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E.A. Sween Co., Inc. v. Deli Express of Tenafly, LLC

United States District Court, D. New Jersey

May 13, 2014

E.A. SWEEN COMPANY, INC., Plaintiff,
v.
DELI EXPRESS OF TENAFLY, LLC., Defendant

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For E.A. SWEEN COMPANY, INC., a Minnesota corporation, doing business as DELI EXPRESS, Plaintiff: GREGORY D. MILLER, LEAD ATTORNEY, PODVEY, MEANOR, CATENACCI, HILDNER, COCOZIELLO & CHATTMAN PC, NEWARK, NJ; SARAH CHRISTINE MITCHELL, PODVEY MEANOR, NEWARK, NJ.

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MEMORANDUM OPINION

KEVIN MCNULTY, United States District Judge.

Plaintiff, E.A. Sween Company, Inc. (" E.A. Sween" ), asserts five causes of action related to infringement of its trademarks. This matter comes before the Court on E.A. Sween's unopposed Motion for Default Judgment (Docket No. 11) against Defendant, Deli Express of Tenafly, LLC (" Defendant" or " Tenafly" ), pursuant to Fed.R.Civ.P. 55(b)(2). The summons and complaint were duly served, no answer or motion was filed in response, and the clerk entered default on December 5, 2013.

E.A. Sween brings this action against Defendant for Trademark Infringement and Unfair Competition under the Lanham Act, 15 U.S.C. § 1051, et seq., and New Jersey statutory and common law. Docket No. 1 (" Compl." ). For the reasons set forth below, I find that entry of a default judgment is appropriate. I will grant E.A. Sween's request for an injunction against further infringement of its trademark and will grant its request for fees and costs, subject to further proofs.

I. BACKGROUND

E.A. Sween is a Minnesota corporation that markets and sells convenience food products, such as sandwiches, bakery products, burritos, breakfast foods, and coffee, under its DELI EXPRESS trademark. The products are available through a wide variety of retail outlets, including convenience stores, delicatessens, drug stores, gas stations, truck stops, and vending machines. Compl. ¶ 10. E.A. Sween owns numerous registered United States trademarks and service marks that include the term " DELI EXPRESS." Id. ¶ 11; Compl., Exh. B (Cease and Desist Letter to Defendant enclosing proof of 19 federal registrations). Additionally, Sween owns three New Jersey state registrations for DELI EXPRESS in connection with food-related products and services. Id. ¶ 12; Compl. Exhibit C (State Renewal Certificates). E.A. Sween also owns many DELI EXPRESS internet domain names. Id. ¶ 14. Defendant has operated a restaurant business under the name DELI EXPRESS OF TENAFLY in Tenafly, New Jersey. Id. ¶ ¶ 2, 5.

Before filing suit, E.A. Sween informed the Defendant of its brand registrations and its objection to the continued use of DELI EXPRESS OF TENAFLY or any marks confusingly similar to the DELI EXPRESS mark. Id. ¶ 17. As of June 13, 2013, Defendant continued to use the DELI EXPRESS mark on the exterior of its store and on its take-out and delivery menus. Id. ¶ 18; Compl. E.A. Sween's counsel continued to contact Defendant from May 14, 2012 to the filing of this action in an attempt to resolve the dispute. Id. ¶ 19.

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On July 11, 2012, E.A. Sween's counsel first received a communication from Oliver Carona-Vidal, Defendant's CEO and registered agent, and an unidentified female employee. Through these individuals, the Defendant informed E.A. Sween's counsel that the name of the restaurant and deli had been changed to " The Bagel Shop" six months earlier. Id. ¶ 20. From July 11, 2012, through early 2013, E.A. Sween requested photographs and other evidence from the Defendant in order to confirm that it was no longer using the DELI EXPRESS or DELI EXPRESS OF TENAFLY marks. Defendant did not comply with these requests. Id. ¶ ¶ 21-22. In June 2013, E.A. Sween confirmed that the Defendant continued to use the DELI EXPRESS mark on its exterior awning and on promotional items, and that it held itself out to the public as " Deli Express." Id. ¶ 22; Exhibit E (Photographs taken June 2013). Plaintiff's counsel spoke to Corona-Vidal on July 25, 2013. During the conversation, Corona-Vidal informed E.A. Sween's counsel that he did not plan to change the name of the business or amend the promotional materials. Id. ¶ 23-24.

