THE INTERCOLLEGIATE WOMEN'S LACROSSE COACHES ASSOCIATION v. CORRIGAN SPORTS ENTERPRISES, INC.

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

INTERCOLLEGIATE WOMEN'S )

LACROSSE COACHES ASSOCIATION, )

)

Plaintiff, )

)

v. ) 1:20cv425

)

CORRIGAN SPORTS ENTERPRISES, )

INC. and RICHARD LEE CORRIGAN )

JR., in his individual and )

official capacities, )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

This matter is before the court on the motion of Plaintiff

Intercollegiate Women’s Lacrosse Coaches Association (“IWLCA”) for

temporary restraining order (“TRO”) pursuant to Federal Rule of

Civil Procedure 65(b). (Doc. 18.) After notice to all parties,

this court held a hearing on the motion on July 6, 2020. Having

considered all matters of record and the arguments of counsel, the

court finds as follows at this preliminary stage:

1. IWLCA is a North Carolina non-profit corporation. (Doc.

15 ¶ 1.) Members of the IWLCA are coaches of NCAA college

women’s lacrosse programs across the country. (Id.) IWLCA

hosts tournaments for high school club lacrosse teams. (Id.)

Defendant Corrigan Sports Enterprises, Inc. (“CSE”) is a

Maryland corporation that hosts, manages, and runs sports

tournaments. (Id. ¶¶ 2, 13.) Defendant Richard Lee Corrigan,

Jr., the president of CSE, is a citizen and resident of Maryland.

(Id. ¶ 3.)

2. IWLCA traditionally hosts six lacrosse tournaments for

women’s high school club lacrosse teams: the Champions Cup,

New England Cup, Midwest Cup, Capital Cup, Presidents Cup, and

the Debut Tournament. (Id. ¶ 1a-1e.) College coaches (members

of the IWLCA) attend these tournaments to scout potential

players for their schools’ lacrosse teams. (Id. ¶ 1.) IWLCA

retains an event management firm to run the tournaments. (Id.

¶ 7.) IWLCA first created the “Champions Cup” in 2006 and hired

a management firm, USTC, to run the tournament thereafter. (Id.

¶ 7a.) IWLCA created more tournaments over the following years.

(Id. ¶ 7b-7f.)

3. IWLCA first hired CSE to run one of its tournaments in

2009 and continued to hire CSE to run its tournaments. (Id.

¶ 7c-7f.) In hiring a management firm, IWLCA would issue a

Request for Proposals (“RFP”), receive proposals from various

event management companies, select a company from the proposals,

and formulate a contract with that company to manage their

tournaments. (Id. ¶ 7.) For example, after IWLCA selected CSE

to host and manage the tournaments in 2013, 2014, and 2015, the

parties signed a contract. (Doc. 14-1 at 15-20.) The parties

signed an addendum extending the terms of the contract to

tournaments held in 2016. (Id. at 22-23.)

4. In 2017, IWLCA issued an RFP seeking proposals from

management companies to host IWLCA’s tournaments in 2018, 2019,

and 2020. (Doc. 15 ¶ 8; Doc. 15-1.) CSE submitted a proposal

(Doc. 15-2), which IWLCA accepted, pursuant to the terms laid

out in the RFP. (Doc. 15 ¶ 10.) The parties did not enter into

a separate formal contract as they had in past years; IWLCA

regarded the RFP and CSE proposal, as accepted, to be the

agreement that governed the parties for tournaments in 2017-20.

5. IWLCA’s RFP states that IWLCA “will retain the right to

determine and approve all aspects related to the competition

venue operations during the tournament.” (Doc. 15-1 at 7.)

Furthermore, the RFP states, under the heading “Payment of

Funds,” that “IWLCA shall receive a financial report within 90

days after the conclusion of the tournament. All money payable

to the IWLCA shall be paid within 120 days . . . pursuant to

the transfer instructions provided by the IWLCA.” (Id. at 8.)

CSE’s proposal, under the heading “Partnership,” states that

“CSE has created a financial model that will allow the IWLCA to

share in the profit of the IWLCA events. CSE will split the

‘net’ profit on a 50/50 basis with the IWLCA.” (Doc. 15-2 at

7.)

6. The Board of Directors of IWLCA voted in April 2020 to

cancel all IWLCA tournaments in 2020 because of the worldwide

COVID-19 pandemic that reached the United States. (Id. ¶ 42.)

