.. , IN THE UNITED STATE DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Alexandria Division U-HAUL INTERNATIONAL, INC. 2727 North CentralAvenue. Phoenix, AZ 85004, Plaintiff, v. WHENU.COM 494 8tb Avenue 21stFloor New York, NY 10001, Civil Ac.tion No. COMPLAINT A VI NAIDER 494 8th Avenue 21stFloor New York, NY 10001, BUDGET RENT A CAR CORPORATION 4225 Naperville Road Lisle. n..60532. MOVERSBA Y.COM 1 Q 10 Rockville Pike, Suite 100 Rockville, MD 20852, and DOOR TO DOOR STORAGE P.O. Box 7014 SanFrancisco, CA 94120, Defendants. COMPLAINT PlaintiffU-Haul International, Inc. ("U-Haul" or "Plaintiff'), by its undersigned attorneys,
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..,
IN THE UNITED STATE DISTRICT COURTFOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
U-HAUL INTERNATIONAL, INC.2727 North Central Avenue.Phoenix, AZ 85004,
Plaintiff,v.
WHENU.COM494 8tb Avenue21st FloorNew York, NY 10001,
Civil Ac.tion No.
COMPLAINT
A VI NAIDER494 8th Avenue21st FloorNew York, NY 10001,
BUDGET RENT A CAR CORPORATION4225 Naperville RoadLisle. n.. 60532.
MOVERSBA Y.COM1 Q 10 Rockville Pike, Suite 100Rockville, MD 20852, and
DOOR TO DOOR STORAGEP.O. Box 7014San Francisco, CA 94120,
Defendants.
COMPLAINT
PlaintiffU-Haul International, Inc. ("U-Haul" or "Plaintiff'), by its undersigned attorneys,
NATURE OF THE ACTION
Plaintiff, together with its affiliates, is among the world's foremost providers of
truck and trailer rentals, self storage facilities, moving services, boxes and supplies, and related
goods and services. Plaintiff's brand names are among, if not, the most widely recognized in the
self moving, truck and trailer rental and self storage industry. Plaintiff advertises and sells its
services and goods through its web pages on the World Wide Web.
2 In sharp contrast to the significant uniqueness of its brands, the services and
original content PJaintiffproyides through the World Wide Web, defendant WhenU.com,
("WhenU.com") as directed by defendant Avi Naider ("Naider"), its Chief Executive Officer, is
essentially a parasite on the Web that free rides on the hard work and investments of Plaintiff and
other website owners. WhenU.com makes money by placing advertisements for third parties,
including defendants Budget Rent A Car Corporation ("Budget"), Moversbay.com
("Moversbay.com") and Door to Door Storage ("Door to Door Storage"), on the Plaintiffs
Thus, in the example below, WhenU.comwebsit~s without Plaintifes authorization.
advertisements for Budget and Moversbay.com, discount truck and trailer moving rental
companies, were inserted by WhenU.com on the homepage ofPlaintifI's website.
3. In short, WhenU.com sells advertising space on Plaintiffs websites without
Plaintiffs authorization and pockets the profits from such sales.
Equally outrageous, Plaintiffis infonned and believes that WhenU.com markets4.
its practice by offering to "sell" the URL's of Plaintiffs websites to prospective advertisers as part
of targeting the advertisers' ads to a particular audience. Indeed, on infonnation and belief,
WhenU.com tells prospective advertisers that it is more effective to-advertise on a targeted
website by buying the URL through WhenU.com than actually approaching the website owner
itself.
Quite simp1y, WhenU.com, with the know1edge and-at the direction ofNaider,5
free rides on the valuable intellectual property rights of Plaintiff and the substantial investment
Plaintiff has made, and continues to make, to draw millions of visitors to its websites. This
scheme by WhenU.com and Naider, in which the other named defendants participate as
advertisers, constitutes trade mark infringement, unfair competition, trademark dilution,
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Conspiracy Act. It must be stopped and appropriate relief accorded to Plaintiff.
THE PARTIES
6.
Haul Websites").
800-GO-U-HAUL@.
