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Mainstream Advertising, Inc. v. Moniker Online Services, LLC

United States District Court, S.D. Florida

April 23, 2018

MAINSTREAM ADVERTISING, INC., Plaintiff,
v.
MONIKER ONLINE SERVICES, LLC, Defendant.

          ORDER GRANTING IN PART DEFENDANT'S MOTION TO DISMISS

          BETH BLOOM UNITED STATES DISTRICT JUDGE

         THIS CAUSE is before the Court upon Defendant Moniker Online Services, LLC's Motion to Dismiss Plaintiff Mainstream Advertising, Inc.'s Second Amended Complaint (the “Motion”). See ECF No. [45]. The Court has considered the Motion, Plaintiff's Response, and Defendant's Reply. For the reasons that follow, the Motion is granted in part and denied in part.

         I. BACKGROUND[1]

         Plaintiff is a California company that provides a variety of online advertising services. See ECF No. [44], at ¶¶ 1, 7. One of the ways Plaintiff monetizes its online advertising services is through its select registration and holding of domain names. See Id. at ¶ 8. Once Plaintiff acquires a desired domain name, it creates a site containing advertising content that includes links to good and services. See Id. These links direct visitors to Plaintiff's clients. See Id. Plaintiff is then compensated for the online referral. See Id.

         In and around 2004 to 2005, Plaintiff engaged Defendant, a Florida company, to acquire and host domain names for Plaintiff's online advertising business. See Id. at ¶¶ 2, 9. The parties entered into a “Registration Agreement, ” which was updated by Defendant in November 2008 and August 2013. See Id. at ¶ 12. Throughout their contractual relationship, Plaintiff maintained “hundreds of thousands” of internet domain names through Defendant's registration and hosting services, including domain names that utilize Plaintiff's federally-registered trademarks and service marks. Id. Some of these trademarks include, but are not limited to, “colo.com, ” “yellowpagesonline.com, ” “currentaffair.com, ” “mainstreamadvertising.com, ” “cashnews.com, ” and “vortals.com.” See Id. at ¶¶ 11-12.

         Around early 2012, Defendant also entered the online traffic advertising business, leading to “direct competition” with Plaintiff in the “online marketing space.” See Id. at ¶¶ 13-14. Then, in March 2016, Defendant advised Plaintiff that it would be taking 118 of Plaintiff's domain names, including some over which Plaintiff holds trademarks, as a result of a payment dispute between the parties. See Id. at ¶ 16. According to Plaintiff, the value of the 118 domain names that were seized far exceeded the amount of money Defendant claimed was due as a result of the payment dispute. See Id.

         These differences led to Plaintiff filing suit against Defendant in this Court for Breach of the Registration Agreement, Breach of the Implied Covenant of Good Faith and Fair Dealing, Conversion, Unjust Enrichment, and Trademark Infringement. See Id. at ¶ 17; see also Mainstream Advertising, Inc. v. Moniker Online Services, LLC, No. 16-cv-61316-BB (“Mainstream I”), ECF No. [43]. On September 29, 2016, ten days after filing the Amended Complaint, counsel for Plaintiff filed a Motion to Withdraw. See ECF No. [44], at ¶ 18; see also Mainstream I, ECF No. [44]. The Court granted the motion and extended the dates by which Plaintiff had to retain new counsel on four separate occasions. See Mainstream I, ECF Nos. [45], [50], [51], [53] (October 20, 2016; October 28, 2016; November 14, 2016; and November 23, 2016).

         Defendant, meanwhile, filed an Answer and Counterclaim to the Amended Complaint on November 3, 2016, alleging Breach of Contract, Account Stated, Open Account, and Quantum Meruit. See ECF No. [44], at ¶ 18; see also Mainstream I, ECF No. [52]. On November 30, 2016, the Court dismissed Plaintiff's Amended Complaint without prejudice for failing to retain counsel despite the Court's four orders to do so. See ECF No. [44], at ¶ 18; see also Mainstream I, ECF No. [55]. Because Plaintiff also failed to answer or otherwise respond to Defendant's Counterclaim, [2] Defendant moved for the Clerk's Entry of Default, which was entered on December 1, 2016. See Mainstream I, ECF Nos. [57], [58]. After Defendant filed a Motion for Entry of Final Judgment after Default, the Court entered a Final Default Judgment against Plaintiff on December 23, 2016 for a sum totaling $294, 485.84. See ECF No. [44], at ¶¶ 18-19; see also Mainstream I, ECF Nos. [63], [67]. On April 17, 2017, the Court adopted Judge Alicia O. Valle's Report and Recommendation granting Defendant's Motion for Attorneys' Fees and awarded Defendant $77, 772.50 in attorneys' fees and $115.21 in costs. See ECF No. [44], at ¶ 21; see also Mainstream I, ECF No. [86].[3]

