Hamdan v. Tiger Brothers Food Mart Inc.

Filing 27

RULING and ORDER granting 12 Motion for Default Judgment. A DEFAULT JUDGMENT is ENTERED in favor of Plaintiff Imad Faiez Hamdan, and against Tiger Brothers Food Mart, Inc. Defendant, Tiger Brothers Food Mart, Inc., is PERMANENTLY ENJOINED from usin g "BROTHER'S" or "BROTHERS FOOD MART" in connection with its business. The issue of Defendant's profits and the damages sustained by Plaintiff is referred to the Magistrate Judge to conduct a hearing, pursuant to Federal Rule of Civil Procedure 56(b)(2), to determine the amount of monetary profits and damages due to Plaintiff, Imad Faiez Hamdan. Plaintiff Imad Faiez Hamdan is awarded attorney fees pursuant to 15 U.S.C. §1117. The matter of attorney fees is referred to the Magistrate Judge to determine the amount of the reasonable attorney fees to be awarded. A Final judgment shall issue by separate order. Signed by Chief Judge Brian A. Jackson on 03/21/2016. (BLR)

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UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA CIVIL ACTION IMAD FAIEZ HAMDAN VERSUS TIGER BROTHERS FOOD MART, INC. N0.:15-00412-BAJ-EWD RULING AND ORDER Before t he Court is a Motion for Default Judgment (Doc. 12), filed by Plaintiff Imad Faiez Ha mdan ("Plaintiff'), seeking a default judgment against Defendant, Tiger Brothers Food Mart, Inc. ("Defenda n t"). Plaintiff alleges that Defendant infringed his tra de mark rights in "BROTHERS FOOD MART," a nd seek s a n injunction against t he use of "BROTHER'S" a nd "BROTHERS FOOD MART." Plaintiff also requests a hearing to determine da mages, including Defendant's pr ofits, damages sustained by Plaintiff, and the costs of the action, including attorney fees . Defendant did not file a n opposition to the motion and oral argume nt on this matter is not necessary. Jurisdiction is proper pursuant to 15 U.S.C. §1121, 28 U.S.C. §1338(b), 28 U.S.C. §1367, and 28 U.S.C. §1331. For the reasons below, Plaintiffs Motion for Default Judgment (Doc. 12) is GRANTED. I. Background A. The Complaint On June 24, 2015, Plaintiff filed this lawsuit against Defendant under The Lanham Act, 15 U.S.C. §1051 et seq. ; t he Louisiana Unfair Trade Practices Act, La. R.S. 51:1405 et seq. ; and common law unfair competition. (Doc. 1 at pp. 1-2). Plaintiff alleges t hat he is the owner of the trademark "BROTHERS FOOD MART" registered with the Louisia na Secretary of State as of June 14, 2012. (Doc. 1 at p. 2). Plaintiff also alleges he is the owner of the service ma rk "BROTHER'S" registered with the Louisiana Secretary of State as of June 19, 2015. Plaintiff cla ims continuous u se of the mark "BROTHERS FOOD MART'' since at least September 12, 1992 to identify and distinguish his convenience stores fro m similar businesses. (Doc. 1 at p. 2). Plaintiff alleges that he has used t his mark on his stores, in advertising, and in promotional materials in Baton Rouge a nd New Orlea ns. (Doc. 1 at pp. 2-3). As a result of his advertise ments, Plaintiff alleges th at the public uses the ma rk to identify a nd refer to his convenience stores. (Doc. 1 at p. 3). He also claims t he trademark refers to a high qua lity convenience store emanating from a single source and that his tr ademark has built up secondary meaning and goodwill in the marketplace. (Doc. 1 atp. 3). Plaintiff a lleges th at Defenda nt has infringed his trademark right by usin g "TIGER BROTHERS FOOD MART" in connection with its convenience store, which is likely to cause confusion as to source designation . (Doc. 1 at pp. 3-4). Additionally, Plaintiff claims Defendant's actions constitute unfair competition a nd unfair or deceptive acts a nd practices in t he conduct of business. (Doc. 1 at p. 5). Accordingly, Plaintiff seeks a perma nent injunction restraining Defe nda n t from using "TIGER BROTHERS FOOD MART'' or "TIGER BROTHERS" in connection with convenience stores, as well as damages, attorneys' fees, and court costs. (Doc. 1 at pp. 6-7). 