Autozone IP LLC v. Awad et al

Filing 14

ORDER AND REASONS granting 12 MOTION for Default Judgment as to Adnan Awad and United Autozone, Inc. FURTHER ORDERED that Defendants are hereby PERMANENTLY ENJOINED from using the UNITED AUTOZONE mark or any other mark confusingly similar to Pl aintiffs marks to promote their used car business. FURTHER ORDERED that Defendant shall TRANSFER the domain name unitedautozoneofgretna.com to Plaintiff within ten days of the entry of final judgment. FURTHER ORDERED Evidentiary Hearing set for 1/16/ 2019 09:30 AM before Judge Carl Barbier. FURTHER ORDERED that Defendants shall DELIVER any and all physical media displaying the UNITED AUTOZONE mark in their possession to Plaintiff no later than January 15, 2019. To the extent that such materials do not exist, Defendants shall deliver an affidavit averring as to such. Signed by Judge Carl Barbier on 12/12/2018.(jeg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
AUTOZONE IP LLC

CIVIL ACTION

VERSUS

No. 17-13107

ADNAN AWAD, ET AL.

SECTION: “J”(2)

ORDER AND REASONS
Before the Court is a Motion for Default Judgment (Rec. Doc. 12) filed by
Plaintiff, AutoZone IP LLC. The motion is unopposed by Defendants Adnan Awad
and United Autozone Inc. Having considered the motion, Plaintiff’s memorandum,
the record, and the applicable law, the Court finds that Plaintiff’s motion should be
GRANTED for the reasons set forth more fully below.

FACTS AND PROCEDURAL BACKGROUND
This action derives from a trademark dispute between AutoZone IP LLC, a
nationwide retailer and distributer of automobile parts, and United AutoZone Inc., a
used car dealership in Gretna Louisiana, and United Autozone’s owner, Mr. Adnan
Awad. As this is a motion for default judgment, the Court accepts all well-pleaded
allegations as true. Plaintiff has used its AUTOZONE and extended family of ZONE
marks since 1987, branding automotive parts and accessories as well as its retail

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stores selling these items. 1 The U.S. Patent and Trademark Office registered
Plaintiff’s AUTOZONE mark as a service mark in 1989. 2 Plaintiff has used its mark
in extensive advertising, having spent hundreds of millions of dollars to engage with
customers through direct mail circulars, radio, television, courtside electronic
signage, its website, e-mail advertisements, and in-store print advertisements. 3
Plaintiff has established more than 5,400 stores throughout the nation, including two
in Gretna, Louisiana, where Defendants maintain a used car dealership. 4 Plaintiff
has been a Fortune 500 company since 1999; its revenues exceeded $10.187 billion
for the fiscal year ending 2015. 5
According to Plaintiff, Defendants began operating a used car dealership
under the name United Autozone in October of 2015. 6 Mr. Awad registered a domain
name for the dealership, “unitedautozoneofgretna.com,” on October 9, 2015. 7 Upon
becoming aware of these actions by Defendants, Plaintiff sent several cease and desist
letters to Defendants, demanding they stop using the AUTOZONE mark. Mr. Awad
evidently responded to the letters in September of 2016, by changing the corporate
name of the dealership from United Autozone Inc. to Gretna Auto Depot Inc. 8
However, in June of 2017, Mr. Awad changed the corporate name back to United

(Rec. Doc. 12-1 at 1-3).
(Rec. Doc. 12-2 at 3) (recognizing the first use of AUTOZONE mark in commerce as occurring on
November 19, 1987).
3 (Rec. Doc. 12-1 at 4-5).
4 (Rec. Doc. 12-1 at 3).
5 (Rec. Doc. 12-1 at 5).
6 (Rec. Doc. 12-1 at 6).
7 (Rec. Doc. 1 at 6).
8 (Rec. Doc. 1-1).
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Autozone Inc. 9 In October of 2017, United Autozone was administratively terminated
by the Louisiana Secretary of State. 10
Plaintiff filed its complaint on November 22, 2017, alleging trademark
infringement in violation of 15 U.S.C. §1114; unfair competition in violation of 15
U.S.C §1125(a); unfair trade practices in violation of La. Rev. Stat. § 1401, trademark
dilution in violation of 15 U.S.C. § 1125(c) and La. Rev. Stat. Ann. § 51:223.1; and
cyberpiracy in violation of 15 U.S.C. §1125(d). 11 On November 29, 2017, United
AutoZone and Mr. Awad were served with process. 12 Defendants failed to respond to
the complaint or file an answer by December 20, 2017. On April 20, 2018, Plaintiff
moved for entry of default against both defendants. The Clerk granted Plaintiff’s
motion for entry of default on April 23, 2018. 13 Plaintiff then filed the instant motion
that same day. To date, Defendant has failed to make an appearance in this case.

