Sterling Auto. Grp. Inc v. Ramayo (W.D. La. 2020). · Go Syfert
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Sterling Automotive Group Inc
v.
Ramayo
6:20-cv-00809.
District Court, W.D. Louisiana.
Dec 18, 2020.
Unknown

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF LOUISIANA LAFAYETTE DIVISION STERLING AUTOMOTIVE GROUP INC CASENO. 6:20-CV-00809 ET AL VERSUS JUDGE ROBERT R. SUMMERHAYS EDGARDO RAMAYO MAGISTRATE JUDGE HANNA

MEMORANDUM RULING The present matter before the court is a Motion for Default Judgment [ECF No. 9] filed by plaintiffs Sterling Automotive Group, Inc. and Arthur C. Leblanc, Jr. (“Plaintiffs”). Plaintiffs seek entry of a default judgement against defendant Edgardo Ramayo (“Ramayo”) pursuant to Rule 55(b) of the Federal Rules of Civil Procedure. The Court held an evidentiary hearing on the motion on December 7, 2020. For the reasons stated below, the Court GRANTS the Motion for Default Judgment and enters judgment against Ramayo.

I. FINDINGS OF FACT 8. Sterling is also entitled to an order transferring ownership of the “www.sterlingpremiumselect.com” domain name to Sterling pursuant to 15 U.S.C. § 1125(d)(1)(C). 9. The Court will also order Ramayo to provide an accounting of any profits realized from his registration of the “www.sterlingpremiumselect.com” domain name within 30 days of this Memorandum Ruling. 10. The well-pled allegations of the Complaint establish Ramayo’s liability under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). Specifically, Ramayo’s use of the “www.sterlingpremiumselect.com” domain name to injure Sterling’s business reputation is likely to cause confusion or mistake, and otherwise deceive customers as to the affiliation of Ramayo or Ramayo’s website — and his vulgar title tag --with Sterling. [11]. The well-pleaded allegations of the complaint also establish liability under the Louisiana Anti-Dilution Statute, La. R.S. 51:223.1. Specifically, the record reflects that Ramayo’s use of the domain name “www.sterlingpremiumselect.com” is likely to injure Sterling’s business reputation or otherwise dilute the quality of Sterling’s marks or trade names. [12]. The well-pleaded allegations in the complaint further establish that Ramayo’s actions in registering the “www.sterlingpremiumselect.com” domain name and his use of that domain name and Facebook posts to injure Sterling’s business reputation constitute “unfair methods of competition or deceptive acts or practices in the conduct of any trade or commerce.” La. R.S. 51:, et seq. [13]. The well-pleaded allegations in the Complaint establish that Ramayo breached the non-disparagement provisions of the parties’ Release and Compromise Agreement. Specifically, after the agreement was executed, Ramayo engaged in a cause of conduct in connection with his “www.sterlingpremiumselect.com” domain name to injure and disparage Sterling and LeBlanc. Based on the testimony of Dr. Stewart, these actions damaged the business reputation and brand of Sterling and LeBlanc. The record reflects that this non-disparagement clause was a material term of the Release and Compromise Agreement, and that Ramayo’s breach of this provision was a material breach of the agreement.

[*10][*11][*12]

and the public interest would not be undetermined by the entry of a permanent injunction. Moreover, as outlined above, Plaintiffs have established the merits of their claims against Ramayo.

