T-C-Forum At Carlsbad, LLC v. Thomas Enterprises, Inc. et al, No. 3:2016cv02119 - Document 36 (S.D. Cal. 2017)
Court Description: ORDER Granting 32 Motion for Default Judgment in the amount of $29,967.46. Signed by Judge Dana M. Sabraw on 8/14/2017. (knb)(sjt).
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T-C-Forum At Carlsbad, LLC v. Thomas Enterprises, Inc. et al Doc. 36 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 12 13 14 Case No. 16-cv-2119 DMS (BGS) T-C FORUM AT CARLSBAD, LLC, a Delaware limited liability company, ORDER GRANTING MOTION FOR DEFAULT JUDGMENT Plaintiff, v. 15 THOMAS ENTERPRISES, INC., a Georgia corporation; and DOES 1-10, inclusive, 16 Defendants. 17 18 19 20 21 22 23 24 25 26 27 28 Pending before the Court is Plaintiff T-C Forum at Carlsbad, LLC’s motion for default judgment. Defendant Thomas Enterprises, Inc. did not file an opposition to the motion. For the following reasons, the Court grants the motion. I. BACKGROUND Plaintiff owns a shopping center known as “Forum at Carlsbad,” “Forum Carlsbad,” and “The Forum – Carlsbad.” Plaintiff discovered Defendant using the “Hillside Forum” designation to identify a planned shopping center located across the street from Plaintiff’s shopping center. On June 22, 2016, Plaintiff sent a cease and desist letter to Defendant. (Compl. ¶ 21, Ex. A.) The letter advised Defendant –1– 16-cv-2119 DMS (BGS) Dockets.Justia.com 1 that it must cease using the “Hillside Forum” designation on its shopping center and 2 related business services because it was confusingly similar to Plaintiff’s “Forum at 3 Carlsbad” mark, and any continued use of such designation would give rise to 4 several causes of action against Defendant. (Id.) On July 27, 2016, Defendant 5 responded, disagreeing with Plaintiff. (Compl. ¶ 23, Ex. B.) 6 Thereafter, on August 23, 2016, Plaintiff filed a Complaint against Defendant, 7 alleging eleven causes of action: (1) service mark infringement of unregistered 8 service mark, in violation of 15 U.S.C. § 1125(a), (2) false designation of origin/false 9 advertising, in violation of 15 U.S.C. § 1125(a), (3) false endorsement, in violation 10 of 15 U.S.C. § 1125(a), (4) trade name infringement, in violation of 15 U.S.C. § 11 1125(a), (5) unfair competition, in violation of 15 U.S.C. § 1125(a), (6) state 12 statutory trade name infringement, in violation of Cal. Bus. & Prof. Code §§ 14400 13 & 14411, (7) common law unfair competition, (8) common law trade name 14 infringement, (9) common law misappropriation, (10) violation of Cal. Bus. & Prof. 15 Code § 17500, and (11) statutory unfair competition, in violation of Cal. Bus. & 16 Prof. Code § 17200. (Comp. ¶¶ 29–106.) On October 25, 2016, Plaintiff filed a 17 proof of service, showing that it properly served Defendant’s registered agent by 18 substituted service. When Defendant failed to respond to the Complaint, Plaintiff 19 filed a request for entry of default, which the Clerk of Court granted on November 20 29, 2016. Subsequently, on December 28, 2016, Plaintiff filed a motion for default 21 judgment. 22 On January 20, 2017, Defendant filed a motion to set aside the entry of default. 23 The Court granted Defendant’s motion and ordered Defendant to respond to the 24 Complaint by April 25, 2017. Moreover, the Court conditioned the setting aside of 25 the default by requiring Defendant to reimburse Plaintiff for costs it had incurred as 26 a result of Defendant’s conduct. Defendant, however, has not responded to the 27 Complaint nor did it pay Plaintiff attorneys’ fees and costs as ordered by the Court. 28 On April 27, 2017, Plaintiff filed a second request for entry of default, which –2– 16-cv-2119 DMS (BGS) 1 was granted on the same day. Subsequently on May 26, 2017, Plaintiff filed the 2 present motion. 3 II. 4 DISCUSSION 5 A. Default Judgment 6 A court may grant a default judgment upon application of a party. Fed. R. 7 Civ. P. 55(b)(2). Granting or denying a default judgment under Rule 55(b) is within 8 the court’s discretion. Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). In 9 making this determination, a court considers the following factors, commonly 10 referred to as the Eitel factors: “(1) the possibility of prejudice to the plaintiff, (2) 11 the merits of plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) 12 the sum of money at stake in the action, (5) the possibility of a dispute concerning 13 material facts, (6) whether the default was due to excusable neglect, and (7) the 14 strong policy underlying the Federal Rules of Civil Procedure favoring decisions on 15 the merits.” Id. at 1471–72. When weighing these factors, the well-pleaded factual 16 allegations of the complaint are taken as true, except for those allegations relating to 17 damages. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987); 18 see also Fed. R. Civ. P. 8(b)(6). 19 Based on the factors announced in Eitel, the Court concludes that default 20 judgment is appropriate. First, one of the factors is whether the default was due to 21 excusable neglect. It is highly unlikely that Defendant’s default is due to excusable 22 neglect as this is its second default. When Defendant moved to vacate the first entry 23 of default, the Court granted its request and ordered it to respond to the Complaint 24 by April 25, 2017. Moreover, the Court conditioned the setting aside of the default 25 by requiring the Defendant to pay Plaintiff reasonable attorneys’ fees and costs it 26 had incurred because of Defendant’s conduct. Nevertheless, Defendant has failed to 27 comply with the Court’s orders. To date, Defendant has not responded to the 28 Complaint nor has it paid Plaintiff reasonable attorneys’ fees and costs as ordered –3– 16-cv-2119 DMS (BGS) 1 by the Court. Therefore, this factor weighs in favor of granting default judgment. 2 Next, because Defendant has refused to participate in this lawsuit, no 3 possibility of dispute concerning material facts has been presented. In any event, 4 the Court takes all factual allegations in the Complaint as true in light of the entry of 5 default. See Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). Upon 6 review of the Complaint, the Court finds that Plaintiff has adequately stated claims 7 under the Lanham Act and related state law and common law claims. Therefore, 8 these factors also weigh in favor of granting default judgment. 9 Finally, while “public policy favoring disposition of cases on their merits 10 weighs against default judgment, that single factor is not enough to preclude it.” Rio 11 Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1022 (9th Cir. 2002). Proceeding 12 with the instant litigation would be futile given Defendant’s failure to participate in 13 this action. Moreover, the denial of this motion would likely result in prejudice to 14 Plaintiff because it would be left without resources in the matter. These factors favor 15 default judgment for Plaintiff. After weighing the Eitel factors, the Court finds that default judgment is 16 17 appropriate. 1 Accordingly, Plaintiff’s motion for default judgment is granted. 18 B. Permanent Injunction 19 Under the Lanham Act, “the district court [has] the ‘power to grant injunctions 20 according to principles of equity and upon such terms as the court may deem 21 reasonable, to prevent the violation of any right’ of the trademark owner.” Reno Air 22 Racing Ass’n v. McCord, 452 F.3d 1126, 1137 (9th Cir. 2006) (citing 15 U.S.C. § 23 1116(a)). In order for the Court to grant a permanent injunction, Plaintiff must 24 demonstrate the following: “(1) that it has suffered an irreparable injury; (2) that 25 remedies available at law, such as monetary damages, are inadequate to compensate 26 27 28 1 The fourth factor, the sum of money at stake in the action, is inapplicable to the present case because Plaintiff does not request monetary damages as it only seeks a permanent injunction and sanctions. –4– 16-cv-2119 DMS (BGS) 1 for that injury; (3) that, considering the balance of hardships between the plaintiff 2 and defendant, a remedy in equity is warranted; and (4) that the public interest would 3 not be disserved by a permanent injunction.” eBay Inc. v. MercExchange, L.L.C., 4 547 U.S. 388, 391 (2006). 