ZP No. 314, LLC v. Ilm Capital, LLC

335 F.Supp.3d 1242

ZP NO. 314, LLC, Plaintiff,

v.ILM CAPITAL, LLC, et. al., Defendants.

CIVIL ACTION NO. 16-00521-B

United States District Court, S.D. Alabama, Southern Division.

Signed September 27, 2018

David R. Quittmeyer, Joseph Craig Campbell, Hand Arendall, L.L.C., Mobile, AL, for Plaintiff.

Ellen T. Mathews, Burr & Forman, LLP, Birmingham, AL, Michael David Strasavich, Burr & Forman LLP, Taylor Barr Johnson, Mobile, AL, for Defendants.

ORDER

SONJA F. BIVINS, UNITED STATES MAGISTRATE JUDGE

This action is before the Court on Plaintiff ZP No. 314, LLC's motion for summary judgment and evidentiary materials (Doc. 106), Defendants' response and evidentiary materials in opposition thereto (Docs. 115, 116, 117), and Plaintiff's reply (Doc. 121, 122). Also pending before the Court are Defendants' motions for summary judgment and evidentiary materials (Doc. 82, 84, 85, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103), Plaintiff's response and evidentiary materials in opposition thereto (Doc. 87, 88, 121), and Defendants' reply (Doc. 89, 90, 91, 123, 124, 125). These motions have been fully briefed and are ripe for resolution.

I. INTRODUCTION

This trademark action involves One Ten Student Living and Campus Quarters, which are competing off-campus student housing facilities located in close vicinity to each other and owned and operated by Plaintiff ZP No. 314, LLC (hereinafter "Plaintiff" or "ZP") and the Defendants, respectively. ZP is a limited liability company and owner of One Ten Student Living ("One Ten"), which provides student housing and related services to local college students. (Doc. 60 at 4; Doc. 106 at 1). The One Ten facility is located at 110 Long Street, in Mobile, Alabama, and its website is www.liveoneten.com. (Doc. 60 at 4; Doc. 106-4 at 43-44).

Defendant ILM Capital, LLC ("ILM Capital") is a real estate investment firm that owns the Campus Quarters facility. (Doc. 60 at 2; Doc. 66 at 2; Doc. 115 at 5). The Campus Quarters facility is also located in Mobile, Alabama, and its website is www.campusquarters.com. (Doc. 66 at 4; Doc. 106 at 1; Doc. 115 at 5-6). Defendant Mobile CQ Student Housing, LLC ("Mobile CQ") owns the real property on which Campus Quarters is located. (Doc. 60 at 2; Doc. 66 at 4; Doc. 115 at 5). Defendant ILM Management, LLC ("ILM Management") manages Mobile CQ. (Id. ). Defendant WE Communities, LLC ("WE Communities") is a property management company that has managed Campus Quarters since approximately May 2016. (Doc. 60 at 2; Doc. 66 at 4; Doc. 115 at 5). Defendant Mary Schaffer-Rutherford ("Rutherford") is a former employee of WE Communities who managed Campus Quarters for approximately seven months.¹ Defendant Michael Wheeler ("Wheeler") is the manager, CEO, and sole member of ILM Capital, ILM Management, and WE Communities. (Doc. 60 at 2; Doc. 66 at 2; Doc. 115 at 5). Defendant A.J. Hawrylak ("Hawrylak") is an employee of ILM Capital. (Id. ).

The events giving rise to the instant cause of action center around eight domain names purchased by Defendants.² ZP contends that, through the registration and/or use of domain names that are confusingly similar to its marks, Defendants have willfully infringed on its marks, have acted as cybersquatters by intending to profit from the goodwill associated with ZP's marks, and have unfairly competed with ZP. In its amended complaint, ZP has alleged cybersquatting in violation of the Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d) ; unfair competition, contributory unfair competition, and vicarious unfair competition in violation of the Lanham Act, 15 U.S.C. § 1125(a) ; common law unfair competition; and unfair competition and trademark infringement in violation of Alabama Code Section 8-12-16 and state common law. (Doc. 60 at 11-13).

II. RELEVANT UNDISPUTED FACTS³

Plaintiff ZP avers that it adopted the name "One Ten" for its student housing facility and began using the "One Ten" mark in interstate commerce as early as October 28, 2015. (Docs. 106 at 2; 106-1 at 3). Indeed, ZP used the One Ten mark in connection with the signing of a Management Agreement with Asset Campus Housing ("ACH"), the company that manages One Ten, and it circulated the agreement (which it named the "One Ten Mgmt Agmt FE") via email with a subject line titled "One Ten PMA" on October 29, 2015. (Doc. 106-3 at 4; Doc. 106-4 at 2).

On December 3, 2015, ZP registered the domain name "liveoneten.com" with the registrar GoDaddy.com. (Doc. 106 at 2; Doc. 106-1 at 3; Doc. 106-4 at 68-69). By February 26, 2016, ZP was using the domain name, "liveoneten.com" to market One Ten on ZDC's then-existing website. (Doc. 106 at 2; Doc. 106-1 at 3; Doc. 106-6 at 2-3).

