Opinion
No. 05-CV-6470 CJS.
April 30, 2006
Thomas Delor, pro se, Clearwater, Florida, for the Plaintiff.
David W. Robinson, Esq., Harter, Secrest Emery LLP, Rochester, New York, for the Defendant.
DECISION AND ORDER
INTRODUCTION
This is a diversity action in which plaintiff alleges, inter alia, that defendants stole an internet website from him. Now before the Court is defendants' motion [#3][#7] to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure ("FRCP"). For the reasons that follow, the application is granted and this action is dismissed.
BACKGROUND
The following facts are taken from the complaint in this action, as well as the documents submitted by the parties in connection with the subject motion to dismiss. Plaintiff Thomas Delor ("plaintiff") claims to own the internet domain name "1800AsSeenOnTV.com" as well as a corresponding website. Plaintiff also alleges that he owns two U.S. trademarks relating to the website, as well as a toll-free telephone number, "1-800-AS-SEEN-ON-TV". In or about September 2000, plaintiff granted permission to a company known as Reliant Interactive Media Group Corp. ("Reliant") to license the website. Reliant subsequently executed a "Web Hosting Agreement" with defendant ONTV, Inc. ("ONTV"), which owned its own website entitled "AsSeenOnTV.com". Defendant Daniel Fasano ("Fasano") was the CEO of ONTV, and defendant Seen on TV, Inc. ("SOT") was a subsidiary of ONTV. Pursuant to the agreement with Reliant, ONTV was able to use plaintiff's website to sell its own products. In that regard, Reliant allowed ONTV to transfer plaintiff's website to ONTV's server, and gave Fasano administrative control of the website. Subsequently, plaintiff alleges, Fasano, without permission, altered plaintiff's website to look like ONTV's website, and added links directing visitors from plaintiff's website to ONTV's website. Plaintiff further alleges that Fasano "grabbed the domain names "1800asseenontv.ws" and "1800asseenontv.tv", which he contends are confusingly similar to his domain name. Finally, plaintiff contends that in January 2002, defendants stole the domain name 1800AsSeenOnTV.com, and corresponding website, when Fasano improperly registered the site, in his name, with a company named Intercosmos ("Intercosmos"), doing business as DirectNIC.com, an ICANN accredited domain name registrar.On or about February 24, 2003, plaintiff commenced a lawsuit ("Delor I") in the United States District Court for the Middle District of Florida against Fasano, ONTV, and Intercosmos. In Delor I, plaintiff alleged causes of action for, inter alia, trademark infringement (Trademark No. 2,574,578), unfair competition, unjust enrichment, and cybersquatting, based upon the allegations of fact set forth above. That is, in Delor I, plaintiff alleged that Fasano and ONTV stole the website "1800AsSeenOnTV.com" from him, and infringed his trademark. He also alleged that Intercosmos committed a breach of fiduciary duty by allowing Fasano to register the website in his name. The defendants filed a motion to dismiss the complaint, part of which the court converted to a motion for summary judgment. Subsequently, the court, the Honorable Steven D. Merryday, United States District Judge, presiding, dismissed the action against Fasano and Intercosmos for lack of personal jurisdiction, and granted summary judgment to ONTV. Notably, the claims upon which ONTV was granted judgment were for trademark violations, as well as for unjust enrichment and misappropriation relative to the "1800AsSeenOnTV.com" website. Plaintiff did not appeal the court's ruling.
On or about August 2, 2004, plaintiff commenced a second lawsuit ("Delor II") in the United States District Court for the Middle District of Florida, against Fasano and ONTV, alleging essentially the same facts and causes of action as alleged in Delor I, although he was claiming infringement of a different trademark (Trademark No. 2,764,392). The court, the Honorable James S. Moody, Jr., United States District Judge, presiding, dismissed Delor II as against Fasono for lack of personal jurisdiction, and as against ONTV on the basis of res judicata. With regard to the court's res judicata ruling, while plaintiff contended that he his claim concerning Trademark No. 2,764,392 was new, Judge Moody specifically found that plaintiff had raised claims regarding both Trademark No. 2,574,578 and Trademark No. 2,764,392 in Delor I. Plaintiff again did not appeal.