7 Defendant WhenU.com is a corporation organized and existing under the laws of
the State of DeJa ware, with its principaJ pJace of business in New York, New York.
8 Defendant Avi Naider is an individual who is the Chief Executive Officer of
business in New York, New York.
9. Budget Rent A Car Corporation is a corporation organized and existing under the
laws of the State of Delaware, with its principal place of business in Lisle, Illinois. On
infonIlation and belief, Budget is to be acquired by Cendant Corp., a corporation organized and
existing under the laws of the State of DeJaware, with its principal place of business in New
York, New York
10 Defendant Moversbay.com is a fictitious entity of unknown form, with its
principal place of business in Rockville, Maryland.
11. Defendant Door to Door Storage is a corporation organized and existing under the
laws of the State of Washington, with its principal place of business in Kent, Washington.
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(Some or all of defendants WhenU.com. Naider. Cendant Corp./Budget. Moversbay.com and
Door to Door Storage are collectively referred to herein as "Defendants".)
JURISDICTION AND VENUE
12. This Court has subject matter jurisdiction over this action under 15 U.S.C. § 1121,
28 V.S.C. § 1331,28 V.S.C. § 1332 and 28 V.S.C. § 1338(a) and (b). This Court has
supplemental jurisdiction over the state law claims pursuant to 28 V.S.C. § 1367(a) because
those claims are so related to the federal claims brought herein as to form part of the same case or
controversy.
13. Venue is proper in this district under 28 U.S.C. § 1391 (b) and 28 U.S.C.
§ 1400(a) because Defendants conduct business in this district within the meaning of28 V.S.C. §
1391(c).
14. Defendants are subject to persona] jurisdiction in this district because they
practice the unlawful conduct complained of herein, in part, within the Commonwealth of
Virginia and the Alexandria Division of this Court; because the unlawful conduct complained of
herein causes injury, in part, within the Commonwealth of Virginia and the Alexandria Division
of this Court; and because Defendants regularly do or solicit business, engage in other persistent
courses of conduct and/or derive substantial revenue from goods used or consumed or services
rendered within the Commonwealth of Virginia and the Alexandria Division of this Court.
Defendants regularly and systematically have directed electronic activity into the15
Commonwealth of Virginia with the manifested intent of engaging in business withjn the
Commonwealth and that activity has resulted in causes of action cognizable within the
Commonwealth. Defendants' actions in this regard, on information and belief, include the
regular placement of pop-up advertisements upon the screens of numerous computers within the
-5.
which resulted in cognizable causes of action within the Commonwealth.
PLAINTIFF'S TRADEMARKS
16.
services. "U-Haul@" was first used in 1945 and was first registered as a trademark by the
USPTO in 1968. See, e.g., Federal Trademark Reg. Nos. 1023923,2262059,2379331 and
others.
17 On March 16, 1995, V-Haul first filed to rev.ister the trademark" 1-800-GO-U-
HAUL@" with the USPTO for use, among other things, in connection with providing vehicle and
merchandise rental services. On April 2, 1996, the USPTO issued a trademark registration for
II I -800-GO-U-HAUL@"See Federal Trademark. Reg. No. 1965385
18. Through these trademarks, and because of widespread and favorable public
acceptance and recognition, the above-described trademarks have become distinctive
designations of the source of origin ofP]ajntjffs products and services. These trademarks have
become uniquely associated with, and hence identify, Plaintiff. These marks are assets of
incalculable value as symbols of Plaintiff, its quality products and services and goodwill.
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19.
and the U-Haul@ mark is famous.
PLAINTIFF'S COPYRIGHTS
20. On August 13,2002, U-Haul registered "U-Haulcom Home Page" with the
Copyright Office of the United States Library of Congress ("Copyright Office"). See Federal
Copyright Reg. No. VA 1-130-847 (appended hereto as Exhibit 1).
21. On August 13, 2002, V-Haul registered "V-Haul Dea]er Network Home Page"
with the Copyright Office. See Federal Copyright Reg. No. TX 5-557-014 (appended hereto as
Exhibit 2).
