Court Opinion

ID: 4148479
Source: CourtListenerOpinion
Date Created: 2017-02-27 15:01:09.681831+00
Date Added: 2024-06-11T07:46:28.631168
License: Public Domain

Case: 16-12717   Date Filed: 02/27/2017   Page: 1 of 13

                                                         [DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                       ________________________

                             No. 16-12717
                         Non-Argument Calendar
                       ________________________

                D.C. Docket No. 3:15-cv-00381-HLA-MCR

ROYAL CARIBBEAN CRUISES LTD.,

                                                               Plaintiff-Appellee,

                                  versus

ROYALCARIBEAN.COM,
ROYALCARRIBEAN.COM,
CRUISE TRAFFIC, INC.,

                                                        Defendants-Appellants.
                      __________________ ______

                Appeal from the United States District Court
                    for the Middle District of Florida
                      ________________________

                            (February 27, 2017)

Before MARCUS, MARTIN, and ANDERSON, Circuit Judges.

PER CURIAM:

     Intervenor-Appellant Cruise Traffic, Inc. (“Cruise Traffic”) and the

Defendants-Appellants, consisting of the domains royalcaribean.com and
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 royalcarribean.com (“the Domain Names,” collectively with Cruise Traffic,

 “Appellants”), appeal from the district court’s order denying Cruise Traffic’s

 motion to set aside the clerk’s entry of defaults and granting Plaintiff-Appellee

 Royal Caribbean Cruises Ltd. (“Royal Caribbean”) a default judgment against

 the Domain Names. In this in rem action, brought under the Anticybersquatting

 Consumer Protection Act, 15 U.S.C. § 1125(d) (“ACPA”), Royal Caribbean

 alleged that the Domain Names had been registered and used to wrongfully profit

 from the good will and reputation of Royal Caribbean.                          On appeal, the

 Appellants assert that the district court lacked in rem jurisdiction under the

 ACPA to adjudicate the dispute, and the district court abused its discretion in not

 setting aside the defaults.1 After careful review, we affirm.

                                                A.

           The relevant background is this. Jai George, as owner of Cruise Traffic,

 purchased the Domain Names with Royal Caribbean’s approval in 1999. He was

 an authorized cruise agent for Royal Caribbean for five years, using the Domain

 Names with Royal Caribbean’s knowledge and consent. George and his various

       1
         In the notice of appeal, the Appellants indicate that they also intend to appeal the district
court’s orders denying their two motions for post-judgment relief. However, the Appellants do
not raise any arguments about those orders in their briefs, and, thus, have abandoned any
challenge to them. N. Am. Med. Corp. v. Axiom Worldwide Inc., 522 F.3d 1211, 1217 n.4 (11th
Cir. 2008) (“This circuit has consistently held that issues not raised on appeal are abandoned.”).
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companies, including Cruise Traffic, only used the Domain Names to promote

and sell cruises for Royal Caribbean, while receiving a fee or commission.

      When the relationship between George and Royal Caribbean terminated in

2005, the registrant for the Domain Names was switched to Bindu Joseph,

George’s sister-in-law, with a registrant address of Joseph’s address in India.

Joseph has lived in North Carolina since at least 2010 and uses the name Mary

Joseph George in the United States. After Royal Caribbean ended its relationship

with George and revoked his authorization to sell cruises on its behalf, George,

through his companies, used third-party authorized agents to continue to sell and

profit from the sale of Royal Caribbean cruises. Royal Caribbean contacted

Cruise Traffic in November 2012, asking that it cease using the Domain Names

and transfer the Domain Names to Royal Caribbean. Cruise Traffic’s counsel

responded in December 2012, acknowledging ownership of the Domain Names

and denying any wrongdoing. After this action was filed, the registrant address

for the Domain Names was changed to a North Carolina address.

      In March 2015, Royal Caribbean filed a complaint for in rem injunctive

relief against the Domain Names, pursuant to the ACPA, alleging bad faith

registration and use of the Domain Names. Royal Caribbean asserted its belief

that the district court lacked personal jurisdiction over Joseph, the Domain

Names’ registrant who purportedly lived in India, and that no other person would

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be a proper defendant in this civil action, making in rem jurisdiction appropriate.

