Delta obtains $22 million default judgment against operator of travel club scheme

Delta Air Lines v. John Wunder, John VanGinhoven et al. (N.D. Ga. May 29, 2015).  In its 84-page, 292-paragraph complaint, Delta alleged that John Wunder, John VanGinhoven and 37 other individual and corporate defendants had violated federal and state trademark and racketeering statutes by using Delta’s name and trademarks, without authorization, on “a massive number” of postcards and letters to carry out a fraudulent scheme to sell “travel club” memberships.  The complaint alleged that the defendants designed the mailings to create the impression that Delta had send them; they bear Delta’s logos and some even appear to have been signed by a high-ranking Delta officer (who in fact is fictitious).

According to the complaint, the mailings gleefully announce that the addressee has won two roundtrip Delta tickets for travel anywhere in the continental United States.  Those who call the listed number are screened by call-center operators; those callers who report a sufficient income are informed they must attend a nearby travel-related sales meeting in order to obtain their Delta tickets.  The meetings, which are typically held in hotel conference rooms, are high-pressure presentations during which the attendees are pushed to buy a travel club membership costing thousands of dollars.  The attendees are promised significant discounts on future travel expenses, but the memberships are in fact worthless.

After obtaining a preliminary injunction against Wunder, VanGinhoven and other defendants, Delta moved for a default judgment and permanent injunction against Wunder and his companies.  According to Delta, Wunder and his companies were involved in “nearly every phase” of the travel club scheme.  The court granted Delta’s motion, awarding it a judgment of over $22 million against Wunder and his companies.  The court’s award consisted of statutory damages under the Lanham Act for use of counterfeit marks, attorneys’ fees under the Lanham Act and the federal and Georgia RICO statutes, trebling of the Lanham Act damages and attorneys’ fees under the RICO statutes and, finally, punitive damages.  The court also entered a permanent injunction prohibiting Wunder and his companies from using the name “Delta” or any Delta trademarks in any printed materials and from representing they have any affiliation with Delta.

In the lawsuit, Delta describes VanGinhoven as an “unapologetic intellectual property pirate” and alleges that he and his company handle the printing and mailing aspects of the travel club scheme.  Delta alleges that, in 2011 and 2012, VanGinhoven and his company printed and mailed 5.5 million travel club promotional items that infringed Delta’s trademarks and that they have also printed and mailed similar promotional items infringing trademarks of Continental, American, Southwest, Orbitz, Travelocity and United.  Delta has moved for partial summary judgment and VanGinhoven has moved for summary judgment; briefing of the motions was completed in July 2015.

Update:  On December 15, 2015, the court issued a 49-page order ruling on Delta’s motion for partial summary judgment and VanGinhoven’s motion for summary judgment.  Among other things, the court (i) granted VanGinhoven’s motion as to Delta’s federal and Georgia RICO claims because Delta had failed to establish a “pattern of racketeering activity,” and (ii) granted Delta’s motion as to its trademark infringement (15 U.S.C. § 1114) and unfair competition (15 U.S.C. § 1125(a)) claims because Delta had established that VanGinhoven’s unauthorized use of its trademarks was likely to cause confusion.


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