Preview
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K VI h SBN 235367
krfiaiiloiieilérrlrighgney-lawnet) FILED
Katherine J. Odenbreit (SBN 184619) SAN MATEO COUNTY '
k0denbreit@mahoney-law.net '
Morgan E. Glynn (SBN 303822) JUL 2 2 2015
mglynn@mahoney-law.net
. MAHONEY LAW GROUP, APC
249 E. Ocean Boulevard, Suite 814
\OOOQOM-QWNF-n Long Beach, California 90802
Telephone (562) 590-5550
Facsimile (562) 590-8400
Shafiel A. Karim (SBN 291725)
- --
shafiel@skarimlaw.com ’--C|V
~ -- _.. _ . _ _ _,
\ ‘
LAW OFFICE OF SHAFIEL A. KARIM s
11011335271
17777 Center Court Drive, Suite 600 .'
Amended Complaint
126229
ffi/é/Z
Cerritos, California 90703 i
Telephone (562) 653-6850 1
Facsimile (562) 285-9990
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’ ' ' ' " '---
Attorneys for Plaintiff C&M Cafe LLC
LL
SUPERIOR COURT OF CALIFORNIA >=
COUNTY 0F SAN MATEO — SOUTHERN DISTRICT
m
C & M CAFE LLC, a California limited liability Case No.1 CIV 535271
company, on behalf of itself and all others
similarly situated, FIRST AMENDED CLASS ACTION
COMPLAINT
Plaintiff, .
l. Violation of the Racketeer Influenced and
V- Corrupt Organizations Act (18 U.S.C.
_
§§ 1961 et seq.)
KINETIC FARM, INC, a Delaware corporation, 2. Violation of Lanham Act (15 U.S.C.
and DOES 1-10, inclusive,
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§§ 1051 et seq.)
3. Violation of False Advertising Law (Bus.
& Prof. Code §§ 17500 et seq.)
Defendants. 4. Violation of Unfair Competition Law
(Bus. & Prof. Code §§ 17200 et seq.)
Assigned to: Hon. Marie S. Weiner
Complaint Filed: September 2, 2016
Trial Date: Not Yet Set
(Jury Trial Demanded)
FIRST AMENDED CLASS ACTION COMPLAINT
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Plaintiff C & M CAFE LLC files this First Amended Class Action Complaint (“PAC”), onbeh'alf
ofitself and a Class of similarly situated persons and entities, against Defendant KINETIC FARM, INC,
Defendant JAMES BUTTS, Defendant HENRY LEE, Defendant JEFFREY BYUN, Defendant
ROSARIO GARNETT, Defendant ALAN SMALL, Defendant CHRIS TIMM, and Defendants DOES
1-10, inclusive (collectively, “Defendants”). Defendants devised and executed a scheme to confuse the
\OOOQCBMLWNM
public through a pattern of racketeering activity that diverted customers away from Plaintiff and the
Class, resulting in unlawfully obtained profits from usurping restaurant delivery orders away from
Plaintiff and the Class. Defendants constructively own and operate impostor websites that purport to be
and continue to purport to be official websites of Plaintiff and the Class. In turn, Defendants’ conduct
violates the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. §§ I961 et seq), the
Lanham Act (15 U.S.C. §§ 1101 et seq), California’s False Advertising Law (Bus. & Prof. Code
§§ 17500 et seq), and Ca1ifomia’s Unfair Competition Law (Bus. & Prof. Code §§ 17200 et seq.).
PARTIES
l. Plaintiff C & M CAFE LLC (“C&M”) is a limited liability company duly organized and
existing under the laws of the State of California. C&M’s principal place of business is located at 3400
Overland Avenue, Suites 103 and 104, Los Angeles, California 90034.
2. Defendant KTNETIC FARM, INC. (“Kinetic”) is a corporation duly organized and
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existing under the laws of the State of Delaware. Kinetic’s principal place of business is located at 210
Industrial Road, Suite 102, San Carlos, California 94070. Kinetic’s agent for service of process in
California is Mr. Jeffrey Byun located at 1765 East Bayshore Road, Suite 213, Palo Alto, California
94070; its agent for service of process in Delaware is VCorp Services, LLC located at 181 l Silverside
Road, Wilmington, New Castle, Delaware 19810.
3. Upon information and belief, Defendant JAMES BUTT (“Butt”) is an individual resident
of California. Upon further information and belief, Butt is a co-founder, member, and manager of
Kinetic and knew or should have known about the illegal tactics Kinetic used and continues to use to
grow its business injuring Plaintiffand the Class.
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FIRST AMENDED CLASS ACTION COMPLAINT
2
4. Upon information and belief, Defendant HENRY LEE (“Lee”) is an individual resident
of California. Upon further information and belief, Lee is a co-founder, member, and manager of Kinetic
and knew or should have known about the illegal tactics Kinetic used and continues to use to grow its
business injuring Plaintiff and the Class.
5. Upon information and belief, Defendant JEFFREY BYUN (“Byun”) is an individual
OQOOQOMLDJNH
resident of San Francisco County and/or San Mateo County, California. Upon further information and
belief, Byun is a co-founder, member, and manager of Kinetic and knew or should have known about
the illegal tactics Kinetic used and continues to use to grow its business injuring Plaintiff and the Class.
6. Upon information and belief, Defendant ROSARIO GARNETT is an individual resident
of California.
7. Upon information and belief, Defendant ALAN SMALL is an individual resident of
California.
8. Upon information and belief, Defendant CHRIS TIMM is an individual resident of
California.
