Georgia-Pac. Consumer Prods. LP v. Four-U-Packaging, Inc.

• Decision Date: 04 November 2011
• Docket Number: Case No. 3:09CV1071.
• Citation: 821 F.Supp.2d 948
• Parties: GEORGIA–PACIFIC CONSUMER PRODUCTS LP, et al., Plaintiffs v. FOUR–U–PACKAGING, INC., Defendant.
• Court: U.S. District Court — Northern District of Ohio

821 F.Supp.2d 948

GEORGIA–PACIFIC CONSUMER PRODUCTS LP, et al., Plaintiffs

v.FOUR–U–PACKAGING, INC., Defendant.

Case No. 3:09CV1071.

United States District Court,N.D. Ohio,Western Division.

Nov. 4, 2011.

James D. Curphey, Porter, Wright, Morris & Arthur, Ryan P. Sherman Porter, Wright, Morris & Arthur, Columbus, OH, John Gary Maynard, III, Hunton & Williams LLP, Richmond, VA, W. Kyle Carpenter, Woolf, McClane, Bright, Allen & Carpenter, Knoxville, TN, for Plaintiff, Georgia–Pacific Consumer Products LP and Georgia–Pacific LLC.

Richard F. Ellenberger, Garrick O. White, Anspach Meeks Ellenberger, Toledo, OH, Albert P. Allan, Charlotte, NC, Michael P. Thomas, Patrick, Harper & Dixon, Hickory, NC, Stephen L. Curry, Little Rock, AR, for Defendant, Four–U–Packaging, Inc.

ORDER

JAMES G. CARR, Senior District Judge.

This is a suit by a trademark owner of branded paper towel dispensers and towels against a distributor of a different brand of paper towels. The suit arises from the fact that lessees of the plaintiff's dispensers purchase the defendant's replacement rolls for their dispensers, rather than plaintiff's more expensive replacement rolls.

Plaintiffs Georgia–Pacific Consumer Products LP and Georgia–Pacific LLC [together, Georgia–Pacific] assert seven causes of action against Four–U–Packaging, Inc. [Four–U]: 1) false representation and false designation of origin and dilution under the Lanham Act, 15 U.S.C. § 1125; 2) contributory trademark infringement under the Lanham Act, 15 U.S.C. § 1114; 3) counterfeiting under the Lanham Act, 15 U.S.C. § 1114(1)(a); 4) common law unfair competition; 5) tortious interference with contractual relationships; 6) tortious interference with business relationships; and 7) violation of the Ohio Deceptive Trade Practices Act, O.R.C. §§ 4165.01 et seq.

Jurisdiction is proper under 28 U.S.C. § 1331 and § 1332.

Pending is Four–U's motion to dismiss. [Doc. 31]. For the reasons discussed below, the motion is granted.

Background ¹

Georgia–Pacific, organized under Delaware law, has its principal place of business in Atlanta, Georgia. Georgia–Pacific leases paper towel dispensers to distributors who, in turn, sublease the dispensers to end users such as restaurants and office buildings. Plaintiffs' dispensers and towels are trademarked. The lease and sublease agreements require the end users to stock the dispensers with only Georgia–Pacific brand paper towels.

Four–U is an Ohio seller and distributor of janitorial supplies. Four–U is a distributor for the von Drehle Corporation [von Drehle], whose paper towels fit in Georgia–Pacific dispensers. Georgia–Pacific alleges that operators of locations with its dispensers have bought von Drehle towels from Four–U and placed those towels in the Georgia–Pacific dispensers.

Georgia–Pacific brought cases similar to the instant one in four other district courts. One case has reached a final resolution, while three remain pending.

In the first case, Georgia–Pacific sued a distributor of von Drehle paper towels alleging trademark infringement, unfair competition, tortious interference with current and prospective business relationships, unfair and deceptive trade practices, conversion and concerted action. The district court granted summary judgment to the defendant distributor on all claims except a contributory trademark infringement claim. Georgia–Pacific v. Myers Supply, Inc., 2009 WL 1850324, *3–7 (W.D.Ark.).

After a bench trial, the district court also dismissed that claim, holding that there was no likelihood of confusion. Georgia–Pacific Consumer Prod. LP v. Myers Supply, Inc., 2009 WL 2192721 (W.D.Ark.). The court held that purchasers of replacement rolls, not persons taking the towels from dispensers, were the proper focus of any possible confusion between plaintiff's rolls with those of other manufacturers. Id., at *6. The court also noted that “Georgia–Pacific has produced no evidence that an actual consumer or purchaser of paper towels has ever been confused by the presence of Von Drehle paper in a [ ] [Georgia–Pacific] dispenser.” Id. Georgia–Pacific appealed the case to the Eighth Circuit, which affirmed as to all claims. Georgia–Pacific Consumer Prods. LP v. Myers Supply, Inc., 621 F.3d 771 (8th Cir.2010).

The other three courts with similar litigation have yet to reach a final judgment on the merits.

