Sprint Solutions, Inc. et al v. Lafayette et al
Filing
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ORDER on damages: granting Plaintiffs' request for actual damages under the Lanham Act; granting Plaintiffs' request for treble damages under the Lanham Act; and determining Plaintiffs' punitive damage award. Signed by Judge Samuel H. Mays, Jr on 7/10/2018. (Mays, Samuel)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
SPRINT SOLUTIONS, INC. and
SPRINT COMMUNICATIONS
COMPANY, L.P.,
Plaintiffs,
v.
IRVIN BRYAN LAFAYETTE, EDDIE
D. DANLEY, EMANUEL
LAFFAYETTE, MARCUS S. HALL,
JOHN DOES 1-2, and JANE DOES
1-20,
Defendants.
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No. 2:15-cv-2595-SHM-cgc
ORDER
Before the Court is Plaintiffs Sprint Solutions, Inc. and
Sprint Communications Company L.P.’s (collectively,
“Plaintiffs”) request for actual and treble damages under the
Lanham Act.
(See ECF Nos. 47-1, 49-50.) 1
In its June 22, 2018
Order, the Court deferred ruling on that request until
Plaintiffs provided sufficient support.
(ECF No. 48.)
Plaintiffs filed additional support on July 6, 2018.
(ECF Nos.
49-50.)
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The Court must also determine the appropriate amount of punitive
damages. The Court granted Plaintiffs’ request for punitive damages in its
June 22, 2018 Order, but did not determine the amount. (ECF No. 48.)
For the following reasons, Plaintiffs’ request for actual
damages under the Lanham Act is GRANTED.
Plaintiffs are
entitled to actual damages in the amount of $491,867.02.
Plaintiffs’ request for treble damages under the Lanham Act is
GRANTED.
Plaintiffs are entitled to treble damages in the
amount of $1,475,601.06.
Plaintiffs are entitled to
$983,734.04 in punitive damages.
I.
Background
On June 22, 2018, the Court entered an Order granting in
part and denying in part Plaintiffs’ Motion for Default
Judgment and Permanent Injunction against Defendants Irvin
Bryan Lafayette, Eddie D. Danley, Emanuel Lamont Lafayette, and
Marcus S. Hall.
(ECF No. 48.)
A more complete background can
be found in that Order.
The Court denied default judgment as to Defendants Emanuel
Lafayette and Marcus S. Hall.
(Id. at 518, 521.) 2 Default
judgment was granted as to Defendants Irvin Lafayette and Eddie
Danley on multiple claims. (See generally, id.)
The Court
granted permanent injunctive relief, enforceable against
Defendants Irvin Lafayette and Eddie Danley.
(Id. at 549.)
Plaintiffs’ request for punitive damages was also granted.
2
Unless otherwise noted, citations to the record refer to the
“PageID” number.
2
(Id. at 554.)
The Court deferred ruling on Plaintiffs’ request
for actual and treble damages until they had supplied
sufficient support for their damages.
II.
(Id. at 551 & n.6.)
Analysis
A. Actual Damages
Plaintiffs seek $491,867.02 in actual damages under the
Lanham Act.
(ECF No. 47-1 at 496; ECF Nos. 49-50.)
Under the Lanham Act, a prevailing plaintiff on a
trademark infringement claim “shall be entitled, . . . subject
to the principles of equity, to recover (1) defendant's
profits, (2) any damages sustained by the plaintiff, and (3)
the costs of the action.”
15 U.S.C. § 1117(a).
“The court
shall assess such profits and damages or cause the same to be
assessed under its direction.”
Id.
“The general proof and measure of damages in a
trademark action is governed by the law of damages of
tort actions.”
Broan Mfg. Co., Inc. v. Assoc.
Distrib., Inc., 923 F.2d 1232, 1235 (6th Cir. 1991).
“Under
general
tort
principles
.
.
.
the
infringer/tortfeasor is liable for all injuries caused
to plaintiff by the wrongful act, whether or not
actually anticipated or contemplated by the defendant
when it performed the acts of infringement.”
Id.
(citation and internal quotation marks omitted).
“[D]amages are not permitted which are remote and
speculative in nature.”
Id. (citation and internal
quotation marks omitted).
“[I]n trademark cases
courts draw a sharp distinction between proof of the
fact of damage and proof of the amount of damage.” Id.
Thus, “[t]he plaintiff is held to a lower standard of
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proof in ascertaining the exact amount of damages,”
and, “‘[o]nce the existence of damages has been shown,
all that an award . . . requires is substantial
evidence in the record to permit a factfinder to draw
reasonable inferences and make a fair and reasonable
assessment of the amount of damages.’” Chain, L.P. v.
Tropodyne Corp., Nos. 99–6268/6269, 238 F.3d 421, 2000
WL 1888719, at *4 (6th Cir. Dec.20, 2000) (unpublished
table decision) (quoting Broan Mfg. Co., 923 F.2d at
1236).
La Quinta Corp. v. Heartland Properties LLC, 603 F.3d 327, 342
(6th Cir. 2010) (alternations in original).
Substantial
evidence is “such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.”
Richardson v.
Perales, 402 U.S. 389, 401 (1971) (additional citation and
internal quotation omitted).
Plaintiffs’ support for their damages includes the
declaration of Clint Breithaupt, a Manager in the Fraud
Management Department of Sprint Corporation.
(Decl.