FACTUAL BACKGROUND
The Internet And The World Wide Web
22. The Internet is a global netWork of millions of interconnected computers. The
World Wide Web is a portion of the Internet especially suited to displaying images and sound in
addition to text. Much of the jnfonnation on the World Wide Web is stored in the Conn of "web
pages," which can be accessed through a computer connected to the mtemet (available through
commercial mtemet service providers or IISPs"), and viewed using a computer program called a
"browser," such as Microsoft Internet Explorer and Netscape Navigator. "Web sites" are locations
on the World Wide Web containing a collection of web pages. A web page is identified by its
own unjque Unifonn Resource Locator ("URL") (e.g., httQ://www.uhauJ.com), and a URL
ordinarily incorporates its site's "domain name" (e.g., uhauJ.com).
The vast majority of Internet websites that deliver advertising and source content,23.
including the websites operated by Plaintiff, depend in significant part, ifnot entirely, for their
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27,
follows:
a.
together with other digital walle~ software programs, so that persons who
download the other software programs onto their personal computer
automatically have SaveNow downloaded and installed as well. In
such as Bearshare.com, Cenet.com, Kazaa.com, MP3 and Real.com have
SaveNow automatically downloaded and installed onto their personal
computer. Because SaveNow is bundled with other software programs
and automatically downloaded with those other software programs, even
sophisticated computer users frequently do not know SaveNow has been
installed on their personal computer.
b.
Once SaveNow is installed on a personal computer, whenever a user
initiates a browser-based Internet connection, SaveNow automatically
launches and communicates frequently with WhenU.com's computer
servers, monitoring the user's activities on the World Wide Web and
transmitting that infonnation over the Internet to WhenU.com. Software
that operates in this manner is commonly referred to as "spyware."
c. When a user visits certain websites. WhenU.com's remote computer
systems will transmit to the user's computer one or more unauthorized
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owner of the website intended to be displayed,
d.
As a result ofWhenU.com's unauthorized pop-up advertisements, users
ordinarily do not see the web page in the manner the website owner
advertisement concealing some of the content the website owner intended
to be disp1ayed on that particu1ar web page.
e.
In order for the user to see the web page displayed as intended by the
website owner, the user must move their mouse to the pop-up
advertisement and click the mouse to close WhenU.com's unauthorized
pop-up advertisement, thus delaying access to the site's content.
28.In the example below, a WhenU.com pop-up advertisement for Door to Door
of Plaintiff's dealer webpage.
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The above example of a WhenU.com pop-up advertjsement appeared on U-Haul's29.
httQ://miscdealer.uhaul.com website without V-Haul's authorization. On information and belief,
When U .com does not seek or obtain the authorization of any website upon which it causes its
pop-up advertisements to appear.
WhenU.com asserts that SaveNow has been installed on 25 million personal30.
computers.
On infonnation and belief, ~enU.com offers to third-party Internet advertisers31.
the opportunity to "buy" URLs on which SaveNow will cause to appear pop-up advertisements
it to cause advertisements to display on any website --even the website ora WhenU.com
advertiser's competitor and even websites that do not sel] advertising or refuse to permit certain
advertisers. WhenU.com's service, however, is not cheap. Rates for such pop-up advertising
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websites. Even ifWhenU.com de]ivered such a warning message, there
would be no way to eliminate the inherent confusion created by
WhenU.com's wrongful conduct.
c. Because they appear on a user's screen simultaneously. or nearly
simultaneously, with the downloading and opening of the requested web
page of the targeted website, the WhenU.com pop-up advertisements
appear to be an integral and fuIJy authorized part of the original underlying
web page.
d. The WhenU.com pop-up advertisements fail to suggest they are not
authorized and supplied by the underlying website.
e.
Even if a user ofWhenU.com's digital wallet software removes SaveNow
from his or her computer using the "uninstall" feature, on information and
belief, SaveNow is not removed and continues to operate independently in
Plaintiffs efforts to coordinate its online content.
