Toyo Tire & Rubber Co., Ltd. v. Hong Kong Tri-Ace Tire Co., Ltd.

• Citation: 281 F.Supp.3d 967
• Decision Date: 20 November 2017
• Docket Number: Case No.: SACV 14–00054–CJC(JPRx)
• Court: U.S. District Court — Central District of California
• Parties: TOYO TIRE & RUBBER CO., LTD. and Toyo Tire U.S.A. Corp., Plaintiffs, v. HONG KONG TRI–ACE TIRE CO., LTD., Tri–Ace Wheel & Tire Corporation, Voma Tire Corporation, ITG Voma Corp., and Doublestar Dong Feng Tyre Co., Ltd., Defendants.

281 F.Supp.3d 967

TOYO TIRE & RUBBER CO., LTD. and Toyo Tire U.S.A. Corp., Plaintiffs,

v.HONG KONG TRI–ACE TIRE CO., LTD., Tri–Ace Wheel & Tire Corporation, Voma Tire Corporation, ITG Voma Corp., and Doublestar Dong Feng Tyre Co., Ltd., Defendants.

Case No.: SACV 14–00054–CJC(JPRx)

United States District Court, C.D. California, Southern Division.

Signed November 20, 2017

Jean–Paul Ciardullo, William J. Robinson, Victor De Gyarfas, Foley and Lardner LLP, Los Angeles, CA, for Plaintiffs.

Felix T. Woo, Dentons U.S. LLP, Los Angeles, CA, for Defendants.

ORDER GRANTING IN SUBSTANTIAL PART PLAINTIFFS' RENEWED MOTION FOR CONTEMPT

CORMAC J. CARNEY, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

Before the Court is Plaintiffs' renewed motion for civil contempt. (Dkt. 27 [hereinafter, "Mot."].) For the following reasons, the motion is GRANTED IN SUBSTANTIAL PART.

II. BACKGROUND

Plaintiffs Toyo Tire & Rubber Co., Ltd., and Toyo Tire U.S.A. Corp. (collectively "Toyo") brought this case against Defendants Hong Kong Tri–Ace Wheel & Tire Corporation, Voma Tire Corporation, ITG Voma Corp., and Doublestar Dong Feng Tyre Co., Ltd. ("DDF"), on January 14, 2014, alleging seven claims for relief based on Defendants' alleged infringement of Toyo's intellectual property in its tire designs, including trade dress infringement. (See Dkt. 1.) The Complaint alleged that Defendants' Tri–Ace Mud Gripper M/T tire and Mark Ma Dakar M/T tire ("Mark Ma tire") infringed on Toyo's Open Country M/T tire ("OPMT tire") trade dress. (Id. ¶¶ 73–88.)

On March 7, 2014, Toyo filed a final stipulation for judgment as to DDF ("Stipulation"). (Dkt. 8.) The Stipulation stated that Toyo had "a protectable trade dress in the overall appearance of its" OPMT tires, noting the "tread pattern with an aggressive appearance," that "the overall tread design" was "non-functional," that Defendant DDF manufactured two "Mark Ma" tires that infringed on the OPMT trade dress due to a "confusingly similar" look, and that "[m]anufacture, importation, distribution, sale and/or offer for sale by [DDF] of tires using the OPMT Trade Dress, including [the Mark Ma tires], constitutes trade dress infringement under 15 U.S.C. § 1125(a)." (Dkt. 8 ¶¶ 17, 19, 23–24.) Jianhan Wang signed the Stipulation as DDF's General Manager and worked with an employee of Qingdao Doublestar Tire Industrial Co., Ltd. ("QDT") on the Stipulation. (Dkts. 8, 10; Mot. Ex 6 Responses to Interrogatories Nos. 1 and 14.)

The Court entered a judgment in Toyo's favor on March 10, 2014 ("Final Judgment"). (Dkt. 10.) The judgment states, "[p]ursuant to the parties' stipulation, the Court, having made no independent findings of fact or conclusions of law, orders as follows: [DDF], its subsidiaries, affiliates, parents, successors, assigns, officers, agents, servants, employees, attorneys, and all persons acting in concert or in participation with it be preliminarily and permanently enjoined from ... [u]sing [Toyo's OPMT] Trade Dress or any trade dress or tread or sidewall design confusingly similar thereto." (Dkt. 10 ¶ 1.)

In prior proceedings with the International Trade Commission ("ITC") in 2013, Toyo had requested that DDF fill out a Manufacturer Settlement Questionnaire, which included a request that DDF indicate which tires it produced from a list of tires Toyo provided. (Mot. at 4; Dkt. 27–1 [Declaration of William J. Robinson, hereinafter "Robinson Decl."] ¶ 5, Ex. 2.) DDF indicated that it produced only the "TRI–ACE–FUEL M/T" tire. (Robinson Decl. ¶ 5, Ex. 2 Question 9.) One tire on the list was the AMP M/T ("AMP") tire. (Id. ) Upon later investigation, Toyo discovered that the AMP tire was manufactured in China by QDT, that QDT was a sister company of DDF, and that both QDT and DDF were owned by Doublestar Group Corp ("DGC"). (Robinson Decl. ¶ 6.) Toyo claims that it did not include the AMP tire in the Stipulation because DDF actively suppressed that it produced the AMP tire in the Manufacturer Settlement Questionnaire. (Mot. at 4, Ex. 2, Robinson Decl. ¶ 5.)¹

The AMP tire tread pattern is virtually indistinguishable from the Mark Ma tire tread pattern—Defendants even admit the two tread patterns are "very similar."

