American Automobile Association Incorporated v. Triple A Auto Glass LLC et al

Filing 21

ORDER granting 19 Motion for Default Judgment in favor of AAA against Defendants Triple A Auto Glass, LLC, and John Price. Defendants, their agents, etc are enjoined. Awarding Plaintiff attorneys' costs and fees in the amount of $11,093.60. That the Clerk of Court enter judgment accordingly. Signed by Senior Judge Paul G Rosenblatt on 4/2/12. (see order for full details)(DMT)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 12 13 The American Automobile Association, ) Inc., ) ) Plaintiff, ) vs. ) ) Triple A Auto Glass, LLC, et al. ) ) Defendant. ) ) No. 11-CV-2464-PHX-PGR ORDER 14 15 Before the Court is Plaintiff’s Motion for Default Judgment. (Doc. 19.) 16 Plaintiff, The American Automobile Association (“AAA”), commenced this action 17 on December 13, 2011, filing a complaint alleging trademark infringement, false designation 18 of origin, unfair competition, trademark dilution, and cyberpiracy, in violation of Sections 19 32 and 43(a) of the Federal Trademark Act (“Lanham Act”), 15 U.S.C. §§ 1114, 1125(a), (c), 20 and (d), common law, and Arizona law. (Doc. 1.) The action concerns the unauthorized use 21 by Defendants Triple A Auto Glass, LLC, and John Price of AAA’s trademarks (the “AAA 22 Marks” or “Marks”) in connection with the business Triple A Auto Glass and the registration 23 and use of the domain name TRIPLEAAUTOGLASS.COM to host a website in connection 24 with that business. (Id.) 25 In September 2011, AAA learned that Defendants had registered the business Triple 26 A Auto Glass and were operating an automobile glass repair service under that name. (Id. at 27 ¶ 37.) On September 14, 2011, AAA sent a letter to Defendants requesting that they cease 28 all unauthorized use of the AAA Marks in the business name Triple A Auto Glass and that 1 they transfer the TRIPLEAAUTOGLASS.COM domain name to Plaintiff. Defendants failed 2 to respond to the letter. (Id. at ¶¶ 38–39.) AAA sent a second cease and desist letter on 3 October 18. Defendant Triple A Auto Glass responded that same day by claiming that it had 4 no knowledge that it was using the AAA Marks in advertising. AAA sent Defendants a reply 5 email on October 21 reiterating its rights in the AAA Marks, including TRIPLE A, and 6 further requesting that Defendants cease use of the Marks, but Defendants failed to respond. 7 (Id. at ¶¶ 39–42.) 8 A Summons and Complaint were served on Defendant Triple A Auto Glass on 9 December 14 and 19, 2011, and on Defendant John Price on January 31, 2012. No answer 10 or other defense has been filed by any Defendant. The Clerk of the Court entered a default 11 as to Defendant Triple A Auto Glass on February 13, 2012, and as to John Price on March 12 6, 2012. (Docs. 15, 18.) 13 In the pending motion for default judgment, AAA seeks an order permanently 14 enjoining Defendants from using the AAA Marks without authorization, including in the 15 name Triple A Auto Glass. (Doc. 19.) AAA also asks the Court to enter a judgment of 16 $11,093.60 in costs and attorneys’ fees against Defendants pursuant to Federal Rule of Civil 17 Procedure 54(d)(1), (2). (Id.) 18 DISCUSSION 19 Federal Rule of Civil Procedure 55(a) provides that “[w]hen a party against whom a 20 judgment for affirmative relief is sought has failed to plead or otherwise defend as provided 21 by these rules . . . the clerk shall enter the party’s default.” After a default has been entered 22 and the defendant fails to appear or move to set aside the default under Rule 55(c), the Court 23 may, on the plaintiff’s motion, enter a default judgment. Fed. R. Civ. P. 55(b)(2). 24 Granting default judgment is within the Court’s sound discretion. See Albade v. 25 Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In exercising that discretion, the Court may 26 consider such factors as the possibility of prejudice to the plaintiff, the merits of the 27 substantive claim, the sufficiency of the complaint, the sum of money at stake, the possibility 28 - 2 - 1 of a dispute concerning material facts, whether the default was due to excusable neglect, and 2 the policy favoring decisions on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471–72 3 (9th Cir. 1986). In considering these factors, all factual allegations in the plaintiff’s complaint 4 are taken as true, except those relating to damages. TeleVideo Sys., Inc. v. Heidenthal, 826 5 F.2d 915, 917–18 (9th Cir. 1987). 