317 F.3d 1121 (10th Cir. 2003), 01-4155, Procter & Gamble Co. v. Haugen

Docket Nº:01-4155
Citation:317 F.3d 1121
Party Name:Procter & Gamble Co. v. Haugen
Case Date:January 06, 2003
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit

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317 F.3d 1121 (10th Cir. 2003)

The PROCTER & GAMBLE COMPANY, The Procter & Gamble Distributing Company, Plaintiffs/Counter-Defendants-Appellants,


Randy L. HAUGEN, individually d/b/a/ Freedom Associates, Inc.; Freedom Tools, Incorporated; Freedom Associates, Inc.; a Utah corporation; Steven E. Brady, individually; Stephen L. Bybee, individually; Eagle Business Development, Inc., a Utah corporation; Ted Randall Walker, individually; Walker International Network, a Texas Partnership; Roger D. Patton, individually, Defendants-Appellees.


Amway Corporation, a Michigan corporation, Defendant/Counter-Claimant-Appellee.

No. 01-4155.

United States Court of Appeals, Tenth Circuit

January 6, 2003

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[Copyrighted Material Omitted]

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Neil Peck, Snell & Wilmer, LLP (Tracy Fowler, Matt Mayer and Nathan Davis on briefs), Denver, CO, for Appellants.

James R. Sobieraj (with Cynthia A. Homan, Timothy Q. Delaney, Dominic P. Zanfardino on briefs), Brinks Hofer Gilson & Lione, Chicago, IL (with Joseph J. Joyce, and Kristin A. VanOrman, Strong & Hanni, Salt Lake City, Utah, on briefs), for Appellees.

Before HENRY and McKAY, Circuit Judges, and BROWN, District Judge.[*]

HENRY, Circuit Judge.

In this case, we are asked to consider whether the district court erroneously exceeded the scope of our mandate when it dismissed Procter & Gamble's ("P & G" 's) claims against defendant Amway Corporation. We reject P & G's challenges and conclude that the district court properly complied with our mandate.


The relevant facts and proceedings are fully set out in the district court's order of June 17, 2001, Procter & Gamble Co. v. Haugen, 158 F.Supp.2d 1286 (D.Utah 2001) ("Dist.Ct.Order"), and in our previous opinion in this case, Proctor & Gamble

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v. Haugen, 222 F.3d 1262 (10th Cir. 2000) ("P & G I"). As a result, we will only briefly summarize them.

P & G alleges that in 1994, defendants Mr. Haugen and the other distributors (the "Distributor Defendants"), disseminated a voicemail message that identified P & G products and disparaged them as having "Satanic" qualities, as being somehow connected with the Church of Satan. P & G further contends that Amway, the supplier of products to the Distributor Defendants, is liable under the Lanham Act and various state torts.

The district court granted the defendants' motion for summary judgment as to P & G's Lanham Act claim, finding that the Satanic rumor did not contain false representations about the "qualities" or "characteristics" of P & G's products. See 15 U.S.C. § 1125(a)(1)(B). P & G then filed a Motion for Reconsideration, arguing that the rumor was actionable under the Lanham Act's "false advertising" provision as a misrepresentation concerning P & G's "commercial activities." The district court subsequently denied P & G's motion because P & G had previously failed to make such an argument. The district court also (1) dismissed P & G's state law claims of tortious interference with business relationships and unfair competition for failure to state a claim under Fed.R.Civ.P. 12(b)(6) and (2) granted summary judgment to the defendants on P & G's state law claims of slander per se and vicarious liability.2

On appeal, we reversed and remanded on P & G's Lanham Act and tortious interference claims. We affirmed the district court's ruling in all other respects.

As to the Lanham Act claim, we noted that we would consider matters not raised in the trial court only in the most unusual circumstances, such as when the public interest is implicated or when manifest injustice would result. P & G I, 222 F.3d at 1270. We then concluded that the subject message "clearly related to P & G's 'commercial activities' under § 43(a)(1)(B) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B)." Id. a 1271.3 We thus

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held that the district court erred in granting summary judgment to the defendants. We instructed "the district court to consider whether P & G has met those elements of a § 43(a) Lanham Act claim not before us in this appeal." Id. at 1276 n. 10.

As to the tortious interference prong, we determined that "the text of the subject message itself at least raise[d] an inference that the [Distributor Defendants] were attempting to interfere" with P & G's business. Id.; id. at 1279. We thus reversed and remanded the district court's grant of the defendants' motion to dismiss as to P & G's tortious interference claim.

