Marksman Security Corporation v. P.G. Security, Inc.

CourtDistrict Court, S.D. Florida
DecidedDecember 7, 2021
Docket0:19-cv-62467
StatusUnknown

This text of Marksman Security Corporation v. P.G. Security, Inc. (Marksman Security Corporation v. P.G. Security, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Marksman Security Corporation v. P.G. Security, Inc., (S.D. Fla. 2021).

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA FORT LAUDERDALE DIVISION

CASE NO. 19-62467-CIV-CANNON/Hunt

MARKSMAN SECURITY CORPORATION, a Florida for Profit Corporation,

Plaintiff, v.

P.G. SECURITY, INC., d/b/a Platinum Group Security, a Florida for Profit Corporation, and, CAMERON UNDERWOOD, individually,

Defendants. /

ORDER ADOPTING IN PART MAGISTRATE JUDGE’S REPORT AND RECOMMENDATIONS

THIS CAUSE comes before the Court upon Magistrate Judge Patrick M. Hunt’s Report and Recommendation (“Report”), filed on October 12, 2021 [ECF No. 200]. In the Report, Judge Hunt recommends denying Plaintiff’s Motion for Default Judgment on Counts 3, 5, and 7 as a Sanction for Defendants’ Spoilation of Evidence (“Motion for Default”) [ECF No. 136]. Judge Hunt also recommends that Plaintiff’s Motion for Summary Judgment on Counts 1, 2, 4, and 6 [ECF No. 159] be granted in part and denied in part, with an award of attorneys’ fees in favor of Plaintiff for Count 1 and no permanent injunction [ECF No. 200, p. 35]. On October 26, 2021, Defendants filed an Objection to the Report, accepting the Magistrate Judge’s recommendations on all issues but arguing that the Court should reserve ruling on whether Plaintiff is entitled to attorneys’ fees until after the trial has concluded [ECF No. 206, p. 4]. On October 26, 2021, Plaintiff filed its Objections to the Report, claiming three errors: error in an award of statutory damages instead of disgorging Defendants’ profits, error in declining to recommend the issuance of an adverse inference jury instruction, and error in declining to recommend the entry of a permanent injunction [ECF No. 208]. The parties subsequently filed responses to the Objections [ECF Nos. 214, 215, 216, and 217]. The Court has conducted a de novo review of the Report, the parties’ Objections and

responses, the full record in this case, and is otherwise fully advised in the premises. Upon review of the foregoing materials, the Court ADOPTS IN PART the Report. Plaintiff’s Motion for Default Judgment on Counts 3, 5, and 7 is DENIED [ECF No. 136]. Plaintiff’s Motion for Summary Judgment is GRANTED IN PART as to Count 1 and DENIED IN PART as to Counts 2, 4, and 6 [ECF No. 159]. DISCUSSION A. Plaintiff’s Motion for Default Judgment on Counts 3, 5, and 7 and Adverse Inference Jury Instruction1

In this trademark infringement case, Plaintiff, Marksman Security Corporation (“Plaintiff”), alleges that Defendants, P.G. Security, Inc. d/b/a Platinum Group Security and Cameron Underwood (“Defendants”), intentionally engaged in anticompetitive behavior to harm Plaintiff’s business and drive customers to Defendants [ECF No. 159, p. 3]. It is undisputed that, between March 2018 and December 2020, Defendants took the following actions: (1) Defendants registered six website domain names that were similar to Marksman’s website name and then redirected traffic from those domains to Defendants’ website; (2) Defendants’ Vice President, Rony Joseph, created a Gmail account based on the name of Plaintiff’s founder, Mark Radi; (3) Defendants used the Mark Radi Gmail account to register an Instagram account with the