6 Based on the factual allegations set forth in the Complaint, AAA is entitled to 7 judgment against Defendants. Defendants have knowingly and willfully violated AAA’s 8 rights in the AAA Marks by continuing to make unauthorized use of the Marks in the 9 business name Triple A Auto Glass and in the TRIPLEAAUTOGLASS.COM domain name. 10 Defendants’ infringing uses have damaged, and will continue to damage, the reputation, 11 recognition, and goodwill associated with the AAA Marks. 12 The Eitel factors favor default judgment. AAA will be prejudiced if default is not 13 entered because absent judgment AAA will be without recourse for recovery. The Complaint 14 sufficiently sets forth a valid claim for relief. Given the sufficiency of the Complaint and 15 Defendants’ default, there is no dispute concerning the material facts. Defendants were 16 properly served, so it is unlikely that their failure to answer and the resulting default resulted 17 from excusable neglect. Gemmel v. Systemhouse, Inc., No. CIV 04-187-TUC-CKJ, 2008 WL 18 65604, at *5 (D.Ariz. Jan. 3, 2008). Defendants’ default makes a decision on the merits 19 “impractical, if not impossible.” PepsiCo, Inc. v. Cal. Security Cans, 238 F.Supp.2d 1172, 20 1177 (C.D.Cal. 2002). With respect to the amount at stake, AAA seeks injunctive relief 21 rather than monetary damages, so this factor also favors granting default judgment. Id. at 22 1176–77. 23 24 AAA also seeks attorneys’ fees and costs. AAA is entitled to costs under Rule 54(d)(1) of the Federal Rules of Civil Procedure and 15 U.S.C. § 1117(a). 25 Attorneys’ fees may be awarded in “exceptional cases.” 15 U.S.C. § 1117(a). “A 26 trademark case is exceptional where the district court finds that the defendant acted 27 maliciously, fraudulently, deliberately, or willfully.” Earthquake Sound Corp. v. Bumper 28 - 3 - 1 Industries, 352 F.3d 1210, 1216 (9th Cir. 2003). AAA’s allegations, taken as true, show that 2 Defendants’ infringement was willful. See Rio Properties, Inc. v. Rio Intern. Interlink, 284 3 F.3d 1007, 1023 (9th Cir. 2002) (noting that “by entry of default judgment, the district court 4 determined, as alleged in RIO’s complaint, that RII’s acts were committed ‘knowingly, 5 maliciously, and oppressively, and with an intent to . . . injure RIO.’”). A case may also be 6 deemed exceptional if the defendant has refused to appear and defend. See Taylor Made Golf 7 Co., Inc. v. Carsten Sports, Ltd., 175 F.R.D. 658, 663 (S.D.Cal. 1997). 8 Because Defendants’ infringement is willful and they have refused to appear and 9 defend, this case is “exceptional” and AAA is entitled to reasonable attorneys’ fees. AAA 10 has submitted declarations from counsel in support of its request for attorneys’ fees. (See 11 Doc. 20, Exs. 1–4.). Having considered this information, the Court finds that the fees 12 requested by AAA are reasonable. 13 Under the Lanham Act, “the district court [has] the ‘power to grant injunctions 14 according to principles of equity and upon such terms as the court may deem reasonable, to 15 prevent the violation of any right’ of the trademark owner.” Reno Air Racing Ass'n v. 16 McCord, 452 F.3d 1126, 1137 (9th Cir. 2006). “Injunctive relief is the remedy of choice for 17 trademark and unfair competition cases, since there is no adequate remedy at law for the 18 injury caused by a defendant’s continuing infringement.” Century 21 Real Estate Corp. v. 19 Sandlin, 846 F.2d 1175, 1180 (9th Cir. 1988). 