IWLCA immediately notified CSE of its decision, and then

released a public statement to notify the lacrosse community

and 2020 tournament registrants of the cancellations. (Id.

¶¶ 43, 47-48; Doc. 15-13.) Because CSE directly managed the

registration and communications with teams, coaches, and players

who were participating in the tournaments, IWLCA had no direct

line of communication with the registrants to inform them of

the tournaments’ cancellations. (Id. ¶ 50.) Contrary to the

direction of IWLCA, however, Defendants informed registrants

that the 2020 tournaments would be held as scheduled and that

IWLCA had merely decided to “step away” from its “official

involvement” with the tournaments. (Id. ¶¶ 50, 51b.) In a

press release, CSE displayed and used the logos and names used

in past years with IWLCA’s tournaments. (Id. ¶ 51.) CSE began

referring to the tournaments with “CSE” in front of the

tournament names. For example, Defendants referred to

tournaments as the “CSE Champions Cup” and “CSE Midwest Cup.”

(Id. ¶ 51d.)

7. According to Lee Corrigan, CSE has scheduled the New

England and Midwest Cups to be held on July 25-26 of 2020. (Doc.

27-1 ¶ 41.) The Champions Cup is to be held on August 7-9; the

Capital Cup on August 13-16, and the Presidents Cup on November

20-22. (Id.) Although Corrigan does not say whether CSE will

be hosting the Debut tournament, IWLCA notes that the Debut

tournament has been held in conjunction with the Presidents Cup

since 2017. (Doc 19 at 6.)

8. In correspondence with women’s lacrosse club teams in

North Carolina after IWLCA directed the cancellation of the

tournaments, CSE sent e-mails containing the tournaments’ logos

and names, but with CSE as the sponsor. (Doc. 33-1.)

9. IWLCA directed CSE to issue refunds to the registrants

of the canceled tournaments, but CSE refused to do so. (Doc.

15 ¶¶ 54-56.) CSE states that it intends to hold the tournaments

as it is able this year and has informed registered teams that

the tournaments “will look and feel the exact same as they

always have.” (Doc. 19-1 at 16.) CSE has rescheduled one

tournament -– the Champions Cup –- to be held on August 7-9,

2020, which falls under the NCAA-designated “dead period,” in

which coaches are prohibited from watching prospective student

athletes in person. (Doc. 15 ¶ 52.) Defendants nevertheless

have stated that the tournaments will have “even more college

coach involvement” than past tournaments, even though coaches

will not be able to attend the Champions Cup in person. (Id.)

10. On March 30, 2020, and April 13, 2020, CSE filed

for trademark protection of the tournament logos; these logos

do not contain the IWLCA’s name or logo, but necessarily use

the names of the tournaments for which IWLCA claims ownership.

(Doc. 27 at 3; Doc. 28-1.)1

11. On June 12, 2020, IWLCA filed trademark

applications for the word marks for the names of the tournaments

and the mark of IWLCA itself, based on its first use of these

marks in commerce. (Docs. 15-6, 15-7, 15-8, 15-9, 15-10, 15-

11, 15-12.) All trademark applications submitted by both IWLCA

and CSE remain pending with the U.S. Patent and Trademark

Office.

12. IWLCA filed the present lawsuit in state court on

May 6, 2020, seeking declaratory, monetary, and injunctive

relief arising out of Defendants’ actions. (Doc. 7.)

Defendants removed the case to federal court on May 13. (Doc.

1.) Defendants filed a motion to dismiss for lack of personal

jurisdiction on May 28, 2020. (Doc. 13.) On June 18, IWLCA

filed an amended complaint (Doc. 15) and a response to

Defendants’ motion to dismiss (Doc. 16). On June 24, IWLCA

filed the present motion for temporary restraining order (Doc.

18) and a motion for preliminary injunction (Doc. 20).

Defendants filed a response to the motion for TRO. (Doc. 27.)

The court held a hearing on the TRO on July 6, 2020.

13. In its amended complaint, IWLCA brings ten causes

1 Defendants disclaim any interest in the mark of IWLCA’s name, and

Defendants’ alleged infringing marks of the tournament names do not

contain IWLCA’s name or logo. (Doc. 27 at 14.)

of action against Defendants: (1) conversion of IWLCA’s funds;

(2) breach of fiduciary duty; (3) constructive fraud; (4)

constructive trust; (5) violations of the Lanham Act, 15 U.S.C.

