Court Opinion

ID: 9390197
Source: CourtListenerOpinion
Date Created: 2023-04-27 00:00:51.90703+00
Date Added: 2024-06-11T17:18:32.522059
License: Public Domain

Case: 21-40337         Document: 00516727092             Page: 1      Date Filed: 04/26/2023

              United States Court of Appeals
                   for the Fifth Circuit                                          United States Court of Appeals
                                                                                           Fifth Circuit
                                      ____________                                       FILED
                                                                                      April 26, 2023
                                        No. 21-40337
                                      ____________                                    Lyle W. Cayce
                                                                                           Clerk
   Springboards to Education, Incorporated,

                                                    Plaintiff—Appellant/Cross-Appellee,

                                             versus

   Mission Independent School District,

                                     Defendant—Appellee/Cross-Appellant.
                      ______________________________

                      Appeal from the United States District Court
                          for the Southern District of Texas
                                USDC No. 7:16-CV-527
                      ______________________________

   Before Elrod, Ho, and Wilson, Circuit Judges.
   Per Curiam: *
          We must determine whether the district court correctly granted
   summary          judgment       dismissing       Springboards        to     Education’s
   (“Springboards”) trademark infringement claims. Springboards faces an
   uphill battle, as three of our sister panels have already rejected Springboards’
   arguments in near-twin cases. We see no basis to diverge from those
   opinions, so we affirm.

          _____________________
          *
              This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 21-40337            Document: 00516727092              Page: 2      Date Filed: 04/26/2023

                                             No. 21-40337

                                                   I.
            Springboards offers a suite of products and services to school districts
   that Springboards calls its “Read a Million Words” campaign (“the
   Campaign”). The Campaign fosters literacy and builds excitement around
   reading by encouraging students to read a million words during the school
   year. Each iteration of the Campaign is tailored to the individual school, and
   successful “millionaire readers” receive an induction party and various
   prizes to celebrate their accomplishment.                  To facilitate the Campaign,
   Springboards registered the trademarks “Read a Million Words,”
   “Millionaire Reader,” “The Millionaire’s Reading Club,” and “Million
   Dollar Reader.”
            Mission Independent School District (“Mission”) is located in
   Hidalgo County, Texas. Mission also developed a reading program that
   encouraged students to read a million words during the school year. It
   identified students who did so as “millionaire readers” and provided various
   accolades to successful students that identified them as “millionaire
   readers.” Additionally, at least one Mission school had its own “millionaire
   club.”
            Springboards sued Mission under the Lanham Act, alleging trademark
   infringement, counterfeiting, dilution, 1 and false designation of origin.
   Mission moved to dismiss under Federal Rule of Civil Procedure 12(b)(1),
   arguing that it was immune from suit under the Eleventh Amendment. The
   parties then cross-moved for summary judgment on the merits. The district
   court held that Mission was not immune from suit but granted Mission’s
   summary judgment motion on the merits. Springboards timely appealed, and
   Mission cross-appealed the district court’s denial of Eleventh Amendment
            _____________________
            1
                The dilution claim was dropped and is not at issue in this appeal.

                                                   2
Case: 21-40337         Document: 00516727092       Page: 3   Date Filed: 04/26/2023

                                    No. 21-40337

   immunity. Consistent with our precedent, we affirm. See Springboards to
   Educ., Inc. v. McAllen Indep. Sch. Dist., 62 F.4th 174 (5th Cir. 2023)
   (“McAllen”); Springboards to Educ., Inc. v. Pharr-San Juan-Alamo Indep. Sch.
   Dist., 33 F.4th 747 (5th Cir. 2022) (“Pharr-San Juan-Alamo”); Springboards
   to Educ., Inc. v. Houston Indep. Sch. Dist., 912 F.3d 805 (5th Cir. 2019), as
   revised (Jan. 29, 2019), as revised (Feb. 14, 2019) (“Houston”).
                                         II.
          We review both the district court’s holding regarding Eleventh
   Amendment immunity and its grant of summary judgment de novo. McAllen,
   62 F.4th at 178.
                                         A.
          We begin with the threshold jurisdictional issue. “The Eleventh
   Amendment recognizes the background constitutional principle that states,
   as separate sovereigns, are inherently immune from suit without their
   consent.” Id. Eleventh Amendment immunity extends to “arms of the
   state,” and we use the “Clark factors” to determine whether an entity is an
   arm of the state:
          (1) whether state statutes and case law view the entity as an arm
          of the state; (2) the source of the entity’s funding; (3) the
          entity’s degree of local autonomy; (4) whether the entity is
          concerned primarily with local, as opposed to statewide,
          problems; (5) whether the entity has the authority to sue and
          be sued in its own name; and (6) whether it has the right to hold
          and use property.
   Id. at 178–79 (citing Clark v. Tarrant Cnty., 798 F.2d 736, 744–45 (5th
   Cir. 1986)).
          McAllen largely controls our analysis. There, we considered whether
   the McAllen Independent School District was an “arm of the state” for the

