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First Premier Bank v. Papadimitriou

United States District Court, D. South Dakota, Southern Division

January 7, 2015



DAWRENCE L. PIERSOL, District Judge.

Plaintiffs, a bank and issuers of sub-prime credit cards, brought this case against Evolution Finance and its founder and CEO, Odysseas Papadimitriou, owners and operators of an Internet credit card review website called CardHub. The Complaint asserts three causes of action: (1) unfair competition under section 43(a) of the Lanham Act, (2) state common law unfair competition and (3) breach of contract. Plaintiffs First Premier Bank, Premier Banckcard, LLC and Premier Nevada, LLC move for a preliminary injunction pursuant to Rule 65 of the Federal Rules of Civil Procedure. Defendants move to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Arguments on both motions were heard on October 30, 2014, in Sioux Falls, South Dakota. Plaintiffs asked the Court to permit evidence to be submitted in advance of the hearing by affidavit in order to expedite the proceedings. For the reasons set forth below, both motions are denied.


First Premier, which is based in Sioux Falls, South Dakota, is a provider of financial services and an issuer of credit cards. First Premier owns a registered trademark for its services. Using the First Premier mark, Premier South Dakota markets First Premier's sub-prime credit cards to consumers with bad credit through Internet marketers called "affiliates" that carry First Premier banner advertisements. When an Internet user clicks on one of Premier's affiliate's advertisements, the user is directed to an application for First Premier's credit cards. Typically, Premier South Dakota compensates its affiliates for each application submitted through the affiliate's ad. Premier South Dakota reviews and approves all of its affiliates' advertising before it is used for marketing purposes in order to ensure that it complies with all applicable federal regulations for banks.

Defendant Odysseas Papadimitriou is the founder and Chief Executive Officer of Evolution Finance, the parent company of, a website that helps consumers learn about and compare credit cards. CardHub's database of over 1, 200 credit cards includes information such as the interest rate, fees, and rewards for each card. In addition, CardHub users are encouraged to review and rate each credit card, and their input is presented on the website. CardHub does not issue credit cards. During the relevant period, the "about" page of the website included a disclaimer that "CardHub is not a credit-card company, nor are we the front for any credit-card company. We are, however, committed to helping each and every CardHub customer make better financial decisions regarding the cards in their wallets."

To pay for the expenses associated with maintaining the website, credit card companies that become advertisers on CardHub pay a commission for each credit card application completed by an individual who clicks on an "Apply Now" link on CardHub. In return, advertisers' cards are given priority placement on certain pages throughout CardHub. Every card offered by paying advertisers is clearly labeled "Sponsored Card" on the CardHub website. But if a consumer clicks on a card that happens to not be sponsored, such as First Premier, that lack of sponsorship is not indicated. The details page for every card in the CardHub database includes a disclaimer which states, in relevant part:

Regardless of advertiser status, none of the information on CardHub constitutes a referral or endorsement of the respective issuer by us, or vice versa. Furthermore, it is important to note that the inclusion of non-sponsored cards on CardHub does not indicate that issuer's involvement with the site. Information is displayed first and foremost for helping consumers make better credit card decisions.

Papadimitriou Decl. ΒΆ 17. Every link from CardHub to a credit card's website brings users first to a special page that informs them they are leaving the CardHub site and are being redirected to the credit-card company's site. Plaintiffs claim this special page suggests a relationship between Defendants and First Premier.

On June 15, 2008, First Premier and Evolution Finance entered into an Internet marketing agreement (Agreement). First Premier provided CardHub with banner ads, credit-card images, marketing bullet points and a special tracking hyperlink. When clicked, the hyperlink took the user to an application for First Premier credit cards, which could then be completed and submitted. The hyperlink also recorded on First Premier's servers that the visitor had come from CardHub. If the user signed up for a card, CardHub would receive an $8.50 commission from First Premier.

On January 3, 2011, Premier South Dakota terminated the Agreement with CardHub. CardHub claims that it removed all of the banner ads, credit-card images, marketing bullets, special tracking link and other media that had been given to CardHub as part of the Agreement, and that the CardHub pages for First Premier cards were restored to non-affiliate data like that kept about all other major credit cards. The special hyperlink was replaced with a standard link to First Premier.

First Premier claims that Evolution continued to promote First Premier credit cards on CardHub, sometimes using banner ads and unauthorized copies of First Premier's registered trademark. Premier South Dakota sent letters to Defendants on July 8, 2011, August 29, 2012 and November 20, 2012, accusing them of infringing First Premier's trademark on the CardHub website. The parties were able to work through their disputes until early 2014 when CardHub updated its website to make the site easier to view on handheld devices such as phones and tablets. In the process, CardHub's engineers unintentionally discarded the special code that had been set up to hide the special links directly to First Premier's credit card application. Thus, the CardHub website again had "Apply Now" buttons which directed Internet users to an online application form for a First Premier credit card. Plaintiffs claim that "Apply Now" or "Apply Here" buttons on CardHub's website that direct the consumer to the First Premier transactional or application page confuse consumers, causing them to believe CardHub is affiliated with First Premier.

On April 10, 2014, Plaintiffs filed this lawsuit alleging breach of contract and unfair competition under the Lanham Act and the common law. The same day the complaint was filed, Plaintiffs filed a motion for preliminary injunction. Plaintiffs seek to enjoin Defendants from:

(a) Appropriating and using the FIRST PREMIER name and mark for commercial purposes;
(b) Using the FIRST PREMIER mark or any colorable imitation thereof in connection with offering, selling, advertising or promoting the sale of any goods or services or from otherwise using any name or mark confusingly similar thereto;
(c) Infringing the FIRST PREMIER mark, and unfairly competing with PREMIER;
(d) Placing on the Accused Website or any other website that is directly or indirectly owned, operated or controlled by Defendants graphic messages and any other information that appears in the screen when accessing that website, or a graphic message that appears in a link, "pop-up" advertisement or exit console appearing on such website that promotes First PREMIER's credit card products, directs Internet users to web sites where persons can apply for First PREMIER's credit card products or directs Internet traffic to PREMIER's websites;
(e) Using in connection with the sale of any goods or services or the dissemination or distribution of advertising, promotional or marketing materials, a false or misleading description or representation including words or other symbols tending to deceive or cause confusion with PREMIER or the FIRST PREMIER mark; and
(f) Breaching Section 10.B of the June 15, 2008 agreement between PREMIER South Dakota and defendant Evolution Finance, Inc.

(Doc. 4.)

Within days of learning of the lawsuit, Mr. Papadimitriou had the "Apply Now" links removed. Plaintiffs do not object to CardHub's continued maintenance of basic information about First Premier's credit cards. Plaintiffs' lawyer explained that the Amended Complaint was filed on August 28, 2014, to clarify that Plaintiffs are not seeking to preclude any criticism or commentary about First Premier on CardHub's website, or even the use of Premier's mark; Plaintiffs seek solely to stop CardHub's use of the "Apply Now" buttons to link ...

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