2 B. Procedural History Pla intiff initiated this action on June 24, 2015, and served Defendant on June 25, 2015. (Doc. 1; Doc. 5). Defendant's answer was due on July 20, 2015, or twentyone days after receiving service. Fed. R. Civ. P. 12(a)(1)(A). A purported answer was filed on July 10, 2015, signed by Defendant's agent and officer, Eyad Khaled ("Khaled"). (Doc. 6). However, Mr. !{haled is not an attorney and it was improper for him to file an answer on behalf of Defendant, a corporate entity. (Doc. 8 at p. 1); see Donovan v. Road Rangers Country Junction, Inc. , 736 F.2d 1004, 1005 (5th Cir. 1984) (finding "the 'clear' rule is 'that a corporatio n as a fictional legal person can only be represented by licensed counsel"' (quoting K.M.A. , Inc. v. General Motors Acceptance Corp., 652 F .2d 398, 399 (5th Cir. 1982))). Due to the deficiency of the answer, t he a nswer was stricken from the record by the Court on July 20, 2015. (Doc. 8 at p. 1). On July 22, 2015, Plaintiff moved for a n entry of default, (Doc. 9 at p. 1), which the Clerk of Court entered on July 27, 2015, pursuant to Federal Rule of Civil Procedure ("Rule") 55(a), (Doc. 10 at p. 1). On October 21, 2015, Plaintiff filed the subject Motion for Entry of Default Judgment, pursua nt to Rule 55(b). (Doc. 12). On October 26, 2015, Defendant obtained counsel and filed a n answer, without requesting leave of court, on October 27, 2015. (Doc. 13). On November 16, 2015, Plaintiff filed a Motion to Strike the Answer of Defendant. (Doc. 14 at p. 1). On January 11, 2016, the Court granted the 3 Motion to Strike the Answer and the answer was stricken from the record. (Doc. 26 at p. 4). 1 II. Standard of Review The service of a summons triggers a duty to respond to a complaint and a failure to respond may result in the entry of default or default judgment under Federal Rule of Civil Procedure 55. Rogers u. Hartford Life & Accident Ins. Co. , 167 F.3d 933, 93739 (5th Cir. 1999). When a party establishes by affidavit or some other method that there h as been a defa ult, t he Clerk of Coul't will enter the default. New York L ife Ins. Co. u. B rown, 84 F.3d 137, 141 (5th Cir. 1996). Once there has been an entry of default, th e plaintiff may apply to the Coul't for a defa ult judgment. Id. Default judgments a re usually disfavored under the Federa l Rules of Civil Procedure. Sun Bani?- of Ocala u. Pelican Homestead & Sau. Ass'n, 874 F.2d 274, 276 (5th Cir. 1989). A default judgment is considered t o be a drastic remedy that sh ould only be available "when t he adversary process h as been h alted because of an essentially unresponsive party ." Id. (quoting H.F. Livermore Corp. u. Aktiengesellschaft Gebruder Loepfe, 432 F.2d 689, 691 (D.C. Cir. 1970)). Because of this view, a party is not entitled to a default judgment, even where t he defendant is technically in default. Ganther u. Ingle, 75 F.3d 207, 212 (5th Cir. 1996). In determining whether a default judgment should be en tered, the Fifth Circuit has developed a two part test. Taylor u. City of Baton Rouge, 39 F. Supp. 3d I The Coul"t also denied severa l motions filed by the Defendant. including a Motion for Leave of Court to File Out of Time Answer and a Motion to Set Aside Default Judgment, which was denied. (Doc. 26 at p. 5). 4 807, 813 (NLD. La. 2014). The first part of the analysis is to determine whether the e ntry of default judgment is appropriate under the circumstances. Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998). Several factors are relevant to this inquiry, including: (1) whether there are materia l issues of fact at issue; (2) whether there has been substantial prejudice; (3) whether the grounds for default have been clearly established; (4) whether the default was caused by excusable neglect or good faith mistake; (5) the h arshness of default judgment; and (6) whether the court would think itself obliged to set aside the default on a motion by Defendant. I d. Second, the Court must assess the merits of Plaintiff's claims and find a viable claim for r elief. Nishimatsu Constr. Co. v. Houston Nat'l Banh, 515 F. 2d 1200, 1206 (5th Cir. 1975). III. Ana lys is The Court finds that default judgment is appropriate under the circumstances of this case and that Plaintiff states a viable claim for relief. Default Judgment is appropriate because Defendant failed to file a proper and timely answer, and has failed to produce evide nce to show that its failure to file an answer resulted from "good faith mistake or excusable neglect." See Lindsey, 161 F. 3d at 893. Additionally, Defendant's failure to file an opposition to the motion or otherwise defend the instant suit for more than seven months mitigates the harshness of a default judgment. Lastly, th e Court is not aware of any facts that would constitute "good cause" to set aside default judgment if Defendant filed a motion requesting such. Furthermore, after reviewing the allegations set forth in the Complaint, the Court finds that Plaintiff states a viable claim under 15 U.S.C. §1125(a) for False 5 Designation of Origin; the Louisiana Unfa ir Practice Act, La . R.S. § 51:1405; and Common Law Unfair Competition . A. False Designation of Origin- 15 U.S.C. §1125(a) A claim for false designation of origin under the La nham Act arises when any person uses a m ark in connection with any goods or services, the use of which is likely to cause confusion, mistake, or affiliation. 15 U.S. C. §1125(a). In order to prevail in a claim for fa lse designation of origin, the plaintiff must meet the threshold requirement of proving he or she possesses a protectable mark. Elvis Presley Enters. u. Capece, 141 F.3d 188, 194 (5th Cir. 1998). This tluesh old ca n be met by showing t hat the m a rk is registered, and t hus protected from infringement by junior users. Id. Here, Plaintiff submitted registration certifica tes from the Louisia na Secretary of State for both trade name a nd service na me marks. (Doc. 1-1; Doc. 1-2). These registrations meet the threshold requirement of ownership required in a fa lse designation of origin cla im. Once the threshold requiremen t IS met, a plaintiff can establish a false designation of origin claim by showing t ha t a defendant's use of the trademark creates a likelihood of confusion in t he minds of poten tial customers . Westchester Media u. PRL USA Holdings, Inc. , 214 F.3d 658, 663 (5th Ci1·. 2000). Courts consider a lis t of non-exhau stive, non-dispositive factors to determine whe ther or not a likelihood of confusion exists . Lyons P'ship u. Giannoulas, 179 F.3d 384, 388 (5th Cir. 1999). These facto rs include: (1) the type of t radema rk allegedly infringed, (2) the similarity between the two marks, (3) the simila rity of t he 6 products or services, (4) the identity of the retail outlets and purchasers, (5) the identity of the advertising media u sed, (6) t he defendant's intent, a nd (7) any evidence of actual confusion. Id. at 389 (citations omitted). These facto rs are considered in light of the circumstances of each case a nd accordingly some factors may weigh more heavily in t he analysis t han others. Am. Century Proprietary Holdings v. Am. Century Cas. Co. , 295 F. App'x 630, 635 (5th Cir. 2008) (quoting Scott Fetzer Co. v. House of Vacuums Inc., 381 F.3d 477, 485 (5th Cir. 2004); Marathon Mfg. Co. v. Enerlite Prods. Corp. , 767 F.2d 2 14, 218 (5th Cir. 1985)). Here, th e Court finds that Plaintiffs allegations demonstrate that Defendant's u se of the mark "BROTHERS FOOD lVIART'' creates a likelihood of confusion based on the type of trademark allegedly infringed; the similarity of the two marks and the products and services offered; and evidence of actual confusion. The mark at issue possesses enough strength and distinctiveness to qualify as the type to mark that deserves protection. See Arnstar Corp. v. Domino's Pizza, Inc., 615 F .2d 252, 259 (5th Cir. 1980) (evaluating the strength and distinctiveness of the mark "Domino" as compared to such distinct