SMITH v. DIRECTOR'S CHOICE, LLP

Filing 25

OPINION. Signed by Chief Judge Jerome B. Simandle on 11/30/2015. (dmr)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

RUSS SMITH,

HONORABLE JEROME B. SIMANDLE
Plaintiff,
Civil Action
No. 15-00081 (JBS/AMD)

v.
DIRECTOR’S CHOICE, LLC

OPINION
Defendant.

APPEARANCES:
Mr. Russ Smith
P.O. Box 1860
Ocean City, NJ 08226
Pro Se
Matthew A. Kaplan, Esq.
ABBOTT BUSHLOW & SCHECHNER LLP
70-11 Fresh Pond Road
Ridgewood, NJ 11385
Attorney for Defendant
SIMANDLE, Chief Judge:
I.

INTRODUCTION
This case involves a dispute between pro se Plaintiff Russ

Smith and Defendant Director’s Choice, LLC (“Director’s Choice”)
over Smith’s registration and use of the domain name
<directorschoice.com>. The domain name was registered to a
business entity owned by Smith, HELP.org, LLC (“HELP.org”), when
Director’s Choice brought a complaint against HELP.org under the
Uniform Domain Name Dispute Resolution Policy (“UDPR”). An
arbitration panel declared that Director’s Choice had common law

trademark rights to the “Director’s Choice” mark and that
HELP.org was a cybersquatter, and ordered the transfer of
<directorschoice.org> to Defendant. Smith then changed the
registrant of the domain name to himself and filed a civil
action against Defendant under the Anti-Cybersquatting Consumer
Protection Act (“ACPA”), 15 U.S.C. § 1114(2)(D)(v), challenging
the panel’s decision against HELP.org.
Presently before the Court is a motion to dismiss for lack
of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1) by
Defendant Director’s Choice [Docket Item 9], and a motion for
partial summary judgment by Smith [Docket Item 19]. Before the
Court can resolve Smith’s motion, it must determine whether
Smith has standing to file suit. Specifically, the Court must
decide whether Smith, whose company HELP.org was the “domain
name registrant” of a domain name at the time of an arbitration
panel decision has statutory standing to file a civil action to
seek injunctive relief under the ACPA. The Court finds that he
does, and will deny Defendant’s motion to dismiss. Accordingly,
the Court will lift the stay on Plaintiff’s motion for summary
judgment.
II.

BACKGROUND
A. The Anti-Cybersquatting Consumer Protection Act
The Anti-Cybersquatting Consumer Protection Act (“ACPA”),

Pub.L. No. 106–113, § 3001 et seq., 113 Stat. 1501A–545
2 

(codified in scattered sections of 15 U.S.C.), was enacted in
1999 to prevent the practice of “cybersquatting,” a phenomenon
“whereby individuals register Internet domain names in violation
of the rights of trademark owners.” Sallen v. Corinthians
Licenciamentos LTDA, 273 F.3d 14, 17 (1st Cir. 2001) (citing S.
Rep. No. 106-140, at 4 (1999)).1 Cybersquatters register domain
names incorporating the trademarks of others in bad faith, with
the intent of selling the domain names back to the trademark
owners, or profiting in some other way from the goodwill
associated with the trademarks. See id. at 17; Shields v.
Zuccarini, 254 F.3d 476, 481 (3d Cir. 2001). The ACPA makes it
illegal for a person to register an internet domain name that is
“identical or confusingly similar” to the trademark of another
person or company, with the “bad faith” intent to profit from
that mark. 15 U.S.C. § 1125(d)(1)(A). To “balance the rights
given to trademark owners against cybersquatters, the ACPA also
provides some protection to domain name registrants against
‘overreaching trademark owners,’” and allows domain name
registrants to commence an action to declare that the domain
name registration or use is not unlawful. Barcelona.com, Inc. v.

