Cashmere & Camel Hair Mfrs. v. Saks Fifth Ave.

• Decision Date: 01 April 2002
• Docket Number: No. 00-2341.,00-2341.
• Citation: 284 F.3d 302
• Parties: CASHMERE & CAMEL HAIR MANUFACTURERS INSTITUTE, f/k/a Camel Hair & Cashmere Institute of America, Inc., and L.W. Packard & Co., Inc., Plaintiffs, Appellants, v. SAKS FIFTH AVENUE, Harve Benard, Ltd. and Filenes Basement, Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

284 F.3d 302

CASHMERE & CAMEL HAIR MANUFACTURERS INSTITUTE, f/k/a Camel Hair & Cashmere Institute of America, Inc., and L.W. Packard & Co., Inc., Plaintiffs, Appellants, v. SAKS FIFTH AVENUE, Harve Benard, Ltd. and Filenes Basement, Defendants, Appellees.

No. 00-2341.

United States Court of Appeals, First Circuit.

Heard December 6, 2001.

Decided April 1, 2002.

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Robert J. Kaler, with whom Gadsby Hannah, LLP, was on brief, for appellants.

David B. Bassett, with whom William F. Lee, Michael J. Summersgill, Colleen E. Dunham, Hale and Dorr, LLP, Robert P. Lynn, Jr. and Robert P. Lynn, Jr. LLC, were on brief, for appellees.

Before TORRUELLA, Circuit Judge, ROSENN,^* Senior Circuit Judge, and STAHL, Senior Circuit Judge.

TORRUELLA, Circuit Judge.

Plaintiffs-appellants L.W. Packard & Co. ("Packard") and Cashmere & Camel Hair Manufacturers Institute (the "Institute") appeal from the district court's entry of partial summary judgment dismissing their false advertising claims under the Lanham Act, 15 U.S.C. § 1125(a), and Massachusetts state law. In particular, Packard challenges the dismissal of its claims for money damages, while the Institute argues that the district court erred in dismissing one of its claims for injunctive relief. Because we conclude that the district court relied on impermissible inferences in favor of the moving party in reaching its conclusions, we reverse and remand the case for action consistent with this opinion.

Background¹

The Institute is a trade association of cashmere manufacturers dedicated to preserving the name and reputation of cashmere as a speciality fiber. Packard is a member of the Institute and a manufacturer of cashmere and cashmere-blend fabric.

In 1993, defendant-appellee Harve Benard, Ltd. ("Harve Benard") began manufacturing a line of women's blazers that were labeled as containing 70 percent wool, 20 percent nylon, and 10 percent cashmere. Its labels also portrayed the blazers as "A Luxurious Blend of Cashmere and Wool," "Cashmere and Wool," or "Wool and Cashmere." Harve Benard sold large quantities of these cashmere-blend garments to retail customers, including defendants Saks Fifth Avenue ("Saks") and Filene's Basement.

In 1995, plaintiffs began purchasing random samples of the Harve Benard garments and giving them to Professor Kenneth Langley and Dr. Franz-Josef Wortmann, experts in the field of cashmere identification and textile analysis. After conducting separate tests on the samples, the experts independently concluded that, despite Harve Benard's labels to the contrary, the garments contained no cashmere.² In addition, Dr. Wortmann found that approximately 10 to 20% of the fibers in the Harve Benard garments were recycled — that is, reconstituted from the deconstructed and chemically-stripped remnants of previously used or woven garments.

Relying on their experts' findings, plaintiffs filed this suit in district court claiming that defendants falsely advertised their garments in violation of § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), the Massachusetts Unfair and Deceptive Trade Practices Act, Mass. Gen. Laws ch. 93A, and the common law of unfair competition. More specifically, plaintiffs claim that the garments were mislabeled in two material respects: (1) the Harve Benard blazers contained significantly less than the 10% cashmere they were represented as having ("cashmere content claim"); and (2) any cashmere that the blazers did contain was not virgin, as the unqualified word "cashmere" on the label suggests, but recycled ("recycled cashmere claim").³ Each plaintiff seeks a different form of relief for these alleged misrepresentations: whereas the Institute seeks a permanent injunction against any future mislabeling, Packard seeks monetary damages on the theory that it lost sales as a result of the manufacture and sale of the mislabeled garments.

The district court granted partial summary judgment in favor of defendants, dismissing both of Packard's claims for money damages and seemingly dismissing the Institute's request for injunctive relief on its recycled cashmere claim.⁴ The only ruling in plaintiffs' favor — and thus the only ruling that they do not appeal — was the district court's denial of defendants' summary judgment motion on the Institute's cashmere content claim for injunctive relief.