In late 2015, Defendant ILM Capital learned that ZDC would be building a new student housing facility, and in April 2016, learned that the facility would be named "One Ten." (Doc. 95 at 8; Doc. 98-1 at 5; Doc. 115 at 6). On April 12, 2016, Defendant ILM's general counsel accessed ZDC's website to view One Ten's advertisement. (Doc. 106 at 3; Doc. 106-2 at 9-10; Doc. 106-5 at 32; Doc. 106-6 at 2-3). The following month, Defendants ILM and Hawrylak began registering domain names that incorporated the words "one ten." Specifically, on May 11, 2016, Defendant Hawrylak, acting on behalf of ILM Capital, registered the following domain names through third party domain name registar Go.Daddy.Com, LLC: "onetenlive.com," "liveontenmobile.com," "liveone10.com," "onetenstudentliving.com," and "onetenliving.com", which are collectively referenced as the "May 11 domains." (Doc. 95 at 8; Doc. 98-1 at 5-6; Doc. 106 at 3; Doc. 106-2 at 5-6, 8; Doc. 106-5 at 20-24, 34; Doc. 106-7 at 5-6; Doc. 115 at 7).

On May 26, 2016, the website for One Ten, www.liveoneten.com, went live. (Docs. 60 at 4; 66 at 3; 106 at 4; 106-3 at 3-4). The next day, May 27, 2016, Hawrylak registered three additional domain names, namely: "onetenusa.com," "liveonetenapartments.com," and "liveonetenmobile.com", which are collectively referenced as the "May 27 domains."⁴ (Doc. 95 at 9; Doc. 98-1 at 7; 106 at 3; Doc. 106-2 at 5-6, 8; 106-5 at 20-24, 34; Doc. 106-7 at 5-6; Doc. 115 at 7).

In May 2016, ZP created social media pages for One Ten and began making posts on those sites. (Doc. 106 at 3; Doc. 106-3 at 3-4; Doc. 106-4 at 43). On May 28, 2016, and June 3, 2016, within days of its first social media posts and its website going live, ZP was contacted by its first prospective tenants. (Doc. 106 at 4-5; Doc. 106-4 at 63-65).

On June 14, 2016, Defendants began redirecting users of the May 11 domains to their own website, "campusquarters.com", such that, if a user typed in one of the May 11 domains into an internet browser, the user would be redirected to the website for Campus Quarters. (Doc. 95 at 8-11; Doc. 98-1 at 5-7; Doc. 106 at 5; Doc. 106-2 at 10-11; Doc. 115 at 7-8).

On August 18, 2016, online leasing became available for One Ten, but student occupancy did not occur until a year later in August 2017. (Doc. 66 at 3, 83 at 7, 54-55; Doc. 89 at 2, 5; Doc. 115 at 6). On September 19, 2016, ZP learned that Defendants were redirecting users of one of the May 11 domains, namely "onetenstudentliving.com," to the Campus Quarters website.⁵ (Doc. 106 at 7). On the same day, a representative from ACH, which manages One Ten for ZP, sent an email to Defendant Hawrylak requesting that Defendants end the redirection of the domain name. (Doc. 106 at 7; Doc. 106-5 at 18, 51-52). Hawrylak forwarded the email to an ILM representative asking for guidance on how to respond to the request, and the ILM representative advised Hawrylak, "Tell him FU!" (Doc. 106 at 7; Doc. 106-5 at 51).

On September 19, 2016, ZP's in-house counsel sent Defendants cease and desist letters, demanding that Defendants: "(i) transfer any and all rights in and to the onetenstudentliving.com domain name to ZP NO. 314, LLC; (ii) cease and desist from any and all use of the onetenstudentliving.com domain name; and (iii) cease and desist from any and all use of ZP NO. 314, LLC's name and the One Ten name." (Doc. 60 at 7; 66 at 7; Doc. 106 at 7-8; Doc. 106-1 at 3, 31-42; Doc. 106-5 at 25-29; Doc. 106-13 at 2-3). On September 20, 2016, after receiving the cease and desist letter dated September 19, 2016, Defendants ceased the redirection of all May 11 domains. (Doc. 83 at 9; Doc. 87-12 at 34-38; Doc. 95 at 12; 115 at 8).⁶

ZP sent a second cease and desist letter to Defendants on September 23, 2016. (Doc. 60 at 7; Doc. 66 at 7; Doc. 106 at 8; Doc. 106-5 at 3-4; Doc. 106-13 at 3, 6-7). The September 23 letter included a demand that Defendants relinquish and transfer the "onetenstudentliving.com" domain name to ZP. (Id. ). Defendants declined to do so. (Doc. 112).

ZP filed the instant action on October 6, 2016. (Docs. 1). Subsequent thereto, on December 5, 2016, ZP applied with the United States Patent and Trademark Office ("USPTO") for registration of the trademark "One Ten Student Living". (Doc. 60 at 4; Doc. 66 at 3). With no objection from Defendants, the USPTO issued ZP a certificate of registration for the "One Ten Student Living" mark on July 25, 2017. (Doc. 60 at 5; Doc. 60-1; Doc. 66 at 3; Doc. 106 at 10; Doc. 106-17). Additionally, on March 16, 2017, ZP applied to register the trademark "One Ten" with USPTO. The application was approved on June 9, 2017 and publication occurred on October 17, 2017.⁷ (Doc. 60 at 5; Doc. 60-2; Doc. 106 at 10; Doc. 106-17). The Alabama Secretary of State issued certificates of registration for the marks on March 23, 2017. (Doc. 60 at 5; Doc. 60-3).

III. PROCEDURAL HISTORY

As noted, supra , this action was instituted on October 6, 2016, when ZP filed its initial complaint against ILM Capital, WE Communities, Rutherford, and Mobile CQ. (Doc. 1). On November 3, 2016, Defendants filed a motion to dismiss and/or for a more definite statement. (Docs. 9, 10). On February 21, 2017, ZP timely filed a motion for leave to file an amended complaint. (Doc. 32). In its motion, ZP requested leave...