The district court granted Royal Caribbean’s motion for leave to effect service of

process by email and overnight mail on Joseph and by publication.           Royal

Caribbean provided evidence that the notice mailed to Joseph’s listed address in

India was not delivered because the address was incorrect. When a timely

response was not filed, the clerk entered defaults against the Domain Names.

Royal Caribbean then moved for a default judgment against the Domain Names.

      The next day, Cruise Traffic moved to set aside the entries of default,

claiming it was the real party in interest as the owner of the Domain Names, and

Royal Caribbean had known this for over a decade. Based on Royal Caribbean’s

knowledge, Cruise Traffic argued that the court lacked jurisdiction to proceed in

rem under the ACPA. Cruise Traffic separately responded to Royal Caribbean’s

motion for a default judgment and moved to intervene. After holding a hearing,

the district court granted Cruise Traffic’s motion to intervene in part, but denied

its motion to set aside the defaults and granted Royal Caribbean’s motion for a

default judgment. The court also directed the network administrator to transfer

the Domain Names to Royal Caribbean within seven days of the order.

      The court determined that it had in rem jurisdiction because the Domain

Names’ registrant was a proper ACPA defendant, and Royal Caribbean showed

that the court was unable to obtain personal jurisdiction over the registrant. To

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the extent Cruise Traffic argued that Royal Caribbean could obtain jurisdiction

over Joseph because she actually resided in the United States, the court found

that Joseph, in a bad faith attempt to avoid litigation, willfully represented that

personal jurisdiction over her could not be had by listing an address in India as

her contact information and failing to accurately update the registration for years.

The court found no evidence that Royal Caribbean should have known that

Cruise Traffic or another entity was still utilizing the Domain Names.

      The court allowed intervention for the sole purpose of responding to the

motion for a default judgment. As for Cruise Traffic’s motion to set aside the

defaults, the district court determined that the defaults were “culpable, due to bad

faith and therefore willful.” The court found that the record established that

Cruise Traffic, George, and Joseph had not demonstrated the “clean hands”

required to assert the equitable defenses on which they relied. Additionally,

Royal Caribbean would be prejudiced if it were to set aside the defaults, as the

Domain Names continued to divert customers from Royal Caribbean, causing

loss of income. Finally, as for the motion for default judgment, the court

determined that Royal Caribbean had shown that default judgment was proper.

      The Appellants moved for reconsideration of the district court’s order, and

a stay pending appeal, both of which the district court denied. The Appellants

also separately moved for relief from the judgment, asserting, for the first time,

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that Cruise Traffic and George were the registrant’s “licensees” or the de facto

registrants of the Domain Names. The district court denied the motion,

concluding that this relief was not warranted because the Appellants failed to

present any information or arguments not available prior to the entry of the

underlying judgment. The appellants then filed this timely appeal.

                                        B.

      First, the district court did not err in determining that it had in rem

jurisdiction over this action. We review jurisdictional issues de novo, United

States v. Lopez, 562 F.3d 1309, 1311 (11th Cir. 2009), with the burden of

establishing jurisdiction on the party bringing the claim, Sweet Pea Marine, Ltd. v.

APJ Marine, Inc., 411 F.3d 1242, 1247 (11th Cir. 2005).

       The ACPA provides that a person “shall be liable in a civil action by the

owner of a mark” if he “has a bad faith intent to profit from that mark” and

“registers, traffics in, or uses a domain name” that is identical or confusingly

similar to the protected mark. 15 U.S.C. § 1125(d)(1)(A). As to use of a domain

name, “[a] person shall be liable . . . only if that person is the domain name

registrant or that registrant’s authorized licensee.” Id. § 1125(d)(1)(D). Section

(d)(2) allows the owner of a mark to file an in rem civil action against a domain

name if the domain name violates the owner’s protected mark, and the court

finds that the owner is (1) unable “to obtain in personam jurisdiction over a

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person who would have been a defendant in a civil action under

