ROBIN S. ROSENBAUM, District Judge.
This matter is before the Court on Plaintiff's Motion to Re-open and for an Order to Show Cause [ECF No. 79], Plaintiff's Second Motion for Order to Show Cause [ECF No. 95], Defendant's Motion for Order to Show Cause [ECF No. 125], Plaintiff's Motion for Preliminary Injunction [ECF No. 126], Plaintiff's Motion for Default Judgment [ECF No. 153], and Defendant's Motion for Default Judgment [ECF No. 157], which were previously referred to the Honorable Patrick M. Hunt for a Report and Recommendation. Judge Hunt issued a Report and Recommendation on all of the Motions [ECF No. 185], and Defendant Laera has filed objections to the Report and Recommendation [ECF No. 189]. Plaintiff has also filed Objections [ECF No. 188]. For the reasons set forth below, the Court overrules Defendant's Objections, sustains in part and overrules in part Plaintiff's Objections, and adopts Judge Hunt's Report and Recommendation.
Plaintiff Blanco GmbH+Co. KG brought this action against Defendants Vlanco Industries, LLC, G-Tech-I, Inc., and Vito Antonio Laera, asserting claims for trademark infringement, cyber-squatting, and unfair competition. The parties ultimately reached a settlement, and the Court entered a Final Judgment Upon Consent [ECF No. 76], in which the Court retained jurisdiction to enforce the terms of the parties' agreement. The various motions addressed by the Report and Recommendation relate to various issues arising after entry of the Consent Judgment.
Plaintiff moved for the entry of a preliminary injunction on the grounds that Laera purportedly impersonated Plaintiff and its intellectual property counsel, Franka Kuschnirek, by changing the domain-name account of a GoDaddy domain name registrar to falsely reflect Plaintiff and Kuschnirek as the account owners. See ECF No. 126. Judge Hunt recommended that the Motion be denied because Plaintiff failed to satisfy the elements necessary for a preliminary injunction. The Court agrees. In particular, Plaintiff has failed to show that it lacks an adequate remedy at law or that it will suffer irreparable injury if its motion is not granted.
The purpose of a preliminary injunction is to restrain conduct "in those extraordinary situations where irreparable injury might result from delay or inaction." Alabama v. U.S. Army Corps of Engineers, 424 F.3d 1117, 1133 (11th Cir. 2005) (citing United Bonding Ins. Co. v. Stein, 410 F.2d 483, 486-87 (3d Cir.1969)). Because its sole function is to forestall future harm, injunctive relief is "completely at odds with a sanction for past conduct that may be addressed by adequate remedies at law." Id. As such, even if Defendant wrongfully impersonated Plaintiff, no
Plaintiff requests that the Court find Defendants in contempt of the parties' Consent Judgment. ECF No. 79. In this regard, Plaintiff avers that Defendants (i) filed three applications with the United States Trademark Office containing prohibited designations; (ii) registered fifty-five new domain names containing prohibited designations; (iii) re-directed a number of domain names to a website using the prohibited designation "BLANCO;" and (iv) refused to cooperate in the transfer of certain domain names and transferred ownership of such domain names to third parties. ECF No. 79 at 2-3. In the Report and Recommendation, Judge Hunt found that Plaintiff presented sufficient evidence showing that Defendants, or persons acting in concert with Defendants, violated, and continue to violate, the terms of the Consent Judgment. The Court agrees with Judge Hunt's determination.
The Consent Judgment provides, in pertinent part, that
ECF No. 76 at 2-3. After entry of the Consent Judgment, a third party, Robert Johnson, filed trademark applications that included the term "VLANCO" and registered domain names containing the terms "BLANCO," "VIANCO," and "VLANCO" — all of which constitute prohibited designations under the Consent Judgment.
According to Plaintiff, Robert Johnson is either an alias of Laera or a person acting in concert with Laera. In support of this contention, Plaintiff notes that Johnson's pending trademark applications are virtually identical to those originally filed by Defendants. Indeed, several of the specimens attached to Johnson's applications contain photographs that match those of Defendants' products included in the parties' Stipulation of Settlement and in Plaintiff's original Complaint. See e.g., ECF No. 2-3; ECF No. 79-6; and ECF No. 79-8. Interestingly, the address listed for Robert Johnson in the trademark applications belongs to a leasing office, and no record exists of a Robert Johnson having lived or worked there.
Finally, Robert Johnson is currently listed as the registered agent for Defendant Vilanco Industries, LLC.
The Court agrees with Judge Hunt that Plaintiff has satisfied its burden of establishing a prima facie case of contempt. "A party seeking civil contempt bears the initial burden of proving by clear and convincing evidence that the alleged contemnor has violated an outstanding court order." Commodity Futures Trading Com'n v. Wellington Precious Metals, Inc., 950 F.2d 1525, 1529 (11th Cir.1992). Whether or not Robert Johnson is merely an alias — although the facts strongly suggest that he is — ample support exists for the notion that Robert Johnson was at least an agent of Defendants and acted in concert with Laera, and the actions undertaken by them are clear violations of the Consent Judgment. Indeed, it appears that Defendants were utilizing Robert Johnson in order to attempt to circumvent the Consent Judgment.
Once a prima facie showing of contempt has been made, the burden shifts to the contemnor to show that he was unable to comply with the Court's order. See Commodity Futures Trading Com'n, 950 F.2d at 1529. In Laera's opposition brief to Plaintiff's Motion, Laera stated simply that he had "no information or belief" on the subject. See ECF No. 132 at 47. Additionally, he did not raise the issue in his Objections to the Report and Recommendation. The corporate Defendants have filed no response to Plaintiff's motion, and Judge Hunt therefore recommended that the Court grant Plaintiff's Motion for Default. See ECF No. 153. Because Laera and the corporate Defendants have failed to rebut Plaintiff's showing, the Court concurs with Judge Hunt that Defendants are in contempt of the Consent Judgment.
Plaintiff then filed a Second Motion for Contempt, alleging further violations of the Consent Judgment by Laera and third parties Joseph Napolitano, Vilanco Industries, Inc., and Robert Johnson. In particular, Plaintiff avers that Laera, in concert with these non-parties, sought to evade the Consent Judgment by filing an ancillary lawsuit and assigning certain trademark rights.
On May 21, 2013, Joseph Napolitano and Vilanco Industries, Inc., instituted an action
Plaintiff posits that the South Carolina lawsuit was merely an attempt by Laera to obtain an order allowing him to use the trademarks that he had been prohibited from using by the Consent Judgment. In support of this assertion, Plaintiff provides evidence that demonstrates a clear relationship between Laera, Joseph Napolitano, and Vilanco Industries, Inc. Specifically, Laera was the company's incorporator and was listed as the president and registered agent of Vilanco Industries, Inc., in various corporate documents, including the Articles of Dissolution. See, e.g., ECF Nos. 95-5, 95-6. Joseph Napolitano also appears to be an officer of Vilanco Industries, Inc. ECF No. 95-7. The Florida address associated with both Joseph Napolitano and Vilanco Industries, Inc., is Laera's Florida homestead property, and the mailing address provided in the company's Annual Report corresponds to a property owned by Laera. See ECF No. 185 at 24. Based on these affiliations, Plaintiff maintains that Joseph Napolitano is an alias of Laera's, and the lawsuit was actually brought by Laera against himself in an effort to retain rights to the use of the prohibited designations.
