Ill. Tool Works Inc. v. Rust-Oleum Corp.
| Decision Date | 30 October 2018 |
| Docket Number | Civil Action No. H-17-2084 |
| Citation | 346 F.Supp.3d 951 |
| Parties | ILLINOIS TOOL WORKS INC., Plaintiff, v. RUST-OLEUM CORPORATION and Wipe New, LLC, Defendants. |
| Court | U.S. District Court — Southern District of Texas |
Ashly Iacullo Boesche, Bradley L. Cohn, Kristine Ann Bergman, Pattishall McAuliffe et al., Chicago, IL, Michele Rae Blythe, Michael Daniel Morfey, Andrews Kurth LLP, Houston, TX, for Plaintiff.
Genevieve E. Charlton, John T. Gabrielides, Philip A. Jones, Barnes & Thornburg LLP, Chicago, IL, Olivia M. Clavio, Barnes & Thornburg LLP, Indianapolis, IN, Jon Bentley Hyland, Barnes and Thornburg LLP, Dallas, TX, for Defendants.
Pending before the Court are Plaintiff's Motion For Permanent Injunction (Document No. 172), Rust-Oleum's Motion for Entry of Judgment Denying ITW Any Monetary Relief (Document No. 176), and Plaintiff's Motion for Prejudgment and Post-Judgment Interest (Document No. 174). Having considered the motions, submissions, and applicable law, the Court determines the motions should be granted in part and denied in part.
This is a false advertising case brought pursuant to the Lanham Act. Plaintiff Illinois Tool Works, Inc. ("ITW") and Defendant Rust-Oleum Corporation ("Rust-Oleum") sell competing water repellant products for use on vehicle windshields. ITW's product is named "Rain-X" and Rust-Oleum's product is named "RainBrella." As part of Rust-Oleum's advertising campaign for RainBrella, Rust-Oleum has made three statements in its advertising relevant to this lawsuit: (1) that RainBrella "Lasts 2X Longer than Rain-X" ("2X Claim"); (2) ("Twice As Long Claim"); and (3) RainBrella "Lasts Over 100 Car Washes" ("Over 100 Claim") (collectively, the "Claims").
Based on the foregoing, on July 7, 2017, ITW filed this lawsuit asserting Lanham Act claims for false and misleading advertising against Rust-Oleum. On July 16, 2018, the Court commenced a five-day jury trial. The Court submitted questions, definitions, and instructions to the jury. In response, the jury made findings that the Court received, filed, and entered into the record. The jury found in favor of ITW on all questions submitted to them.1 Following the jury verdict, on August 1, 2018, ITW filed a motion for a permanent injunction. On August 28, 2018, ITW moved for prejudgment and post-judgment interest. On August 30, 2018, Rust-Oleum moved for an entry of judgment denying ITW monetary relief.
Following the jury's verdict, (1) ITW moves for a permanent injunction; (2) Rust-Oleum moves for an entry of judgment denying ITW any monetary relief; and (3) ITW moves for prejudgment and post-judgment interest. The Court addresses each motion in turn.
ITW moves for a permanent injunction seeking to: (1) enjoin Rust-Oleum from disseminating the Claims in advertising materials in connection with RainBrella ("Dissemination Provision"); (2) require Rust-Oleum to recall all advertising materials which contain the Claims ("Recall Provision"); and (3) require Rust-Oleum to destroy all advertising materials containing the Claims ("Destruction Provision"). Rust-Oleum contends a permanent injunction is not proper because there is no evidence of irreparable injury to ITW and the balance of hardships does not weigh in favor of granting a permanent injunction. A plaintiff seeking a permanent injunction must establish the following elements: "(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction." eBay Inc. v. MercExchange, L.L.C. , 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006).
Rust-Oleum contends ITW did not prove irreparable injury. ITW contends it has and will continue to suffer irreparable injury if Rust-Oleum continues to make false and misleading advertising claims. The potential for ongoing harm if a defendant continues to make similar false or misleading statements and the likely impossibility of quantifying the extent of harm suffered as a result of false or misleading statements weigh in favor of finding irreparable injury. Eastman Chemical Co. v. PlastiPure, Inc. , 969 F.Supp.2d 756, 769 (W.D. Tex. 2013) (Sparks, J.), aff'd Eastman Chemical Co v. Plastipure, Inc. , 775 F.3d 230 (2014).