[§ 1125(d)(1)],” or (2) through diligence, was not able to find such a person. See

id. § 1125(d)(2)(A). Diligence requires the mark’s owner to attempt to find “a

person who would have been a defendant” in an ACPA action by (1) sending

notice of the violation and intent to proceed under the ACPA to the domain

name’s registrant at the postal and email address provided to the domain name

registrar, and (2) publishing notice of the action after the action is filed. Id. §

1125(d)(2)(A). The ACPA’s legislative history confirms that this is all that is

required to exercise diligence. 145 Cong. Rec. S14696-03, 14714 (Nov. 17,

1999) (“Under the bill, a mark owner will be deemed to have exercised due

diligence in trying to find a defendant if the mark owner sends notice of the

alleged violation and intent to proceed to the domain name registrant at the postal

and email address provided by the registrant to the registrar and publishes notice

of the action as the court may direct promptly after filing the action.”).

     The Appellants argue that in rem jurisdiction is improper where a district

court can obtain personal jurisdiction over a person who, in bad faith, registers,

uses or traffics in a domain name. They say that Cruise Traffic and George

qualified as persons who used the Domain Names, since Cruise Traffic and

George were known to Royal Caribbean to use and control the Domain Names.

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      But the plain language of the ACPA provides that, to be liable for use of a

domain name, the person must be the “registrant or that registrant’s authorized

licensee.” See 15 U.S.C. § 1125(d)(1)(D); see also Bird v. Parsons, 289 F.3d 865,

881 (6th Cir. 2002) (“The only defendant that registered a domain name is

Parsons, and liability for using a domain name can only exist for the registrant or

that person’s authorized licensee. 15 U.S.C. § 1125(d)(1)(D).”) (emphasis in

original). Here, it is undisputed that Joseph was the domain name registrant at

the relevant time. Therefore, any use or control of the Domain Names by Cruise

Traffic or George, by itself, did not transform them into persons “who would

have been . . . defendant[s]” under § 1125(d)(2)(A) in an ACPA “use” action.

      While the plain language of § 1125(d)(1)(D) provides that it only applies to

ACPA use claims, George and Cruise Traffic would not have been defendants for

registering the Domain Names either. It is undisputed that the Domain Names

were re-registered in Joseph’s name, and we’ve held that “[t]he plain meaning of

register includes a re-registration.” Jysk Bed’N Linen v. Dutta-Roy, 810 F.3d
767, 778 (11th Cir. 2015) (emphasis in original). The Appellants maintain that

George initially registered the Domain Names with Royal Caribbean’s approval.

Thus, George and his companies would not have been proper defendants for an

ACPA registration claim because the Domain Names were not initially registered

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in bad faith. Finally, Royal Caribbean did not claim, and the Appellants do not

argue, that George or Cruise Traffic trafficked in the Domain Names.

       As for the Appellants’ argument that Royal Caribbean did not exercise due

diligence in its attempt to locate a suitable defendant, as required by the statute,

we are unpersuaded. Indeed, Royal Caribbean did all that it was required by

statute when it sent notice to Joseph via mail and email and published notice.

See 15 U.S.C. § 1125(d); see also 145 Cong. Rec. S14696, 14714.

       We also reject the Appellants’ argument that Cruise Traffic qualified as a

registrant or authorized licensee, under § 1125(d)(1)(D), because those terms

encompass developers, launchers, and de facto registrants. As the record reveals,

the Appellants did not argue before the district court that Cruise Traffic was a de

facto registrant or authorized licensee until they filed a motion for relief from

judgment, pursuant to Fed. R. Civ. P. 59(e) and 60(b), even though they had the

opportunity to do so prior to the default judgment.

      We’ve consistently held that issues not raised in the district court will not be

considered on appeal. Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1331

(11th Cir. 2004). “The reason for this prohibition is plain: as a court of appeals,

we review claims of judicial error in the trial courts. If we were to regularly

address questions . . . that districts court never had a chance to examine, we would

not only waste our resources, but also deviate from the essential nature, purpose,

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and competence of an appellate court.” Id. Nevertheless, we may address an issue

newly raised on appeal if: (1) the issue involves a pure question of law, and refusal

to consider it would result in a miscarriage of justice; (2) the party had no

opportunity to raise the issue in district court; (3) the interest of substantial justice

is at stake; (4) the proper resolution is beyond any doubt; or (5) the issue presents

significant questions of general impact or of great public concern. Id. at 1332.