41 WhenU.corn's pop-up advertising scheme enablesWhenU.corn, without the
pemIission of the websites it targets and without having to make any investment or exert any
effort to create and develop content that attracts and holds yiewers, to profit from pop-up
advertisements displayed over websites that have not authorized, do not want and are directly
injured by such parasitic interference with the display and appearance of their sites.
42. WhenU.com's pop-up advertising scheme operates in direct competition with the
sites of Plaintiff, because WhenU.com seeks to sell mtemet advertising services in the very same
marketplace of advertisers to which Plaintiff sell its sertices and goods. Unlike Plaintiff,
however, WbenU.com participates in this market without providing valuable services or goods to
attract visitors to the web pages on which the pop-up advertjsements are displayed. WhenU.com
merely free rides on the Plaintiffs efforts and investment in developing goods, services and
content.
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43.
To the extent WhenU.com derives any revenue or profit from its pop-up
advertising scheme, it does so solely by unfairly free riding on Plaintiffs substantial investments
to develop and operate their famous websites and on Plaintiffs valuable copyrights and
trademark rights.
44, As of at least July 26, 2002, unauthorized pop-up advertisements from
WhenU.com continue to appear over top of viewers' copies of Plaintiffs websites.
45. WhenU.com's actions have caused damage and irreparable injury to Plaintiff.
Further damage and irreparable injury will result ifWhenU.com is allowed to continue to violate
Plaintiffs rights.
46. Plaintiff has no adequate remedy at Jaw.
COUNT I -Trademark Infringement(15 U.S.C. § 1114)
47. Paragraphs through 46 are repeated and realleged as if fu]ly set forth herein.
48.
Plaintiff own valid trademarks and/or rights to valid trademarks entitled to
protection under the Lanham Act.
49. WhenU.com's pop-up advertising scheme and use of-Plaintiffs marks in
marketing that scheme constitute use in commerce of Plaintiffs trademarks without the approval
of Plaintiff.
WhenU.com's unaut}1orized use of Plaintiffs trademarks in commerce is likely to50.
cause confusion or mistake among consumers or to deceive consumers regarding the relationship
between WhenU.com's advertisers and Plaintiff.
Defendants' conduct in utilizing WhenU.com's pop-up advertising scheme51.
constitutes trademark infringement in violation of Section 32 of the Lanham Act, 15 V.S.C. §
1114(1)(a).
-16.
COUNT II -Unfair Competition(15 U.S.C. § 1125(a))
52.
53.
protection under the Lanham Act.
54
associated with one another.
55 Defendants' unauthorized use ofPlainti~fs trademarks in commerce is JikeJy to
cause confusion or mistake among consumers or to dec~ive consumers as to the affiliation or
approval of the goods and services offered by WhenU.~oni's advertisers.
56. Defendants' conduct constitutes a fa]se designation oJ origin and a raIse or
misleading description or representation offact, in viol~tion of Section 43(a) of the Lanham Act,
15U.S.C. § I I 25(a).
COUNT III --Trademark Dilution-(IS V.S.C. § II2S(c))
57 Paragraphs through 56 are repeated and realJeged as if fully set forth herein.
58. Plaintiff owns valid trademarks and/or rights to valid trademarks entitled to
protection under the Lanham Act.
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59.
Trademark Dilution Act, 15 V.S.C. § 1125(c).
60.
mark.
61
the Lanham Act, 15U.S.C. § I I 25(c).
COUNT IV -Copyright Infringement(17 V.S.C. § 106)
62 Paragraphs through 61 are repeated an~ realleged as if fully set forth herein.
63 Plaintiff own valid copyrights to the web~ites identified in Paragraphs 20 and 21
above. PJaintiffhas registered these copyrights with the United States Copyright Office.
64. WhenU.corn's pop-up advertising scheme, as utilized by Defendants, constitutes
an unauthorized display of Plaintiffs copyrighted works and the unauthorized preparation of a
derivative work based upon the copyrighted works. Defendants' actions in this regard violates
Plaintiffs exclusive rights in its copyrights.
65 Defendants' conduct constjtutes copyrigJit infringement under the federal
Copyright Act, 17U.S.C. §§ IOI,et. seq.
