E. & J. Gallo Winery v. Spider Webs Ltd.

• Citation: 129 F.Supp.2d 1033
• Decision Date: 29 January 2001
• Docket Number: No. CIV. A. H-00-450.,CIV. A. H-00-450.
• Parties: E. & J. GALLO WINERY, Plaintiff, v. SPIDER WEBS LTD., Steve E. Thumann, Pierce A. Thumann, and Fred H. Thumann, Trustee, Defendants.
• Court: U.S. District Court — Southern District of Texas

129 F.Supp.2d 1033

E. & J. GALLO WINERY, Plaintiff, v. SPIDER WEBS LTD., Steve E. Thumann, Pierce A. Thumann, and Fred H. Thumann, Trustee, Defendants.

No. CIV. A. H-00-450.

United States District Court, S.D. Texas.

January 29, 2001.

Craig William Weinlein, Carrington Coleman et al, Dallas, TX, for E & J Gallo Winery, plaintiff.

Bernard Lilse Mathews, III, Hocker Morrow et al, Spring, TX, for Spider Webs Ltd, Steve E Thumann, Pierce A Thumann, Fred H Thumann, Trustee, defendants.

MEMORANDUM AND ORDER

CRONE, United States Magistrate Judge.

I. Introduction

Pending before the court is Plaintiff E. & J. Gallo Winery's ("Gallo") Motion for Partial Summary Judgment (# 32). Gallo contends that there exist no issues of material fact on its claims that Defendants Spider Webs Ltd., Steve E. Thumann, Pierce A. Thumann, and Fred H. Thumann, Trustee, (collectively "Spider Webs") are jointly and severally liable for violations of the Texas Anti-Dilution Statute, TEX. BUS. & COM. CODE ANN. § 16.29 (Vernon 2000), and the federal Anti-Cybersquatting Consumer Protection Act ("ACPA"), 15 U.S.C. § 1125(d) (1999 & Supp.2000). Having reviewed the pending motion, the submissions of the parties, the pleadings, and the applicable law, the court is of the opinion that partial summary judgment is warranted.

II. Factual Background

Gallo is a California corporation that manufactures and sells alcoholic beverages and related goods under the trade names THE WINERY OF ERNEST & JULIO GALLO, E. & J. GALLO WINERY, ERNEST AND JULIO GALLO WINERY, and GALLO WINERY, among others. According to Gallo, these trade names derive from the names of two brothers, Ernest Gallo and Julio Gallo, who founded the company. Between March 24, 1953 and March 9, 1999, Gallo registered twelve trademarks on the Principal Register in the United States Patent and Trademark Office, including GALLO, ERNEST & JULIO GALLO, GALLO SONOMA, and ERNEST AND JULIO GALLO & DESIGN. In particular, Gallo registered the mark ERNEST & JULIO GALLO on October 20, 1964, as Registration No. 778,837. Gallo also owns or controls several Internet domain names that incorporate Gallo's registered trademarks, including: GALLO.DE, EJGALL.DE, ERNEST-JULIOGALLO.COM, GALLOWINERY.COM, EJGALLO.COM, and GALLOWINE.COM. Gallo has sold more than four billion bottles of wine bearing the Gallo family of trademarks and has spent more than $500 million promoting the brand.

Defendants, brothers Steve and Pierce Thumann and their father, Fred Thumann, Trustee, operate Doortown, Incorporated, a family-owned prehanging millwork business in Houston, Texas. The business has been in operation for more than fifty years. Fred Thumann is the President and Chairman of the Board, Steve Thumann is Vice-President, and Pierce Thumann's title is "Inside Sales." In approximately June 1999, the Thumanns created Spider Webs Ltd. as a Texas general partnership. Steve and Pierce Thumann and Fred Thumann, Trustee, are the sole partners. Fred Thumann is a partner in his capacity as trustee of the Fred H. Thumann Trust. Spider Webs Ltd. does not have any employees and is operated at the same business address as Doortown, Inc. According to Steve Thumann, Spider Webs' business plan is to develop Internet address names. He further described the business as "an internet-type business, consumer advocates, building web sites." Since its creation, Spider Webs has registered nearly 2,000 Internet domain names for an average of $70.00 each, including the names of cities, the names of buildings, names related to a business or trade (such as air conditioning or plumbing), and the names of famous companies. It offers many of these names for sale on its web site and through the online auction site Ebay.com, although ERNESTANDJULIOGALLO.COM is apparently not among them.

