Herb Reed Enters., Inc. v. Monroe Powell's Platters, LLC, 2:11–CV–02010–PMP–RJJ.

Citation103 U.S.P.Q.2d 1081,842 F.Supp.2d 1282
Decision Date01 February 2012
Docket NumberNo. 2:11–CV–02010–PMP–RJJ.,2:11–CV–02010–PMP–RJJ.
PartiesHERB REED ENTERPRISES, INC., and Herb Reed Enterprises, LLC, Plaintiffs, v. MONROE POWELL'S PLATTERS, LLC; Monroe Powell; and Don Gloude, Defendants.
CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Nevada

OPINION TEXT STARTS HERE

Eric M. Sommers, Sommers Law, PLLC, Portsmouth, NH, John L. Krieger, Lewis and Roca LLP, Las Vegas, NV, for Plaintiffs.

John R. Dacorsi, Dacorsi, Placencio & Rumsey, P.C., Las Vegas, NV, for Defendants.

ORDER

PHILIP M. PRO, District Judge.

Presently before this Court is Plaintiff Herb Reed Enterprises, Inc. and Herb Reed Enterprises, LLC's Motion for a Preliminary Injunction (Doc. # 4), filed on December 15, 2011. Defendant Monroe Powell's Platters, LLC; Monroe Powell; and Don Gloude (collectively Powell) filed an Opposition to the Motion for a Preliminary Injunction (Doc. # 17) on January 5, 2012. Plaintiffs filed a Reply to Powell's Opposition (Doc. # 23) on January 6, 2012. The Court held a hearing on the Motion on January 9, 2012 (Doc. # 25).

I. BACKGROUND

The Platters musical group was formed in 1953. (Decl. of Frederick J. Balboni (“Balboni Decl.”) (Doc. # 6) ¶ 5 & Ex. C; Defs.' Opp'n to Mot. for Prelim. Inj. (“Defs' Opp'n”) (Doc. # 17) at 3.) 1 The “original” members of the group were David Lynch, Herb Reed (Reed), Paul Robi (“Robi”), Zola Taylor, and Tony Williams. (Balboni Decl. ¶ 7.) The group charted several number one hits during the 1950s and 1960s. ( Id. ¶ 8.) In 1956, Buck Ram, the group's manager, incorporated Five Platters, Inc. (“FPI”), and the original members of the group assigned their rights in “The Platters” mark to FPI in exchange for the issuance of stock in FPI. (Balboni Decl. ¶¶ 9, 10; Defs.' Opp'n at 3.) Gradually the original members left the group, and in 1969 Reed was the only original member remaining. (Balboni Decl. ¶ 12.) In 1969, Reed discontinued his relationship with FPI but continued performing. ( Id. ¶ 13.) In 1970, FPI hired Monroe Powell (Powell) to perform with FPI's Platters group. (Defs.' Opp'n, Decl. of Monroe Powell (“Powell Decl.”) ¶ 2.)

Thereafter, FPI brought suit against Robi, an original member, for trademark infringement in the California Superior Court, Case No. C43926, claiming exclusive rights to “The Platters” mark based on the 1956 assignments. In 1974, the court granted judgment in favor of Robi. Robi v. Five Platters, Inc., 838 F.2d 318, 320, 324 (9th Cir.1988) (discussing the 1974 California judgment). The court held that FPI “was a sham used by Mr. Ram to obtain ownership in the name ‘Platters,’ and FPI's issuance of stock to the group members was “illegal and void” because it violated California corporate securities law. Id. at 320 (quoting the 1974 Californiajudgment). The 1974 California judgment left open the question of who owns the rights to “The Platters,” and various parties have been embroiled in litigating this question ever since.

Numerous courts have endeavored to determine who, of all the parties claiming rights to the mark, is “The Great Pretender.” SeeRobi v. Reed, 173 F.3d 736, 737 (9th Cir.1999). Unfortunately this drawn out legal battle has created “a tangled web of litigation resulting in a number of inconsistent federal and state court decisions.” Five Platters Inc. v. Williams, 4 U.S.P.Q.2d 1296, 1297 (N.Y.Sup.Ct.1987). While some courts have held that one party has superior rights to the other, this Court has held that “Only You,” Herb Reed, have exclusive rights to the mark. Reed v. Bennett, No. 2:10–CV–01981–JCM–RJJ (D.Nev. May 16, 2011). The Court will give a brief account of the cases that affect Reed's and Powell's rights to “The Platters.”

A. Litigation between FPI and Robi

Years after the 1974 judgment in favor of Robi, FPI sued Robi again for trademark infringement. Robi, 838 F.2d at 323. The district court dismissed FPI's complaint against Robi based on the claim preclusive effect of the 1974 California judgment. Id. In 1988, the Court of Appeals for the Ninth Circuit affirmed. Id. at 324. Specifically, the Ninth Circuit held [t]he claim preclusive effect of the 1974 California judgment precludes the Corporation from challenging Robi's use of the name THE PLATTERS.” Id. The Ninth Circuit remanded, and the district court cancelled FPI's registration of the mark and permanently enjoined FPI from challenging Robi's use of the mark. Robi v. Five Platters, Inc., 918 F.2d 1439, 1441 (9th Cir.1990). FPI once again appealed, and the Ninth Circuit affirmed. Id. In sum, as between Robi and FPI, Robi has superior rights to the mark.