STANDARD FOR DEFAULT JUDGMENT
Under Rule 55(b) of the Federal Rules of Civil Procedure, a default judgment
may be entered against a party when it fails to plead or otherwise respond to the
plaintiff’s complaint within the required time period. Fed. R. Civ. P. 55(b). A plaintiff
who seeks a default judgment against an uncooperative defendant must proceed
through two steps. First, the plaintiff must petition the court for the entry of default,

(Rec. Doc. 1-1).
(Rec. Doc. 12-1 at 6).
11 (Rec. Doc. 1).
12 (Rec. Docs. 6, 7).
13 (Rec. Doc. 11).
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which is “a notation of the party’s default on the clerk’s record of the case.” Dow Chem.
Pac. Ltd. v. Rascator Mar. S.A., 782 F.2d 329, 335 (2d Cir. 1986). To obtain an entry
of default, the plaintiff must show “by affidavit or otherwise” that the defendant “has
failed to plead or otherwise defend” the complaint within the required time period.
Fed. R. Civ. P. 55(a). Beyond that requirement, however, the entry of default is largely
mechanical. See United States v. Hansen, 795 F.2d 35, 37 (7th Cir. 1986) (describing
the entry of default as “an intermediate, ministerial, nonjudicial, virtually
meaningless docket entry”).
After the clerk has entered the default, the plaintiff may move for default
judgment. Fed. R. Civ. P. 55(b). When considering whether there is a “sufficient basis
in the pleadings” for the entry of a default judgment, the court must accept as true
“the well-pleaded factual allegations in the plaintiff’s complaint.” Meyer v. Bayles, 559
F. App'x 312, 313 (5th Cir. 2014) (quoting Nishimatsu Const. Co. v. Hous. Nat'l Bank,
515 F.2d 1200, 1206 (5th Cir. 1975)). However, the defaulting defendant “is not held
to admit facts that are not well-pleaded or to admit conclusions of law.” Nishimatsu,
515 F.2d at 1206. No party is entitled to a default judgment as a matter of right, even
where the defendant is technically in default. Lewis v. Lynn, 236 F.3d 766, 767 (5th
Cir. 2001). The disposition of a motion for the entry of default judgment ultimately
rests within the sound discretion of the district court. Mason v. Lister, 562 F.2d 343,
345 (5th Cir. 1977).

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DISCUSSION
I.

JURISDICTION
Before entering a default judgment, the district court must “look into its

jurisdiction both over the subject matter and the parties.” Sys. Pipe & Supply, Inc. v.
M/V Viktor Kurnatovskiy, 242 F.3d 322, 324 (5th Cir. 2001) (quoting Williams v. Life
Sav. & Loan, 802 F.2d 1200, 1203 (10th Cir. 1986)). Judgment entered in the absence
of jurisdiction is void, and the court must therefore refrain from entering judgment if
its jurisdiction is uncertain.
The instant matter is a suit for trademark dilution and infringement and
cyberpiracy under the Lanham Act; the Court has jurisdiction pursuant to 15 U.S.C.
§ 1121 and 28 U.S.C. §§ 1331, 1337, and 1338. The Court has supplemental
jurisdiction over Plaintiff’s state law claims pursuant to 28 U.S.C. § 1367(a). The
Court has personal jurisdiction over United Autozone as an incorporated entity with
its principal place of business in Louisiana and Mr. Awad because he is a citizen of
Louisiana. Additionally, the alleged tortious acts committed by the Defendants were
committed in this judicial district of Louisiana.

II.

