Toyota Motor Sales, U.S.A., Inc. v. Allen Interchange LLC

CASE: Toyota Motor Sales, U.S.A., Inc. v. Allen Interchange LLC, No. 22-cv-1681 (KMM/JFD), United States District Court for the District of Minnesota. JUDGE: Katherine Menendez, United States District Judge. DATE: September 30, 2025.

BACKGROUND: Plaintiff Toyota Motor Sales, U.S.A., Inc. ('TMS') is a California corporation headquartered in Texas that serves as the exclusive authorized importer and distributor of Toyota-branded automotive parts in the continental United States, including Alaska. TMS operates under a Toyota Importer Agreement with Toyota Motor Corporation Japan ('TMC Japan'), which grants TMS a non-exclusive license to use the Toyota Marks (registered trademarks owned by TMC Japan) but also grants TMS an exclusive importership. TMS distributes parts to approximately 1,200 authorized Toyota and Lexus dealers and provides a manufacturer's warranty on parts that meet its quality and distribution standards (so-called 'Genuine Toyota Parts').

Defendant Allen Interchange LLC ('Allen') is a Minnesota limited liability company that imports, markets, and sells Toyota-branded parts in the United States without authorization from TMS. TMS alleges Allen's parts are 'gray market' goods — parts intended for sale outside the United States that Allen imports without TMS's authorization — or possibly parts obtained through illegitimate 'black market' channels from unaffiliated middlemen ('jobbers'). TMS alleges Allen's parts differ materially from Genuine Toyota Parts in packaging, labeling, warranty coverage, and supply chain integrity. TMS further alleges that Allen falsely markets its parts as 'manufacturer warranty' covered, 'Toyota Quality Assured,' and 'same as your local dealer,' causing authorized dealers to unknowingly use Allen's parts in warranty repairs and submit those warranty costs to TMS.

TMS's Third Amended Complaint asserted seven counts: (1) trademark infringement under Section 43(a)(1)(A) of the Lanham Act, 15 U.S.C. § 1125(a); (2) false designation of origin and unfair competition under Section 43(a); (3) false advertising under Section 43(a)(1)(B) [not at issue in this motion]; (4) tortious interference with contract under Minnesota common law; (5) unjust enrichment under Minnesota law; (6) violations of the Minnesota Deceptive Trade Practices Act ('MDTPA'), Minn. Stat. § 325D.44; and (7) violations of the Minnesota Unlawful Trade Practices Act ('MUTPA'), Minn. Stat. § 325D.13. Allen moved to dismiss Counts 1, 2, and 4–7, leaving the false advertising claim (Count 3) intact.

RULINGS:

1. STATUTORY STANDING UNDER SECTION 43(a) (Count 1): Allen argued TMS lacks statutory standing — the right to sue under the statute — because it is neither the trademark owner nor an exclusive licensee. Judge Menendez denied dismissal. Under Lexmark International, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014), a plaintiff must allege an injury to a commercial interest in reputation or sales. The court found TMS's allegations of its role as exclusive importer and U.S. distributor, combined with its license to use the Toyota Marks and its investment in quality control, plausibly allege such a commercial interest. The court further noted that TMS explicitly alleges it has been the exclusive authorized importer since 1957, which is confirmed by the Importer Agreement. The court declined to hold that exclusivity in all respects is a prerequisite to statutory standing, and noted that Allen cited no controlling precedent requiring it.

2. REGISTERED vs. UNREGISTERED MARKS (Count 1): Allen argued Section 43(a) applies only to unregistered trademarks, and because the Toyota Marks are federally registered (by TMC Japan), TMS's claim must proceed, if at all, under Section 32(1) of the Lanham Act (15 U.S.C. § 1114(1)), which allows only the 'registrant' to sue. Judge Menendez rejected this argument. She found that Section 43(a)'s text — 'any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin' — does not exclude registered marks. She noted that Allen cited no controlling authority establishing that Section 43(a) is limited to unregistered marks, and pointed to cases within this District and elsewhere that have evaluated Section 43(a) claims involving registered marks.

3. FALSE DESIGNATION OF ORIGIN / UNFAIR COMPETITION (Count 2): Allen argued Count 2 is merely duplicative of Count 1 and should be dismissed. Judge Menendez denied dismissal. She distinguished the case Allen relied upon (Parks LLC v. Tyson Foods, Inc., 3d Cir. 2017), which concerned a plaintiff improperly framing a false association claim as a false advertising claim to avoid a higher evidentiary burden. Here, there is no indication TMS is attempting such a maneuver. The court held that any issue of true duplication between Counts 1 and 2 can be addressed at summary judgment or trial.