1

A domain name is “any alphanumeric designation which is
registered with or assigned by any domain name registrar, domain
name registry, or other domain name registration authority as
part of an electronic address on the Internet.” 15 U.S.C. §
1127.
3 

Excelentisimo Ayuntamiento de Barcelona, 330 F.3d 617, 625 (4th
Cir. 2003).
In order to claim a particular domain name, a registrant
makes an application to a registrar, submits a fee, and agrees
to the terms of the domain name registration agreement. See
Barcelona.com, Inc. v. Excelentisimo Ayuntamiento de Barcelona,
330 F.3d 617, 624 (4th Cir. 2003). The registration agreement
includes a dispute resolution process, the Uniform Domain Name
Dispute Resolution Policy (“UDRP”), a contractually mandated
process for resolving disputes that might arise between domain
name registrants and trademark owners. The UDRP is intended to
provide a quick process for resolving domain name disputes by
submitting them to authorized dispute resolution panels. Sallen,
273 F.3d at 20-21. If the dispute resolution panel finds that
the domain name registrant has no rights or legitimate interests
in the domain name and is using the domain name in bad faith,
the dispute resolution panel may order the registrar to cancel
or transfer registration of the domain name to the trademark
holder. See id. at 21; Barcelona.com, 330 F.3d at 624.
The ACPA recognizes a registrar’s decision to cancel,
disable, or transfer a domain name under the UDRP, and limits
its liability with respect to those decisions. In addition, as
noted above, 15 U.S.C. § 1114(2)(D)(v) allows a “domain name
registrant whose domain name has been suspended, disabled, or
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transferred under a policy described under clause (ii)(II)” to
file an action in federal court. The “policy described under
clause (ii)(II)” encompasses registrar actions taken pursuant to
UDRP panel decisions.2 Barcelona.com, 330 F.3d at 625; see also
Sallen, 273 F.3d at 29 (“(D)(v) is best understood to provide
domain name holders with a cause of action to rectify reverse
domain name hijacking by trademark holders using the UDRP
process to require registrants to transfer domain names
originally held by rightful users under U.S. law.”). Similarly,
§ 1114(2)(D)(iv) permits “the domain name registrant” to file a
civil suit to recover damages against a person if the
registrar’s actions were based upon a knowing and material
misrepresentation by that person that the domain name is
identical to or confusingly similar to a protected mark.
In other words, a person who lost his domain name to a
trademark owner in a dispute resolution proceeding mandated by
the UDRP may file an action in federal court under these
provisions to recover the domain name. If the plaintiff can
prove that that his registration or use of the domain name is
not unlawful under the Lanham Act (as amended by the ACPA), he

2

Specifically, the “policy” refers to the registrar’s
implementation of a “reasonable policy . . . prohibiting the
registration of a domain name that is identical to, confusingly
similar to, or dilutive of another’s mark.” 15 U.S.C. §
1114(2)(D)(ii)(II).
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is entitled to declaratory relief and an injunction requiring
the registrar to reactivate or transfer the domain name back to
the domain name registrant. 15 U.S.C. §§ 1114(2)(D)(iv) & (v);
see also Barcelona.com, 330 F.3d at 626.
B. Factual Background
For the past eighteen years, Plaintiff Russ Smith has
operated a variety of business entities that develop web sites
that generate income through the display of advertisements. (Am.
Compl. ¶ 11.) These entities regularly buy and sell both web
sites and domain names. (Id.) On March 7, 2000, a now-dissolved
business entity operated by Smith registered the domain name
<directorschoice.com> (“domain name”). (Id. ¶ 12.) The domain
name registration was at some point transferred to HELP.org, LLC
(“HELP.org”), of which Smith is the owner. The domain name is
currently owned by Smith and operates as a movie review web
site. (Id. ¶ 15.)
In 2002, Defendant Director’s Choice contacted Smith for
the first time to inquire about purchasing the domain name. (Id.
¶ 13.) Over the next twelve years, Defendant intermittently
contacted Smith via email seeking to purchase the domain name.
(See Ex. A-F to Am. Compl.) When Smith placed the domain name up
for sale in 2014, Defendant filed a complaint against HELP.org
pursuant to the Internet Corporation for Assigned Names and
Numbers’ (“ICANN”) Uniform Domain Name Dispute Resolution Policy
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(“UDRP”). Defendant alleged that it had maintained “continuous
and extensive use of ‘DIRECTOR’S CHOICE’ as a common law
trademark” (id. ¶¶ 13-14); that Smith had no right to the mark
because he did not register the domain name until nearly three
years after Defendant began using the mark in commerce; and
Smith’s use of the domain name was in bad faith because it was
intended to attract internet users to Smith’s site by creating
confusion between Smith’s site and Defendant’s services. (See
Notice of Opp’n, Ex. C to Mot. to Dismiss [Docket Item 9-7].)
On December 22, 2014, a three-member administrative panel
with the National Arbitration Forum (“NAF”) agreed with
Defendant that HELP.org, LLC did not have any rights or
legitimate interests in the disputed domain name and ordered the
transfer of the domain name from HELP.org, LLC to Defendant.
(Id. ¶ 1.) Shortly thereafter, on January 7 or 8, 2015,
Plaintiff changed the Registrant for the disputed domain name
from the business entity HELP.org, LLC, of which he is the
owner, to himself, Russ Smith. (Compare WHOIS Record dated Jan.
8, 2015, Ex. H to Mot. to Dismiss [Docket Item 9-12] with WHOIS
Record dated Jan. 6, 2015, Ex. I to Mot. to Dismiss [Docket Item
9-13].)
At around the same time, on January 7, 2015, Smith filed a
two-count Complaint [Docket Item 1] against Director’s Choice

