United States District Court, E.D. Virginia, Alexandria Division
REPORT AND RECOMMENDATIONS
Michael S. Nachmanoff United States Magistrate Judge
matter is before the Court on Plaintiffs' Motion for
Default Judgment as to Defendant Travel Smart Solutions, LLC
(Dkt. No. 17). Having reviewed the record, the undersigned
Magistrate Judge recommends granting the Motion in part for
the reasons that follow.
September 26, 2016, Plaintiffs Park Hotels & Resorts,
Inc., Hilton Grand Vacations Company, LLC, and Hilton
International Holding, LLC (collectively
“Hilton”) filed a complaint against Defendants
Spinnaker Resorts, Inc. and Travel Smart Solutions, LLC for
alleged trademark infringement, trademark dilution, unfair
competition, and false advertising, as well as state law
claims of alleged unfair competition and tortious
interference with business expectancy. See Compl.
1-2 (Dkt. No. 1). Plaintiffs are Delaware corporations
offering vacation and timeshare services and products, with
principle places of business in either Virginia or Florida.
Id. ¶¶ 5-7, 13-16. Defendant Spinnaker
Resorts, Inc., a Florida corporation with its principal place
of business in South Carolina, is a timeshare developer that
markets vacation and resort packages to consumers.
Id. ¶¶ 8, 30. Defendant Travel Smart
Solutions, LLC, a Florida limited liability company with its
principal place of business in Florida, is a third party
telemarketing vendor that advertises and sells
Spinnaker's vacation and resort packages. Id.
¶¶ 9, 31-32.
allege that since its founding in 1919, Hilton “has
been a prominent and respected global hospitality company for
nearly one hundred years … invest[ing] substantial
time, effort, and money in advertising and promoting its
services under the Hilton brand and using distinctive Hilton
marks … earn[ing] a reputation for quality and
consistency in its hotel, resort, and timeshare
services.” Compl. ¶ 17 (Dkt. No. 1).
“HILTON” and “HILTON GRAND VACATIONS”
(collectively “Hilton marks”) are registered
marks. Id. ¶ 18 (citing Exs. 1-4). In sum,
Plaintiffs allege that “[t]he goodwill of the Hilton
name is worth a great deal, and those who invoke and trade on
that goodwill receive a valuable benefit.” Compl.
¶ 29 (Dkt. No. 1).
assert that Defendants “intentionally target[ ] and
market[ ] their products and services directly to Hilton
customers through telemarketing and promotions” and
“falsely informed them (i) that Defendants obtained
their contact information and other personal information
through a partnership with Hilton, (ii) that Defendants are
associated with Hilton, and/or (iii) that Defendants
purchased their contact and other personal information from
Hilton.” Id. ¶¶ 30, 33, 39. As a
result of Defendants' false representations about their
association with Hilton, Plaintiffs claim that
“Hilton's customers have been confused and are
likely to be confused about an affiliation between Hilton and
Defendants.” Id. ¶ 40. Despite
Hilton's customers' alleged complaints about
Defendants' solicitations and Hilton's cease and
desist letters to Defendant Spinnaker Resorts, Inc., Hilton
continued to receive customer complaints. Id.
contend that Defendants' deliberate and intentional
“conduct has caused and will continue to cause
irreparable injury because it diminishes the reputation of
the HILTON Marks and the valuable and inherent goodwill built
in the Hilton brand.” Id. ¶¶ 46, 48.
Plaintiffs seek declaratory and injunctive relief, damages,
profits, interest, attorneys' fees, and costs.
corporate employee was served in person by a special process
server on September 30, 2016. See Aff. & Proof
of Service (Dkt. No. 6); Letter to the Court (Dkt. No. 6-1).
On November 4, 2016, Plaintiffs were ordered to obtain a
default from the Clerk's Office, which entered default on
November 15, 2016. See Order (Dkt. No. 7); Request
for Entry of Default (Dkt. No. 9); Entry of Default (Dkt. No.
11). On December 2, 2016, Plaintiffs filed the instant Motion
for Default Judgment as to Defendant Travel Smart Solutions,
LLC. See Dkt. Nos. 17, 18. On December 9, 2016, the
Court heard oral argument on Plaintiffs' Motion, at which
time Defendant failed to appear, and the matter was taken
under advisement. See Dkt. No. 23. On February 1,
2017, the Court dismissed Defendant Spinnaker Resorts, Inc.
pursuant to a Consent Motion to Dismiss. See Order
(Dkt. No. 33). Defendant Travel Smart Solutions, LLC is the
only remaining defendant in the case.
Service of Process, Jurisdiction, and Venue
docket reflects that Defendant was properly served pursuant
to Fla. Stat. § 48.081. See Dkt. Nos. 6, 6-1.
The Court has subject matter jurisdiction over this case
pursuant to 28 U.S.C. §§ 1331 and 1338, and 15
U.S.C. §§ 1121 and 6104, as Plaintiffs' claims
arise under federal law, the Lanham Act, and from an Act of
Congress regulating trademarks, unfair competition, and false
designations. Compl. ¶ 10 (Dkt. No. 1). The Court has
supplemental jurisdiction over Plaintiffs' state law
claims under 28 U.S.C. § 1367. Id. The Court
has personal jurisdiction over Defendant Travel Smart
Solutions, LLC. As alleged in the Complaint, through
telemarketing and promotions, Defendant solicits members of
the public, including Virginia residents, for sales of
vacation and timeshares, and represents that it is affiliated
with Plaintiffs' entities headquartered in Virginia.
Id. ¶ 11. Virginia's long-arm statute
authorizes the exercise of personal jurisdiction over
Defendant, and Defendant satisfies the minimum contacts test
under the Due Process Clause of the Fourteenth Amendment.
See CFA Inst. v. Inst. of Chartered Fin. Analysts of
India, 551 F.3d 285, 292 (4th Cir. 2009). Defendant
promotes vacation and timeshare packages to Virginia
residents. Compl. ¶ 11 (Dkt. No. 1). Venue is proper in
this Court pursuant to 28 U.S.C. § 1391(b) because a
substantial part of the events or omissions giving rise to
Plaintiffs' claims occurred in Virginia. Id.
foregoing reasons, the undersigned recommends a finding that
Defendant was properly served with the Summons and Complaint,
and that the Court has subject matter jurisdiction over this
action, personal jurisdiction over Defendant, and venue in
this Court is proper.
judgment is appropriate if the well-pled allegations of the
complaint establish that the plaintiff is entitled to relief
and the defendant has failed to plead or defend within the
time frame set out in the rules. Fed.R.Civ.P. 55; see
also Traffic Names, Ltd. v. Zhenghui Yiming, No.
14-cv-1607, 2015 WL 2238052, at *4 (E.D. Va. May 12, 2015).
By defaulting, the defendant admits the plaintiff's
well-pled allegations of fact, which then provide the basis
for judgment. See Ryan v. Homecomings Fin. Network,
253 F.3d 778, 780 (4th Cir. 2001) (quoting Nishimatsu
Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200,
1206 (5th Cir. 1975)); Partington v. Am. Int'l
Specialty Lines Ins. Co., 443 F.3d 334, 341 (4th Cir.
2006). Nevertheless, “‘[a] court confronted with
a motion for default judgment is required to exercise sound
judicial discretion in determining whether the judgment
should be entered, and the moving party is not entitled to