In light of the evidence provided by Plaintiff, Judge Hunt determined that the South Carolina action was a subversive tactic designed to shirk the terms of the parties' settlement agreement. Judge Hunt noted that compelling evidence existed supporting the notion that Joseph Napolitano was merely an alias, but regardless, Plaintiff had presented enough evidence demonstrating that Joseph Napolitano and Vilanco Industries, Inc., had actual notice of the Consent Judgment and acted in concert with Laera in violating its terms. Moreover, Laera provided insufficient explanation for the license agreements and the ancillary lawsuit, and Laera did not address the issue in his Objections to the Report and Recommendation. As a result, the Court agrees that Laera, Joseph Napolitano, and Vilanco Industries, Inc., are in contempt of the Consent Judgment.
Plaintiff has also presented evidence that Laera assigned a fifty-percent ownership interest in twenty-four trademarks to Robert Johnson, in violation of the parties' Stipulation of Settlement. This, along with the other evidence of Robert Johnson's affiliation with Laera, led Judge Hunt to again appropriately conclude that Robert Johnson had notice of the Consent Judgement and acted in concert with Laera in violating its terms.
The Consent Judgment provides for $150,000 in liquidated damages per violation.
In its Objections to the Report and Recommendation, Plaintiff requests that the Court also direct the United States Trademark Office to abandon with prejudice the three pending trademark applications filed by Robert Johnson. As the Court has determined those applications to be in violation of the Consent Judgment, the Court grants Plaintiff's request. Plaintiff also asks the Court to award injunctive relief with respect to the license agreements between Laera, Vilanco Industries, Inc., and Joseph Napolitano. But such relief is unnecessary because the license agreements are already in direct violation of the Consent Judgment. As the conduct has previously been enjoined, no additional injunction is required.
Finally, the Court agrees with Judge Hunt that Plaintiff must continue to abide by the terms of the Consent Judgment. Despite Defendants' actions in this matter, the Court finds no good cause to relieve Plaintiff of its obligations at this time.
Laera asserts that Plaintiff failed to abide by the terms set forth in the Consent Judgment. Specifically, Laera appears to contend that Plaintiff wrongfully challenged Laera's use of certain designations because he believes that the Consent Judgment allows him to register any name or mark "confusingly similar to `VILANCO' and `VALCO.'" See, e.g., ECF No. 125 at 4, 10, 11. This contention is wholly incorrect. The Consent Judgment makes clear that Defendants are permanently enjoined from registering any slogan, name, mark, or domain name that is confusingly similar to "BLANCO," with the exception of "VILANCO" and "VALCO." ECF No. 76 at 2-3. Thus, although Defendants are permitted to use the designations "VILANCO" and "VALCO," other confusingly similar designations are expressly prohibited. As a result, Plaintiff's challenges to Defendants' use of the prohibited designations were proper.
Laera also asserts that Plaintiff failed to redirect certain domain names as required by the Stipulation of Settlement. As noted by Judge Hunt, however, Plaintiff has already demonstrated its compliance with the parties' agreement. See ECF No. 185 at 36. For these reasons, Defendant's Motion for an Order to Show Cause is denied.
Finally, Laera moves for an entry of default judgment against Defendants G-Tech-I,
For the foregoing reasons, it is
PATRICK M. HUNT, United States Magistrate Judge.
THIS CAUSE is before this Court upon several pending motions. The Honorable Robin S. Rosenbaum referred the motions to the undersigned for disposition or report and recommendation as appropriate. (ECF Nos. 80, 96, 128, 154); see also 28 U.S.C. § 636(b); S.D. Fla. L.R. Mag. R. 1. The undersigned has carefully reviewed the motions and responses thereto, all supporting documentation, the court file, and
The convoluted procedural history of this case only serves to complicate the relatively simple issue: whether the parties have complied with the Final Judgment Upon Consent (the "Consent Judgment") entered by this Court on April 4, 2013. See (ECF No. 76). As a precursor, this matter involves (i) Plaintiff Blanco GmbH + CO. KG ("Blanco"), a company that sells faucets, sinks, and kitchen utensils; (ii) the three original defendants in this action, Corporate Defendants Vlanco Industries LLC (now "Vilanco Industries LLC")
On August 14, 2012, Plaintiff Blanco commenced this case against Defendants alleging claims of trademark infringement and counterfeiting under §§ 32(1) and 43(a) of the Trademark Act of 1946 (Lanham Act),
On September 17, 2012, approximately one month after Plaintiff filed the action against Defendants, Defendant Laera and Third-Party Defendant Vlanco Industries Inc. (not to be confused with Defendant Vlanco Industries LLC) executed a License Agreement ("License Agreement I") under South Carolina law. Defendant Laera's address was listed as 419 York Southern Road, Fort Mill, South Carolina 29715, and Vlanco Industries Inc.'s address was listed as 5960 SW 32 Terrace, Fort Lauderdale, Florida 33312 — an address that Defendant Laera has represented as his own, via filings with the Florida Department of State and while testifying at an October 29, 2013 evidentiary hearing.
That same day, Defendant Laera executed a "Trademark Assignment," conveying 50% ownership of the twenty-four subject trademarks listed in Schedule A of License Agreement I to Third-Party Defendant Robert Johnson. (ECF No. 125 Ex. 2 at 11). Defendant Laera's address was listed as 5960 SW 32 Terrace, Fort Lauderdale, Florida 33312, and Robert Johnson's address was listed as 4304 West Atlantic Boulevard, Coconut Creek, Florida 33066. (ECF No. Ex. 2 at 11). The transfer of interest did not include a reference to any consideration for the assignment or a signature by Robert Johnson.
On November 19, 2012, Judge Rosenbaum referred this case to Magistrate Judge Peter R. Palermo for mediation. (ECF No. 33). A settlement conference was scheduled for December 19, 2012 (ECF No. 34), but was later rescheduled for January 8, 2013 (ECF No. 51). On January 8, 2013, Plaintiff Blanco and Defendants entered into a Stipulation of Settlement (the "Stipulation"). (ECF No. 95 Ex. 1). The Stipulation provided, in part, as follows:
(ECF No. 95 Ex. 1 at 2-3). The Stipulation also required Defendant Laera to withdraw twenty-five trademark applications — which included the twenty-four
(ECF No. 95 Ex. 1).
Other pertinent aspects of the Stipulation were set out as follows: (i) Paragraph 6 permitted Defendants to use and register the terms "Vilanco" and "Valco" in connection with the marketing and sale of any goods and permitted a "Sell-Off Period" of nine months, within which Defendants could sell products bearing the mark "Vlanco"; (ii) Paragraph 8 acknowledged that violation of the Settlement would result in irreparable injury entitling Blanco to injunctive relief, damages, and reasonable attorney's fees and costs; (hi) Paragraph 12 referenced the simultaneous agreement to execute the Final Judgment Upon Consent attached to the Stipulation that would be entered by this Court; and (iv) Paragraph 17 states that the Stipulation is "binding upon the parties and their respective legal representatives, predecessors, successors, affiliates and assigns." (ECF No. 95 Ex. 1 at 8-11). The Stipulation was signed by Plaintiff's counsel, Defendants' counsel, and Defendant Laera, individually and in his capacity as President of Corporate Defendants. (ECF No. 95 Ex. 1 at 13).
