Crossfit, Inc. v. Jenkins

• Decision Date: 28 March 2014
• Docket Number: Civil Action No. 13-cv-01219-MSK-CBS
• Parties: CROSSFIT, INC., a Delaware corporation, Plaintiff, v. MURRELL A. JENKINS, an individual, and DOES 1-10, Defendants.
• Court: U.S. District Court — District of Colorado

CROSSFIT, INC., a Delaware corporation, Plaintiff, v. MURRELL A. JENKINS, an individual,and DOES 1-10, Defendants.

Civil Action No. 13-cv-01219-MSK-CBS

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Dated: March 28, 2014

RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

Magistrate Judge Craig B. Shaffer

This civil action comes before the court on Plaintiff's ". . . Motion for Entry of Default Judgment and Permanent Injunction." Pursuant to the Order Referring Case dated May 22, 2013 (Doc. # 5) and the memorandum dated January 16, 2014 (Doc. # 22), this matter was referred to the Magistrate Judge. The court has reviewed the Motion and Memorandum of Points and Authorities in Support (Docs. # 18 and # 19), the pleadings, the entire case file, the hearing held on March 5, 2014 (see Courtroom Minutes/Minute Order (Doc. # 25)), the declarations and exhibits, and the applicable law and is sufficiently advised in the premises.

I. Statement of the Case

Plaintiff CrossFit, Inc. ("CrossFit") is principally engaged in the business of fitness training and consulting. (See Complaint (Doc. # 1) at ¶ 5). CrossFit owns protectable interests in several registered United States trademarks and service marks comprised of the term "CrossFit." (See id.; Exhibits B, C to Declaration of Marshall S. Brenner (Docs. # 20-2, #20-3)). Defendant Murrell "Jake" A. Jenkins ("Jenkins") is an individual doing business as "CrossFit Nutrition." (See Doc. # 1 at ¶ 6). Jenkins owns and controls a website with the domain name www.crossfitnutrition.com, which offers vitamins, supplements, and nutrition products for sale. (See id.). Jenkins and Aaron Corporate Enterprises, Inc. ("Aaron Corp."), a Colorado corporation, are registered publishers for several product distributors for the links contained in the crossfitnutrition.com website. (See Exhibits 5, 6, 7 to Declaration of You-Fong C. Amato (Docs. # 21-5, # 21-6, # 21-7)).

This case arises out of Jenkins's alleged infringement of the CrossFit marks, among other unlawful conduct. CrossFit alleges that Jenkins utilizes the CrossFit marks to trade on the goodwill associated with the CrossFit name through the unauthorized website with the domain name www.crossfitnutrition.com. CrossFit alleged four Counts for violations of the Lanham Act, including false designation of origin, trademark infringement, trademark dilution, and cyperpiracy under the Anticybersquatting Consumer Protection Act ("ACPA"). (See Doc. # 1 at 6-10 of 12). For its ACPA claim, CrossFit seeks monetary relief of $100,000 in statutory damages $18,996.00 in attorney's fees, and $3784.09 in costs, for a total of $122,780.09. (See Doc. # 19). CrossFit also seeks an order requiring the domain name registrar to transfer the www.crossfitnutrition.com domain to CrossFit, and a permanent injunction precluding Jenkins from using the CrossFit marks. (See id.).

II. Standard of Review

Judgment by default may enter against a party who fails to appear or otherwise defend. In order for default judgment to be entered by the court:

. . . the party must apply to the court for a default judgment. A default judgment may be entered against a minor or incompetent person only if represented by ageneral guardian, conservator, or other like fiduciary who has appeared. If the party against whom default judgment is sought has appeared personally or by a representative, that party or its representative must be served with written notice of the application at least 7 days before the hearing. The court may conduct hearings or make referrals - preserving any federal statutory right to a jury trial - when, to enter or effectuate judgment it needs to:

(A) conduct an accounting;

(B) determine the amount of damages;

(C) establish the truth of any allegation by evidence; or

(D) investigate any other matter.

Fed. R. Civ. P. 55(b).

"[I]n civil cases, where a party fails to respond, after notice the court is ordinarily justified in entering a judgment against the defaulting party." Cablevision of Southern Connecticut, Limited Partnership, v. Smith, 141 F. Supp. 2d 277, 281 (D. Conn. 2001). "[A] party is not entitled to a default judgment as of right; rather the entry of a default judgment is entrusted to the sound judicial discretion of the court." Id., 141 F. Supp. 2d at 282 (internal quotation marks and citation omitted). "There must be a sufficient basis in the pleadings for the judgment entered." Bixler v. Foster, 596 F.3d 751, 762 (10th Cir. 2012).

"While a party's default is deemed to constitute a concession of all well pleaded allegations of liability, it is not considered an admission of damages." Id. See also Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (In order to fulfill the court's obligation to ensure that damages are appropriately awarded, the court must do more than merely accept at face value the movant's statement of damages.) (citations omitted); Patray v. Northwest Publishing, Inc., 931 F. Supp. 865, 869 (S.D. Ga. 1996) ("allegations of the complaint are to be accepted as true, except those relating to theamount of damages") (citation omitted).

