INSTRUCTIONS: DO THE FOLLOWING, IN THIS ORDER —
- PRINT OUT THIS HANDOUT. READ PAPER, NOT SCREENS.
- READ THE CASE BUT NOT THE QUESTIONS.
- BRIEF THE CASE.
- ANSWER THE DISCUSSION QUESTIONS.
- BRING YOUR BRIEF AND ANSWERS TO CLASS.
TWO MEN AND A TRUCK INTERNATIONAL, INC., a Michigan corporation, Plaintiff,
v.
CLETE, INC., a North Carolina corporation, d/b/a Truck and Two Guys Moving; and Bruce Hensley, an individual, jointly and severally, Defendants.
Civil No. 1:07CV394.
United States District Court, W.D. North Carolina, Asheville Division.
June 19, 2008
James M. Harrington, The Harrington Practice PLLC, Charlotte, NC, for Plaintiff.
MEMORANDUM AND ORDER
[1] THIS MATTER is before the Court on Plaintiff’s motion for a preliminary injunction. For the reasons stated herein, the Court will grant the requested preliminary injunction, however, rulings on Plaintiff’s motions for default judgment and permanent injunction and for attorney fees and costs will be deferred.
I. PROCEDURAL HISTORY
[2] Plaintiff, who is in the moving business, filed a complaint on December 18, 2007, against Defendants Clete, Inc., d/b/a Truck and 2 Guys Moving, and Bruce Hensley, the owner of Clete. According to the complaint, Defendants, who are also in the moving business, are actively advertising and operating a company whose business name bears a confusing similarity to Plaintiff’s nationally recognized trademark. The complaint alleges trademark infringement and unfair competition in violation of the federal Lanham Act and Chapter 75 of the North Carolina General Statutes, as well as unjust enrichment. Based on these causes of action, the complaint seeks an injunction that would prevent Defendants from advertising or operating their business as “Truck and 2 Guys Moving” or any other confusingly similar name. It also requests monetary damages, attorney’s fees, and statutory interest.
[3] On January 7, 2008, Plaintiff moved for a preliminary injunction, seeking to enjoin Defendants from using the designation “Truck and 2 Guys Moving.” Plaintiff also requested that the Court require Defendants to assign their business telephone numbers to Plaintiff; provide accounts of sales and profits to Plaintiff; and destroy or surrender all labels, signs, vehicles, and other advertising bearing the confusingly similar business name. The Court denied this motion without prejudice, finding that the record, at that time, contained no indication that either the complaint or the motion for preliminary injunction had been successfully served on any of the Defendants.
[4] Plaintiff then made a number of attempts to serve Defendants with the summons and complaint[, the nature and service of which are governed by Federal Rules of Civil Procedure 4]. Ex Parte Motion for Alternative Service, filed March 6, 2008, at 2. Defendants, however, consistently acted to evade service of process, using deception and – it appears – threatening tactics. Id. After considerable difficulties, Plaintiff requested the Court to detail the United States Marshals Service to effect service of process. The Court did so, and the Marshals Service, after several attempts, finally managed to serve the summons and complaint. Order, filed March 17, 2008, at 1-2 (finding that Plaintiff had used its best efforts to effectuate service and that adequate cause existed to involve the Marshals Service); Process Receipt and Return, filed March 31, 2008, at 1, 3 (indicating that Defendant Hensley again attempted to evade service and that multiple endeavors and surveillance were required in order to successfully serve him).
[5] Plaintiff then renewed its motion for preliminary injunction. Plaintiff served its renewed motion on Defendants by mailing it to their last known address . . . . Additionally, at Plaintiff’s behest, the Clerk made an entry of default against Defendants on May 15, 2008. Plaintiff then requested a default judgment and a permanent injunction against Defendants.
