OPINION & ORDER
Presently before this Court are the motions for partial summary judgment by both Defendant Brett Prince and Plaintiff Mayflower Transit, LLC (“Mayflower Transit”).
1
Plaintiff Mayflower Transit
BACKGROUND
Plaintiff Mayflower Transit is a company which provides interstate moving, shipping and storage services nationwide. MAYFLOWER is the service mark of Mayflower Transit. Plaintiff company uses affiliated agents to conduct these moves, who must undergo specific training and adhere to specific procedures mandated by Plaintiff, such as the use of particular forms, trucks, and boxes. Except in Texas and Florida, Mayflower Transit is not licensed to engage in intra-state moves; however, many of its affiliated agents can and do conduct such intra-state moves. When performing an intra-state move, an agent is permitted to use the Mayflower truck, boxes and uniforms, but is not required to do so. Mayflower Transit exercises no control over the intra-state moves of its agents nor does it have the right to monitor, control or alter the company’s performance during the intra-state move. Mayflower Transit receives no financial benefit from such moves, and the state agent operates entirely in its own capacity during such moves.
On September 4, 1997, Defendant Prince contacted Plaintiff Mayflower Transit to arrange for a move from West Orange, New Jersey to Freehold, New Jersey. In making these arrangements, Defendant met with Edward Scott, who allegedly identified himself as a sales manager with Mayflower Transit. The contract for the move was, however, ultimately made with Lincoln Storage Warehouses, (“Lincoln Storage”), a New Jersey corporation. As Plaintiff explains, Lincoln Storage is an agent of Mayflower Transit solely for purposes of engaging in intra-state moves. Defendant’s moving contracts bore Lincoln Storage’s name and intrastate moving license number and did not mention Mayflower Transit. (Pl.Ex. B, C). The “Order for Insurance” form between Defendant and Lincoln Storage did, however, contain the Mayflower name and logo. (Pl.Ex. E).
On September 13, 1997, employees of Lincoln Storage picked up personal property from Defendant’s residence, loaded them into a Lincoln Storage moving van and drove the van to the City of Orange, where it was parked overnight. The boxes and truck used in the move bore the Mayflower trademark and logo. While the van was parked overnight, thieves broke in and stole much of Defendant’s property. Defendant sued Lincoln Storage and its insurance carrier in Essex County Superior Court for his losses, and the matter was settled between the parties in May 2002.
After the moving incident, Defendant registered the Internet domain name “mayflowervanlinebeware.com” and posted a website at this address describing his moving incident. The home page is headlined “Beware of Lincoln Storage Warehouse. Beware of Mayflower Van Line,” and states, “If you are thinking about moving or had a bad experience moving with Mayflower Van Lines or Lincoln Storage Warehouses then please read on and reply to me at the following e-mail address: MayfiowerBeware@Yahoo.com.” A link to another page entitled “Don’t let this happen to you” includes such language as “I honestly expected fair and reasonable treatment by Lincoln Storage Warehous
In March 2000, Defendant also registered the domain names “mayflowervan-line.com” and “lincolnstorageware-hous.com.” Each displayed material similar to that included at “mayflowervanlinebe-ware.com.” At some point, Defendant ceased using the domain name “mayflow-ervanlinebeware.com,” but continued to use “mayflowervanline.com” and “lincolns-toragewarehous.com.” Defendant also uses the website “newjerseymoving-compa-ny.com” and linked that domain name to the aforementioned website. In addition, Defendant has registered the website “cumberlandinsurancegrp.com,” the name of the insurer involved in Defendant’s claim for stolen property, but no material has been posted on that site.
Through various correspondence and telephone calls, Plaintiff informed Defendant that only Lincoln Storage, and not Mayflower Transit, was involved in his in-tra-state move. In response to these assertions, Defendant allegedly stated that he desired a resolution of his dispute with Lincoln Storage and would not change his website until he received a satisfactory settlement.