       Here, the district court did not have an opportunity to examine whether

 Cruise Traffic was a de facto registrant or authorized licensee -- this argument

 was raised for the first time in a motion filed pursuant to Rules 59(e) and 60(b),

 which cannot be used to “raise argument or present evidence that could have

 been raised prior to the entry of judgment.” Wilchombe v. TeeVee Toons, Inc.,

 555 F.3d 949, 957 (11th Cir. 2009). Furthermore, the Appellants have not

 argued that any of the Access Now exceptions apply. Instead, the Appellants say

 that, while they did not use the term “authorized licensee” in district court, they

 asserted that Cruise Traffic used and was the owner of the Domain Names,

 submitted evidence that Cruise Traffic was the user of the Domain Names, and

 described its arrangement with the registrant. But “[a] mere recitation of the

 underlying facts . . . is insufficient to preserve an argument; the argument itself

 must have been made below.” Ledford v. Peeples, 657 F.3d 1222, 1258 (11th

 Cir. 2011). We, therefore, will not consider the Appellants’ argument on appeal

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that Cruise Traffic was Joseph’s authorized licensee or a de facto registrant. For

all of these reasons, we reject the Appellants’ argument that the district court

lacked in rem jurisdiction over this action.

      We also find no merit to the Appellants’ claim that the district court

abused its discretion by denying Cruise Traffic’s motion to set aside the defaults.

A district court may set aside an entry of default “[f]or good cause.” Fed. R. Civ.

P. 55(c). In determining what constitutes “good cause,” courts consider, among

other things, factors such as whether the default was willful, whether the

defaulting party would have a meritorious defense, and whether setting aside the

default would result in prejudice to the non-defaulting party. See Compania

Interamericana Export–Import, S.A. v. Compania Dominicana de Aviacion, 88
F.3d 948, 951 (11th Cir.1996). We review the district court’s denial of a motion

to set aside default for abuse of discretion. In re Worldwide Web Sys., Inc., 328
F.3d 1291, 1295 (11th Cir. 2003). Discretion means that the district court may

act within a “range of choice,” and we will not disturb its decision “as long as it

stays within that range and is not influenced by any mistake of law.” Betty K

Agencies, Ltd. v. M/V Monada, 432 F.3d 1333, 1337 (11th Cir. 2005).

      In denying Cruise Traffic’s motion to set aside the defaults, the district

court first determined that the defaults were willful and resulted from bad faith

conduct. As the record shows, George changed the registration of the Domain

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Names to his sister-in-law after Royal Caribbean terminated its relationship with

him. Royal Caribbean attempted to mail notice of the action to Joseph’s address

as it was listed in the domain names registrar, but the notice was not delivered

because the address was incorrect. Further, Joseph lived in North Carolina and

used the name Mary Joseph George in the United States as early as 2010, but the

registrant address was not changed to a North Carolina address until after Royal

Caribbean filed this action in 2015.

      The district court further determined that Cruise Traffic, George, and

Joseph lacked clean hands, and, thus, could not assert equitable defenses. The

Appellants do not argue that this conclusion was influenced by a mistake of law,

but only that it is not supported by the evidence. See Betty K Agencies, Ltd.,
432 F.3d at 1337. As we’ve detailed, however, the court’s conclusion about the

Appellants’ willful default and bad faith has ample support in the record.

      The district court also determined that Royal Caribbean would be

prejudiced by the continued use of the Domain Names. This determination was

supported by evidence that the Domain Names diverted customers attempting to

book cruises directly through Royal Caribbean to third-party agents, to whom

Royal Caribbean then paid a commission. In other words, Royal Caribbean

incurred additional expenses due to the use of the Domain Names. On this

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record, we cannot say that the district court abused its discretion by denying the

Appellants’ motion to set aside the entries of default.

     AFFIRMED.

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