LIABILITY
The complaint alleges that (1) Plaintiff has valid marks that are entitled to

protection under the Lanham Act, 14 (2) Plaintiff's marks are famous, (3) Defendants
used the marks to advertise and sell its goods and services without Plaintiff's consent,

Plaintiff registered its mark in 1989, that is prima facie evidence that Plaintiff enjoys an exclusive
right to its AUTOZONE mark in connection with the registered services. 15 U.S.C. § 1115(a).
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(4) Defendants used the Plaintiff’s marks after they became famous, (5) Defendants'
use of the marks is likely to cause confusion in the marketplace for used vehicles sales
as to the source and authority for offering such services, 15 (6) Defendants' use of the
marks dilutes the distinctive quality of the marks to identify and distinguish
Plaintiff's goods and services, (7) Defendants' use of the marks intended to confuse
and deceive the consuming public, and (8) Defendants used a domain name
confusingly similar to Plaintiff’s marks with the bad faith intent of profiting from
consumer association with Plaintiff’s marks. By their default, Defendants have
admitted these allegations, which together constitute the essential elements of
Plaintiff’s claims of trademark infringement, unfair trade practices, cyberpiracy and
dilution pursuant to the Lanham Act.
Furthermore, the Fifth Circuit has concluded that the Louisiana Unfair Trade
Practices Act (“LUTPA”) prohibits trademark infringement as a variation of an unfair
trade practice and that, “[l]ikelihood of confusion is the essential ingredient for claims
of unfair competition under both the Lanham Act and the Louisiana statute.”
Louisiana World Exposition, Inc. v. Logue, 746 F.2d 1033, 1039 (5th Cir. 1984). Thus,
the elements of Plaintiff’s LUTPA claim are met. Finally, the requirements for
dilution under state law are the same as the requirements for dilution under the
Lanham Act, see Nola Spice Designs, LLC v. Haydel Enterprises Inc., 969 F. Supp. 2d
688, 703 (E.D. La. 2013), and therefore Plaintiff has proved a violation of Louisiana’s
anti-dilution law as well.
“Whether consumers are likely to be confused about the origin of a defendant's products or services
is ultimately a question of fact.” AutoZone, Inc. v. Strick, 543 F.3d 923, 929 (7th Cir. 2008).
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III.

REMEDY
Plaintiff has requested a permanent injunction and the Court agrees that

Plaintiff would be irreparably harmed if Defendant were allowed to continue using
the UNITED AUTOZONE mark. Keeping in mind that “an equitable remedy for
trademark infringement should be no broader than necessary to prevent the
deception,” Abraham v. Alpha Chi Omega, 708 F.3d 614, 620 (5th Cir. 2013) (quoting
Westchester Media et al. v. PRL USA Holdings, et al., 214 F.3d 658, 671 (2000)), the
Court shall enjoin Defendants from employing the UNITED AUTOZONE mark—or
any other mark confusingly similar to Plaintiff’s marks—to promote its used car
business. This injunction shall prohibit Defendant from using the UNITED
AUTOZONE mark as its trade name for its used vehicle business or in its domain
name.
Plaintiff has also requested damages. While all well-pleaded factual
allegations are considered true for purposes of default judgment, this does not include
allegations as to damages. U.S. For Use of M-CO Const., Inc. v. Shipco Gen., Inc., 814
F.2d 1011, 1014 (5th Cir. 1987). The Court finds an evidentiary hearing is required
before the Court can grant monetary damages pursuant to 15 U.S.C. § 1117.
Finally, Plaintiff requests that the Court direct the Defendants to deliver all
physical promotional materials which bear the UNITED AUTOZONE mark, so that
they may be destroyed pursuant to 15 U.S.C. § 1118. However, Plaintiff provides no
evidence of the existence of any such materials. Thus, Defendants shall deliver such

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materials to the extent they exist or an affidavit averring that such materials do not
exist, if in fact they do not.
CONCLUSION
Accordingly,
IT IS ORDERED that Plaintiff's Motion for Default Judgment (Rec. Doc. 12)
is GRANTED.
IT IS FURTHER ORDERED that Defendants are hereby PERMANENTLY
ENJOINED from using the UNITED AUTOZONE mark—or any other mark
confusingly similar to Plaintiff’s marks—to promote their used car business.
IT IS FURTHER ORDERED that Defendant shall TRANSFER the domain
name “unitedautozoneofgretna.com” to Plaintiff within ten days of the entry of final
judgment.
IT IS FURTHER ORDERED that an evidentiary hearing shall be held on
January 16, 2019 at 9:30 a.m. to determine Plaintiff’s damages.
IT IS FURTHER ORDERED that Defendants shall DELIVER any and all
physical media displaying the UNITED AUTOZONE mark in their possession to
Plaintiff no later than January 15, 2019. To the extent that such materials do not
exist, Defendants shall deliver an affidavit averring as to such.
New Orleans, Louisiana, this 12th day of December, 2018.

CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
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