ALEXIS LICHINE & CIE. v. SACHA A. LICHINE ESTATE
| Decision Date | 08 June 1994 |
| Docket Number | Civ. A. No. 84-2415-WJS. |
| Citation | 855 F. Supp. 479 |
| Court | U.S. District Court — District of Massachusetts |
| Parties | ALEXIS LICHINE & CIE., Plaintiff, v. SACHA A. LICHINE ESTATE SELECTIONS, LTD. and Sacha Lichine, Defendants. |
Charles Hieken, Fish & Richardson, Boston, MA, Robert M. Kunstadt, Jonathan E. Moskin, Pennie & Edmonds, New York City, for plaintiff.
Charles N. Mayburck, New York City, Patricia G. Curtin, Alan Hoffman, Lynch Brewer Hoffman, Boston, MA, Robert J. Hausen, Ghadbourne & Parke, New York City, for defendants.
MEMORANDUM AND ORDER ON OBJECTIONS OF REPORT OF MAGISTRATE JUDGE.
In the above-entitled matter both parties object to a report and recommendation of the magistrate judge denying the defendant's motion to modify an injunction. The only significant objections are those filed by the defendant.
The defendant raises two issues:
(1) that the magistrate judge made a material mistake of fact in concluding that the witness Aaron had testified that the use of the defendant of his own name would not be "important," but Mr. Aaron in fact testified that it would not be "important" in the retail wine business, but that it would be "important" in the defendant's importing and wholesale business; and (2) that the magistrate judge failed to appreciate that the Supreme Court in Rufo v. Inmates of Suffolk County Jail, ___ U.S. ___, 112 S.Ct. 748, 116 L.Ed.2d 867 (1992) liberalized the stringent requirements of a "clear showing of a grievous wrong evoked by new and unforeseen conditions" established by United States v. Swift & Co., 286 U.S. 106, 119, 52 S.Ct. 460, 464, 76 L.Ed. 999 (1932).
Upon consideration of the excerpt from the transcript, it is my opinion that the magistrate judge did, in fact, misunderstand Mr. Aaron's testimony. In my opinion, the fact that the use of the defendant's name is "important" to him is not enough to warrant modification of the injunction in this case. Prevailing in a dispute is practically always "important" to the parties involved.
Even assuming that Rufo has liberalized the standards for the modification of decrees as argued by the defendant, there is still a valid public policy in favor of the finality of dispute resolutions. In my opinion, the defendant has not offered sufficient reason to overturn that policy.
Accordingly, the objections of both parties to the magistrate judge's report and recommendation are overruled. I adopt the recommendation of the magistrate judge. The defendant's motion to modify the injunction is denied. Final judgment shall enter accordingly.
REPORT AND RECOMMENDATION RE: SACHA LICHINE'S MOTION FOR LEAVE TO INTERVENE AND TO MODIFY AN INJUNCTION (DOCKET ENTRY # 39)
On August 16, 1991, defendant Sacha Lichine ("Sacha Lichine") filed a motion seeking leave to intervene and to modify the injunction entered by the district judge on April 28, 1986. (Docket Entry # 39). On April 1, 1992, the district judge allowed the motion to intervene. (Docket Entry # 49). As to modifying the injunction, the district judge found the facts disputed thereby necessitating an evidentiary hearing. (Docket Entry # 49).
On April 13, 1993, the district judge referred this case to the undersigned for a report and recommendation concerning the motion to modify the injunction. (Docket Entry # 47). On July 1, 1993, the district judge additionally referred a motion in limine (Docket Entry # 45) filed by plaintiff Alexis Lichine & Cie. ("ALC"), a motion for leave to file an amended complaint (Docket Entry # 50) and a motion to disqualify (Docket Entry # 52). After issuing a ruling on the above three motions (Docket Entry # 63), on January 18 through 21, 1994, this court held an evidentiary hearing on the motion to modify the injunction. On February 14, 1994, the parties submitted post hearing memoranda. (Docket Entry ## 74 & 76). The motion to modify (Docket Entry # 39) is therefore ripe for review.
Before summarizing the relevant testimony, it is important to recognize that modifying an injunction entered and agreed to by the parties in 1986 involves a limited inquiry. As explained in greater detail infra, Sacha Lichine bears the burden of establishing a "clear showing of grievous wrong evoked by new and unforeseen conditions." United States v. Swift, 286 U.S. 106, 119, 52 S.Ct. 460, 464, 76 L.Ed. 999 (1932). He primarily argues that changed factual circumstances justify modifying the injunction to permit him to use his given name in script on better quality wines selling in the United States in the range of $15 to $100. (Tr. 18, pp. 107-109; Ex. N).