20 For the Court to grant a permanent injunction, AAA must demonstrate that it is likely 21 to succeed on the merits, that there is a likelihood of irreparable injury if injunctive relief is 22 not granted, that a balance of hardships favors AAA, and that an injunction will advance the 23 public interest. Winter v. Natural Res. Def. Counsel, 555 U.S. 7, 20 (2008). AAA satisfies 24 these criteria. It has demonstrated a likelihood of success on the merits of its claims. If an 25 injunction were not granted, AAA would suffer irreparable injury from the ongoing damages 26 to its reputation and goodwill. Furthermore, the balance of hardships favors AAA because 27 an injunction will only proscribe Defendants’ infringing activities. Finally, an injunction is 28 - 4 - 1 in the public interest because “[t]he public has an interest in avoiding confusion between two 2 companies’ products.” Internet Specialties West, Inc. v. Millon–Di Giorgio Enters., Inc., 559 3 F.3d 985, 993 n. 5 (9th Cir. 2009). 4 Accordingly, 5 IT IS ORDERED granting Judgment in favor of AAA against Defendants Triple A 6 Auto Glass, LLC, and John Price. 7 IT IS FURTHER ORDERED issuing the following injunction: 8 1. 9 10 Each Defendant, their agents, servants, employees, attorneys, and all persons in active concert or participation with any of them, are enjoined and restrained from engaging in any of the following acts: 11 (1) Using without the authorization of AAA any of AAA’s Marks, logos, 12 and trade names, including, but not limited to, the designations “AAA” or “TRIPLE A,” or 13 any other name, logo, or Mark that includes the designations “AAA” or “TRIPLE A” that 14 is confusingly or deceptively similar to any of AAA’s Marks, logos, and trade names, either 15 alone or in conjunction with other words or symbols, as a part of any trademark, service 16 mark, logo, trade name, corporate name, assumed name, domain name, on or in relation to 17 any goods sold or distributed by Defendants, or in any other manner; and 18 (2) Using the letter “A” or any multiple combination of letters “A” in any 19 form or manner that would tend to identify or associate Defendants or their business or 20 services with AAA, including, without limitation, in the marketing, promotion, advertising, 21 identification, sale or distribution of goods or services, or in any other manner; 22 2. Defendants are ordered to destroy all literature, signs, labels, prints, packages, 23 wrappers, containers, advertising materials, Internet content, stationery, software, and any 24 other items in its possession or control which contain the infringing designations “AAA” or 25 “TRIPLE A,” or any term confusingly similar to the AAA Marks, either alone or in 26 combination with other words or symbols, and to destroy all plates, molds, matrices, masters, 27 and other means of making any of those infringing items; 28 - 5 - 1 3. Defendants are ordered to provide notice to any and all third parties of whom 2 or of which they have knowledge that are using the designations “AAA” or “TRIPLE A,” or 3 any term confusingly similar to the AAA Marks, either alone or in combination with other 4 words or symbols, in connection with the marketing, promotion, advertising, or other 5 identification of Defendants’ business; 6 4. Defendants are ordered to cancel any assumed business names and other public 7 filings that contain the designations “AAA” or “TRIPLE A” and to cancel or amend any 8 licenses or registrations that contain those designations, so as to remove the designations 9 therefrom; 10 11 5. Defendants are ordered to transfer to AAA the registration for the domain name TRIPLEAAUTOGLASS.COM; and 12 6. Defendants are ordered to file with the Court and to serve on AAA, within 13 thirty (30) days after the date of entry of this Order, a report in writing, under oath, setting 14 forth in detail the manner and form in which Defendants have complied with this injunction. 15 IT IS FURTHER ORDERED finding that an award to Plaintiff of costs of suit and 16 reasonable attorneys’ fees is appropriate in accordance with 15 U.S.C. § 1117 and Arizona 17 law. 18 19 IT IS FURTHER ORDERED awarding Plaintiff attorneys’ costs and fees in the amount of $11,093.60. 20 IT IS FURTHER ORDERED that the Clerk of Court enter judgment accordingly. 21 DATED this 2nd day of April, 2012. 22 23 24 25 26 27 28 - 6 -

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