ZP NO. 314, LLC v. ILM Capital, LLC et al

Filing 193

ORDER granting in part and denying in part 187 Motion for consideration of attorneys fees, statutory equitable relief, and mediation as set out. ZP is directed to file NLT 11/19/19 a brief as set out & Defendant's are to respond NLT 12/10/19. Signed by Magistrate Judge Sonja F. Bivins on 10/29/19. (mpp) Copies to counsel

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
ZP NO. 314, LLC,
Plaintiff,
vs.
ILM Capital, LLC, et al.,
Defendants.

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* CIVIL ACTION NO. 16-00521-B
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ORDER

This case is before the Court on Plaintiff ZP’s motion for
consideration of attorneys’ fees, statutory equitable relief, and
mediation, and Defendants’ responses thereto.
189).

(Docs. 186, 187,

The motion has been briefed by the parties and is ripe for

consideration.

For the reasons set forth herein, ZP’s motion is

GRANTED, in part, and DENIED, in part.1
I. Settlement conference or mediation.
First, in response to ZP’s request to reconvene mediation with
the Court, Defendants have advised that they have no interest in a
court-facilitated settlement conference or mediation at this time.
(Doc. 186 at 11-12).
time.

1

Therefore, ZP’s request is DENIED at this

The parties may file a joint request for a court-facilitated

ZP also has filed a motion for a permanent injunction. (Doc.
188). That motion has been fully briefed by the parties (Docs.
188, 190) and will be addressed by separate order.

settlement conference at any time.
II. Damages.
Following a bench trial in this case, the Court issued an
order on September 30, 2019, finding in favor of ZP on its claims
for unfair competition under the Lanham Act (15 U.S.C. § 1125(a)),
trademark infringement and unfair practices under Alabama Code §
8-12-1, et seq., contributory and vicarious liability with respect
to the aforementioned claims, and injunctive relief.2
22-30, 36-37).

(Doc. 176 at

In ZP’s instant motion, it seeks damages, including

equitable relief in the form of an accounting of Defendants’
profits, attorneys’ fees and costs, nominal damages, and injunctive
relief.

The Court will address ZP’s requests for damages in turn.
A. “Defendants’ profits” and “damages sustained by ZP.”

In its motion, ZP argues that a broad menu of remedies are
available

for

trademark

infringement

under

the

Lanham

Act,

including “damages sustained by the plaintiff,” “an accounting of
defendant’s
costs.

profits,”

injunctive

(Doc. 187 at 2).

relief,

attorneys’

fees,

and

Relying on Hard Candy, LLC v. Anastasia

Beverly Hills, Inc., 921 F.3d 1343, 1352–53 (11th Cir. 2019), ZP
seeks “an equitable accounting” of Defendants’ profits in the

2

The Court found against ZP and in favor of Defendants on ZP’s
cybersquatting claim under 15 U.S.C. § 1125(d) and its state law
claim for intentional interference with business relations. (Doc.
176 at 12-22, 32).
2

instant case.

In their response, Defendants do not dispute ZP’s

statement of the law but maintain that ZP abandoned any claim for
“damages sustained by the plaintiff” or for “an accounting of
defendants’ profits” under the Lanham Act.
The

record

reflects

that,

in

its

(Doc. 189 at 2).
amended

complaint,

ZP

originally requested nominal relief, equitable relief, including
preliminary and permanent injunctive relief, costs and attorneys’
fees, and an order directing that Defendants give an accounting of
“any and all profits derived by them from the sale of products or
services through the use of the infringing marks” or domain names.
(Doc. 60 at 14).

However, in pretrial proceedings and at trial,

ZP abandoned its claim for an accounting of profits and sought only
nominal damages, injunctive relief, attorneys’ fees, and costs
related to its claims for unfair competition under the Lanham Act
(15 U.S.C. § 1125(a)) and trademark infringement/unfair practices
under Alabama Code § 8-12-1, et seq.3 Indeed, in the parties’ joint
proposed pretrial document, ZP expressly sought “monetary relief
for at least nominal damages,” injunctive relief, statutory damages
for cybersquatting, costs, and attorneys’ fees.

