George Sink, P.A. v. George Sink II Law Firm LLC

407 F.Supp.3d 539

GEORGE SINK, P.A. INJURY LAWYERS, Plaintiff,

v.GEORGE SINK II LAW FIRM LLC, George Sink Law Firm LLC, Southern Legal Association LLC, and George ("Ted") Sink, Jr., Defendants.

2:19-cv-01206

United States District Court, D. South Carolina, Charleston Division.

Signed August 9, 2019

Allan Riley Holmes, Cheryl H. Ledbetter, Gibbs and Holmes, Trudy Hartzog Robertson, Moore and Van Allen PLLC, Charleston, SC, John Mark Wilson, Pro Hac Vice, Kathryn G. Cole, Pro Hac Vice, Minar Kim, Pro Hac Vice, Moore and Van Allen PLLC, Charlotte, NC, for Plaintiff.

Eric S. Bland, Eric S. Bland and Associates, Columbia, SC, Ronald L. Richter, Jr., Scott M. Mongillo, Bland Richter, Charleston, SC, Timothy David St. Clair, Parker Poe Adams and Bernstein LLP, Greenville, SC, for Defendants.

ORDER

DAVID C. NORTON, UNITED STATES DISTRICT JUDGE

This matter is before the court on plaintiff George Sink P.A. Injury Lawyers' ("plaintiff" or "Sink P.A.") motion to seal, ECF No. 16, and motion for preliminary injunction, ECF No. 14; and on defendants George Sink II Law Firm, LLC, George Sink Law Firm, LLC, Southern Legal Association, LLC ("SLA"), and George ("Ted") Sink, Jr.'s¹ (collectively, "defendants") motions to dismiss, ECF Nos. 11 and 26. For the reasons set forth below, the court grants the motion to seal, denies the motion to dismiss, and grants the motion for preliminary injunction.

I. BACKGROUND

This matter arises from a dispute between George Sink Sr. and his son, George Sink Jr. According to the complaint, George Sink Sr. started Sink P.A. in 1997, since which time he has used "GEORGE SINK-formative marks in connection with legal services." ECF No. 17 ¶ 10. Plaintiff has expanded into 14 offices throughout South Carolina and Georgia. The firm advertises heavily on television, radio, billboards, mail, online, and through its website, www.sinklaw.com. Plaintiff owns U.S. Service Mark registration No. 3,849,776 ("the '776 registration" or "the '776 mark") for the GEORGE SINK, P.A. INJURY LAWYERS and design mark, which was issued on September 10, 2010 after the mark was allegedly first used in commerce as early as February 18, 1999. Plaintiff also owns U.S. Service Mark Registration No. 4,620,500 ("the '500 registration" or "the '500 mark") for the GEORGE SINK, P.A. INJURY LAWYERS mark, which was issued on October 14, 2014 and was allegedly used in commerce as early as February 18, 1999. Plaintiff alleges that these marks are associated with the firm's legal services and have acquired distinctiveness by having a secondary meaning to consumers. Plaintiff also claims that it has acquired common law rights in the GEORGE SINK marks, and that it has "expended significant resources in advertising and promoting its legal services" under these marks. Id. ¶ 22.

Plaintiff alleges that in March 2013, George Sink Jr.—who had previously worked in marketing in New York City for ten years—moved to Charleston to perform marketing work for plaintiff. George Sink Jr. then attended Charleston School of Law and graduated in 2016. In March 2018, George Sink Jr. transitioned from plaintiff's marketing team to work as an entry-level attorney at the firm. On April 30, 2018, George Sink Jr. signed a Confidentially and Non-Solicitation Agreement ("the Agreement") with Sink P.A.² The "circumstances surrounding entry into and the actual terms of [the Agreement] are set out by the Plaintiff's Amended Demand for Arbitration dated May 3, 2019." Id. ¶ 31. George Sink Jr.'s employment with plaintiff was terminated on February 7, 2019. According to plaintiff, George Sink Jr. formed SLA on February 11, 2019 for the purposes of managing two other corporations, named Sink II and Sink III, that he also formed in February 2019.

Plaintiff alleges that defendants "have been using in commerce the designations GEORGE SINK and GEORGE SINK II in connection with" the offering and marketing "of identical legal services in the same geographical regions as plaintiff." Id. ¶ 34. Plaintiff claims that these uses violates its exclusive right to use its protected mark. Plaintiff alleges various instances of confusion among the public from defendants' use of plaintiff's marks.