9. C&M is unaware of the true names and capacities of all defendants in this action. C&M
sues those unknown persons under the fictitious names DOES 1-10, inclusive. C&M will amend this
Complaint with their true names and capacities once their identities have been ascertained.
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JURISDICTION AND VENUE
10. As a court of general jurisdiction, this Court has subject matter jurisdiction over this
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action. in particular, this Court has originaljurisdiction over this action under Article VI, Section 10 of
the California Constitution exercisable under Section 410.10 of the Code of Civil Procedure.
ll. This Court has personal jurisdiction over Defendants. Defendants regularly and
systematically conduct business in thisjudicial district. The alleged business practices described in the
Complaint occurred in this judicial district. Defendants have sufficient minimum contacts with this
judicial district through their use of the Internet, an instrumentality of interstate commerce.
Accordingly, this Court’s exercise of personaljurisdiction comports with traditional notions offair play
and substantial justice.
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FIRST AMENDED CLASS ACTION COMPLAINT
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12. Venue is proper in this Court because Defendant resides in this County and a substantial
part of the events, frauds, and patterrli of racketeering activities giving rise to this action occurred in the
County of San Mateo. Defendants’ principal place of business is located in thisjudicial district. The
venue requirements of Section 395 5|
of the Code of Civil Procedure are satisfied.
\OOO\lO\LlI-J>Lfil\)-—
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STATEMENT 0F FACTS
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l3. C&M is a fast casual rlestaurant with locations in West Los Angeles and the San Fernando
Valley. C&M is known for its gourrr'iet menu items, eclectic menu item names (e.g., “B.A.M” which is
an acronym for “Bada** Motherfipker”) and fun and playful atmosphere epitomized by its cartoon
chicken and monkey logo:
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l4. C&M actively advertises its food and restaurant through its official website located at
www.cmcafela.com (“Official Site”i) and social media. Although food quality is unquestionably the
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biggest draw for customers, like mdst small restaurants, C&M’s success is also rooted in its customer
intimaCy business philosophy. C&lV'lIl’s staffis trained to attempt to establish a personal connection with
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its customers in furtherance of that business philosophy.
15. As part of its customelr intimacy business phi1050phy, C&M also delivers its food directly
to customers. C&M accepts delivery orders on the Official Site and by telephone. C&M charges
customers an additional $3.00 for deliveries within a three-mile radius of its restaurants. C&M
employees personally deliver these orders.
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FIRST AMENDED CLASS ACTlON COMPLAINT
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BLDG PHI 55-5 SOCIAL CCH MCI
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16. On or around April 22, 2015, C&M learned of the existence of www.candmcafe.com
(“Impostor Site”). Defendants falsely held out the Impostor Site as an official website of C&M. The‘
Impostor Site shared an alliteratively similar domain name-cf “candmcafecom” and “cmcafelacom”
and C &M Cafc-—and displayed C&M’s trademarks, service marks, and copyrights. The Impostor
Site’s sole purpose was to (l) confuse C&M’s existing and prospective customers into believing it was
an official website, (2) divert those existing and prospective customers away from the Official Site,
(3) fraudulently acquire more users for Defendant KINETIC FARM, INC.’s OrderAhead smart phone
application (“OrderAhead App”), and (4) profit from usurping a delivery sale from C&M by charging a
different inflated price for its menu items.
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FIRST AMENDED CLASS ACTION COMPLAINT
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17. The above screenshot of the Impostor Site is an altered version that prominently
displayed the name “C&M Cafe” and accurately listed C&M’s address.l The sandwich displayed on:
that webpage is C&M’s popular “Lil’ Stacker," and was retrieved from a Yelp review authored by a
C&M customer.2 Although the Impostor Site included a near verbatim reproduction of the C&M menu,
it offered to sell C&M’s menu at different and inflated prices, making those statements literally false.
l8. The Impostor Site differed in color palette and design to be sure, but it was so
professional in appearance that a reasonable existing or prospective C&M customer could have and
would have believe that it was official or had the imprimatur of C&M. More important, the Impostor
Site was accessible at the confusingly similar www.candmcafe.com domain name.
'
The street address listed shows C&M’s previous address. Following a series of scathing articles
describing the fraudulent character of the OrderAhead App, Kinetic altered many of the Impostor Sites to look
less like the underlying official websites. Todd Bishop, “Rogue OrderAhead websites altered to look less like
official restaurant sites,” GeekWire (May l4, 2015) available at http://www.geekwire.com/20lS/rogue-
orderahead-websites-altered-to-look-less-like-oflicial-restaurant-sites/ (last visited Jan. 30, 20l 6).
2 Lil’
Stacker, available at http://www.yelp.com/biz_photos/c-and-m-oafe-los-
angeles#pKzPa74d02yM268TOr3Q (last visited May, l 1,2015). ~
FIRST AMENDED CLASS ACTION COMPLAINT
6
l9. Like the Official Site, the lmpostor Site was also available in a mobile version:
‘OOOOATBIT '6‘ 5227 PM 1 $ 47961:)’ 06060 ATM’ 3‘ 5125951 1 1'5 4696c“
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Don't Lot Your Moat Lost $12-60
Organic rosemary sourdough, turkey (elrgfllpgflj n, viii-ma‘, REM] um‘ FIN-1 gllllIIlu.
meatloaf‘ Havani choose‘ rod onion‘ house
pickles. and arugula Brion QIOIL
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Sorry About It 812.60
Open lHiU AM ~
5:00 PM
Organic gmsséed beet burger melt‘ First Salivary incl
sourdough‘ provolone, ponobollo
mushrooms avocado red onion. and ; UELIVERYINFO
jalapenos pesto uioli.