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under the ACPA, 15 U.S.C. § 1114(2)(D)(iv) and (v),3 arguing that
his use of the domain name is lawful, and that Defendant made
materially false statements to the UDRP panel which caused the
panel to order the domain name transferred to Defendant. Smith
challenges the decision of the UDRP panel and seeks a
declaration of his lawful use of the domain name (Count One),
and a declaration that the Defendant made materially false
statements to the UDRP panel (Count Two). He asks this Court to
enjoin the transfer of the domain name to Director’s Choice, and
for an award of damages in the amount of $2,100. (Am. Compl. ¶¶
50-56.)4
Defendant filed the instant motion to dismiss for lack of
subject matter jurisdiction pursuant to Fed. R. Civ. P.
12(b)(1), arguing that Smith lacks standing to sue under the
ACPA. Specifically, Defendant contends that the “domain name
registrant” who files suit under § 1114(2)(D)(iv) and (v) must
have been the domain name registrant at the time of the UDRP
proceedings, and alternatively, that Smith does not hold
trademark rights individually in the Mark “DIRECTOR’S CHOICE.”
(Def. Br. [Docket Item 9] at 9-11.) Smith maintains that there
is no requirement that a domain name registrant at the time the

3

The Complaint was subsequently amended on February 6, 2015.
[Docket Item 7.]
4 The domain name does not appear to have been transferred to
Director’s Choice.
8 

arbitration dispute was decided be the same “domain name
registrant” who files suit under the ACPA. (Pl. Br. [Docket Item
12] at 3-4.) Plaintiff has also filed a motion for summary
judgment on Count One of his Amended Complaint. [Docket Item
19.]5
III. Standard of Review
A motion to dismiss for lack of standing is properly
brought pursuant to Rule 12(b)(1) because standing is a
jurisdictional matter. Constitution Party of Pa. v. Aichele, 757
F.3d 347, 357 (3d Cir. 2014) (internal citation omitted). In
deciding such a motion, a court must first determine whether the
movant presents a facial or factual attack, because that
distinction determines how the pleading is reviewed. Mortensen
v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir.
1977). A facial challenge contests the sufficiency of the
complaint because of an alleged pleading deficiency, while a
factual attack challenges the actual failure of the plaintiff’s
claims to comport with jurisdictional prerequisites. See id.;
United States ex rel. Atkinson v. PA. Shipbuilding Co., 473 F.3d
506, 514 (3d Cir. 2007).

5

Briefing on Plaintiff’s summary judgment motion was temporarily
stayed pending the present motion to dismiss, by Order entered
November 19, 2015. [Docket Item 24.]
9 

A Rule 12(b)(1) motion is facial in nature when filed prior
to any answer, because it ordinarily calls for assessment of the
pleadings only. See Aichele, 757 F.3d at 358 (facial attack
occurs before the moving party has filed an answer or otherwise
contested the factual allegations of the complaint); Cardio–Med.
Assocs., Ltd. v. Crozer-Chester Med. Ctr., 721 F.2d 68, 75 (3d
Cir. 1983) (“[D]efendants' motion under Rule 12(b)(1) was filed
prior to any answer. The motion is therefore a facial challenge
to jurisdiction.” (citing Mortensen, 549 F.2d 884, 891 (3d Cir.
1977))); Bennett v. Atlantic City, 288 F. Supp. 2d 675, 678
(D.N.J. 2003) (“A motion to dismiss on the basis of Fed. R. Civ.
P. 12(b)(1) for lack of subject matter jurisdiction made prior
to the filing of the defendant's answer is a facial challenge to
the complaint.”).
In reviewing a facial challenge to standing, the court must
accept as true all material allegations set forth in the
complaint. The court may rely on “documents referenced [in the
complaint] and attached thereto,” but must consider them in
light most favorable to the plaintiff.6 Gould Electronics Inc. v.