(Mot. Ex. 1; SACV 15–00246–CJC(JPRx) [hereinafter "CIA Case"] Dkt. 352 ¶ 4.) The raised portions of the treads are "blocks" and the grooves within the blocks are "sipes." On the Mark Ma tire, there are four columns of blocks. The left shoulder blocks are trapezoids that point up diagonally towards the right. A sipe runs horizontally through the middle of the blocks and curves downward. The right shoulder blocks are trapezoids that point down diagonally towards the left. A sipe runs horizontally through the middle of the block and curves upward. In the center of the tread are two columns of blocks. The center left blocks are trapezoids with a hook jutting outward on the bottom. The center right blocks are trapezoids with a hook jutting outward on the top. Both center blocks have a sipe that runs vertically down the middle of the block and curves toward the hook. The AMP tread blocks and sipes match the Mark Ma tread pattern in size, shape, and orientation. Exhibit 1 to Toyo's motion is reproduced below to illustrate the two tire treads:

(Mot. at 3.)

On August 26, 2014, Toyo's counsel sent a letter to DDF's General Manager, Mr. Wang, and a copy was sent to QDT. (Id. at 4.) The letter summarized the Final Judgment, set out Toyo's belief that the AMP tire violated the injunction, and sought to "quickly and amicably resolve this issue." (Id. Ex. 5.) A copy of the Stipulation and Final Judgment were enclosed. (Id. ) The letter was sent via FedEx, which returned a delivery receipt for Mr. Wang and QDT. (Id. Ex. 7.) Neither DDF nor QDT responded to the letter. (Mot. at 5; Robinson Decl. ¶ 7.) On November 13, 2014, Toyo filed a motion for contempt against DDF, QDT, and DGC. (Dkt. 13.) The motion was served by mail to DDF, QDT, and DGC, and included a copy of the Stipulation and Final Judgment. (Dkts. 13, 14.) None of the alleged contemnors responded. (Dkts. 15, 22 at 4.) On December 12, 2014, the Court denied Toyo's motion without prejudice. (Dkt. 16 at 3–4.)

On February 12, 2015, Toyo filed a second lawsuit against CIA Wheel Group, DDF, QDT, and DGC, (CIA Case at Dkt. 1), seeking relief for trade dress infringement regarding the AMP tire, amongst other claims, (id. at Dkt. 75). QDT and DGC were served with the complaint in September 2015, which included a copy of the Final Judgment. (Id. at Dkts. 1 ¶¶ 26–30, 352 ¶ 16.) In the course of discovery in the CIA Case, DDF and QDT both admitted to manufacturing, selling, and exporting the AMP tire, (id. at Dkt. 90 at ¶¶ 36–37, 91, 95), between January 2013 and August 2016, (Mot. Ex. 10, Response to Interrogatory No. 6).

Based on those findings, Toyo renewed its motion for contempt before this Court on September 26, 2016, (Dkt. 17), and the Court denied Toyo's motion without prejudice, (Dkt. 21). On February 6, 2017, Toyo again renewed its motion for contempt, (Dkt. 22), and the Court denied Toyo's motion without prejudice, (Dkt. 26).² On October 9, 2017, Toyo filed its present renewed motion for contempt. (Mot.) A hearing on Toyo's motion was held on November 16, 2017, and both parties presented oral argument.

III. DISCUSSION

A. The Terms of the Final Judgment are Specific and Definite

"Rule 65(d) requires that any injunction or restraining order be 'specific in terms' and describe 'in reasonable detail, and not by reference to the complaint or other document, the act or acts sought to be restrained.' " Reno Air Racing Ass'n., Inc. v. McCord , 452 F.3d 1126, 1132 (9th Cir. 2006) (quoting Fed. R. Civ. P. 65(d) ). "If an injunction does not clearly describe prohibited or required conduct, it is not enforceable by contempt." Gates v. Shinn, 98 F.3d 463, 468 (9th Cir. 1996) ; see also Schmidt v. Lessard, 414 U.S. 473, 476, 94 S.Ct. 713, 38 L.Ed.2d 661 (1974) ("[T]he specificity provisions of Rule 65(d) are no mere technical requirements. The Rule was designed to prevent uncertainty and confusion on the part of those faced with injunctive orders, and to avoid the possible founding of a contempt citation on a decree too vague to be understood."). "[T]he fair notice requirement of Rule 65(d) must be applied in the light of the circumstances surrounding [the order's] entry." Reno Air Racing Ass'n , 452 F.3d at 1133 (internal quotations and citations omitted). Thus, the Court looks to the language of the Final Judgment to determine if it provided Defendants with fair and well-defined notice of the prohibited conduct. Here, the Final Judgment provided Defendants fair notice of the conduct it enjoined.

The Final Judgment enjoined "[DDF], its subsidiaries, affiliates, parents, successors, assigns, officers, agents, servants, employees, attorneys, and all persons acting in concert or in participation with it" from "[u]sing [Toyo's OPMT] Trade Dress or any trade dress or tread or sidewall design confusingly similar thereto." (Dkt. 10 ¶ 1.) The Final Judgment incorporated the Stipulation by reference–it was entered "[p]ursuant to the parties' stipulation." (Id. ) The Ninth Circuit has "permitted incorporation by reference in certain limited scenarios, for example, where the referenced document is 'physically attached to the [order] itself.' " Reno Air Racing Ass'n , 452 F.3d at 1133. In Reno Air , the Ninth Circuit held a TRO incorporated a document by reference where the TRO referred to the document and the document was attached to the TRO that was provided to the defendant when the order was served on him. Id. Here, the Final Judgment referred to the parties' Stipulation, (Dkt. 10 ¶ 1), and the Stipulation was linked to the Final Judgment on the docket entry, (see docket entry for Dkt. 10). Moreover, DDF clearly had "acquired a context for understanding the referenced document and the subject matter of the dispute" because it freely entered into the Stipulation which predicated the...