3

(Doc. 147 at 8-

While ZP did seek statutory damages for cybersquatting and
punitive damages for intentional interference with business
relations under Alabama common law, ZP did not prevail on those
claims at trial. Thus, those demands are not at issue here and do
not, in any event, involve an accounting of Defendants’ profits.
(Doc. 60 at 14).
3

9).

As Defendants point out, ZP’s failure to identify in the joint

proposed pre-trial document any additional categories of damages
it was seeking, or any facts relating to the amount of those
categories of damages, resulted in a waiver of the right to seek
any such damages. See, e.g., Rockwell Int’l Corp. v. United States,
549 U.S, 457, 474 (2007) (“[C]laims, issues, defenses, or theories
of damages not included in the pretrial order are waived even if
they appeared in the complaint . . . .”).
Further, at the pretrial conference, the Court instructed the
parties to be prepared to present at trial all evidence regarding
damages, except for the issue of attorneys’ fees which would be
bifurcated and decided after trial.4

(Doc. 154).

In the Court’s

pretrial order, the claims to be tried were listed as: whether
there had been any violations of the Anti-cybersquatting Act (15
U.S.C.

§

1125(d)(1)(A)),

trademark

infringement

and

unfair

competition under 15 U.S.C. § 1125(a) of the Lanham Act, federal
common law, Alabama Code § 18-21-1, and Alabama common law, and,
if so, whether statutory damages or injunctive relief should be
awarded.

(Doc. 161 at 1-2).

The issue of attorneys’ fees was

bifurcated and reserved until after a ruling on liability and

4

In truth, ZP’s primary focus throughout this litigation and at
trial was on its claim for statutory damages under the
cybersquatting statute, on which ZP ultimately did not prevail at
trial.
(Continued)
4

damages.

(Id.).

At trial, ZP offered no evidence regarding Defendants’ profits
or any damages suffered by ZP, nor did ZP request leave to do so
at a later date.5

Moreover, in its proposed findings of fact and

conclusions of law submitted after trial, ZP did not include any
damages related to Defendant’s profits or ZP’s damages, but asked
the Court to award injunctive relief, nominal damages, statutory
damages for cybersquatting, punitive damages for ZP’s state law
intentional interference claim, attorneys’ fees, and costs.

(Doc.

170 at 19-21).
Having reviewed the record at length, including the parties’
many filings and representations to the Court, the Court finds
that, with respect to the claims on which ZP prevailed, namely its
claims for unfair competition under the Lanham Act and state law
trademark infringement claims, ZP made the conscious and strategic
decision to forego the recovery of any damages other than nominal
damages, injunctive relief, attorneys’ fees, and costs.

Indeed,

at trial, ZP made no attempt to present any evidence of its damages
or of Defendants’ profits.

Accordingly, ZP’s belated request for

an equitable accounting in order to prove damages in the form of

5

Defense counsel, on the other hand, elicited testimony from
Defendant Hawrylak that neither he nor Defendant ILM Capital had
profited from the alleged misconduct nor received any funds as a
result of registering the domain names. (Doc. 166 at 181).
5

“defendant’s profits” or “damages sustained by the plaintiff” for
Defendants’ trademark infringement and unfair competition under 15
U.S.C. § 1125(a) of the Lanham Act is DENIED.
B. Attorneys’ fees and costs.
In its motion, ZP seeks leave to file a brief and supporting
affidavits and documentation to support its claims for attorneys’
fees and costs in this action.

(Doc. 187 at 1-2).

not oppose ZP’s motion to submit such documentation.

Defendants do
(Doc. 189).

Accordingly, ZP is DIRECTED to file a brief addressing its request
for attorneys’ fees and costs, specifically including an analysis
of the criteria required by the Lanham Act for such an award and
how that criteria has been met, along with supporting documentation
of the claimed fees and costs, no later than November 19, 2019.
Defendants are DIRECTED to respond by December 10, 2019.6
DONE this the 29th day of October, 2019.
/s/ SONJA F. BIVINS
UNITED STATES MAGISTRATE JUDGE

6

Although Defendants have suggested in briefing that they too may
seek attorney’s fees in this case, no such motion is pending before
the Court.
6