On or about November 24, 2004, plaintiff commenced a third lawsuit ("Delor III"), in the United States District Court for the Eastern District of Louisiana against Intercosmos, alleging essentially the same claims as in Delor I and Delor II. Intercosmos then filed a third-party complaint against Fasano and ONTV. Intercosmos moved to dismiss the complaint, stating that plaintiff did not actually own the "1800AsSeenOnTV.com" domain name, but rather, that it was owned by a corporation, Delor Associates, Inc. ("DAI"). The court, the Honorable Carl J. Barbier, United States District Judge, presiding, converted the motion to one for summary judgment, and by Decision and Order filed on November 18, 2005, granted summary judgment for Intercosmos, dismissing plaintiff's claims with prejudice. Delor v. Intercosmos Media Group, Inc., 232 F.R.D. 562, 2005 WL 3542896 (E.D. La. 2005). In that regard, the court stated:
The Court has examined the documents and reviewed the deposition testimony and has concluded that in fact, DAI was the owner of the domain name at the relevant time, and thus Thomas Delor is not a proper party to bring this suit. In addition, because the confusion surrounding the ownership of the domain name was caused by Delor's untruthfulness to both opposing counsel and the Court, this matter should be dismissed with prejudice.Id. at 564. Apparently, plaintiff has appealed this determination to the United States Court of Appeals for the Fifth Circuit.
Plaintiff commenced the subject action ("Delor IV") on September 9, 2005, against Fasano, ONTV, and SOT, alleging five causes of action: 1) theft; 2) fraud; 3) unjust enrichment; 4) cybersquatting; and 5) unfair competition. The theft, fraud, and unjust enrichment claims all allege the theft of the "1800AsSeenOnTV.com" domain name and website by all three defendants. The cybersquatting and unfair competition causes of action, which are asserted against Fasano and SOT, refer to Trademark "No. 2,764,352" [sic]. All of these claims are based upon the same factual allegations as in the three prior actions. Defendants filed the subject motion to dismiss, alleging that the judgments in Delor I and Delor II are dispositive of plaintiff's claims here, on the basis of res judicata. In that regard, defendants contend that Fasano and SOT are both "in privity" with ONTV, and that the judgments in favor of ONTV therefore bar any further litigation against them concerning the matters litigated in Delor I and Delor II. Defendants further contend that plaintiff's first three causes of action, pertaining to his alleged ownership of the website, must be dismissed pursuant to the doctrine of collateral estoppel, since the Louisiana District Court determined that plaintiff does not own the domain name.
As discussed above, plaintiff's earlier lawsuits referenced a Trademark "No. 2,764,392". It appears that there is a typographical error in those cases or in this one.
Opposing the motion, plaintiff alleges, first, that the judgment in Delor I pertained only to Trademark No. 2,574,578 and not Trademark No. 2,764,392. As for the ruling in Delor II, while plaintiff tacitly acknowledges that the judgment pertained to both trademarks, he contends that he should not be barred by the judgment, because he lacked the funds to appeal. As for the ruling in Delor III, he contends that the judgment is not final, because he has appealed. Finally, he contends that res judicata and collateral estoppel do not apply in this action, because it is based upon "new facts and causes of action . . . that were unknown to be litigated in prior actions."
ANALYSIS
It is well settled that in determining a motion under Fed.R.Civ.P. 12(b)(6), a district court must accept the allegations contained in the complaint as true and draw all reasonable inferences in favor of the nonmoving party. Burnette v. Carothers, 192 F.3d 52, 56 (1999), cert. denied, 531 U.S. 1052 (2000). While the Court must accept as true a plaintiff's factual allegations, "[c]onclusory allegations of the legal status of the defendants' acts need not be accepted as true for the purposes of ruling on a motion to dismiss." Hirsch v. Arthur Andersen Co., 72 F.3d 1085, 1092 (2d Cir. 1995) ( citing In re American Express Co. Shareholder Litig., 39 F.3d 395, 400-01 n. 3 (2d Cir. 1994)). The Court "may dismiss the complaint only if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (internal quotations omitted) ( citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).