5 Here, Plaintiff requests a permanent injunction against Defendant as follows: 6 1. That Defendant, its officers, directors, principals, owners, agents, 7 servants, employees, representatives, affiliates, associates, partially or wholly- 8 owned subsidiaries, assignees, successor entities or individuals, and all persons 9 and/or entities in concert or participation with Defendant, directly or indirectly, be 10 11 preliminarily and permanently enjoined and restrained perpetually from: A. infringing the “Forum at Carlsbad,” “Forum Carlsbad,” and “The 12 Forum – Carlsbad” unregistered Service Marks (hereinafter “Plaintiff’s 13 Service Marks”) which have become distinctive in the public’s mind 14 and caused the public to associate Plaintiff’s Property located at 1923 15 Calle Barcelona, Carlsbad, California 92009 (hereainafter “Plaintiff’s 16 Property”) with Plaintiff’s Service Marks; 17 B. infringing the “Forum at Carlsbad,” “Forum Carlsbad,” and “The 18 Forum – Carlsbad” Trade Names (hereinafter “Plaintiff’s Trade 19 Names”) which have become distinctive in the public’s mind and 20 caused the public to associate Plaintiff’s Property with Plaintiff’s Trade 21 Names; 22 C. using the term “Hillside Forum,” any phonetic equivalent or 23 abbreviation therefor, or any mark using the designation “Forum” alone 24 or in combination with any other word or design in its business affairs, 25 including but not limited to as a trademark or trade name, or any other 26 designation confusingly similar to Plaintiff’s Service Marks and/or 27 Plaintiff’s Trade Names, in connection with Defendant’s services, 28 including the sale, offering for sale, leasing, offering to lease –5– 16-cv-2119 DMS (BGS) 1 commercial or retail real estate, and/or to identify a shopping center and 2 services related thereto; 3 D. promoting or marketing services in any way that tends to deceive, 4 mislead, or confuse the public into believing that Defendant’s services 5 and/or shopping center is in any way sanctioned by Plaintiff or affiliated 6 with Plaintiff’s Property or Plaintiff’s “Forum at Carlsbad,” “Forum 7 Carlsbad,” and “The Forum – Carlsbad” shopping center; 8 E. otherwise competing unfairly with Plaintiff in any manner; 9 F. passing off, inducing, or enabling others to sell or pass off any sale, 10 offering for sale, leasing, offering to lease commercial or retail real 11 estate, and/or to identify a shopping center or any other properties under 12 or in connection with the term “Forum”, or any designation confusingly 13 similar thereto; and 14 G. committing any acts calculated to cause purchasers to believe any 15 goods or services provided by Defendant are sponsored by, approved 16 by, connected with, guaranteed by or offered, sold, or leased by 17 Plaintiff, or under the control or supervision of Plaintiff. 18 After reviewing the record, the Court concludes a permanent injunction is 19 appropriate in this case. Plaintiff has made a sufficient showing that it will suffer 20 irreparable harm absent an injunction and that monetary damages are inadequate to 21 compensate for that harm. Plaintiff alleges “[it] will suffer great and irreparable 22 injuries, for which damages would not afford adequate relief, in that said damages 23 would not adequately compensate for injury to Plaintiff’s service marks and trade 24 names, business reputation, goodwill, and customer base, and Defendant’s conduct, 25 if allowed to continue, would inevitably result in damage to Plaintiff’s retail real 26 estate holdings.” (Compl. ¶ 35.) As to the balance of hardships, Plaintiff’s interest 27 in maintaining the integrity of its service and trade marks and protecting its goodwill 28 outweighs any interest that Defendant may have in continued infringement. Finally, –6– 16-cv-2119 DMS (BGS) 1 the public interest in maintaining vigorous protection for intellectual property rights 2 also favors an injunction. These factors weigh in favor of granting Plaintiff’s request 3 for a permanent injunction. 