Dominion Resources, Inc. v. Dominion Energy Group LLC
Filing
19
MEMORANDUM OPINION AND ORDER granting plaintiff's 14 MOTION to Strike; striking the 8 , 11 Answers and the defendant's 12 MOTION to Dismiss; granting the plaintiff's 14 MOTION for entry of default judgment against de fendant; directing default judgment entered against Defendant Dominion Energy Group LLC; plaintiff to file a memorandum and supporting affidavit or other materials evidencing the precise amount of monetary relief it seeks by 12/2/2013; and as fu rther directed and set forth more fully herein. Signed by Judge Thomas E. Johnston on 11/7/2013. (cc: attys; Charles Varney, Rt. 44 South 175 Leo Street, Whites Addition, Mt. Gay, West Virginia 25637; Edward Stephenson, 50 Washington Street, 4th Floor, Norwalk, Connecticut 06854-2750) (taq)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
CHARLESTON DIVISION
DOMINION RESOURCES, INC.,
Plaintiff,
v.
CIVIL ACTION NO. 2:13-cv-04757
DOMINION ENERGY GROUP LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
Pending is Plaintiff Dominion Resources, Inc.’s motion to strike two Answers and a
motion to dismiss filed on behalf of Defendant Dominion Energy Group LLC and for entry of
default judgment against Defendant [ECF 14] . Also pending is Defendant’s motion to dismiss
[ECF 12]. For the reasons that follow, the Court GRANTS Plaintiff’s motion to strike and
motion for default judgment.
I.
BACKGROUND
Plaintiff Dominion Resources, Inc. (“Dominion Resources”), by counsel, filed its
Complaint against Defendant Dominion Energy Group LLC (“Dominion Energy”) alleging
various trademark infringement claims. In its Complaint, Plaintiff Dominion Resource states that
it is one of the largest producers and transporters of energy in the nation and is the exclusive owner
of numerous registered trademarks including “Dominion,” “Dominion Energy,” and “Dominion
Energy Solutions.” Plaintiff Dominion Resources alleges that Defendant Dominion Energy has
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illegally used Plaintiff’s trademarks and that Plaintiff twice demanded in writing that Defendant
cease and desist from using Plaintiff’s trademarks. Edward Stephenson, Defendant’s general
counsel, managing member, and chief financial officer, allegedly advised Plaintiff on numerous
occasions that Defendant was in the process of retaining counsel. Mr. Stephenson allegedly
assured Plaintiff that Defendant would “respond substantively” by a specified deadline. (ECF 1
at 13.) Plaintiff alleges that Defendant repeatedly missed deadlines that were agreed upon for
Defendant’s responses.
Plaintiff attached to its Complaint various exhibits, including copies of records from the
United States Patent and Trademark Office evidencing the official registration of Plaintiff’s
various trademarks (ECF 1–1); an October 9, 2012, email from an individual to Defendant that
claims that Charles Varney, a managing member of Defendant, had made statements insinuating
that Defendant’s company was affiliated with Plaintiff’s business (ECF 1–3); a copy of Plaintiff’s
October 31, 2012, cease-and-desist correspondence sent via certified mail to Mr. Varney advising
him of Plaintiff’s belief that Defendant was using Defendant’s trademarks without Plaintiff’s
consent and that the infringement had caused actual confusion by customers and the general public
(ECF 1–4); and a copy of Plaintiff’s January 17, 2013, cease-and-desist correspondence to Mr.
Stephenson demanding immediate cessation of Defendant’s use of Plaintiff’s trademarks (ECF 1–
5).
On June 26, 2013, an Answer (ECF 8) to Plaintiff’s Complaint was filed on behalf of
Defendant by Mr. Varney. Mr. Varney has not made an appearance as counsel in this case and,
based on Plaintiff’s representations, Mr. Varney is not an attorney. On July 23, 2013, Mr. Varney
filed a second Answer on behalf of Defendant (ECF 11). On August 16, 2013, Mr. Varney filed a
motion to dismiss on behalf of Defendant contending that Plaintiff’s Complaint fails to state a
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claim upon which relief may be granted.