Breithaupt, ECF No. 50.)_ Breithaupt represents that Defendants
acquired “251 accessories,” “423 feature phones,” and “646
smart phones,” amounting to a $491,867.02 loss to Plaintiffs.
(Id. ¶¶ 7-8.)
Breithaupt provides “a table outlining each
phone that Defendants fraudulently obtained from Sprint,”
identified by a “Billing Account Number (‘BAN’)” and
“Electronic Serial Number (‘ESN’).”
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(Id. ¶¶ 9.)
Plaintiffs’ evidence demonstrates that it sustained actual
damages in the amount of $491,867.02.
Plaintiffs’ request for
actual damages in that amount under the Lanham Act is GRANTED.
B. Treble Damages
Plaintiffs request treble damages of $1,475,601.06 under
the Lanham Act. (See ECF No. 47-1 at 497; ECF No. 49.)
In assessing damages for violations under § 1114(1)(a) of
the Lanham Act, the court shall award treble damages for
intentional violations “unless the court finds extenuating
circumstances.” 15 U.S.C. § 1117(b).
The Sixth Circuit has not
defined what constitutes “extenuating circumstances” under §
1117(b).
Courts outside this circuit have found that
“[e]xtenuating circumstances will be present only in ‘a rare
case,’ such as in the case of ‘an unsophisticated individual,
operating on a small scale, for whom the imposition of treble
damages would mean that he or she would be unable to support
his or her family.’”
Tiffany & Co. v. Costco Wholesale Corp.,
274 F. Supp. 3d 216, 225 (S.D.N.Y. 2017) (quoting Koon Chun
Hing Kee Soy & Sauce Factory, Ltd. v. Star Mark Mgmt., Inc.,
628 F.Supp.2d 312, 325 (E.D.N.Y. 2009)); accord Microsoft Corp.
v. CMOS Techs., Inc., 872 F. Supp. 1329, 1339 (D.N.J. 1994);
Zerorez Franchising Sys., Inc. v. Distinctive Cleaning, Inc.,
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No. CV 13-2326 ADM/BRT, 2016 WL 2637801, at *6 n.5 (D. Minn.
May 6, 2016).
In its June 22, 2018 Order, the Court found Defendants
Irvin Lafayette and Eddie Danley intentionally liable for
trademark infringement under § 1114(1)(a) of the Lanham Act.
(ECF No. 48 at 537.)
There are no extenuating circumstances in
the record.
Plaintiffs’ request for treble damages is GRANTED.
Plaintiffs are entitled to treble damages in the amount of
$1,475,601.06.
C. Punitive Damages
Once a court determines that a defendant is liable for
punitive damages, it must, to the extent relevant, consider the
factors outlined by the Tennessee Supreme Court in Hodges v.
S.C. Toof & Co., 833 S.W.2d 896 (Tenn. 1992), 3 in assessing the
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The factors are:
(1) The defendant's financial affairs, financial condition, and
net worth;
(2) The nature and reprehensibility of defendant's wrongdoing,
for example
(A) The impact of defendant's conduct on the plaintiff, or
(B) The relationship of defendant to plaintiff;
(3) The defendant's awareness of the amount of harm being caused
and defendant's motivation in causing the harm;
(4) The duration of defendant's misconduct and whether defendant
attempted to conceal the conduct;
(5) The expense plaintiff has borne in the attempt to recover the
losses;
(6) Whether defendant profited from the activity, and if
defendant did profit, whether the punitive award should be in
excess of the profit in order to deter similar future behavior;
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amount of punitive damages.
Id. at 901; Coffey v. Fayette
Tubular Prods., 929 S.W.2d 326, 328 (Tenn. 1996).
The purpose
of punitive is to punish the wrongdoer and to deter the
wrongful conduct.
Coffey, 929 S.W.2d at 328 (citing Huckeby v.
Spangler, 563 S.W.2d 555, 558–59 (Tenn. 1978)).
Punitive
damages may not exceed double compensatory damages or $500,000,
whichever is greater.
T.C.A. § 29-39-104.
In its June 22, 2018 Order, the Court granted Plaintiffs’
request for punitive damages.
(ECF No. 48 at 554.)
Considering the Hodges factors and based on the deceitful,
willful, malicious, and intentional conduct by which Defendants
secured the devices and profited from their resale, the Court
finds that an award of punitive damages in the amount of
$983,734.04 -- double the amount of Plaintiffs’ actual damages
-- is warranted and appropriate in this case.
III. Conclusion
For the foregoing reasons, Plaintiffs’ request for actual
damages under the Lanham Act is GRANTED.
Plaintiffs are
(7) Whether, and the extent to which, defendant has been subjected
to previous punitive damage awards based upon the same wrongful
act;
(8) Whether, once the misconduct became known to defendant,
defendant took remedial action or attempted to make amends by
offering a prompt and fair settlement for actual harm caused; and
(9) Any other circumstances shown by the evidence that bear on
determining the proper amount of the punitive award.
Hodges, 833 S.W.2d at 901–02.
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entitled to actual damages in the amount of $491,867.02.
Plaintiffs’ request for treble damages under Lanham Act is
GRANTED.
Plaintiffs are entitled to treble damages in the
amount of $1,475,601.06.
Plaintiffs are entitled to
$983,734.04 in punitive damages.
For all of which let judgment
enter.
So ordered this 10th day of July, 2018.
/s/ Samuel H. Mays, Jr.
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT COURT JUDGE
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