1 Defendants did not object to the Magistrate Judge’s Report regarding Plaintiff’s Motion for Default Judgment [ECF No. 206]. username “Marksmansecurity”; and (4) Defendants hired Cameron Underwood to recruit and pay acquaintances to post positive online reviews about Defendants’ company [ECF No. 137 ¶¶ 6–14]. Although Plaintiff was able to obtain screenshots of Defendants’ online activity and postings, it became evident during discovery that the Instagram account, the Gmail account, and

several of Mr. Joseph’s text messages relating to posting fake online reviews were deactivated or deleted during the pendency of this litigation [ECF No. 136, p. 5]. There is no dispute that such evidence no longer exists. Accordingly, as a sanction for Defendants’ failure to preserve the electronically stored information (“ESI”), Plaintiff filed a Rule 37 motion urging the Court to enter a default judgment against Defendants on Count 3 (common law unfair competition), Count 5 (Violation of Florida’s Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201), and Count 7 (misleading advertising under Fla. Stat. § 817.41) in the Second Amended Complaint [ECF No. 136, p. 4]. Plaintiff also requests that the Court issue an adverse inference instruction informing the jury that the deleted ESI would have been unfavorable to Defendants [ECF No. 136, p. 23].

In the Report, Judge Hunt concludes that Defendants had a duty to preserve the ESI and failed to take reasonable steps to do so, but ultimately recommends that Plaintiff’s Motion for Default Judgment be denied because Plaintiff suffered minimal prejudice and Defendants did not delete the evidence in bad faith [ECF No. 200, pp. 8–14]. Specifically, on the prejudice prong, Judge Hunt finds that (1) Plaintiff suffered no prejudice for the loss of the Instagram account because screenshots of the account had been produced during discovery, giving Plaintiff information about the number of followers on the page and the number of accounts that the Instagram account itself had followed [ECF No. 200, pp. 9–10]; (2) Plaintiff likewise suffered no prejudice for the lost Gmail account because its sole purpose was to set up the Instagram account (not to message customers), and it was Google that ultimately deactivated the account due to inactivity [ECF No. 200, pp. 10–11]; and (3) Plaintiff suffered some prejudice due to the deletion of some of Mr. Joseph’s text messages,2 but the loss of that information caused only minimal prejudice, because Plaintiff has

ample evidence to prove Defendants’ intent, including Defendants’ admission of intent to redirect consumers away from Plaintiff toward Defendants [ECF No. 200, p. 11]. On the subject of potential sanctions, Judge Hunt finds that, although Defendants “may have spoliated evidence,” there is no “direct evidence of the ‘intent to deprive’” warranting sanctions [ECF No. 200, p. 12]. For example, Judge Hunts finds that (1) the Instagram account was deleted on the “arguably misunderstood advice of counsel” to “stop” operating the Instagram account [ECF No. 200, pp. 5-6]; (2) the Gmail account was lost because Google deactivated the account due to inactivity [ECF No. 200, p. 6]; and (3) Mr. Joseph’s text messages were deleted (although some were later recovered) because his iPhone was set to auto-delete text messages after 30 days, triggering deletion of the messages even prior to the start of litigation

[ECF No. 200, pp. 8–10, 13]. For these reasons, Judge Hunt determines that “Defendants’ spoilation of evidence, while negligent, does not equal the intent to deprive or bad faith,” rendering improper the sanction of default judgment against Defendants [ECF No. 200, pp. 13, 35]. Judge Hunt further recommends against an adverse inference jury instruction, advising instead to reserve any such instruction for trial should Defendants attempt improperly to use the absence of the ESI to their benefit [ECF No. 200, p. 14].

2 Some of Mr. Joseph’s text messages were recovered during discovery following a forensic search [ECF No. 200, p. 12]. Upon review, the Court finds that Judge Hunt’s recommendation to deny Plaintiff’s Motion to grant default judgment on Counts 3, 5, and 7 as a sanction—a finding as to which Plaintiff does not object—is well-reasoned and correct. The Eleventh Circuit has “long acknowledged the broad discretion of the district court to impose sanctions.” Flury v. Daimler Chrysler Corp., 427 F.3d

939, 944 (11th Cir. 2005).

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Marksman Security Corporation v. P.G. Security, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/marksman-security-corporation-v-pg-security-inc-flsd-2021.