(ECF 12.)
Plaintiff, by counsel, responded in
opposition to the motion to dismiss. (ECF 15.)
On August 29, 2013, Plaintiff filed its motion to strike the Answers and motion to dismiss
filed by Mr. Varney and further moved for entry of default judgment. (ECF 14.) Plaintiff
contends that in filing Answers on behalf of Defendant, Charles Varney, “purported to be acting
pro se as the defendant in this action.” (ECF 14 at 1–2.) Plaintiff cites authority for the rule that
limited liability corporations such as Defendant are not permitted to proceed pro se. (Id. at 2–3.)
Plaintiff alleges that Mr. Varney is a “non-lawyer” and has filed two Answers and a motion to
dismiss on behalf of Defendant, a limited liability company. Defendant did not respond to
Plaintiff’s motion.
Because of Plaintiff’s concerns about complying with various scheduling deadlines set
forth in the Court’s Scheduling Orders, on September 19, 2013, the Court’s law clerk conducted a
telephone conference with Plaintiff’s counsel, Russell Jesse, and Mr. Stephenson concerning the
question of whether Defendant intended to retain counsel.
During this conversation, Mr.
Stephenson stated that Defendant had been in contact with an attorney in Charleston, West
Virginia, and that Defendant intended to retain this attorney within the following two weeks.
Based on that representation, the Court granted a two-week extension for the filing of the parties’
Rule 26 report. Mr. Stephenson acknowledged to the Court’s law clerk that he understood the
importance of Defendant’s retention of counsel.
On October 4, 2013, Plaintiff filed a supplemental memorandum in support of its motion to
strike Mr. Varney’s Answers and for default judgment. (ECF 17.) There, Plaintiff represents
that, contrary to Mr. Stephenson’s September 19, 2013, representations to the Court’s law clerk,
Defendant has still failed to retain counsel. On October 17, 2013, the Court entered an Order
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stating that it would enter default judgment if Defendant did not retain counsel by October 28,
2013. (ECF 18.)
To date, no attorney has made an appearance on behalf of Defendant.
II. DISCUSSION
A.
Legal Standards
Federal Rule of Civil Procedure 55 governs default judgments. Rule 55 provides in
pertinent part:
(a)
Entering a Default. When a party against whom a judgment for
affirmative relief is sought has failed to plead or otherwise defend, and that failure
is shown by affidavit or otherwise, the clerk must enter the party’s default.
(b)
Entering a Default Judgment.
(1)
By the Clerk. If the plaintiff’s claim is for a sum certain or a
sum that can be made certain by computation, the clerk—on the plaintiff’s
request, with an affidavit showing the amount due—must enter judgment
for that amount and costs against a defendant who has been defaulted for
not appearing and who is neither a minor nor an incompetent person.
(2)
By the Court. In all other cases, the party must apply to the
court for a default judgment . . . The court may conduct hearings or make
referralspreserving any federal statutory right to a jury trialwhen, to
enter or effectuate judgment, it needs to:
(A) conduct an accounting;
(B) determine the amount of damages;
(C) establish the truth of any allegation by evidence; or
(D) investigate any other matter.
“[T]rial judges are vested with discretion, which must be liberally exercised, in entering . .
. [default] judgments and in providing relief therefrom.” United States v. Moradi, 673 F.2d 725,
727 (4th Cir. 1982). However, default judgment is available “when the adversary process has
been halted because of an essentially unresponsive party.” S.E.C. v. Lawbaugh, 359 F.Supp. 2d
418, 421 (D. Md. 2005) (citing Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)). A
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defaulting party admits the plaintiff’s well-pleaded factual allegations in the complaint, in contrast
to the allegations regarding damages. Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780
(4th Cir. 2001). Also, the party in default is not held to admit conclusions of law. Id. The Court
may conduct a hearing to determine the amount of damages pursuant to Rule 55(b)(2), however, it
may award damages without a hearing where the amount claimed is “capable of mathematical
calculation.” James v. Frame, 6 F.3d 307, 310 (5th Cir. 1993). Courts are afforded much
discretion when determining the need for such a hearing. Pope v. United States, 323 U.S. 1, 12
(1944) (“It is a familiar practice and an exercise of judicial power for a court upon default, by
taking evidence when necessary or computation from facts of record, to fix the amount which the
plaintiff is lawfully entitled to recover and give judgment accordingly.”).
