WILLIAM D. QUARLES, Jr., District Judge.
Seasons Pizza Franchisor, Inc. ("Seasons Pizza") sued 4 Seasons Pizza and Subs, Inc. ("4 Seasons") for Lanham Act trademark infringement and unfair competition.
Seasons Pizza is a Delaware corporation. ECF No. 1 ¶ 2. Seasons Pizza has been the registered trademark holder of the "SEASONS PIZZA" (Registration Certificate No. 3,221,231) and "SEASONS PIZZA PASTA WINGS" (Registration Certificate No. 4,579,244) marks since March 27, 2007 and August 5, 2014, respectively. ECF Nos. 1-3, 1-4. Seasons Pizza's corporate affiliates operate restaurants in Maryland, Delaware, New Jersey, and Pennsylvania, including two locations in Anne Arundel County, Maryland. ECF No. 1 ¶ 2. The corporate affiliates and six other restaurants licensed by Seasons Pizza trade under the SEASONS PIZZA mark. Id. The restaurants serve, inter alia, pizza, stromboli, calzones, pasta, salads, sandwiches, and chicken wings for eat-in, take-out, and delivery. Id. ¶ 7.
4 Seasons is a Maryland corporation with its principal place of business at 2219 Defense Highway, Crofton, Maryland 21114. Id. ¶ 4. When the complaint was filed, 4 Seasons's corporate directors were Hafid Laaboudi and Tarik Essanarhi.
On March 16, 2015, Seasons Pizza sued 4 Seasons for trademark infringement and unfair competition. ECF No. 1.
On July 15, 2015, this Court referred Seasons Pizza's motion for default judgment to Judge Gesner for an R&R. ECF No. 12. On July 25 and September 9, 2015, Seasons Pizza again moved for default judgment. ECF Nos. 13, 15.
On September 24, 2015, Judge Gesner issued an R&R. ECF No. 17.
Under the Magistrate Judges Act, 28 U.S.C. § 636, a district judge may designate a magistrate judge to conduct hearings (if necessary) and report proposed findings of fact and recommendations for action on a dispositive motion. See 28 U.S.C. § 636(b)(1)(B); Fed. R. Civ. P. 72(b); see also Local Rule 301.5(b) (D. Md. 2011).
A party aggrieved by a magistrate judge's R&R about a dispositive motion must file "specific written objections to the proposed findings and recommendations" within 14 days. Fed. R. Civ. P. 72(b)(2). The reviewing judge "shall make a de novo determination of those portions of the [magistrate judge's] report . . . to which objection is made." 28 U.S.C. § 636(b)(1)(C). The judge "may accept, reject, or modify, in whole or in part, the findings or recommendations," and "may also receive further evidence or recommit the matter to the magistrate judge with instructions." Id.
Judge Gesner made several findings in connection with 4 Seasons's liability and the damages to which Seasons Pizza is owed. ECF No. 17 at 4-7. First, Judge Gesner found that Seasons Pizza had adequately alleged trademark infringement and unfair competition claims; thus, the entry of default judgment was proper. Id. at 4-5.
Seasons Pizza objects to the portion of Judge Gesner's R&R excluding successors and assigns. ECF No. 18 at 1. Because 4 Seasons has been sold, Seasons Pizza argues that the injunction "will effectively be a nullity" if it "[does] not enjoin the current owner and operator." Id. at 2. Seasons Pizza further argues that extending the scope of the injunction is appropriate because it has "sufficiently demonstrated" trademark infringement and unfair competition claims against the new owner. Id. at 3.
Seasons Pizza relies on a single sentence in Putt-Putt, LLC v. 416 Constant Friendship, LLC, 936 F.Supp.2d 648, 655 (D. Md. 2013) ("[A]ny disputes with respect to the ownership of the property or operation of the business located at 416 Constant Friendship Boulevard do not alter the outcome of this case, as Putt-Putt substantiates its burden once it shows that 416 CF has used its mark without its authorization, and that such use has resulted in a likelihood of confusion"). See ECF No. 3. In that case, the defendant had argued that summary judgment on the plaintiff's Lanham Act claims was improper because it did not own the business alleged to have infringed on the plaintiff's trademarks. Putt-Putt. 936 F. Supp. 2d at 655. The Hon. Alexander Williams, Jr., rejected the defendant's assertion because the evidence demonstrated otherwise. Id. Putt-Putt did not address the scope of any subsequent injunction, and, unlike this case, was resolved at the summary judgment — not default judgment — stage. See id. at 660 (ordering the parties to brief the nature of injunctive relief). Thus, there had been a fuller "airing of the merits of [the plaintiff's] case." Cf. ECF No. 17 at 7.
Under Federal Rule of Civil Procedure 65(d), an injunction generally "binds only the following who receive actual notice of it by personal service or otherwise: [] the parties; [] the parties' officers, agents, servants, employees, and attorneys; and [] other persons who are in active concert or participation with [the aforementioned persons]." Fed. R. Civ. P. 65(d) (emphasis added); see also Equal Employment Opportunity Comm'n v. Int'l Longshoremen's Ass'n, 541 F.2d 1062, 1063-64 (4th Cir. 1976). "Action as an alter ego, or in collusion, is required to find concert or participation under [R]ule 65(d)." Thaxton v. Vaughan, 321 F.2d 474, 478 (4th Cir. 1963).
Although lower courts within the Fourth Circuit have issued injunctions binding successors and assigns following the entry of default judgment,
Here, however, Seasons Pizza had notice in June 2015 that 4 Seasons had been sold to Ashrat. See ECF No. 18-1. Yet, Seasons Pizza did not join Ashrat as a defendant. See Fed.R. Civ. P. 19(a) ("A person . . . must be joined as a party if . . . that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may . . . as a practical matter impair or impede the person's ability to protect the interest."). Nor is there evidence that Ashrat — either before or after buying 4 Seasons — was informed about the suit and given an opportunity to intervene. See Fed. R. Civ. P. 24(a) ("On timely motion, the court must permit anyone to intervene who . . . claims an interest relating to the property . . . that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest."). Thus, the Court will not expand the scope of the injunction to the extent Seasons Pizza suggests. Accordingly, its objection will be overruled.
For the reasons stated above, Seasons Pizza's objection will be overruled; Judge Gesner's R&R will be adopted. Seasons Pizza's September 9, 2015 motion for default judgment will be granted; its earlier motions for default judgment will be denied as moot. Seasons Pizza's request for a permanent injunction will be granted in part.
Potomac Conference Corp. of Seventh-day Adventists v. Takoma Acad. Alumni Ass'n, Inc., 2 F.Supp.3d 758, 768 (D. Md. 2014). Judge Gesner found that all five elements were present. ECF No. 17 at 5.
eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006). Judge Gesner found all four elements were present. ECF No. 17 at 7.
ECF No. 17 at 7.