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time: ‘item m w no! am w we: ozl-s',
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LU m {j rm pm. ll currently closed.
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Official Site (Mobile) lmpostor Site (Mobile) OrderAhead App
The mobile lmpostor Site displayed C&Mis trademarks, service marks, and copyrights vis-a~vis the
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logo and menu item names. The mobile lmpostor Site was so professional in appearance that a
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. reasonable existing or prospective customer could have and would have believed that it was official or
had the imprimatur of C&M. More important, the mobile lmpostor Site was accessible at the
confusingly similar www.candmcafe.com domain name.
l4. Similarly, the OrderAhead App displays C&M’s trademarks, service marks, and copyrights
vis-a-vis the logo and menu item names. The OrderAhead App falsely claims that the “First Delivery
[is] free!” because C&M charges at least $3.00 for all deliveries. The OrderAhead App is so professional
in appearance that a reasonable current or prospective C&M customer could and would believe that it
is official or has the imprimatur of C&M, especially because the OrderAhead App is accessible from
the confusingly similar www.candmcafe.com domain name.
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FIRST AMENDED CLASS ACTION COMPLAINT
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15. On April 27, 2015, C&M’s counsel sent a cease and desist letter to Defendant ROSARIO
GARNETT (“Garnett”); the domain registrant of the lmpostor Site, by First Class Mail. See Exhibit A.
C&M’s counsel was unable to confirm receipt of the electronic mail and the hardcopy was returned;
because Garnett’s address listed on the domain registration did not exist. See Exhibit B. Registering a
domain name with a fake address is a violation of the domain registration policies of the Internet
‘OOOQOUILUJNF
Corporation for Assigned Names and Numbers (“ICANN”).3
l6. On May 6, 2015, C&M learned of an article published by GeekWire reaffirming
Garnett’s connection with Kinetic.4 Apparently, Garnett not only owns the Impostor Site but also owns
“hundreds of domains” with names that are confusingly similar to other restaurants comprising the
_-
O Class. See Exhibit C. GeekWire also confirmed that Gamett’s address listed on the domain registration
_- '—-
statements for each of the domains did not exist.
.- N l7. In fact, it turns out that Gamett was not the only domain registrant working t0 divert
_-
LN website traffic away from the Class’ websites and to the Kinetic’s impostor sites. Upon information and
- J} belief, Kinetic also relied on Defendant CI-IRIS TIMM and Defendant ALAN SMALL to register
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multiple domain names that shared a confusingly similar name with that of an existing restaurant.5 And
-- like Garnett, the contact information listed on the domain registration statements was false in violation
_- \1
of ICANN policy.
¢—
00 l8. According to GeekWire, Kinetic failed to respond to an inquiry by the Washington State
—-
\O Attorney General following complaints of “hijacking” a Seattle restaurant’s “online identity and
[\J O diverting customers away from the rcstaurant’s real website.”6 GeekWire further described Kinetic’s
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3
About WHOIS, ICANN, available at http://whois.icann.org/en/about-whois (last visited Jul.
N U) 9, 2016).
4
See Rogue restaurants sites raise questions about Y Combinator-backed OrderAhead delivery
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service, available at http://www.geekwire.com/2O I 5/rogue-rcstaurant-sites-raise-questions-about-
M U!
orderahead-the-y-combinator-backed-delivery-service/ (last visited May 6, 2015).
5
See Thousands of Rogue Restaurant Websites Diverting Customers to OrderAhead, available
N O\ at http://www. geekwire.com/201 S/exclusive-thousands-of-rogue-restaurant-websites-diverting-
customers-to-orderahead-deliveries/ (last visited May 7, 2015).
[\J \1 6
OrderAhead ignores state Attorney General’s inquiry into restaurants allegations of online
[\J 00 hijacking available at http://www.geekwire.com/20l5/orderahead-ignores-statc-attorney-generals-
inquiry-into-allegations-of-online-hijacking/ (last visited Jan. 31, 2016).
FIRST AMENDED CLASS ACTION COMPLAINT
8
misleading and deceptive practice of constructively owning and actually Operating impostor websites
that purport to be the official websites of the Class (collectively, f‘unofticial sites”) as follows:
Frequently, the unofficial sites outrank the official restaurant sites in search results, using
savvy SEO techniques. In some cases, for example, the sites have been connected to the
Google Local listings for the restaurants, ensuring that the OrderAhead sites are featured
©OO\IO\MJ>WN~—-
more prominently in search results They leverage multiple hosting providers but are
all powered by a common infrastructure, pulling CSS, JavaScript and images from the
same Amazon Web Services Cloudfront instance.7
l9. According to Bruce Michaux of Wild Ginger, a Seattle restaurant, “I have not heard of
[Kinetic 0r the OrderAhead App] and we have no association with them whatsoever I would hate
for anybody to be co-opting our name [without customers knowing]. That’s most upsetting.”8 Emily
Yaw, a corporate accountant at Me1’s Market in Seattle described the unofficial sites as “super shady”
and added that she “had no idea this website even existed.”9
20. Similarly, Nikos Gyros, another Seattle restaurant, does not have a website and does not
offer delivery to its customers. However, Garnett is the registered owner of www.nikosgyros.net, an
impostor site that purports to be the official website of Nikos Gyros, and directs users to order from
Nikos Gyros online through Kinetie’s OrderAhead App. Alex Serpanos, owner of Nikos Gyros
explained: “[the unofficial site] has our family history, photos of the restaurant, a menu, but not with
our pricing We have no agreement with [Kinetic] [but] [t]hey were delivering our food I feel
violated [The unofficial site] looks like ours. It smells like ours. It reads like ours, but it’s not
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ours.”lo Serpanos continues, “It misdirects the customer. They think [the unofficial site is] actually our
restaurant. [Customers] would call the number, place an order, then [OrderAhead] would deliver our
food to the customer without our knowledge or permission. [Kinetic is] misrepresenti[ng] Nikos
Gyros.”ll
21. Indeed, once a customer places an order on the OrderAhead App, a Kinetic driver goes
to the restaurant and personally places that customer’s order. Both the customer and the restaurant are
7
Id.