On January 18, 2013, Judge Rosenbaum held a hearing regarding the parties' settlement and proposed judgment. (ECF Nos. 55, 58). Judge Rosenbaum ordered the parties to file a proposed consent judgment on or before February 7, 2013. (ECF No. 60). On January 29, 2013, Vlanco Industries LLC filed a notice of name change with the FDSDC, changing its name to Vilanco Industries LLC.
Several issues arose concerning the terms of the Stipulation before the parties could file a proposed consent judgment, which prevented the entry of a consent judgment. One issue was Defendant Laera's use of the mark "ViLANCO," instead of "VILANCO." Additionally, defense counsel sent a letter to Plaintiff Blanco's counsel, dated February 12, 2013, indicating that Plaintiff failed to redirect the domain names that Defendant Laera transferred to Plaintiff pursuant to the Stipulation. (ECF No. 132 Ex. 11). After various motions to schedule and reschedule further mediation, final mediation was held on March 25, 2013. See (ECF Nos. 61-71).
On March 25, 2013, at final mediation, the parties executed an Addendum to Stipulation of Settlement (the "Addendum"), wherein the parties modified the Stipulation as follows; (i) Paragraph 2 was amended to include seven more trademark applications
(ECF No. 95 Ex. 2 at 2-7). Plaintiff's counsel, Defendants' counsel, and Defendant Laera, individually and in his capacity as President of Corporate Defendants, signed the Addendum. (ECF No. Ex. 2 at 7).
On April 4, 2013, this Court entered the Consent Judgment (ECF No. 76) (the "Consent Judgment") and the case was closed. However, this Court retained jurisdiction for "the limited purpose of enforcing the terms of [the] Judgment and the [Stipulation and Addendum]." See (ECF No. 76 at T 12). The Consent Judgment was consistent with the Stipulation and Addendum and permanently enjoined several acts relating to the use of certain identified marks, including prohibiting Defendants, their officers, servants, agents, employees, attorneys, and representatives and/or anyone acting in active concert with the aforementioned from the following acts:
On April 10, 2013, Third-Party Defendant Vilanco Industries Inc. filed its Annual Report that listed Joseph Napolitano as its Officer/Director, with his address being identical to Defendant Laera's Fort Lauderdale address — 5960 SW 32 Terrace, Ft. Lauderdale, Florida 33312. On April 12, 2013, Defendant Laera and Vilanco Industries Inc. executed another License Agreement Modification, wherein Defendant Laera admitted violating the January 10, 2013 license modification, and agreed to pay Vilanco Industries Inc. (i) liquidated damages of $100,000,000.00; (ii) actual damages of $1,842,313.53; and (hi) punitive damages of $203,684,627.00. (ECF No. 125 Ex. 2 at 44). There is no further information contained in the document.
On June 17, 2013, Plaintiff filed its Motion to Re-Open the Case and for an Order to Show Cause Why Defendants Should Not Be Held in Contempt, to Enforce Consent Judgment, and other related relief ("Plaintiff's First Motion for Contempt"). (ECF No. 79).
On July 10, 2013, defense counsel filed a Motion to Withdraw rather than filing a response to Plaintiff's Motion for an Order to Show Cause. (ECF No. 86). The undersigned set a hearing to address counsel's request to withdraw before considering Plaintiff's motions for contempt. The hearing was initially held on July 24, 2013, during which Defendant Laera testified that he no longer had the authority to bind Corporate Defendants. See (ECF No. 106). Defendant Laera testified that Robert Johnson was the President of Vilanco Industries LLC and Anna Mancini was the President of G-Tech-I Inc., neither of whom appeared at the July 24, 2013 hearing.
On July 17, 2013, prior to this Court ruling on defense counsel's Motion to Withdraw, Plaintiff filed its Second Motion for an Order to Show Cause why Defendant Laera and those acting in concert with him — Third-Party Defendants Vilanco Industries Inc., Robert Johnson, and Joseph Napolitano — should not be held in contempt along with other related relief ("Plaintiff's Second Motion for Contempt"). (ECF No. 95). Though the title of the motion identifies Vilanco Industries Inc., Robert Johnson, and Joseph Napolitano as "Defendants," as previously stated, the Third-Party Defendants were not parties to the Stipulation and Addendum, and were not defendants included in the Consent Judgment. But see Fed.R.Civ.P. 65(d)(2) (providing that persons bound by an injunction include parties' agents, officers, servants, employees, attorneys, and other persons acting in concert or participation with the aforementioned). Plaintiff's Second Motion for Contempt alleges continued violations of the Consent Judgment and the lack of a substantive response to Plaintiff's First Motion for Contempt.
On July 22, 2013, yet another license modification agreement was executed between Defendant Laera and Third-Party Defendant Vilanco Industries Inc. (ECF No. 144 at 7). In this document, Defendant
On August 8, 2013, this Court issued an Order to Show Cause, wherein it expressly advised that the failure to respond to Plaintiff's Motions for Contempt would result in a recommendation to Judge Rosenbaum that Plaintiff's Motions be granted by default. See (ECF No. 118). Notwithstanding express notice, Corporate Defendants Vilanco Industries LLC and G-Tech-I Inc. have failed to respond or otherwise appear in the post-judgment phase of this litigation. Likewise, Third-Party Defendants Robert Johnson, Joseph Napolitano, and Vilanco Industries Inc. have failed to appear. Indeed, on August 29, 2013, Defendant Laera voluntarily dissolved Vilanco Industries Inc.
Plaintiff's first position is that Anna Mancini, Robert Johnson, and Joseph Napolitano are aliases used by Defendant Laera to subvert the Consent Judgment. Alternatively, Plaintiff argues that regardless of the apparent use of aliases, Defendants and Third-Party Defendants are jointly and severally liable for the violations of the Consent Judgment.
Unlike the non-responding parties, Defendant Laera has filed numerous pro se documents — including a purported response to Plaintiff's Motions for Contempt (ECF No. 132) and a 500-page Motion for an Order to Show Cause Why Plaintiff Should [Not] be Held in Contempt and related relief (ECF No. 125) — all of which are collectively addressed in this Report and Recommendation and in the Omnibus Order entered contemporaneously herewith.
On August 15, 2013, Plaintiff filed an Emergency Motion for Injunction to Prohibit Further Impersonation of Plaintiff by Defendant Vito Antonio Laera. (ECF No. 126). In that motion, Plaintiff seeks to enjoin Defendant Laera from impersonating Plaintiff's counsel, which arose from one instance wherein Defendant Laera acted on behalf of Plaintiff Blanco without its permission. However, there have been no further allegations of ongoing impersonation or similar wrongdoings.
