California Scents v. Surco Products, Inc.

Decision Date06 May 2005
Docket NumberNo. 03-56116.,03-56116.
Citation406 F.3d 1102
PartiesCALIFORNIA SCENTS, aka California Scents, Inc., Plaintiff-counter defendant-Appellant, v. SURCO PRODUCTS, INC., aka Doe 1; Magic Mountain Products, aka Doe 2; Odor Control Central, aka Doe 3, Defendants, Associated Products, Inc., a Pennsylvania Corporation; Ralph J. Simons, Counter-defendants, and Pestco, Inc., a Pennsylvania Corporation dba Pacific Coast; Air-Scent International, a Pennsylvania Corporation, Defendants-counter-claimants-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

Steven Brower (argued) and Robert M. Dato (briefed), Stephan, Oringher, Richman & Theodora, Costa Mesa, CA, for the plaintiff-appellant.

Richard A. Ejzak, Cohen & Grigsby, Pittsburgh, PA, for the defendants-appellees.

Appeal from the United States District Court for the Central District of California; Gary L. Taylor, District Judge, Presiding. D.C. No. CV-99-00009-GLT.

Before: PREGERSON, CANBY, JR., Circuit Judges, and REED, JR.,* District Judge.

PREGERSON, Circuit Judge.

When plaintiff California Scents filed its complaint it did not demand a jury trial. Defendant Pestco answered, filed counterclaims, and did demand a jury trial "as to all counterclaims." In this appeal we consider whether, under Federal Rule of Civil Procedure 38, California Scents reasonably relied on Pestco's jury trial demand "as to all counterclaims" so as to preserve California Scents's right to a jury trial on the claims pled in its complaint.

We conclude that the district court's denial of a jury trial on California Scents's claims was error that caused California Scents to suffer prejudice. We reverse and remand for trial.

FACTUAL AND PROCEDURAL BACKGROUND
I. The Complaint, Answer, and Summary Judgment

California Scents manufactures air fresheners for the retail market. Its air fresheners are individually packaged "pull top" aluminum cans carrying brightly colored "scratch and sniff" labels. The labels produce a fragrance that corresponds to the name of the air freshener. The names of California Scents's air fresheners, for example "Sierra Meadows" and "Pasadena Rose," are suggestive of various California regions. Pestco manufactures a similar air freshener for the retail market.

California Scents brought suit against Pestco in district court, alleging trade dress infringement, unfair competition, and false advertising under the Lanham Act, 15 U.S.C. § 1125(a), and unfair competition under California Business and Professions Code § 17200. In its complaint, California Scents alleged that it had developed and marketed an "inherently distinctive and non functional" trade dress for its air freshener. California Scents further alleged that after it sent Pestco a cease-and-desist letter, Pestco continued to manufacture a "nearly identical air freshener product, in nearly identical color-coded cans, with nearly identical color coded `scratch and sniff' labels," and "exhibited [its] air fresheners in counter top display boxes which are nearly identical to [California] Scents's display box." Finally, California Scents claimed that Pestco falsely advertised that it had been in business since 1946. California Scents did not demand a jury trial when it filed its complaint.

Pestco asserted several affirmative defenses and counterclaims in its answer. Pestco admitted to manufacturing air fresheners such as "Sierra Spruce" and "Rose Parade," but alleged that California Scents's claims were barred by the doctrine of "unclean hands" because California Scents had copied Pestco's distinctive product line. Specifically, in its third affirmative defense, Pestco alleged that California Scents copied Pestco's "Nature Scent" product line, which consists of "a spill proof wafer impregnated with organic air fresheners in a variety of fragrances contained in a recyclable aluminum can with a removable ring-top cover and a multicolor outer label." Pestco further alleged that it began manufacturing and selling the distinctive air fresheners at least eight years before California Scents came into existence.

Pestco counterclaimed alleging (1) business disparagement, (2) business defamation, (3) conspiracy to disparage and defame under California law, and (4) false advertising under federal law. Pestco's first three counterclaims are based on the same allegations: that California Scents injured Pestco's reputation and sales by falsely representing to sales representatives and competitors in the air freshener industry that Pestco "copied and/or infringed upon" California Scents's air freshener trade dress. Pestco's fourth counterclaim is based on the allegation that California Scents falsely advertised that its product contains one-hundred percent natural fragrance oils and made contradictory representations about the life-span of its air fresheners. The factual allegations in Pestco's third affirmative defense, including the contention that California Scents copied its trade dress from Pestco, were incorporated by reference into each of Pestco's counterclaims. Pestco demanded a jury trial "as to all counterclaims." The case was set for a jury trial in September 2000.

Pestco moved for summary judgment on California Scents's trade dress infringement and unfair competition claims.1 The district court granted Pestco's motion for summary judgment. The district court then granted Pestco's subsequent motion to dismiss its counterclaims with prejudice.

California Scents appealed the grant of summary judgment in favor of Pestco. See Cal. Scents v. Surco Prods., Inc., No. 00-56763, 2002 WL 22346 (9th Cir. Jan.8, 2002) (unpublished disposition). We reversed and held that a genuine issue of material fact existed on each of the three factors necessary to make out a trade dress claim under the Lanham Act. See id. at *4.