marks as "Kodak" and "Xerox"). "To be protectable, a mark must be distinctive, either inherently or by achieving secondary meaning in the mind of t he public." Am. Rice, Inc. v. Producers Rice Mill, Inc., 518 F.3d 321, 329 (5th Cir. 2008). Plaintiff a lleges that consumers use t he trademark to identify and refer to "a high quality convenience store emanating from a single source" and that the mark has "built up extensive secondary mea ning and good will." 7 (Doc. 1 at p. 3). The consumer recognition alleged by Plaintiff sufficiently establishes a distinctive mark a nd weighs in favor of actual confusion. I n addition to the distinctiveness of Pla intiff's mark, there are a lso similarities between the marks a nd the products and services offered. "TIGER BROTHERS FOOD MART" and "BROTHERS FOOD MART'' are effectively identical marks, notwithstanding the Defendant's addition of the word "Tiger." See Cottonwood Fin. Ltd. v. Cash Store Fin. Servs., 778 F. Supp. 2d 726,75 1 (N.D. Tex. 2011) (finding "The Cash Store" and "Cash Store" effectively identical); see also Visa Int'l Serv. Ass'n v. JSL Corp., 610 F.3d 1088, 1090 (9th Cir. 2010) (concluding the marks "Visa" and "eVisa" were "effectively identical"). The similarity of the marks is further exasperated by t he similarity of the products a nd services offered. P laintiff alleges that both companies engage in the business of providing convenie nce store services in Baton Rouge, Louisiana, including the sale of a lcoholic beverages. (Doc. 1 at pp. 23; Doc. 1-5). The similar products and services offered by t he two companies appeal to the same consume r group , despite the relative sizes of the companies . See Oleg Cassini, Inc. u. Cassini Tailors, Inc. , 764 F. Supp. 1104, 111 (W.D. Tex. 1990) (finding that a strong similarity in the types of goods a nd services provided, even if t he plaintiff and defendant are drastically different business sizes, ca n lead to a likelihood of cons umer confusion). Each of these similarities a lleged weigh in favor of a likelihood of confusion. Finally, Plaintiff a lleges actual confusion, which is the best indicator that a likelihood of confusion does in fact exist. Am.star Corp. , 6 15 F.2d at 263. In his 8 Complaint, Plaintiff a lleges consumers are confused as to the ownership of "TIGER BROTHERS FOOD MART" in relation to his store, "BROTHERS FOOD MART." In support of this assertion, Plaintiff, in his declar ation, claims that vendor representatives from Coca-Cola and Budweiser, as well as a representative from a nother convenience store ch a in, Circle K, believed that "TIGER BROTHERS FOOD MART" was actually owned and operated by Plaintiff as part of his chain of convenience stores. (Doc. 12-1 at p. 13). These instances of confusion, from actors who are familiar with the convenie nce store business, is evidence of actu al confusion. Evidence of actual confusion , in addition to the distinctiveness of Plaintiffs mark and the similarities between the marks, strongly support a finding that Plaintiff a lleges a viable false designation of origin claim. See Fuji Photo Film Co. v. Shinohara Shoji Kabushiki Kaisha, 754 F.2d 591, 597 (5th Cir. 1985) (finding evidence of actual confusion is t he best evidence of a likelihood of confusion, whether those instances of actual confu sion are on the part of consumers or professionals). B. Louis iana Unfair Trade Practices Act-La. R.S. §51:1401 et seq. The Louisiana Unfair Trade Practices Act ("LUTPA") prohibits any unfair methods of competition and any unfair or deceptive acts or practices in the conduct of any trade or commerce. La. R.S. §51:1405. Under Fifth Circuit law, a likelihood of confusion supports both a claim under the Lanham Act a nd under the LUPTA. Louisiana Worl d Exposition, Inc. u. Logue, 746 F.2d 1033, 1039 (5th Cir. 1984) (finding likelihood of confusion is a n essentia l element to claims under the Lanha m Act and Louisiana statute, §51:1401 et seq.); see also Bd. of Supervisors for Louisiana 