§ 1051 et seq.; (6) unfair or deceptive trade practices pursuant

to N.C. Gen. Stat. § 75-1.1 et seq.; (7) unjust enrichment; (8)

breach of contract; (9) breach of the covenant of good faith

and fair dealing; and (10) punitive damages. (Doc. 15 ¶¶ 62-

142.) IWLCA seeks a TRO based on its claims for (1) trademark

infringement, (2) conversion, and (3) constructive trust. (Doc.

19 at 2, 22, 24.) It seeks, inter alia, injunctive relief

ordering Defendants to: cease use or display of IWLCA’s

trademarks; recall all infringing advertising materials;

destroy or deliver all inventory, promotional material, or

advertising that uses IWLCA’s marks; cease use of any funds

collected from 2020 tournament registrants and issue full

refunds as directed by IWLCA; and take corrective measures to

remedy confusion among consumers regarding the 2020 tournaments.

(Doc. 18 at 5-7.)

Based on these findings, the court concludes as follows:

1. The court has personal jurisdiction over the Defendants

because the Defendants directed emails containing the allegedly

infringing marks into North Carolina. IWLCA must make a prima

facie showing that the court has personal jurisdiction over

Defendants. Universal Leather, LLC v. Koro AR, S.A., 773 F.3d

553, 558 (4th Cir. 2014). The court construes “all relevant

pleading allegations in the light most favorable” to IWLCA and

“draw[s] the most favorable inferences for the existence of

jurisdiction.” Id. (quoting Combs v. Bakker, 886 F.2d 673, 676

(4th Cir. 1989)). To determine whether personal jurisdiction

is proper, the court engages in a two-step inquiry. First,

North Carolina’s long-arm statute must provide a statutory basis

for asserting personal jurisdiction, and second, the exercise

of personal jurisdiction must comport with the Due Process

Clause of the Fourteenth Amendment. Christian Sci. Bd. of Dirs.

of the First Church of Christ, Sci. v. Nolan, 259 F.3d 209, 215

(4th Cir. 2001). The North Carolina long-arm statute is

construed “to extend jurisdiction over nonresident defendants

to the full extent permitted by the Due Process Clause.” Id.

Thus, the two-part test “collapse[s] into a single inquiry”

whether the non-resident defendant has sufficient minimum

contacts with the forum state such that exercising jurisdiction

over the defendant “does not offend traditional notions of fair

play and substantial justice.” AARP v. Am. Family Prepaid Legal

Corp., Inc., 604 F. Supp. 2d 785, 798 (M.D.N.C. 2009) (quoting

Christian Sci., 259 F.3d at 215).

2. There are two types of personal jurisdiction: general

and specific. General jurisdiction exists when a defendant has

“systematic and continuous contacts” within the forum state.

Id. However, if the contacts with the forum fall below the

requirements for the court to exercise general jurisdiction,

courts may exercise specific jurisdiction when “the cause of

action ‘aris[es] out of or relate[s] to’ the defendant’s

contacts with the forum state.” Id. (alterations in original)

(quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466

U.S. 408, 413-14 (1984)). To decide whether specific personal

jurisdiction exists, the court must determine “(1) the extent

to which the defendant purposefully availed [himself] of the

privilege of conducting activities in the forum state; (2)

whether the plaintiff’s claims arise out of those activities;

and (3) whether the exercise of personal jurisdiction is

constitutionally reasonable.” Tire Eng’g & Distrib., LLC v.

Shandong Linglong Rubber Co., Ltd., 682 F.3d 292, 301-02 (4th

Cir. 2012). Each prong must be satisfied for personal

jurisdiction to exist. Consulting Eng’rs Corp. v. Geometric

Ltd., 561 F.3d 273, 278–79 (4th Cir. 2009).

3. IWLCA has made a prima facie showing that Defendants

purposefully availed themselves of the privileges of conducting

business in North Carolina. Defendants solicited business from

North Carolina women’s lacrosse teams and received registration

fees from those teams so the teams could participate in the

tournaments at issue. (Doc 16-1 ¶¶ 8-9; Doc. 16-2 ¶¶ 8-9.)