In Georgia–Pacific Consumer Prods. LP v. von Drehle Corp., 645 F.Supp.2d 532, 536–39 (E.D.N.C.2009), rev'd, 618 F.3d 441 (4th Cir.2010), Georgia–Pacific sued von Drehle and a distributor of von Drehle's rolls, alleging almost identical causes of action. Granting summary judgment in defendants' favor, the district court held that Georgia–Pacific failed to show that von Drehle's towels caused customer confusion. This was so, the court held, because the relevant end users were businesses purchasing replacement towels from distributors, not customers using paper towels in restrooms. Id. at 536–37.

Finding genuine issues of material fact as to likelihood of confusion on the part of users and also the distributor's intent, the Fourth Circuit reversed and remanded. Georgia Pacific Consumer Prods. LP v. von Drehle Corp., 618 F.3d 441 (4th Cir.2010).

Citing Myers Supply, supra, von Drehle filed a motion in the district court for reconsideration, urging the same grounds—issue preclusion—as in this case. The district court denied the motion, 815 F.Supp.2d 927, 2011 WL 4402949 (E.D.N.C.). The case is awaiting trial.

Finally, the Southern District of Ohio has denied the defendant's motion to dismiss in Georgia–Pacific Consumer Prods. LP v. Superior Janitor Supply, Inc., 2011 WL 4002563 (S.D.Ohio). In that case the plaintiffs here have alleged the same causes of action against another distributor of von Drehle's replacement towels. Contrary to the decision which I reach in this case, the Southern District rejected the distributor's claim of issue preclusion. ²

Standard of Review

Plaintiffs argue that, although defendants move to dismiss the case, I should treat their motion as a motion for summary judgment because defendants have presented matters outside the pleadings. Defendant does not disagree.

A party is entitled to summary judgment on motion under Fed.R.Civ.P. 56 where the opposing party fails to show the existence of an essential element for which that party bears the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The movant must initially show the absence of a genuine issue of material fact. Id. at 323, 106 S.Ct. 2548.

Once the movant meets that initial burden, the “burden shifts to the nonmoving party [to] set forth specific facts showing there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (quoting Fed.R.Civ.P. 56(e)). Rule 56(e) “requires the nonmoving party to go beyond the [unverified] pleadings” and submit admissible evidence supporting its position. Celotex, supra, 477 U.S. at 324, 106 S.Ct. 2548.

In deciding a motion for summary judgment, I accept the opponent's evidence as true and construe all evidence in the opponent's favor. Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 456, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992). The movant can prevail only if the materials offered in support of the motion show there is no genuine issue of a material fact. Celotex, supra, 477 U.S. at 323, 106 S.Ct. 2548.

Discussion

Defendants argue that the doctrine of issue preclusion bars plaintiffs' claims.

Issue preclusion acts to “preclude[ ] relitigation of issues of fact or law actually litigated and decided in a prior action between the same parties and necessary to the judgment, even if decided as part of a different claim or cause of action.” Gargallo v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 918 F.2d 658, 661 (6th Cir.1990).

To establish issue preclusion, the defendant must show:

1. Identity of issues in the earlier and later litigation;

2. The parties in the prior action and the court adjudicated the issue;

3. Resolution of the issue was necessary and essential to a judgment on the merits in the prior litigation;

4. The party to be estopped was a party to the prior litigation (or in privity with such a party); and

5. The party to be estopped had a full and fair opportunity to litigate the issue.

Wolfe v. Perry, 412 F.3d 707, 716 (6th Cir.2005) (citing Santana–Albarran v. Ashcroft, 393 F.3d 699, 704 (6th Cir.2005)).

Plaintiffs, principally contesting the first and fifth elements of issue preclusion, dispute application of this doctrine on the basis of: 1) dissimilarity of facts between Myers Supply and this case; 2) inability in that case to litigate their Ohio state claims; 3) different standards for the underlying claims in the Sixth and Eighth Circuits; and 4) conflicting determinations from the Fourth and Eighth Circuit courts.

1. Dissimilarity of Facts

Plaintiffs claim the facts between Myers Supply and this case are not identical. They point out that Myers Supply involved a distributor for a particular part of Arkansas, and the evidence included surveys of consumers in Arkansas. Here the geographic area of concern is Northern Ohio and Northeast Indiana.

Plaintiffs used consumer surveys in Myers Supply and other litigation to demonstrate “actual confusion” between trademarks, a factor in an analysis of the likelihood of confusion between two products, which goes to prove trademark infringement. The Sixth Circuit has held that the central inquiry for a finding of trademark infringement is “a likelihood of confusion in the minds of the buying public.” General Motors Corp. v. Keystone Automotive Industries, Inc., 453 F.3d 351, 354 (6th Cir.2006) (quoting J. Thomas McCarthy, 1 McCarthy on Trademarks and Unfair Competition §§ 2:7–2:8 (4th ed. 1996)). The Sixth Circuit uses an eight-factor test for determining likelihood of confusion:

1. strength of the plaintiff's mark;

2. relatedness of...