Simon Prop. Grp. v. Casino Travel, Inc.
| Decision Date | 19 October 2020 |
| Docket Number | CASE NO. 19-60807-CIV-ALTMAN/Hunt |
| Parties | SIMON PROPERTY GROUP, L.P., et al., Plaintiffs, v. CASINO TRAVEL, INC., et al., Defendants. |
| Court | U.S. District Court — Southern District of Florida |
Before the Hon. Roy K. Altman:
Sawgrass Mills—the owner of a large shopping mall—contracted with Casino for bussing services to and from its mall. To advertise that partnership, Casino displayed various Sawgrass Mills trademarks on its busses and website. When Casino's financial condition declined, it partnered—in clear violation of the contract's anti-assignment clause—with John Sansac and Sansac's company (Half Price), who took over Casino's Sawgrass Mills-branded busses and website. What's worse, even after Sawgrass Mills terminated its agreement with Casino, Sansac and Half Price continued to use the Sawgrass Mills marks.
In this trademark-infringement action, Sawgrass Mills (primarily) sought injunctive relief. Because Sansac and Half Price never appeared in the case, the Court entered a final default judgment and permanent injunction against them. That injunction expressly applied to Sansac, Half Price, and "any persons acting in concert and participat[ing] with them." When Sawgrass Mills terminated its contract with Casino, Casino was acting only through Sansac and Half Price. As a result, Sawgrass Mills received precisely what it sought from this lawsuit: an injunction barring all Defendants (including Casino) from using its marks. Having achieved that result—and wisely hoping to avoid the needless expenditure of time and money—Sawgrass Mills voluntarily dismissed its case as to Casino.
That's when things took a strange turn. Despite playing only a (very) minimal role in the case—and ignoring the fact that it, too, like Sansac and Half Price, was subject to the Court's injunction—Casino moved for over $90,000 in attorneys' fees, arguing (illogically) that, in fact, it was the prevailing party. This Court referred that motion to U.S. Magistrate Judge Patrick M. Hunt, who (unsurprisingly) concluded that, if anything, Sawgrass Mills—and not Casino—had prevailed. As this summary should have made clear, this Court will AFFIRM the Magistrate Judge's decision.
On March 27, 2019, the Plaintiffs, Simon Property Group, L.P., Simon-Mills III, LLC, and Sunrise Mills (MLP), L.P. (collectively, "Sawgrass Mills"), brought this action for injunctive relief and damages against the Defendants, Casino Travel, Inc. ("Casino Travel"); Tour95, LLC ("Tour95"); Half Price Tour Tickets, LLC ("Half Price"); and John Sansac ("Sansac").1 See Compl. [ECF No. 1]. Sawgrass Mills owns and operates a large shopping mall in Sunrise, Florida. See Preliminary Injunction Order [ECF No. 69] ("PI Order") at 2. Casino Travel and Tour95 (together, "Casino") are commonly owned and provide bussing services. Id. at 4, 6-7.2
Sawgrass Mills contracted with Casino (through Casino's owner) to shuttle customers to and from the mall. Id. at 4. The contract allowed Casino to use Sawgrass Mills's trademarks to promote its services. Id. The contract also (1) prohibited Casino from assigning any of its rights under that agreement without Sawgrass Mills's prior written consent, (2) allowed Sawgrass Mills to terminate the contract for any reason, and (3) required Casino to stop using Sawgrass Mills's marks on the agreement's expiration (or termination). Id. at 4-5.
During the course of this service contract, Casino's financial condition deteriorated. Id. at 4. To continue providing shuttle services, Casino partnered with Sansac—a South Florida tourism services provider who owned Half Price. Id. As part of that partnership, Casino transferred to Sansac and Half Price both (1) the Sawgrass-branded shuttle busses and (2) a website Casino had previously operated, which displayed the Sawgrass Mills marks and advertised the company's shuttle services. Id. at 4-5. Learning of this arrangement, Sawgrass Mills demanded that the Defendants stop infringing on their marks and (then) promptly terminated its service contract with Casino. Id. at 5. Casino Travel later went out of business and dissolved. Id. at 5-6.3
But, even after Sawgrass Mills terminated the service contract, Sansac and Half Price continued to operate the Sawgrass-branded busses and website. Id. at 5. The quality of the shuttle service substantially declined during this time, and the continued operation resulted in a significant increase in marketplace confusion. Id. So, on March 27, 2019, Sawgrass Mills—left with no choice—brought this action, through which it (mainly) sought temporary and permanent injunctive relief against the Defendants. See generally Compl.
