Andretti v. Borla Performance Industries, Inc.
| Decision Date | 21 October 2005 |
| Docket Number | No. 04-2406.,No. 04-2404.,No. 04-1835.,04-1835.,04-2404.,04-2406. |
| Parties | Mario ANDRETTI; M.A. 500, Incorporated, Plaintiffs-Appellants/Cross-Appellees, v. BORLA PERFORMANCE INDUSTRIES, INCORPORATED, Defendant-Appellee/Cross-Appellant. |
| Court | U.S. Court of Appeals — Sixth Circuit |
ARGUED: Eric D. Scheible, Wineman & Scheible, Bloomfield Hills, Michigan, for Appellants. Jeffrey P. Thennisch, Dobrusin & Thennisch, Birmingham, Michigan, for Appellee. ON BRIEF: Eric D. Scheible, Wineman & Scheible, Bloomfield Hills, Michigan, for Appellants. Jeffrey P. Thennisch, Dobrusin & Thennisch, Birmingham, Michigan, Melvin M. Raznick, Law Offices of Melvin Raznich, Southfield, Michigan, for Appellee.
Before: GUY, BATCHELDER, and GILMAN, Circuit Judges.
This case involves a dispute over Mario Andretti's right of publicity. Mario Andretti and Car Sound Exhaust System, Inc. (Car Sound) entered into a contract in which Andretti agreed to be Car Sound's corporate spokesperson. During the contract period, defendant Borla Performance Industries, Inc. (Borla) advertised a statement Andretti had made about Borla's product. Andretti had no prior knowledge and did not give Borla permission to use his name or quotation. Andretti and M.A. 500, Inc. (collectively, "Andretti") sued Borla, seeking a permanent injunction and damages for violating Andretti's right to publicity, tortiously interfering with a business relationship, violating the Michigan Consumer Protection Act, quantum meruit, violating the Lanham Act §§ 1125(a) and 1125(c), and unfair competition. The district court granted summary judgment to Borla on all the damage claims, but issued the permanent injunction against Borla sought by Andretti. The court then awarded Rule 11 sanctions against Andretti, ordered Andretti to pay the costs incurred by Borla after it made an unsuccessful Rule 68 offer of judgment, denied Borla's other requests for costs and fees, and denied Andretti's request for costs. We affirm the district court's rulings on every issue.
The facts underlying this case are undisputed and uncomplicated. Mario Andretti was a successful and well known race-car driver before he retired from automobile racing. Andretti is now a corporate spokesman for companies that contract with Andretti for the exclusive right to utilize his name, image, likeness, and personal services. On November 1, 2001, Andretti and Car Sound, a manufacturer of after-market exhaust systems and catalytic converters, entered into a contract that provided Car Sound with the exclusive right for four years to utilize Andretti's rights of publicity with regard to exhaust systems. Borla, Car Sound's largest direct competitor, began an advertisement campaign in the spring of 2003 that included a quote from Andretti in which he praised a Borla product. Borla received permission to use the quotation from the publication in which the quote originally appeared, but it did not seek or receive Andretti's permission.
Andretti filed a five-count complaint and a motion for a preliminary injunction against Borla in Oakland County Circuit Court, Michigan, on March 20, 2003. Borla removed the complaint to federal court. To demonstrate that the amount in controversy exceeded the federal diversity jurisdiction requirement of $75,000, Borla's attorney attached his own declaration to the notice of removal stating that Andretti's pre-suit demands to Borla were about $200,000. The parties stipulated to a preliminary injunction order on April 30, 2003. In June, Andretti filed an eight-count First Amended Complaint, which included claims for violation of his right to publicity, tortious interference with a business relationship, violation of the Michigan Consumer Protection Act, quantum meruit, violation of the Lanham Act §§ 1125(a) and 1125(c), and unfair competition. Borla made an offer of judgment pursuant to Federal Rule of Civil Procedure 68 on December 22, 2003. Borla's offer included $15,000 for costs, expenses, fees, and damages and a permanent injunction "forever barring, enjoining, and restraining Defendant from using or disseminating any advertisement or promotional material that contains the quotation given by Plaintiff, Mario Andretti, on page 17 of the Summer 2001 edition of the C5 Registry." Andretti rejected the Rule 68 offer of judgment.