On October 23, 2013, Plaintiff filed a five-count Complaint, alleging claims of Federal Trademark Infringement, pursuant to 15 U.S.C. Section 1114; Unfair Competition, pursuant to 15 U.S.C. Section 1125(a); Trademark Dilution, pursuant to 15 U.S.C. Section 1125(c); Trademark Dilution under New Jersey law, pursuant to N.J.S.A. 56:3-13:20; and Unfair Competition under New Jersey, pursuant to N.J.S.A. 56:4-1, 56:4-2, and the common law. Plaintiff requests the entry of judgment in its favor in the form of injunctive relief as well as attorneys' fees and costs. Docket No. 11 (" P1. Br." ) at 17-18.

E.A. Sween alleges that Defendant used the DELI EXPRESS mark without authorization in connection with the promotion and retail sale of sandwiches and other food products, in violation of Lanham Act § § 32, 43 and New Jersey law. Plaintiff alleges that the DELI EXPRESS mark is well known, famous, and distinctive. Compl. ¶ 13. In 2001, DELI EXPRESS was voted " Vendor of the Year" and inducted into the Convenience Store Industry Hall of Fame. Id. The DELI EXPRESS brand has been co-branded with other food industry marks such as Jimmy Dean meats, Armour ham, Butterball turkey, and Hot Pockets pizza. Id.

On October 28, 2013, Plaintiff personally served Oliver Corona-Vidal, as registered agent for Defendant, with the Complaint and Summons. Docket No. 9. Pursuant to Fed.R.Civ.P. 12(a)(1), Defendant had twenty-one days, i.e., until November 25, 2013, to answer or otherwise respond to the complaint. Defendant failed to do so, then or subsequently. On December 4, 2013, Plaintiff requested that the Clerk enter default pursuant to Fed.R.Civ.P. 55(a). On December 5, 2013, the Clerk entered default against the Defendant, Deli Express of Tenafly, LLC. On January 21, 2014, Plaintiff filed the pending Motion for Default Judgment. Docket No. 11.

II. DISCUSSION

A. Entry of Default Judgment

" [T]he entry of a default judgment is left primarily to the discretion of the district court." Hritz v. Woma Corp., 732 F.2d 1178, 1180 (3d Cir. 1984) (citing Tozer v. Charles A. Krause Milling Co., 189 F.2d 242, 244 (3d Cir. 1951)). Because the entry of a default judgment prevents the resolution of claims on the merits, " this court does not favor entry of defaults and default judgments." United States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 194 (3d Cir. 1984). Thus, before entering default judgment, the Court must determine

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whether the " unchallenged facts constitute a legitimate cause of action" so that default judgment would be permissible. DirecTV, Inc. v. Asher, 03-cv-1969, 2006 WL 680533, at *1 (D.N.J. Mar. 14, 2006) (citing Wright, Miller, Kane, 10A Federal Practice and Procedure: Civil 3d § 2688, at 58-59, 63).

" [D]efendants are deemed to have admitted the factual allegations of the Complaint by virtue of their default, except those factual allegations related to the amount of damages." Doe v. Simone, CIV.A. 12-5825, 2013 WL 3772532, at *2 (D.N.J. July 17, 2013). While " courts must accept the plaintiff's well-pleaded factual allegations as true," they " need not accept the plaintiffs factual allegations regarding damages as true." Id. (citing Chanel, Inc. v. Gordashevsky, 558 F.Supp.2d 532, 536 (D.N.J. 2008)). Moreover, if a court finds evidentiary support to be lacking, it may order or permit a plaintiff seeking default judgment to provide additional evidence in support of the allegations. Doe, 2013 WL 3772532, at * 2.

Before a court may enter default judgment against a defendant, the plaintiff must have properly served the summons and complaint, and the defendant must have failed to file an answer or otherwise respond to the complaint within the time provided by the Federal Rules, which is twenty-one days. See Gold Kist, Inc. v. Laurinburg Oil Co., Inc., 756 F.2d 14, 18-19 (3d Cir. 1985); Fed.R.Civ.P. 12(a).