Plaintiff filed suit with the Court on October 30, 2000, requesting injunctive relief and damages for alleged violations of the Anticybersquatting Consumer Protection Act of 1999, 15 U.S.C. § 1125(d) (“ACPA”) (Count I), trademark dilution in violation of the Federal Dilution Act of 1995, 15 U.S.C. § 1125(c) (Count II) and claims for trade libel (Count III) and libel (Count IV) under state law. Both parties seek summary judgment with respect to the cybersquatting, libel and trade libel claims. On September 8, 2003, this Court took both summary judgment motions under advisement.
Discussion
A. Standard for Summary Judgment
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment may be granted only when the evidence contained in the records shows “that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”
Serbin v. Bora Corp.,
The moving party bears the initial burden of identifying evidence that demonstrates the absence of a genuine issue of material fact.
Celotex Corp. v. Catrett,
B. Anti-Cybersquatting Claim
Plaintiff claims that Defendant’s actions violate the Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d)(1)(A) (“ACPA”). The ACPA was enacted in an effort to stop cybers-quatting, a practice defined as the “deliberate, bad-faith and abusive registration of Internet domain names in violation of the rights of trademark owners.”
Virtual Works, Inc. v. Volkswagen of Am., Inc.,
In the case at bar, there is no dispute that the first two prongs of Plaintiffs ACPA claim have been met. Plaintiff’s MAYFLOWER trade mark is “distinctive.” Plaintiff Mayflower Transit has five separate federal registrations of the term Mayflower, which “entitles [it] to a presumption that its registered trademark is inherently distinctive.”
Sporty’s Farm L.L.C. v. Sportsman’s Market, Inc.,
In addition, the Court finds that Defendant’s use of “mayflowervanline.com” is “confusingly similar” to the MAYFLOWER trade mark. The insertion of the term “vanline.com” does not remedy this confusion, as Plaintiff is in fact a moving van company. It is highly likely that a customer searching for Plaintiffs moving company on the Internet would be confused by this designation.
See, e.g., Shields,
A violation of the ACPA also requires that Defendant’s actions amount to a “bad faith intent to profit.” The Court’s determination of whether the actions in the present case amount to bad faith is guided by the nine statutory factors enumerated in the ACPA:
(B)(i) In determining whether a person has a bad faith intent described undersubparagraph (a), a court may consider factors such as, but not limited to
(I) the trademark or other intellectual property rights of the person, if any, in the domain name;
(II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;
(III) the person’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;
(IV) the person’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name;
(V) the person’s intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site;
(VI) the person’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person’s prior conduct indicating a pattern of such conduct;
(VII) the person’s provision of material and misleading false contact information when applying for the registration of the domain name, the person’s intentional failure to maintain accurate contact information, or the person’s prior conduct indicating a pattern of such conduct;
(VIII) the person’s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and
(IX) the extent to which the mark incorporated in the person’s domain name registration is or is not distinctive and famous within the meaning of subsection (c)(1) of this section.
15 U.S.C. § 1125(d)(l)(B)(I). These factors are not considered exclusive or mandatory.
See, e.g., Morrison & Foerster,
The first three of these factors clearly favor Plaintiffs case. Defendant had no intellectual property rights in mayflower-vanline.com, the domain name does not consist of his legal name in any respect, and he has never offered goods or services under this domain name. The fifth factor likewise cuts against Defendant. Clearly, Defendant would not have chosen this domain name but for its similarity to the name of Plaintiffs company. The fact that Internet users attempting to find the web site for the Mayflower moving company might reach Defendant’s sites and its critical comments instead, would undoubtedly tend to “tarnish” or “disparage” the mark and “harm the goodwill represented by the mark.” For reasons already discussed, the ninth factor, concerning the distinctiveness of Plaintiffs mark, also points toward the validity of Plaintiffs claim.
On the other hand, an examination of certain factors bolster Defendant’s position. Defendant did not supply false contact information when registering these
This Court finds that an analysis of the fourth factor under bad faith — whether Defendant had a “bona fide noncommercial or fair use of the mark” — speaks to the ultimate disposition of this case, and demonstrates why Defendant cannot be held liable under the ACPA. The purpose of this element is to protect domain name registrations and users engaged in protected activities such as critical commentary.