                                         3
Case: 21-40337      Document: 00516727092          Page: 4   Date Filed: 04/26/2023

                                    No. 21-40337

   purposes of the Eleventh Amendment. We extensively cited Texas case law
   and statutes in concluding that factors one and three weighed in favor of
   immunity, while the rest cut against immunity. Id. at 183–84. For the most
   part, that analysis applies equally here because Mission is bound by the same
   Texas case law and statutes as the school district in McAllen. We must
   consider, however, one distinction as to the second factor, the source of the
   entity’s funding.
          Mission avers that it depends on the state for roughly 72% of its
   funding, which is a higher proportion than the “roughly half” that the school
   district in McAllen received from the state. See id. at 183. But this slight
   distinction does not flip the second factor in Mission’s favor for two reasons.
   First, Mission still receives a substantial component of its funding from non-
   state sources. Second, Mission “maintain[s] the power to levy certain taxes
   and issue bonds,” id. at 183–84 (citing Tex. Educ. Code §§ 45.001,
   45.002), and “[t]he ability to self-finance weighs heavily against immunity,”
   id. at 184 (citing Pendergrass v. Greater New Orleans Expressway Comm’n, 144
   F.3d 342, 346 (5th Cir. 1998)). Therefore, we discern no reason to deviate
   from our holding in McAllen: Mission is not an arm of the state for the
   purposes of the Eleventh Amendment, so it is not entitled to immunity. Id.;
   see also San Antonio Indep. Sch. Dist. v. McKinney, 936 S.W.2d 279, 284 (Tex.
   1996) (holding that “an independent school district is more like a city or
   county than it is like an arm of the State of Texas and is amenable to suit in
   federal court under the Eleventh Amendment”).

                                         4
Case: 21-40337          Document: 00516727092                Page: 5       Date Filed: 04/26/2023

                                            No. 21-40337

                                                  B.
              We turn to the merits of Springboards’ trademark claims. We note
   that Springboards’ briefing in this case is nearly identical to its briefing in
   McAllen, portending a similar result.
             The Lanham Act imposes liability on anyone who uses “in commerce
   any reproduction, counterfeit, copy, or colorable imitation of a registered
   mark in connection with the sale, offering for sale, distribution, or advertising
   of any goods or services on or in connection with which such use is likely to
   cause confusion” without the consent of the holder of the mark. 15 U.S.C.
   § 1114(1)(a). To succeed on any of its trademark claims, Springboards must
   establish “a likelihood of confusion in the minds of potential customers as to
   the source, affiliation, or sponsorship” of Mission’s reading program.
   McAllen, 62 F.4th at 184 (quoting Elvis Presley Enters., Inc. v. Capece, 141 F.3d
   188, 193 (5th Cir. 1988)).
             In some cases, such as this one, the threshold question of the identity
   of the relevant class of “consumers” is not immediately clear. Springboards
   contends that the relevant consumers are students, parents, and educators
   affiliated with Mission. We have repeatedly rejected that argument. See
   McAllen, 62 F.4th at 185; Pharr-San Juan-Alamo, 33 F.4th at 750. Rather, as
   we have held before, the relevant class of consumers is third-party school
   districts who may be misled into thinking that Mission’s reading program is
   affiliated with Springboards’ Campaign. McAllen, 62 F.4th at 185.
             Ordinarily, with that threshold question answered, we would analyze
   the “digits of confusion” 2 at this juncture.                  “We need not parse the

             _____________________
   2
       The “digits of confusion” are:
             (1) the type of mark allegedly infringed, (2) the similarity between the two
             marks, (3) the similarity of the products or services, (4) the identity of the

                                                   5
Case: 21-40337         Document: 00516727092                Page: 6       Date Filed: 04/26/2023

                                           No. 21-40337

   individual digits here, however, for the practical effect of any conceivable
   confusion on the sophisticated school districts to which Springboards
   markets its products is at most exceedingly remote.” Pharr-San Juan-Alamo,
   33 F.4th at 750. In other words, though some of the digits of confusion weigh
   in Springboards’ favor, see Houston, 912 F.3d at 814–18, its antecedent error
   of misidentifying the relevant class of consumers severely weakens the
   viability of its likelihood of confusion argument because Springboards did not
   present evidence germane to the relevant class of consumers. “One decisive
   fact” sounds the death knell of Springboards’ case: “[S]ophisticated school-
   district customers can tell the difference between goods Springboards is
   selling them and goods and slogans [Mission] is not.” Pharr-San Juan-
   Alamo, 33 F.4th at 751.
                                               III.
           For the reasons provided here and in our prior cases, the district court
   did not err either in concluding that Mission is not entitled to immunity from
   suit or in granting Mission’s motion for summary judgment on the merits.
                                                                               AFFIRMED.

           _____________________
           retail outlets and purchasers, (5) the identity of the advertising media used,
           (6) the defendant’s intent, (7) any evidence of actual confusion . . . [and]
           (8) the degree of care exercised by potential purchasers.
   Streamline Prod. Sys., Inc. v. Streamline Mfg., Inc., 851 F.3d 440, 453 (5th Cir. 2017)
   (citation omitted).

                                                  6