8
Id.
9
Id.
1°
Delivery Company Hijacks Nikos Gyros, available at
http://wwwmagnoliavoice.com/20 l5/04/29/delivery-eompany-hijacks-nikos-gyros/ (last visited May
12, 2015).
ll 1d
FIRST AMENDED CLASS ACTION COMPLAINT
9
,_.
completely unaware of the fact that (l) Kinetic, the impostor site, and the OrderAhead App are not
affiliated with the restaurant, (2) the prices charged by Kinetic on the OrderAhead App are higher than
the rcstaurant’s actual menu prices, and (3) the Kinetic driver is also not affiliated with the restaurant.
As far as the customer is concerned, the restaurant made the delivery; and as far as the restaurant is
concerned, the Kinetic driver was the end-customer.
\DOOQQUI-PUJM
22. C&M is informed and believes that Kinetie’s drivers frequently botch customers’
orders.I2
23. Below is a table comparing C&M’s actual prices with Kinetic’s prices on the OrderAhead
App:
C&M Café’s Impostor Site/ Difference
Menu Item Name Actual Price OrderAM {Dollars and
mg Percent)
Plain Jane $7.95 $9.15 $1.20 or 15%
We Bought The Farm $10.25 $11.80 $1.55 or 15%
When 1n Rome $10.25 $11.80 $1.55 or 15%
Mmmmmmmm. . ..Motor Market $9.95 $10.30 $0.35 or 4%
Marvel
Grilled Cheese Heaven $8.95 $10.30 $1.35 or 15%
Fabulous Disaster $10.25 $11.80 $1 .55 or 15%
What Should Have Been $10.95 $12.60 $1.65 or 15%
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Mantastic $10.95 $12.60 $1.65 or 15%
P.B.R. (Pork Belly Rules!) $11.25 $12.95 $1.70 or 15%
Blonde Bomb $10.25 $11.80 $1.55 or 15%
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Many Thanks $10.25 $11.80 $1.55 or 15%
The Better B.L.T. $10.25 $11.80 $1.55 or 15%
86’ED $10.95 $12.60 $l.65 or 15%
Knock-Out Punch $3.00 $4.60 $1.60 or 53%
D0n’t Let Your Meat Loaf $10.95 $12.60 $1.65 or 15%
Sorry About It $10.95 $12.60 $1.65 or 15%
Here’s the Beef $10.95 $12.60 $1.65 or 15%
24. Silicon Valley has long had a penchant for disrupting incumbent businesses and
industries with innovative technologies. While the marketplace welcomes ethical innovation, unethical
‘2
C&Mis informed and believes that several of its orders that were later determined to have
originated from the OrderAhead App were incorrectly ordered by Kinetic’s drivers, and subsequently
C&M’s end-customers received the wrong order from Kinetic thinking that C&M was responsible for
the snafu instead of Kinetic, the real culprit.
FlRST AMENDED CLASS ACTION COMPLA 1NT
10
business practices guised as innovations are neither disruptive nor welcomed. Although it is legal to
buy something for one dollar and sell it for two, it is not legal to buy something for one dollar and falsely
advertise that thing in an effort to sell it for two.
25. Kinetic’s use ofthe Impostor Site and unofficial sites was not and is not innovative or
mfiosm-b'wN—-
disruptive. Instead, Kinetic’s constructive ownership and actual operation of the Impostor Site and
unofficial sites are plain illegal and represent a pattern of racketeering activity because the tactic aims
to confuse the public, divert customers away, and profit from usurping delivery sales of restaurants.
Such business tactics are clearly illegal and do not embody any of the innovative entrepreneurial spirit
of Silicon Valley 0r its legends such as David Packard and Steve Jobs.
26. The Racketeer Influenced Corrupt Organizations Act (18 U.S.C. §§ 1961 et
seq.)(“RICO”) states:
It shall be unlawful for any person employed by or associated with any enterprise
engaged in, or the activities of which affect, interstate or foreign commerce, to conduct
or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a
pattern of racketeering activity or collection of unlawful debt.