After the district court's summary judgment ruling, however, the Institute chose to voluntarily dismiss this remaining claim so that it could expedite the appeal of its recycled cashmere claim for injunctive relief.

Standard of Review

Plaintiffs appeal the district court's summary judgment dismissing Packard's cashmere content claim for money damages; Packard's recycled cashmere claim for money damages; and the Institute's recycled cashmere claim for injunctive relief. We review de novo the district court's summary judgment dismissing plaintiffs' claims. See Straughn v. Delta Air Lines, Inc., 250 F.3d 23, 33 (1st Cir.2001).

Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). "[T]o defeat a properly supported motion for summary judgment, the nonmoving party must establish a trial-worthy issue by presenting enough competent evidence to enable a finding favorable to the nonmoving party." LeBlanc v. Great Am. Ins. Co., 6 F.3d 836, 842 (1st Cir.1993) (internal quotation marks omitted). In exercising our review, we construe the record evidence "in the light most favorable to, and drawing all reasonable inferences in favor of, the nonmoving party." Feliciano de la Cruz v. El Conquistador Resort & Country Club, 218 F.3d 1, 5 (1st Cir.2000).

For the purposes of this appeal, defendants concede that the issue of whether the garments were mislabeled is both material and genuinely in dispute. They argue, however, that there is no evidence that their mislabeling deceived any members of the consuming public or caused plaintiffs any harm. Defendants thus seek summary judgment on the grounds that plaintiffs cannot adduce sufficient evidence of consumer deception or causation to satisfy the requirements of the applicable law.

Discussion

I.

Before delving into the merits of plaintiffs' appeal, we pause to address a jurisdictional challenge. Defendants argue that the Institute has no legal standing to seek appellate review because the Institute is impermissibly attempting to appeal from its own voluntary dismissal. After the district court's grant of summary judgment, the Institute had at least one remaining claim against defendants. Rather than pursuing that claim to trial, however, the Institute voluntarily moved to dismiss its claim with prejudice. Shortly thereafter, the Institute timely filed the instant appeal. Since it is well known that generally "a plaintiff may not appeal a voluntary dismissal because there is no involuntary or adverse judgment against him," Bell v. City of Kellogg, 922 F.2d 1418, 1421 (9th Cir.1991), defendants contend that this Court lacks jurisdiction over the Institute's improper appeal.

Defendants acknowledge in their brief, however, that there is a narrow exception which permits appeals from voluntary dismissals where the dismissal was sought to expedite review of a prejudicial interlocutory ruling. See John's Insulation, Inc. v. L. Addison & Assocs. Inc., 156 F.3d 101, 107 (1st Cir.1998) (noting that "most circuits hold that voluntary dismissals, and especially those with prejudice, are appealable final orders," and holding that "a plaintiff that deems an interlocutory ruling to be so prejudicial as to deserve immediate review ... has the alternative of dismissing the complaint voluntarily"); Martin v. Franklin Capital Corp., 251 F.3d 1284, 1288 (10th Cir.2001) (same holding). Nevertheless, defendants assert that the Institute does not fall within this exception because its voluntary dismissal was not sought for the purposes of obtaining immediate appellate review of a prior order, but rather because the Institute realized that its remaining claim was without merit.

Defendants' argument is undermined, however, by that portion of the record establishing that the Institute voluntarily dismissed its remaining claim, in part, so that it could appeal adverse rulings in the summary judgment order. In its motion to dismiss, the Institute unequivocally stated:

"[The Institute] has determined that the most appropriate course of action is to dismiss [its remaining claim] with prejudice to avoid an unnecessary trial on that issue, without prejudice to the plaintiffs' right to appeal the broader rulings dismissing the bulk of their claims."

The Institute's motion thus demonstrates that (1) it believed that the summary judgment order significantly prejudiced its case by dismissing "the bulk of [its] claims," and (2) the Institute sought the voluntary dismissal to expedite appellate review of the prior order. Because the Institute has satisfied the prerequisites for appealing a voluntary dismissal, see John's Insulation, 156 F.3d at 107 (noting that "the proper course of action is to file a motion for voluntary dismissal with prejudice, stating explicitly that the purpose is to seek immediate review of the interlocutory order in question"), we conclude that the Institute is properly before this Court.

At oral argument, defendants unveiled a new contention: they claimed that the Institute could not avail itself of the exception because the summary judgment order did not substantially prejudice the Institute, as is required by existing caselaw. See id. In particular, defendants argued that since the summary judgment order did not dismiss any of the Institute's claims for injunctive relief, there is insufficient...