COUNT V --Contributory Copyright Infringement(17 U.S.C. § 106)
66, Paragraphs 1 through 65 are repeated and realleged as if fully set forth herein.
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67.
Plaintiff owns valid copyrights to the websites identified in Paragraphs 20 and 2 I
above. Plaintiff has registered these copyrights with the United States Copyright Office.
68. WhenU.com's pop-up advertising scheme, as utilized by Defendants, facilitates
the unauthorized and infringing public display of Plaintiffs copyrighted works by third parties as
well as the creation of unauthorized derivative works by those same third parties. Defendants
have engaged jn this pop-up advertjsjng scheme knowjng, or wjth reckless djsregard, that jt was
inducing, causing or materially contributing to conduct by third parties that infringed Plaintiffs
exclusive rights in its copyrights.
69. Defendants' conduct constitutes contributory copyright infringement under the
federal Copyright Act, 17 V.S.C. §§ 101, et. seq.
COUNT VI -Misappropriation
70. Paragraphs 1 through 69 are repeated and realleged as if fully set forth herein.
71 Plaintiff has expended, and continues to expend, substantial costs and resources to
create, design and maintain its web. sites. In particular, Plaintiff expends substantial costs and
resources to gather and display its services, goods and related products found on its websites.
72. WhenU.com's pop-up advertising scheme, as utilized by Defendants, has
wrongfully misappropriated the content and advertising opportunities of Plaintiffs sites. By
selling pop-up advertising on these sites to competitors of Plaintiff, WhenU.com has turned the
sites into forums for its own advertisers without making any investment in the sites. Defendants'
actions in this regard constitute free riding on Plaintiffs costly efforts to generate.and maintain its
own websites.
WhenU.com's pop-up adve,rtising scheme, as utilized by Defendants, constitutes73.
misappropriation under the common law because it takes the entire commercial value of the
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fonD would be threatened.
74. Plaintiff has been damaged by WhenU.com's pop-up advertising scheme as
utilized by Defendants.
COUNT VII -Interference With Prospective Economic Advantage
75 Paragraphs 1 through 74 are repeated and realleged as if fully set forth herein.
76 Plaintiff has numerous valid and binding contracts with its customers and dealers.
It is probable that such third-parties will continue to do business with Plaintiff in the future. On
jnformation and belief, Defendants were aware of the existence of these contracts.
77 Absent WhenU.com's intentional and improper interference through its pop-up
advertising scheme, as utilized by Defendants, it is reasonably certain that Plaintiff would realize
new an'd/or additional third-party contracts. However, Wh~JlU.com's pop-up advertising scheme,
as utilized by Defendants, has damaged Plaintiff.
78--
WhenU.com's pop-up advertising scheme, as utilized by Defendants, constitutes
improper interference with Plaintiffs prospective economic advantage.
COUNT VIII --Unjust Enrichment
79 Paragraphs through 78 are repeated and reaJJeged as if fully set forth herein
80 WhenU.com's pop-up advenising scheme confers a benefit upon Defendants by
and at the expense of Plaintiff.
81 Defendants know that WhenU.com's pop-up advertising scheme confers a benefit
upon them by and at the expense ofPlaintitT.
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82
advertising scheme under circumstances that would render it inequitable for Defendants to retain
such benefit without paying for its value.
83 WhenU.com's pop-up advertising scheme, as utilized by Defendants, constitutes
unjust enrichment.
COUNT IX -Violation of Va. Business Conspiracy Act(Va. Code §§ 18.2-499 & 18.2-500)
84 Paragraphs 1 through 83 are repeated and realleged as if fully set forth herein.
85 WhenU.com's pop-up advertising scheme involves a conspiracy between
WhenU.com and the other Defendants against Plaintiff. As such, WhenU.com's pop-up
advertising scheme, as utilized by Defendants, constitutes a combination of two or more persons
for the purpose of wi II fully and maliciously injuring Plaintiff in its businesses.
86 A primary and overriding purpose of the combination is to injure Plaintiff in its
business.
87.
Plaintiff has been damaged by Defendants' use ofWhenU.com's pop-up
advertising scheme.
