THOMAS N. O'NEILL, Jr.,
Now before me are: plaintiff The Hanover Insurance Company's motion for judgment on the pleadings (Dkt. No. 26), defendant and third-party plaintiff Urban Outfitters's response (Dkt. No. 29), third-party defendant One Beacon America Insurance Company's response (Dkt. No. 30), Hanover's reply brief (Dkt. No. 32), and Urban Outfitters's surreply (Dkt. No. 33). For the following reasons I will grant the motion.
I. The Underlying Action
This suit stems from claims brought in the United States District Court of the District of New Mexico by the Navajo Nation against Urban Outfitters and its wholly-owned and controlled subsidiaries, entities, and retail brands (collectively "Urban Outfitters") for trademark infringement, trademark dilution, unfair competition, false advertising, commercial practices laws violations, and for violation of the Indian Arts and Crafts Act. See Dkt. No. 30 Ex. 1 (Amended Complaint) ¶ 1. The Navajo Nation allege they suffered, inter alia, "advertising injuries arising out of Urban Outfitters's misappropriation of the Navajo Nation's advertising ideas and styles of doing business" that include "advertising injuries and web-site injuries arising out of [Urban Outfitters's] infringement of title by falsely suggesting and misrepresenting that its products are Indian made, when they were not, " advertising injuries arising out of disparagement of the Navajo Nation's products, advertising injuries arising out of [Urban Outfitters's] use of the Navajo Nations' advertising ideas, and advertising injuries and web-site injuries arising out of [Urban Outfitters's] infringing upon the Navajo Nation's identity, culture, and cache associated with being a producer of authentic Indian products. Am. Compl. ¶¶ 115-119. "The amended complaint alleges that the defendants' advertising materials were improper either because (1) they used the "Navajo" or "Navaho" names, or (2) they falsely represented through the use of Indian identifiers, styles, designs, tribal patterns, or motifs that the products advertised were of genuine Indian or Native American origin." Dkt. No. 32 p. 2. Hanover argues that these "common themes constitute the substance of all of the offending publications at issue in the underlying litigation, and provide the factual basis for all of the Navajo Nation's claims against the insureds." Id.
i. Allegations with Respect to the Use of the Navajo Name
The amended complaint alleges that "[s]ince at least March 16, 2009, Urban Outfitters has advertised, promoted, and sold its goods under the Navaho' and Navajo' names and marks. Urban Outfitters offers these goods on the Internet and in stores across the United States, and they compete directly with the Navajo Nation's goods." Am. Compl. at ¶ 2. The amended complaint further asserts that "at least as early as March 16, 2009, Urban Outfitters started using the Navajo' and Navaho' names in its product line, or in connection with the sale of its goods, online, in its catalogs, and in its physical stores." Id. at ¶ 37. "Urban Outfitters's use has included, and includes (but is not limited to): clothing, jewelry, footwear, handbags, caps, scarves, gloves, undergarments, and flasks." Id . "These items sold under the Navajo' and Navaho' names and marks evoke the Navajo Nation's tribal patterns, including geometric prints and designs fashioned to mimic and resemble Navajo Indian-made patterned clothing, jewelry and accessories." Id . The Amended complaint further alleges that Urban Outfitters has sold and is selling over 20 products using the "Navajo" and "Navaho" trademarks in its retail stores, its catalogs and its online stores. Id .; see also, id. at ¶ 41. Plaintiff attaches copies of screenshots from online shopping websites, which are an "illustrative and not exhaustive" list of the more than 20 items comprising the "Navajo Collection" sold at Urban Outfitters, as exhibits to the amended complaint. Id . Plaintiff asserts that Urban Outfitters, however, also sold its goods in physical stores and in catalogs, and "this has also infringed on the Navajo Nation's marks." Id .; see also id. at ¶ 77.
ii. Allegations with Respect to the Use of Indian Identifiers
Plaintiff also alleges that "Urban Outfitters's display and sale of its goods in its stores and on the Internet in manners that falsely suggest they are the product of the Navajo Nation, a Navajo arts and crafts organization, an Indian Tribe, an Indian arts and crafts organization, or an Indian artisan." Id. at ¶ 7. This effectively misrepresents "that such goods are Indian-produced or the product of an Indian Tribe, American Indian arts and crafts organization, or Indian artisan violates the Indian Arts and Crafts Act." Id . Further, "Urban Outfitters' sale of its retail goods under the "Native American, " "Indian, " "Tribal, " or the name of a particular Indian Tribe, such as Navajo, falsely suggests [Urban Outfitters's] products are Indian products of the Navajo Nation, an Indian Tribe, an Indian arts and crafts association, or an Indian artisan, when in-fact [Urban Outfitters's] products are not." Id. at ¶ 76. Additionally, "since March 16, 2009, and possibly earlier as discovery will confirm, and continuously thereafter to the present date, [Urban Outfitters] has advertised, marketed, offered, displayed for sale, and sold goods in manners that falsely suggested they are Indian-made, an Indian product, a product of an Indian Tribe, or the product of an Indian arts and crafts organization... including Indian products... in a traditional Indian style, printed design, or medium." Id. at ¶ 78.
A. The Insurance Policies
One Beacon, third party defendant in this action, issued a "fronting policy" to Urban Outfitters providing both commercial general liability and umbrella liability coverage for a policy period extending from July 7, 2010 to July 7, 2011 for which Hanover is the responsible insurer pursuant to an agreement between those two companies. Dkt. No. 1 ¶ 10. Hanover thereafter issued separate commercial general liability and commercial umbrella policies to Urban Outfitters for the subsequent policy period of July 7, 2011 to July 7, 2012. Id. at ¶ 11. The insurance policies stated that coverage was afforded only for a covered "personal and advertising injury" offense that is committed "during the policy period." Id. at ¶ 13.
"Personal and advertising injury" is defined in both policies as injury arising out of one or more of the following offenses:
Oral or written publication, in any manner, of material... that disparages a person's or organization's goods, products or services. This does not include any disparagement related to the actual or alleged infringement ...