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PNGI Charles Town Gaming, LLC v. Hot Spot CT Real Estate, LLC

United States District Court, N.D. West Virginia, Martinsburg

December 16, 2019




         Now before the Court is Defendants Hot Spot CT Real Estate, LLC's and Brent Jackson's Motion for Partial Summary Judgment [ECF No. 176], filed on August 5, 2019. Plaintiffs filed a response in opposition on August 26, 2019. ECF No. 182. Accordingly, this matter has been fully briefed and is now ripe for review. For the following reasons, Defendants' Motion for Partial Summary Judgment is denied.

         I. Factual and Procedural Background

         This action arises from Defendants' ownership of two pawn shops: (1) the Berkeley Plaza Pawn Shop, located in Martinsburg, WV and (2) the Charles Town Pawn Shop, located across the street from Plaintiff's Hollywood Casino in Charles Town, WV.

         On July 12, 2007, Defendant Brent Jackson (“Defendant Jackson”), through his company Hot Spot Real Estate LLC (“Defendant Hot Spot”), purchased property across the street from Plaintiffs' Hollywood Casino. See ECF No. 177-1 & ECF No. 177-3. Ten years later, in September 2017, Defendant Jackson opened a pawn shop (“Charles Town Pawn Shop”) at this property, displaying a sign reading “Hollywood Pawn.” See ECF No. 182-13 at 2; see also ECF No. 182-12 at 4. Two months later, Defendant Jackson removed the “Hollywood Pawn” sign from Charles Town Pawn Shop after receiving a letter from Plaintiffs' counsel alleging that his proposed use of the Hollywood mark “constitute[d] intentional and willful trademark infringement.” See ECF No. 182-12 at 4; see also ECF No. 177-5 at 1. During the two months that the “Hollywood Pawn” sign was erected at Charles Town Pawn Shop, a shuttle van for Lust Gentleman's Club in nearby Martinsburg, WV was parked in the pawn shop's parking lot. See ECF No. 182-17. Defendants Brent Jackson helped manage the club while his wife, Defendant Lynn Perkins, was the owner. See ECF No. 182-6 at 22; see also ECF No. 182-26.

         On December 8, 2017, Defendant Jackson replaced the “Hollywood Pawn” sign at Charles Town Pawn Shop with a sign reading “Casino Pawn.” See ECF No. 182-15 at 2; see also ECF No. 182-6 at 11. The “Casino Pawn” sign remained displayed at this location until December 8, 2018. See ECF No. 182-12 at 4. Since its establishment, Charles Town Pawn Shop has remained vacant and has never been open to the public. See ECF No. 182-6 at 4.

         In December 2018, Defendants Lynn Perkins, Christopher Perkins, and Casino Pawn, LLC opened a second pawn shop in Martinsburg, WV (“Berkeley Plaza Pawn Shop”). See ECF No. 182-5 at 10; see also ECF No. 182-10 at 8. The Berkeley Plaza Pawn Shop uses the same “Casino Pawn” logo as the Charles Town Pawn Shop. See ECF No. 178-17 at 2; ECF No. 178-10 at 9; ECF No. 178-5 at 9. To date, the Berkeley Plaza Pawn Shop does not have regular business hours and is only open a few days per week. See ECF No. 178-10 at 12. Additionally, this location has no active website, no signage readily visible from the street, and has only made one sale worth twenty-five dollars. See Id; see also ECF No. 178-5 at 12-13.

         In terms of marketing efforts, Defendants purchased two roadside billboards. ECF No. 182-6 at 14-15. On their face, both billboards refer exclusively to the Charles Town location, stating that Casino Pawn is located “across from the casino, ” in capital letters. ECF No. 182-18; ECF No. 182-19. Both billboards also featured the slogan, “We Pay the Most!” Id. The billboard near the Charles Town Pawn Shop remains displayed, whereas the other billboard near the Berkeley Plaza Pawn Shop was removed in early 2019. ECF No. 177-18 at 3-4.

