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Journey Group Companies v. Sioux Falls Construction, LLC

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

October 5, 2017

JOURNEY GROUP COMPANIES d/b/a SIOUX FALLS CONSTRUCTION, a South Dakota Corporation, Plaintiff,
v.
SIOUX FALLS CONSTRUCTION, LLC, a South Dakota Limited Liability Company, and LORENA DE JESUS, aka LORENA ZAMORA, aka LORENA FLEY, an individual, Defendants.

          MEMORANDUM OPINION AND ORDER GRANTING MOTION FOR ATTORNEY FEES

          Lawrence L. Piersol, United States District Judge

         Plaintiff Journey Group Companies d/b/a Sioux Falls Construction ("Plaintiff) has filed a Motion for Attorney Fees. (Doc. 22.) The motion is supported by the Affidavit of Sander J. Morehead and exhibits attached to the affidavit. (Doc. 23.) Defendants Sioux Falls Construction, LLC ("SFC") and Lorena De Jesus ("De Jesus") have not resisted the motion. For the following reasons, the motion will be granted.

         BACKGROUND

         Plaintiff has offered construction services in South Dakota and the surrounding region for over a century, continuously using the service mark "Sioux Falls Construction" ("the Mark") in advertising and otherwise promoting its construction services with great success and consumer recognition. The Mark is registered with the United States Patent & Trademark Office ("USPTO"), and with the South Dakota Secretary of State on it Fictitious Name Registration system.

         SFC and De Jesus began promoting and advertising their construction services using the Mark on a pirated domain and on Facebook, and by displaying the Mark on business cards and on the sides of SFCs commercial vehicles.

         On June 28, 2016, Plaintiffs lawyers sent by certified mail, return receipt requested, and by e-mail, a letter to De Jesus and SFC advising them that they were infringing upon Plaintiffs registered service mark. De Jesus represented that SFC would cease and desist using the Mark in conjunction with its construction business. However, SFC and De Jesus continued to conduct business in association with the Mark, confusing both consumers and potential consumers. For instance, Plaintiff was contacted by both potential consumers and Sioux Falls, South Dakota, city officials who were confused as to whether Plaintiff Sioux Falls Construction was responsible for SFC commercial trucks with the Mark on the sides of the trucks. Sioux Falls city officials have called Plaintiff and noted that vehicles bearing the Mark were located at job sites lacking a proper building permit.

         Despite repeated subsequent contacts between Plaintiffs lawyer and SFC and De Jesus demanding that they cease and desist use of the Mark, SFC and De Jesus nevertheless continued to conduct business in association with the "Sioux Falls Construction" name.

         After being notified of Plaintiffs rights in the Mark, including Plaintiffs Registrations regarding that Mark, SFC and De Jesus fraudulently obtained a South Dakota state registration for the mark "Sioux Falls Construction LLC" under SDCL Ch. 37-6 on September 12, 2016, by misrepresenting to the South Dakota Secretary of State's Office that it had valid rights in the Mark.

         Plaintiff initiated this trademark infringement action against SFC and De Jesus on September 2, 2016. (Doc. 1, Complaint.) A Summons was obtained from the Clerk of Courts the same day, and Plaintiff began efforts to serve De Jesus both individually and as the Registered Agent of SFC. Service of the Summons and Complaint was accomplished onboth Defendants on October 18, 2016. (Docs. 6 and 7.) Defendants were required to serve an answer within 21 days. FED.R.Crv.P. 12(a)(1)(A)(i). They failed to do so. Defendants also failed to file an answer or otherwise respond to the Amended Complaint that was filed on November 30, 2016.[1] Plaintiff moved for entry of default on December 21, 2016. (Doc. 13.) Pursuant to Federal Rule of Civil Procedure 55(a), the Clerk of Court entered default against Defendants on the same day. (Doc. 16.)

         On January 12, 2017, Plaintiff moved for default judgment pursuant to Rule 55(b) on its claims for: 1) violating Plaintiffs rights under the Lanham Act including 15 U.S.C. §§ 1114 and 1125; 2) a counterfeit trademark under 15 U.S.C. § 1116; and 3) cybersquatting in violation of 15 U.S.C. § 1125(d). Plaintiff also asserted that the admitted facts established that SFC's state trademark registration for "Sioux Falls Construction, LLC" should be cancelled. This Court granted Plaintiffs motion for default judgment on April 12, 2017, awarding damages and injunctive relief. (Doc. 21.) Regarding Plaintiffs request for attorney fees, the Court stated:

The Lanham Act authorizes "reasonable attorney fees to the prevailing party" in "exceptional cases." 15 U.S.C. § 1117(a). "Courts have defined the characteristics of exceptional cases with adjectives suggesting egregious conduct by a party." Aromatique, Inc. v. Gold Seal, Inc., 28 F.3d 863, 877 (8th Cir. 1994). According to the Eighth Circuit, an exceptional case within the meaning of the Lanham Act "is one in which one party's behavior went beyond the pale of acceptable conduct." Id. As noted above, Defendants deliberately and knowingly counterfeited Sioux Falls Construction's mark, marketed its own services with this counterfeit mark, and intended to use Sioux Falls Construction's well-known mark in an attempt to profit from the goodwill of that well-established construction company. Thus, this is an exceptional case justifying an award of fees.

(Doc. 21 at 12.) Plaintiffs counsel was directed to file an application for attorney fees with a supporting affidavit and time records. (Id.)

         On April 21, 2017, Plaintiff moved for attorney fees on the ground that the instant action is an exceptional case under the Lanham Act. (Docs. 22, 24.) The motion is supported by an affidavit of Plaintiffs lawyer with billing ...


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