Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-01628/USCOURTS-casd-3_10-cv-01628-4/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1114 Trademark Infringement

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ALBERT SANCHEZ, SR.,

Plaintiff,

CASE NO. 3:10-cv-1628-GPC-MDD

ORDER:

(1) DISMISSING WITH

PREJUDICE ALL CAUSES OF

ACTION;

(2) VACATING HEARING

v.

ALBERT SANCHEZ, JR., et al.,

Defendant.

I. INTRODUCTION

Before the Court is the issue of whether this action should be dismissed based

on res judicata. The parties have fully briefed the issue. (ECF Nos. 144, 150, 151.)

Upon review of the moving papers, admissible evidence, and applicable law, the Court

DISMISSES WITH PREJUDICE all causes of action against all defendants.

II. BACKGROUND

This case involves a business dispute between a father and son. (See ECF No.

44.) In this action Plaintiff Albert Sanchez, Sr. seeks to recover from Defendant Albert

Sanchez, Sr. for the allegedly wrongful sale and distribution of goods bearing the

alleged trademark “POLY-MVATM.” (See id.) Sanchez, Sr. had also instituted a parallel

state court action against Sanchez, Jr. seeking the same or similar recovery. (See ECF

No. 130-1.)

On December 21, 2012, this Court found that the parallel state court action

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would have preclusive effect in this action once final judgment in the state court action

was entered (the “Stay Order”). (ECF No. 136, at 4–8.) Based on the Colorado River

abstention doctrine, this Court found it appropriate to stay this action pending final

judgment in the state court action. (Id. at 8–9); see also Colo. River Water

Conservation Dist. v. United States, 424 U.S. 800 (1976).

On April 3, 2015, final judgment was issued in the parallel state court action,

(ECF No. 140, Ex. A), and on May 14, 2015, the stay was lifted in this case, (ECF No.

141). The parties have since briefed the issue of whether this action should be

dismissed based on res judicata. (ECF Nos. 144, 150, 151.)1

III. DISCUSSION

In the Stay Order, this Court found that all elements of res judicata had been met

as to all claims except for the element of final judgment. (ECF No. 136, at 7–8.) Since

the Stay Order, final judgment has been issued in the state court action. (See ECF No.

140, Ex. A.) Sanchez, Sr. raises three arguments in response: (1) he quotes the

arguments made to this Court prior to the issuance of the stay, (2) he notes that

Defendant ALO Investments, LLC (“ALO”) was not a party to the state court action,

and (3) he argues that the primary right at issue here differs from the primary right at

issue in the state court action. (ECF No. 150, at 3–9.)

First, Sanchez, Sr. has not argued any basis for this Court to reconsider its

previous ruling in the Stay Order and this Court already considered the arguments he

raised at that time. Second, this Court has already found that the same primary right

was at issue in both this action and the parallel state court action, (see ECF No. 136,

at 4–6), and Sanchez, Sr. has put forth no basis justifying reconsideration of that

determination. Moreover, the primary right analysis is as applicable to ALO as it is to

any other defendant in this case. The Court now turns to Sanchez, Sr.’s final remaining

contention: ALO’s absence from the state court action.

The Court also notes that, prior to the stay, the parties had also submitted

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multiple briefs regarding this issue. (ECF Nos. 125, 126, 130, 131, 132, 133.)

Additionally, the Court held two hearings on the issue. (ECF Nos. 128, 135.)

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Sanchez, Sr. argues the final judgment in the state court action does not have

preclusive effect on his claims against ALO because ALO was not a party to the state

court action. (ECF No. 150, at 6–10.) Sanchez, Jr. concedes that ALO was not a party

to the state court action, but argues that ALO is in privity with the defendants in the

state court action. (ECF No. 151, at 3.) The Court agrees with Sanchez, Jr. The doctrine

of res judicata applies not only to the parties themselves, but to “parties or their

privies.” In re Schimmels, 127 F.3d 875, 881 (9th Cir. 1997) (quoting Montana v.

United States, 440 U.S. 147, 153 (1979)) (emphasis added). Privity “is a legal

conclusion ‘designating a person so identified in interest with a party to former

litigation that he represents precisely the same right in respect to the subject matter

involved.’” Id. at 881 (quoting Sw. Airlines Co. v. Tex. Int’l Airlines, Inc., 546 F.2d 84,

94 (5th Cir.1977)). Privity exists where two parties have “sufficient commonality of

interest.” In re Gottheiner, 703 F.2d 1136, 1140 (9th Cir. 1983) (citation omitted).

“When a person owns most or all of the shares in a corporation and controls the affairs

of the corporation, it is presumed that in any litigation involving that corporation the

individual has sufficient commonality of interest.” Id. (citing Sparks Nugget, Inc. v.

Commissioner, 458 F.2d 631, 639 (9th Cir.1972)).

The parties do not dispute that Sanchez, Jr. owns ALO. (See ECF No. 44 ¶ 12

(“Albert Jr. (as owner of ‘Alo Investments LLC’)”); ECF No. 151, at 2 (“ALO is

owned by Sanchez Jr.”).) Accordingly, the Court finds that Sanchez, Jr., who was a

party to the state court action, (see ECF No. 140, Ex. A), is in privity with ALO and

thus the state court final judgment has preclusive effect against ALO. See Gottheiner,

703 F.2d at 1140. Based on thisfinding, that the only remaining element of resjudicata

that needed to be met was final judgment, (see ECF No. 136, at 4–8), and that final

judgment was issued in the state court action, (ECF No. 140, Ex. A), the Court finds

that all elements of res judicata have been met as to all defendants. Thus, the Court

DISMISSES WITH PREJUDICE all of Sanchez, Sr.’s causes of action against all

defendants as they are barred by res judicata.

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IV. CONCLUSION AND ORDER

For the reasons stated above, IT IS HEREBY ORDERED that:

1. All causes of action against all defendants are DISMISSED WITH

PREJUDICE; and

2. The hearing set for August 28, 2015, is VACATED.

DATED: August 27, 2015

HON. GONZALO P. CURIEL

United States District Judge

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