Court Opinion

ID: 3164321
Source: CourtListenerOpinion
Date Created: 2015-12-21 18:00:26.808765+00
Date Added: 2024-06-11T12:01:49.221354
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 _____________

                                 Nos. 14-3922 & 14-3999
                                     _____________

    THE BOARD OF DIRECTORS OF SAPPHIRE BAY CONDOMINIMIUMS WEST,
                                    Appellant in 14-3999

                                             v.

                                GEORGE R. SIMPSON,
    Individually and D/B/A North American Alliance for Honest Corporate Management,
                                               Appellant in 14-3922
                                   ______________

                            On Appeal from the District Court
                                    of the Virgin Islands
                            (District Court No. 3-04-cv-00062)
                           District Judge: Hon. Juan R. Sanchez
                                      ______________

                   Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
                                    May 19, 2015
                                  ______________

           Before: McKEE, Chief Judge, SMITH and SCIRICA, Circuit Judges.

                           (Opinion filed: December 21, 2015 )

                               _______________________

                                       OPINION*
                                ______________________

*
 This disposition is not an opinion of the full court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
MCKEE, Chief Circuit Judge.

       Appellant-Cross Appellee George Simpson appeals the district court’s order

dismissing his claims for damages and attorney’s fees against Appellee-Cross Appellant

Board of Directors of Sapphire Bay Condominiums West. Sapphire Bay appeals the

district court’s order dismissing its claims under the Lanham Act, 15 U.S.C. § 1125(a)(1),

the Virgin Islands Similar Trade Name Prohibition Act, 11 V.I.C. § 1204, and its claims

that Simpson engaged in deceptive trade practices and is liable for common law torts.

For the reasons that follow, we will affirm the district court’s orders.1

                                              I.

       Because we write for the parties who are familiar with the lengthy factual and

procedural history of this ongoing saga, we provide only the limited background

necessary to our conclusions.2

       We review a district court’s findings of fact for clear error and exercise plenary

review over its conclusions of law.3 “Clear error exists when, giving all deference to the

opportunity of the trial judge to evaluate the credibility of witnesses and to weigh the

evidence, we are ‘left with a definite and firm conviction that a mistake has been

1
  The district court had jurisdiction pursuant to 28 U.S.C. § 1331 and 48 U.S.C. §
1612(a). We have jurisdiction under 15 U.S.C. § 1121(a) and 28 U.S.C. § 1291.
2
  The facts underlying this case can be found in prior decisions. See Feuerstein v.
Simpson, 582 F. App’x 93 (3d Cir. 2014) cert. denied, 135 S. Ct. 2860 (2015); Bd. of
Dirs. of Sapphire Bay Condos. W. v. Simpson, 129 F. App’x 711 (3d Cir. 2005); Bd. of
Dirs. of Sapphire Bay Condos. W. v. Simpson, No. CV 04-62, 2014 WL 4067175 (D.V.I.
Aug. 13, 2014).
3
  See Gordon v. Lewistown Hosp., 423 F.3d 184, 201 (3d Cir. 2005).

                                              2
committed.’”4

                                              II.

       Section 1125(a) of the Lanham Act creates two bases for liability: unfair

competition under Section 1125(a)(1)(A) and false advertising under Section

1125(a)(1)(B). To prove unfair competition, a plaintiff must demonstrate that: “(1) it has

a valid and legally protectable mark; (2) it owns the mark; and (3) the defendant’s use of

the mark to identify goods or services causes a likelihood of confusion.”5 To establish

false advertising under the Lanham Act, a plaintiff must show that the statement is either

“(1) literally false or (2) literally true or ambiguous, but has the tendency to deceive

consumers.”6 The district court analyzed Sapphire Bay’s claims under both subsections