On remand, the district court determined that, to the extent our holding affirmed the district court's earlier ruling, none of P & G's claims against defendant Amway Corporation could survive. Specifically, the court (1) determined that P & G could not establish Amway was vicariously liable under the Lanham Act for the actions of the Distributor Defendants; (2) rejected P & G's assertion of contributory infringement under the Lanham Act; (3) concluded that P & G could not establish the elements of a tortious interference claim; (4) determined that P & G's operative complaint was its Second Amended Complaint, and (5) rejected P & G's product disparagement claim as outlined in P & G's Third Amended Complaint. See Dist. Ct. Order, 158 F.Supp.2d. at 1292-95.

In this appeal, P & G disputes the district court's application of our mandate in P & G I and raises five challenges. First, P & G contends that P & G I's ruling that Amway is not vicariously liable for actions of the Distributor Defendants applies only to the Utah vicarious liability claim, not to the federal Lanham Act claim. Second, P & G maintains that when we reinstated its § 43(a) Lanham Act claims in P & G I, we also resurrected P & G's purported claim for contributory infringement. Thus, asserts P & G, the district court erred when it determined this claim was waived, or in the alternative, when the court found that the claim failed on the merits. Third, P & G disputes the district court's dismissal of its tortious interference with contract claims based on res judicata and on the merits. Fourth, P & G contends that the P & G I mandate revived its claims for product disparagement embodied in its previously rejected Third Amended Complaint. Finally, P & G urges that the district court should have allowed discovery before dismissing Amway as a party. For the reasons set forth below, we reject each of P & G's arguments and affirm the district court.


A. Standard of Review

When reviewing the district court's application of our mandate, we consider whether the court abused the limited discretion that our mandate left to it. See United States v. Hicks, 146 F.3d 1198, 1200 (10th Cir. 1998) ("The mandate rule is a discretion-guiding rule that, generally requires trial court conformity with the articulated appellate remand.") (internal quotation marks omitted). " '[W]hen the remand is general, however, the district court is free to decide anything not foreclosed by the mandate.'" Hicks v. Gates Rubber Co., 928 F.2d 966, 971 (10th Cir. 1991) (quoting 1B S. Moore, J. Lucas, & T. Currier, Moore's Federal Practice § 0.404[10] (1988)). But cf. Field v. Mans, 157 F.3d 35, 40 (1st Cir. 1998) ("We

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review an application of the law of the case de novo.").

B. Application of the Mandate Rule

Not surprisingly, "[t]o decide whether the district court violated [our] mandate, it is necessary to examine the mandate and then look at what the district court did." Id.; see Barber v. International Broth, of Boilermakers, 841 F.2d 1067, 1071 (11th Cir. 1988) ("As should be apparent, the application of these mandate rule principles will . . . depend considerably on the stage a case has reached when it goes up on appeal and on the language of the appellate court's mandate and/or opinion."); see generally, 18 J. Moore et al, Moore's Federal Practice ¶ 134.23 (3d ed.2002) (discussing the relationship between the law of the case and the mandate rule).

The mandate consists of our instructions to the district court at the conclusion of the opinion, and the entire opinion that preceded those instructions. See Barber, 841 F.2d at 1071. Although a district court is bound to follow the mandate, and the mandate "controls all matters within its scope, . . . a district court on remand is free to pass upon any issue which was not expressly or impliedly disposed of on appeal." Newball v. Offshore Logistics Int'l, 803 F.2d 821, 826 (5th Cir. 1986); see Hicks, 928 F.2d at 966 (noting that with a general mandate, the district court "is free to decide anything not foreclosed by the mandate") (internal quotation marks omitted).

Here, our opinion in P & G I instructed the district court to explicitly evaluate P & G's commercial activities claim under § 43(a)(1)(B) of the Lanham Act and to also consider P & G's tortious interference claim. Consequently, at this stage of this convoluted litigation we must consider whether the arguments that P & G now raises in this appeal were expressly or impliedly disposed of by P & G I. See Aplt's Br. at 12; Wyler Summit Partnership v. Turner Broadcasting Sys., 235 F.3d 1184, 1193 (9th Cir. 2000) (noting that "[f]or the law of the case doctrine to apply, the issue in question must have been decided explicitly or by necessary implication in [the] previous disposition").

C. P & G's Challenges

1. Vicarious Liability

P & G argues that in P & G I, we limited our rejection of P & G's claim that Amway was vicariously liable for the dissemination of the message from the Distributor Defendants to vicarious liability under Utah law. Thus, P & G asserts, the district court erred when it examined the balance of P & G's claims and determined that, to the extent P & G's federal claim under the Lanham Act rested upon vicarious...

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