On September 13, 2013, Plaintiff filed a Motion for Entry of Default Judgment against Corporate Defendants and Third-Party Defendant Robert Johnson for their failure to respond in these proceedings. See (ECF No. 153). In mirror-image fashion, on September 26, 2013, Defendant Laera filed a Motion for Default Judgment against Corporate Defendants G-Tech-I Inc. and Vilanco Industries LLC.
All matters are now ripe for a ruling and the undersigned recommends a specific disposition for each motion referenced herein.
On August 15, 2013, Plaintiff filed an Emergency Motion for Injunction to Prohibit Impersonation of Plaintiff by Defendant Vito Antonio Laera. (ECF. No. 126). Plaintiff's Emergency Motion seeks an injunction prohibiting Defendant Laera from impersonating Plaintiff and its intellectual-property counsel, Franka Kuschmirek. (ECF No. 126). In the Motion, Plaintiff describes one instance of unauthorized behavior by Defendant Laera, in which Defendant Laera unilaterally changed the owner of a domain account with the registrar GoDaddy.com from Robert Johnson to Plaintiff, and Plaintiff received subsequent notification concerning a bid for a domain name that it did not make. See (ECF No. 126). Plaintiff did not file a memorandum of law in support of its motion.
A party seeking an injunction must show that "(1) it has a substantial likelihood of success on the merits; (2) irreparable injury will be suffered unless the injunction issues; (3) the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing party; and (4) if issued, the injunction would not be adverse to the public interest." Klay v. United Healthgrp., Inc., 376 F.3d 1092, 1097 (11th Cir.2004) (quoting Siegel v. LePore, 234 F.3d 1163, 1176 (11th Cir.2000) (en banc)) (internal quotation marks omitted). A "preliminary injunction is an extraordinary and drastic remedy not to be granted unless the movant `clearly carries the burden of persuasion' as to the four prerequisites." United States v. Jefferson Cnty., 720 F.2d 1511, 1519 (11th Cir.1983) (quoting Canal Auth, v. Callaway, 489 F.2d 567 (5th Cir. 1974)).
Here, Plaintiff has simply informed this Court of a single incident where Defendant Laera acted improperly — without the support of a legal memorandum as required by Local Rule 7.1(a). Though the undersigned acknowledges the fraudulent nature of Defendant Laera's conduct, because there is no evidence of ongoing impersonation, the facts alleged do not "demonstrate a threat of irreparable harm." Siegel, 234 F.3d at 1177. While presented as an "emergency," the undersigned finds that the events and issues presented merely evidence the progression of Defendant Laera's violations of the Consent
A consent judgment has the same effect as any other judgment rendered by a court, and the prevailing party may request the court to enforce same. See Smalbein v. City of Daytona Beach, 353 F.3d 901, 907 (11th Cir.2003) ("What is important is that under a settlement agreement that is the functional equivalent of a consent decree, `the plaintiff thereafter may return to court to have the settlement enforced.'" (quoting Am. Disability Ass'n v. Chmielarz, 289 F.3d 1315, 1320 (11th Cir.2002))). A party seeking an order of contempt bears the initial burden of demonstrating by clear and convincing evidence that the alleged contemnor has violated a valid court order. Howard Johnson Co. v. Khimani, 892 F.2d 1512, 1516 (11th Cir.1990). The "clear and convincing" evidence must establish that an order was violated and that (i) the allegedlyviolated order was valid and lawful; (ii) the order was clear and unambiguous; and (iii) the alleged violator had the ability to comply. Id. at 1516; Jove Eng'g, Inc. v. IRS, 92 F.3d 1539, 1545 (11th Cir.1996).
A defendant may also be found in contempt where the evidence gives rise to an inference that a defendant and a nonparty are acting in concert to violate a consent judgment. See Chanel, Inc. v. Krispin, No. 08-23439, 2010 WL 4822737, at *3 (S.D.Fla.2010) (Torres, Mag. J.) (recommending sanctions and civil contempt where defendants, their agents, or persons acting in concert therewith were violating permanent injunction). Thus, a party subject to an order or injunction is not absolved of guilt merely because a non-party did the overt act that violated the order or injunction. Moreover, a non-party to the injunction or order may be found in contempt for violating the terms thereof if it had actual notice of the prohibited conduct. See Fed.R.Civ.P. 65(d)(2)(C); see also Marshak v. Treadwell, 595 F.3d 478, 486-88 (3d Cir.2009) ("Courts ... have admitted a significant exception to the general maxim that only parties and their privies may be bound by an injunction: specifically, non-parties guilty of aiding or abetting or acting in concert with a named defendant or his privy in violating the injunction.... may be held in contempt." (quoting Savarese v. Agriss, 883 F.2d 1194, 1209 (3d Cir.1989)) (internal quotation marks omitted)).
The focus of a court's inquiry in civil contempt proceedings is not the subjective intent of the alleged contemnors; rather, it is whether their conduct objectively complied with the terms of the order. Khimani, 892 F.2d at 1516. Thus, alleged contemnors must do more than merely assert they did not violate the order; they must introduce evidence to support their claim. Chanel, 2010 WL 4822737, at *3.
The Consent Judgment in this case, entered into after the Stipulation and Addendum, contains certain prohibitions on Defendants and provides for significant monetary damages in the event of a breach by Defendants. Specifically, the Consent Judgment permanently enjoined several acts relating to the use of certain identified marks, including prohibiting Defendants, their officers, servants, agents, employees, attorneys, and representatives and/or anyone acting in active concert with the aforementioned from the following:
See (ECF No. 76 at 2-3). The Consent Judgment further provided that any violation would result in the responsible Defendant paying to Plaintiff "liquidated damages in the amount of $150,000 for each [violation]" and the entitlement to recover attorney's fees, expert fees, and costs incurred in recovering such liquidated damages. (ECF No. 76 at 7-8).
Plaintiff's First Motion for Contempt (ECF No. 79), alleges that Defendants were in violation of the Consent Judgment by (i) filing three applications with the U.S. Trademark Office containing Prohibited Designations (as defined in the Consent Judgment); (ii) registering fiftyfive new (post-Consent Judgment) domain names containing prohibited designations; (iii) re-directing these fifty-five domain names and twenty-three others to a website using the prohibited designation "BLANCO"; and (iv) refusing to cooperate in the transfer of certain . domain names and transferring ownership of such domain names to third parties. See (ECF No. 79). Among other things, Plaintiff presented the sworn declarations of Franka Kuschmirek, intellectual property counsel to Plaintiff, and Liz Elfeld, an investigator for American Trademark Investigations, who was retained to assist in locating the individual named Robert Johnson. See (ECF No. 79 Exs. 1, 5). Plaintiff seeks liquidated damages, attorney's fees and costs, and many forms of injunctive relief. The requested relief is addressed infra section B.3.