B.
Analysis
Plaintiff Dominion Resources is entitled to have the various filings made by Mr. Varney, a
non-lawyer, stricken from the record. As noted, Defendant Dominion Energy is a limited liability
company. As such, it is obligated to retain counsel to defend itself in this Court. See MR
Crescent City, LLC v. TJ Biscayne Holdings LLC, No. 12–1432, 2013 WL 1243541 at 1 (4th Cir.
Mar. 28, 2013) (citing Rowland v. California Men’s Colony, 506 U.S. 194, 201–02, 113 S. Ct. 716,
121 L.Ed.2d 656 (1993) (“It has been the law for the better part of two centuries ... that a
corporation may appear in the federal courts only through licensed counsel.”) and United States v.
Hagerman, 545 F.3d 579, 581–82 (7th Cir. 2008) (LLCs, like corporations, are not permitted to
proceed pro se)). In United States v. Hagerman, the Seventh Circuit explained its holding as
follows:
An individual is permitted by 28 U.S.C. § 1654 to proceed pro se in a civil case in
federal court because he might be unable to afford a lawyer, or a lawyer’s fee might
be too high relative to the stakes in the case to make litigation worthwhile other
than on a pro se basis. There are many small corporations and corporation
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substitutes such as limited liability companies. But the right to conduct business
in a form that confers privileges, such as the limited personal liability of the owners
for tort or contract claims against the business, carries with it obligations one of
which is to hire a lawyer if you want to sue or defend on behalf of the entity. Pro se
litigation is a burden on the judiciary . . . and the burden is not to be borne when the
litigant has chosen to do business in entity form. He must take the burdens with
the benefits. From that standpoint there is no difference between a corporation
and a limited liability company, or indeed between either and a partnership, which
although it does not provide its owners with limited liability confers other
privileges, relating primarily to ease of formation and dissolution. That is why the
privilege of pro se representation is, as we noted, denied to partnerships too.
545 F.3d at 581–82 (citations omitted).
The Court finds the Seventh Circuit’s reasoning
persuasive. Accordingly, the Court GRANTS Plaintiff’s motion to strike, STRIKES the two
Answers (ECF 8, 11) filed by Mr. Varney, a non-lawyer, from the Court’s docket, and also
STRIKES the motion to dismiss (ECF 12) filed by Mr. Varney on behalf of Defendant.
Plaintiff is further entitled to entry of default judgment against Defendant Dominion
Energy. Based on the factual allegations set forth in Plaintiffs’ Complaint and its exhibits, which
are taken as true in light of Defendant Dominion Resources’ failure to defend itself, the Court
FINDS that Plaintiff’s Complaint sufficiently states claims entitling Plaintiff to relief under 15
U.S.C. §§ 1114(1) and 1125(a) 1 and GRANTS Plaintiff’s motion for default judgment.
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Section 1114(1) provides in pertinent part:
Section 1114(1) provides in pertinent part:
Remedies; infringement; innocent infringement by printers and publishers
(1) Any person who shall, without the consent of the registrant-(a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in
connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection
with which such use is likely to cause confusion, or to cause mistake, or to deceive; or
(b) reproduce, counterfeit, copy, or colorably imitate a registered mark and apply such reproduction, counterfeit,
copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be
used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or
services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive,
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With respect to its requested relief, Plaintiff seeks various items of injunctive relief and an
unspecified amount of damages, attorneys’ fees, and costs. Plaintiff further requests that the
Court schedule a hearing to determine the amount of damages owed to Plaintiff by Defendant.
