Flexstake, Inc. v. Dbi Servs., LLC

• Decision Date: 30 November 2018
• Docket Number: Civil Action No. 17-20858-Civ-Scola
• Parties: Flexstake, Inc., Plaintiff, v. DBI Services, LLC, Defendant.
• Court: U.S. District Court — Southern District of Florida

Flexstake, Inc., Plaintiff, v. DBI Services, LLC, Defendant.

Civil Action No. 17-20858-Civ-Scola

United States District Court for the Southern District of Florida

November 30, 2018

Opinion Order Granting Defendant's Motion for Summary Judgment and Dismissing Case

This dispute relates to Defendant DBI Services, LLC's ("DBI") use of generic plastic posts to service and maintain express lane delineators manufactured by Plaintiff Flexstake, Inc. ("Flexstake") that were installed along I-95 in Miami-Dade County, Florida.

Before the Court is a motion for summary judgment filed by DBI. (the "Motion," ECF No. 104.) Having considering the parties' written submissions and accompanying exhibits, and the applicable law, the Court grants the Motion (ECF No. 104) and dismisses this case with prejudice for the reasons that follow.

1. Background

A. The Material¹ Undisputed Facts

Flexstake manufactures and sells lane delineators ("Delineator") for use on highways. (ECF No. 106, 111 at ¶¶ 1.) Flexstake owns the federally registered word mark "Flexstake." (ECF Nos. 103, 106 at ¶¶ 4.) The Delineator consists of: a base, a vertical plastic post ("Flexstake Post"), an insert to connect the two, and a hinge. (Id. at ¶¶ 3; ECF Nos. 103, 106 at ¶¶ 2.) Beginning in 2008, Flexstake furnished Delineators for use on I-95 express lanes in Miami-Dade County, Florida. (ECF Nos. 106, 111 at ¶¶ 12.)

DBI is a corporation that provides highway operations and maintenance services to public entities. (ECF Nos. 103, 106 at ¶¶ 6.) In 2014, DBI entered into an Asset Maintenance Contract with the Florida Department of Transportation ("FDOT") to maintain all assets within FDOT's right of way in Miami-DadeCounty, including the service or replacement of damaged or missing Delineators on I-95. (Id. at ¶¶ 7.)

The Delineators and accompanying Flexstake replacement parts were consistently purchased for use on I-95 in Miami-Dade County from 2009 to October 2014. (Id. at ¶¶ 23.) Later, DBI replaced worn down Delineator Posts with generic posts that were not manufactured by Flexstake ("Generic Posts"), and installed the Generic Posts onto existing Flexstake Delineator bases and hinges on I-95. (ECF Nos. 106, 111 at ¶¶ 30, 31.) The Generic Posts did not contain any markings, logos or words indicating that Flexstake manufactured them. (ECF Nos. 103, 106 at ¶¶ 12.) The Generic Posts performed poorly. (ECF Nos. 106, 111 at ¶¶ 35.)

In 2016, FDOT adopted a specification² for the performance of lane delineators used on I-95, which required any lane delineators used on Florida highways to be tested by a recognized testing facility that is accredited to crash test roadway safety devices. (ECF Nos. 103, 106 at ¶¶ 24.) The Delineator did not meet the new FDOT specifications and was never tested by an accredited facility, and therefore was precluded from continued use by DBI on I-95. (Id. at ¶¶ 25, 27; ECF No. 105-1 at ¶ 30.)

B. Course of Proceedings

Flexstake asserts three claims in its Amended Complaint: (1) Count I for violations of Florida's Deceptive and Unfair Trade Practices Act ("FDUTPA"), Fla. Stat. § 501.201 et seq., (ECF No. 30 at ¶¶ 38-31); (2) Count II for common law unfair competition, (id. at ¶¶ 32-36); and (3) Count III for violations of the Lanham Act, 28 U.S.C. § 1125(a), (id. at ¶¶ 37-41).

DBI seeks summary judgment in its favor on all three claims, arguing: (1) that there is no admissible evidence that DBI sent Generic Posts to TTI, which, in any event, was not the proximate cause of Flexstake's damages because the Delineator did not meet FDOT's specifications; (2) there is no dispute of material fact that DBI did not "use" Flexstake's mark or one confusingly similar to it; (3) Flexstake cannot show FDOT or TTI ever saw a Generic Post and therefore cannot show DBI used Flexstake's mark in a manner likely to cause consumer confusion; and (4) in the alternative, Flexstake is prohibited from recovering lost profits under 15 U.S.C. § 1111. (ECF No. 104.)

2. Legal Standard

Summary judgment is proper if following discovery, the pleadings, depositions, answers to interrogatories, affidavits and admissions on file show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Celotex, 477 U.S. at 322; Fed. R. Civ. P. 56. "An issue of fact is 'material' if, under the applicable substantive law, it might affect the outcome of the case." Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259-60 (11th Cir.2004). "An issue of fact is 'genuine' if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party." Id. at 1260. All the evidence and factual inferences reasonably drawn from the evidence must be viewed in the light most favorable to the nonmoving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970); Jackson v. BellSouth Telecomms., 372 F.3d 1250, 1280 (11th Cir. 2004).