6

Because the Complaint is predicated upon the underlying NAF
decision ordering the transfer of the domain name to Director’s
Choice and Plaintiff alleges that he is the domain name
registrant, documents related to these matters submitted by both
parties will be considered in connection with the pending motion
to dismiss. See In re Rockefeller Ctr. Props., Inc., Sec.
Litig., 184 F.3d 280, 287 (3d Cir. 1999).
10 

United States, 220 F.3d 169, 176 (3d Cir. 2000); see also In re
Schering Plough Corp. Intron/Temodar Consumer Class Action, 678
F.3d 235, 243 (3d Cir. 2012); Ballentine v. United States, 486
F.3d 806, 810 (3d Cir. 2007).
IV.

DISCUSSION
The question before the Court is whether 15 U.S.C. §§

1114(2)(D)(iv) and (v) permit Smith, the current “domain name
registrant” of <directorschoice.com>, to file a civil action to
establish that his registration and use of the domain name is
lawful, even though the UDRP complaint was decided against
HELP.org, not Smith.
Defendant frames this issue as one of statutory standing.
“Statutory standing is simply statutory interpretation: the
question it asks is whether Congress has accorded this injured
plaintiff the right to sue the defendant to redress his injury.”
Graden v. Conexant Sys. Inc., 496 F.3d 291, 295 (3d Cir. 2007).
As with all questions of statutory interpretation, the Court
begins with the text of the statute. See Chamber of Commerce v.
Whiting, 131 S. Ct. 1968, 1980 (2011) (“[A]s we have said
before, Congress’s authoritative statement is the statutory
text, not the legislative history.’” (quoting Exxon Mobil Corp.
v. Allapattah Servs., Inc., 545 U.S. 546, 568 (2005))).
15 U.S.C. § 1114(2)(D)(iv) and (v) provides:

11 

(iv) If a registrar, registry, or other registration
authority takes an action described under clause (ii)
based on a knowing and material misrepresentation by any
other person that a domain name is identical to,
confusingly similar to, or dilutive of a mark, the person
making the knowing and material misrepresentation shall
be liable for any damages, including costs and
attorney's fees, incurred by the domain name registrant
as a result of such action. The court may also grant
injunctive relief to the domain name registrant,
including the reactivation of the domain name or the
transfer of the domain name to the domain name
registrant.
(v) A domain name registrant whose domain name has been
suspended, disabled, or transferred under a policy
described under clause (ii)(II) may, upon notice to the
mark owner, file a civil action to establish that the
registration or use of the domain name by such registrant
is not unlawful under this chapter. The court may grant
injunctive relief to the domain name registrant,
including the reactivation of the domain name or
transfer of the domain name to the domain name
registrant.7
Subsection (v) allows a “domain name registrant whose domain
name has been suspended, disabled, or transferred” under a
specified policy (such as the UDRP) to sue. The Court reads this
provision to mean that a registrant of a transferred domain name
may file a civil suit to recover a domain name if he lost the
domain name through the UDRP process. Plaintiff clearly falls

7

To establish a right to relief against an overreaching
trademark owner under § 1114(2)(D)(v), a plaintiff must prove
“(1) that it is a domain name registrant; (2) that its domain
name was suspended, disabled, or transferred” by a registrar
under the UDPR; (3) that proper notice of the civil action has
been made to the owner of the mark, “by service or otherwise”;
and (4) “that the plaintiff’s registration or use of the domain
name is not unlawful under the Lanham Act, as amended.”
Barcelona.com, 330 F.3d at 626.
12 

within the meaning of this phrase: he is the current “domain
name registrant” of <directorschoice.com>, and his domain name
was ordered transferred by the NAF panel that decided the UDRP
case brought by Director’s Choice.
Defendant attempts to confuse by arguing that
§§ 1114(2)(D)(iv) and (v) cannot be read to permit a different
“registrant” to file suit than the one who participated in the
UDRP. That question is not implicated here, because the two
registrants are one and the same. Although the respondent in the
arbitration case was HELP.org, there is no real dispute that
HELP.org was operated by Smith at the time, and that Smith was
the sole owner of the LLC. Indeed, although Defendant insists
that the UDRP decision was against HELP.org, the actual
respondent named in the Complaint filed before the NAF, which
Defendant attaches to the motion to dismiss, is “HELP.org Domain
Administrator,” which is Smith. (NAF Complaint, Ex. A to Def.
Br. [Docket Item 9-3], at 1.)
To the extent Defendant argues that the provision must be
read to mean that the person who files the civil suit must have
been listed as the “domain name registrant” at the time of the
UDRP decision,8 (Def. Br. at 8; see also Def. Reply Br. [Docket