18 U.S.C. § 1962(c). The phrase “racketeering activity” includes “frauds and swindles” as defined in
18 U.S.C. § 1341, “wire fraud”as defined in l8 U.S.C. § 1343, the use of“any facility in interstate
commerce” including the Internet for “any unlawful activity” as defined by l8 U.S.C § 1952, and
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“traffics in goods or services and knowingly uses a counterfeit mark on or in connection with such goods
or services” as defined by 18 U.S.C. § 2320. See 18 U.S.C. § 1961(1). A “pattern of racketeering
OO\JO\LIIJ>~L'JN—*O\OOO\IONKJIQDJN~
Preview
i ' K VI h SBN 235367 krfiaiiloiieilérrlrighgney-lawnet) FILED Katherine J. Odenbreit (SBN 184619) SAN MATEO COUNTY ' k0denbreit@mahoney-law.net ' Morgan E. Glynn (SBN 303822) JUL 2 2 2015 mglynn@mahoney-law.net . MAHONEY LAW GROUP, APC 249 E. Ocean Boulevard, Suite 814 \OOOQOM-QWNF-n Long Beach, California 90802 Telephone (562) 590-5550 Facsimile (562) 590-8400 Shafiel A. Karim (SBN 291725) - -- shafiel@skarimlaw.com ’--C|V ~ -- _.. _ . _ _ _, \ ‘ LAW OFFICE OF SHAFIEL A. KARIM s 11011335271 17777 Center Court Drive, Suite 600 .' Amended Complaint 126229 ffi/é/Z Cerritos, California 90703 i Telephone (562) 653-6850 1 Facsimile (562) 285-9990 é . ‘iii/Ml”, H ’ ' ' ' " '--- Attorneys for Plaintiff C&M Cafe LLC LL SUPERIOR COURT OF CALIFORNIA >= COUNTY 0F SAN MATEO — SOUTHERN DISTRICT m C & M CAFE LLC, a California limited liability Case No.1 CIV 535271 company, on behalf of itself and all others similarly situated, FIRST AMENDED CLASS ACTION COMPLAINT Plaintiff, . l. Violation of the Racketeer Influenced and V- Corrupt Organizations Act (18 U.S.C. _ §§ 1961 et seq.) KINETIC FARM, INC, a Delaware corporation, 2. Violation of Lanham Act (15 U.S.C. and DOES 1-10, inclusive, OOQOt-awM—-O\OOO\IONUIJ>LRN~O §§ 1051 et seq.) 3. Violation of False Advertising Law (Bus. & Prof. Code §§ 17500 et seq.) Defendants. 4. Violation of Unfair Competition Law (Bus. & Prof. Code §§ 17200 et seq.) Assigned to: Hon. Marie S. Weiner Complaint Filed: September 2, 2016 Trial Date: Not Yet Set (Jury Trial Demanded) FIRST AMENDED CLASS ACTION COMPLAINT l W' Plaintiff C & M CAFE LLC files this First Amended Class Action Complaint (“PAC”), onbeh'alf ofitself and a Class of similarly situated persons and entities, against Defendant KINETIC FARM, INC, Defendant JAMES BUTTS, Defendant HENRY LEE, Defendant JEFFREY BYUN, Defendant ROSARIO GARNETT, Defendant ALAN SMALL, Defendant CHRIS TIMM, and Defendants DOES 1-10, inclusive (collectively, “Defendants”). Defendants devised and executed a scheme to confuse the \OOOQCBMLWNM public through a pattern of racketeering activity that diverted customers away from Plaintiff and the Class, resulting in unlawfully obtained profits from usurping restaurant delivery orders away from Plaintiff and the Class. Defendants constructively own and operate impostor websites that purport to be and continue to purport to be official websites of Plaintiff and the Class. In turn, Defendants’ conduct violates the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. §§ I961 et seq), the Lanham Act (15 U.S.C. §§ 1101 et seq), California’s False Advertising Law (Bus. & Prof. Code §§ 17500 et seq), and Ca1ifomia’s Unfair Competition Law (Bus. & Prof. Code §§ 17200 et seq.). PARTIES l. Plaintiff C & M CAFE LLC (“C&M”) is a limited liability company duly organized and existing under the laws of the State of California. C&M’s principal place of business is located at 3400 Overland Avenue, Suites 103 and 104, Los Angeles, California 90034. 2. Defendant KTNETIC FARM, INC. (“Kinetic”) is a corporation duly organized and OOQQMQWN~O\OOO\IC\UNJ>UJN~O existing under the laws of the State of Delaware. Kinetic’s principal place of business is located at 210 Industrial Road, Suite 102, San Carlos, California 94070. Kinetic’s agent for service of process in California is Mr. Jeffrey Byun located at 1765 East Bayshore Road, Suite 213, Palo Alto, California 94070; its agent for service of process in Delaware is VCorp Services, LLC located at 181 l Silverside Road, Wilmington, New Castle, Delaware 19810. 3. Upon information and belief, Defendant JAMES BUTT (“Butt”) is an individual resident of California. Upon further information and belief, Butt is a co-founder, member, and manager of Kinetic and knew or should have known about the illegal tactics Kinetic used and continues to use to grow its business injuring Plaintiffand the Class. /// FIRST AMENDED CLASS ACTION COMPLAINT 2 4. Upon information and belief, Defendant HENRY LEE (“Lee”) is an individual resident of California. Upon further information and belief, Lee is a co-founder, member, and manager of Kinetic and knew or should have known about the illegal tactics Kinetic used and continues to use to grow its business injuring Plaintiff and the Class. 5. Upon information and belief, Defendant JEFFREY BYUN (“Byun”) is an individual OQOOQOMLDJNH resident of San Francisco County and/or San Mateo County, California. Upon further information and belief, Byun is a co-founder, member, and manager of Kinetic and knew or should have known about the illegal tactics Kinetic used and continues to use to grow its business injuring Plaintiff and the Class. 6. Upon information and belief, Defendant ROSARIO GARNETT is an individual resident of California. 7. Upon information and belief, Defendant ALAN SMALL is an individual resident of California. 8. Upon information and belief, Defendant CHRIS TIMM is an individual resident of California. 