WhenU..com's pop-up advertising scheme, as utilized by Defendants, constitutes a86
violation of the Virginia Business Conspiracy Act, Va. Code §§ 18.2-499 & 18.2-500.
PRAYER FOR RELIEF
WHEREFORE, P]aintiff prays for judgnlent in its favor and against Defendants and that
the Court grant the following relief:
A preliminary and a permanent injunction, prohibiting Defendants, their agents,
A.
servants, employees, officers and all other persons in active concert or participation with them,
from
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1 continuing to perpetrate WhenU.com's pop,.up advertising scheme against,
or display any other advertising on any website owned by or affiliated with Plaintiff
without the express consent of Plaintiff;
2. altering or modifying, or causing any other entity to alter or modify, any
copy of any website owned by or affiliated with Plaintiff, in any way, including its
appearance or how it is displayed;
3 infringing, or causing any other entity to infringe, Plaintiffs copyrights;
4. making any designations of origin, descriptions, representations or
suggestions that Plaintiff is the source, sponsor or in any way affiliated with
WhenU.com's advertisers' websites, services and products;
5.
acting in any manner which causes WhenU.corn's advertisers' products.
services. website. or advertisements to be in any way associated with Plaintiffs products.
services, or website, including, but not limited to, any means of marketing, advertising, or
agreement with third parties likely to induce the be!iefthat WhenU.com's advertisers'
websites, advertisements, products or services are in any way associated, connected, or
affiliated with, or licensed or authorized by Plaintiff;
infringing, or causing any' other entity to infringe, Plaintiffs trademark6.
and/or service mark rights;
7.
unfairly competing with P]aintiff in any maImer whatsoever
acting, or causing another entity to act, in any manner JjkeJy to diJute,8
tarnish or blur the distinctiveness of Plaintiff's trademarks;
causing a likelihood of confusion or injuries to Plaintiffs businesses or9,
reputations;
-22-
10. misappropriating content on any website oWned by or affiliated with the
Plaintiff;
interfering with Plaintiffs contracts with its customers and/or dealers; and
12. conspiring with advertisers to hanD Plaintiff in its businesses.
B.
An order directing an accounting to detennine all gains, profits, savings, and
advantages obtained by WhenU.com as a result of its wrongful actions;
c. An order directing imposition of a constructive trust over WhenU.com's assets;
D. Restitution to Plaintiff of all gajns, profits, savjngs and advantages obtajned by
WhenU.com as a result of its wrongful actions;
E. An order awarding Plaintiff all damages caused by Defendants' wrongful actions;
F.
An order awarding Plaintiff treble the amount of its damages, together with the
costs of this suit, including reasonable attorneys' .fees and expenses and prejudgment interest;
G. An order awarding Plaintiff an amount sufficient to conduct a corrective
advertising campaign to dispel the effects of Defendants' wrongful conduct and ~onfusi.ng and
misleading advertising;
H.
--An order directing .Defendants to post on their own websites corrective advertising
in a manner and form. to be established by the Court;
I. Punitive damages in an amount sufficient. to deter other and future similar conduct
by Defendants and others; and
], An order granting P]aintiff such other relief as the Court may deem just.
JURY DEMAND
Pursuant to Rule 38(b) of the Federal Rules ofCiyil Procedure and Local Rule 38,
Plaintiff hereby demands a trial by jury on all issues and claims so triable.
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Respectfully Submitted,
U-HAUL INTERNATIONAL, INC.
By Counsel
Dated: October 1, 2002c. -~~;;;P;~"SB#:15066)~Jeffrey H. Geiger (VSB #40163)Sands, Anderson, Marks & Miller, P.C801 East Main Street (23219)P.O. Box 1998Richmond, VA 23218-1998Phone: (804) 648-1636Facsimile: (804) 783-7291
Rod S. BennanNeil C. EricksonJEFFER, MANGELS, BUTLER & MARMARO LLP1900 Avenue of the Stars, Seventh FJoorLos AngeJes, California 90067Phone: (310) 203-8080
Attorneys for Plaintiff
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