Laurel Capital Group, Inc. v. Bt Financial Corp.
| Decision Date | 15 April 1999 |
| Docket Number | No. Civ.A. 97-311J.,Civ.A. 97-311J. |
| Parties | LAUREL CAPITAL GROUP, INC., Laurel Savings Bank, Plaintiffs, v. BT FINANCIAL CORPORATION, Laurel Bank, Defendant. |
| Court | U.S. District Court — Western District of Pennsylvania |
Hunter A. McGeary, Jr., Dickie, McCamey & Chilcote, Pittsburgh, PA, David M. Kelly, Kristen K. Darnell, Julia Anne Matheson, Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, DC, for plaintiffs.
Joseph J. Serritella, Pepper Hamilton, George M. Medved, Sharon F. DiPaolo, Dennis M. Sheedy, Pepper Hamilton, Pittsburgh, PA, for defendant.
Before the court are cross-motions for summary judgment. Plaintiffs Laurel Capital Savings Group, Inc. and Laurel Savings Bank ("Plaintiffs") have requested partial summary judgment on their trademark infringement action under the Lanham Act, 15 U.S.C. § 1125(a). Defendants BT Financial Corporation and Laurel Bank ("Defendants") have filed a competing motion for summary judgment. For the following reasons, I will grant the Plaintiffs' motion for partial summary judgment and deny the Defendants' motion. As explained infra, the precise geographic scope of the parties' respective rights in the mark at issue will be addressed subsequently at the remedial stage of this action. Hence, the geographic scope used to resolve the present motions will not be law of the case for purposes of crafting an appropriate remedy.
Plaintiff Laurel Capital Group, a bank holding company, has been the parent company of plaintiff Laurel Savings Bank since December 1993. Dkt. no. 40, Exh. 1, at 2. At the present time, Laurel Savings Bank is a Pennsylvania state-chartered stock savings bank conducting business at six branch offices clustered along Route 8 in Allegheny County and lower Butler County in Western Pennsylvania. Id. at 2-3.1
The predecessor to Laurel Savings Bank, known as Laurel Savings Association, was formed in 1981 when Peoples Savings Association merged with Allison Park Savings and Loan Association. Id. at 2. In May 1981, a committee consisting of two directors from each of the merged institutions was appointed to choose a name, preferably one associated with Pennsylvania. The committee initially chose "Mountain Laurel" after the state flower, but shortened it simply to "Laurel" and named the new entity "Laurel Savings Association." Dkt. no. 43, Exh. 2, at 4-5. At the time, the committee was unaware of any other banking institutions using the name "Laurel" in any fashion. Id. at 7-8. The name was approved by the combined entity's board in mid-December 1981 and used beginning in early January 1982.2 Id. at 6.
Between 1982 and 1995, Laurel Savings Association operated as a state-chartered savings association at the same six branches now operated by the Plaintiffs. Dkt. no. 40, Exh.1, at 3. It offered a variety of banking services to Pittsburgh-area individuals and commercial customers including mortgage loans, installment loans, checking accounts, certificates of deposit, passbook, club and money market accounts, night depository services, U.S. Savings Bond sales and redemptions, travelers' checks, money orders and retirement accounts (IRA, KEOGH, SEP). Dkt. no. 57, Exh. 1, at 4. ATM services were made available to individuals and commercial customers in 1983, credit card merchant charge services to commercial customers in 1984, and credit card and safety deposit boxes to individuals and commercial customers in 1987. Id. In addition, as of 1982, Laurel Savings Association branches were authorized to offer commercial real estate lending and, to a limited extent, non-interest bearing demand deposit accounts and interest bearing negotiable order of withdrawal ("NOW") accounts. Dkt. no. 60, Exh. 4, at 1-2.
As a savings association, Laurel Savings was subject to regulation by the Office of Thrift Supervision ("OTS") and required to pay annual OTS assessment charges. Dkt. no. 57, Exh. 1, at 3. In January 1995, in an effort to avoid further OTS charges, Laurel Savings Association converted to a state-chartered stock savings bank, thereby becoming subject instead to regulation by the Federal Deposit Insurance Corporation ("FDIC"). Accordingly, Laurel Savings Association changed its name to Laurel Savings Bank to reflect the change in its charter. Id. at 5. The conversion, however, did not alter the institution's range or type of services, or its customer base. Id. at 4-5; Dkt. no. 40, Exh. 1, at 2.
Laurel Savings Bank, currently holding over 35,000 customer accounts, primarily serves individuals and businesses proximately located near its six branch offices. Dkt. 40, Exh. 1, at 4, 12-13. Its customers hale mostly from Allegheny and southern Butler Counties. These branch offices, however, do serve individuals who, while residing in the nearby contiguous counties of Armstrong, Beaver, Washington and Westmoreland, find it convenient to bank in the Allegheny southern Butler area. Id. at 12-13. Laurel Savings Bank uses the color green and a stylized "L" logo in its marketing materials. See e.g., Dkt. no. 42, Exhs. K, M, O.
