Cosmetic Warriors Ltd. v. Nailush LLC

• Decision Date: 06 November 2017
• Docket Number: Civil No. 17-1475 (RBK/JS)
• Parties: COSMETIC WARRIORS LIMITED, Plaintiff, v. NAILUSH LLC, Defendant.
• Court: U.S. District Court — District of New Jersey

COSMETIC WARRIORS LIMITED, Plaintiff, v. NAILUSH LLC, Defendant.

Civil No. 17-1475 (RBK/JS)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CAMDEN VICINAGE

November 6, 2017

NOT FOR PUBLICATION

OPINION

KUGLER, United States District Judge:

This suit concerns trademark infringement and unfair competition. Plaintiff Cosmetic Warriors Limited ("CWL") brings this suit against Defendant Nailush, LLC ("Nailush") for infringing on its mark "LUSH." Presently before the Court is CWL's Motion for entry of Default Judgment under Federal Rule of Civil Procedure 55(b)(2). For the following reasons, CWL's motion is GRANTED.

I. FACTUAL AND PROCEDURAL BACKGROUND

CWL is a popular world-wide purveyor of high-quality, whole-ingredient bath, hair care, and beauty products. (Compl. ¶ 7.) CWL has numerous retail-stores in New Jersey and Pennsylvania, including a store in Cherry Hill, New Jersey, less than eight miles away from Nailush's location. (Id.) In these stores, CWL's beauty products include cosmetics for nail and cuticle care. (Id.) CWL also operates a spa in Philadelphia, Pennsylvania, less than ten miles from Nailush, where it offers spa services and treatments. (Id.) CWL has used the LUSH trademark since at least 1996 to identify its cosmetics and retail-stores. (Compl. ¶ 8.) It also uses the LUSH mark for its spa location. (Id.) CWL owns United States Trademark Registrations 2,282,428, 2,853,483, 3,001,303, 3,008,685, 4,118,438, 3,102,767, and 3,987,808 ("'808 registration") for the LUSH mark. (Compl. ¶ 9.) The latest registration was granted on July 5, 2011, for hair salon services, and nailcare and manicure services. (Compl. ¶ 10.)

Nailush operates a nail salon under that name offering nailcare services and selling skincare and nailcare beauty products. (Compl. ¶ 15.) It uses the mark Nailush in advertising, social media, and its website www.nailush.us. (Compl. ¶ 16.) CWL was first alerted to Nailush's existence and use of its mark after Nailush filed an application with the U.S. Patent and Trademark Office ("USPTO") to register Nailush for nailcare services on June 9, 2015. (Compl. ¶ 15.) On September 28, 2015, the USPTO refused to register the mark because it was confusingly similar to CWL's '808 registration. (Id.) After Nailush appealed, the USPTO issued a final refusal to register the mark, and because Nailush failed to respond, its application was abandoned on September 26, 2016. (Id.) CWL contacted Nailush on November 24, 2015, and three other occasions, requesting that it cease and desist from using the mark Nailush. (Compl. ¶ 18.) Nailush never responded. (Id.)

Because CWL never received a response from Nailush regarding its use of the mark, CWL filed a complaint on March 3, 2017, instituting this suit for trademark infringement and unfair competition due to the confusing similarity between LUSH and Nailush. (See Compl.) CWL demands that Nailush: (1) be permanently enjoined from using its mark, that ownership of www.nailush.us be transferred to it; (2) remove the mark from all of its promotional materials and social media; (3) be required to show proof that it destroyed all of its materials; (4) cease using the mark in its registration with the State of New Jersey business and licensing board; and (5) detail in writing the steps it took to comply with the injunction. (Compl. ¶¶ A-F.) CWL also demandsdamages, treble damages, statutory damages under 15 U.S.C. § 1117(d), punitive damages, reasonable attorneys' fees, and costs. (Compl. ¶¶ G-M.)

Nailush was served at its place of business on March 4, 2017. On April 4, 2017, United States Magistrate Judge Joel Schneider entered an order directing the Clerk to reject Nailush's pro se answer because a non-attorney may not represent a corporation. (Doc. No. 8-3 ¶ 4.) Nailush never filed a response to CWL's complaint. (Id.) On May 1, 2017, the Clerk entered Default against Nailush pursuant to Rule 55(a). CWL then moved for default judgment against Nailush on July 14, 2017. (Doc. No. 8).

In this motion, CWL seeks only nominal damages of $1 because it would be impossible to ascertain the amount of profits it lost due to Nailush's failure to answer. (Doc. No. 8-2, ¶ 16.) CWL requests a permanent injunction, enjoining Nailush from using Nailush and any marks confusingly similar to LUSH in its company name, trade name, license to operate, advertising, social media, signage, print materials, and otherwise. (Doc. No. 8-1.) CWL seeks an order directing the State of New Jersey to remove the Nailush mark from Defendant's cosmetology license and business registration. (Id.) CWL similarly seeks an order directing Facebook.com, Groupon.com and other social media sites to remove the Nailush mark from its platforms. (Id.) CWL asks this Court to require Defendant to file and serve a written report of compliance, and if Defendant fails to do so, take the extreme action of authorizing a U.S. Marshal to visit Defendant's premises and destroy all references to the Nailush mark. (Id.) CWL also seeks attorneys' fees and costs in the amount of $28,058.55. (Id.) Nailush has not responded to this motion.

II. STANDARD

Federal Rule of Civil Procedure 55(b)(2) allows the Court, upon plaintiff's motion, to enter default judgment against a defendant that has failed to plead or otherwise defend a claim foraffirmative relief. The Court should accept as true all well-pleaded factual allegations in the complaint by virtue of the defendant's default except for those allegations pertaining to damages. Chanel, Inc. v. Gordashevsky, 44 F. Supp. 2d 532, 536 (D.N.J. 2008) (citing Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990)). The Court also does not adopt Plaintiff's legal conclusions because whether the facts set forth an actionable claim is for the Court to decide. Doe v. Simone, No. 12-5825, 2013 WL 3772532, at *2 (D.N.J. July 17, 2013).

While the decision to enter default judgment is left principally to the discretion of the district court, there is a well-established preference in the Third Circuit that cases be decided on the merits rather than by default judgment whenever practicable. Hritz v. Woma Corp., 732 F.2d 1178, 1180-81 (3d Cir. 1984). Consequently, the Court must address many issues before deciding whether a default judgment is warranted in the instant case. If the Court finds default judgment to be appropriate, the next step is for the Court to determine a proper award of damages.

III. DISCUSSION AND ANALYSIS

A. Appropriateness of Default Judgment

1. The Court's Jurisdiction

First, the Court must determine whether it has both subject matter jurisdiction over Plaintiff's cause of action and personal jurisdiction over defendants. See U.S. Life Ins. Co. in N.Y.C. v. Romash, No. 09-3510, 2010 WL 2400163, at *1 (D.N.J. June 9, 2010). In this case, the Court plainly has subject-matter jurisdiction because CWL asserts trademark infringement and unfair competition claims under the Lanham Act, 15 U.S.C. § 1121. See 28 U.S.C. §§ 1331 and 1338. This Court also has supplemental jurisdiction over CWL's New Jersey state law claims for trademark infringement and unfair competition. See 28 U.S.C. § 1367(a).

This Court has personal jurisdiction over Nailush in the form of general jurisdiction. For a corporation, the paradigm forum for the exercise of general jurisdiction is "one in which the corporation is fairly regarded as at home," such as the place of incorporation or principal place of business. Daimler AG v. Bauman, 134 S.Ct. 746, 760, 187 L.Ed.2d 624 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 131 S.Ct. 2846, 2853-54, 180 L.Ed.2d 796 (2011)). Here, Defendant is regarded as at home in New Jersey because its principal place of business and place of incorporation are both in New Jersey. (See Compl. ¶ 2.) Furthermore, Plaintiff served its complaint on Defendant in the forum at its place of business in New Jersey, providing a basis for exercising personal jurisdiction. See, e.g., Erwin v. Waller Capital Partners, LLC, No. 10-3283, 2010 WL 4053553, at *3 (D.N.J. Oct. 14, 2010) (exercise of personal jurisdiction proper where the plaintiff served defendant at his New Jersey residence).

2. Entry of Default

Second, the Court must ensure that the entry of default under Rule 55(a) was appropriate. Rule 55(a) directs the Clerk of the Court to enter a party's default when that party "against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise." In this case, Nailush has failed to appear with proper representation or otherwise defend this action. Accordingly, the Clerk appropriately issued the entry of default under Rule 55(a) on May 1, 2017.

3. Fitness of Nailush to be Subject to Default Judgment

Third, the Court will confirm that the defaulting parties are not infants or incompetent persons, or persons in military service exempted from default judgment. See F.R. Civ. P. 55(b)(2); 50 U.S.C. App. § 501 et seq. (2006) (codification of the Servicemembers Civil Relief Act of 2003). In this case, Defendant is a corporate entity and therefore cannot be an infant, incompetent person,or person in military service exempted from default judgment. Thus, the Court finds that Nailush is subject to default judgment under Rule 55(b)(2).

4. CWL's Cause of Action

Fourth, the Court must determine whether Plaintiff's complaint states proper causes of action against Defendant. In performing the inquiry into a cause of action, the Court accepts as true a plaintiff's well-pleaded factual allegation while disregarding its mere legal conclusions. See Directv, Inc. v. Asher, No. 03-1969, 2006 WL 680533, at *1 (D.N.J. Mar. 14, 2006) (citing 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2688, at 58-59 (3d ed. 1998)).

Federal trademark infringement and unfair competition are measured by the same standard,¹ See A & H Sportswear, Inc. v. Victoria's...