[*13]
1 Plaintiffs assert federal claims under the Anti-cybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d) (the “ACPA”) and the Lanham Act, 15 U.S.C. § 1125(a), as well as state law claims for tradename dilution, defamation, breach of contract, and violations of the Louisiana Unfair Trade Practices and Consumer Protection Law, LA.R.S.51:1401, et seq. (“SLUTPA”) Plaintiffs seek compensatory damages, statutory penalties, an order requiring transfer of the domain names at issue, an accounting of profits, attorney’s fees and costs, and permanent injunctive relief. Sterling owns and operates multiple new and used car dealerships in Acadia, Jefferson Davis, Lafayette, and St. Landry Parishes, Louisiana. Sterling has operated since 1995 and sells vehicles onsite at its dealerships as well as online and through its affiliated auction company. Sterling sells vehicles to customers located in Louisiana and customers who reside in other states.!
3 Sterling registered the tradename “Sterling Premium Select” with the Louisiana Secretary of State on March 27, 2015. Sterling uses this tradename in connection with two used car dealerships in Lafayette Parish, Louisiana. Sterling also owns, maintains, and utilizes several internet domain names including www.saveatsterling.com, www.sterlingpremiumusedcars.com, and www.sterlingbroussard.com. Each of Sterling’s websites contains its logo and a “title tag.” The title tag for the website address www.sterlingpremiumusedcars.com includes Sterling’s tradename “Sterling Premium Select.” 4, Ramayo is a former Sterling employee who was ultimately terminated for misconduct. After his termination, Ramayo asserted a claim for unpaid wages and penalties. Ramayo also posted disparaging comments about Sterling on his Facebook page using the hashtags #wagetheft, #stopwagetheft, #saveatsterling, #sterlingautmotive, #sterlingautomotive group, #notafraid, and #sterling. Ramayo also attempted to “tag” local media outlets and the U.S. Department of Labor on those disparaging posts.’
5 Sterling and Ramayo entered into a Release and Compromise Agreement on January 16, 2020 (the “Release and Compromise”). Pursuant to this agreement, Sterling paid 1 Complaint at 6. 2 Complaint at { 8. 3 Complaint at Jf 35-38. Ramayo $48,500.00. This agreement contains a non-disparagement provision in which Ramayo agreed as follows: Settlor Specifically covenants and agrees not to, directly or indirectly, make or cause to be made to anyone, any statement, publicly or privately, criticizing, defaming, or disparaging the Released Party or commenting in a negative fashion on the operations, products sold or business reputation of the Released Party, whether by oral, visual, electronic, written or other means of expression or communication, including, but not limited to, any website, social media, forum, chatroom, blog, news or media outlet or other method of expression, publication or communication. The Parties acknowledge and agree that this provision extends to statements, written, published or verbal, made to anyone, including but not limited to news media, competitors, vendors, employees (both past and present) of the Released Party. The Parties agree that this provision is a substantial and material covenant contained in this Agreement and that breach of this provision will cause substantial harm to them and may be properly enforced through equitable relief, including but not limited to, injunctive relief.4
6 Sterling attempted to register the internet domain name “www.sterlingpreiumselect.com” in May 2020. But Sterling was unable to register this domain name because Ramayo had already registered it. Ramayo acquired, registered, and used the www-.sterlingpreiumselect.com domain name under a fictitious registrant name, Domains by Proxy, LLC, an affiliate of GoDaddy. Ramayo listed the “www.sterlingpremiumselect.com” domain name for sale on GoDaddy for a purchase price of $99,999.00.°
7 Ramayo also “linked” his domain name, www.sterlingpreiumselect.com, to Sterling’s domain name, www.sterlingpremiumusedcars.com. With this link, anyone entering Ramayo’s domain name would be redirected to Sterling’s “Sterling Premium Select” website. However, anyone redirected from Ramayo’s domain name would see the vulgar title tag “f__k our Employees. Art LeBlanc.” This vulgar title tag was created by Ramayo to defame and damage Sterling and LeBlanc.°® 4 Complaint at J 38; Hearing Exhibit 2. > Complaint at J 12; Hearing Exhibit 5. ® Complaint at 7 13; Hearing Exhibit 6.
8 Ramayo’s actions with respect to the www.sterlingpremiumselect.com domain name occurred after he had entered into the Release and Compromise, and thus violated the agreement’s non-disparagement provision.
9 With respect to defamation damages, Sterling and LeBlanc presented the testimony of Dr. Jeffery T. Stewart. Dr. Stewart holds a Doctor of Philosophy in Business Administration- Marketing. He holds the Moody Company/BROSF Endowed Chair in Regional Development and is an Associate Professor in the Department of Marketing at the University of Louisiana at Lafayette. The Court finds that Dr. Stewart is qualified as an expert to opine on the damages incurred by Plaintiffs as a result of Defendant’s actions.’ 10. _Dr. Stewart analyzed Sterling’s internet presence and online social media reviews following Ramayo’s disparaging Facebook posts in January 2020 and his use of the www.sterlingselectpremium.com domain name to disparage Sterling and LeBlanc. Factoring in the number of customers impacted by these reviews and lost sales, Dr. Stewart opined that Sterling was damaged in the amount of $136,546.84 as a result of lost customers.®
11 Dr. Stewart opined that Ramayo’s Facebook posts and vulgar title tag created confusion in the marketplace and irreparable damage to Sterling’s relationship with its customers, employees, and the public. He opined that Ramayo’s actions weakened Sterling’s brand positioning.”
12 Dr. Stewart further opined on the cost to Sterling and LeBlanc to repair their reputations as a result of Ramayo’s conduct. Dr. Stewart opined that the cost to reverse the 7 Hearing Testimony of Dr. Stewart. 8 Td. Id. negative publicity generated through Ramayo’s Facebook posts, vulgar title tag, and other conduct totals $22,000.00."°
13 The Court finds that Dr. Stewart’s analysis and conclusions are thorough, credible, and persuasive.
14 The Court concludes that Plaintiffs are entitled to damages of $48,500.00 based on Ramayo’s violation of the Release and Compromise Agreement. This amount reflects the consideration period to Ramayo.
15 The well-pleaded allegations in the complaint established all of the essential elements of a defamation claim under Louisiana law. Specifically, Ramayo’s use of “www.sterlingpremiumselect.com” domain name and a vulgar title tag for internet traffic that were directed to Sterling’s website was defamatory per se with respect to Sterling and LeBlanc. Ramayo’s defamatory statements were intentionally published to third parties and injured Sterling’s and LeBlanc’s reputations. These statements were false and misleading, and Ramayo’s conduct was willful and malicious in publishing these defamatory statements.
16 The Court concludes that Sterling and Leblanc are entitled to damages of $158,546.84 for their Louisiana defamation claims.
17 The well-pleaded allegations of the complaint and the evidence presented during the December 7 hearing establish that Ramayo’s conduct with respect to his use of the “www.sterlingpremiumselect.com” domain name resulted in irreparable injury to Sterling and Leblanc, and that money damages are inadequate to fully compensate them for that injury. Considering the balance of harms to Plaintiffs and Ramayo, equity relief in this case is warranted
18 The Court, therefore, concludes that Plaintiffs are entitled to permanent injunctive relief as follows: a. requiring Ramayo to comply with the non-disparagement clause of the January 16, 2020 Release and Compromise Agreement; and b. requiring Ramayo, and all those acting in concert with him, to cease and desist in taking any action to create, obtain, register, or employ a URL or ICANN domain name involving or using Plaintiffs marks, trade names, or the logo or trademark of Sterling Automotive Group, Inc. or any and all variations thereof, including common misspellings. IV. CONCLUSION The reasons previously stated, the Court GRANTS Plaintiffs’ Motion for Default Judgment. A judgment will be entered contemporaneously herewith. THUS DONE in Chambers on this 18th day of December, 2020. UNITED STATES DI CT JUDGE