The undersigned finds that the Consent Judgment is unambiguous, valid, and enforceable. Furthermore, based on the evidence submitted with Plaintiff's motion, as well as during, and after, the October 29, 2013 evidentiary hearing, the undersigned finds that Plaintiff has presented clear and convincing evidence that Corporate Defendants, their agents, and or persons acting in concert with Defendants — i.e., Third-Party Defendants Robert Johnson, Joseph Napolitano, and Vilanco Industries Inc. — have repeatedly violated the terms of the Consent Judgment; thus, Plaintiff has made a prima facie showing that Corporate Defendants violated, and continue to violate, the Consent Judgment.
Upon a plaintiff's prima facie showing of a violation of the order — by clear and convincing evidence — the burden of production shifts to the defendants to show they were unable to comply with the order. Commodity Futures Trading Comm'n v. Wellington Precious Metals,
Because Corporate Defendants Vilanco Industries LLC and G-Tech-I Inc. have not appeared to rebut the prima facie case presented by Plaintiff, the undersigned recommends that Plaintiff's Motion for Entry of Default Judgment against Vilanco Industries LLC and G-Tech-I Inc. (ECF No. 153) be GRANTED IN PART with regard to the relief requested, as further detailed infra section B.3.
Unlike Corporate Defendants, Defendant Laera filed a collective Response to both the First and Second Motion for Contempt (ECF No. 132), which exceeds 1000 pages. Defendant Laera's Response is convoluted and incongruous. Nonetheless, after carefully reviewing the Response, the undersigned makes the following findings.
First, Defendant Laera seems to copy Plaintiff's motions in block form and, more times than not, responds with a statement that he "lacks information or belief upon the unanswered subjects." See (ECF No. 132). Second, Defendant Laera apparently argues that the term "BLANCO" is a generic term when, for instance, he states that "[t]he mark Blanco for sinks is like owning the make [sic] VANILLA for Icecream." See (ECF No. 132 at 40). Defendant Laera also appears to dispute the obligation to re-direct certain domain names to Plaintiff. See (ECF No. 132 at 46) ("If [Plaintiff] would have redirected the domains as instructed we would not be having this conversation."). Last, Defendant Laera outright denies that Third-Party Defendants Robert Johnson and Joseph Napolitano are aliases or persons acting in concert with him and Corporate Defendants. See (ECF No. 132 at 44, 47-52).
Despite Defendant Laera's representations in his court filings and his testimony that Robert Johnson and Joseph Napolitano are not aliases, he has presented no evidence or credible explanation to rebut Plaintiff's prima facie showing that Defendant Laera was acting in concert with Robert Johnson to violate the Consent Judgment by registering prohibited domain names, filing prohibited trademark applications, improperly redirecting internet traffic to a website using prohibited marks, and failing to transfer certain domain names to Plaintiff. Moreover, the undersigned finds that nothing in Defendant Laera's lengthy Response demonstrates a good-faith attempt to comply with the Consent Judgment or an inability to comply with such judgment. Accordingly, the undersigned recommends that Plaintiff's First Motion for Contempt be GRANTED IN PART with regard to the relief requested, as further detailed infra section B.3.
Plaintiff's Second Motion for Contempt, filed one month after the First Motion for
As previously indicated, courts can assert jurisdiction over non-parties to an injunction or order in contempt proceedings where it is alleged that the nonparty violated an order in active concert or participation with a named party. See, e.g., ClearOne Commc'n, Inc. v. Chiang, 670 F.Supp.2d 1248, 1280-81 (D.Utah 2009) (finding that court had jurisdiction over non-party for violations of permanent injunction and temporary restraining order); see also Computer Searching Serv. Corp. v. Ryan, 439 F.2d 6 (2d Cir.1971) (noting that in copyright-infringement action, plaintiff who had obtained pre-trial order prohibiting defendant from transferring any of allegedly infringing assets did not need to add non-party to litigation to obtain relief for violation of order, as plaintiff could rely on its rights under Federal Rule of Civil Procedure 65(d)). However, in order to hold a non-party to an order in civil contempt for a violation thereof, the non-party must have actual notice of the enjoined acts. See Fed.R.Civ.P. 65(d)(2) (providing that an injunction binds "other persons who are in active concert or participation with" the parties or their agents, provided there is actual notice of the injunction).
On February 12, 2013, Vlanco Industries Inc. — which was originally incorporated by Defendant Laera as its president — became Vilanco Industries Inc. See (ECF No. 95 Ex. 5-6). Vilanco Industries Inc.'s mailing address and registeredagent address are identical to Defendant Laera's homestead property. Compare (ECF No. 95 Ex. 5), with (ECF No. 113 Ex. 3 at 25). On April 10, 2013, in an Annual Report filed with the FDSDC, an individual named Joseph Napolitano was identified as the registered agent and President of Vilanco Industries Inc. The Annual Report included an address for Joseph Napolitano matching that of Defendant Laera's homestead property in Florida and a mailing address to a property in South Carolina that Defendant Laera owns. See (ECF No. 95 Ex. 7). On July 30, 2013, Joseph Napolitano resigned from his position as registered agent and was replaced by Defendant Laera. See (DE 113). Defendant Laera has subsequently dissolved Vilanco Industries Inc. on August 29, 2013.
Plaintiff's Second Motion for Contempt presents additional evidence of Consent Judgment violations. Specifically, Plaintiff demonstrates that Defendant Laera (or persons acting in concert with him) filed separate actions that were pending in the U.S. District Court for South Carolina, Napolitano v. Laera, Case No. 1:13-cv-01373-MBS-SVH, and in this district, Laera v. Blanco GmbH + Co.KG, Case No. 13-CV-61423-RNS. Plaintiff argues that Defendant Laera filed both actions in order to circumvent the Consent Judgment, and filed the South Carolina action in an effort to become judgment-proof by consenting to a large judgment against him so that any judgment obtained herein would be uncollectible. See (DE 95 at 9).
On June 28, 2013, after Plaintiff's First Motion for Contempt was filed, Defendant Laera filed a Complaint in this district against Blanco and Corporate Defendants G-Tech-I Inc. and Vilanco Industries LLC
On May 21, 2013, Third-Party Defendants Joseph Napolitano and Vilanco Industries Inc. filed an action against Defendant Laera in the United States District Court for the District of South Carolina, Napolitano, Case No. 1:13-cv-01373-MBS-SVH. In that action, Joseph Napolitano and Vilanco Industries Inc. sought a judgment against Defendant Laera for the rights to the same trademarks and domain names at issue in the instant action, as well as an award of liquidated damages exceeding two-hundred million dollars. See (ECF No. 95 at 3-4, Ex. D). Plaintiff Blanco provided this Court with a copy of the federal complaint filed in the District of South Carolina. (ECF No. 95 Ex. D). As previously addressed in the Background section herein, Defendant Laera, Joseph Napolitano, and Vilanco Industries Inc. executed various license agreements and modifications after the commencement of the instant action against Defendants and after the Consent Judgment, all in an apparent effort for Defendant Laera to retain the use of the prohibited marks referenced in the Consent Judgment.
