Council of Better Bus. Bureaus v. Bailey & Assoc.

• Decision Date: 29 March 2002
• Docket Number: No. 4:00-CV-1236 CAS.,4:00-CV-1236 CAS.
• Court: U.S. District Court — Eastern District of Missouri
• Parties: COUNCIL OF BETTER BUSINESS BUREAUS, INC., et al., Plaintiffs, v. BAILEY & ASSOCIATES, INC., d/b/a New Horizons, d/b/a National Resorts, d/b/a National Acceptance Corp., et al., Defendants.

197 F.Supp.2d 1197

COUNCIL OF BETTER BUSINESS BUREAUS, INC., et al., Plaintiffs, v. BAILEY & ASSOCIATES, INC., d/b/a New Horizons, d/b/a National Resorts, d/b/a National Acceptance Corp., et al., Defendants.

No. 4:00-CV-1236 CAS.

United States District Court, E.D. Missouri, Eastern Division.

March 29, 2002.

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Frank B. Janoski, Partner, Joseph E. Martineau, Maureen C. Beekley, Lewis and Rice, St. Louis, MO, for Plaintiffs.

John T. Walsh, Abigail T. Kelman, Nicole L. Morris, Erin M. Matis, Gallop and Johnson, Clayton, MO, for Defendants.

MEMORANDUM AND ORDER

SHAW, District Judge.

This is an action by plaintiffs Council of Better Business Bureaus, Inc. ("CBBB") and Better Business Bureau of St. Louis, Inc. ("BBB"), asserting trademark infringement and counterfeiting under Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1) (Count I); unfair competition under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1) (Count II); dilution under Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c) (Count III); and Missouri common law trademark infringement (Count IV). The CBBB and BBB are collectively referred to as "plaintiffs." Plaintiffs seek monetary and injunctive relief. The defendants are Bailey & Associates, Inc., Winner's Circle of Chicago, Inc., William Bailey, Jeffrey Anthony D'Amato, Debra Lynn D'Amato and Robert Williams (collectively "defendants").

The matter is before the Court on plaintiff CBBB's motion for partial summary judgment on Count I. CBBB asserts it is entitled to judgment as a matter of law on its claims that (1) defendants have infringed CBBB's registered service trademarks in violation of Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1); (2) defendants have counterfeited CBBB's registered service trademarks in violation of section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1); and (3) CBBB is entitled to recover, at its election any time before final judgment herein, statutory damages as provided under Section 35(c) of the Lanham Act, 15 U.S.C. § 1117(c), in lieu of defendants' profits or CBBB's actual losses resulting from the infringing activity. Defendants oppose the motion.

For the following reasons, the Court will grant in part and deny in part CBBB's motion for partial summary judgment.

Background.

The CBBB is a not-for-profit corporation, and is the owner and registrant of certain federally-registered service trademarks. The CBBB establishes general policies under which member Better Business Bureaus ("member BBBs"), including plaintiff BBB, are licensed to use the trademarks in exclusive geographical territories throughout the United States.

Among the activities of member BBBs, including plaintiff BBB, is the compilation and reporting of business complaint history. Consumers can complain to a member BBB about the advertising, sales practices, services or products of a business. The member BBB records information about the complaint, notifies the business and requests a response. Sometimes the response resolves the complaint. Sometimes no resolution is reached. A summary of this information is compiled in the BBB's reliability report ("BBB report") on the business, which is then made available to consumers considering a transaction with the business.

The Amended Complaint alleges that as early as 1995, defendants used documents bearing the BBB torch logo and a "Better Business Bureau Report" caption in connection with sales of New Horizons travel club memberships. Plaintiffs allege that these documents purported to be copies of the BBB Report for the New Horizons travel club, a name under which defendant Bailey & Associates, Inc. does business, but in fact the documents were not generated or approved by the CBBB, the registered owner of the Marks at issue, or any of its licensees. Plaintiffs assert that defendants were not entitled to use the Marks in these documents or in any other way, and had no reason to believe they were so authorized. In addition, plaintiffs assert that the documents were not accurate reproductions of genuine BBB reports about New Horizons, but rather in many respects were falsifications of genuine BBB reports and were counterfeit.