Eurotech, Inc. v. Cosmos European Travels Aktiengesellschaft,
The totality of circumstances in this case demonstrate that Defendant’s motive for registering the disputed domain names and posting his criticism was to express his customer dissatisfaction through the medium of the Internet. Defendant’s “cy-ber-griping” is a far cry from the “squatting” activity made illegal by the ACPA, in which a person purchases numerous domain names of prominent companies cheaply with the purpose of selling the domain names at a higher price to those companies. Whereas Defendant’s activity may be actionable under other statutory provisions, 2 a question the Court need not decide today, it is clear that these actions do not fall within the ambit of the ACPA.
The Court concurs fully with the legal analysis and outcome of the recent Sixth Circuit decision of
Lucas Nursery and Landscaping, Inc.,
Other courts have reached similar conclusions. In
Northland Ins. Cos. v. Blay-lock,
Whereas courts in this Circuit have not yet faced a suit brought against a cyber-griper under the ACPA, the defendant in
Shields v. Zuccarini,
The legislative history corroborates the Court’s conclusion that genuine cyber-gri-pers like Defendant are not covered by the ACPA. The ACPA’s congressional record consistently signals the drafters’ intention to target a narrow class of cyber-squatters consisting of those who have the bad faith intent
to profit,
and not to tread on the rights of those with any other motives. H.R. Rep. 106-412, 10; S. Rep. 106-40, 13;
Ford Motor Co.,
Moreover, those situations in which cy-ber-gripers were found liable under the ACPA are readily distinguishable. In
Toronto-Dominion Bank v. Karpachev,
Plaintiff cites to
People for Ethical Treatment of Animals (PETA) v. Doughney,
“Bad faith with intent to profit” requires more than what Plaintiff has shown in this action. To be actionable, bad faith with intent to profit need only be one of a defendant’s motives for registering a domain name.
See PETA v. Doughney,
The Court recognizes that excluding cy-ber-gripers from the scope of the ACPA has the potential of “evisceratfing] the protections of the bill by suggesting a blueprint for cybersquatters who would simply create criticism sites in order to immunize themselves from liability despite their bad-faith intentions.” S. Rep. 106-140, 9. For that reason, it is important to carefully examine the entire record, to ascertain the context surrounding the formation and use of the disputed domain name, and to scrutinize the defendant’s actions for any evidence that the griping may in fact be a pretext disguising an underlying profit motive. Having undertaken such an inquiry in this case, the Court concludes that Defendant lacked the requisite bad faith intent to profit. In conclusion, as no reasonable fact finder could find that Defendant possessed the requisite “bad faith with intent to profit,” he cannot be held liable under the ACPA. Accordingly, Defendant’s motion for summary judgment on the ACPA claim is granted, and Plaintiffs motion for partial summary judgment on this claim is denied.
C. Defamation
Plaintiff also claims that Defendant’s website postings constitute libel actionable under state law. A corporation may recover for defamation.
See Turf Lawnmower Repair, Inc. v. Bergen Record Corp.,
The Court must first examine whether Defendant’s statements on his website can be considered a “defamatory statement of fact” relating to Plaintiff. Whether a statement is defamatory is a matter of law to be determined by the court.
Higgins v. Pascack Valley Hosp.,
In the case at bar, there is no dispute that Defendant’s website holds Plaintiff at least partially responsible for Defendant’s disastrous moving experience. Defendant warns readers to “Beware of Mayflower Van Line” and states, “Do not become the next victim of Lincoln Storage Warehouses or Mayflower Van Lines. The disaster that happened to me when I hired them to move my property may happen to you.” (Pl.’s Ex. B, at 1) (emphasis added). After describing the details of his move, Defendant states that he “honestly expected fair and reasonable treatment by Lincoln Storage Warehouses/Mayflower Van after their obvious negligence.” Defendant concludes, “Unless you’re willing to risk a total loss of your possessions, do not do business with Lincoln Storage Warehouses or Mayflower Van Lines. What happened to me can and will happen to you! Don’t be their next victim!” (PL’s Ex. B, at 2) (emphasis added).