II. The Bench Trial

On remand, California Scents argued that it was entitled to a jury trial on its claims for trade dress infringement and unfair competition even though it never demanded a jury trial. California Scents contended that many of the factual issues raised in Pestco's business defamation and disparagement counterclaims were similar to the issues raised in its trade dress infringement and unfair competition claims. In other words, California Scents believed that Pestco's jury demand was directed to the same issues raised in California Scents's complaint. California Scents claimed that it was therefore entitled to rely on Pestco's jury demand to preserve its own right to a jury trial on its complaint. The district court disagreed, and ordered the case to be tried as a bench trial.

After a four day bench trial, the district court ruled for Pestco. The court found that California Scents failed to show by a preponderance of the evidence that its trade dress was nonfunctional, distinctive, or that there was a likelihood that the public would confuse Pestco's and California Scents's trade dress.

California Scents appeals the district court's ruling. California Scents argues that the district court erred in denying it a jury trial on its complaint and that the error was not harmless.

STANDARD OF REVIEW

Entitlement to a jury trial is a question of law reviewed de novo. See Kulas v. Flores, 255 F.3d 780, 783 (9th Cir.2001). This court reviews de novo a district court's interpretation of the Federal Rules of Civil Procedure. See Atchison, Topeka & Santa Fe Ry. Co. v. Hercules Inc., 146 F.3d 1071, 1073 (9th Cir.1998).

ANALYSIS
I. The Scope of Reasonable Reliance Under Rule 38

Federal Rule of Civil Procedure 38(b) provides that a party seeking to have a disputed issue tried before a jury must serve a jury demand upon the other parties "at any time after the commencement of the action and not later than 10 days after the service of the last pleading directed to such issue." Fed.R.Civ.P. 38(b). A party may "specify the issues which the party wishes so tried; otherwise the party shall be deemed to have demanded trial by jury for all the issues so triable." Fed.R.Civ.P. 38(c). Once a demand has been made, it "may not be withdrawn without the consent of the parties." Fed.R.Civ.P. 38(d).

Rule 38 "has been interpreted as incorporating a right of reasonable reliance on the jury demand of another party." In re N-500L Cases, 691 F.2d 15, 22 (1st Cir.1982); see also Rosen v. Dick, 639 F.2d 82, 87 (2d Cir.1980) ("Undoubtedly, Rule 38 embodies the equitable principles of reasonable reliance (for a party seeking to invoke the jury trial right) and adequate notice (for the other parties in an action)."). Thus, "once one party files such a [jury] demand other parties are entitled to rely on that demand for the issues it covers, and need not file their own demands." Fuller v. City of Oakland, 47 F.3d 1522, 1531 (9th Cir.1995); see also Rosen, 639 F.2d at 91 ("[C]ourts will not require the formal making of a superfluous second demand, nor will they penalize a party who has reasonably relied on an existing demand.").

The question presented in this appeal is whether the "issues" raised in California Scents's complaint were embraced by Pestco's jury demand. See Rosen, 639 F.2d at 92 ("If the first demand does not cover issues pertinent to a second party, the second party cannot rely reasonably on the first demand, and the second demand would be far from superfluous since, without it, the right to a jury trial will have been waived as to those additional issues."). If so, California Scents reasonably relied on Pestco's jury demand to preserve its own right to a jury trial on the claims in its complaint. If not, California Scents waived its right to a jury trial on its claims by failing to request a jury trial within ten days of the last pleading directed to the issues raised in its complaint. See Fed.R.Civ.P. 38(b), 38(d).

In deciding this question, we draw on those cases analyzing whether a plaintiff that has waived its right to a jury trial on the claims in its complaint may...

To continue reading

Request your trial
30 cases
  • Baldwin v.United States
    • United States
    • U.S. District Court — Northern Mariana Islands
    • September 26, 2011
    ...Aetna Ins. Co. v. Kennedy ex rel. Bogash, 301 U.S. 389, 393, 57 S.Ct. 809, 81 L.Ed. 1177 (1937)); accord Cal. Scents v. Surco Prods., Inc., 406 F.3d 1102, 1108 (9th Cir.2005). This flexible standard “accept[s] jury demands that fall far short of the ideal.” Lutz, 403 F.3d at 1064 (finding t......
  • Individually v. United States
    • United States
    • U.S. Court of Appeals — Federal Circuit
    • March 31, 2010
    ... ... statute. See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, ... 15. See, e.g., Cal. Scents v. Surco Prods., Inc., ... 406 F.3d 1102, 1109 (9th ... ...
  • Bauerle v. U.S. Dep't of Health & Human Servs.
    • United States
    • U.S. District Court — District of Arizona
    • December 17, 2013
    ...other parties may rely on that demand "for the issues it covers, and need not file their own demands." California Scents v. Surco Products, Inc., 406 F3d 1102, 1106 (9th Cir. 2005), internal quotes omitted. In other words, as Northwest Medical Center and the Arizona Department of Health Ser......
  • Adobe Sys. Inc. v. Christenson
    • United States
    • U.S. District Court — District of Nevada
    • September 10, 2012
    ...Cir.2002) (“False light, like defamation, requires at least an implicit false statement of objective fact.”); Cal. Scents v. Surco Prods., Inc., 406 F.3d 1102, 1109 (9th Cir.2005) (common law product disparagement). There are two fundamental problems with Adobe and SIIA's arguments, however......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT