Vulcan Golf, LLC v. Google Inc.

552 F.Supp.2d 752

VULCAN GOLF, LLC, John B. Sanfilippo & Son, Inc., Blitz Realty Group, Inc., and Vincent E. "Bo" Jackson, Individually and on Behalf of All Others Similarly Situated, Plaintiffs, v. GOOGLE INC., Oversee.Net, Sedo LLC, Dotster, Inc., a/k/a Revenue Direct.Com., Internet Reit, Inc., d/b/a Ireit, Inc., and John Does I-X, Defendants.

No. 07 C 3371.

United States District Court, N.D. Illinois. Eastern Division.

March 20, 2008.

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Robert M. Foote, Mark Anthony Bulgarelli, Stephen William Fung, Foote, Meyers, Mielke & Flowers, LLC, Kathleen Currie Chavez, Chavez Law Firm P.C, Geneva, IL, Bryan L. Clobes, Cafferty Faucher, LLP, Philadelphia, PA, Dana Marie Pesha, William J. Harte, William J Harte, Ltd., Dominic J. Rizzi, Nyran Rose Pearson, Cafferty Faucher LLP, Chicago, IL, for Plaintiffs.

Aaron Daniel Van Oort, Faegre & Benson LLP, Minneapolis, MN, Henry M. Baskerville, Jonathan M. Cyrluk, Joseph J. Duffy, Mariah E. Moran, Stelter & Duffy, Ltd., Ronald Y. Rothstein, Marlon Emile Lutfiyya, Thomas Joseph Wiegand, Winston & Strawn LLP, Jeffrey Singer, Anastasios T. Foukas, Misty Rose Martin, Segal, McCambridge, Singer & Mahoney, Ltd., Alison C. Conlon, Michael R. Dockterman, Wildman, Harrold, Allen & Dixon, LLP, Alexis Elizabeth Payne, Bradley Louis Cohn, Brett A. August, Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, Chicago, IL, Joseph Gratz, Michael Page, Keker & Van Nest LLP, San Francisco, CA, Steven D. Atlee, Winston & Strawn LLP, Los Angeles, CA, Joanna J. Cline, Robert L. Hickok, Vincent V. Carissimi, Pepper Hamilton LLP, Philadelphia, PA, Kenneth P. Held, Steven R. Borgman, Vinson & Elkins LLP, Houston, TX, Scott Ryan Wiehle, Vinson & Elkins, Dallas, TX, for Defendants.

MEMORANDUM AND ORDER

BLANCHE M. MANNING, District Judge.

Plaintiffs Vulcan Golf, LLC, John B. Sanfilippo & Son, Inc. ("JBSS"), Blitz Realty Group, Inc., and Vincent E. "Bo" Jackson, have filed a complaint styled as a class action lawsuit against the following defendants: Google, Inc., Oversee.net, Sedo LLC, Dotster, Inc. a/k/a revenuedirect.com, Internet Reit, Inc., d/b/a Ireit, Inc.¹, and John Does I-X. The defendants have filed a consolidated motion to dismiss the RICO counts as well as certain of the state law claims. All of the defendants except Dotster have filed their own motions to dismiss various counts. For the reasons discussed below, the consolidated motion to dismiss the RICO counts is granted, the consolidated motion to dismiss the unjust enrichment and civil conspiracy counts is granted, and the individually-filed motions to dismiss are granted in part and denied in part as provided herein.

I. Background

According to the lengthy First Amended Complaint ("FAC") (469 paragraphs and 91 pages long — the latter counted by hand because the plaintiffs did not paginate the document), the defendants have engaged in a massive scheme to use deceptive domain names on the internet to generate billions of advertising dollars at the expense of the plaintiffs. The specifics of the scheme are somewhat complicated, but in its most simple form, the FAC alleges that certain of the defendants register, license and/or "park",² among other things, domain names that are the same as or substantially and confusingly similar to the plaintiffs' distinctive trade names or marks.³ The defendants do this because they know that when an internet user types a domain name into the address bar on the Google web browser, there is a possibility that the user will either guess the domain name for the plaintiff (and guess wrong) or misspell the name he or she is looking for.

For example, the FAC alleges that Dotster has registered and/or otherwise controls the domain name "wwwVulcanGolf.com." FAC ¶ 65. This domain name is obviously very similar to the domain name "www.VulcanGolf.com," which is registered to and has been used by plaintiff Vulcan since May 1997. According to the plaintiffs' theory, Dotster has intentionally registered this domain name without the period after the "www" expecting that a certain number of internet users will mistype the name and will land on the webpage Dotster has created that is associated with the "incorrect" and allegedly deceptive domain name. When that happens, the defendants, having registered similar and purportedly deceptive domain names, profit if the internet user clicks on the advertising that is placed on the "deceptive" domain site. The advertising is allegedly created, sponsored, and maintained by Google which, according to the FAC, has developed "the largest single online marketing/advertising business in the world." The FAC alleges that Google "partners" with domain registrants as well as parking companies and others and consequently has "millions of domain names under its direct or indirect license, use, control, and management" including the purportedly deceptive domains. FAC ¶ 100.