Here, Defendant DELI EXPRESS OF TENAFLY was properly served and has failed to respond to the complaint. Defendant's time to respond to the Complaint has long since expired. Accordingly, I am satisfied that the prerequisites to filing a default judgment are met. See Gold Kist, Inc., 756 F.2d at 18-19.

I must now evaluate the following three factors: (1) whether the party subject to default has a meritorious defense, (2) the prejudice suffered by the party seeking default, and (3) the culpability of the party subject to default. Doug Brady, Inc. v. N.J. Bldg. Laborers Statewide Funds, 250 F.R.D. 171, 177 (D.N.J. 2008) (citing Emcasco Ins. Co. v. Sambrick, 834 F.2d 71, 74 (3d Cir. 1987)). The factors weigh in favor of entry of a default judgment.

1. Whether Defendant has a Meritorious Defense

As to the first factor, I am disadvantaged, of course, by the lack of any submission by the Defendant, but I will review the record that is before me. See Coach, Inc. v. Bags & Accessories, CIV.A. 10-2555 JBS-J, 2011 WL 1882403, at *6 (D.N.J. May 17, 2011) (" Because the Defendants did not respond, the Court cannot determine whether the Defendants had meritorious defenses that are not reflected in the record." ). I am satisfied that Plaintiff has stated claims for relief for Counts I, II, III, IV, and V. Accepting the factual allegations as true, as I must, it appears that Plaintiff has stated claims for trademark infringement under federal law; unfair competition under federal and state law; and dilution under federal and state law. My independent review of the record has not revealed any reason to believe that these claims are legally flawed or that there is a meritorious defense to them. See Doe, 2013 WL 3772532, at * 5;

a. Trademark Infringement and Unfair Competition under the Lanham Act (Counts I and II)

Under the Lanham Act Section 32, 15 U.S.C. Section 1114(1):

(1) Any person who shall, without the consent of the registrant--

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(a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive . . .
Shall be liable in a civil action by the registrant . . . .

15 U.S.C.A. § 1114(1)(a). Furthermore, the Lanham Act Section 43(a) proscribes unfair competition or, as the statute refers to it, " false designation of origin" or " false description." 15 U.S.C.A. § 1125(a). The statute provides that:

(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which--
(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person . . .
shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

15 U.S.C.A. § 1125(a)(1)(A).

To state a claim for trademark infringement, 15 U.S.C. § 1114(1), and unfair competition, 15 U.S.C. § 1125(a)(1), under the Lanham Act, a plaintiff must show three elements: " (1) it has a valid and legally protectable mark; (2) it owns the mark; and (3) the defendant's use of the mark to identify goods or services causes a likelihood of confusion." A & H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 210 (3d Cir. 2000) (" We measure federal trademark infringement, 15 U.S.C. § 1114, and federal unfair competition, 15 U.S.C. § 1125(a)(1)(A), by identical standards" ). A plaintiff bears the burden of proving these elements. Id.

Here, E.A. Sween has provided evidence of the first and second elements. That evidence consists of trademark registrations establishing ownership of a valid and legally protectable mark. Compl. ¶ ¶ 30-72; Compl., Exhibit B (copies of 19 Federal Registration Certificates); Compl., Exhibit D (copies of three state renewal certificates). A " certificate of registration issued by the United States Patent and Trademark Office constitutes prima facie evidence of the validity and ownership of a disputed mark" and is therefore sufficient to establish the first and second elements of trademark infringement and unfair competition claims. Coach, Inc. v. Cosmetic House, No. 10 Civ. 2794, 2011 WL 1211390, *2 (D.N.J. Mar. 29, 2011) (citing 15 U.S.C. § § 1057(b), 1115(a)). E.A. Sween also alleges that it has continuously used the marks at issue and has used its various registration notices in association with the DELI EXPRESS marks on its goods, in connection with its service, and in its advertising. Compl. ¶ ¶ 30-72; see Compl., Exhibit A. I am satisfied that the first two elements are met here.

As to the third element, a " likelihood of confusion" exists where " consumers viewing the mark would probably assume that the product or service it represents is associated with the source of a different product or service identified by a similar mark." Coach, Inc. v. Cosmetic House, 2011 WL 1211390, at ...


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