United States District Court, W.D. Tennessee, Western Division
SPRINT SOLUTIONS, INC. and SPRINT COMMUNICATIONS COMPANY, L.P., Plaintiffs,
IRVIN BRYAN LAFAYETTE, EDDIE D. DANLEY, EMANUEL LAFAYETTE, MARCUS S. HALL, JOHN DOES 1-2, and JANE DOES 1-20, Defendants.
H. MAYS, JR. UNITED STATES DISTRICT COURT JUDGE
the Court is Plaintiffs Sprint Solutions, Inc. and Sprint
Communications Company L.P.'s (collectively,
“Plaintiffs” or “Sprint”) unopposed
September 12, 2017 Motion for Default Judgment and Permanent
Injunction Against Defendants Irvin Bryan Lafayette, Eddie D.
Danley, Emanuel Lamont Lafayette, and Marcus S. Hall
(collectively, “Defendants”) (“the
Motion”). (ECF No. 47.) Oral argument is unnecessary.
following reasons, the Motion is GRANTED in part and DENIED
sell wireless phones under the brands Sprint, Boost Mobile,
Virgin Mobile, payLo, and Assurance Wireless for use on
Sprint's wireless network. (Compl., ECF No. 1 ¶ 1.)
Plaintiff Sprint Communications Company, L.P. owns federal
trademark registrations for the stylized Sprint® marks,
which are depicted below:
OMITTED) (Id. ¶ 30.)
Sprint Solutions, Inc. has been assigned the right to use and
enforce the Sprint® marks. (Id.) Plaintiffs have
also been assigned the right to use and enforce the standard
character and stylized Virgin Mobile, payLo, Assurance
Wireless, and Boost Mobile trademarks, which are depicted
OMITTED) (Id. ¶ 31.)
sell their phones for substantially less than their
manufacture price. (Id. ¶ 22.) Plaintiffs earn
revenue from the sale of Sprint's wireless service, which
customers must use to transmit and receive calls, texts, and
data on Sprint phones. (Id.) Plaintiffs offer
reduced phone prices only if the phones are intended for use
on the Sprint wireless network. (Id. ¶ 26.) In
addition to subsidizing the phones, Plaintiffs offer
customers the option of leasing the phones or purchasing them
through installment payments. (Id. ¶ 23.) Those
subsidies and investment programs are not offered by
telecommunications carriers outside the United States.
(Id.) Manufacturers that produce wireless phones for
Plaintiffs install proprietary software to prevent the phones
from being used outside the Sprint network. (Id.
phones are also sold subject to certain terms and conditions,
which restrict the resale and use of the phones.
(Id. ¶ 24.) Those terms and conditions are set
out in printed inserts that are included with the purchase of
every Sprint phone. (Id.) Customers may manifest
their agreement to these terms and conditions by signing a
written contract, orally acknowledging their agreement over
the phone, clicking appropriate buttons on a website, or, in
the case of prepaid services, by purchasing a phone in a
package conspicuously indicating that the purchase or use
constitutes the customer's agreement. (Id.
recently discovered that, although large quantities of their
phones are purchased throughout the United States, a
significant number are not being used on the Sprint network.
(Id. ¶ 34.)
also recently discovered that Defendants acquired Sprint
phones directly or indirectly through co-conspirators by
illicit means, such as through unauthorized orders on
existing Sprint accounts and diverting Sprint phones from
their intended destinations. (Id.) Defendants then
sold the phones for a substantial profit and shipped them
directly overseas, where they can be used on other wireless
carriers' networks, or shipped to other domestic
traffickers, who add them to larger shipments headed
overseas. (Id.) Plaintiffs refer to this conduct as a
“Handset Theft and Trafficking Scheme.”
(Id. ¶ 1.)
of the alleged scheme, Defendants call Sprint customer care
and falsely identify themselves as Sprint employees who need
access to a particular Sprint account for a legitimate
purpose. (Id. ¶ 40.) If Defendants succeed in
acquiring account access, they place another call to Sprint
and represent themselves as the account holder or person
authorized to access the account, place orders, and make
changes. (Id. ¶ 41.) Defendants use this
unauthorized access to receive upgrades for new Sprint
phones, add lines of service, and place unauthorized orders
for new mobile devices. (Id.) Any cost is charged to
the legitimate customer's account, without the
customer's knowledge or consent. (Id.)
