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The Sparta Group, Inc v. Morgan Stanley Smith Barney

May 11, 2011


The opinion of the court was delivered by: Hon. Dennis M. Cavanaugh




This matter comes before the Court upon motion for summary judgment by Morgan Stanley Smith Barney, LLC("Defendant") to dismiss Plaintiff's complaint pursuant to Fed. R. Civ. P.56, and cross-motion by The Sparta Group, Inc. ("Plaintiff") for summary judgment, or for a stay to conduct discovery pursuant to Fed. R. Civ. P. 56(d). Pursuant to Fed. R. Civ. P. 78, no oral argument was heard. For the reasons stated herein, Plaintiff's motion pursuant to Fed. R. Civ. P. 56(d) is granted, and Plaintiff will be allowed to engage in limited discovery to be determined by Magistrate Judge Joseph A. Dickson in accordance with this Opinion.The Court reserves opinion on both Plaintiff and Defendant's motions for summary judgment pursuant to Fed. R. Civ. P. 56(a).


Plaintiff is aNew Jersey Corporation with its principal place of business in Parsippany, New Jersey. Defendant is a Delaware limited liability company with its principal place of business in New York City. Plaintiff is engaged in the business of providing sports agent and representation services to major league and minor league baseball players, as well as investment and financial advice to ballplayers, coaches, sportscasters and other high net worth individuals . The Sparta group was founded in 1980, and has continuously operated under that name ever since. According to the declaration of Eugene Casaleggio, Plaintiff's senior partner and director of player development, in the summer of 2009, Plaintiff hired Eric Reese, a former college baseball player whose father was an old friend of Mr. Casaleggio, as a summer intern. After Mr. Reese left Plaintiff's employ, he and Mr. Casaleggio remained in touch, and Mr. Casaleggio offered Mr. Reese "advice on career and professional matters." (Dec. Of Eugene Casaleggio, ECF Doc. 1-7, p.2 par. 3).By October 1, 2010 Mr. Reese apparently accepted a job with Defendant, and sent an e-mail to Mr. Casaleggio, the subject of which was "positioning myself with agents." Mr. Reese attached a copy of his "Team Brochure, " and mentioned that, "O yea, I just reread the brochure and because all 3 of us are from Sparta, they named our team The Sparta Group at Morgan Stanley Smith Barney...Coincidence." (Exhibit A to Dec. Of Eugene Casaleggio, ECF. Doc 1-8).On October 6, 2010 Mr. William R. Boyd, Plaintiff's Chief Financial Officer, received a phone call from a long term acquaintance, Mr. Charles Savite, who reported that he had received "an unsolicited call from a person claiming to be from The Sparta Group," but who did not, in fact, work for Plaintiff. (ECF Doc. 1-9, Dec. Of William R. Boyd). The next day, Mr. Sohail Shahpar, in-house legal counsel for Plaintiff, sent a letter to Defendant describing the alleged infringement and potential for confusion, and requesting that Defendant cease and desist from using the name The Sparta Group.(ECF Doc. 1-10, Ex. B to Boyd Dec.). On October 12, 2010 Defendant's attorney responded and did not indicate that Defendant was prepared to comply, or that Defendant believed itself to be infringing or creating confusion.On October 25, 2010 Plaintiff filed the instant law suit, requesting that Defendant be temporarily restrained, and preliminarily and permanently enjoined from infringing Plaintiff's service mark and trade name. By October 29, 2010, Defendant ceased using Plaintiff's service mark and trade name, and agreed to destroy all promotional materials, etc., that used the name as well. Although Plaintiff's attorney reported to the Court on October 29, 2010that"the Sparta Group has obtained all it sought in its application for preliminary injunctive relief, and, therefore, withdraws that motion," Plaintiff elected to continue to press for damages, profits, attorneys fees and costs.


A. Summary Judgment "A court reviewing a summary judgment motion must evaluate the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor." Gaston v. U.S. Postal Serv., 2009 U.S. App. LEXIS 5673 (3d Cir. 2009). However, "[t]he judgment sought should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c).

"A party against whom relief is sought may move at any time, with or without supporting affidavits, for summary judgment on all or part of the claim." Fed. R. Civ. P. 56(b). "[T]he burden on the moving party may be discharged by "showing" -- that is, pointing out to the district court --that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Cartrett, 477 U.S. 317, 325 (1986). "[R]egardless of whether the moving party accompanies its summary judgment motion with affidavits, the motion may, and should, be granted so long as whatever is before the district court demonstrates that the standard for the entry of summary judgment, as set forth in Rule 56(c)." Celotex, 477 U.S. at 323 (citing Fed. R. Civ. P. 56(c).

When a motion for summary judgment is properly made and supported, [by contrast,] an opposing party may not rely merely on allegations or denials in its own pleading; rather, its response must--by affidavits or as otherwise provided in this rule--set out specific facts showing a genuine issue for trial. If the opposing party does not so respond, summary judgment should, if appropriate, be entered against that party.

Fed. R. Civ. P. 56(e)(2). "When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (internal citations omitted). Indeed, "unsupported allegations in [a] memorandum and pleadings are insufficient to repel summary judgment." See Schoch v. First Fid. Bancorp., 912 F.2d 654, 657 (3d Cir. 1990). Rule 56(e) permits "a party contending that there is no genuine dispute as to a specific, essential fact 'to demand at least one sworn averment of that fact before the lengthy process of litigation continues.'" Id. (quoting Lujan v. National Wildlife Fed'n., 497 U.S. 871, 889 (1990)). "It is clear enough that unsworn statements of counsel in memoranda submitted to the court are even less effective in meeting the requirements of Rule 56(e) than are the unsupported allegations of the pleadings." Schoch, 912 F.2d at 657.

B. Lanham Act

15 U.S.C. § 1117(a), in addition to injunctive relief pursuant to 15 U.S.C. § 1116, 1117(a) provides in relevant part that:

When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, a violation under section 43(a), (c), or (d) [15 U.S.C. § 1125(a), (c), or (d)],or a willful violation under section 43(c) [15 U.S.C. § 1125(c)], shall have been established in any civil action arising under this Act, the plaintiff shall be entitled, subject to the provisions of section 29 and 32 [15 U.S.C. §§ 1111, 1114], and subject to the principles of equity, to recover (1) defendant's profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action. The court shall assess such profits and damages or cause the same to be assessed under its direction. In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such ...

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