Motions to dismiss based upon res judicata and collateral estoppel are properly brought under FRCP 12(b)(6). See, Sassower v. Abrams, 833 F.Supp. 253, 264 n. 18 (S.D.N.Y. 1993) ("The Court notes it is well settled that a court may dismiss a claim on res judicata or collateral estoppel grounds on a Rule 12(b)(6) motion.") (citations omitted). The doctrine of res judicata, or claim preclusion, is firmly established: "Under the doctrine of res judicata, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action." Saud v. Bank of New York, 929 F.2d 916, 918-19 (2d Cir. 1991) (internal quotations omitted). In deciding whether a claim is one that was or could have been raised in a previous action, "it does not matter that [the newly asserted] claim was not expressly asserted in the [previous action]", since "it is the facts surrounding the transaction or occurrence which operate to constitute the cause of action, not the legal theory upon which a litigant relies." Id. at 919. In this regard, "[w]hether or not the first judgment will have preclusive effect depends in part on whether the same transaction or connected series of transactions is at issue, whether the same evidence is needed to support both claims, and whether the facts essential to the second were present in the first." Id. Thus, "it is the factual predicate of the several claims asserted that determines whether res judicata will apply, not a litigant's ability to devise a new legal theory." Id. at 920 (internal quotation marks omitted). Moreover, "[a]s a general rule, newly discovered evidence does not preclude the application of res judicata", except when "the evidence was either fraudulently concealed or when it could not have been discovered with due diligence." Id. (citation omitted).
Similarly, pursuant to the related, but distinct, doctrine of collateral estoppel, or issue preclusion,
a judgment in a prior proceeding bars a party and its privies from relitigating an issue if, but only if: (1) the issues in both proceedings are identical, (2) the issue in the prior proceeding was actually litigated and actually decided, (3) there was full and fair opportunity to litigate in the prior proceeding, and (4) the issue previously litigated was necessary to support a valid and final judgment on the merits. If the issues were not identical, there is no collateral estoppel. Nor is litigation of an issue barred by collateral estoppel if that issue was not actually decided in the prior proceeding or if its decision was not necessary to the judgment.N.L.R.B. v. Thalbo Corp., 171 F.3d 102, 109 (2d Cir. 1999) (citations and internal quotation marks omitted).
Applying the foregoing principles of law to the facts of this case, the Court finds that plaintiff is collaterally estopped from attempting to prove that he owns the domain name "1800AsSeenOnTV.com". While plaintiff maintains that the judgment in Delor III is not final, the Court disagrees, and finds that the judgment by the District Court for the Eastern District of Louisiana is final, notwithstanding plaintiff's appeal. Chariot Plastics, Inc. v. U.S., 28 F.Supp.2d 874, 881 (S.D.N.Y. 1998) ("Further, res judicata and collateral estoppel apply once final judgment is entered in a case, even while an appeal from that judgment is pending.") ( citing Petrella v. Siegel, 843 F.2d 87, 90 (2d Cir. 1988)). In the event that plaintiff's appeal is successful, he will be able to pursue his claims concerning the website in the Louisiana District Court.
Moreover, the Court agrees with defendants that res judicata bars all of his claims in any event. Specifically, despite plaintiff's contention that the instant claims are new, the Court finds that they are based on the same facts as alleged in Delor I and Delor II, and that they either were raised, or could have been raised, in those actions against ONTV. Moreover, Fasano and SOT are in privity with ONTV, in whose favor judgments were rendered in those cases. In re Teltronics Services, Inc., 762 F.2d 185, 191 (2d Cir. 1985) ("A judgment against a corporation bars later litigation on the same cause of action by an officer, director, or shareholder of the corporation if the individual participated in and effectively controlled the earlier case."); see also, Lufti v. Dow Jones, No. 95 Civ. 8775 (RPP), 1996 WL 343065 at *2 (S.D.N.Y. Jun. 20, 1996) ("A corporate parent is deemed to be in "privity" with its subsidiary when it sufficiently represents that subsidiary's interests."), aff'd 107 F.3d 3 (2d Cir. 1997); JSC Securities, Inc. v. Gebbia, 4 F.Supp.2d 243, 251 (S.D.N.Y. 1998) ("Likewise, as the wholly-owned subsidiary of JJSG, SSC is also in privity with its parent JJSG."); Central Hudson Gas Elec. Corp. v. Empresa Naviera Santa S.A., 56 F.3d 359, 367-68 (2d Cir. 1995) ("In its modern form, the principle of privity bars relitigation of the same cause of action against a new defendant known by a plaintiff at the time of the first suit where the new defendant has a sufficiently close relationship to the original defendant to justify preclusion.") To the extent that plaintiff believes that the Florida District Courts' decisions in Delor I and/or Delor II were incorrect, particularly insofar as the decision in Delor II granted judgment against him concerning Trademark No. 2,764,392, he should have appealed from them. Since he did not do so, the Court agrees with defendants that the instant case is barred by res judicata.
CONCLUSION
Defendants' motion to dismiss [#3][#7] is granted, and this action is dismissed with prejudice.
SO ORDERED.