Ambassador East v. Shelton Corners

• Decision Date: 27 April 1954
• Parties: AMBASSADOR EAST, Inc. v. SHELTON CORNERS, Inc., et al.
• Court: U.S. District Court — Southern District of New York

120 F. Supp. 551

AMBASSADOR EAST, Inc. v. SHELTON CORNERS, Inc., et al.

United States District Court S. D. New York.

April 27, 1954.

O'Brien, Driscoll & Raftery, New York City, Edward C. Raftery, Paul D. O'Brien, Milton M. Rosenbloom, New York City, of counsel, for plaintiff.

O'Dwyer & Bernstein, New York City, for defendant Shelton Corners, Inc.

Wien, Lane, Klein & Purcell, New York City, for defendants Lawrence A. Wien, Harry B. Helmsley, Alvin S. Lane and William F. Purcell, associated in a joint venture doing business under the name of Shelton Hotel Associates.

Budner & Budner, New York City, for defendant Hotel Shelton Equities, Inc.

IRVING R. KAUFMAN, District Judge.

Plaintiff moves for a temporary injunction restraining defendants from using the name Pump Room or any facsimile thereof, on the ground that the use of this name constitutes unfair competition and causes irreparable damage to plaintiff's business.

Plaintiff is a Delaware corporation which owns and operates the Ambassador East Hotel in Chicago, Illinois. As part of the operation, and on the hotel premises, plaintiff has a fashionable restaurant and night club known as the Pump Room. From the affidavit of James A. Hart, president of the plaintiff corporation, it appears that the Pump Room was opened on October 1, 1938, and that it was named for a famous 18th Century watering spa and rendezvous for royalty and actors at Bath, England. The affidavit describes in detail the unique character of the Pump Room, and alleges the excellence of its service, food and reputation, as well as the high quality of its clientele. It explains the methods used, and asserts that substantial expenses have been incurred, in advertising this distinctive quality of the Pump Room. For example, the affidavit states that the Pump Room's gross revenue during the last five years totalled $5,500,000. Annual magazine advertising costs for the Ambassador Hotels in Chicago and the Pump Room are stated to be $45,000; $35,000 a year is similarly expended for other public relations activities which in large measure are devoted to the Pump Room. An estimated $25,000 has been expended for the printing and circulation of pamphlets describing the Pump Room. Assertions of the restaurant's national fame and reputation are supported by extensive quotations from national magazines and other media of publicity which have recognized the high quality of the Pump Room and its distinctive character. The affidavit further states that no expense or detail was spared to make the Pump Room as famous as its English counterpart and that as a result the name Pump Room represents extraordinary quality and character. The replacement cost of the Pump Room today is estimated to be $200,000 to $250,000. During the past year, some $30,000 was spent in renovating the room and a total of $100,000 was spent for the installation of a new air-conditioning system. The affidavit urges that the use of the name Pump Room by any other restaurant confuses the public because of the association in the mind of the public with the Chicago Pump Room, and that should the public find such other restaurant inferior in quality to the Chicago restaurant, the reputation of the Chicago Pump Room will be irreparably damaged. The affidavit notes that it has been brought to affiant's attention that defendants operate a medium class restaurant in New York City called the "Pump Room", in no way similar in decor or in quality of service to the Pump Room in Chicago; that defendants have been notified that they are thereby infringing the valuable trade name of the Chicago Pump Room, and that unless defendants are enjoined, plaintiff will sustain irreparable damage.

Additional affidavits by two New York residents, and by plaintiff's attorney, elaborate upon and substantiate the statements of the Hart affidavit.

Defendants do not deny the general assertions of the plaintiff as to the quality and reputation of the Pump Room, nor do they deny that their New York restaurant is using the name "Pump Room" and that it is a less expensive and less elaborate establishment than plaintiff's. Defendants, however, vigorously assert that there is no competition between their business and plaintiff's; that plaintiff comes before the Court with unclean hands because its use of the name Pump Room rests upon a misrepresentation that it has an authorized connection with the original Pump Room in Bath, England; that defendants have not practiced...