These harsh statements are undoubtedly defamatory in nature with respect to Plaintiff. Defendant’s accusations of professional incompetence and criticisms of Mayflower Transit’s behavior certainly would harm its reputation among reasonable persons of ordinary intelligence. These statements could not but subject Mayflower to “a loss of the good will and confidence” of its customers and potential customers. Moreover, despite Defendant’s claims to the contrary, Defendant’s comments are actionable statements of fact, and not just of opinion. This is because the words used by Defendant contain certain underlying factual assertions, such as that Mayflower Transit was in fact hired by Defendant, was in fact involved in the move, and was in fact responsible for the theft of the goods.
Having found a defamatory statement of fact, the Court must now decide whether these statements were false. As mentioned, Defendant implicates Plaintiff in the move in dispute, stating that he hired both Mayflower Transit and Lincoln Storage and that it was their negligence which caused his losses. As Plaintiff notes, Mayflower Transit was not in fact involved in Defendant’s move because Lincoln Storage serves as Mayflower Transit’s agent for certain inter-state moves but not as its agent for moves that take place entirely within the state of New Jersey, as such intra-state moves are conducted solely by Lincoln Storage.
However, whether or not Mayflower Transit was directly involved in the move does not end the Court’s inquiry. One can reasonably construe from the statements on the web site that irrespective of who actually performed the move, Defendant allegations imply that Mayflower Transit was responsible for the disputed move and that the negligent actions of Lincoln Storage could be imputed to Mayflower Transit through some form of agency relationship between them. Under this interpretation, a determination of the truthfulness of this assertion for purposes of defamation law therefore requires a brief examination of agency principles.
Agency is the fiduciary relationship in which an agent acts on behalf of his principal.
Restatement (Second) of Agency,
§ 1 (1958). A principal can be found liable for the actions, of an agent only when the agent acts with “authority,” which may be “actual” or “apparent.”
See, e.g., Automated Salvage Transport, Inc. v. NV Koninklijke KNP BT,
The doctrine of apparent authority is well recognized within the law of agency and firmly established in the State of New Jersey.
See, e.g., Shadel v. Shell Oil Co.,
One who represents that another is his servant or other agent and thereby causes a third person justifiably to rely upon the care or skill of such apparent agent is subject to liability to the third person for harm caused by lack of care or skill of the one appearing to be a servant or other agent as if he were such.
Therefore, the doctrine of “Apparent authority imposes liability on the principal not as a result of an actual contractual relationship, but because the principal’s actions have misled a third-party into believing that a relationship of authority in fact exists.”
Mercer v. Weyerhaeuser Co.,
It has been noted that “[questions of apparent authority are questions of fact and are therefore for the jury to determine.”
Gizzi v. Texaco Inc.,
In the present case, the Court cannot determine as a matter of law whether apparent authority existed for the move. The putative principal Mayflower Transit does permit Lincoln Storage to use Mayflower boxes, to wear Mayflower uniforms and to use moving trucks containing the Mayflower logo. The “Order for Insurance” form between Defendant and Lincoln Storage also contained the Mayflower name and logo, presumably without objection by Mayflower Transit. Moreover, Mayflower Transit has contracted with Lincoln Storage to be its agent for all inter-state moves without attempting to clarify the intra-/inter-state agency distinction to consumers. In the absence of any such warnings to the contrary, it is eminently reasonable for the average consumer to believe that the corporate identity of his mover and the legal liability for that mover’s negligence does not change once
There has been case law supporting the proposition that express statements by a principal denying an agéncy relationship can preclude a finding of apparent authority. In
Wilzig v. Sisselman,
The existence of various indicia of an apparent agency relationship bars a finding of summary judgment on this issue.
See, e.g., Mercer v. Weyerhaeuser Co.,
The Court agrees with Plaintiff that the “actual malice” fault standard is not appropriate in this case. Defendant did not charge Plaintiff with any substantial fraud or regulatory violation that would place it into the per se actual malice category—rather, Plaintiff has been accused of negligence in conducting a move. Plaintiffs moving business is more naturally likened to an “everyday service” than an activity which “intrinsically involves a legitimate public interest.” As far as the Court can ascertain, the moving truck industry is not “heavily regulated by the government” as is banking, nor is it an “essential of life” like the sale of water. Because Defendant makes no arguments to the contrary, the Court finds that the negligence standard is most appropriate.
