Crossfit, Inc. v. Quinnie

232 F.Supp.3d 1295

CROSSFIT, INC., Plaintiff,

v.Kateric Peter QUINNIE, Donald Jett, and Total Body Recall, LLC, Defendants.

1:15–cv–04080–WSD

United States District Court, N.D. Georgia, Atlanta Division.

Signed February 8, 2017

Cecily J. McLeod, Gordon & Rees, LLP, Atlanta, GA, Hazel Mae Pangan, Susan B. Meyer, Yuo–Fong C. Amato, Gordon & Rees, LLP, San Diego, CA, for Plaintiff.

OPINION AND ORDER

WILLIAM S. DUFFEY, JR., UNITED STATES DISTRICT JUDGE

This matter is before the Court on Plaintiff CrossFit, Inc.'s ("CrossFit") Motion for Default Judgment [15].

I. BACKGROUND

A. Facts

CrossFit is a Delaware corporation principally engaged in the business of fitness training and consultancy. (Compl. [1] ¶ 6). CrossFit owns several registered United States trademarks and service marks for the term "CROSSFIT." (Id. ; U.S. Trademark and Service Mark Registrations, Ex. AA [15.12] ).

Defendant Kateric Peter Quinnie ("Quinnie") is a Georgia resident. ( [1] ¶ 7). Defendant Donald Jett ("Jett") is a Georgia resident, and Defendant Total Body Recall, LLC ("Total Body Recall") is a Georgia limited liability company owned and controlled by Jett. (Id. ¶¶ 8–10). CrossFit's Complaint alleges that Quinnie and Jett are business partners. (Id. ¶¶ 20–22).

In April 2015, CrossFit discovered that Defendants began offering fitness-training services under the name "KrossFit 24." (Id. ¶¶ 7, 15). On April 23, 2015, CrossFit sent a letter to Quinnie, demanding Defendants to cease and desist their use of the CROSSFIT® marks and the term "KrossFit" on their Facebook page (www.facebook.com/krossfit24) (the "KrossFit24 Facebook page"). (Id. ¶ 17; [15.1] at 16; [15.10] at 4). On April 25, 2015, Quinnie apologized for the error and responded that they would correct the issue. ( [1] ¶ 17; [15.10] at 4).

Beginning on May 1, 2015, CrossFit sent a series of letters to Quinnie. ( [1] ¶¶ 18–19). On May 1, 2015, CrossFit requested the removal of the terms KrossFit and CrossFit from the KrossFit24 Facebook page and Total Body Recall's webpage (www.totalbodyrecall.org) (the "TBR webpage"). ( [15.10] at 3). In response to CrossFit's letter, Quinnie deleted the KrossFit24 Facebook page.¹ ( [15.1] at 17; [15.10] at 3). On May 19, 2015, and May 29, 2015, CrossFit sent two letters to Quinnie demanding, again, the removal of the word "Krossfit" from the TBR webpage. ( [1] ¶ 18; [15.10] at 2–3). Quinnie did not respond. ( [15.1] at 16). On June 8, 2015, CrossFit sent another letter to Quinnie, demanding Jett to remove the term Krossfit from the TBR webpage. On June 18, 2015, CrossFit's outside counsel, Gordon & Rees LLP ("Gordon & Rees"), sent a letter to both Quinnie and Jett, demanding Jett to comply with CrossFit's demands and to stop their use of "any confusingly similar terms (including without limitation, "Krossfit," "Kfit," "Xfit," "Crossfitness," etc.)...." ( [1] ¶ 19; [15.16] ¶ 3; [15.17] at 2). On June 21, 2015, Quinnie responded that he stopped using those terms. ( [15.17] at 2).

Beginning from June 22, 2015, to July 21, 2015, CrossFit and Defendants engaged in several discussions concerning Defendants' business partners and potential business name change. (Id. ¶¶ 20–23). During these discussions, Defendants were uncooperative and evasive regarding their business associates' identities. (Id. ).

On November 10, 2015, CrossFit discovered that Defendants failed to remove the "KrossFit24" signage located at their previous fitness center in Marietta, Georgia. ( [1] ¶ 24; [15.1] at 19). When CrossFit called the number listed on the signage, it discovered that Defendants continued to conduct their business as "KrossFit 24," though at a new location in Kennesaw, Georgia. ( [1] ¶ 24; [15.1] at 19).

To date, Defendants continue to advertise as "Kross Fit 24" on Groupon, and Defendants' now defunct business² is still listed on the WhitePages and YellowPages websites as well as on Instagram and on Facebook. (See [15.1] at 20; Instagram Screenshots, Ex. A [15.15]; Facebook Page, Ex. B [15.15]; Groupon Offer, Ex. E [15.18]; Whitepages Listing, Ex. F [15.19]; Yellowpages Listing, Ex. G [15.20] ).

B. Procedural History

On November 20, 2015, CrossFit filed this action against Defendants, asserting the following federal and state trademark violations: (1) trademark infringement under 15 U.S.C. § 1114 ; (2) false designation of origin under 15 U.S.C. § 1125(a) ; (3) trademark dilution under 15 U.S.C. § 1125(c) ; (4) Georgia statutory trademark dilution under O.C.G.A. § 10–1–451(b) ; and (5) violation of Georgia's Uniform Deceptive Trade Practices Act under O. C.G.A. §§ 10–1–370 to 10–1–375. (See Compl. [1] ).