On August 26, 1999, through a company called Network Solutions, Inc., Spider Webs registered the domain name "ERNESTANDJULIOGALLO.COM" in the name of Spider Webs Ltd. Steve Thumann stated in his deposition that Spider Webs regarded the domain name as "real estate" and that they intended to hold onto and eventually make a profit from the name. On February 11, 2000, Gallo filed its Original Complaint, alleging violations of the ACPA, dilution under federal and Texas law, trademark infringement under federal and Texas law, and unfair competition under federal and Texas law. Gallo seeks a permanent injunction to prevent Spider Webs from "a. using the Internet domain name ERNESTANDJULIOGALLO.COM; b. registering any domain name that contains the word `Gallo'; and c. registering any Internet domain name that contains the words `Ernest' and `Julio.'" Gallo also seeks an order requiring Spider Webs to transfer to Gallo the domain name "ERNESTANDJULIOGALLO.COM" as well as any Internet web sites, domain names, databases, programs, or other storage means using the Gallo name or name similar to the Gallo marks. Gallo further requests statutory damages, punitive damages, court costs, and attorneys' fees.

Approximately six months after the commencement of this action, Spider Webs published a web site at ERNESTANDJULIOGALLO.COM, devoting space to discussions of the pending litigation as well as the risks associated with alcohol use and alleged misrepresentations made by corporations. As of the date of this opinion, the web site accessed by typing in the Internet address ERNESTANDJULIOGALLO.COM is called "SpinTopic," which appears to be a site for accessing anti-corporate articles and opinions, including a section for commentary about the use of alcohol. It is unclear whether Spider Webs is affiliated with SpinTopic. On August 31, 2000, Gallo moved for partial summary judgment on its claims of violations of the Texas Anti-Dilution Statute and the ACPA.

III. Analysis

A. Summary Judgment Standard

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). The party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and identifying those portions of the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Colson v. Grohman, 174 F.3d 498, 506 (5th Cir.1999); Marshall v. East Carroll Parish Hosp. Serv. Dist., 134 F.3d 319, 321 (5th Cir.1998); Wenner v. Texas Lottery Comm'n, 123 F.3d 321, 324 (5th Cir.1997), cert. denied, 523 U.S. 1073, 118 S.Ct. 1514, 140 L.Ed.2d 667 (1998). The moving party, however, need not negate the elements of the nonmovants' case. See Wallace v. Texas Tech Univ., 80 F.3d 1042, 1047 (5th Cir.1996) (citing Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994)).

Once a proper motion has been made, the nonmoving parties may not rest upon mere allegations or denials in the pleadings, but must present affirmative evidence, setting forth specific facts, to show the existence of a genuine issue for trial. See Celotex Corp., 477 U.S. at 322-23, 106 S.Ct. 2548; Anderson, 477 U.S. at 257, 106 S.Ct. 2505; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-86, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Colson, 174 F.3d at 506; Marshall, 134 F.3d at 321-22; Wallace, 80 F.3d at 1047; Little, 37 F.3d at 1075. All the evidence must be construed "in the light most favorable to the non-moving party without weighing the evidence, assessing its probative value, or resolving any factual disputes." Williams v. Time Warner Operation, Inc., 98 F.3d 179, 181 (5th Cir.1996) (citing Lindsey v. Prive Corp., 987 F.2d 324, 327 n. 14 (5th Cir.1993)); see Colson, 174 F.3d at 506; Marshall, 134 F.3d at 321; Messer v. Meno, 130 F.3d 130, 134 (5th Cir.1997), cert. denied, 525 U.S. 1067, 119 S.Ct. 794, 142 L.Ed.2d 657 (1999); Hart v. O'Brien, 127 F.3d 424, 435 (5th Cir.1997), cert. denied, 525 U.S. 1103, 119 S.Ct. 868, 142 L.Ed.2d 770 (1999); Songbyrd, Inc. v. Bearsville Records, Inc., 104 F.3d 773, 776 (5th Cir.1997). "The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson, 477 U.S. at 255, 106 S.Ct. 2505; Palmer v. BRG of Ga., Inc., 498 U.S. 46, 49 n. 5, 111 S.Ct. 401, 112 L.Ed.2d 349 (1990); see Marshall, 134 F.3d at 321. Nonetheless, "`only reasonable inferences can be drawn from the evidence in favor of the nonmoving party.'" Eastman Kodak Co. v. Image Tech. Servs., 504 U.S. 451, 469 n. 14, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992) (emphasis in original) (quoting H.L. Hayden Co. of New York, Inc. v. Siemens Med. Sys., Inc., 879 F.2d 1005, 1012 (2d Cir.1989)). "If the [nonmoving party's] theory is ... senseless, no reasonable jury could find in its favor, and summary judgment should be granted." Id. at 468-69, 112 S.Ct. 2072.

The nonmovants' burden is not satisfied by "some metaphysical doubt as to material facts," conclusory allegations, unsubstantiated assertions, speculation, the mere existence of some alleged factual dispute, or "only a scintilla of evidence." Little, 37 F.3d at 1075; see Hart, 127 F.3d at 435; Wallace, 80 F.3d at 1047; Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1429 (5th Cir.1996) (citing Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir.), cert. denied, 513 U.S. 871, 115 S.Ct. 195, 130 L.Ed.2d 127 (1994)); State Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5th Cir. 1990) (citing Anderson, 477 U.S. at 247-48, 106 S.Ct. 2505). Summary judgment is mandated if the nonmovants fail to make a showing sufficient to...