because Sapphire Bay did not specify the section it was proceeding under.7

4
  A & H Sportswear, Inc. v. Victoria’s Secret Stores, Inc., 166 F.3d 191, 194 (3d Cir.
1999) (quoting Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573 (1985)).
5
  See A & H Sportswear, Inc. v. Victoria’s Secret Stores, Inc., 237 F.3d 198, 210 (3d Cir.
2000).
6
  Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharm. Co.,
290 F.3d 578, 586 (3d Cir. 2002).
7
  Bd. of Dirs. of Sapphire Bay Condos. W., 2014 WL 4067175, at *3. As a threshold
matter, the district court ruled that Simpson’s websites do not contain commercial speech
because at no point were any goods or services ever advertised on them, they never
referred to any specific product or service that Simpson provides, and there was no
evidence that Simpson’s speech was economically motivated. Id. at *3-4. In so ruling,
the district court acknowledged that it had found Simpson’s speech commercial in nature
prior to issuing the preliminary injunction against him. The court concluded that it was
not bound by this prior determination, however, because the very nature of a preliminary
injunction is such that the court’s review of the evidence was less formal and less
complete. Concluding Simpson’s speech was noncommercial in nature, the court then
held that his use of Sapphire Bay’s trademark in connection with his websites did not
violate the Lanham Act. The court relied on out-of-circuit precedent to reach this
conclusion. We need not resolve whether the speech was commercial because we agree

                                              3
                                  A. Unfair Competition

       The district court ruled that Sapphire Bay could not prove that any of Simpson’s

websites caused the likelihood of confusion required for a claim of unfair competition.8

We look to ten factors to analyze the likelihood of confusion:9

        (1) the degree of similarity between the owner’s mark and the alleged
        infringing mark;
        (2) the strength of the owner’s mark;
        (3) the price of the goods and other factors indicative of the care and
        attention expected of consumers when making a purchase;
        (4) the length of time the defendant has used the mark without evidence
        of actual confusion arising;
        (5) the intent of the defendant in adopting the mark;
        (6) the evidence of actual confusion;
        (7) whether the goods, competing or not competing, are marketed
        through the same channels of trade and advertised through the same
        media;
        (8) the extent to which the targets of the parties’ sales efforts are the
        same;
        (9) the relationship of the goods in the minds of consumers, whether
        because of the near-identity of the products, the similarity of function, or
        other factors;
        (10) other facts suggesting that the consuming public might expect the
        prior owner to manufacture both products, or expect the prior owner to
        manufacture a product in the defendant’s market, or expect that the prior
        owner is likely to expand into the defendant’s market.10

As we have explained, “[n]one of these factors is determinative in the likelihood of

confusion analysis and each factor must be weighed and balanced one against the

with the district court that, even if Simpson’s websites were commercial, Sapphire Bay
still cannot establish any of its claims under the Lanham Act.
8
  Id. at *7.
9
  Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 463 (3d Cir. 1983).
10
   Kos Pharms., Inc. v. Andrx Corp., 369 F.3d 700, 709 (3d Cir. 2004) (quoting A & H
Sportswear, Inc. v. Victoria’s Secret Stores, Inc., 237 F.3d 198, 211 (3d Cir. 2000)).

                                             4
other.”11 Furthermore, “[t]he single most important factor in determining likelihood of

confusion is mark similarity.”12

       Considering the meticulousness with which the district court reviewed and

balanced each of the relevant factors, we have no difficulty concluding it ruled correctly

that Sapphire Bay did not establish a likelihood of confusion. We therefore affirm the

district court’s ruling on this part of Sapphire Bay’s Lanham Act claim substantially for

the reasons set forth by the district court.13

                                     B. False Advertising

       The district court also concluded that Sapphire Bay’s false advertising claim failed

because it did not satisfy either of the Lanham Act’s grounds for liability, literal falsity or

a tendency to deceive consumers.14 The district court first concluded that, considering

the full context of the disputed statements, those statements could be deemed at least

ambiguous, if not literally true.15 The district court also concluded that Sapphire Bay did

not establish that the statements were actually deceptive.16

11
   Checkpoint Sys., Inc. v. Check Point Software Techs., Inc., 269 F.3d 270, 280 (3d Cir.
2001).
12
   See A & H Sportswear, Inc. v. Victoria’s Secret Stores, Inc., 237 F.3d 198, 216 (3d Cir.
2000).
13
   Bd. of Dirs. of Sapphire Bay Condos. W., 2014 WL 4067175, at *5-7.
14
   Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharm. Co.,
290 F.3d 578, 586 (3d Cir. 2002).
15
   Bd. of Dirs. of Sapphire Bay Condos. W., 2014 WL 4067175, at *8.
16
   Id.