On December 13, 2015, CrossFit served the Complaint on Jett and Total Body Recall. ( [5], [6] ). On January 7, 2016, CrossFit served the Complaint on Quinnie. ( [7] ). Defendants failed to respond, and no counsel appeared on their behalf.

On February 24, 2016, CrossFit filed a Request for Entry of Default [13] based on Defendants' failure to respond to the Complaint. On February 26, 2016, the Clerk entered default against Defendants.

On May 13, 2016, CrossFit moved for default judgment. ( [15] ). CrossFit is seeking to recover the following relief: Defendants' profits, treble damages, permanent injunction, and attorneys' fees and costs. (Id. at 43).

II. DISCUSSION

A. Legal Standard

Rule 55(b) of the Federal Rules of Civil Procedure provides that default judgment may be entered against defaulting defendants as follows:

(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....If the party against whom a default judgment is sought has appeared personally or by a representative, that party or its representative must be served with written notice of the application at least 7 days before the hearing. The court may conduct hearings or make referrals...when, 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.

Fed. R. Civ. P. 55(b).

"[T]here is a strong policy of determining cases on their merits....[Courts] therefore view defaults with disfavor." In re Worldwide Web Sys., Inc. , 328 F.3d 1291, 1295 (11th Cir. 2003). "The entry of a default judgment is committed to the discretion of the district court." Hamm v. DeKalb Cnty. , 774 F.2d 1567, 1576 (11th Cir. 1985), cert. denied , 475 U.S. 1096, 106 S.Ct. 1492, 89 L.Ed.2d 894 (1986) (citing 10A Charles Alan Wright, et al., Federal Practice & Procedure § 2685 (1983) ).

When considering a motion for default judgment, a court must investigate the legal sufficiency of the allegations and ensure that the complaint states a plausible claim for relief. Cotton v. Mass. Mut. Life Ins. Co. , 402 F.3d 1267, 1278 (11th Cir. 2005) ; Bruce v. Wal–Mart Stores, Inc. , 699 F.Supp. 905, 906 (N.D. Ga. 1988). If "the plaintiff has alleged sufficient facts to state a plausible claim for relief," a motion for default judgment is warranted. Surtain v. Hamlin Terrace Found. , 789 F.3d 1239, 1246 (11th Cir. 2015). "Conceptually, then, a motion for default judgment is like a reverse motion to dismiss for failure to state a claim." Id. at 1245. "[W]hile a defaulted defendant is deemed to 'admit[ ] the plaintiff's well-pleaded allegations of fact,' he 'is not held to admit facts that are not well-pleaded or to admit conclusions of law.' " Cotton , 402 F.3d at 1278 (quoting Nishimatsu Constr. Co. v. Houston Nat'l Bank , 515 F.2d 1200, 1206 (5th Cir. 1975) ).

B. Trademark Infringement

Under the Lanham Act, a defendant is liable for trademark infringement if he, without consent, uses "in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark" that "is likely to cause confusion, or to cause mistake, or to deceive." 15 U.S.C. § 1114(1). In order to prevail on a federal trademark infringement claim under § 1114, "the registrant must show that (1) its mark was used in commerce by the defendant without the registrant's consent and (2) the unauthorized use was likely to cause confusion, or to cause mistake or to deceive." Optimum Techs., Inc. v. Henkel Consumer Adhesives, Inc. , 496 F.3d 1231, 1241 (11th Cir. 2007) ; see also Caliber Automotive Liquidators, Inc. v. Premier Chrysler, Jeep, Dodge, LLC , 605 F.3d 931, 934 (11th Cir. 2010).

CrossFit's Complaint alleges that CrossFit owns a registered U.S. service mark comprised of the word "CROSSFIT," as registered in U.S. Service Mark Registration No. 3,007,458 issued on October 18, 2005, for use in fitness training and services. ( [1] ¶ 12). The CROSSFIT® mark, CrossFit asserts, has been "in continuous use in commerce since at least the dates of first use identified in their registrations to the present day." (Id. ). Once a mark has been registered for five years with the U.S. Patent and Trademark Office and "become 'incontestable,' its validity is presumed....[I]ts validity cannot [then] be challenged on the grounds that it is merely descriptive." Dieter v. B & H Indus. , 880 F.2d 322, 328 (11th Cir. 1989) ; Frehling Enters. v. Int'l Select Grp., Inc. , 192 F.3d 1330, 1336 (11th Cir. 1999) (citing Wilhelm Pudenz, GmbH v. Littlefuse, Inc. , 177 F.3d 1204, 1208 (11th Cir. 1999) ). CrossFit only permits "persons who have completed CrossFit's certificate process and entered into valid affiliate license agreements" to use the CROSSFIT® mark. ( [1] ¶ 14). Neither Jett nor Quinnie is ever authorized or licensed to use the CROSSFIT® mark. (Id. ¶ 25). Accordingly, the Court concludes that any purported use of the CROSSFIT® mark is without consent.

The question is then whether Defend...