Troutman Sanders LLP: Coach v. 356 Cybersquatters - Improper Joinder?

Troutman Sanders LLP: Coach v. 356 Cybersquatters - Improper Joinder?

By Robert Angle

In Coach, Inc., v. 1941 coachoutletstores.com, Civil Action No. 1:11cv309 (JCC/JFA) [enhanced version available to lexis.com subscribers], Coach, Inc., the well-known leather goods company, sought to enjoin 356 alleged cybersquatters - almost all of which registered domain names in Hong Kong or China - from using Coach's registered trademarks as part of the alleged cybersquatters' domain names.  The problem from Magistrate Judge Anderson's perspective, however, was that many of these 356 alleged cybersquatters were unrelated to each other, and therefore Coach could not meet the "transaction or occurrence" test for joinder under Fed. R. Civ. P. 20. Thus, when Coach filed a motion for entry of default judgment, Magistrate Judge Anderson issued Report and Recommendation on Nov. 25, 2011, that found joinder improper as to 345 alleged cybersquatters, and recommended severing those defendants from the action. 

As Magistrate Judge Anderson explained in a detailed, 28 page opinion:

Simply put, the evidence presented is insufficient to establish that Coach's claims against all of the defendant domain names are related, that they arise from the same transaction or occurrence, or that there is any joint action among all the defendant domain names that warrants relief under the ACPA in a single action.

Id. at 15. Magistrate Judge Anderson went on to recommend finding that the remaining 11 the defendant domain names violated the Anticybersquatting Consumer Protection Act (ACPA). A copy of Magistrate Judge Anderson's Report and Recommendation can be found here.

Coach quickly appealed the Report and Recommendation, and Senior District Judge James C. Cacheris just as quickly rejected Magistrate Judge Anderson's recommendation on misjoinder. On January 5, 2012, in a short, 5 paragraph Judgment and Order, Judge Cacheris found that the additional 345 defendant domain names had been properly joined, and thus modified Report and Recommendation to require that all 356 defendant domain names be transferred to Coach. While Judge Cacheris's decision (found here) certainly favors expediency in a world of increasing numerous foreign cyberquatters, his opinion offers no explanation for why he disagreed with Magistrate Judge Anderson, where he found commonality between the 356 defendant domain names, or whether he interpreted Rule 20 or the ACPA differently than Magistrate Judge Anderson. Only time will tell whether litigants can continue to include multiple, unrelated cybersquatters in a single action or must bring separate actions against each of them.

Copyright © 2012, Troutman Sanders LLP

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