Homelight, Inc. v. Shkipin

Background

Homelight, Inc. sued HomeOpenly, Inc. and Dmitry Shkipin under federal trademark and false-advertising laws. Homelight alleged that defendants’ website published reviews and articles accusing Homelight of illegal price fixing, violations of state and federal laws, defrauding or misleading the public, and harming consumers. Homelight also alleged that HomeOpenly used Homelight’s registered logo and adopted a logo confusingly similar to Homelight’s logo.

Shkipin, representing himself, filed one motion seeking dismissal of the entire complaint and another seeking dismissal of HomeOpenly alone. He argued that Homelight had not stated valid claims, lacked statutory standing to bring the trademark and false-advertising claims, and had failed to join approximately 28,000 partner agents as required parties. He also argued that HomeOpenly was dissolved and that the reviews were protected by the First Amendment.

Requests for Judicial Notice

Shkipin asked the court to consider exhibits including website pages and Homelight’s referral agreement. The court declined to take judicial notice because the exhibits contained facts subject to reasonable dispute and did not support Shkipin’s arguments about Homelight’s statutory standing.

Trademark Claims

The court held that Homelight sufficiently alleged trademark infringement based on HomeOpenly’s allegedly confusingly similar logo. The court also rejected Shkipin’s argument that use of Homelight’s logo was protected by nominative fair use. Nominative fair use concerns using another party’s trademark to refer to that party’s goods or services. Based on Homelight’s allegations that defendants used the trademark to refer to defendants’ own goods or services, the court said the traditional fair-use analysis applied instead. The court concluded that Homelight had stated a plausible trademark-infringement claim.

False-Advertising Claim and Commercial Speech

The court held that Homelight adequately alleged an injury to its commercial reputation and sales caused by defendants’ advertising, including an allegation of thousands of dollars in lost business and reputational damage. At the motion-to-dismiss stage, the court accepted the complaint’s allegations as true and did not consider Shkipin’s arguments that the reviews were not false.

The court also rejected Shkipin’s argument that the reviews were noncommercial speech entitled to heightened First Amendment protection. The court found that Homelight plausibly alleged that defendants used the reviews to disparage competitors and direct business to HomeOpenly. Although HomeOpenly was free to users, Shkipin acknowledged that it earned advertising revenue. Taking Homelight’s allegations as true, the court concluded that Homelight plausibly alleged that the reviews were commercial speech covered by the false-advertising law.

Failure to Join Required Parties

The court rejected Shkipin’s argument that HomeLight’s partner agents were required parties. Shkipin did not identify the possible conflicting obligations that would result from proceeding without those agents, and he did not suggest that the agents had claimed an interest in the litigation. The court concluded that he had not met his burden to show that the partner agents were required, so it did not reach the later questions about whether joining them was feasible or whether the case could proceed without them.

Motion to Dismiss HomeOpenly

The court also denied Shkipin’s request to dismiss HomeOpenly under Federal Rule of Civil Procedure 21. The complaint sufficiently alleged misconduct by HomeOpenly that began before its dissolution. The court noted that a dissolved corporation continues to exist for purposes including defending lawsuits. It further held that a corporation may appear in federal court only through licensed counsel. Because Shkipin was not a licensed attorney, he could not move to dismiss on HomeOpenly’s behalf.

Disposition

The court denied Shkipin’s motion to dismiss and motion to dismiss a single party. It vacated the December 13, 2022 hearings for those motions and stated that the order disposed of docket entries 15 and 18. This was a ruling on the sufficiency of the pleadings under Rule 12, not a final decision on whether Homelight would ultimately prove trademark infringement or false advertising.