Plaintiff filed this lawsuit on April 25, 2019, and filed an amended complaint on May 21, 2019, bringing the following claims: (1) trademark infringement in violation of 15 U.S.C. § 1114 ; (2) unfair competition in violation of 15 U.S.C. § 1125(a) ; (3) cybersquatting in violation of 15 U.S.C. § 1125(d) ; (4) common law trademark infringement; (5) unfair trade practices in violation of S.C. Code § 39-5-20 et seq. ; and (6) dilution in violation of S.C. Code § 39-15-1165. ECF No. 17. On May 21, 2019, plaintiff also filed a motion requesting permission to file under seal the Amended Demand for Arbitration filed by plaintiff against George Sink Jr. pursuant to the arbitration clause of the Agreement. ECF No. 16. On June 7, 2019, defendants filed a motion to dismiss for failure to state a claim. ECF No. 26.³ On June 21, 2019, plaintiff filed its response, ECF No. 34, and on June 27, 2019, defendants filed their reply, ECF No. 34. On May 15, 2019, plaintiff filed a motion for preliminary injunction, ECF No. 14, to which defendants responded on May 29, 2019, ECF No. 20, and to which plaintiff replied on June 5, 2019, ECF No. 24.

II. STANDARDS

A. Motion to Dismiss

Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss for "failure to state a claim upon which relief can be granted." When considering a Rule 12(b)(6) motion to dismiss, the court must accept the plaintiff's factual allegations as true and draw all reasonable inferences in the plaintiff's favor. See E.I. du Pont de Nemours & Co. v. Kolon Indus., 637 F.3d 435, 440 (4th Cir. 2011). But "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). On a motion to dismiss, the court's task is limited to determining whether the complaint states a "plausible claim for relief." Id. at 679, 129 S.Ct. 1937. Although Rule 8(a)(2) requires only a "short and plain statement of the claim showing that the pleader is entitled to relief," "a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The "complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ). "Facts pled that are ‘merely consistent with’ liability are not sufficient." A Soc'y Without a Name v. Va., 655 F.3d 342, 346 (4th Cir. 2011) (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ).

B. Preliminary Injunction

"The purpose of a preliminary injunction is merely to preserve the relative positions of the parties until a trial on the merits can be held." United States v. South Carolina, 840 F. Supp. 2d 898, 914 (D.S.C. 2011) (quoting Univ. of Tex. v. Camenisch, 451 U.S. 390, 395, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981) ). "A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of the equities tips in his favor, and that an injunction is in the public interest." Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008). As the Supreme Court has noted, a preliminary injunction is "an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." Id. at 22, 129 S.Ct. 365.

III. DISCUSSION

A. Motion to Dismiss

A brief discussion of the Agreement is required before addressing defendants' motion to dismiss. The Agreement contains an arbitration clause, under which the parties agreed that "any controversy arising under, or relating to, this Agreement will be subjected to binding arbitration pursuant to the South Carolina Uniform Arbitration Act [ ] in the County of Charleston, State of South Carolina." ECF No. 11-1 at 3. The clause mandates that the arbitration "shall be conducted on a confidential basis," hence the pending motion to seal. Despite the requirement that all disputes between the parties be handled in arbitration, the clause contains the following exclusion: "[t]he Arbitrator shall be fully empowered to enter injunctive relief, and the parties may seek and obtain a temporary restraining order or injunction from a court while awaiting the decision of the Arbitrator on a claim for a restraining order or injunction." Id. Plaintiff filed suit pursuant to this exclusion. ECF No. 17 ¶ 54.

Defendants' motion to dismiss appears to articulate two distinct bases upon which the court should dismiss the complaint. First, defendants argue that the complaint seeks relief from this court beyond what is permitted by the arbitration clause and that the entire complaint should thus be dismissed. As discussed in the above paragraph, the arbitration clause allows either party to seek a temporary restraining order or injunction from the court while awaiting the Arbitrator's final decision. Defendants' arguments on this ground were put forth in their original motion to dismiss, ECF No. 11, which was filed before plaintiff filed the amended complaint, ECF No. 17. Defendants were correct that the original complaint—in seeking damages and permanent injunctive relief—went beyond the scope of relief allowed by the arbitration clause. However, the amended complaint seeks only temporary injunctive relief. Defendants' new motion to dismiss did not add anything to its original motion to dismiss, but rather incorporated wholly the arguments made in that first motion; thus, the current motion to dismiss does not account for the new complaint, which does not seek relief...