The jury found Rust-Oleum is liable for false or misleading advertising for each of the Claims.2 In finding that Rust-Oleum is liable for false or misleading advertising, the jury found ITW was harmed as a result of each of the Claims.3 At trial, there was testimony that ITW's reputation and brand was harmed as a result of the Claims.4 The Court finds the potential for ongoing harm if Rust-Oleum continues to make the Claims and the likely impossibility of quantifying such harm weigh in favor of finding irreparable injury. The Court therefore finds ITW has proven an irreparable injury.5
Rust-Oleum contends the balance of hardships between Rust-Oleum and ITW does not weigh in favor of issuing a permanent injunction because ITW's proposed permanent injunction is overbroad6 and would require Rust-Oleum to expend significant amounts of money. Specifically, as to the Destruction Provision, Rust-Oleum contends destroying all advertising material containing the Claims would require it to repackage all its RainBrella product, costing between $40,000 to $50,000. As to the Recall provision, Rust-Oleum contends recalling all RainBrella product would greatly damage its ability to continue as a viable product and would require Rust-Oleum to identify all retailers who still have RainBrella product, buy back the product, and pay for freight and labor. ITW contends an injunction would protect its interest in preventing Rust-Oleum from continuing to make false and misleading commercial advertisements.
Preventing a party from "repeating statements a jury found to be false and misleading" weighs in favor of granting an injunction. Eastman , 969 F.Supp.2d at 769. The jury found the Claims were false or misleading advertisements.7 The evidence introduced at trial showed Rust-Oleum spent $1,318,023 on advertising. There is no evidence regarding how much RainBrella product is still on the market or the cost to Rust-Oleum in complying with the Recall Provision. Having found ITW will be irreparably harmed if Rust-Oleum continues to make the Claims the jury found to be false or misleading, the Court finds the balance of hardships weighs in favor issuing a permanent injunction. The Court, however, finds the balance of hardships does not weigh in favor of recalling all RainBrella product containing the Claims. Accordingly, ITW's motion for a permanent injunction is denied as to the Recall Provision.8
The Court will briefly address the remaining elements because ITW has the burden of proof on the necessity for a permanent injunction. First, ITW contends the monetary damages the jury awarded are inadequate to compensate it for its injuries because it is difficult to quantify the extent of harm to its reputation and goodwill as a result of the Claims. Fringe Ins. Benefits, Inc. v. Beneco, Inc. , No. A-13-CV-034-AWA, 2015 WL 631181, at *8 (W.D. Tex. Feb. 11, 2015) (Austin, Mag. J.); Eastman , 969 F.Supp.2d at 768–69. The Court finds ITW has established that remedies available at law, such as monetary damages, are alone inadequate to compensate it for its injuries in this case.
Finally, "the public interest is always served by requiring compliance with Congressional statutes such as the Lanham Act." Quantum Fitness Corp. v. Quantum LifeStyle Centers, L.L.C. , 83 F.Supp.2d 810, 832 (S.D. Tex. 1999) (Rosenthal, J.). ITW was the prevailing party in this lawsuit because the jury found the Claims constituted false or misleading advertising. ITW seeks a permanent injunction to enforce the Lanham Act. The Court therefore finds ITW has established a permanent injunction in this case would serve the public interest. In sum, ITW has established all four elements to demonstrate that it is entitled to a permanent injunction in this case.9
Rust-Oleum contends ITW's proposed permanent injunction is overbroad. ITW contends its proposed permanent injunction is not overbroad in this case. The scope of an injunction "is dictated by the extent of the violation established" and so a court "must narrowly tailor an injunction to remedy the specific action which gives rise to the order." John Doe # 1 v. Veneman , 380 F.3d 807, 818 (5th Cir. 2004). At the same time, a business " ‘once convicted of unfair competition ... should thereafter be required to keep a safe distance away from the margin line even if that requirement involves a handicap as compared with those who have not disqualified themselves.’ " Mary Kay, Inc. v. Weber , 661 F.Supp.2d 632, 641 (N.D. Tex. 2009) (Fish, J.) (quoting Chevron Chem. Co. v. Voluntary Purchasing Groups, Inc. , 659 F.2d 695, 705 (5th Cir. 1981) ). In particular, Rust-Oleum contends ITW's proposed permanent injunction: (1) does not allow for the possibility that RainBrella could be modified to substantiate the Claims; (2) should not include the prohibition on the Over 100 Claim because ITW argued that the Over 100 Claim is misleading, not false; (3) should not include "Protects Through 100 Car Washes" because it was not litigated at trial; and (4) improperly includes Rust-Oleum's NEVERWET product that was not litigated at trial. Having found ITW has established it is entitled to a permanent injunction and having considered the contentions, submissions, and applicable law,...
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