The Court declines to schedule a hearing at this time. Rather, Plaintiff is DIRECTED to file with
the Court on or before December 2, 2013, a memorandum and supporting affidavit or other
materials evidencing the precise amount of monetary relief it seeks.
III. CONCLUSION
For the foregoing reasons, the Court GRANTS Plaintiff’s motion to strike the two
Answers and the motion to dismiss filed on behalf of Defendant Dominion Energy Group LLC.
[ECF 14.] The Court also GRANTS Plaintiff’s motion for entry of default judgment against
Defendant. [ECF 14.] The two Answers (ECF 8, 11) and the motion to dismiss (ECF12) are
STRICKEN from the Court’s Docket. The Court DIRECTS the Clerk to enter default judgment
against Defendant Dominion Energy.
shall be liable in a civil action by the registrant for the remedies hereinafter provided. Under subsection (b) hereof, the
registrant shall not be entitled to recover profits or damages unless the acts have been committed with knowledge that
such imitation is intended to be used to cause confusion, or to cause mistake, or to deceive. . . .
Section 1125(a) provides in pertinent part:
(a) Civil action
(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce
any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or
misleading description of fact, or false or misleading representation of fact, which-(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or
association of such person with another person, or as to the origin, sponsorship, or approval of his or her
goods, services, or commercial activities by another person, or
(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or
geographic origin of his or her or another person's goods, services, or commercial activities,
shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
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Additionally, it is ORDERED that:
(1)
Defendant and its agents, representatives, servants, employees, attorneys, officers,
directors, shareholders, licensees, affiliates, joint venturers, parents, subsidiaries, related
corporations, and others in privity and acting in concert with them are permanently
enjoined from:
(i) Using the Plaintiff Dominion Resource’s trademarks and any other mark
containing or consisting, in whole or in part, of the term "Dominion" and any other mark
confusingly similar to the Dominion Marks, including in the advertising, offering for sale,
and/or sale of products or services that may reasonably be encompassed by the Dominion
Marks or which may constitute a natural zone of expansion for Dominion, including, but
not limited to, any use in connection with the operation of a public utility services and
energy provider;
(ii) Using any service mark, trademark, trade name, trade dress, word, domain name,
number, abbreviation, design, color, arrangement, collocation, or any combination
thereof, which would imitate, resemble, or suggest the Dominion Marks;
(iii)
Otherwise infringing the Dominion Marks;
(iv) Unfairly competing with Dominion or otherwise injuring its business reputation in
any manner;
(v) Publishing any telephone, directory, or Internet listing using the Dominion Marks and
any other confusingly similar trademark to the Dominion Marks, in the advertising,
offering for sale, and/or sale of goods or services that may reasonably be encompassed by
the Dominion Marks, or which may constitute a natural zone of expansion for Dominion
Resources and its affiliates and subsidiaries;
(vi) Using or registering any domain name which is confusingly similar to the Dominion
Marks in advertising, offering for sale public utility services and/or sale of energy; or any
other goods or services that may reasonably be encompassed by the Dominion Marks, or
which may constitute a natural zone of expansion for Dominion;
(2)
Charles Varney, Jr., Edward Stephenson, or other m e m b e r s o f Defendant shall file with
this Court and serve on Dominion, within ten days of the date of this Order a report in
writing, under oath, setting forth in detail the manner and form in which Defendant has
complied with this Order; and
(3)
Defendant shall destroy all goods, advertisements, literature, signs, prints, packages,
electronic files, or any other media, and all other materials in its possession or under its
control bearing the Dominion Marks.
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IT IS SO ORDERED.
The Court DIRECTS the Clerk to send a copy of this Order to counsel of record and to
Charles Varney, Rt. 44 South 175 Leo Street, Whites Addition, Mt. Gay, West Virginia 25637 and
Edward Stephenson, 50 Washington Street, 4th Floor, Norwalk, Connecticut 06854-2750.
ENTER:
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November 7, 2013
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