The opinion of the court was delivered by: JEROME B. SIMANDLE
SIMANDLE, District Judge:
This matter involves a dispute over the use of a common trade name, Harrison Avenue Recycling. Both plaintiff/counter-defendant and defendants/counter-plaintiffs operate recycling businesses on Harrison Avenue in Camden, New Jersey, with plaintiff/counter-defendant's business incorporated as and operating under the trade name "Harrison Avenue Recycling, Inc." and defendants/counter-plaintiffs' unincorporated business operating under the trade name "Harrison Avenue Recycling." Plaintiff's complaint seeks equitable relief and damages, as does defendants' counterclaim. The matter is before the court following a hearing on July 28, 1995 upon the motion of defendants/counter-claimants for summary judgment.
Plaintiff's complaint alleges that the defendants, Robert P. Casey and Anita M. Casey, have misappropriated plaintiff's corporate name for the purpose of conducting a recycling business, for which injunctive relief, an accounting and money damages are sought. (Compl. filed Nov. 23, 1994.) The Caseys' counterclaim alleges that they filed and used the trade name "Harrison Avenue Recycling" in May, 1993, and that plaintiff/counterclaim-defendant did not commence business until 1994 when it created large signs across the street and began to divert the Caseys' customers; the counterclaim's first count seeks compensatory and punitive damages and an order restraining the plaintiff/counterclaim-defendant from using the name "Harrison Avenue Recycling," while the second count alleges that such conduct constitutes and unconscionable commercial practice under unidentified New Jersey statutes, for which treble damages, an injunction, and attorney's fees are sought.
The facts pertinent to a resolution of the complaint and counterclaim are undisputed. On May 13, 1993, defendants/counter-plaintiffs registered the name of their business, "Harrison Avenue Recycling," with the Clerk of the County of Camden. See Certif. of Robert P. Casey at P 2; Non-Resident Trade Name Registration, Ex. "A" to Casey Certif. The business was described therein as involving the recycling of concrete, brick and block. Id. The business name was in use by defendants/counter-plaintiffs for a short time prior to the actual trade-name registration and has been in use since that time. Casey Certif. P 3. The name of defendants'/counter-plaintiffs' business is prominently displayed on the premises and is visible to all who pass the property, including William Hargrove, the principal of plaintiff Harrison Avenue Recycling, Inc., who has an office located across the street from that of defendants/counter-plaintiffs. Id. at P 5. It is undisputed that Mr. Hargrove often saw defendants' large mounted signs on their property displaying defendants' trade name, "Harrison Avenue Recycling." Id.
It is undisputed that customer confusion began shortly after plaintiff/counter-defendant began operating its business. Casey Certif. P 6. Defendants/counter-plaintiffs provide the court with an example of such confusion, wherein checks intended for defendants/counter-plaintiffs were received by plaintiff/counter-defendant and not returned. Id. P 7.
The parties' two recycling yards lie six blocks apart, and the record is also uncontradicted that plaintiff/counter-defendant's property is located such that using a customary truck route into the neighborhood, a truck driver would always pass plaintiff/counter-defendant's property before coming to defendants'/counter-plaintiffs' property. Id. P 8. As a consequence, customer confusion results. Id.
This court has diversity jurisdiction, and New Jersey law supplies the rule of decision. The motion of defendants/counter-plaintiffs is premised upon New Jersey common law, and we therefore focus our discussion upon the state common law cause of action for unfair business practices for appropriation of a prior user's trade name.
New Jersey has long recognized a cause of action for the danger of harm to a plaintiff's trade from the defendant's use of plaintiff's trade name in such a way as to deceive the public into the belief that the defendant's affairs are those of the plaintiff. See American Shops, Inc. v. American Fashion Shops, 13 N.J. Super. 416, 80 A.2d 575 (App.Div. 1951) (citing Cape May Yacht Club v. Cape May Yacht and Country Club, 81 N.J. Eq. 454, 86 A. 972 (Ch. 1913)).
Thus, in Donner v. Parker Credit Corp., 10 N.J. Super. 350, 76 A.2d 277 (Ch.Div. 1950), where the plaintiff operated his jewelry business in New Jersey under the trade name "Parker Credit Co.," which name had been registered with the Essex County Clerk in 1947, plaintiff was determined to be entitled to an injunction restraining defendant, another jewelry seller previously operating only in New York, from operating its business under the name "Parker Credit Corp." in New Jersey, despite the fact that defendant's business had been operating under that name since 1949 in New York, and despite the fact that defendant was able to obtain a certification of incorporation under that name in New Jersey in 1950. Indeed, unlike Mr. Hargrove, the defendant in Donner was ignorant of the fact of plaintiff's prior registration and use of the trade name. Nonetheless, finding that good faith is not a defense to a request for injunctive relief but is only a defense to a claim for damages, the court permanently enjoined defendant from the use of the name in New Jersey. Id. at 356.
Here, there is no dispute that plaintiff/counter-defendant incorporated under the name "Harrison Avenue Recycling, Inc." at a point in time subsequent to defendants'/counter-plaintiffs' use and registration of the trade name. It is therefore uncontested that defendants/counter-plaintiffs were prior users of the trade name in the same business in the same neighborhood. As made clear in Donner, the fact that no entity was previously incorporated under the same name is of no moment to the analysis. The facts of the present case, of course, are more compelling than those of ...