B. Litigation between Robi and Reed

Following litigation with FPI, Robi transferred his rights to his wife, Martha Robi. Robi, 173 F.3d at 738. Martha Robi sued Reed claiming exclusive rights to the mark. Id. The district court held that Reed had the right to use the mark to the exclusion of Robi. Id. In 1999, the Ninth Circuit affirmed. Id. The Ninth Circuit held that “members of a group do not retain rights to use the group's name when they leave the group.” Id. at 739. Unlike Robi, who joined the Platters in 1954 and left in 1965, Reed was a member of the group since its inception in 1953 and performed continuously with the group since 1953. Id. Therefore, Robi lost his rights to the mark when he left the group, but Reed has retained his rights to the mark. Id. at 740. In sum, as between Robi and Reed, Reed has superior rights to the mark.

C. Litigation between FPI and Powell

Powell performed for FPI from 1970 to 1995 but continued performing with a group calling themselves The Platters after 1995. (Powell Decl. ¶¶ 3–4.) FPI brought suit against Powell for trademark infringement in the United States District Court for the Central District of California. Five Platters, Inc. v. Powell, 7 Fed.Appx. 794, 794–95 (9th Cir.2001). The district court granted summary judgment in Powell's favor. Id. at 795. In 2001, the Ninth Circuit reversed, reasoning that FPI used the mark with intent to mislead by presenting its group as “The Platters,” although the group did not include any original members. Id. The Ninth Circuit held that “unless the plaintiffs can present evidence that they used the trademark in a way that was not false and misleading (e.g., by identifying the group as ‘The Platters Since 1970 or some similarly distinguishinglabel), they cannot assert a common law trademark in ‘The Platters.’ Id. The Ninth Circuit remanded to the district court to determine if any of FPI's use was not false or misleading. Id.

On remand the district court dismissed for lack of federal jurisdiction, Case No. 98–3712 R (BQRX). (Pls.' Mot. for Prelim. Inj. (Doc. # 4), Decl. of Eric M. Sommers (“Sommers Decl.”), Ex. D.) Thereafter FPI filed suit against Powell in state court. In 2002, FPI and Powell entered into a stipulation for entry of judgment in the California Superior Court, Case No. BC262188. (Sommers Decl., Ex. B.) Powell agreed not to use “The Platters” name and FPI agreed not to contest Powell's use of the names Monroe Powell Platters,” “The Platters Featuring Monroe Powell,” “The Platters Featuring the Legendary Monroe Powell,” or Monroe Powell and the Platters” provided Powell's name was featured prominently in any advertising. ( Id.) In short, as between FPI and Powell, no court has determined who has superior rights to the mark. But FPI and Powell agreed that Powell could use certain names, including “The Platters featuring Monroe Powell.”

D. Litigation between FPI and Reed

1. Florida Action

In 1984, FPI sued Reed for trademark infringement in the United States District Court for the Southern District of Florida, Case No. 84–8324–CIV–ARONOVITZ. (Sommers Decl., Ex. C.) In 1987, FPI and Reed entered into a stipulation for settlement (“the 1987 stipulation”). ( Id.) Similar to Powell, Reed agreed not to use “The Platters” name and FPI agreed not to contest Reed's use of the names Herb Reed and The Platters” or “Herb or Herbert Reed of the Original Platters.” ( Id.) But the stipulation also included the following clause:

In the event that a court of competent jurisdiction enters a final order with all appeals being exhausted that provides that the Five Platters, Inc. has no right in the name “The Platters,” then nothing contained herein shall be construed to limit Herbert Reed's rights in the name “The Platters” and this agreement shall not inure to any party other than The Five Platters, Inc., and its successors and assigns or Herbert Reed.

( Id.) This Order will refer to this provision as the “escape clause.”

2. New York Action

Years later, FPI sued Reed again for trademark infringement in the United States District Court for the Eastern District of New York (the “New York action”). Marshak v. Reed, No. 96–CV–2292–NGMLO, 2001 WL 92225, at *1 (E.D.N.Y. Feb. 1, 2001). The district court interpreted the 1987 stipulation—specifically Reed's consent to dismissal with prejudice and the escape clause—as barring “Reed from asserting that he has any right to the name ‘The Platters' as against FPI or those claiming through FPI except as specifically allowed in the agreement, or from otherwise interfering with [FPI's] rights to the use of ‘The Platters.’ Id. at *15. The district court reasoned that a stipulation of dismissal with prejudice dismisses claims, counterclaims, and claims that could have been brought by the parties. Id. at *16. Therefore, the 1987 stipulation dismissed FPI's claims against Reed, Reed's counterclaims against FPI, and Reed's claim to exclusive rights to the mark because Reed could have brought such claim in the Florida action. Id. at *17.

The district court further concluded that [t]here has been no adjudication that FPI has no right to the name ‘The Platters' as required by the escape clause of the stipulation for settlement.” Id. at *19. Accordingly,the district court granted FPI's motion for summary judgment and declared “FPI's rights, and the rights of the other plaintiffs derived from FPI” as...

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