ACCU Personnel, Inc. v. AccuStaff, Inc., Civ. A. No. 93-30 MMS.
| Decision Date | 18 February 1994 |
| Docket Number | Civ. A. No. 93-30 MMS. |
| Citation | 846 F. Supp. 1191 |
| Court | U.S. District Court — District of Delaware |
| Parties | ACCU PERSONNEL, INC., Plaintiff, v. ACCUSTAFF, INC., Defendant. |
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Jeffrey B. Bove and R. Eric Hutz of Connolly, Bove, Lodge & Hutz, Wilmington, DE; Mark D. Simpson and Donald C. Simpson, of Simpson & Simpson, P.C., Moorestown, NJ, of counsel, for plaintiff.
Robert H. Whetzel of Richards, Layton & Finger, Wilmington, DE; Laurence R. Hefter and David M. Kelly of Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, DC, of counsel, for defendant.
Plaintiff, ACCU PERSONNEL, INC., "ACCU" has filed suit against defendant ACCUSTAFF, INC. "ACCUSTAFF"1 alleging trademark infringement,2 unfair competition, and deceptive trade practices under the Lanham Act, 15 U.S.C. § 1125(a) (1988), the Delaware Uniform Deceptive Trade Practices Act, Del.Code tit. 6, § 2531 et seq. (1974) the "Delaware Act", and the common law. Docket Item "D.I." 1. The Court has subject matter jurisdiction over plaintiff's Lanham Act claim pursuant to 28 U.S.C. § 1338(a). The related state statutory and common law claims fall within the Court's supplemental jurisdiction pursuant to 28 U.S.C. §§ 1338(b) and 1367(a).
This opinion addresses defendant's motion for partial summary judgment (D.I. 81), in which defendant argues: (1) defendant is a geographically remote, good faith user of its trademark; (2) plaintiff's claims under the law of Delaware should be dismissed because plaintiff has no trademark rights in Delaware; (3) plaintiff is not entitled to either actual or increased damages because plaintiff can show no instances of actual confusion leading to lost sales; and (4) plaintiff is not entitled to an accounting of profits, punitive damages or attorneys' fees because defendant has not acted in bad faith. D.I. 82.
For the reasons which follow, defendant's motion for partial summary judgment will be granted in part and denied in part. Summary judgment will be granted defendant as to: whether defendant made geographically remote, good faith use of its trademark; whether plaintiff is entitled to actual damages, an accounting of profits, increased damages, punitive damages and treble damages; and whether plaintiff is entitled to attorneys' fees. Summary judgment will be denied defendant as to whether plaintiff properly brings claims under the law of Delaware.
Plaintiff, incorporated in New Jersey on March 13, 1980, currently has four offices, all of which are located in New Jersey. D.I. 1 at 2. The main office, in Pennsauken, is located on Route 38, approximately six miles from the Ben Franklin Bridge, which connects Center City Philadelphia, Pennsylvania with Southern New Jersey. D.I. 98 at ¶ 3. Plaintiff also has offices in Burlington, Cherry Hill and Woodbury Heights. Id. at ¶ 4; D.I. 84 at A83-A89. Plaintiff's Burlington office is located within two miles of the Burlington Bristol Bridge, connecting New Jersey to Bristol, Pennsylvania. D.I. 98 at ¶ 4.
In its opening brief in support of its motion for a preliminary injunction, plaintiff claimed to have customers in twenty-nine states. D.I. 29 at 27. As defendant points out, this statement is based upon "Customer Lists" which plaintiff created on March 9, 1993 specifically for this litigation. See D.I. 83 at A6-A87; D.I. 84 at A93-A102. Defendant further notes that in creating these "Customer Lists," plaintiff did not consider the following information for use as a customer address: where the job orders originated; where the client contact was located; or where the services were rendered. D.I. 82 at 8. Instead, according to Edward J. Damm, plaintiff's Secretary and Executive Vice President, a customer was listed as "out-of-state" if: (1) plaintiff sent an invoice to an out-of-state address; (2) plaintiff received payment from an out-of-state address; or (3) plaintiff signed a contract out-of-state. D.I. 84 at A97-A99. Plaintiff does not dispute these or the following facts pertaining to its sales activity unless otherwise noted. D.I. 89 at 4.