Furthermore, after IWLCA announced the cancellation of the 2020

tournaments, Corrigan authored an email to registered lacrosse

teams, including teams in North Carolina, in which he clarified

that CSE would still be hosting the tournaments this year. (Doc.

33-1.) At the hearing on IWLCA’s motion for TRO, IWLCA alleged

that this letter was sent to 46 teams in North Carolina.

Critically, this email contained the alleged infringing marks

at issue in this case. (Id.)

4. In a tort action such as a trademark infringement claim,

a court may exercise jurisdiction “over a non-resident defendant

who is a primary participant[] in an alleged wrongdoing

intentionally directed at a resident in the forum state.” AARP,

604 F. Supp. at 799 (alteration in original) (internal quotation

marks omitted). Under analogous circumstances, this court has

found that exercise of personal jurisdiction over a corporate

officer was proper when the officer “actively participate[d]”

in the tort. Id. Here, Defendant Lee Corrigan, as President

of CSE, authored and directed a letter sent via email to various

coaches who reside in North Carolina regarding CSE’s decision

to hold the 2020 tournaments despite IWLCA’s decision to “step

away from its ‘official involvement’ with [the] tournaments.”

(Doc. 33-1.) This email also contained the word marks at issue

in IWLCA’s trademark infringement claims. Thus, the evidence

before the court indicates that IWLCA’s trademark claims arise

from and relate to Corrigan’s “direction of allegedly tortious

activity into North Carolina for commercial gain with the

knowledge that harm was likely to occur.” AARP, 604 F. Supp.

2d at 801. Such evidence is sufficient for the first and second

prongs of the specific personal jurisdiction analysis.

Furthermore, the court finds that exercise of personal

jurisdiction here would be constitutionally reasonable, as

having Defendants defend this action in North Carolina “does

not offend traditional notions of fair play and substantial

justice.” Id. In addition to the conduct set out above, for

some time preceding and up to the filing of this action,

Defendants also dealt directly with IWLCA through its

representatives located in Durham, North Carolina. (Doc. 33-

2.) Thus, the court may exercise specific personal jurisdiction

over both CSE and Corrigan.

5. Federal Rule of Civil Procedure 65(b) governs the

availability of a TRO to preserve the status quo ante until a

hearing on a motion for preliminary injunction can be held.

Hoechst Diafoil Co. v. Nan Ya Plastics Corp., 174 F.3d 411, 422

(4th Cir. 1999).

6. The requirements for obtaining temporary and preliminary

injunctive relief are the same. See Rogers v. Stanback, No.

1:13CV209, 2013 WL 6729864, at *1 (M.D.N.C. Dec. 19, 2013)

(citing U.S. Dep’t of Labor v. Wolf Run Mining Co., 452 F.3d

275, 281 n.1 (4th Cir. 2006)). A TRO, like a preliminary

injunction, is “an extraordinary remedy . . . which is to be

applied only in [the] limited circumstances which clearly demand

it.” Direx Israel, Ltd. v. Breakthrough Med. Corp., 952 F.2d

802, 811 (4th Cir. 1991) (internal quotation marks omitted)

(citation omitted). In order to obtain a TRO, a movant must

establish: (1) that it is likely to succeed on the merits of

the dispute; (2) that it is “likely to suffer irreparable harm”

in the absence of a TRO; (3) that “the balance of equities” tips

in its favor; and (4) that injunctive relief is in the public

interest. Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7,

20 (2008); Real Truth About Obama, Inc. v. Fed. Election Comm’n,

575 F.3d 342, 346–47 (4th Cir. 2009), vacated on other grounds,

559 U.S. 1089 (2010). IWLCA must satisfy all four requirements

to receive relief. Real Truth, 575 F.3d at 346.

7. IWLCA first must make a “clear showing” that it is likely

to succeed on the merits of its claims. Id. at 345-46. IWLCA

offers three legal claims to support its request for a TRO, each

of which will be addressed in turn.

8. The first legal claim IWLCA offers to support its

requested injunction is trademark infringement. To make out a

trademark infringement claim, IWLCA must first demonstrate that

it owns valid and protectable trademarks. Where, as here, the

parties agree that the marks at issue are unregistered (Doc. 19

at 4; Doc. 27 at 6.), Section 43(a) of the Lanham Act, codified

at 15 U.S.C. § 1125(a), provides federal protection for

unregistered trademarks. MicroStrategy Inc. v. Motorola, Inc.,

245 F.3d 335, 341 (4th Cir. 2001). IWLCA bears the burden of

proving the validity of its marks. Id. at 340. This requires

the court to determine whether the marks are “(1) generic, (2)

descriptive, (3) suggestive, or (4) arbitrary or fanciful.”