9. C&M is unaware of the true names and capacities of all defendants in this action. C&M sues those unknown persons under the fictitious names DOES 1-10, inclusive. C&M will amend this Complaint with their true names and capacities once their identities have been ascertained. NNNNNNNNN-~_—_F-t_t__ JURISDICTION AND VENUE 10. As a court of general jurisdiction, this Court has subject matter jurisdiction over this OOQQMLMNWO©OOQO-M$WN~ action. in particular, this Court has originaljurisdiction over this action under Article VI, Section 10 of the California Constitution exercisable under Section 410.10 of the Code of Civil Procedure. ll. This Court has personal jurisdiction over Defendants. Defendants regularly and systematically conduct business in thisjudicial district. The alleged business practices described in the Complaint occurred in this judicial district. Defendants have sufficient minimum contacts with this judicial district through their use of the Internet, an instrumentality of interstate commerce. Accordingly, this Court’s exercise of personaljurisdiction comports with traditional notions offair play and substantial justice. /// FIRST AMENDED CLASS ACTION COMPLAINT 3 l i l l 12. Venue is proper in this Court because Defendant resides in this County and a substantial part of the events, frauds, and patterrli of racketeering activities giving rise to this action occurred in the County of San Mateo. Defendants’ principal place of business is located in thisjudicial district. The venue requirements of Section 395 5| of the Code of Civil Procedure are satisfied. \OOO\lO\LlI-J>Lfil\)-— l STATEMENT 0F FACTS ' l3. C&M is a fast casual rlestaurant with locations in West Los Angeles and the San Fernando Valley. C&M is known for its gourrr'iet menu items, eclectic menu item names (e.g., “B.A.M” which is an acronym for “Bada** Motherfipker”) and fun and playful atmosphere epitomized by its cartoon chicken and monkey logo: \ l i l l l4. C&M actively advertises its food and restaurant through its official website located at www.cmcafela.com (“Official Site”i) and social media. Although food quality is unquestionably the NNNNNNNNFdrdP-l—b—‘i—fi—li—ll-lr—l biggest draw for customers, like mdst small restaurants, C&M’s success is also rooted in its customer intimaCy business philosophy. C&lV'lIl’s staffis trained to attempt to establish a personal connection with ggfiQ'JI-PUJNP-‘O9OOQONLIIQWNI-‘o its customers in furtherance of that business philosophy. 15. As part of its customelr intimacy business phi1050phy, C&M also delivers its food directly to customers. C&M accepts delivery orders on the Official Site and by telephone. C&M charges customers an additional $3.00 for deliveries within a three-mile radius of its restaurants. C&M employees personally deliver these orders. // / /// l /// l /// l /// l FIRST AMENDED CLASS ACTlON COMPLAINT 4 i l ,_ BLDG PHI 55-5 SOCIAL CCH MCI OOOOQQKII-IAWN 16. On or around April 22, 2015, C&M learned of the existence of www.candmcafe.com (“Impostor Site”). Defendants falsely held out the Impostor Site as an official website of C&M. The‘ Impostor Site shared an alliteratively similar domain name-cf “candmcafecom” and “cmcafelacom” and C &M Cafc-—and displayed C&M’s trademarks, service marks, and copyrights. The Impostor Site’s sole purpose was to (l) confuse C&M’s existing and prospective customers into believing it was an official website, (2) divert those existing and prospective customers away from the Official Site, (3) fraudulently acquire more users for Defendant KINETIC FARM, INC.’s OrderAhead smart phone application (“OrderAhead App”), and (4) profit from usurping a delivery sale from C&M by charging a different inflated price for its menu items. /// /// /// // / // / /// FIRST AMENDED CLASS ACTION COMPLAINT 5 ._¢ OROOOQQUI-D'UJN ' -. .--.-ef’??‘=""‘i ~-;,-.-;>-_;.“ ‘ "22*;7-‘_:,,_t..,. ', '_ ~;,-.~,::r ., v 17. The above screenshot of the Impostor Site is an altered version that prominently displayed the name “C&M Cafe” and accurately listed C&M’s address.l The sandwich displayed on: that webpage is C&M’s popular “Lil’ Stacker," and was retrieved from a Yelp review authored by a C&M customer.2 Although the Impostor Site included a near verbatim reproduction of the C&M menu, it offered to sell C&M’s menu at different and inflated prices, making those statements literally false. l8. The Impostor Site differed in color palette and design to be sure, but it was so professional in appearance that a reasonable existing or prospective C&M customer could have and would have believe that it was official or had the imprimatur of C&M. More important, the Impostor Site was accessible at the confusingly similar www.candmcafe.com domain name. ' The street address listed shows C&M’s previous address. Following a series of scathing articles describing the fraudulent character of the OrderAhead App, Kinetic altered many of the Impostor Sites to look less like the underlying official websites. Todd Bishop, “Rogue OrderAhead websites altered to look less like official restaurant sites,” GeekWire (May l4, 2015) available at http://www.geekwire.com/20lS/rogue- orderahead-websites-altered-to-look-less-like-oflicial-restaurant-sites/ (last visited Jan. 30, 20l 6). 