Tracfone Wireless, Inc. v. Hernandez
196 F. Supp. 3d 1289
S.D. Fla.2016Background
- TracFone sued Juan Hernandez for operating an "Airtime Theft Scheme," allegedly obtaining TracFone airtime PINs (via brute-forcing and inducement of TracFone employees) and reselling them online (e.g., eBay) to customers.
- TracFone served Hernandez abroad by international mail (FedEx) and email pursuant to the Court’s Rule 4(f) order; Hernandez did not appear and a clerk’s default was entered.
- TracFone submitted a non-military affidavit under the SCRA; the court found SCRA compliance satisfied.
- TracFone alleged six causes of action: conversion, federal trademark infringement (Lanham Act), federal unfair competition, CFAA violations (18 U.S.C. § 1030), and unjust enrichment; TracFone supported factual assertions with an investigator’s purchases and the Wehling Declaration.
- The court accepted TracFone’s evidence, concluded Hernandez’s default admitted well-pleaded facts, awarded monetary damages of $35,275.00 plus prejudgment interest of $4,266.72 (total $39,541.72), and entered a permanent injunction prohibiting Hernandez (and related persons/entities) from selling or facilitating sale of TracFone-branded service or using TracFone marks.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was service abroad (postal/email) proper under Rule 4(f) and Hague Convention? | Service by postal channels (FedEx) and email was authorized by the court and allowed because destination country did not object to Article 10(a). | No response (default); some authority questions Article 10(a) scope. | Court found service proper (and notes majority of district courts and U.S. position support its view). |
| Did TracFone satisfy SCRA requirements for default judgment against an individual? | Filed non-military affidavit stating inability to locate military service; complied with SCRA. | No response. | Court found SCRA compliance satisfied. |
| Is Hernandez liable for conversion, Lanham Act infringement/unfair competition, CFAA violations, and unjust enrichment based on the pleaded facts? | Evidence (Wehling Dec., investigator purchases, customer complaints) shows unlawful acquisition/resale of PINs, use of TracFone marks, unauthorized access to protected systems, and unjust enrichment. | Defaulted—no defenses asserted. | Court concluded TracFone proved all counts; default admitted well-pleaded allegations; judgment for TracFone on all six counts. |
| Are damages, prejudgment interest, and permanent injunctive relief appropriate? | Seeks lost revenue ($35,275), prejudgment interest at Florida statutory rate, and a permanent injunction to prevent ongoing harm. | No response. | Court awarded $35,275 + $4,266.72 prejudgment interest; found irreparable harm and entered a broad permanent injunction; ordered post-judgment fact information sheet. |
Key Cases Cited
- Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d 1298 (11th Cir. 2009) (default admits well-pleaded factual allegations)
- Frehling Enters., Inc. v. Int’l Select Group, Inc., 192 F.3d 1330 (11th Cir. 1999) (evidence of actual confusion is strong proof of likelihood of confusion in trademark cases)
- Sony Music Entm’t, Inc. v. Global Arts Prods., 45 F. Supp. 2d 1345 (S.D. Fla. 1999) (defendant default can satisfy success-on-the-merits and irreparable harm for injunctions)
- Bosem v. Musa Holdings, Inc., 46 So.3d 42 (Fla. 2010) (Florida law permits prejudgment interest when damages are ascertainable)
- Adolph Coors Co. v. Movement Against Racism and the Klan, 111 F.2d 1538 (11th Cir. 1986) (default-judgment damages may be entered without hearing when amount is liquidated or mathematically calculable)