBLETAP, INC., Defendant



         Pending before the Court is Defendant's Motion to Dismiss (Doc. No. 14). For the reasons stated herein, Defendant's Motion to Dismiss will be granted, and this action will be dismissed without prejudice.


         Encore Furniture Thrifts and More (“Encore”) owns and operates a retail store in Clarksville, Tennessee, under the name of “Double Tap Tactical.” Encore sells tactical gear, gun accessories, military surplus, clothing, and other related products. Doubletap, Inc. (“Doubletap”) manufactures and distributes firearm ammunition under the brand name Doubletap and has registered trademarks for the name Doubletap Ammunition and the names of several subcategories of ammunition and bullets.

         This dispute arose from Encore's alleged unauthorized use of Doubletap's trademarks, which Doubletap contends has caused actual consumer confusion. On October 6, 2016, Doubletap's attorney sent a letter to Encore, demanding that Encore stop using the Double Tap name in connection with ammunition and related products. (Doc. No. 24-1.) In response, Encore's attorney wrote a letter, dated October 25, 2016, to Doubletap's attorney, contending that Encore was not infringing upon any trademarks of Encore and stating: “All that said, my client would prefer to resolve this dispute without the need for litigation.” (Doc. No. 24-2.) Encore asked for clarification as to the specific extent which Doubletap claimed it should not be allowed to use the name Double Tap. Id.

         Encore filed this declaratory judgment action on November 7, 2016, but Doubletap argues it did not receive service of the Complaint until December 13, 2016.[1] Doubletap filed its own enforcement action in Utah on December 8, 2016. On December 9, 2016, Doubletap's lawyer sent another letter to Encore's lawyer, further explaining its claims and stating: “It is clear to Doubletap that your client does not intend to resolve this dispute without litigation.” The letter asserted that if its demands were not met by December 20, 2016, Doubletap would serve its Utah complaint upon Encore. (Doc. No. 15-5.)

         Encore asserts that Doubletap's “baseless and overly broad and expansive threat of potential liability” created uncertainty for Encore and its business and, therefore, Encore filed this action, asking the Court to resolve that uncertainty through Declaratory Judgment. Encore claims that an actual controversy exists by way of Doubletap's demand for Encore to cease and desist use of Encore's business name and because of the threatened potential liability. Doubletap has moved to dismiss this action, arguing that Encore filed it simply for the purpose of “procedural fencing, ” and that the Court, in its discretion, should not exercise declaratory judgment jurisdiction.


         For purposes of a motion to dismiss, the Court must take all of the factual allegations in the complaint as true. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). 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. Id. A claim has facial plausibility 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.


         The Declaratory Judgment Act states that in a case of actual controversy within its jurisdiction, a court may declare the rights and other legal relations of any interested party seeking such declaration. 28 U.S.C. § 2201. The central purpose of the Declaratory Judgment Act is to provide the opportunity to clarify rights and legal relationships without waiting for an adversary to file suit. Severe Records, LLC v. Rich, 658 F.3d 571, 580 (6th Cir. 2011). The Act allows federal courts unique and substantial discretion in deciding whether to declare the rights of litigants. Scepter, Inc. v. Metal Bulletin Ltd. 165 F.Supp.3d 680, 686 (M.D. Tenn. 2016).

         Under the Declaratory Judgment Act, the court has discretion not to hear a declaratory judgment action, even where jurisdiction exists. Catholic Health Partners v. Carelogistics, LLC, 973 F.Supp.2d 787, 792 (N.D. Ohio 2013). A plaintiff who files a declaratory judgment action does not have a right to the forum of his choosing. Id. “The federal declaratory judgment is not a prize to the winner of the race to the courthouse.” Id. Thus, the misuse of the Declaratory Judgment Act to gain a procedural advantage and preempt the forum choice of the plaintiff in a coercive action militates in favor of dismissing the declaratory judgment action. Id.

         The Sixth Circuit has adopted a five-factor test to assess the propriety of the federal court's exercise of discretion in a Declaratory Judgment Act case: (1) whether the judgment would settle the controversy; (2) whether the declaratory judgment action would serve a useful purpose in clarifying the legal relations at issue; (3) whether the declaratory remedy is being used merely for the purpose of “procedural fencing” or “to provide an arena for a race for res judicata;” (4) whether the use of the declaratory action would increase the friction between federal and state courts and improperly encroach on state jurisdiction; and (5) whether there is an alternative remedy that is better or more effective. Amsouth Bank v. Dale, 386 F.3d 763 (6th Cir. 2004).

         FIRST-TO-FIL ...

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