         Plaintiffs filed their initial complaint [ECF No. 1] on March 19, 2018 and later filed an amended complaint [ECF No. 132] on March 18, 2019. In their amended complaint, Plaintiffs assert three claims for relief against Defendants concerning the Charles Town location.[1] Plaintiffs claim that the Defendants' use of the “Casino Pawn” mark at Charles Town Pawn Shop creates a false association with Plaintiffs' Hollywood Casino gaming facility in violation of 15 U.S.C. § 1125(a) and common law unfair competition under West Virginia law. See ECF No. 132 at 15-16, & 19. Plaintiffs also assert a federal trademark infringement claim under 15 U.S.C § 1114(a) regarding Defendants' use of the “Hollywood Pawn” mark at Charles Town Pawn Shop. ECF No. 132 at 17- 18. Defendants move for summary judgment on all three counts.

         II. Standard of Review

         Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A genuine issue exists “if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Thus, the Court must conduct “the threshold inquiry of determining whether there is the need for a trial-whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Id. at 250.

         The party opposing summary judgment “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., 475 U.S. at 586. That is, once the movant has met its burden to show an absence of material fact, the party opposing summary judgment must then come forward with affidavits or other evidence establishing there is indeed a genuine issue for trial. Fed.R.Civ.P. 56; Celotex Corp., 477 U.S. at 323-25; Anderson, 477 U.S. at 248. “If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 249 (citations omitted). A motion for summary judgment should be denied “if the evidence is such that conflicting inferences may be drawn therefrom, or if reasonable men might reach different conclusions.” Phoenix Savs. & Loan, Inc. v. Aetna Cas. & Sur. Co., 381 F.2d 245, 249 (4th Cir. 1967); see also id. at 253 (noting that “[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge”).

         III. Applicable Legal Standard

         Under 15 U.S.C. § 1125(a), any person who uses a word or mark “in commerce” that 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” shall be liable in a civil action to “any person who believes that he or she is likely to be damaged by such an act.” 15 U.S.C. § 1125(a). The statute “goes beyond trademark protection” and creates a cause of action for unfair competition through misleading advertising or labeling. POM Wonderful LLC v. Coca-Cola Co., 134 S.Ct. 2228, 2234 (2014). To that end, the plain language of the statute does not require that the plaintiff “possess or have used a trademark in U.S. commerce as an element of the cause of action.” Belmora LLC v. Bayer Consumer Care AG, 819 F.3d 697, 706 (4th Cir. 2016). However, the plaintiff “must allege an injury to a commercial interest in reputation or sales, ” and must show that the “economic or reputational injury flow[s] directly from the deception.” Id. at 707- 08.

         The test for false association under 15 U.S.C. § 1125(a) closely parallels the test for trademark infringement under 15 U.S.C. 1114(1), focusing on whether there is a confusing similarity between two marks. Polo Fashions, Inc. v. Craftex, Inc., 816 F.2d 145, 148 (4th Cir. 1987). The test for common law unfair competition under West Virginia law resembles tests evaluating federal trademark infringement and unfair competition claims by also focusing on confusion and injury. Choice Hotels Int'l, Inc. v. Fisher, 2014 WL 795046, at *5 (N.D. W.Va. Feb. 27, 2014). Therefore, it is appropriate for the Court to evaluate Plaintiffs' false association (Count I) and unfair competition (Count III) claims using the same legal standard.

         To state a federal false association claim or a common law unfair competition claim, a plaintiff must sufficiently allege that: (1) a defendant uses a designation; (2) in interstate commerce; (3) in connection with goods and services; (4) which designation is likely to cause confusion, mistake, or deception as to origin, sponsorship, or approval of defendant's goods or services; and, (5) plaintiff has been or is likely to be damaged by these acts. Superior Performers, Inc. v. Family First Life, LLC, 2014 WL 7338923, at *4 (M.D. N.C. Dec. 22, 2014). In a previous order, pertaining to the Martinsburg location [ECF No. 217], the Court reduced this test to the following three factors based on the applicable statute: (1) use of the mark in interstate commerce; (2) that is likely to cause confusion as to the Defendants' affiliation with the Plaintiffs; and, (3) the Plaintiffs' business and reputation has been harmed by the false association. See ECF No. 39 at 5-6 (deriving from 15 U.S.C. § 1125(a)).

         IV. Discussion

         A. Counts I (False Association) and III (Common Law Unfair Competition)

         Parties do not dispute Defendants' use of the “Casino Pawn” mark in interstate commerce at Charles Town Pawn Shop. Therefore, the Court's consideration of Defendants' motion for summary judgment on both counts involving the Charles Town Pawn Shop will be restricted to the second (likelihood of confusion) and third (business and reputational harm) prongs of this test.

         a. Second Factor - ...

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