As defendant has summarized in a chart, assuming every customer designated "out-of-state" is indeed located out-of-state, plaintiff's customers are distributed as follows:
Total3 Southern Southeastern Other
Year Customers New Jersey Pennsylvania Areas
1991 546 503 19 24
1992 648 566 22 60
19934 256 239 8 9
D.I. 83 at A88-A92.5 Those customers generated the following sales:
In fact, however, defendant has compiled numerous documents supporting these sales which indicate that: (1) orders by most of the customers designated "out-of-state" emanated from within Southern New Jersey; and (2) the contact persons employed by these customers also are located within Southern New Jersey. Id. at A93-A332. Plaintiff has not placed into evidence any documents to the contrary. Taking into account this information, and reclassifying, when appropriate, the customers designated "out-of-state" as customers within Southern New Jersey, plaintiff's customers are as follows:
Total Southern Southeastern Other
Year Customers New Jersey Pennsylvania Areas
1991 546 516 21 9
1992 648 611 24 13
1993 256 239 10 7
See id. at A333-A335.
At issue are the last two columns containing plaintiff's sales to customers in two disputed trade areas: Southeastern Pennsylvania and Northern Delaware. The following sections contain a more detailed summary of sales, by trade area, based on a summary compiled by defendant. Plaintiff, while conceding this summary is correct, focuses its attention upon the economic relationship among Southern New Jersey, Southeastern Pennsylvania, and Northern Delaware — commonly known as the "Delaware Valley." According to plaintiff, that economic relationship is most determinative of whether plaintiff has penetrated the markets in Southeastern Pennsylvania and Northern Delaware. D.I. 89 at 6-10. In support of this theory, plaintiff has filled the record with various sources recognizing the existence of the Delaware Valley. See D.I. 96 at B1-B21.
Plaintiff's 1991, 1992, and 1993 "Customer Lists" identify nineteen, twenty-two and eight customers, respectively, for total sales of $763,249.16 in Southeastern Pennsylvania. D.I. 83 at A6-A87, A88-A92, A439-A443. The geographic breakdown of those customers is as follows:
1991 1992 1993
Number of Number of Number of
City Customers Customers Customers
Aston 0 0 1
Bala Cynwyd 1 1 0
Bensalem 1 2 1
Bristol 7 3 2
Frazier 0 1 0
Hatfield 0 0 1
Lehigh Valley 0 1 0
Lester 1 1 0
Malvern 0 1 0
Newtown 0 0 1
Philadelphia 8 11 2
Reading 0 1 0
Valley Forge 0 1 0
Warrington 1 0 0
TOTAL 19 237 8
Id. Cf. D.I. 84 at A177 (map depicting listed cities). As defendant asserts, and plaintiff does not dispute, many of plaintiff's customers in Southeastern Pennsylvania represent isolated sales for relatively small amounts of money, such as a few hundred to a few thousand dollars. See D.I. 83 at A25-A26, A52-A53, A85-A86, A439-443. The following chart summarizes the number of customers in Southeastern Pennsylvania which account for less than $2,500 in annual sales:
After taking into account the double or triple counting of those customers represented in more than one year, plaintiff sells to a total of thirty-four different customers scattered through Southeastern Pennsylvania. Id. Further, the documents supporting these sales indicate that of those thirty-four, at least eighteen are, in fact, more accurately classified as customers located in Southern New Jersey. D.I. 83 at A93-A332; D.I. 103 at C1-C92. The customers are ASI, Boscov's, Day Products, The Equitable, Kiddie City, Lou Ziapone, Morris Flamingo, Penn Linen, Pep Boys, Philadelphia Daily News, Philadelphia Focus, Philadelphia Inquirer, A. Pomerantz, Pro Built, Rouse & Associates,...
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