The Complaint asserted federal claims of trademark infringement, false designation of origin, and unfair competition—in addition to some supplemental state-law claims. See generallyid. One day after filing the Complaint, Sawgrass Mills moved for a preliminary injunction against the Defendants. See Motion for Preliminary Injunction [ECF No. 6]. This Court resolved that motion in two stages.
First, on June 26, 2019, after Half Price and Sansac failed (for several months) to appear, this Court entered default final judgments and permanent injunctions against both of them. See [ECF Nos. 63, 65, 80]. Crucially, the injunction applied broadly to Half Price, Sansac, and "any persons acting in concert and participation with them." Permanent Injunction Against Half Price [ECF No. 63]. In full, that injunction provided as follows:
A permanent injunction is entered against Half Price, enjoining it, its managing members, officers, directors, agents, employees, and any persons acting in concert and participation with them from using any mark, name, slogan, word, phrase, Internet domain, trade name, business name, or device that is identical or confusingly similar to the Plaintiffs' trademarks, for any purpose . . . .
Id. at 1.4
Second, on July 10, 2019, after conducting evidentiary hearings,5 the Court—having already granted an injunction against Half Price and Sansac—denied Sawgrass Mills's Motion for Preliminary Injunction as to Casino, the only remaining Defendant in the case. See generally PI Order. But this decision—to deny the request for a preliminary injunction against Casino—was (notably) not based on the merits. Id. at 7-9. Instead, the Court ruled that Sawgrass Mills had notshown a "substantial threat of irreparable injury" because—by that point—the Sawgrass-marked shuttles and website were operated entirely through Half Price and Sansac, who had already been enjoined from further infringing on Sawgrass Mills's intellectual property. Id. at 7.
A few days after this Court entered its Preliminary Injunction Order, Sawgrass Mills—satisfied that it had obtained the relief it was after—voluntarily dismissed Casino from the case. See Notice of Voluntary Dismissal [ECF No. 70]. Because Sawgrass Mills voluntarily dismissed Casino before Casino answered to the Complaint, Sawgrass Mills did not need leave of court. See FED. R. CIV. P. 41(a)(1)(A)(i). Casino thus received no ruling in its favor on the merits; and, indeed, Sawgrass Mills remains free to re-file its claims against Casino.
Despite having participated in only two hearings—and filing a single motion to dismiss (which never ripened)—Casino seeks over $90,000 in attorneys' fees. See Motion for Attorneys' Fees [ECF No. 73] (the "Motion") at 14. This Court referred that Motion to U.S. Magistrate Judge Patrick M. Hunt, who ( that Casino had not prevailed) recommended that this Court deny Casino's request. See Report and Recommendation [ECF No. 81] (the "Report"). Casino timely objected to the Report. See Objections [ECF No. 82]. For the reasons set out below, the Court now affirms.
A district court "may refer a motion for attorney's fees to a magistrate judge under Rule 72(b) as if it were a dispositive pretrial matter." FED. R. CIV. P. 54(d); FED. R. CIV. P. 72. "The district judge must determine de novo any part of the magistrate judge's disposition that has been properly objected to." FED. R. CIV. P. 72(b)(3). But, when no party has timely objected, "the court need only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation." FED. R. CIV. P. 72 advisory committee's notes.
Although Rule 72 itself is silent on the standard of review, the Supreme Court has acknowledged that Congress's intent was to require de novo review only when objections have been properly filed—and not when neither party objects. See Thomas v. Arn, 474 U.S. 140, 150 (1985) (). And so, the "[f]ailure to object to the magistrate [judge]'s factual findings after notice precludes a later attack on these findings." Lewis v. Smith, 855 F.2d 736, 738 (11th Cir. 1988) (citing Nettles v. Wainwright, 677 F.2d 404, 410 (5th Cir. 1982)).
This dispute over attorneys' fees rapidly devolved into a (misguided) quarrel over the application of state verses federal law—along with a doubly unnecessary back-and-forth over the meaning of Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938). So, Casino cited Fla. Stat. § 817.41(6)—a provision that awards attorneys' fees to prevailing parties in misleading advertising suits—for its position that its fee request is governed by state law. See Motion at 5. Sawgrass Mills, on the other hand, pointed to the Lanham Act's fee provision—15 U.S.C. § 1117—for its view that federal law applies. See Response [ECF No. 77] at 2. Ultimately, of course, this Erie dispute is beside the point because Casino isn't entitled to fees under either standard.6
The Lanham Act provides that "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." 15...
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