2 Lil’ Stacker, available at http://www.yelp.com/biz_photos/c-and-m-oafe-los- angeles#pKzPa74d02yM268TOr3Q (last visited May, l 1,2015). ~ FIRST AMENDED CLASS ACTION COMPLAINT 6 l9. Like the Official Site, the lmpostor Site was also available in a mobile version: ‘OOOOATBIT '6‘ 5227 PM 1 $ 47961:)’ 06060 ATM’ 3‘ 5125951 1 1'5 4696c“ awe-9w:m» I .Y‘9e11dm°afs-s°imv¢ town - {Slull Up \OOOQOXUI-hwmfi Don't Lot Your Moat Lost $12-60 Organic rosemary sourdough, turkey (elrgfllpgflj n, viii-ma‘, REM] um‘ FIN-1 gllllIIlu. meatloaf‘ Havani choose‘ rod onion‘ house pickles. and arugula Brion QIOIL G Delivery Sorry About It 812.60 Open lHiU AM ~ 5:00 PM Organic gmsséed beet burger melt‘ First Salivary incl sourdough‘ provolone, ponobollo mushrooms avocado red onion. and ; UELIVERYINFO jalapenos pesto uioli. Q Add ‘ Dollvory Address time: ‘item m w no! am w we: ozl-s', ) ' Ham's the Beef $1130 g‘ I» -~ ' _ ‘MENU < j, {I} m (j < j, LU m {j rm pm. ll currently closed. I Official Site (Mobile) lmpostor Site (Mobile) OrderAhead App The mobile lmpostor Site displayed C&Mis trademarks, service marks, and copyrights vis-a~vis the NNNNNNNI————|—*>—~|—p-p— logo and menu item names. The mobile lmpostor Site was so professional in appearance that a agamgwwflo©°ofiawN~o . reasonable existing or prospective customer could have and would have believed that it was official or had the imprimatur of C&M. More important, the mobile lmpostor Site was accessible at the confusingly similar www.candmcafe.com domain name. l4. Similarly, the OrderAhead App displays C&M’s trademarks, service marks, and copyrights vis-a-vis the logo and menu item names. The OrderAhead App falsely claims that the “First Delivery [is] free!” because C&M charges at least $3.00 for all deliveries. The OrderAhead App is so professional in appearance that a reasonable current or prospective C&M customer could and would believe that it is official or has the imprimatur of C&M, especially because the OrderAhead App is accessible from the confusingly similar www.candmcafe.com domain name. /// FIRST AMENDED CLASS ACTION COMPLAINT 7 15. On April 27, 2015, C&M’s counsel sent a cease and desist letter to Defendant ROSARIO GARNETT (“Garnett”); the domain registrant of the lmpostor Site, by First Class Mail. See Exhibit A. C&M’s counsel was unable to confirm receipt of the electronic mail and the hardcopy was returned; because Garnett’s address listed on the domain registration did not exist. See Exhibit B. Registering a domain name with a fake address is a violation of the domain registration policies of the Internet ‘OOOQOUILUJNF Corporation for Assigned Names and Numbers (“ICANN”).3 l6. On May 6, 2015, C&M learned of an article published by GeekWire reaffirming Garnett’s connection with Kinetic.4 Apparently, Garnett not only owns the Impostor Site but also owns “hundreds of domains” with names that are confusingly similar to other restaurants comprising the _- O Class. See Exhibit C. GeekWire also confirmed that Gamett’s address listed on the domain registration _- '—- statements for each of the domains did not exist. .- N l7. In fact, it turns out that Gamett was not the only domain registrant working t0 divert _- LN website traffic away from the Class’ websites and to the Kinetic’s impostor sites. Upon information and - J} belief, Kinetic also relied on Defendant CI-IRIS TIMM and Defendant ALAN SMALL to register t- kll multiple domain names that shared a confusingly similar name with that of an existing restaurant.5 And -- like Garnett, the contact information listed on the domain registration statements was false in violation _- \1 of ICANN policy. ¢— 00 l8. According to GeekWire, Kinetic failed to respond to an inquiry by the Washington State —- \O Attorney General following complaints of “hijacking” a Seattle restaurant’s “online identity and [\J O diverting customers away from the rcstaurant’s real website.”6 GeekWire further described Kinetic’s [\J —- N [\J 3 About WHOIS, ICANN, available at http://whois.icann.org/en/about-whois (last visited Jul. N U) 9, 2016). 4 See Rogue restaurants sites raise questions about Y Combinator-backed OrderAhead delivery [\J -P service, available at http://www.geekwire.com/2O I 5/rogue-rcstaurant-sites-raise-questions-about- M U! orderahead-the-y-combinator-backed-delivery-service/ (last visited May 6, 2015). 5 See Thousands of Rogue Restaurant Websites Diverting Customers to OrderAhead, available N O\ at http://www. geekwire.com/201 S/exclusive-thousands-of-rogue-restaurant-websites-diverting- customers-to-orderahead-deliveries/ (last visited May 7, 2015). [\J \1 6 OrderAhead ignores state Attorney General’s inquiry into restaurants allegations of online [\J 00 hijacking available at http://www.geekwire.com/20l5/orderahead-ignores-statc-attorney-generals- inquiry-into-allegations-of-online-hijacking/ (last visited Jan. 31, 2016). FIRST AMENDED CLASS ACTION COMPLAINT 8 misleading and deceptive practice of constructively owning and actually Operating impostor websites that purport to be the official websites of the Class (collectively, f‘unofticial sites”) as follows: Frequently, the unofficial sites outrank the official restaurant sites in search results, using savvy SEO techniques. In some cases, for example, the sites have been connected to the Google Local listings for the restaurants, ensuring that the OrderAhead sites are featured ©OO\IO\MJ>WN~—- more prominently in search results They leverage multiple hosting providers but are all powered by a common infrastructure, pulling CSS, JavaScript and images from the same Amazon Web Services Cloudfront instance.7 l9. According to Bruce Michaux of Wild Ginger, a Seattle restaurant, “I have not