9 State Uniu. Agric. & Mech. Coll. u. Smach Apparel Co., 550 F.3d 465, 490 (5th Cir. 2008) (holding that the digits-of-confusion analysis for likelihood of confusion apply with equal force to LUTPA claim requirements). As the Court h as found Plaintiffs allegations of a likelihood of confusion are supported by the factual allegations of the Complaint, these facts would also support a finding of a violation of t he LUTPA. C. Common Law Unfair Competition Under the common law, a likelihood of confusion or an attempt to pass off someone's goods or services as those of a nother constitute unfair competition. Prof'l Golfers Ass'n of Am. u. Bard?.ers Life & Cas. Co., 514 F.2d 665, 671 (5th Cir. 1975); see also Gulf Coast Bank u. Gulf Coast Bani?, & Trust Co., 652 So.2d 1306, 1308 (La. 1995) (holding that a party need not prove fra ud to enjoin another from using its trade name, but must only show a likelihood of confusion). Plaintiff h as alleged and demonstrated that there is a likelihood of confusion- and in fact actual confusionbetween his business and that of Defendant. As Plaintiff has met t his burden of showing a likelihood of confusion for a false designation of origin cla im, Plaintiff h as also met the burden required for a successful common law unfair competition claim. See also Boston Professional Hocl?.ey Ass'n u. Dallas Cap & Emblem Mfg., Inc., 510 F.2d 1004, 1010 (5th Cir. 1975) (finding the same facts that s upport a claim of trademark infringement a lso support a claim for unfai1· competition); Pebble B each Co. u. Tour 18 I , 942 F. Supp. 1513, 1554 (S.D. Tex. 1996) (finding t he same facts that support a claim oftrademark infringeme nt also support claims for common law unfair competition and so liability depends on a likelihood of confusion); King-Size, Inc. u. 10 Frank's King Size Clothes, Inc. , 547 F. Supp. 1138, 1163 (S.D. Tex. 1982) (finding that claims for trademark infringement and common law unfair competition require t he same elements). Thus, Plaintiff alleges a viable common law unfair competition claim. D. Remed ies Plaintiff is requesting a perma nent injunction against "TIGER BROTHERS FOOD MART," as well as Defendant's profits, Plaintiffs damages, and attorney fees. The Lanham Act grants the Comt discretion to enter an injunction to prevent continued infringement of a trademark. 15 U .S.C. §1116(a). In order for a permanent injunction to issue, a plaintiff must show "that a commercial advertisement or promotion is either literally false or that t he advertisement is likely to mislead a nd confuse consumers" and that the plaintiff "will s uffer irreparable harm if the injunction is not granted." Logan u. Burgers Ozarh Country Cured Hams, Inc. , 263 F.3d 447, 465 (5th Cir. 2001) (quoting Seven-Up u. Coca-Cola Co. , 86 F.3d 1379, 1390 (5th Cir. 1996)). Plaintiffs a llegations have shown Defendant's use of "TIGER BROTHERS FOOD MART" is likely to confuse consumers as to the source of the goods and services provided. Plaintiff also alleges the continued use of "TIGER BROTHERS FOOD MART'' will cause irreparable harm to his trademark, "BROTHERS FOOD MART," by damaging his consumer goodwill. (Doc. 1 at p. 7). As such, a permanent injunction is warranted. Upon a successful claim under 15 U.S.C. §1125, a plaintiff shall be entitled to recover the defendant's profits, da mages sustained by the plaintiff, a nd the costs of 11 the action. 15 U.S.C. §1125. The awarding of profits is not automatic and is within th e discretion of t he court. Quich Techs., Inc. v. Sage Grp. PLC, 313 F.3d 338, 349 (5th Cir. 2002) (citing Champion Sparh Plug Co. v. Sanders , 331 U .S. 125, 131 (1947); Pebble Beach Co. v. Tour 18 I, Ltd. , 155 F.3d 526, 554 (5th Cil:. 