Unincorporated Associations Have Capacity To Hold, Assert Federal Trademark Rights

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By Anandashankar Mazumdar  

Aug. 12 — A California darts league whose disgruntled ex-member tried to usurp its name and identity had the ability to sue and to assert trademark rights under federal law, the U.S. Court of Appeals for the Ninth Circuit ruled Aug. 11.

Affirming summary judgment by a federal district court, the court affirmed a victory by the darts league after a lengthy dispute over the manner in which the ex-member's name had appeared in league standings.

League Lost Corporate Powers 37 Years Ago

The Southern California Darts Association of Northridge, Calif., was established in the 1960s and claims to be the oldest British-style darts association in the U.S. At some point it had been incorporated, but in 1977, the government of California suspended the entity for failure to pay state franchise tax.

The association has since continued to operate as an unincorporated entity.

Dino M. Zaffina of Los Angeles, a law school graduate, joined the league but in 2010 became embroiled in a dispute over the way his name was being displayed in league standings. The dispute became heated with Zaffina making escalating threats. The league organizers refunded his membership fees.

Zaffina discovered that the league was not incorporated and in 2011 filed his own incorporation papers with the California government for the Southern California Darts Association Inc., the same name originally used by the association.

Zaffina then began bringing complaints against businesses, such as bars and public houses, which hosted association events, for using the Southern California Darts Association name. In 2012, the association sued, alleging infringement under federal and state law.

Judge R. Gary Klausner of the U.S. District Court for the Central District of California entered summary judgment on the federal trademark claim in favor of the association, issuing a permanent injunction against Zaffina.

Zaffina was ordered to change the name of his corporate entity, cancel any fictitious business name registrations, surrender any marketing materials, and awarded $116,000 in attorneys' fees plus costs to the association. Zaffina appealed.

1996 Decision Supports Capacity, Standing

Referring to 15 U.S.C. §1125, which allows for claims under the Lanham Act to protect unregistered trademarks, the appeals court first rejected Zaffina's argument that there was no federal jurisdiction in the matter because the association did not hold a federal trademark registration.

Next, the court rejected Zaffina's argument that because the original corporation's powers had been suspended under California law, that it did not have the capacity to bring a lawsuit.

Under Fed. R. Civ. 17(b)(3)(A), the court said that an unincorporated association “that lacks the capacity to sue under the law of the state in which the court is located ‘may sue or be sued in its common name to enforce a substantive right existing under the United States Constitution or laws.' ” Comm. for Idaho's High Desert, Inc. v. Yost, 92 F.3d 814 (9th Cir. 1996); Sierra Ass'n for Env't v. Federal Energy Regulatory Comm'n, 744 F.2d 661 (9th Cir. 1984).

The court noted that “the district court expressly found” that the association was “an organization formed by the consent of individuals who share a common cause and, therefore, is an unincorporated association.”

Thus, the association had the ability to bring claims under the federal trademark law, the court concluded.

The court also rejected as meritless Zaffina's argument that the association's president, L. David Irete, was the real party in interest and thus the association did not have standing.

Turning to the merits of the association's trademark claims, the court held that, pursuant to Idaho's High Desert, unincorporated associations could bring trademark claims pursuant to the Lanham Act.

The court then rejected several other arguments by Zaffina, including that the association should not be able to assert trademark rights because it had been acting unlawfully, and that it had abandoned any trademark rights it had held.

The court thus affirmed the award of summary judgment.

The court's opinion was authored by Judge Mark L. Wolf and joined by Judges Ronald M. Gould and Kim McLane Wardlaw. Zaffina represented himself. The association was represented by Kawahito Shraga & Westrick LLP, Los Angeles.

To contact the reporter on this story: Anandashankar Mazumdar in Washington at amazumdar@bna.com

To contact the editor responsible for this story: Naresh Sritharan at nsritharan@bna.com

Text is available at http://www.bloomberglaw.com/public/document/SOUTHERN_CALIFORNIA_DARTS_ASSOCIATION_a_California_unincorporated.