U.S. Search, LLC v. U.S. Search.com Inc., 300 F.3d 517, 523 (4th

Cir. 2002). Suggestive marks -– in addition to arbitrary and

fanciful marks –- are considered inherently distinctive and

receive the greatest amount of protection. Rebel Debutante LLC

v. Forsythe Cosm. Grp., Ltd., 799 F. Supp. 2d 558, 568 (M.D.N.C.

2011). In comparison, a descriptive mark may receive

protection, but only if it has acquired a secondary meaning in

the minds of the public. Id. at 568-69. “Secondary meaning is

the consuming public’s understanding that the mark, when used

in context, refers not to what the descriptive word ordinarily

describes, but to the particular business that the mark is meant

to identify.” Perini Corp. v. Perini Constr., Inc., 915 F.2d

121, 125 (4th Cir. 1990); see also Wal-Mart Stores, Inc. v.

Samara Bros., Inc., 529 U.S. 205, 211 (2000) (noting that

secondary meaning “occurs when, in the minds of the public, the

primary significance of a [mark] is to identify the source of

the product rather than the product itself” (alteration in

original) (internal quotation marks omitted)). The burden of

demonstrating secondary meaning, which typically “entails a

rigorous evidentiary standard,” lies with the party asserting

that a secondary meaning exists. U.S. Search, 300 F.3d at 525.

The Fourth Circuit has suggested six factors to consider to

determine whether a mark has acquired a secondary meaning: “(1)

the plaintiff's advertising expenditures; (2) consumer studies

linking the mark to a source; (3) the plaintiff's record of

sales success; (4) unsolicited media coverage of the plaintiff's

business; (5) attempts to plagiarize the mark; and (6) the

length and exclusivity of the plaintiff's use of the mark.”

George & Co., LLC v. Imagination Entm’t Ltd., 575 F.3d 383, 395

(4th Cir. 2009). However, direct evidence, such as testimony

from players and coaches regarding their state of mind, is not

strictly necessary; circumstantial evidence such as length of

use, amount and type of advertising and promotion used to bring

attention to the designation as a mark, recognition of the marks

by the media and customers, and the use (or non-use) of the mark

by third parties may all be utilized in demonstrating that the

marks have a secondary meaning. 2 J. Thomas McCarthy, McCarthy

on Trademarks & Unfair Competition § 15:30 (5th ed. 2017).2 In

2 Even Internet searches may be probative of secondary meaning. See Lisa

Larrimore Ouellette, The Google Shortcut to Trademark Law, 102 Calif.

L. Rev. 351 (2014); cf. mophie, Inc. v. Shah, Case No.: SA CV 13-01321-

DMG, 2014 WL 10988347, at *19 at n.14 (C.D. Cal. Nov. 12, 2014) (citing

Ouellette’s article and clarifying that an Internet search “is certainly

not a definitive determination of secondary meaning,” but it may be

probative of the issue).

determining whether a mark has secondary meaning, the court

directs its attention to the relevant class of consumers at

issue –- here, presumably the teams, coaches, players, and

families associated with high school and college women’s

lacrosse. 2 McCarthy on Trademarks § 15:46.

9. IWLCA argues that its marks for Champions Cup, Capital

Cup, Presidents Cup, Midwest Cup, and New England Cup are

suggestive, contending that these marks “conjure images of the

associated tournaments, services, activities, and competitions,

without directly describing them.” (Doc. 19 at 7-8.) IWLCA

contends that the mark Debut is arbitrary “because it is a

common word applied in an unfamiliar way.” (Id. at 8.)

Defendants argue that the marks are invalid because they are

descriptive and lack a secondary meaning. (Doc. 27 at 8-9.)

Defendants point out that several other sports leagues use the

term “Champions Cup” as tournament names, indicating that the

marks at issue are descriptive rather than suggestive. (Id.)

Defendants also argue that IWLCA has not presented any evidence

of secondary meaning in the record.