In essence, Defendant Laera is using the South Carolina court to obtain an order allowing him — through Third-Party Defendants Vilanco Industries Inc. and Joseph Napolitano — to use the very trademarks and domain names that he was prohibited from using by this Court's Consent Judgment. Likewise, the inordinate amount of damages alleged in the District of South Carolina action would render Defendant Laera judgment-proof in the current action, if in fact a judgment were entered against Defendant Laera in the District of South Carolina. Plaintiff, however, was able to intervene in the South Carolina case, and it has since been voluntarily dismissed. The aforementioned subversive tactics are a clear representation of Defendant Laera's and Third-Party Defendants Joseph Napolitano's and Vilanco Industries Inc.'s disregard for the Consent Judgment.
Accordingly, the undersigned finds that Plaintiff has supplied this Court with a prima facie showing of Defendant Laera's and Third-Party Defendants Joseph Napolitano's and Vilanco Industries Inc.'s violation of the Consent Judgment via their various license agreements and ancillary federal court action. Regardless of whether Joseph Napolitano is an alias for Defendant Laera — despite compelling evidence that such is the case — the facts of this case are sufficient to find that Joseph Napolitano and Vilanco Industries Inc. had actual notice of the Consent Judgment and acted in concert with Defendant Laera to violate the same. Third-Party Defendants Joseph Napolitano and Vilanco Industries Inc. have failed to appear or respond in the instant action in order to rebut the prima facie showing of their contumacious
Plaintiff has submitted record evidence that Third-Party Defendant Robert Johnson filed trademark applications related to the same trademarks at issue in this litigation and those marks that are the subject of the Consent Judgment. See (ECF No. 79 Exs. 1, 5). Plaintiff submitted a declaration from Elizabeth Elfeld, an investigator for American Trademark Investigations Inc., who attempted to locate Robert Johnson based on his listed address of 4303 West Atlantic Boulevard, Coconut Creek, Florida 33066. Ms. Elfield was advised that the Coconut Creek address was for a leasing office in a residential complex, not an actual residence. (ECF No. 79 Ex. 1). Plaintiff also submitted further evidence concerning the relationship of Robert Johnson to Defendants and the Consent Judgment. See (DE 136). For instance, the domain names that Plaintiff re-directed to Defendant Laera's IP address, as required under the Consent Judgment, also reference a website owned by Robert Johnson. See (DE 136).
Despite Defendant Laera's representations that Robert Johnson exists and is not an alias, there has been no independent evidence of his existence — absent his name being used for various purposes prohibited by the Consent Judgment. Interestingly, Defendant Laera testified at the October 29, 2013 evidentiary hearing that Robert Johnson is now on an open-ended vacation in Brazil. However, regardless of whether Robert Johnson is an actual person or an alias for Defendant Laera, it is clear from Plaintiff's evidence that he had actual notice of the Consent Judgment as president of Corporate Defendant Vilanco Industries LLC and acted in concert with Defendant Laera at the time he applied for prohibited trademarks.
Upon a plaintiff's prima facie showing of a violation of the order — by clear and convincing evidence — the burden of production shifts to the defendants to show they were unable to comply with the order. Commodity Futures Trading Comm'n v. Wellington Precious Metals, Inc., 950 F.2d 1525, 1529 (11th Cir.1992). To date, Third-Party Defendant Robert Johnson has not appeared in the current proceedings. In turn, Plaintiff has filed a Motion for Default Judgment against Robert Johnson. See (ECF No. 153). Plaintiff submitted credible evidence that it attempted to serve Robert Johnson with the show cause order. (ECF No. 119 Ex. A). Because Robert Johnson has not appeared in these proceedings, he has not rebutted Plaintiff's prima facie showing of contumacious behavior. Consequently, a finding of contempt against Robert Johnson and Defendant Laera for Robert Johnson's actions is warranted and the undersigned recommends that the Second Motion for Contempt against Robert Johnson and Defendant Laera be GRANTED IN PART with regard to the relief requested, as further detailed infra section B.3. See, e.g., Chanel, 2010 WL 4822737, at *3 (recommending sanctions and civil contempt where defendant or their agents or person acting in concert therewith were violating permanent injunction).
Plaintiff's Motions for Contempt collectively seek an order
The Consent Judgment provides for liquidated damages of $150,000.00 for each violation. See (ECF No. 76 at 10). Plaintiff submits that Defendants and Third-Party Defendants violated the Consent Judgment each time a prohibited designation was registered, licensed, applied for, used on a website, or not properly transferred to Plaintiff. See (ECF No. 95). According to Plaintiff, the violations of the Consent Judgment warrant an aggregate award in excess of seven million dollars. (DE 95). Based on the potential impact and significant magnitude of Plaintiff's request for relief, the undersigned has carefully considered its appropriateness under the current circumstances.
A damages provision is enforceable where the damages consequent to a breach are not readily ascertainable and the sum stipulated to be forfeited is not grossly disproportionate to damages that might be reasonably expected to result from a breach. See Country Inns & Suites by Carlson, Inc. v. Interstate Props., LLC, 329 Fed.Appx. 220, 221 (11th Cir.2009) (citing Lefemine v. Baron, 573 So.2d 326, 328 (Fla.1991)). Liquidated-damages provisions are useful in trademark infringement actions because it is difficult for the owner of a trademark to prove the amount of his damage or how much of the damage is caused by infringement. See Carling Brewing Co. v. Philip Morris, Inc., 277 F.Supp. 326, 335 (N.D.Ga.1967) (citing Pure Foods v. Minute Maid Corp., 214 F.2d 792, 797 (5th Cir.1954)); see also Aronowitz v. Health-Chem Corp., 513 F.3d 1229, 1241 (11th Cir.2008) (acknowledging that trademarkinfringement damages may be awarded despite the fact that they are not susceptible to precise calculations).
Here, liquidated damages are appropriate because the damages caused by the violations of the Consent Judgment by Defendants and Third-Party Defendants are not quantifiable. However, though an aggregate award of over seven million dollars could be justified if this Court separates the violations into each improperly used or transferred domain name and trademark, the practicality of such an award is lacking in this case. All indications are that each violation of the Consent Judgment is the doing of one man — Defendant Laera. The evidence strongly indicates that he has been using fake names, shell companies, and subversive tactics to violate an agreement that he apparently regretted executing. The thrust of this action is to get Defendant Laera to comply with the Consent Judgment and to award Plaintiff damages for the many violations thereof. The undersigned does not ignore the breadth of Defendant Laera's seemingly fraudulent behavior, but recommends that many violations be merged into categories, to which the $150,000.00 liquidated damages will be awarded for each category as follows:
(i) the licensing of trademarks, trademark applications, and domain names identified in License Agreement I between Defendant Laera, Vilanco Industries Inc., and Joseph Napolitano, including the filing of the legal action in the District of South Carolina;
(ii) the filling of U.S. Trademark Application Serial Nos. 85/911435, 85/911213, and 85/911,425 by Robert Johnson and Defendant Laera;
(iv) the failure to transfer vlanco.it andvlanco.cn and the redirection of domains to websites using the prohibited designation "BLANCO."