Upon determining that the appropriate fault standard is negligence, the Court cannot hold that Defendant acted negligently as a matter of law in making its statements, as Plaintiff contends, or that Defendant acted non-negligently as a matter of law, as Defendant contends. There are certainly facts which tend to suggest the unreasonableness of Defendant’s comments insofar as they hold Plaintiff Mayflower Transit responsible for the move. The contract for the underlying move named only Lincoln Storage as the mover and bore only Lincoln Storage’s intra-state license; the estimated Costs and Services form had only Lincoln’s name and address on it; both versions of the Bill
Because summary judgment must be denied as to fault and falsity
4
, the Court need not at this juncture reach the question of whether Plaintiff has shown damages as required under a prima facie defamation case. For the sake of completeness, however, the Court will briefly address the issue. A defamation action generally requires that plaintiff demonstrate damages in the form of “actual harm to reputation through the production of concrete proof.”
Ward v. Zelikovsky,
D. Trade Libel
Plaintiff also argues that Defendant has committed trade libel as a matter of law. Trade libel, also known as “product disparagement,” derives from the cause of action for interference with contractual relations, rather than that for libel or slander. “Defamation of a corporation injures the reputation of the corporation: product disparagement injures the reputation of its products.”
Dairy Stores, Inc. v. Sentinel Publishing Co., Inc.,
The Court has already found that the “publication” prong has been met. Moving to the next legal element, in order to establish “malice” in a product disparagement case, Plaintiff must demonstrate that Defendant’s statements were false or that they were written with reckless disregard for the truth or falsity.
Juliano v. ITT Corp.,
The Court must also deny summary judgment for Plaintiff because it has not asserted special pecuniary damages. Unlike ordinary defamation actions, an action for product disparagement “requires special damage in all cases.... ”
System Operations Inc.,
In light of its legal discussion of the various claims, the Court also notes that Defendant’s request for the imposition of sanctions under Rule 11 of the Federal Rule of Civil Procedure and the award of attorney’s fees under the Lanham Act, 15 U.S.C. § 1117(a) must be denied. All of Plaintiffs “allegations and other factual contentions” possess a sufficient degree of evidentiary support in the record, Fed. R.Civ.P. 11(b)(8) and are adequately “warranted by existing law” so as to file suit. Fed.R.Civ.P. 11(b)(2). Plaintiffs arguments are neither legally nor factually frivolous. Moreover, after reviewing the record, the Court does not feel that this case was pursued in bad faith to harass or intimidate Plaintiff, but rather was initiated with the intention of remedying the alleged violation of its legal rights.
Conclusion
For the reasons stated herein, IT IS on this-day of March, 2004, hereby,
ORDERED that Defendant’s motion for summary judgment with respect to the Anticybersquatting Consumer Protection Act claim is GRANTED; and it is
FURTHER ORDERED that Defendant’s motion for summary judgment with respect to the libel claim is DENIED; and it is
FURTHER ORDERED that Defendant’s motion for summary judgment with respect to the trade libel claim is DENIED; and it is
FURTHER ORDERED that Defendant’s request for sanctions and attorney fees is DENIED; and it is
FURTHER ORDERED that Plaintiffs motion for summary judgment with respect to its Anticybersquatting Consumer Protection Act claim is DENIED; and it is
FURTHER ORDERED that Plaintiffs motion for summary judgment with respect to its libel claim is DENIED; and it is
FURTHER ORDERED that Plaintiffs motion for summary judgment with respect to its trade libel claim is DENIED.
It is so ordered.
Notes
. Although Defendant does not make this entirely clear in his submissions, the Court construes his motion as one for partial summary judgment as it only refers to Plaintiff's cybers-quatting, libel and trade libel claims.
. Accordingly, the Court will not delve into those cases with ostensibly similar factual circumstances that did not allege violations of the ACPA.
See e.g., Taubman Co. v. Webfeats,
. Plaintiff's reference to
Tucker v. Fischbein,
. For clarity purposes, the Court notes that Plaintiff must prove both falsity and fault at trial. The two factors, though overlapping, are distinct-even if Defendant’s statements are deemed false as a matter of law, he still may not have been negligent in making those false statements.