4 Generally, “an injunction must be narrowly tailored … to remedy only the 5 specific harms shown by [a plaintiff], rather than ‘to enjoin all possible breaches of 6 the law.’” Price v. City of Stockton, 390 F.3d 1105, 1117 (9th Cir. 2004) (quoting 7 Zepeda v. INS, 753 F.2d 719, 727 (9th Cir. 1983)). After reviewing Plaintiff’s 8 proposed language for the permanent injunction, the Court finds that the language 9 in paragraphs D, E, and G is vague as it is not directed specifically at Defendant’s 10 infringing conduct, but rather, it is a general proscription against Defendant 11 engaging in any conduct that negatively affects Plaintiff’s business. Accordingly, 12 Plaintiff is entitled to a permanent injunction against Defendant as requested, with 13 the exception of paragraphs D, E, and G. 14 C. Attorneys’ Fees 15 Plaintiff seeks imposition of sanctions in the form of attorneys’ fees pursuant 16 to the Court’s inherent powers and Civil Local Rule 83.1. Specifically, Plaintiff 17 requests attorneys’ fees in the amount of $31,453.46, consisting of $18,453.46 18 awarded pursuant to the Court’s order issued on April 11, 2017, and $13,435.72 19 incurred in connection with preparing supplemental briefs regarding attorneys’ fees 20 and costs, second request for entry of default, and the instant motion. 21 “All federal courts are vested with inherent powers enabling them to manage 22 their cases and courtrooms effectively and to ensure obedience to their orders.... As 23 a function of this power, courts can dismiss cases in their entirety, bar witnesses, 24 award attorney’s fees and assess fines.” F.J. Hanshaw Enters., Inc. v. Emerald River 25 Dev., Inc., 244 F.3d 1128, 1136 (9th Cir. 2001) (citations omitted). Sanctions are an 26 appropriate response to “willful disobedience of a court order ... or when the losing 27 party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.” Fink 28 v. Gomez, 239 F.3d 989, 991 (9th Cir. 2001) (internal quotation marks and citations –7– 16-cv-2119 DMS (BGS) 1 omitted). Further, Rule 83.1(a) permits the Court to order sanctions for “[f]ailure of 2 counsel or of any party to comply with these rules, with the Federal Rules of Civil 3 or Criminal Procedure, or with any order of the court[.]” Civ. L. R. 83.1(a). 4 As explained above, this is Defendant’s second default. When the Defendant 5 moved to vacate the first entry of default, the Court granted its request and ordered 6 it to respond to the Complaint by April 25, 2017. Moreover, the Court has ordered 7 Defendant to reimburse Plaintiff reasonable attorneys’ fees and costs it had incurred 8 due to Defendant’s conduct. Nevertheless, Defendant has failed to comply with the 9 Court’s orders. To date, Defendant has not responded to the Complaint nor has it 10 paid Plaintiff attorneys’ fees and costs. Defendant’s refusals to participate in this 11 lawsuit and to comply with the Court’s orders have resulted in substantial delay in 12 this case and forced Plaintiff to file a second entry of default and motion for default 13 judgment, thereby incurring additional attorneys’ fees and costs. Accordingly, 14 pursuant to the Court’s inherent power to administer justice and Rule 83.1, a sanction 15 against Defendant in the form of attorneys’ fees is clearly warranted. 16 The amount of fees awarded is a matter within the trial court’s discretion. 17 Jankey v. Poop Deck, 537 F.3d 1122, 1132 (9th Cir. 2008). “The most useful starting 18 point for determining the amount of a reasonable fee is the number of hours 19 reasonably expended on the litigation multiplied by a reasonable hourly rate.” 20 Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). 