10. The line between descriptive and suggestive marks

is frequently a fine one. On the current record, the court

cannot say that IWLCA has demonstrated a likelihood of success

that its marks are valid and protectable. IWLCA’s contention

that the marks are protected is contained largely in one

paragraph with a conclusory statement. (Doc. 19 at 7-8.) The

categorization of a mark is a question of fact. E.T. Browne

Drug Co. v. Cococare Prods., Inc., 538 F.3d 185, 192 (3d Cir.

2008). It is not that IWLCA cannot not make this showing;

rather, it is that IWLCA has simply not provided sufficient

evidence at this stage demonstrating either that its marks are

suggestive (and are therefore inherently valid) or have a

secondary meaning (thus entitling descriptive marks to

protection). U.S. Search, 300 F.3d at 525-26. At this

preliminary stage and faced with difficult legal and factual

questions on an undeveloped record, the court should not yet

enjoin any activity. See 5 McCarthy on Trademarks § 30:45 (“A

trial judge hearing a request for preliminary injunction is not

required to decide difficult legal and factual issues which

could only be determined at a full trial. Indeed, the judge

should not be expected to make a determination of a serious

factual dispute based on an incomplete showing in affidavits

submitted at the preliminary injunction hearing.”). IWLCA may

well show a likelihood of success on the merits in its motion

for preliminary injunction with the benefit of a more well-

developed evidentiary record through discovery. See, e.g., Di

Biase v. SPX Corp., No. 3:14-cv-00656-RJC-DSC, 2015 WL 5714547,

at *4 (W.D.N.C. Sept. 29, 2015), aff’d, 872 F.3d 224 (4th Cir.

2017).

11. Because IWLCA has yet to show at this early stage

a likelihood of success that its marks are valid and

protectable, it is unnecessary for the court to consider the

remaining elements of IWLCA’s trademark infringement claim.3

See Lone Star Steakhouse & Saloon, Inc. v. Alpha of Va., Inc.,

43 F.3d 922, 930 (4th Cir. 1995) (finding that a trademark

infringement claim requires a showing that plaintiff “has a

valid, protectible trademark, and that the defendant’s use . . .

is likely to cause confusion among consumers.”) Likewise, it

is unnecessary for the court to consider the remaining Winter

preliminary injunction factors in connection with IWLCA’s

trademark infringement claim, as the failure to satisfy one of

the Winter factors is fatal to a movant’s claim. United States

v. North Carolina, 192 F. Supp. 3d 620, 629 (M.D.N.C. 2016).

12. A conversion claim is a tort that North Carolina

courts have defined as “an unauthorized assumption and exercise

of the right of ownership over goods or personal chattels

belonging to another, to the alteration of their condition or

the exclusion of an owner’s rights.” Peed v. Burleson’s Inc.,

94 S.E.2d 351, 353 (N.C. 1956). The Supreme Court of North

3 It bears noting that IWLCA has presented some evidence that Defendants’

actions have caused confusion amongst consumers. (Doc. 16-1 ¶ 12; Doc.

16-2 ¶ 12; Doc. 19-1.) Moreover, unauthorized use of a mark is an

“undeniable threat” to the trademark owner’s reputation. Ark. Best

Corp., v. Carolina Freight Corp., 60 F. Supp. 2d 517, 520 (W.D.N.C.

1999).

Carolina has defined the tort as having two elements: (1)

“ownership in the plaintiff” and (2) “wrongful possession or

conversion by the defendant.” Variety Wholesalers, Inc. v.

Salem Logistics Traffic Servs., 723 S.E.2d 744, 747 (N.C. 2012).

Thus, IWLCA must show that it owned the funds Defendants

collected from registrants of the 2020 lacrosse tournaments.

See id.

13. IWLCA argues that the 2017 RFP and CSE’s proposal

together comprise a binding contract between the two parties,

and that the contract gives IWLCA exclusive control over all

registration fees and registrant information. (Doc. 19 at 22.)

Defendants argue that the RFP and CSE’s proposal did not form a

contract and that, in any event, the two documents do not grant

IWLCA exclusive control over the funds as IWLCA claims. (Doc.

27 at 17-18.) As a result, CSE argues that its ownership of

the registry funds is not wrongful.

14. Assuming the RFP and CSE’s proposal formed a

contract, IWLCA’s remedy would then be contractual (which is

not the substance of equitable relief), and not in tort.