Once a party properly makes a summary judgment motion by demonstrating the absence of a genuine issue of material fact, whether or not accompanied by affidavits, the nonmoving party must go beyond the pleadings through the use of affidavits, depositions, answers to interrogatories and admissions on file, and designate specific facts showing that there is a genuine issue for trial. Celotex, 477 U.S. at 323-24. The nonmovant's evidence must be significantly probative to support the claims. Anderson, 477 U.S. at 249. The Court will not weigh the evidence or make findings of fact. Id.; Morrison v. Amway Corp., 323 F.3d 920, 924 (11th Cir. 2003). Rather, the Court's role is limited to deciding whether there is sufficient evidence upon which a reasonable juror could find for the nonmoving party. Id.

3. Analysis

A. Flexstake Does Not Seek Actual Damages Under FDUTPA

In Count I, Flexstake asserts that DBI violated the FDUTPA by "manufacturing and selling a knock-off" stake "designed to deceive the State of Florida and other consumers into believing that the knock-off is a genuineFlexstake TM 750 series delineator, and by installing said product into the Flexstake TM 750 base and hinge, thereby passing it off as a genuine Flexstake product." (ECF No. 30 at ¶ 30.) Flexstake generally concludes that it was "damaged" as a result of that conduct. (Id. at ¶ 31.) In opposition to the Motion Flexstake elaborated on its damage theory, arguing that its FDUTPA claim seeks recovery of "lost profits, damage to reputation and other adverse consequences" resulting from the "publication of the Technical Memorandum" and "the negative publicity, poor performance and unsightly appearance that resulted from the use of counterfeit top sections [i.e. the Generic Posts]" on I-95. (ECF No. 107 at p. 14.) In response, DBI correctly argues that none of those damage theories are recoverable under FDUTPA. (ECF No. 112 at p. 6.)

The elements of a cause of action under FDUTPA are "(1) a deceptive act or unfair trade practice; (2) causation; and (3) actual damages." Dolphin LLC v. WCI Cmtys., Inc., 715 F.3d 1243, 1250 (11th Cir. 2013) (affirming summary judgment for Defendant where FDUTPA plaintiff "made no allegation and presented no evidence" of an element of the claim). With respect to the third element, "[p]roof of actual damages is necessary to sustain a FDUTPA claim." Casa Dimitri Corp. v. Invicta Watch Co. of Am., Inc., 270 F. Supp. 1340, 1352 (S.D. Fla. 2017) (Moore, C.J.) (quoting Dorestin v. Hollywood Imps., Inc., 45 So. 3d 819, 824 (Fla. 4th DCA 2010)). "FDUTPA 'actual damages' do not include consequential damages." Diversified Mgmt. Sols., Inc. v. Control Sys. Research, Inc., No. 15-cv-81062, 2016 WL 4256916, at *5 (S.D. Fla. May 16, 2016) (Middlebrooks, J.) (quoting Kia Motors Am. Corp. v. Butler, 985 So. 2d 1133, 1140 (Fla. 3d DCA 2008)).

"Lost profits are a 'quintessential example' of consequential damages" and are not recoverable under FDUTPA. Id. at **5-6 (dismissing FDUTPA claim and holding that "lost profits are consequential damages, and, thus, not recoverable under FDUTPA.") (citing Nyquist v. Randall, 819 F.2d 1014, 1017 (11th Cir. 1987)); see also Five for Entm't S.A. v. Rodriguez, 877 F. Supp. 2d 1321, 1331 (S.D. Fla. 2012) (Seitz, J.) ("It remains well-settled in Florida that consequential damages in the form of lost profits are not recoverable under FDUTPA.").

Nor are reputational harm or "stigma damages" recoverable under FDUTPA. See Casa Dimitri, 270 F. Supp. 3d at 1352 (dismissing FDUTPA claim where plaintiff's "harmed goodwill" damage theory was consequential and "expressly not recoverable under the FDUTPA"); Krupa v. Platinum Plus, LLC, No. 8:16-cv-3189-T-33MAP, 2017 WL 1050222, at *7 (M.D. Fla. Mar. 20, 2017) (same); BPI Sports, LLC v. Labdoor, Inc., 2016 WL 739652, at *6 (S.D. Fla. Feb. 25, 2016) (Bloom, J.) (dismissing FDUTPA claim where plaintiff's allegations of "competitive harm, diverted or lost sales, and harm to the goodwill and reputation" of plaintiff were improper consequential damages); Rollins, Inc. v. Butland, 951 So. 2d 860, 870 (Fla. 2d DCA 2006) ("the recovery afforded underFDUTPA does not include diminution in value or stigma damages"); Clear Marine Ventures, Ltd. v. Brunswick Corp., No. 08-22418, 2010 WL 528477, at **3-4 (S.D. Fla. Feb. 11, 2010) (Torres, Mag. J.) (same).

Flexstake's FDUTPA claim seeks recovery of "lost profits, damage to reputation and other adverse consequences"—all theories of consequential damages. (ECF No. 107 at pp. 14-15); see, e.g., Five for Entm't, 877 F. Supp. 2d at 1331; Casa Dimitri, 270 F. Supp. 3d at 1352; Rollins, Inc., 951 So. 2d at 870. Because Flexstake is not pursuing "actual damages," its FDUTPA claim fails and DBI is entitled to judgment as a matter of law. Diversified Mgmt. 2016 WL 4256916, at *5; Casa Dimitri, 270 F. Supp. at 1352. Accordingly, the Court grants summary judgment to DBI on Count I.

B. DBI Did Not Use the Flexstake Mark or One Confusingly Similar

Flexstake's remaining two claims, unfair competition under Florida law and ...