Defendants have the merchandise shipped to addresses in
Memphis, Tennessee, to which they have access, and then
resell the merchandise. (Id. ¶ 42.)
alleged scheme requires Defendants to call Sprint thousands
of times to change account information and to steal equipment
and services from Sprint and its customers. (Id.
March 2015 - August 2015, Sprint's investigators observed
Defendants and their co-conspirators obtain shipments and
subsequently advertise devices matching the shipment
descriptions. (See id. ¶¶ 45, 49, 50-52,
filed a complaint against Defendants on September 10, 2015.
(ECF No. 1.) The complaint asserts fourteen (14) counts: (1)
unfair competition, (2) tortious interference with existing
and prospective business relationships, (3) common law and
statutory inducement of breach of contract (Tenn. Code Ann.
§ 47-50-109), (4) conspiracy to defraud, (5) unjust
enrichment, (6) common law fraud and fraudulent
misrepresentation, (7) trafficking in computer passwords (18
U.S.C. § 1030(a)(6)), (8) unauthorized access (18 U.S.C.
§ 1030(a)(5)(C)), (9) unauthorized access with intent to
defraud (18 U.S.C. § 1030(a)(4)), (10) federal trademark
infringement (15 U.S.C. § 1114)), (11) federal common
law trademark infringement and false advertising (15 U.S.C.
§ 1125)), (12) contributory trademark infringement, (13)
conversion, and (14) unfair and deceptive acts and practices
(Tenn. Code Ann. §§ 47-18-101, et seq.).
The complaint seeks compensatory, consequential, statutory,
and special damages; attorneys' fees and costs, and
permanent injunctive relief.
have not responded to the complaint, and the deadline to do
so has passed. Fed.R.Civ.P. 12(a)(1)(A). Defendants have not
Sprint's motion, the clerk of court filed an entry of
default against Defendants Irvin Bryan Lafayette and Eddie D.
Danley on November 10, 2015. (ECF Nos. 24-27.) On
Sprint's motion, the clerk of court filed an entry of
default against Defendant Emanuel Lamont Lafayette on April
29, 2016. (ECF Nos. 36-37.) On Sprint's motion, the clerk
of court filed an entry of default against Defendant Marcus
S. Hall on June 9, 2016. (ECF Nos. 40-41.)
September 12, 2017, Sprint moved for default judgment. (ECF
No. 47.) Defendants have not filed a response to Sprint's
motion for default judgment, and the deadline to do so has
Jurisdiction & Choice of Law
court's default judgment is invalid unless it has
subject-matter and personal jurisdiction. See, e.g.,
Citizens Bank v. Parnes, 376 Fed.Appx. 496, 501 (6th
Cir. 2010) (citing Kroger Co. v. Malease Foods
Corp., 437 F.3d 506, 510 (6th Cir. 2006)).
Court has subject-matter jurisdiction over Sprint's
federal trademark infringement claims, 15 U.S.C. §§
1114 and 1125, and Computer Fraud and Abuse Act (CFAA)
claims, 18 U.S.C. § 1030. Under 28 U.S.C. §§
1331, United States district courts have original
jurisdiction “of all civil actions arising under the
Constitution, laws, or treaties of the United States.”
Sprint's federal trademark infringement claims and CFAA
claims arise under the laws of the United States.
Court has supplemental jurisdiction over Sprint's
state-law claims under 28 U.S.C. § 1367. Those claims
derive from a “common nucleus of operative fact”
with the federal-law claims. United Mine Workers of Am.
v. Gibbs, 383 U.S. 715, 725 (1966); Soehnlen v.
Fleet Owners Ins. Fund, 844 F.3d 576, 588 (6th Cir.
2016); see also 28 U.S.C. § 1367(a).
process requires proper service of process for a court to
have jurisdiction to adjudicate the rights of the
parties.” O.J. Distrib., Inc. v. Hornell Brewing
Co., 340 F.3d 345, 353 (6th Cir. 2003). Plaintiff bears
the burden of exercising due diligence to perfect service of
process and to show that proper service has been made.
