Tracfone Wireless, Inc. v. Cabrera

• Decision Date: 11 July 2012
• Docket Number: Case No. 1:12–cv–20768.
• Citation: 883 F.Supp.2d 1220
• Parties: TRACFONE WIRELESS, INC., Plaintiff, v. Ricardo CABRERA, Jr., Defendant.
• Court: U.S. District Court — Southern District of Florida

883 F.Supp.2d 1220

TRACFONE WIRELESS, INC., Plaintiff,

v.Ricardo CABRERA, Jr., Defendant.

Case No. 1:12–cv–20768.

United States District Court,

S.D. Florida.

July 11, 2012.

James Blaker Baldinger, Carlton Fields PA, West Palm Beach, FL, Steven Jeffrey Brodie, Aaron Stenzler Weiss, Carlton & Fields PA, Miami, FL, for Plaintiff.

ORDER GRANTING FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT RICARDO CABRERA. JR.

JOAN A. LENARD, District Judge.

Plaintiff TracFone Wireless, Inc. (“TracFone”) brought the above-captioned lawsuit against Defendant Ricardo Cabrera, Jr. asserting claims for conversion; common-law fraud; federal trademark infringement, 15 U.S.C. § 1114; federal unfair competition and false advertising, 15 U.S.C. § 1125(a)(1); unjust enrichment; unauthorized access to a protected computer with intent to defraud, 18 U.S.C. § 1030(a)(4); unauthorized access to a protected computer, 18 U.S.C. § 1030(a)(5)(C); civil conspiracy and violations of Florida's Deceptive and Unfair Trade Practices Act.

I. Cabrera's Illegal Conduct

According to TracFone, Cabrera is engaged in, and knowingly facilitates and encourages others to engage in, unlawful business practices involving the illicit sale to consumers across the country of stolen TracFone Prepaid Phones, prepaid airtime minutes, and other equipment for use on TracFone's service, and other violations of federal and state law (the “Illegal Airtime Fraud Scheme”). Id. at ¶ 2. As alleged in the Complaint, Cabrera is a former TracFone employee who has fraudulently represented himself as a TracFone dealer and fraudulently advertised stolen TracFone phones and airtime online through classified advertisements on websites like Craig's List. Id. at ¶ 30–31. Cabrera's participation in the Illegal Airtime Fraud Scheme has caused damage and substantial and irreparable harm to TracFone. See id. at ¶ 44–49.

II. The Present Litigation

As a result of Cabrera's theft and other illegal activities, TracFone asserted claims against Cabrera for conversion; common-law fraud; federal trademark infringement, 15 U.S.C. § 1114; federal unfair competition and false advertising, 15 U.S.C. § 1125(a)(1); unjust enrichment; unauthorized access to a protected computer with intent to defraud, 18 U.S.C. § 1030(a)(4); unauthorized access to a protected computer, 18 U.S.C. § 1030(a)(5)(C); civil conspiracy and violations of Florida's Deceptive and Unfair Trade Practices Act.

The Court finds that all of the allegations in the complaint are well pled, and they are deemed admitted by virtue of Cabrera's default. See Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d 1298, 1307 (11th Cir.2009). TracFone has therefore succeeded in proving its claims and Cabrera is hereby permanently enjoined and liable to TracFone for the damages set forth herein. Further, the Court finds Cabrera has violated two orders of this Court: an April 11, 2012 order [DE 16] requiring him to appear at a May 10, 2012 deposition; and a May 15, 2012 order of this Court [DE 25] requiring him to show cause why he should not be held in civil contempt and sanctioned for his failure to appear at the deposition.

DISCUSSION

I. Conversion (Count One)

In order to establish a claim for conversion, TracFone must prove the following three elements: “(1) act of dominion wrongfully asserted; (2) over another's property; and (3) inconsistent with his ownership therein.” Del Monte Fresh Produce Co. v. Dole Food Co., Inc., 136 F.Supp.2d 1271, 1294 (S.D.Fla.2001) (citing Warshall v. Price, 629 So.2d 903, 904 (Fla. 4th DCA 1993) (analyzing each element to find that plaintiff had established conversion claim)).

The evidence demonstrates that TracFone has the right to provide its telecommunications services to the public and Cabrera has no such privilege or right. Compl., ¶ 22. Moreover, Cabrera knew or should have known that TracFone is the owner of the Marks and that Cabrera had no legal right to use the Marks on their infringing products and services. Id., ¶ 51. Finally, Cabrera knew or should have known that TracFone is the owner of a Lenovo ThinkPad T510 (the “Computer”) which Cabrera stole and kept for his own personal use. Id., ¶ 18. Cabrera was wrongfully interfering with TracFone's rights by engaging in the Illegal Airtime Fraud Scheme and caused substantial harm to TracFone. Id., ¶ 53. Therefore, Cabrera's actions constitute conversion.