Moreover, the sections of the RFP and CSE’s proposal that IWLCA

relies on do not clearly show that IWLCA holds exclusive control

over registration fees. For example, the RFP states that the

IWLCA “will retain the right to determine and approve all

aspects related to the competition venue operations during the

tournament.” (Doc. 15-1 at 7 (emphasis added).) Furthermore,

the RFP states, under the heading “Payment of Funds,” that

“IWLCA shall receive a financial report within 90 days after

the conclusion of the tournament. All money payable to the

IWLCA shall be paid within 120 days . . . pursuant to the

transfer instructions provided by the IWLCA.” (Id. at 8

(emphasis added).) CSE’s proposal, under the heading

“Partnership,” states that “CSE has created a financial model

that will allow the IWLCA to share in the profit of the IWLCA

events. CSE will split the ‘net’ profit on a 50/50 basis with

the IWLCA.” (Doc. 15-2 at 7.) These statements, even if

considered terms of a binding contract, do not clearly grant

complete ownership of the registration fees to IWLCA. IWLCA

has thus failed to demonstrate a likelihood of success on its

conversion claim, given the record currently before the court,

and the court is constrained to deny IWLCA’s motion for TRO

based on its conversion claim. North Carolina, 192 F. Supp. 3d

at 629. This is not to say that IWLCA has no remedy for

potential breach of the relationship with CSE.

15. A constructive trust “is a duty . . . imposed by

courts of equity to prevent the unjust enrichment of the holder

of title to, or of an interest in, property which such holder

acquired through fraud, breach of duty or some other

circumstance making it inequitable for him to retain it against

the claim of the beneficiary of the constructive trust.”

Bissette v. Harrod, 738 S.E.2d 792, 800 (N.C. Ct. App. 2013)

(quoting Cury v. Mitchell, 688 S.E.2d 825, 827 (N.C. Ct. App.

2010)), disc. review denied, 747 S.E.2d 251 (N.C. 2013). A

constructive trust requires a showing of “some fraud, breach of

duty or other wrongdoing by the holder of the property.” Id.

(quoting Cury, 688 S.E.2d at 800). IWLCA argues that the facts

supporting its trademark infringement and conversion claims

support a finding that it would be “unconscientious or

inequitable” for Defendants to retain the registration funds.

Variety Wholesalers, 723 S.E.2d at 752.

16. Because the court finds that IWLCA has not yet

demonstrated a likelihood of success on its trademark and

conversion claims, it is premature at this stage for IWLCA’s

constructive trust claim to form the grounds for the entry of a

TRO.

17. In sum, in the absence of a demonstrated likelihood

of success on the merits of the three claims on which IWLCA

seeks a TRO, its motion will be denied at this stage.

18. Having said that, the record raises grave concerns

as to the propriety of Defendants’ conduct. This case strongly

suggests that CSE is seeking to unfairly trade on its

relationship with IWLCA, who is and has been the sponsor of

these tournaments. IWLCA retained CSE to implement IWLCA’s plan

to set up tournaments it has historically sponsored, and

Defendants have rejected its sponsor’s directions and appear to

be hijacking the tournaments in CSE’s name. That IWLCA has not

yet demonstrated its rights in the purported marks at this early

stage does not necessarily foreshadow an inability to do so on

a more complete record. The tournaments are also imminent (as

early as this weekend), and at this late stage it is difficult

for the court to sort out the highly contested issue of validity

of the marks. If the marks are valid, there is evidence of

infringement and confusion notwithstanding CSE’s use of its name

as sponsor. Rebel Debutante, 799 F. Supp. 2d at 573 (finding

that pairing name with another’s trademark cannot alone avoid,

and may very well increase, potential confusion). Ultimately,

the principal issue in this case is which party has the right

to the marks in order to conduct tournaments in the future. The

court therefore directs the Magistrate Judge to set an expedited

discovery schedule that will permit the court to hold a hearing

on the pending motion for preliminary injunction as soon as

practicable. IWLCA’s pending motion to expedite limited

discovery (Doc. 30) will therefore be referred to the Magistrate

Judge.

IT IS THEREFORE ORDERED that IWLCA’s motion for temporary

injunctive relief (Doc. 18) is DENIED WITHOUT PREJUDICE.

/s/ Thomas D. Schroeder

United States District Judge

July 23, 2020