See Byrd v. Stone, 94 F.3d 217, 219 (6th Cir. 1996).
judgment is improper where service has not been effected.
See, e.g., O.J. Distrib, 340 F.3d at 353
(“Due process requires proper service of process for a
court to have jurisdiction to adjudicate the rights of the
parties. Therefore, if service of process was not proper, the
court must set aside an entry of default.” (citation
issued for Defendants Irvin Bryan Lafayette, Emanuel
Lafayette, Eddie D. Danley, and Marcus S. Hall on September
10, 2015. (ECF Nos. 7-10.) The propriety of service must be
evaluated separately for each Defendant. See O.J.
Distrib., 340 F.3d at 353.
Defendants Eddie D. Danley and Irvin Bryan Lafayette
of service were filed as to Defendants Eddie D. Danley and
Irvin Bryan Lafayette on October 13, 2015. (ECF Nos. 11-12.)
Those affidavits demonstrate that service was made by
delivering a copy of the summons at each Defendant's
dwelling or usual place of abode with someone of suitable age
and discretion who resided there. (Id.) Service of
process was proper for Defendants Eddie D. Danley and Irvin
Defendant Emanuel Lafayette
summons was returned executed as to Defendant Emanuel
Lafayette on March 25, 2016. (ECF No. 33.) The proof of
service is blank. (Id. at 416.) The person who
signed the summons is Eneka Lafayette. (Id. at 417.)
have failed to satisfy their burden to establish proper
service on Defendant Emanuel Lafayette. Eneka Lafayette is
not a party to this action. It is unclear whether Eneke
Lafayette resided at Defendant Emanuel Lafayette's
dwelling or usual place of abode. Service of process is
improper under Federal Rule of Civil Procedure 4(e)(2). It is
also improper under Federal Rule of Civil Procedure 4(e)(1)
because it fails to satisfy Tennessee service laws.
Rule of Civil Procedure 4B “permits service on the
secretary of state as the defendant's agent for service
of process, whenever it is constitutionally permissible for
the courts of the state to exercise personal jurisdiction
over the defendant.” Thompson v. Ameriquest Mortg.
Co., No. W2011-00501-COA-R3CV, 2011 WL 6016892, at *1
(Tenn. Ct. App. Dec. 5, 2011) (quoting Robert Banks, Jr.
& June F. Entman, Tennessee Civil Procedure §
2-5(b), at 2-64 to -65 (3d ed. 2009)). Under Rule 4B, the
plaintiff must deliver the original and a copy of the
process, duly certified, to the Tennessee Secretary of State,
who then sends it by registered or certified return receipt
mail to the defendant. Tenn. R. Civ. P. 4B(2). Rule 4B
Acceptance of such registered or certified mail by any member
of the addressee's family, over the age of sixteen (16)
years and residing in the same dwelling with him, shall
constitute a sufficient delivery thereof to the addressee.
Tenn. R. Civ. P. 4B(5).
Lafayette is unidentified. Without more, service of process
was improper as to Defendant Emanuel Lafayette.
Plaintiff's Motion against him is DENIED.
Defendant Marcus S. Hall
original summons issued for Defendant Marcus S. Hall listed
Hall's address as: 2765 Pickering Drive, Apt.3, Memphis,
Tennessee 38115. (ECF No. 10.) A second summons issued for
Defendant Hall on February 16, 2016. (ECF No. 31-1.) That
summons listed the original Memphis address and added three
addresses in Georgia. (Id.)
April 4, 2016, Sprint filed what appears to be a Notice of
Service. (ECF No. 34.) It says that the Notice and summons
were sent to Defendant Hall at one of the three Georgia
addresses listed in the second summons. (Id.) The
Notice is addressed to Defendant Hall from the Tennessee
Secretary of State. (Id.) The filing also contains a
scanned copy of the second summons and a letter addressed to
Defendant Hall that has a stamp: “Return to Sender.