Consistent with the above categories and based on a finding that Defendants' and Third-Party Defendants' violations are all interrelated, it is recommended that Defendant Laera, Corporate Defendants Vilanco Industries LLC and G-Tech-I, and Third-Party Defendants Robert Johnson, Joseph Napolitano, and Vilanco Industries Inc. be jointly and severally liable for the sum of $600,000.00 in liquidated damages ($150,000.00 multiplied by four categorical violations). The undersigned also recommends the award of reasonable attorney's fees and costs related to this action, pursuant to the terms of the Consent Judgment.
Regarding Plaintiff's requests for injunctive relief against Defendants and Third-Party Defendants, the undersigned finds that the Consent Judgment already prohibits the conduct of Defendants and Third-Party Defendants that Plaintiff seeks to enjoin; thus, the finding of contempt and award of damages sufficiently compels the parties to cure any ongoing violations of the Consent Judgment without the need of further injunctions. Defendants and Third-Party Defendants should cure any ongoing violations of the Consent Judgment within 14 days of the date of the District Judge's Order on this Report and Recommendation.
The undersigned further recommends that this Court direct the Registrar(s) and Registry(ies) of the domain names containing prohibited designations identified in the Consent Judgment and licensed in the license agreements at issue in the South Carolina Action discussed herein to transfer ownership of the domain names to Plaintiff, including vlanco.cn and vlanco.it. Also, the United States Trademark Office should be directed to comply with the Consent Judgment and enter judgment in favor of Plaintiff in the opposition/cancellation proceedings identified in Schedule A of the Consent Judgment.
Last, Plaintiff asks this Court to relieve it from its duty to comply with the Consent Judgment based on Defendants' and Third-Party Defendants' actions. The undersigned recommends that this Court deny Plaintiff's request. Defendant Laera testified at the evidentiary hearing that he has a large quantity of merchandise bearing prohibited designations that he needs to sell before the sell-off period expires. The undersigned acknowledges the business implications of the Consent Judgment and recommends that the terms of the Consent Judgment continue to be honored by all parties.
On August 15, 2013, Defendant Laera re-filed a Motion for Order to Show Cause Why Plaintiff should [Not] be Held in Contempt and other related relief, wherein he purports to assert nine causes of action against Plaintiff. See (ECF No. 125). The crux of Defendant Laera's position is that, as he sees it, he was allowed to use any name or mark
As previously stated, the party seeking an order of contempt bears the burden of demonstrating by clear and convincing evidence that the alleged contemnor has violated a valid court order. Howard Johnson Co., 892 F.2d at 1516. Defendant Laera filed a 500-page motion that purports to assert nine claims for contempt. Defendant Laera makes the legally invalid assertion that he "is a member of the public and is free to use Blanco in any way shape or form allowed by law and the constitution of the United States of America." See (ECF No. 125 at 34). While courts should afford a litigant proceeding pro se leeway in pleadings, even pro se litigants must satisfy essential burdens. See Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972); Brown v. Crawford, 906 F.2d 667, 670 (11th Cir.), cert. denied, 500 U.S. 933, 111 S.Ct. 2056, 114 L.Ed.2d 461 (1991). Applying the pertinent legal standards set out supra section B, the undersigned finds that Defendant Laera has failed to meet his burden of providing clear and convincing evidence of a violation by Plaintiff to warrant a finding of contempt. Accordingly, the undersigned finds no legal or factual basis in Defendant Laera's submissions as he fails to recognize the validity of the Consent Judgment and the related Stipulation and Addendum.
Furthermore, contrary to Defendant Laera's assertions, Plaintiff has demonstrated its compliance with the Consent Judgment by providing evidence that it re-directed all domain names as required by the Consent Judgment, or attempted in good faith to comply with the Consent Judgment. (ECF No. 79 Exs. 2E, 2F; ECF Nos. 138, 139). Accordingly, the undersigned recommends that Defendant Laera's Motion for Order to Show Cause Why Plaintiff should [Not] be Held in Contempt and other related relief (ECF No. 125) be DENIED.
Defendant Laera filed a Motion for Default Judgment (ECF No. 157) against Corporate Defendants Vilanco Industries LLC and G-Tech-I Inc. for their failure to respond to his counterclaim and Motion for an Order to Show Cause. See (ECF No.
Based on the foregoing, the undersigned recommends as follows:
1. Defendant Vito Laera's Motion for an Order to Show Cause (ECF No. 125) should be DENIED.
2. Plaintiff's Motion for a Preliminary Injunction (ECF No. 126) should be DENIED.
3. Defendant Vito Laera's Motion for Default Judgment (ECF No. 157) should be DENIED AS MOOT.
4. Plaintiff's Motions for Contempt (ECF Nos. 79, 95) and Motion for Default Judgment (ECF No. 153) should be GRANTED IN PART as follows:
The temporary stay on filings in this case is lifted for the limited purpose of allowing the parties to have fourteen (14) days after service of a copy of this Report and Recommendation within which to file written objections, if any, with the Honorable Robin S. Rosenbaum, United States District Judge. See 28 U.S.C. § 636(b)(1) (providing procedure for review of magistrate judge report and recommendation). Written objections shall be no longer than twenty (20) pages in length, unless leave is granted, pursuant to Local Rule 7.1(c)(2). Failure to timely file objections shall bar the parties from a de novo determination by Judge Rosenbaum of any issue covered in the Report and shall bar the parties from challenging, on appeal, the factual findings accepted or adopted by this Court, except upon grounds of plain error or manifest injustice. See Thomas v. Arn, 474 U.S. 140, 145-53, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985) (holding that party waives appellate review of magistrate judge's factual findings that were not objected
DONE AND SUBMITTED at Fort Lauderdale, Florida this 12th day of December 2013.
Table of Related Companies
Corporate Defendant G-Tech-I Corporate Defendant Third-Party Defendant
Inc. Vlanco/Vilanco Industries Vlanco/Vilanco Industries
LLC Inc.
3/21/2007: 11/16/2011: 4/9/2012:
Articles of Incorporation: filed Articles of Organization: Organized Articles of Incorporation: Incorporated
by Vito Laera as "Blanco Industries as "Vlanco Industries
LLC" filed by Registered Agent Inc." Filed by Vito Laera with
G-Tech-I address of 5960 SW 32 Ter., Ft.
Lauderdale, FL 33312
Address: 5960 SW 32 Ter. Ft. Address: 419 York Southern Rd.,
Lauderdale, FL 33312 Ft. Mill, SC 29715
Contact Person: Vito Laera,
5960 SW 32 Ter., Ft. Lauderdale,
FL 33312
2/28/2008: 3/12/2012: 2/12/2013:
Annual Report: address is 419 Name changed to Vlanco Name changed to Vilanco
York Southern Rd., Ft. Mill, SC Industries LLC Industries Inc.
29715
1/3/2012: 1/29/2013: 4/10/2013:
Annual Report: Registered Name Changed to Vilanco Annual Report: Registered
Agent is Vito Laera Industries LLC Agent is Joseph Napolitano with
address 5960 SW 32 Ter., Ft.