II. DISCUSSION
A. Motion for Preliminary Injunction
[6] Federal Rule of Civil Procedure 65 governs the entry of injunctive relief and provides in pertinent part that, “[e]very order granting an injunction … must: (A) state the reasons why it issued; (B) state its terms specifically; and (C) describe in reasonable detail … the act or acts restrained or required.” Fed. R. Civ. P. 65(d)(1). In analyzing the propriety of a preliminary injunction, the Fourth Circuit has observed:
[P]reliminary injunctions are extraordinary interlocutory remedies that are granted in limited circumstances and then only sparingly. The limited circumstances amount to the demonstration of a need to protect the status quo and to prevent irreparable harm during the pendency of the litigation to preserve the court’s ability in the end to render a meaningful judgment on the merits. If that need is not presented, then a preliminary injunction should not be considered. But if the need is demonstrated, then the entry of a preliminary injunction rests in the discretion of the district court, which is informed by balancing factors under an analysis conducted pursuant to the familiar four-part test described in Blackwelder [Furniture Co. of Statesville v. Seilig Manuf. Co., 550 F.2d 189, 194-96 (4th Cir.1977)]. Under this test
a court should consider (1) the likelihood of irreparable harm to the plaintiff if the preliminary injunction is denied; (2) the likelihood of harm to the defendant if the injunction is granted; (3) the likelihood that the plaintiff will succeed on the merits; and (4) the public interest.
Further, the plaintiff bears the burden of establishing that each of these factors supports granting the injunction.
[7] In re Microsoft Corp. Antitrust Litig., 333 F.3d 517, 526 (4th Cir.2003) (internal citation and quotation marks omitted). “In applying this four-factor test, ‘[t]he irreparable harm to the plaintiff and the harm to the defendant are the two most important factors.’…Emphasis on the balance of these first two factors results in a sliding scale that demands less of a showing of likelihood of success on the merits when the balance of hardships weighs strongly in favor of the plaintiff, and vice versa.” Id. (alteration in original) (quoting Rum Creek Coals Sales, Inc. v. Caperton, 926 F.2d 353, 359 (4th Cir.1991)).
[8] In this case, therefore, the Court must first examine whether the “limited circumstances” described in Microsoft exist here: namely, whether Plaintiff has demonstrated “a need to protect the status quo and to prevent irreparable harm during the pendency of the litigation to preserve the court’s ability in the end to render a meaningful judgment on the merits.” Id.
[9] Plaintiff’s complaint includes an affidavit describing numerous specific instances in which customers have confused “Two Men and a Truck” and “Truck and 2 Guys Moving,” including several occasions in which unhappy customers of Defendants expressed dissatisfaction to or about Plaintiff, thinking the two were the same. Based on these occurrences, Plaintiff maintains that “Defendants’ actions are depriving and/or damaging Plaintiff’s market goodwill and confusing Plaintiff’s prospective customers.” Motion for Preliminary Injunction, supra, at 15, 19-20 (citing instances of actual confusion by customers and potential customers). The Court finds that there is at least a temporary need to prevent future injuries of this type while this litigation is resolved and that a preliminary injunction would aid in preserving the Court’s ability to render a judgment in the future. The first step of the Microsoft test is, therefore, satisfied.
[10] Having determined that the “limited circumstances” are present in which a preliminary injunction may be issued in the Court’s discretion, the Court must now decide whether to exercise that discretion. The Court’s decision is informed by the four-prong analysis described in Blackwelder. The first Blackwelder factor is the likelihood of irreparable harm to Plaintiff absent the requested relief. Particularly in light of the documented instances of misplaced hostility by Defendants’ customers, the Court finds that enabling Defendants to continue with the alleged infringement is very likely to cause irreparable harm to Plaintiff in the form of lost business, decreased revenue, and loss of reputation and goodwill.
[11] The second Blackwelder factor is the likelihood of harm to Defendants from a preliminary injunction. Defendants could indeed incur harm from even a temporary prohibition on the use of their “Truck and 2 Guys Moving” business name; however, the likely harm to Plaintiff from a lack of injunction is potentially greater, given that Defendant’s business is only about a year and a half old and Plaintiff has been in business since 1985.
[12] The third factor is the likelihood that Plaintiff will succeed on the merits. Given Defendants’ history of total passivity and non-responsiveness in this lawsuit, coupled with the striking similarity between Plaintiff’s and Defendants’ business names, the Court finds that this factor weighs very heavily in Plaintiff’s favor.
[13] Finally, as to the fourth factor-public interest considerations – as noted above, Plaintiff has carefully documented instances of customers’ mistaking Plaintiff for Defendants and vice versa. It appears likely that a preliminary injunction would at least temporarily eliminate the potential for such confusion, which would indeed be good for the public.
[14] On the basis of these considerations, the Court concludes that entry of a preliminary injunction is proper in this case. Although Defendants will likely incur harm from such an injunction, the other three Blackwelder factors are heavily in Plaintiff’s favor and outweigh any potential harm that Defendants may suffer.
