La Chemise Lacoste v. Alligator Co., Inc.

• Decision Date: 26 December 1974
• Docket Number: No. 74-1493,74-1493
• Citation: 184 USPQ 321,506 F.2d 339
• Parties: LA CHEMISE LACOSTE, a French Corporation, Appellant, v. The ALLIGATOR COMPANY, INC., a Delaware Corporation, Defendant and Third-Party Plaintiff, v. JEAN PATOU, INC., a New York Corporation, Third-PartyDefendant-Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 339

506 F.2d 339

184 U.S.P.Q. 321

LA CHEMISE LACOSTE, a French Corporation, Appellant, v. The ALLIGATOR COMPANY, INC., a Delaware Corporation, Defendant and Third-Party Plaintiff, v. JEAN PATOU, INC., a New York Corporation,

Third-PartyDefendant-Appellant.

No. 74-1493.

United States Court of Appeals, Third Circuit.

Argued Oct. 29, 1974.

Decided Dec. 26, 1974.

Thomas S. Lodge, Wilmington, Del., W. Brown Morton, Jr., Donald N. Huff, Morton, Bernard, Brown, Roberts & Sutherland, Donal B. Tobin, Washington, D.C., Weingarten, Maxham & Schurgin, Boston, Mass., for appellants; Connolly, Bove & Lodge, Wilmington, Del., of counsel.

Irving Constant, Abraham G. Levin, New York City, Rubin, Wachtel, Baum & Levin, New York City, Arthur H. Seidel, Philadelphia, Pa., Seidel, Gonda & Goldhammer, P.C., Philadelphia, Pa., Lewis S. Black, Jr., Wilmington, Del., Brian L. Bilzin, New York City, Morris, Nichols, Arsht & Tunnell, Wilmington, Del., for appellee.

Appeal from the United States District Court for the District of Delaware (D.C. Civil Action No. 3876).

Before STALEY, ALDISERT and ROSENN, Circuit Judges.

OPINION OF THE COURT

ALDISERT, Circuit Judge.

The decisive question posed by this appeal is whether there was proper federal jurisdiction in a declaratory judgment proceeding removed from the Delaware Court of Chancery. The district court refused to remand and proceeded to an adjudication on the merits. Appellants contend here, as they did at the trial level, that because a federal question did not appear in plaintiff's complaint, the case was improperly removed. We agree with the appellants and will vacate the judgment without comment on the merits.

The genesis of this case is a contest between La Chemise Lacoste, a French corporation and the owner of a common law trademark in the emblem of a crococile, on the one side, and The Aligator Company, Inc., which has federally registered trademarks for the word mark 'Alligator' and for the design of a lizard-like reptile, on the other. Lacoste brought this action in Delaware seeking a declaration of its ownership of and right to use the crocodile emblem as a trademark for toiletries, and for an injunction against interference with those rights. In its complaint Lacoste alleged that it is 'the lawful owner of (the) crocodile emblem as a trademark for toiletries in Delaware, and elsewhere in the United States, and has the exclusive right to use, and to authorize the use of, said emblem as a trademark on toiletries without authorization or consent of any sort from defendant.' Lacoste also averred that its emblem 'has been for many years past, widely and famously associated with M. Rene Lacoste, founder and still a principal officer in the management of plaintiff, having originated during M. Lacoste's career as a Davis Cup tennis player as his personal symbol, and having become the commercial property of plaintiff as a trademark identifying its products in Delaware and elsewhere in the United States, in France and generally throughout the world.'

Following Judge Layton's denial of the motion to remand, Lacoste unsuccessfully attempted to have the removal question certified for review under 28 U.S.C. 1292(b). Prior litigation in this court, La Chemise Lacoste v. General Mills, Inc., 487 F.2d 312, 314 (3d Cir. 1973), did not treat the removal issue, but was limited to 'the propriety of the denial of a preliminary injunction and, incidentally at least, the propriety of the dismissal of the added parties, since most, if not all, of the alleged infringements sought to be restrained pendente lite are acts of those corporations rather than Alligator.' The earlier appeal was not from a final judgment, but from an interlocutory order reviewable under the special provisions of 28 U.S.C. 1292(a).

The within appeal emanates from a final judgment, and, in the absence of a certification under 1292(b), see Climax Chemical Co. v. C. F. Braun & Co., 370 F.2d 616, 617 (10th Cir. 1966), cert. denied, 386 U.S. 981, 87 S.Ct. 1287, 18 L.Ed.2d 231 (1967), is the first opportunity in this court for review of the order denying the petition to remand. Chicago, R.I. & Pac. R.R. v. Stude, 346 U.S. 574, 578, 74 S.Ct. 290, 98 L.Ed. 317 (1954); Wilkins v. American Export-Isbrandtsen Lines, Inc., 401 F.2d 151 (2d) Cir. 1968); C. Wright, Law of Federal Courts 41, at 147 (2d ed. 1970). Accordingly, we reject appellee's contention that appellants, by waiting until appeal from final judgment, have waived the right to challenge the denial of the motion to remand. ¹