heard of [Kinetic 0r the OrderAhead App] and we have no association with them whatsoever I would hate for anybody to be co-opting our name [without customers knowing]. That’s most upsetting.”8 Emily Yaw, a corporate accountant at Me1’s Market in Seattle described the unofficial sites as “super shady” and added that she “had no idea this website even existed.”9 20. Similarly, Nikos Gyros, another Seattle restaurant, does not have a website and does not offer delivery to its customers. However, Garnett is the registered owner of www.nikosgyros.net, an impostor site that purports to be the official website of Nikos Gyros, and directs users to order from Nikos Gyros online through Kinetie’s OrderAhead App. Alex Serpanos, owner of Nikos Gyros explained: “[the unofficial site] has our family history, photos of the restaurant, a menu, but not with our pricing We have no agreement with [Kinetic] [but] [t]hey were delivering our food I feel violated [The unofficial site] looks like ours. It smells like ours. It reads like ours, but it’s not NMNNNNN----~>~ QSOMAWN~O©OOQQM$WhJ~O ours.”lo Serpanos continues, “It misdirects the customer. They think [the unofficial site is] actually our restaurant. [Customers] would call the number, place an order, then [OrderAhead] would deliver our food to the customer without our knowledge or permission. [Kinetic is] misrepresenti[ng] Nikos Gyros.”ll 21. Indeed, once a customer places an order on the OrderAhead App, a Kinetic driver goes to the restaurant and personally places that customer’s order. Both the customer and the restaurant are 7 Id. 8 Id. 9 Id. 1° Delivery Company Hijacks Nikos Gyros, available at http://wwwmagnoliavoice.com/20 l5/04/29/delivery-eompany-hijacks-nikos-gyros/ (last visited May 12, 2015). ll 1d FIRST AMENDED CLASS ACTION COMPLAINT 9 ,_. completely unaware of the fact that (l) Kinetic, the impostor site, and the OrderAhead App are not affiliated with the restaurant, (2) the prices charged by Kinetic on the OrderAhead App are higher than the rcstaurant’s actual menu prices, and (3) the Kinetic driver is also not affiliated with the restaurant. As far as the customer is concerned, the restaurant made the delivery; and as far as the restaurant is concerned, the Kinetic driver was the end-customer. \DOOQQUI-PUJM 22. C&M is informed and believes that Kinetie’s drivers frequently botch customers’ orders.I2 23. Below is a table comparing C&M’s actual prices with Kinetic’s prices on the OrderAhead App: C&M Café’s Impostor Site/ Difference Menu Item Name Actual Price OrderAM {Dollars and mg Percent) Plain Jane $7.95 $9.15 $1.20 or 15% We Bought The Farm $10.25 $11.80 $1.55 or 15% When 1n Rome $10.25 $11.80 $1.55 or 15% Mmmmmmmm. . ..Motor Market $9.95 $10.30 $0.35 or 4% Marvel Grilled Cheese Heaven $8.95 $10.30 $1.35 or 15% Fabulous Disaster $10.25 $11.80 $1 .55 or 15% What Should Have Been $10.95 $12.60 $1.65 or 15% NNNNNNN~H~H-ns-i—_v~ Mantastic $10.95 $12.60 $1.65 or 15% P.B.R. (Pork Belly Rules!) $11.25 $12.95 $1.70 or 15% Blonde Bomb $10.25 $11.80 $1.55 or 15% agamhww~ooooqom4>wm~o Many Thanks $10.25 $11.80 $1.55 or 15% The Better B.L.T. $10.25 $11.80 $1.55 or 15% 86’ED $10.95 $12.60 $l.65 or 15% Knock-Out Punch $3.00 $4.60 $1.60 or 53% D0n’t Let Your Meat Loaf $10.95 $12.60 $1.65 or 15% Sorry About It $10.95 $12.60 $1.65 or 15% Here’s the Beef $10.95 $12.60 $1.65 or 15% 24. Silicon Valley has long had a penchant for disrupting incumbent businesses and industries with innovative technologies. While the marketplace welcomes ethical innovation, unethical ‘2 C&Mis informed and believes that several of its orders that were later determined to have originated from the OrderAhead App were incorrectly ordered by Kinetic’s drivers, and subsequently C&M’s end-customers received the wrong order from Kinetic thinking that C&M was responsible for the snafu instead of Kinetic, the real culprit. FlRST AMENDED CLASS ACTION COMPLA 1NT 10 business practices guised as innovations are neither disruptive nor welcomed. Although it is legal to buy something for one dollar and sell it for two, it is not legal to buy something for one dollar and falsely advertise that thing in an effort to sell it for two. 25. Kinetic’s use ofthe Impostor Site and unofficial sites was not and is not innovative or mfiosm-b'wN—- disruptive. Instead, Kinetic’s constructive ownership and actual operation of the Impostor Site and unofficial sites are plain illegal and represent a pattern of racketeering activity because the tactic aims to confuse the public, divert customers away, and profit from usurping delivery sales of restaurants. Such business tactics are clearly illegal and do not embody any of the innovative entrepreneurial spirit of Silicon Valley 0r its legends such as David Packard and Steve Jobs. 26. The Racketeer Influenced Corrupt Organizations Act (18 U.S.C. §§ 1961 et seq.)(“RICO”) states: It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt. 18 U.S.C. § 1962(c). The phrase “racketeering activity” includes “frauds and swindles” as defined in 18 U.S.C. § 1341, “wire fraud”as defined in l8 U.S.C. § 1343, the use of“any facility in interstate commerce” including the Internet for “any unlawful activity” as defined by l8 U.S.C § 1952, and NNNNNNNNN~——>-lr—~r—_,_._ “traffics in goods or services and knowingly uses a counterfeit mark on or in connection with such goods or services” as defined by 18 U.S.C. § 2320. See 18 U.S.C. § 1961(1). A “pattern of racketeering OO\JO\LIIJ>~L'JN—*O\OOO\IONKJIQDJN~