         According to the Second Amended Complaint, Defendant appropriated Plaintiff's trademarks by taking Plaintiff's domain names for Defendant's use. See ECF No. [44], at ¶ 28. Specifically, Plaintiff alleges that Defendant:

(1) Transferred the registered domain names “yellowpagesonline.com” and “currentaffair.com” to itself. When clicking on either domain name, users will suffer a virus attack, “causing damage to [Plaintiff's] trademarked reputation”;
(2) “Hijacked” the registered domain name “mainstreamadvertising.com” from Plaintiff's account and did not renew the domain name, allowing it to be registered by DropCatch.com and placed for sale by HugeDomains.com;
(3) Sold the registered domain name “vortals.com” to Digital Domains MEPE (registered now through Epik, Inc.) and listed “cashnews.com” for sale.

See Id. at ¶¶ 29-31. Following the entry of the Final Default Judgment, Defendant began initiating collection actions in various courts. For instance, after obtaining the Final Default Judgment in this Court, Defendant proceeded to initiate ex parte proceedings in the Circuit Court for the City of Alexandria, Virginia. See Id. at ¶ 37. Nevertheless, Plaintiff contends that Defendant did so without complying with Federal Rule of Civil Procedure 69, or Florida Statute Chapters 55 and 56 relating to the execution of judgments. See Id. at ¶ 36. Defendant then obtained the appointment of a Special Receiver and orders from the Virginia state court in June 2017 ordering the sale at auction of a portfolio of domain names to partially satisfy the Final Default Judgment entered in this Court. See Id. at ¶ 37. However, in July 2017, the Virginia state court ordered Defendant to restore the domain names and reverse all actions taken pursuant to the June 2017 orders. See Id. at ¶ 39; see also ECF No. [44-4], at 21-28. Plaintiff contends that Defendant has refused to comply with the Virginia state court's orders; as a result, Defendant continues to “hold and receive income from at least 1840 domain names” that were ordered to be returned. See ECF No. [44], at ¶¶ 40-42.

         Defendant also initiated proceedings in the United States District Court for the Northern and Central Districts of California to collect on the Final Default Judgment, despite failing to comply with Fed.R.Civ.P. 69 or Fla. Stat. §§ 55, 56. See Id. at ¶¶ 45, 48. The Northern District “denied [Defendant's] motions for seizure [of Plaintiff's domain names] and directed [Defendant] to limit its action to [sic] issuance of a writ of execution.” See Id. at ¶ 47. The Central District also denied Defendant's “requests for ex parte seizure orders.” See Id. at ¶ 49.

         Meanwhile, on July 17, 2017, a new firm entered an appearance in Mainstream I on behalf of Plaintiff and filed a Second Amended Complaint. See Mainstream I, ECF Nos. [87], [88]. Defendant responded with a Motion to Strike, which was granted by the Court on July 24, 2017, because the Second Amended Complaint was filed without leave of Court and despite the case having been closed on December 23, 2016. See Mainstream I, ECF No. [90]. On July 20, 2017, however, Plaintiff filed a new complaint in a new action-the one presently before the Court. See ECF No. [1]. Plaintiff's new Complaint brought the same five claims against Defendant as the Complaint and Amended Complaint in Mainstream I. Compare ECF No. [1], with Mainstream I, ECF Nos. [1], [43]. On August 11, 2017, Plaintiff filed its Amended Complaint with the Court, alleging one count for trademark infringement against Defendant. See ECF No. [6].[4] On August 25, 2017, Defendant filed a motion to dismiss, arguing that the Amended Complaint should be dismissed under res judicata, collateral estoppel, and for failure to properly state a claim for trademark infringement. See ECF No. [9]. The Court granted the motion in part, finding that Plaintiff had not pled enough factual content to determine precisely how Defendant, an internet domain registrar, had infringed upon its trademarks. See ECF No. [39]. Plaintiff was provided leave to amend. See Id.

         On January 3, 2018, Plaintiff filed its Second Amended Complaint, bringing forth claims for trademark infringement under 15 U.S.C. § 1114 (Count I); Wrongful Garnishment/Seizure (Count II); Abuse of Process (Count III); Conversion (Count IV); and Accounting (Count V). See ECF No. [44], at 15-27. On January 17, 2018, Defendant filed the present Motion. See ECF No. [45]. Plaintiff filed its response on February 19, 2018, see ECF ...


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