B. Motion for Default Judgment and Permanent Injunction
[15] After receiving an entry of default by the Clerk, Plaintiff has moved for entry of a default judgment and permanent injunction. In addition to the injunction, Plaintiff requests the following monetary relief: (1) treble damages “in consequence of [Defendants’] … willful acts of service mark infringement and unfair competition”; (2) treble damages “in consequence of [Defendants’] … willful acts, which have caused injury to Plaintiff’s goodwill and reputation, and caused Plaintiff to suffer damages in lost revenue due to Plaintiff’s franchisees’ lost sales”; (3) statutory interest; and (4) attorneys’ fees and expenses totaling $22,210.18. Accompanying affidavits detail the attorneys’ fees and expenses incurred thus far in the prosecution of this litigation. Plaintiff has not, however, attached any documentation pertaining to the two different types of treble damages it requests.
[16] The undersigned recognizes that Defendants’ past conduct and recalcitrance make it difficult for Plaintiff to ascertain the exact amount of damages. Therefore, as part of the accompanying preliminary injunction, the Defendants will be required to provide the Court and Plaintiff financial information regarding sales and profits while operating under the infringing name. . . . This action will, of necessity, defer any ruling on the Plaintiff’s motion for default judgment and permanent injunction until such time as the Defendants comply with the Court’s preliminary injunction or the deadline for doing so expires.
[17] As to Plaintiff’s request for attorneys’ fees and expenses, Plaintiff has already named a sum certain and submitted the necessary supporting documentation. . . . However, because attorney fees and expenses will no doubt continue to be incurred until this litigation is concluded, the Court will also hold in abeyance Plaintiff’s request for attorney fees and costs to allow Plaintiff to amend such request and for a single order to encompass the entire fee request.
III. ORDER
[18] IT IS, THEREFORE, ORDERED that Plaintiff’s motion for a preliminary injunction is hereby GRANTED, and such is filed contemporaneously herewith.
[19] IT IS FURTHER ORDERED that Plaintiff’s motions for a default judgment, permanent injunction, and for attorney fees and costs are hereby held in abeyance pending further developments in this litigation.
QUESTIONS:
1. Who are the plaintiff(s) and defendant(s)?
2. Is the case being heard in a state court or a federal court? If you were the plaintiff, which court would you prefer? Which court might the defendant prefer? Whose choice should prevail?
3. Where in the country is the case being heard? Go to the plaintiff’s site at https://twomenandatruck.com/. Where are they based? Where do they do business? Did the plaintiff file suit in its home state? Why or why not?
4. What are the plaintiff’s “causes of action?” Why is the plaintiff pleading multiple causes of action?
5. What relief, or “remedies,” did the plaintiff seek? What is a preliminary injunction? What is a permanent injunction? What remedies would you seek if you were the plaintiff?
6. Why is no attorney listed for the defendants? Why was there a motion for “Ex Parte Motion for Alternative Service?” What does “ex parte” mean? Is there any reason to be concerned about ex parte litigation?
7. Did the defendants defend against the lawsuit? What arguments might they have made? In one trademark case, the United States Court of Appeals for the Tenth Circuit stated:
We test the degree of similarity between [trade]marks on three levels: sight, sound, and meaning. We do not consider these factors in isolation. Instead, we must examine them “in the context of the marks as a whole as they are encountered by consumers in the marketplace.” . . . We give the similarities of the marks more weight than the differences.
King of the Mountain Sports, Inc. v. Chrysler Corp., 185 F.3d 1084, 1090 (10th Cir. 1999) (citations omitted). Another court stated:
The greatest protection extends to marks that are purely arbitrary or fanciful and bear no relation to the products or services sold under the mark. The marks “Kodak” and “Xerox” are such marks. A suggestive mark, as the term implies, suggests characteristics of the product or service offered but does not actually describe the product or service. A suggestive mark is entitled to a narrower range of protection than an arbitrary mark.
Minturn Advertising, Inc. v. Hermsen Design Assoc., Inc., 728 F. Supp. 430, 432 (N.D. Tex. 1990) (citations omitted).
8. Did the court grant all of the relief requested by the plaintiff? Why or why not? What relief was granted? Is the case over?
9. This course is about civil procedure. Identify as many procedural issues as you can that arise in the Two Men case. What are the procedural devices? Why are they important?
Revised July 29, 2019