Lauderdale, FL 33312
4/10/2013: 4/10/2013: 7/30/2013:
Annual Report: Registered Annual Report: Registered Notice of resignation of Joseph
Agent and Officer is Anna Mancini Agent is Robert Johnson with Napolitano.
with address of 5960 SW 32 address 4303 W. Atlantic Blvd.,
Ter., Ft. Lauderdale, FL 33312; Coconut Creek, FL 33066; Company
Company mailing address of 419 mailing address of 5960 SW
York Southern Road, SC 29715 32 Ter., Ft. Lauderdale, Florida
33312.
Registered Agent is Vito Laera
with addresses 419 York
Southern Road, Fort Mill, SC
29715 and 5960 SW 32 Ter.,
Ft. Lauderdale, FL 33312
12/8/2013: 12/8/2013: 8/29/2013:
No change in information since No change in information since Voluntary Dissolution of
4/10/2012 4/10/2013 Corporation.
This matter is before the Court upon Plaintiff BLANCO GmbH + Co. KG's Motion Requesting Reconsideration and Further Amendment of Amended Order Adopting Magistrate's Report and Recommendation [ECF No. 196]. In its Motion, Plaintiff again asks the Court to relieve Plaintiff of its obligation under the parties' settlement agreement to redirect certain domain names as a result of Defendant's bad-faith conduct. Plaintiff also requests that the Court award Plaintiff attorney's fees and costs as sanctions for Defendant's actions. The Court has considered Plaintiff's Motion and all supporting and opposing filings and is otherwise fully advised. For the reasons set forth below, the Court grants Plaintiff's Motion.
On January 13, 2014, the Court adopted Magistrate Judge Hunt's Report and Recommendation, which disposed of numerous motions filed by both parties in this case. See ECF No. 192. In adjudicating Plaintiff's Motions for Contempt, the Court found that Defendants and other non-parties to the litigation were in contempt of the Court's Final Judgment on Consent and were therefore jointly and severally liable for $600,000.00 in liquidated damages. See id. at 11. Despite Defendants' violation of the Consent Judgment, however, the Court ordered Plaintiff to continue to comply with its obligations under the parties' settlement agreement. Id. at 12. Specifically, pursuant to the parties' Stipulation of Settlement, Plaintiff is obligated to temporarily redirect certain domain names to the IP address "vilanco.com" so that Defendants can continue to sell products with non-infringing designations. According to Plaintiff, Defendant Vito Antonio Laera is now further redirecting those domain names from "vilanco.com" to another website that features various Nazi iconography. As a result of these actions, Plaintiff renews its request to be relieved of its obligation to redirect the various domain names and requests that the Court impose monetary sanctions against Laera in the form of attorney's fees and costs.
"[Reconsideration of a previous order is an extraordinary remedy to be employed sparingly." Burger King Corp. v. Ashland Equities, Inc., 181 F.Supp.2d 1366, 1370 (S.D.Fla.2002) (citing Mannings v. Sch. Bd. of Hillsborough Cnty., 149 F.R.D. 235, 235 (M.D.Fla.1993)). "The `purpose of a motion for reconsideration is to correct manifest errors of law or fact or to present newly discovered evidence.'" Id. at 1369 (quoting Z.K. Marine Inc. v. M/V Archigetis, 808 F.Supp. 1561, 1563 (S.D.Fla.1992)). Only three major grounds generally justify reconsideration: "(1) an intervening change in the controlling law; (2) the availability of new evidence; and (3) the need to correct clear error or prevent manifest injustice." Id. (citing Offices Togolais Des Phosphates v. Mulberry Phosphates, Inc., 62 F.Supp.2d 1316, 1331 (M.D.Fla.1999); Sussman, 153 F.R.D. at 694).
A court may award attorney's fees and costs as a sanction for bad-faith litigation pursuant to the court's inherent authority. Barash v. Kates, 585 F.Supp.2d 1368, 1371 (S.D.Fla.2008) (citing Chambers v. NASCO, Inc., 501 U.S. 32, 51-53, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991)). Invocation of this inherent power serves the dual purpose of (1) vindicating judicial authority
The key to invoking inherent authority is a finding of bad-faith conduct. See Byrne v. Nezhat, 261 F.3d 1075, 1121 (11th Cir.2001), abrogated on other grounds by Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639, 128 S.Ct. 2131, 170 L.Ed.2d 1012 (2008); Barnes v. Dotton, 158 F.3d 1212, 1214 (11th Cir. 1998). Bad-faith conduct can be demonstrated by a party's knowing or reckless raising of a frivolous argument, by a party's harassment of an opponent, by a party's delay or disruption of a proceeding, or by a party's hampering of the enforcement of a court order. Byrne, 261 F.3d at 1121 (citing Barnes, 158 F.3d at 1214). In determining the propriety of a bad-faith fee award, the inquiry focuses "primarily on the conduct and motive of a party." Rothenberg v. Security Mgmt. Co., 736 F.2d 1470, 1472 (11th Cir.1984).
Here, Plaintiff seeks reconsideration of the Court's prior Order based upon newly discovered evidence. In this regard, Plaintiff contends that it recently discovered that, rather than utilizing Plaintiff's redirection of the domain names to continue Laera's business operations, Laera is further redirecting the domain names to a website depicting Nazi imagery.
A review of the evidence included with Plaintiff's Motion leaves no doubt as to the accuracy of Plaintiff's assertion. Indeed, a DVD provided by Plaintiff portrays each domain name being typed into an Internet browser, being redirected to "vilanco.com," and then being further redirected to the IP address "albusbella.com." That website, in turn, depicts a large photograph of Adolph Hitler, various Nazi swastikas, the Nazi flag, and the Nazi emblem. The Court's own search reveals that since the filing of Plaintiff's Motion, Laera has done nothing to halt this additional redirection.
Laera's redirection of Plaintiff's domain names to an IP address portraying nothing but Nazi symbols is egregious and epitomizes bad faith. The purpose of redirecting the domain names was to allow Defendants to utilize the infringing domain names for a limited transition period so that Defendants could continue to sell their products without interruption. But it is evident that Laera has completely abused this allowance by attempting to associate Plaintiff with the Nazi party for the sole purpose, it appears, of besmirching Plaintiff's business reputation.
The Court also finds that sanctions are appropriate in this instance. As noted above, there can be no question that Laera's conduct amounts to bad faith. His multiple attempts to associate Plaintiff with Nazi war crimes reveal his antagonistic motivations and constitute harassment. Indeed, Laera's actions have done nothing but unnecessarily delay this litigation and disrupt enforcement of this Court's Consent Judgment. Accordingly, Plaintiff is entitled to an award of reasonable attorney's fees and costs. Because Plaintiff provided only an estimate as to the total fees and costs it incurred in relation to its Motion, the Court directs Plaintiff to separately file a motion for attorney's fees that complies with the Local Rules so the Court may determine the reasonableness of the award sought.
For the foregoing reasons, it is hereby
(ECF No. 79 Ex. 5 Attach. G). Plaintiff has also submitted a Declaration of Anastasios Nikolopoulos, a member of the Information and Technology group of Plaintiff's counsel (Norris McLaughlin & Marcus, P.A.), which includes a list of 78 domains that Mr. Nikolopoulos visited to record evidence of the improper redirection to "blancoamerica.us" website. (Ex. 11 submitted at October 29, 2013, evidentiary hearing).
