Hawes v. Network Solutions, Inc., 02-1182.

• Decision Date: 09 July 2003
• Docket Number: No. 02-1377.,No. 02-1825.,No. 02-1824.,No. 02-1182.,02-1182.,02-1377.,02-1824.,02-1825.
• Citation: 337 F.3d 377
• Parties: Christopher J. HAWES, d/b/a CJH Color and Design Group, Plaintiff-Appellant, v. NETWORK SOLUTIONS, INCORPORATED; L'Oreal, a Societe Anonyme, Defendants-Appellees. Christopher J. Hawes, d/b/a CJH Color and Design Group, Plaintiff-Appellant, v. Network Solutions, Incorporated; L'Oreal, a Societe Anonyme, Defendants-Appellees. Christopher J. Hawes, d/b/a CJH Color and Design Group, Plaintiff-Appellant, v. Network Solutions, Incorporated; L'Oreal, a Societe Anonyme, Defendants-Appellees. Christopher J. Hawes, d/b/a CJH Color and Design Group, Plaintiff-Appellant, v. Network Solutions, Incorporated; L'Oreal, a Societe Anonyme, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 377

337 F.3d 377

Christopher J. HAWES, d/b/a CJH Color and Design Group, Plaintiff-Appellant, v. NETWORK SOLUTIONS, INCORPORATED; L'Oreal, a Societe Anonyme, Defendants-Appellees.

Christopher J. Hawes, d/b/a CJH Color and Design Group, Plaintiff-Appellant, v. Network Solutions, Incorporated; L'Oreal, a Societe Anonyme, Defendants-Appellees.

Christopher J. Hawes, d/b/a CJH Color and Design Group, Plaintiff-Appellant, v. Network Solutions, Incorporated; L'Oreal, a Societe Anonyme, Defendants-Appellees.

Christopher J. Hawes, d/b/a CJH Color and Design Group, Plaintiff-Appellant, v. Network Solutions, Incorporated; L'Oreal, a Societe Anonyme, Defendants-Appellees.

No. 02-1182.

No. 02-1377.

No. 02-1824.

No. 02-1825.

United States Court of Appeals, Fourth Circuit.

Argued: January 21, 2003.

Decided: July 9, 2003.

ARGUED:

Thomas J. Frain, Bolton, Massachusetts, for Appellant. Robert L. Sherman, Paul, Hastings, Janofsky & Walker, New York, New York; Brian Albert Davis, Network Solutions, Inc., Dulles, Virginia, for Appellees.

ON

BRIEF:

Peter Paul Mitrano, Boston, Massachusetts, for Appellant. Philip L. Sbarbaro, Network Solutions, Inc., Dulles, Virginia; Timothy B. Hyland, Leffler & Hyland, P.C., Fairfax, Virginia, for Appellees.

Before WIDENER, WILKINSON, and NIEMEYER, Circuit Judges.

Affirmed in part, reversed in part, and remanded by published opinion. Judge NIEMEYER wrote the opinion, in which Judge WIDENER and Judge WILKINSON joined.

OPINION

NIEMEYER, Circuit Judge:

Christopher J. Hawes, doing business as CJH Color and Design Group ("Hawes"), commenced this action against Network Solutions, Inc. and L'Oreal, S.A., a French corporation, under the Lanham Act as amended by the Anticybersquatting Consumer Protection Act, for a declaratory judgment that Network Solutions' transfer of his domain name to L'Oreal was "improper" and that his registration and use of was "not unlawful." He also seeks an injunction ordering the return of the domain name. The district court dismissed Hawes' complaint for lack of subject matter jurisdiction, under Federal Rule of Civil Procedure 12(b)(1).

For reasons that differ from those given by the district court, we affirm dismissal of Hawes' complaint against Network Solutions. We reverse the district court's order dismissing Hawes' complaint against L'Oreal and remand that portion of the case for further proceedings.

I

In April 1999, Hawes registered the domain name with Network Solutions, Inc. in Herndon, Virginia, and, in connection with that registration, entered into a Domain Name Registration Agreement. Hawes alleges that he registered the domain name to develop a forum in which to communicate with L'Oreal concerning problems with its products because his efforts to communicate with L'Oreal had been unsuccessful and its representatives were unable to "properly answer [Hawes'] inquiries."

A little over a year after Hawes registered , L'Oreal filed suit against Hawes in a French court, alleging infringement of L'Oreal's French trademarks. Upon learning of this French litigation, Network Solutions transmitted a "Registrar Certificate" for the domain name to counsel for L'Oreal in Paris, tendering control and authority over the registration of the domain name to the French court, in accordance with Network Solutions' "standard service agreement with its registrants and the dispute policy incorporated therein." On Hawes' failure to appear before the French court, the court entered judgment in favor of L'Oreal and ordered the domain name to be transferred to L'Oreal. Hawes has challenged the French court's jurisdiction through appellate review. After Hawes received notice of the French court's order, he wrote Network Solutions a letter stating that if Network Solutions transferred the domain name pursuant to its dispute resolution policy and the ensuing French court order, then he would file suit in a federal court in the United States to establish that his registration and use of was not unlawful. Notwithstanding this letter, Network Solutions transferred the name to L'Oreal on October 5, 2000.