16, 2016, Sprint filed a “Summons Returned
Executed” as to Defendant Hall. (ECF No. 38.) The
filing has a copy of the second summons and an Affidavit and
Endorsement by an agent of the Tennessee Secretary of State.
(Id.) The Affidavit states that a notice of service
and summons were sent to Defendant Hall and addressed to a
second Georgia address: 370 Northside Drive NW, Atlanta, GA,
30318. (Id.) The certified mail was allegedly
returned undelivered, containing the notation: “Return
to Sender. Unclaimed.” (Id.) Sprint filed this
document twice. (See ECF No. 39.) The Affidavit does
not state whether the Notice was sent to a specific apartment
number. The second summons lists the second Georgia address
with two separate apartments: Apt. 2303 and Apt. 2242.
(Id. at 446.) It is unclear from the Affidavit
whether the Notice and summons was delivered to either of
those apartments. Sprint has not filed any notice or
affidavit as to the Memphis address listed on the second
attempts do not constitute proper service under Federal Rule
of Civil Procedure 4(e)(2) or Tennessee law. See
Fed. R. Civ. P. 4(e)(1).
Rule of Civil Procedure “4B(1), in effect, permits
service on the secretary of state as the defendant's
agent for service of process, whenever it is constitutionally
permissible for the courts of the state to exercise personal
jurisdiction over the defendant.” Thompson,
2011 WL 6016892, at *1 (quoting Tennessee Civil Procedure
§ 2-5(b), at 2-64 to - 65). Rule 4B(7) provides that, if
a plaintiff attempts to make service on the secretary of
state as the defendant's agent, and if the secretary of
state receives notice that its registered or certified mail
is undelivered, service may be complete if (1) the
undelivered mail, (2) affidavit, and (3) a copy of the notice
are part of the record. Tenn. R. Civ. P. 4B(7).
Sprint's filings addressing Defendant Hall satisfies Rule
4B(7). The April 2016 filing does not include an affidavit.
(See ECF No. 34.) The May 2016 filing does not state
to which apartment, if any, the summons and notice were sent,
and does not include the undelivered mail or a copy of the
notice. (See ECF No. 38-39.) Service of process was
improper as to Defendant Marcus S. Hall. Plaintiff's
Motion against him is DENIED.
Choice of Law
explicitly invoke Tennessee law. (See ECF No. 1;
see also ECF No. 47-1.) Defendants have not
challenged the application of Tennessee law. The Court will
apply Tennessee substantive law. See GBJ Corp. v. E. Ohio
Paving Co., 139 F.3d 1080, 1085 (6th Cir. 1998) (finding
courts need not analyze choice-of-law questions sua
Standard of Review
55(b)(2) of the Federal Rules of Civil Procedure governs
default judgments. See Fed.R.Civ.P. 55(b).
“When a party against whom a judgment for affirmative
relief is sought has failed to plead or otherwise defend, and
that failure is shown by affidavit or otherwise, the clerk
must enter the party's default.” Fed.R.Civ.P.
55(a). Once the Court Clerk enters default, all well-pleaded
allegations are deemed admitted, except those concerning
damages. See Antoine v. Atlas Turner, Inc., 66 F.3d
105, 110-11 (6th Cir. 1995).
damages, “[t]he allegations in the complaint . . . are
not deemed true. The district court must instead conduct an
inquiry in order to ascertain the amount of damages with
reasonable certainty.” Vesligaj v. Peterson,
331 Fed.Appx. 351, 355 (6th Cir. 2009) (quoting Credit
Lyonnais Sc. (USA), Inc. v. Alcantara, 183 F.3d 151, 155
(2d Cir. 1999)); see also Fed.R.Civ.P. 55(b)(2). A
court may reach a reasonable certainty on the correct amount
of damages from the record without conducting a hearing.
See Vesligaj, 331 Fed.Appx. at 355.
hearing under Rule 55(b)(2) is not necessary where there is
sufficient evidence in the record to make a determination as
to damages. See, e.g., id; Boards of
Trustees of Ohio Laborers' Fringe Benefit Programs v.
Akron Insulation & Supply, Inc., No. 2:15-CV-2864,
2017 WL 749202, at *3 (S.D. Ohio Feb. 27, 2017).