                                                 5
       Context is key in determining literal falsity.17 Here, the websites contained false

statements in only a limited sense. Namely, the first website stated that it was Sapphire

Bay’s “official” website, even though Sapphire Bay was not involved in creating or

maintaining it. The rest of the contents of the first website, in contrast, contained either

ambiguous or true statements. “Unless the claim is unambiguous . . . it cannot be literally

false.”18 This is even clearer in the context of the second two websites, neither of which

contained the arguably deceptive text about Sapphire Bay ownership. Accordingly, the

record supports the district court’s conclusion that Sapphire Bay did not meet its burden

of proving that the statements were literally false or actually deceptive.19

                                             III.

       Sapphire Bay does not dispute that its claims under Virgin Islands law largely

parallel its Lanham Act claims, and we will therefore affirm the district court’s dismissal

of the claims under Virgin Islands law for the same reasons we affirm the court’s

disposition on the Lanham Act claims. We also note that the district court correctly

dismissed Sapphire Bay’s allegation of tortious interference because Sapphire Bay has

17
   See, e.g., Castrol Inc. v. Pennzoil Co., 987 F.2d 939, 946 (3d Cir. 1993) (“[I]n
assessing whether an advertisement is literally false, a court must analyze the message
conveyed in full context.”).
18
   Groupe SEB USA, Inc. v. Euro-Pro Operating LLC, 774 F.3d 192, 198 (3d Cir. 2014).
19
   The district court also concluded that Simpson’s actions did not violate the Lanham
Act’s anti-dilution requirements. This aspect of the district court’s decision is not at issue
on appeal so we do not address it.

                                              6
not provided any evidence of an actual or prospective contract with which Simpson

interfered,20 nor did Sapphire Bay establish the required financial injury. 21

                                             IV.

       Simpson’s claims for attorney’s fees and compensation are frivolous. In brief,

Simpson claims that he is entitled to attorney’s fees for his pro se representation. He also

contends he is entitled to compensation for the business opportunities he was forced to

forgo in order to defend himself against Sapphire Bay.

       Attorney’s fees are inappropriate because Simpson is not an attorney and

attorney’s fees are only properly awarded to attorneys. Section 541(b) of the Virgin

Islands Code provides for attorney’s fees for victorious parties, but its language limits

such awards to an “attorney” as distinguished from the “prevailing party.”22 Similarly,

appellate courts have interpreted 42 U.S.C. § 1988 as barring awards of attorney’s fees to

pro se parties.23 Simpson is not entitled to compensation for lost business opportunities

because he offered no evidence to support this claim.

       Finally, Simpson disputes the legitimacy of Sapphire Bay’s suit. He first alleges

that Sapphire Bay did not have a properly constituted board of directors and thus had no

standing to sue on Sapphire Bay’s behalf. He again does not bother to offer evidence in

20
   Bd. of Dirs. of Sapphire Bay Condos. W., 2014 WL 4067175, at *12.
21
   RESTATEMENT (SECOND) OF TORTS §§ 766-766B (1979).
22
   V.I. CODE ANN. tit. 5, § 541(b) (1997).
23
   See, e.g., Kay v. Ehrler, 499 U.S. 432, 435 (1991) (“The Circuits are in agreement . . .
on the proposition that a pro se litigant who is not a lawyer is not entitled to attorney’s
fees.”).

                                              7
this regard. In addition, there is evidence that Sapphire Bay was injured by the website,

and that gives representatives of Sapphire Bay standing to sue.

        Simpson’s second challenge to the suit—that the district court violated Rule 19 by

failing to join a necessary party—is also meritless. Simpson’s claim that North American

Alliance for Honest Corporate Management and Randolph Lindsey (who purportedly ran

North American Alliance for Honest Corporate Management) operated the websites is as

precarious as it is conclusory and we need not repeat why these ephemeral arguments

lack substance.24

                                              V.

        For the reasons set forth above, we will affirm the judgment of the district court in

its entirety.

24
  See Feuerstein v. Simpson, 582 F. App’x 93, 99 (3d Cir. 2014) cert. denied, 135 S. Ct.
2860 (2015) (“Simpson does not point to any evidence other than his own testimony that
Randolph Lindsey and/or the North American Alliance for Honest Corporate
Management are the true owners of the websites at issue, or that these entities even
exist.”).

                                              8