Borla then filed several motions for summary judgment, including a motion for summary judgment on Count II, tortious interference with a business relationship, and a motion for summary judgment on Count VIII, Unfair Competition. Borla also moved for summary judgment on the remaining claims, arguing that since Andretti could not show any damages, his claims were moot due to Borla's offer to enter a permanent injunction. Andretti moved to strike this third motion on procedural grounds. The district court granted the motion on Count II on April 2, 2004; granted the motion on Count VIII on April 13, 2004;1 granted the motion for summary judgment on the remaining claims on May 27, 2004; and denied Andretti's motion to strike (the May 27, 2004 Order). Also on May 27, 2004, the district court issued the Order Entering Judgment and Granting Injunction (the Judgment). The Judgment was in favor of Andretti and M.A. 500, Inc. and enjoined Borla from using Andretti's quotes or likeness or implying that Andretti endorsed Borla's products. The permanent injunction was worded identically to the preliminary injunction. Andretti appealed from the May 27 Order but not the Judgment.
Borla then moved for costs, sanctions, and attorney fees pursuant to Federal Rule of Civil Procedure 54(d); Federal Rule of Civil Procedure 68; 15 U.S.C. § 1117(a) (the Lanham Trademark Act); 15 U.S.C. § 505 (the Copyright Act); and Federal Rule of Civil Procedure 11. On August 27, 2004, the district court ruled that Andretti was a prevailing party and therefore that Borla was not entitled to costs or attorney fees as provided in Rule 54(d) and the Lanham Act. The court also determined that Borla was not entitled to attorney fees under the Copyright Act because, even though Borla had argued that several of plaintiffs' claims were preempted by the Copyright Act, plaintiffs had not directly alleged any Copyright Act claims and the court had not ruled that any of plaintiffs' claims were preempted.2 The district court did award Rule 11 sanctions against plaintiffs because plaintiffs failed to voluntarily dismiss Count VIII of the Amended Complaint, and ordered plaintiffs to pay defendant the costs and attorney fees incurred in pursuing the motion for summary judgment on that claim. Furthermore, the district court awarded Borla its costs incurred after December 22, 2003, the date it made its Rule 68 offer of settlement, because the relief obtained by plaintiffs was not more favorable than the Rule 68 offer. The costs totaled $5,393.35. Finally, the district court rejected plaintiffs' requests for costs as the prevailing party under Rule 54(d) because their "judicially sanctioned victory was insignificant and the final disposition of this case amounted to a victory for Defendant." The parties cross-appealed.
On appeal, plaintiffs argue that the district court erred by (1) denying its motion to strike Borla's motion for summary judgment, (2) granting Borla's motion for summary judgment based on the lack of evidence of damages, (3) awarding Borla costs under Rule 68, (4) sanctioning plaintiffs under Rule 11, and (5) refusing to award Andretti costs under Rule 54(d). Defendant argues that we lack jurisdiction to consider plaintiffs' appeal because they appealed just the order granting defendant's motion for summary judgment but not the judgment itself. It also cross-appeals the district court's August 27, 2004 Order, arguing that the district court erred by (1) determining that plaintiffs were the prevailing party, (2) denying its motion for fees under 15 U.S.C. § 1117, and (3) denying additional sanctions against plaintiffs for their refusal to voluntarily dismiss Count II.3 We turn first to the jurisdiction issue.
Borla contests this court's jurisdiction over Andretti's appeal of the May 27, 2004 order because Andretti has not appealed the judgment, and if we were to reverse the district court's ruling against Andretti, Borla contends the district court's judgment predicated on mootness would somehow remain in place with a hypothetically "live" damages claim, which is inconsistent with the doctrine of mootness. Borla had previously moved to dismiss Andretti's appeal, but another panel of this court rejected Borla's motion, stating simply: "The fact that the plaintiffs did not also appeal the injunctive relief granted in their favor does not render moot their appeal of the dismissal of the claims for damages." (No. 04-1835 Order of 9/29/04). We agree.
We have appellate jurisdiction pursuant to 28 U.S.C. § 1291 because a final judgment has been entered. Andretti was not required to appeal a judgment in his favor in order to bring his appeal of a contemporaneously issued order adverse to his interests. If we were to decide that the May 27, 2004 order was incorrect because there was an issue of fact as to Andretti's damages, the order would be vacated and remanded to the district court for proceedings consistent with our opinion. The judgment would still be valid and its injunction still in place. It would no longer be a final judgment because the district court would be required to conduct further proceedings consistent with our hypothetical decision, but the judgment would not be "wholly inconsistent" with our decision regarding damages, as Borla argues. In any event, we explain immediately below why the district court correctly decided that Andretti failed to produce evidence of damages, and therefore the effect of a reversal is...
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