8

The Court has not found any cases that that have considered the
precise issue presented here, namely, whether 15 U.S.C. §§
1114(2)(D)(iv) and (v) allow someone other than the formal
13 

Item 13] at 2), the Court does not agree. The statute states
only that “[a] domain name registrant whose domain name has been
suspended, disabled, or transferred” may file a civil action.
Thus, if A was the domain name registrant at the time of the
UDRP decision, A may, of course, sue under a plain reading of 15
U.S.C. §§ 1114(2)(D)(v). But contrary to Defendant’s contention,
the statute does not permit only A to sue. The UDRP decision
binds A and anyone else with whom A is in privity, such as B. If
registration of the domain name was later transferred to B, B
would fall within the meaning of “domain name registrant whose
domain name has been suspended, disabled, or transferred.”9
Defendant cites dicta from only one case, Dlulos v.
Strasberg, 321 F.3d 365 (3d Cir. 2003), but the case provides no
support for Defendant’s position. Although the Third Circuit
described § 1114(2)(D)(v) as “provid[ing] registrants . . . with
an affirmative cause of action to recover domain names,” 321
F.3d at 373, it did not attempt to define the word “registrant,”
nor did it suggest that the statute permitted only the

domain name registrant at the time of the arbitration proceeding
to file suit.
9 Plaintiff does not lose standing to sue by changing the domain
name registrant from an entity owned by him to himself, but
neither will he insulate himself from the prior conduct of
HELP.org. Because he is in privity with HELP.org, in order to
prove that registration and use of <directorschoice.com> were
lawful, Plaintiff must still prove that the actions taken by
domain name registrant HELP.org were not in bad faith.
14 

registrant listed at the time of the UDRP to file suit. Rather,
the opinion emphasized that the UDRP was meant to provide
“registrants” who lose a domain name to a trademark holder a
“‘clear mechanism’ for ‘seeking judicial review of a decision of
an administrative panel cancelling or transferring the domain
name.’” Id. at 372. The statute is intended to provide the
person who lost his domain name in the UDRP process an
opportunity to redress his loss in federal court. HELP.org was
the domain name registrant at the time of the UDRP decision, but
as HELP.org’s sole owner, Plaintiff suffered the loss of the
domain name, and he seeks review of the decision rendered by the
NAF panel against HELP.org. Nothing in Dlulos prohibits
Plaintiff from seeking such a review even though he was not
named as the domain name registrant at the time of the UDRP
decision.
The Court therefore finds that under this particular set of
facts, Smith, who was the sole owner of HELP.org at the time
HELP.org was the “domain name registrant” subject to the
arbitration panel decision, counts as a “domain name registrant”
within the meaning of §§ 1114(2)(D)(iv) and (v) of the ACPA for
filing a civil action.
Defendant’s second argument, that Plaintiff lacks standing
because he has no trademark rights in “DIRECTOR’S CHOICE,” is
equally without merit. 15 U.S.C. § 1114(2)(D)(v) does not
15 

require a domain name registrant to assert trademark rights in
order to bring a reverse domain hijacking claim. To prevail,
Plaintiff need only demonstrate that the mark was not
distinctive or famous when he registered the name, and/or that
he did not act in bad faith. See 15 U.S.C. § 1125(d)(1)(A). The
ACPA sets forth nine factors for courts to consider in
determining a Plaintiff’s bad faith, and a registrant’s
trademark or other intellectual property rights in a domain name
is just one of the factors that a court will consider in
determining whether a registrant’s use is in bad faith and
therefore unlawful under the ACPA. See id. § 1125(d)(1)(B)(i).
The Court expresses no opinion on whether the Plaintiff may
prevail on the merits.
V.

Conclusion
Because Plaintiff has standing under 15 U.S.C. §§

1114(2)(D)(iv) and (v) to bring this action, the Court will deny
Defendant’s motion to dismiss for lack of subject matter
jurisdiction. Accordingly, the Court will lift the stay on
Plaintiff’s motion for summary judgment, the motion will be
reinstated, and Plaintiff’s motion shall be deemed filed on the
date of entry of this Opinion and the accompanying Order.

November 30, 2015
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge
16