1998)). Relevant factor s in this a na lysis include, (1) whether the defenda nt had t he intent to confuse or deceive, (2) whether the sales have been diverted, (3) the adequacy of other remedies, (4) any unreasonable delay by t he plaintiff in asserting his rights, (5) the public interest in making the misconduct unprofitable, a nd (6) whether it is a case of palming off. Quick Techs. , I nc. , 313 F.3d at 349 (quoting Pebble Beach, 155 F.3d at 554). Similarly, the court is given broad discretion to determine "a just amo unt or recovery for trademark infTingement." Martin 's Herend Imports, Inc. v. Diamond & Gem Trading USA, Co. , 112 F.3d 1296, 1304 (5th Cir. 1997). Because Plaintiff h as not a lleged specific damages and Defendant's profits have not been calculated, a hearing is necessary to determine the appropriateness of awarding profits, a nd if appropriate, to calculate a just amount. Furthermore, t he Lanham Act provides for attorney fees, but only in "exception a l cases." 15 U.S.C. §1117. The Fifth Circuit has defined "exceptiona l cases" as those where the defendant infringes the plaintiffs mark in ba d faith-w here t he infringement is malicious, fraudulent, deliber ate, or willful. Nat 'l Bus. Forms & Printing, I nc. v. Ford Motor Co., 67 1 F.3d 526, 537 (5th Cir. 20 12) (citations omitted) ; Procter & Gamble, Co. v. Amway Corp. , 280 F. 3d 519, 527 (5th Cir. 2002); Tex. Pig Stands, I nc. v. Hard Rocle Ca{e Int 'l, Inc., 951 F.2d 684, 697 (5th Cir. 1992); K&G 12 Men's Co. v. Carter, No. 10-309-JJB-SCR, 20 10 U.S. Dist. LEXIS 95830 (M.D. La . 2010). Cour ts have fo und that a failure to cease and desist upon request of the plaintiff or the failure to respond to pleadings can constitute bad faith. See Chevron I ntellectual Prop., LLC v. Allen, 2009 U.S. Dist. LEXIS 74751 (N. D. Tex. 2009); K&G Men's Co., 20 10 U.S. Dist. LEXIS 95830 at * 1, *4. Here, Defenda nt has exhibited several instances of bad faith . First, according to Plaintiffs attorney's declaration, he contacted Defenda nt's agent, Mr. Khaled, concerning t he use of "TIGER BROTHERS FOOD :MART" on Ma rch 19, 2015. Mr. Illialed indicated that he would change the business name afte r state licenses were received because to ch ange the name at th at time would delay the business opening by 45 days. (Doc. 12-10 at p. 1). After receiving the a nticipa ted licenses, and beginning operations on June 2, 2015, Mr . Khaled refused to change the business name and indicated th at he believed it to be a non-issue. (Doc. 12-10 at p. 2). Addition ally, after being properly served with Plaintiffs Complaint on June 25, 2015, Defendant failed to timely file a response. Defendant also failed to file an opposition to the insta nt motion. Therefore, these instances of bad faith on t he part of Defendant m ake this claim an "exceptional case" a nd entitle Plaintiff to attorney fees under 15 u.s.c. §1117. IV. Conc lus ion For t he foregoing reasons, t he Cour t concludes t hat Plaintiff is ent itled to a default judgment against Defendant. Accordingly, 13 IT IS ORDERE D t hat Plaintiff Imad Faiez Hamdan's Motion for Default Judgme n t (Doc. 12) is GRANTED, and a DEFAULT JUDGMENT is ENTERED in favor of Plaintiff I mad Faiez Hamda n, and against Tiger Brothers Food Mart, Inc. IT IS FURTHER ORDERED that Defendant, Tiger Brothers Food Mart, Inc., is PERMANENTLY ENJOINED from using "BROTHER'S" or "BROTHERS FOOD MART" in connection with its business. IT IS FURTHER ORDERED t hat the issue of Defendant's profits and the damages sustained by Plaintiff is referred to the Magistrate Judge to conduct a h earing, pursuant to Federal Rule of Civil Procedure 56(b)(2), to determine the amount of monetary profits and damages due to Plaintiff, I mad Faiez Hamdan. IT IS FURTHER ORDERED that Plaintiffimad Faiez Hamdan is awarded attorney fees pursuant to 15 U.S.C. §1117. The matter of attorney fees is referred to the Magistrate Judge to determine the amount of the reasonable attorney fees to be awarded. IT IS FURTHER ORDERED that final judgment shall issue by separate order. !T Baton Rouge, Louisiana, this '2./ - day of March, 20 16. BRIAN A. JACKSON, CHIEF JUDGE UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA 14

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