Plaintiffs allege that although defendants knew these documents were counterfeit, they and their agents periodically created, modified, reproduced and distributed the documents and included within them information they knew was not included in genuine BBB reports. Plaintiffs allege that defendants exploited the Marks in connection with the sale of their travel-related services, sometimes as a precursor and inducement for a sale, and other times after a sale, presumably to make the customer comfortable with the purchase and to safeguard against the customer checking with the BBB and obtaining a genuine report on New Horizons. Plaintiffs also allege that as early as August 1997, defendant William Bailey, president of Bailey & Associates, Inc., learned about the counterfeit documents, but the practice of displaying the documents to consumers continued through at least 1999.

Summary Judgment Standard.

The standards applicable to summary judgment motions are well settled. Pursuant to Federal Rule of Civil Procedure 56(c), a court may grant a motion for summary judgment if all of the information before the court shows "there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

The initial burden is placed on the moving party. City of Mt. Pleasant, Iowa v. Associated Elec. Co-op., Inc., 838 F.2d 268, 273 (8th Cir.1988) (the moving party has the burden of clearly establishing the non-existence of any genuine issue of fact that is material to a judgment in its favor). Once this burden is discharged, if the record shows that no genuine dispute exists, the burden then shifts to the non-moving party who must set forth affirmative evidence and specific facts showing there is a genuine dispute on a material factual issue. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Once the burden shifts, the non-moving party may not rest on the allegations in its pleadings, but by affidavit and other evidence must set forth specific facts showing that a genuine issue of material fact exists. Fed.R.Civ.P. 56(e); Herring v. Canada Life Assurance Co., 207 F.3d 1026, 1029 (8th Cir.2000); Allen v. Entergy Corp., 181 F.3d 902, 904 (8th Cir.), cert. denied, 528 U.S. 1063, 120 S.Ct. 618, 145 L.Ed.2d 512 (1999). A dispute about a material fact is "genuine" only "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Herring, 207 F.3d at 1029 (quoting Anderson, 477 U.S. at 248, 106 S.Ct. 2505).

In reviewing a motion for summary judgment, this Court is required to view the facts in a light most favorable to the non-moving party and to give the non-moving party the benefit of any inferences that can logically be drawn from those facts. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Moreover, this Court is required to resolve all conflicts in favor of the non-moving party. Robert Johnson Grain Co. v. Chemical Interchange Co., 541 F.2d 207, 210 (8th Cir.1976). Nonetheless, "Self-serving, conclusory statements without support are not sufficient to defeat summary judgment." Armour and Co., Inc. v. Inver Grove Heights, 2 F.3d 276, 279 (8th Cir.1993).

Facts.

With the foregoing standards in mind, the Court finds the following facts for purposes of the instant motion for partial summary judgment:¹

1. CBBB is the owner and registrant of certain proprietary and federally registered service trademarks (the "Marks"), including the following:

• BETTER BUSINESS BUREAU— Registration Numbers 566,415 (Registration Year 1952) and 971,579 (Registration Year 1973) (Both for: "Investigative and information services relative to business and trade practices for protecting responsible business against abusive business practices and for establishing and maintaining legitimate advertising and merchandising practices...."), and 969,847 (Registration Year 1973) (For: "Indicating membership in applicant. ...")

• BBB—Registration Number 2,314,197 (Registration Year 2000) (For: "Investigative and information services relative to business and trade practices for protecting responsible business and the public against abusive business practices and for establishing and maintaining legitimate advertising and merchandising practices....")

• BBB—Registration Number 2,314,197 (Registration Year 2000) (For: "Investigative and information services relative to business and trade practices for protecting responsible business and the public against abusive business practices and for establishing and maintaining legitimate advertising and merchandising practices....")

• BBB Torch Logo—Registration Number 749,915 (Registration Year 1963) (For "Investigative and information services relative to business and trade practices for protecting responsible business and the public against abusive business practices and for establishing and maintaining legitimate advertising and merchandising practices. ...")

• Composite mark of the words "Better Business Bureau" in a semi circle above the Torch Logo—Registration Numbers 1,841,476 (Registration Year 1994) and 2,073,514 (Registration Year 1997) (Both for: "Investigative and information services relative to business and trade practices for protecting responsible business and the public against abusive business practices and for establishing and maintaining legitimate advertising and merchandising practices....")

(Certified copies of CBBB trademarks— Appendix Tab 1; Affidavit of Ronald Berry ¶ 2—Appendix Tab 2). The Marks are in full force and effect, unrevoked and uncanceled. (Id.)

2. The CBBB...