II. Common Law Fraud Claim (Count Two)

To prevail on a claim for fraud, TracFone must demonstrate a “(1) misrepresentation of material fact; (2) by someone who knew or should have known of the statement's falsity; (3) with intent that the representation would induce another to rely and act on it; and (4) injury suffered in justifiable reliance on the representation.” Zarrella v. Pacific Life Ins. Co., 755 F.Supp.2d 1231, 1237 (S.D.Fla.2011)

TracFone has properly established fraud by Cabrera. Upon information and belief, as part of the Illegal Airtime Fraud Scheme, Cabrera regularly and systematically uses TracFone codes and other identifiers to access TracFone's proprietary computer system over the internet or through TracFone representatives over the telephone. [DE 1 at ¶ 54.] In so doing, Cabrera misrepresents to TracFone, on an ongoing basis, that he is authorized to obtain TracFone prepaid airtime for use on TracFone's Prepaid Wireless Service. Id. Cabrera knew that he was not authorized to obtain TracFone prepaid airtime in the manner described herein. Id., ¶ 55. Further, Cabrera intended for TracFone to rely on his misrepresentations so as to obtain the TracFone prepaid airtime for use on TracFone's Prepaid Wireless Services. Id., ¶ 56. TracFone's reliance on Cabrera's misrepresentations was reasonable as Cabrera presented the codes and identifiers necessaryfor the legitimate transmittal of TracFone prepaid airtime. Id., ¶ 57. Further, TracFone was harmed as a result of Cabrera's' actions. Id., ¶ 58. Thus, Cabrera's actions constitute fraud.

III. Trademark–Related Claims (Counts Three and Four)

Section 32(1) of the Lanham Act protects against the use in commerce of “any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive.” 15 U.S.C. § 1114(1)(a). Section 43(a) of the Lanham Act states that:

Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which—

(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection or association of such person with another person, or as to the origin, sponsorship or approval of his or her goods, services, or commercial activities by another person, or,

(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

“[T]he Court interprets this Section [§ 43(a) ] as having created a federal cause of action for infringement of unregistered trademark or trade dress and concludes that such a mark or trade dress should receive essentially the same protection as those that are registered.” Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 776, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992) (Stevens, J., concurring). Thus, in order to prevail on a claim of trademark infringement under Sections 32 and 43, TracFone must demonstrate that (1) it has a valid, protectable mark and (2) that defendant's use of the mark is “likely to cause confusion, or to cause mistake, or to deceive.”

A. Valid and Protectable Mark

Pursuant to Section 7(b) of the Lanham Act, a certificate of registration of a trademark issued by the United States Patent and Trademark Office is “prima facie evidence of the validity of the registered mark and of the registration of the mark, of the registrant's ownership of the mark, and of the registrant's exclusive right to use the registered mark in commerce on or in connection with the goods or services specified in the certificate.” 15 U.S.C. § 1057(b). Moreover, the Eleventh Circuit strongly presumes registered marks to be valid. See Coach House Rest., Inc. v. Coach & Six Rests., Inc., 934 F.2d 1551, 1562 (11th Cir.1991); Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1184–1185 (5th Cir.1980). If a registered trademark is incontestable, its validity, ownership, and exclusive right of use are conclusive and irrebuttable, subject only to a limited number of defenses. See15 U.S.C. § 1115(b); Soweco, 617 F.2d at 1184–1185.

In addition to the legal presumption afforded to registered trademarks, TracFone's Marks are also valid because they have acquired secondary meaning. ¹Indeed, TracFone's Marks are well known and established to customers and the trade as symbols identifying and distinguishing TracFone's products and services, and signifying distinctive services of exceptional quality. [DE 1 at ¶ 28] As a result of the high quality of TracFone's products, services, sales, promotion and advertising, the Marks have become an intrinsic and essential part of the valuable goodwill and property of TracFone. Id.

B. Likelihood of Confusion

The Eleventh Circuit considers seven factors to determine whether there is a likelihood of confusion: (1) type of mark; (2) similarity of mark; (3) similarity of the products the marks represent; (4) similarity of the parties' retail outlets and customers; (5) similarity of advertising media used; (6) defendant's intent; and, (7) actual confusion. See Dieter v....