Turning to a resolution of the removal question, we quickly note that Alligator does not contend that Lacoste relied on relief under a federal statute in the state declaratory proceeding. Indeed Alligator's argument follows a very narrow compass. It contends: Lacoste desired state declaratory relief vecause Alligator had threatened coercive action against Lacoste for using the trademark on toiletries; since this proposed coercive action was federal in nature, Lacoste in fact had filed an action 'aris(ing) under the Constitution, laws, or treaties of the United States,' 28 U.S.C. 1331. Consequently, the case satisfied the requirement announced in Gully v. First National Bank, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936)-- that the 'right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action. Starin v. New York, 115 U.S. 248, 257 (6 S.Ct. 28, 29 L.Ed. 388); First National Bank v. Williams, 252 U.S. 504, 512, (40 S.Ct. 372, 374, 64 L.Ed. 690)'-- and qualified for removal under 28 U.S.C. 1441(b).

Our analysis begins with an examination of paragraph 10 of Lacoste's complaint:

Defendant has herertofore wrongfully threatened, and continues to threaten, to interfere with plaintiff's said sale of toiletries identified by said crocodile emblem in Delaware, and welsewhere in the United States, by threatening to bring suit against plaintiff and against one or more of the enterprises constituting said authorized channels of distribution of toiletries to enjoin or curtail said sales.

In its petition for removal Alligator contended:

The reference in paragraph 10 of the complaint to a suit which Petitioner threatened and intended to bring against plaintiff, is to a contemplated action in the United States District Court under the Lanham Act, (15 U.S.C. 1051 et seq.), for protection of Petitioner's rights under the aforesaid United States Trademark Registrations.

Alligator asserted, and the district court agreed, that had Alligator sued Lacoste for infringement under the Lanham Act, the district court could have had jurisdiction under 28 U.S.C. 1338. Therefore, Alligator argues that the state action raised a substantial federal question permitting removal.

In denying the motion to remand, the district court reasoned:

To determine whether a declaratory judgment action raises a federal question, the Court must look to the cause of action which the declaratory defendant threatens to assert; if the threatened action involves a claim under federal law, there exists federal question jurisdiction over the declaratory judgment action. Public Service Commission of Utah v. Wycoff Co., 344 U.S. 237, 73 S.Ct. 236, 97 L.Ed. 291 (1952); e.g., Product Engineering and Manufacturing, Inc. v. Barnes, 424 F.2d 42, 165 U.S.P.Q. 229 (10th Cir. 1970); Apex Beauty Products Manufacturing Corp. v. Brown Shoe Co., 209 F.Supp. 73 (S.D.N.Y.1962). Alligator threatened Lacoste with an action for infringement of its federally registered trademark and, under 28 U.S.C. 1338(a), the District Courts have original jurisdiction of any civil action arising under any Act of Congress relating to trademarks. Therefore, while Lacoste had an option to seek declaratory relief in a state or federal forum, it cannot deny Alligator's right to have the federal question determined by a federal court by the expedient of artful pleading.

Federal jurisdiction exists here for another reason. Although the normal rule requires that federal jurisdiction is established solely by the complaint, Gully v. First National Bank, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936), in certain cases where a question of federal status is involved, the Court may look beyond the complaint to establish jurisdiction; e.g., Fay v. American Cystoscope Makers, 98 F.Supp. 278 (S.D.N.Y.1951); Ulichny v. General Electric, 309 F.Supp. 437 (N.D.N.Y.1970).

La Chemise Lacoste v. Alligator Co., 313 F.Supp. 915, 917-918 (D.Del.1970). We do not accept either part of this analysis.

First, any evaluation of the dictum in Public Service Commission v. Wycoff, 344 U.S. 237, 73 S.Ct. 236, 97 L.Ed. 291 (1952), must proceed from the threshold understanding that the declaratory judgment proceeding there was federal; it was not a state declaratory proceeding removed to a district court. ² Thus the precise Wycoff dictum refers to an action originating in the federal court: 'Where the complaint in an action for (federal) declaratory judgment seeks in essence to assert a defense to an impending or threatened state court action, it is the character of the threatened action, and not of the defense, which will determine whether there is federal-question jurisdiction in the District Court.' Ibid. at 248, 73 S.Ct. at 242. ³

Although we applied the Wycoff teaching to a federal declaratory judgment act proceeding, Thiokol Chemical Corp. v. Burlington Industries, Inc., 448 F.2d 1328, 1330-1331 (3d Cir. 1971), cert. denied, 404 U.S. 1019, 92 S.Ct. 684, 30 L.Ed.2d 668 (1972), we have not been directed to, nor has our research disclosed, the application of the Wycoff principle to any removal case ⁴ except that of the district court here.

Given the factual complex of this case, this is not a distinction without a difference, for, unlike the typical Wycoff situation, in the instant case we are constrained both by principles for determining federal...