"Damages, which are neither susceptible of mathematical computation nor liquidated as of the default, usually must be established by the plaintiff in an evidentiary proceeding in which the defendant has the opportunity to contest the amount." Cablevision of Southern Conn., 141 F. Supp. 2d at 282 (internal quotation marks and citation omitted).

The outer bounds of recovery allowable are of course measured by the principle of proximate cause. The default judgment did not give [plaintiff] a blank check to recover from [defendant] any losses it had ever suffered from whatever source. It could only recover those damages arising from the acts and injuries pleaded and in this sense it was [plaintiff's] burden to show "proximate cause." On the other hand, there was no burden on [plaintiff] to show that any of [defendant's] acts caused the well-pleaded injuries, except as we have indicated that it had to for the purpose of establishing the extent of the injury caused [plaintiff], in dollars and cents.

Id. "[T]he court has considerable latitude in deciding whether to require plaintiff to produce evidence in support of the claims before entering such a judgment." Id. See also Jones v. Winnepesaukee Realty, 990 F.2d 1, 4 (1st Cir.1993) (trial judge, sitting without a jury, has considerable latitude in determining the amount of the damages); Kleier Advertising, Inc. v. John Deery Motors, Inc., 834 F. Supp. 311, 314 (D. Iowa 1993) ("It is a proper exercise of judicial power for a court upon default, by taking evidence when necessary or by computation from facts of record, to fix the amount which the prevailing party is lawfully entitled to recover and then give judgment accordingly."). Here, the court accepts the undisputed facts set forth in the Declarations and exhibits. (See Docs. # 20 through #20-5, # 21 through # 21-9).

III. Analysis

A. Subject Matter Jurisdiction, Venue, and Personal Jurisdiction

The court has subject matter jurisdiction over CrossFit's claims pursuant to 28 U.S.C. §1331 and 28 U.S.C. §§ 1338(a) and (b), as the claims arise under the trademark laws of the United States. Venue is proper in this court pursuant to 28 U.S.C. §§ 1391 and 1400.

After unsuccessful attempts to informally resolve this matter failed, CrossFit filed this action on May 8, 2013. (See Doc. # 1). On June 16, 2013, Jenkins was personally served with the summons and complaint in this action. (See "Proof of Service" (Doc. # 8)). Thus, Jenkins's responsive pleading was due on or before July 8, 2013. See Fed. R. Civ. P. 12(a)(1)(A)(i). As of this date, Jenkins has not appeared, filed an Answer, or otherwise responded in this action. Upon CrossFit's motion the court entered default on August 1, 2013. (See Docs. # 12, # 13).

"[J]udgment by default should not be entered without a determination that the court has jurisdiction over the defendant." Dennis Garberg & Assocs. v. Pack-Tech Int'l Corp., 115 F.3d 767, 771 (10th Cir. 1997). "Plaintiff bears the burden of establishing personal jurisdiction, but where, as here, the issue is determined on the basis of the pleadings and affidavits, that burden may be met by a prima facie showing." Sharpshooter Spectrum Venture, LLC v. Consentino, No. 09-cv-0150-WDM-KLM, 2011 WL 3159094, at *2 (D. Colo. July 26, 2011) (citing Shrader v. Biddinger, 633 F.3d 1235, 1239 (10th Cir. 2011)). Because neither the Lanham Act, 15 U.S.C. § 1051 et seq., nor the Anti-Cybersquatting Consumer Protection Act ("ACPA"), 15 U.S. C. § 1125(d), provide for nationwide service of process, the court looks to the Colorado long-arm statute. Toytrackerz LLC v. Koehler, No. 08-2297-GLR, 2009 WL 1505705, at * 3 (D. Kan. May 28, 2009).

The well-pleaded allegations and record before the court indicate that Jenkins is a resident of Colorado. Colorado Secretary of State records reflect that Jenkins's company, Aaron Corporate Enterprises, Inc., was formed and is located in Colorado. (See Exhibit 3 toDeclaration of You-Fong C. Amato (Doc. # 21-3)). As registered agent for the corporation, Jenkins provided his address in Monument, Colorado. (See id.). Jenkins is subject to personal jurisdiction in this court as a resident of Colorado. Even if Jenkins were not a Colorado resident, the court would have personal jurisdiction over him based on his activities in this state. Colorado's long arm statute provides that a defendant is subject to personal jurisdiction where he or she engages in the "transaction of any business within this state" or commits a "tortious act within this state." Colo. Rev. Stat. § 13-1-124. Jenkins has transacted business in Colorado by the incorporation of Aaron Corp. Jenkins and Aaron Corp. are the registrants for www.crossfitnutrition.com. (See Exhibit 2 to Declaration of You-Fong C. Amato (Doc. # 21-2)). Jenkins has admitted to "owning" the website, offered it for sale...