In April 2001, Hawes commenced this action by filing a two-count complaint against Network Solutions and L'Oreal. In Count I, Hawes alleged that Network Solutions breached the Domain Name Registration Agreement when it transferred to the French court. In Count II, Hawes alleged that even though L'Oreal owned the mark "L'Oreal," Hawes' registration and use of the domain name was "not unlawful" under the Lanham Act. For relief, Hawes sought a declaratory judgment that Network Solutions' transfer of control over the domain name to French counsel for deposit with the French court was "not permitted" and that his registration and use of that domain name was "not unlawful." He also requested that the court "reactivate the domain name ... and/or transfer said domain name to [Hawes]." Each of the two counts are grounded on 15 U.S.C. § 1114(II) (although no statutory section with that number exists).

On Network Solutions' motion to dismiss, filed under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), District Judge Gerald Lee dismissed the complaint against Network Solutions under Rule 12(b)(1) for lack of subject matter jurisdiction. On L'Oreal's motion to dismiss under Rule 12(b)(1), which was assigned to District Judge Claude Hilton, Judge Hilton denied the motion without prejudice to L'Oreal's ability to resurrect the issue of subject matter jurisdiction at the conclusion of discovery. L'Oreal filed an answer and counterclaims for trademark infringement and trademark dilution.

After discovery proceeded for about four months, L'Oreal renewed its motion under Rule 12(b)(1), arguing to Judge Hilton that Judge Lee's prior dismissal of the complaint against Network dictated dismissal of the complaint against L'Oreal because, if the district court were not to dismiss the case, "we [would be] left in the terribly awkward position of having this Court rule inherently on the propriety of Network Solutions' actions, namely the transfer of the certificate of registration pursuant to a French court order, in the absence of Network Solutions." Judge Hilton responded:

I believe that [Hawes has] the right to come in, if this domain name has been improperly transferred, whether it has or not is another question, but if it has been improperly transferred, [he has] the right to come in and ask for that domain name back. But now I find myself in a posture where my colleague has dismissed out of the case the very person who has to be here in order to get that accomplished.

Judge Hilton then referred the matter back to Judge Lee. A few days later Judge Lee granted L'Oreal's motion to dismiss under Rule 12(b)(1). Because the complaint against it had been dismissed, L'Oreal voluntarily dismissed its counterclaims.

From the final judgment dismissing the claims against both Network Solutions and L'Oreal for lack of subject matter jurisdiction, Hawes filed this appeal.

II

In dismissing Count I of the complaint, which alleged that Network Solutions improperly transferred the domain name , the district court construed the claim as one under 15 U.S.C. § 1114(2)(D)(i)(II)(bb) and then gave its reason for dismissing it as follows:

[Hawes] never alleges that any underlying ACPA action was in existence when [Network Solutions] allegedly transferred the LOREALCOMPLAINTS.COM domain name. Without the existence of an underlying action, [Network Solutions], as a domain name registry, could not be in violation of 15 U.S.C. § 1114.

The district court concluded that "[t]herefore, this Court does not have subject matter jurisdiction over [Hawes'] claim against [Network Solutions] pursuant to federal question jurisdiction."

In dismissing Count II of the complaint, which was asserted against L'Oreal to obtain the declaration that Hawes' registration and use of the domain name was "not unlawful under Title 15, United States Code, § 1114(II) [sic]," the district court concluded that it did not have subject matter jurisdiction for three reasons. First, it found that there was no justiciable case or controversy, explaining that "[a] mere desire to use a trademark in connection with a product does not constitute a course of conduct placing a party in a legally adversarial conflict with another party." Second, construing Count II as a claim under 15 U.S.C. § 1114(2)(D)(v), the district court concluded that it lacked jurisdiction to hear a claim under that section because the domain name was transferred to L'Oreal pursuant to an order of a French court and therefore "is exempt from 15 U.S.C. § 1114's jurisdictional grant because liability under § 1114(2)(D)(v) for transfer of a domain name depends on the implementation of a reasonable policy effecting that transfer." The court explained, "L'Oreal's receipt of the domain name was pursuant to a court order, and not pursuant to the implementation of [Network Solutions'] reasonable policy." Finally, based on its first two reasons, the court indicated an unwillingness to exercise discretion to grant declaratory relief based on the discretionary language of 28 U.S.C. § 2201.

In reaching these conclusions, the district court was required to interpret the complaint with scant help from Hawes' now-replaced counsel, who based both counts of the complaint on "15 U.S.C. § 1114(II)," a statutory provision that does not exist. Nonetheless, the district court's conclusions that Count I against Network Solutions was based on § 1114(2)(D)(i)(II)(bb) and that Count II against L'Oreal was based on § 1114(2)(D)(v) are not only eminently reasonable but also undoubtedly correct in light of the allegations made and relief sought with respect to each count. See Fed.R.Civ.P. 8(f) ("All pleadings shall be so construed as to do substantial justice"); Anderson v. Foundation for Advancement, Educ. & Employment of Am. Indians, 155 F.3d 500, 505 (4th Cir.1998) ("Federal `notice'...