4. LIMITATION OF LANHAM ACT CLAIMS / JUDICIAL ADMISSION: Allen argued that TMS's 'black market' theory of infringement (that Allen obtained parts through unauthorized channels) should be excluded because TMS previously judicially admitted this was purely a gray market case. Judge Menendez denied this request. A judicial admission must be 'deliberate, clear, and unambiguous.' She found TMS's prior answer to Allen's counterclaim — admitting that Allen 'buys Toyota-branded parts injected into the stream of commerce through an initial sale outside the United States' — was not an admission that every Allen part was authorized or that Allen's acquisition was blessed by a Toyota entity. Moreover, TMS's subsequent answer to Allen's Second Amended Counterclaim denied that each part sold by Allen was subject to an authorized first sale, superseding any earlier admission. The court also found the Third Amended Complaint's allegations about Allen's use of unaffiliated middlemen and unsecured supply chains plausibly allege the absence of authorized first sales, sufficient to survive Rule 12(b)(6).

5. TORTIOUS INTERFERENCE WITH CONTRACT (Count 4): Allen argued TMS failed to identify specific dealer contracts it claims Allen induced authorized dealers to breach. Judge Menendez denied dismissal. The complaint adequately identifies the Toyota Dealer Agreements and Lexus Dealer Agreements as the contracts at issue, alleges Allen knew of the prohibition on purchasing gray market parts in those agreements, and alleges Allen nonetheless solicited dealers to purchase from Allen. The court noted that TMS cannot identify specific breaching dealers in its pleading because that information is designated Attorneys' Eyes Only under the applicable protective order. Allen's argument that the dealer agreements may be unenforceable under Minn. Stat. § 80E.07, subd. 1(b) (prohibiting termination of dealer franchises for refusing to accept unordered parts) was rejected: the statute addresses a dealer's right not to be terminated for refusing unordered parts, not the enforceability of a prohibition on purchasing from unauthorized third-party suppliers.

6. UNJUST ENRICHMENT (Count 5): Allen argued TMS's unjust enrichment claim fails for lack of any pre-existing contractual or quasi-contractual relationship between TMS and Allen. Judge Menendez denied dismissal. She acknowledged this claim lacks the hallmarks of a traditional unjust enrichment case (where the plaintiff performs under a failed contract and the defendant retains the benefit). However, citing Moreland v. Kladeck, Inc. (D. Minn. 2022), where an unjust enrichment claim survived dismissal in the context of trademark misuse without a prior contractual relationship, the court found TMS's allegations sufficient. TMS alleges Allen's misuse of Toyota Marks causes customers and authorized dealers to submit warranty claims to TMS for repairs involving Allen's parts, and that Allen fails to make its own warranty accessible to consumers, resulting in TMS shouldering costs that should fall on Allen.

7. MDTPA (Count 6) — Minnesota Residency / Injury: Allen argued that as a non-Minnesota company, TMS cannot bring claims under Minnesota's MDTPA because of the general presumption against extraterritorial application of state laws. Judge Menendez denied dismissal. She distinguished cases where individual out-of-state consumers purchased products in their home states and suffered harm there. Here, TMS's allegations support an inference that Allen makes deceptive sales to authorized dealers and consumers in Minnesota, and that TMS's reputation is harmed there.

8. MDTPA (Count 6) — Irreparable Harm: Because the MDTPA provides only injunctive relief, a plaintiff must allege irreparable harm. Allen argued TMS's complaint lacks such allegations. Judge Menendez disagreed, finding that TMS plausibly alleges irreparable harm to its reputation and business goodwill from consumer confusion about the Toyota Marks in its distribution territory, and a threat of continued future harm.

9. MUTPA (Count 7) — Upstream Distributor: Allen argued TMS is a merchant/distributor rather than a consumer, and therefore cannot bring a claim under the MUTPA per the Eighth Circuit's decisions in Marvin Lumber and Cedar Co. v. PPG Industries, Inc. (8th Cir. 2000 and 2005). Judge Menendez denied dismissal. She acknowledged that merchants cannot bring claims under the MUTPA, but found that TMS more closely resembles the indirect consumer plaintiffs (HMOs) permitted to sue in Group Health Plan, Inc. v. Philip Morris, Inc., 621 N.W.2d 2 (Minn. 2001), than the merchant plaintiff in Marvin. TMS does not purchase Allen's parts; rather, it suffers indirect harm from Allen's misrepresentations to dealers and end consumers.

10. DISCOVERY ORDER OBJECTION: TMS objected to Magistrate Judge John F. Docherty's July 28, 2025 order denying TMS's motion to compel documents showing an authorized first sale of Allen's parts. Judge Docherty had previously limited discovery into Allen's supply chain and declined to expand it pending resolution of the motion to dismiss. Judge Menendez affirmed the magistrate's order under the applicable standard of review (clearly erroneous or contrary to law, 28 U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a)), finding the magistrate's case management approach reasonable. However, she noted that her findings on the motion to dismiss — particularly that TMS is not barred from litigating whether Allen's parts were obtained through authorized channels — may bear on the proper scope of future discovery, and directed that question back to Magistrate Judge Docherty.

DISPOSITION: Allen's Partial Motion to Dismiss the Third Amended Complaint (Dkt. No. 456) is DENIED in its entirety. TMS's objection to the discovery order (Dkt. No. 568) is OVERRULED and the July 28, 2025 discovery order (Dkt. No. 549) is AFFIRMED.