The April 1986 injunction1 permanently enjoins and restrains Sacha Lichine from using the name Alexis Lichine or any colorable limitation, including, without limitation, Sacha A. Lichine and Sacha Lichine, in connection with the sale, importation, brokerage, distribution or advertising of alcoholic beverages in the United States and abroad, absent the express written consent of ALC. ALC is the owner of United States Trademark Registration No. 770,062 Alexis Lichine. (Ex. B).
As alleged by Sacha Lichine, the changed circumstances are: (1) the June 1989 death of Alexis Lichine, Sacha Lichine's father; (2) Sacha Lichine's rise in the wine industry, including his ownership of S.A. de Château Prieuré-Lichine, a French corporation which owns the United States trademark Château Prieuré-Lichine and the Château Prieuré-Lichine in Bordeaux, France; and (3) the declining reputation of ALC and Alexis Lichine wines in the United States. (Docket Entry ## 30 & 76). Sacha Lichine contends that the changed circumstances undermine the basis for the April 1986 injunction and render its continued application inequitable. He also submits that he controls the senior of the two marks. (Docket Entry # 76).
In 1951, Alexis Lichine purchased the Château Prieuré-Cantenac and in 1952 or 1953 changed its name to the Château Prieuré-Lichine. The property is located in the Haut-Médoc district of France near Bordeaux in the village of Cantenac. In 1955 the wines produced on the property became entitled to the place name Margaux. Cantenac is one of five villages which make up the appellation of Margaux. (Tr. 18, pp. 44-46; Ex. R, p. 404 & back leaf).
Also in 1955, Alexis Lichine founded his own company, ALC. In May 1964, ALC registered the mark Alexis Lichine with the United States Patent Office. The first use noted in the registration is October 25, 1955. Before incorporating ALC, however, Alexis Lichine operated Alexis Lichine Selections in an unincorporated manner, bringing wines into the United States in 1946, 1947 and 1948 under that label. As of 1980, he had been in the wine business on "both sides of the Atlantic" for approximately 40 years. (Tr. 21, pp. 40-46; Ex. B & Ex. R, back leaf; Docket Entry # 37).
In July 1964, S.A. de Château Prieuré-Lichine registered the mark Château Prieuré-Lichine with the United States Patent Office. The first use noted in the registration is December 10, 1954. In or around October 1964, Alexis Lichine sold his interest in ALC, including ALC's ownership of the Alexis Lichine mark to a company affiliated with Bass Charrington.2 Alexis Lichine retained the Château Prieuré-Lichine mark as well as the Château Prieuré-Lichine.3 .
Sacha Lichine, an American citizen, was born in August 1960. He spent his childhood in Bordeaux as well as in New York. During his childhood, his father taught him how to produce and how to taste wine. As a child, he also worked in lines bottling wine or assisted with work in the vineyards. (Tr. 18, pp. 36-39).
He studied at Boston University. While in Boston, he worked as a wine steward in a Boston restaurant and as a consultant for C. Pappas & Company ("Pappas"), a now defunct company. He traveled throughout France assisting Pappas in selecting wine. Thereafter, he began his own wine brokerage company, Sacha A. Lichine Estate Selections ("SLES"), named as a defendant in this suit.
After being enjoined from operating the company under the SLES name or from using his own name to market wine in the United States, Sacha Lichine moved to California and worked as a wine distributor for Southern Wine & Spirits. In April 1987, he moved back to Bordeaux. Having partially reconciled his differences with his father, he began operating the vineyard at the Château Prieuré-Lichine. His father, an internationally known wine grower and merchant, authored the well known book, Alexis Lichine's New Encyclopedia of Wines & Spirits. (Tr. 18, pp. 71-72; Ex. 26.)
In June 1989, Alexis Lichine died. Already owning approximately 40% of S.A. de Château Prieuré-Lichine, Sacha Lichine inherited the remaining shares of the corporation, except for a percentage of one percent.4 His inheritance was not necessarily foreseeable at the time of the 1986 injunction inasmuch as his relationship with his father was unpredictable. At the time of his father's death, the château consisted of approximately 62 to 63 hectares.5 It presently comprises in excess of 200 acres. (Tr. 18, pp. 46-51; Tr. 19, p. 36; Ex. 29).
After inheriting the château, Sacha Lichine expended approximately $3,000,000 to upgrade the property. His improvements include building a new wine cellar, a visitor's center6 and a sales shop, creating a stronger sales force, improving the physical plants and the vineyards and installing a helicopter pad. (Tr. 18, pp. 73-75).
The château produces a red wine made of several different grapes, including merlot, cabernet sauvignon and petit verdot. The volume of wine produced each year varies from 35,000 to 40,000 cases, each containing 12 bottles. Wines produced on the property are sold around the world, primarily under two labels, Château Prieuré-Lichine and Château de Clairefont. Château Prieuré-Lichine...
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