21 Plaintiff seeks fees based on an hourly rate of $430 for Partner Matthew A. 22 Newboles and $325 for Of Counsel Stephen Z. Vegh. For the reasons explained in 23 the April 11, 2017 order, the Court finds the hourly rates reasonable. 24 Next, Plaintiff seeks to recover fees for 19.2 hours of work performed in 25 connection with preparing supplemental briefs regarding attorneys’ fees and costs. 26 It is notable the billing entries from March 2 and 3, 2017 are not related to work on 27 the supplemental briefs. Therefore, a deduction of 0.5 hours is warranted. Next, 28 Plaintiff requests fees for 12.3 hours for preparing a second request for entry of –8– 16-cv-2119 DMS (BGS) 1 default. The hours billed on April 11, 2017 through April 21, 2017, and April 26 2 and 27, 2017 appear unreasonable because the billing entries pertain to unrelated 3 activities. Therefore, the Court deducts 5.3 hours. Lastly, Plaintiff seeks to recover 4 fees for 8.5 hours expended in connection with the second motion for default 5 judgment. The requested number of hours appears to be reasonable. Accordingly, 6 the Court allows recovery of 34.2 hours. 7 III. 8 CONCLUSION For these reasons, Plaintiff’s motion for default judgment is granted. A 9 10 permanent injunction is entered in favor of Plaintiff as follows: 11 1. That Defendant, its officers, directors, principals, owners, agents, servants, 12 employees, representatives, affiliates, associates, partially or wholly-owned 13 subsidiaries, assignees, successor entities or individuals, and all persons 14 and/or entities in concert or participation with Defendant, directly or 15 indirectly, be preliminarily and permanently enjoined and restrained 16 perpetually from: 17 A. infringing the “Forum at Carlsbad,” “Forum Carlsbad,” and “The 18 Forum – Carlsbad” unregistered Service Marks (hereinafter “Plaintiff’s 19 Service Marks”) which have become distinctive in the public’s mind 20 and caused the public to associate Plaintiff’s Property located at 1923 21 Calle Barcelona, Carlsbad, California 92009 (hereainafter “Plaintiff’s 22 Property”) with Plaintiff’s Service Marks; 23 B. infringing the “Forum at Carlsbad,” “Forum Carlsbad,” and “The 24 Forum – Carlsbad” Trade Names (hereinafter “Plaintiff’s Trade 25 Names”) which have become distinctive in the public’s mind and 26 caused the public to associate Plaintiff’s Property with Plaintiff’s Trade 27 Names; 28 C. using the term “Hillside Forum,” any phonetic equivalent or –9– 16-cv-2119 DMS (BGS) 1 abbreviation therefor, or any mark using the designation “Forum” alone 2 or in combination with any other word or design in its business affairs, 3 including but not limited to as a trademark or trade name, or any other 4 designation confusingly similar to Plaintiff’s Service Marks and/or 5 Plaintiff’s Trade Names, in connection with Defendant’s services, 6 including the sale, offering for sale, leasing, offering to lease 7 commercial or retail real estate, and/or to identify a shopping center and 8 services related thereto; and 9 D. passing off, inducing, or enabling others to sell or pass off any sale, 10 offering for sale, leasing, offering to lease commercial or retail real 11 estate, and/or to identify a shopping center or any other properties under 12 or in connection with the term “Forum”, or any designation confusingly 13 similar thereto. 14 Moreover, Defendant shall make payment to Plaintiff in the amount of 15 $29,967.46 within thirty (30) days of this Order for reasonable attorneys’ fees, 16 consisting of $18,453.46 awarded under the Court’s April 11, 2017 Order, and 17 $11,514 for fees related to preparing supplemental briefs regarding attorneys’ fees 18 and costs, second request for entry of default, and the instant motion. The Clerk of 19 Court is instructed to enter judgment in favor of Plaintiff and close the case. 20 21 IT IS SO ORDERED. Dated: August 14, 2017 22 23 24 25 26 27 28 – 10 – 16-cv-2119 DMS (BGS)
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