Over the years, while continuing to operate at the same six branch offices, Laurel Saving Bank's business has grown at a moderate pace. See Dkt. no. 40, Exh. 1, at 4. Its current assets exceed $212,000,000, up from $177,729,000 in 1994. Id. Laurel Savings Bank has considered acquiring or opening new branch offices in Allegheny and Westmoreland Counties, but has yet to do so. Id.
Defendant BT Financial Corporation is a bank holding company headquartered in Johnstown, Pennsylvania. Dkt. no. 50, Exh. C, at 2. Defendant Laurel Bank, a wholly owned subsidiary of BT Financial, traces its roots back to the First National Bank of Ebensburg, a commercial bank which opened its first branch office in Cambria County in 1897. Id. By 1974, the First National Bank of Ebensburg had grown considerably through new branch offices and acquisitions. Id.; Dkt. no. 50, Exh. D, at 9-11. As the Bank grew, however, there was increasing concern that the regionality of the "Ebensburg" name no longer reflected its geographic service area. Dkt. no. 50, Exh. C, at 3. Thus, in 1974, the First National Bank of Ebensburg changed its name to "The Laurel National Bank" and adopted Pennsylvania's state flower, the Mountain Laurel, for use in its marketing endeavors. Id. at 3. The name change was extensively advertised in various media, through open house events, and a campaign to give away 10,000 laurel bush seedlings. Id.
The Laurel National Bank was acquired by defendant BT Financial Corporation on January 1, 1985. Dkt. no. 50, Exh. C, at 3. It immediately converted to a state charter so as to be subject to the same federal regulator as BT Financial's other commercial subsidiary, the Johnstown Bank and Trust Company. Id. The conversion had no impact on Laurel National Bank's range of powers and services, but it did require the Bank to drop "National" from its corporate name. Id. Thereafter, it carried on its commercial banking business as "Laurel Bank," a BT Financial affiliate.
Meanwhile, from its headquarters in Johnstown, BT Financial continued to expand westward. In 1991, BT Financial acquired Peoples Federal Savings Bank of New Kensington. Dkt. 43, Exh. 6, at 25. It began to operate Peoples' branches in Tarentum and Natrona Heights in Allegheny County, New Kensington and Lower Burrell in Westmoreland County and Sarver in Butler County as branches of the Johnstown Bank and Trust Company ("JBT"). Id. In 1993, BT Financial acquired First South Financial Corporation and began to operate First South's six branches in Allegheny County (Brookline, Brentwood, Pleasant Hills, Mount Oliver, Carson Street in Pittsburgh's South Hills and McCandless Township in Pittsburgh's North Hills) and one in Washington County (Donaldson's Crossroads) as branches of another BT Financial subsidiary, Fayette Bank. Id. at 25-26.
On October 10, 1997, BT Financial consolidated its three affiliate commercial banks — Fayette Bank, JBT and Laurel Bank — into one institution. BT Financial proposed to call the consolidated entity "Laurel Bank." Dkt. no. 50, Exh. C, at 3. "Laurel" was chosen to reflect the institution's wide geographic distribution and to capitalize on the goodwill and customer recognition associated with the name. Id. As a result of the consolidation, the newly formed Laurel Bank had seventy-two branch offices in twelve counties: Allegheny, Armstrong, Butler, Fayette, Westmoreland, Somerset, Bedford, Blair, Cambria, Indiana, Greene, and Washington.3 Prior to the consolidation, Laurel Bank had operated at twelve branch offices located across three counties — Blair, Cambria and Indiana — variously 70 to 100 miles east of the Pittsburgh metropolitan area.
In March 1997, the Plaintiffs learned of defendant BT Financial's plan to merge Fayette Bank, JBT, and Laurel Bank into an institution named "Laurel Bank." Dkt. no. 40, Exh. 1, at 12. Concerned because some of the Fayette Bank and JBT branch offices were located in or near areas already served by Laurel Savings Bank,4 Plaintiffs notified BT Financial of their prior use of the "Laurel" mark in those areas. Id. at 19. In spite of the Plaintiffs' continued assertion in a series of letters of its superior rights in the mark, Dkt. no. 42, Exhs. FF, GG, and HH, defendant BT Financial consummated its October 10, 1997 consolidation and began the process of renaming and advertising the merged institution's new name. Dkt. no. 42, Exhs. II, JJ, KK (print and billboard name change advertisements). The new Laurel Bank put out a small number of advertisements and erected a few billboards in the Pittsburgh area, using the color green and a stylized "L" logo similar to that of Laurel Savings Bank. See id.
On November 19, 1997, Plaintiffs filed suit...
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