Google allegedly uses sophisticated software that "processes" these domain names and assists in deciding what advertisements would be profitable on each domain. Google and the parking company defendants "collaborate in the placement of advertisements on domains and in the design/optimization of the landing pages associated with those domains." FAC ¶ 111. "To encourage Internet users to click [on the advertisements], Defendant Google, and in some instances other Parking Company Defendants, use targeting solutions that intelligently select the most relevant ads and categories for the domain names." FAC ¶ 113. When a user clicks on the advertising, Google and the parking companies and/or the domain owners receive revenue from that advertiser. The FAC also alleges that the defendants use "redirection, framing, masking, or other methods to prevent or deter even sophisticated users from identifying or confirming Defendant Google's role." FAC ¶ 119.⁴

In essence, then, the plaintiffs allege that Google and the other defendants have engaged in a wide-ranging scheme whereby they receive "billions of dollars in ill-gotten advertising and marketing revenue" by knowingly and intentionally registering, licensing and monetizing purportedly deceptive domain names at the expense of the plaintiff-mark owners.

Based on this general set of allegations, the plaintiffs, a putative class, have filed the instant amended complaint alleging the following fourteen counts: (1) Count I — RICO (18 U.S.C. § 1962(c)); (2) Count II — RICO (18 U.S.C. § 1962(d)); (3) Count III — Cybersquatting (15 U.S.C. § 1125(d)); (4) Count IV — Trademark Infringement (15 U.S.C. § 1114(1)); (5) Count V — False Designation of Origin (15 U.S.C. § 1125(a)); (6) Count VI — Dilution of Trademarks (15 U.S.C. § 1125(c)); (7) Count VII — Illinois Consumer Fraud and Deceptive Trade Practices Act (815 ILCS 505/2); (8) Count VIII — Declaratory Judgment; (9) Count IX — Common Law Trademark; (10) Count X — Contributory Trademark Infringement; (11) Count XI — Vicarious Trademark Infringement; (12) Count XII — Intentional Interference with Current and Prospective Economic Advantage; (13) Count XIII — Unjust Enrichment; (14) Count XIV — Civil Conspiracy.

As a group, the defendants have moved to dismiss Counts I and II, the RICO counts as well as certain state law claims. All of the defendants except Dotster have moved separately to dismiss various other counts.

II. Analysis

On a motion to dismiss under Fed. R.Civ.P. 12(b)(6), the court accepts the allegations in the complaint as true, viewing all facts, as well as any inferences reasonably drawn therefrom, in the light most favorable to the plaintiff. See Marshall-Mosby v. Corporate Receivables, Inc., 205 F.3d 323, 326 (7th Cir.2000). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation to provide the `grounds' of his `entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, ___ U.S. ___-___, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929 (2007) (citations omitted).

The Seventh Circuit has interpreted Bell Atlantic as follows:

Rule 12(b)(6) permits a motion to dismiss a complaint for failure to state a claim upon which relief can be granted. To state such a claim, the complaint need only contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R.Civ.P. 8(a)(2). The Supreme Court has interpreted that language to impose two easy-to-clear hurdles. First, the complaint must describe the claim in sufficient detail to give the defendant "fair notice of what the ... claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, ___ U.S. ___, ___, 127 S.Ct. 1955, 1964, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)) (alteration in Bell Atlantic). Second, its allegations must plausibly suggest that the plaintiff has a right to relief, raising that possibility above a "speculative level"; if they do not, the plaintiff pleads itself out of court. Bell Atlantic, 127 S.Ct. at 1965, 1973 n. 14.

E.E.O.C. v. Concentra Health Services, Inc., 496 F.3d 773, 776 (7th Cir.2007). See also Killingsworth v. HSBC Bank Nevada, N.A., 507 F.3d 614, 618-19 (7th Cir.2007) (observing that Supreme Court in Bell Atlantic "retooled federal pleading standards" such that a complaint must now contain "enough facts to state a claim to relief that is plausible on its face.").

A. Standing

Purported class plaintiffs must themselves have suffered an injury allegedly wrought by the defendant. See Warth v. Seldin, 422 U.S. 490, 502, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) (named plaintiffs seeking to represent a class "must allege and show that they personally have been injured, not that injury has been suffered by...