E. Kemp v. Tyson Foods Inc.

• Citation: 620 F.3d 873
• Decision Date: 03 September 2010
• Docket Number: No. 09-2031.,09-2031.
• Parties: SUPERIOR SEAFOODS, INC.; Superior Seafoods, L.L.C.; Quality Finer Foods, Inc., Plaintiffs-Appellants, Louis E. Kemp, Plaintiff, v. TYSON FOODS, INC.; Con Agra Grocery Products Company, L.L.C., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

620 F.3d 873

SUPERIOR SEAFOODS, INC.; Superior Seafoods, L.L.C.; Quality Finer Foods, Inc., Plaintiffs-Appellants,

Louis E. Kemp, Plaintiff,

v.TYSON FOODS, INC.; Con Agra Grocery Products Company, L.L.C., Defendants-Appellees.

No. 09-2031.

United States Court of Appeals,Eighth Circuit.

Submitted: Feb. 9, 2010.

Filed: Sept. 3, 2010.

Marcy S. Wallace, argued, Minneapolis, MN, for appellant.

Robert James Gilbertson, argued, John W. Ursu, on the brief, Minneapolis, MN, for Tyson Foods, Inc.

Patrick C. Stephenson, argued, John P. Passarelli, on the brief, Omaha, NE, for Con Agra Grocery Products Company, L.L.C.

Before WOLLMAN, HANSEN, and MELLOY, Circuit Judges.

MELLOY, Circuit Judge.

This case is the latest in a series of trademark-related actions stemming from Plaintiff Louis Kemp's sale of a seafood-products business to Oscar Mayer. ¹ In one of the earlier cases, the district court ² entered a consent judgment disposing of several issues prior to a bench trial. The present case, filed more than five years later and after several foregone opportunities to challenge the consent judgment, is an independent equitable action seeking relief from the consent judgment pursuant to Federal Rule of Civil Procedure 60(d). In this action, Mr. Kemp alleges that he entered into an underlying consent agreement by mistake and that the resulting consent judgment was the product of fraud on the court. The district court granted summary judgment against Mr. Kemp, and we affirm.

I. Background

Mr. Kemp built a seafood business and sold it to Oscar Mayer. Through subsequent transfers, the business is now owned by Con Agra Grocery Products, L.L.C. ³ At the time Mr. Kemp sold the business, he had used variations of trademarks based upon his last name on surimi seafood products and owned federal registrations based upon his use in commerce of the marks KEMP, KEMP'S, and KEMP'S & DESIGN. In a stock purchase agreement governing the initial sale of the business, Mr. Kemp warranted that there had been no other use of the marks on any other products. Pursuant to the stock purchase agreement, Mr. Kemp sold all trademark rights developed through his actual use of KEMP-related marks in commerce. Further, Mr. Kemp agreed that he would not initiate any new uses other than marks that included the word KEMP preceded by one or more words with the additional words subject to approval in advance by Con Agra. ⁴

In an amendment to the stock purchase agreement signed two years later, Mr. Kemp expressly “granted” to Con Agra the right to use the mark LOUIS KEMP on seafood and related products in a “natural zone of product line expansion.” ⁵ The agreement, however, contained no acknowledgment by Con Agra that Louis Kemp actually possessed any such rights to grant. Mr. Kemp alleges that, initially, Con Agra orally agreed to allow him to use the mark LOUIS KEMP broadly. As quoted above, this sentiment is not expressed in the written amendment to the stock purchase agreement.

Mr. Kemp then initiated his own use of a LOUIS KEMP mark on wild rice products. Mr. Kemp initiated this use without seeking advance approval from Con Agra as required by the amendment and the stock purchase agreement. Eventually, Mr. Kemp and Con Agra found themselves embroiled in litigation in California and Minnesota. Mr. Kemp asserted that Con Agra obtained only limited rights through the agreement and the amendment, and Con Agra asserted that Mr. Kemp's use of the mark LOUIS KEMP was an unapproved, infringing use. Litigation included trademark, contract, business-tort, and declaratory judgment claims as well as a bankruptcy by Mr. Kemp in California.

In 1999, prior to trial in Minnesota, the parties reached a settlement regarding all of the California cases and dismissed with prejudice all of Mr. Kemp's claims against Con Agra in California. The parties then negotiated a consent agreement over the course of approximately twenty months to pare down the issues remaining for trial in Minnesota. It became apparent in negotiations over the consent agreement that Mr. Kemp wanted any such agreement to state that Con Agra's right to use the LOUIS KEMP marks was limited (1) narrowly to surimi and related products, or (2) in accordance with consents and assignments as contained in the parties' earlier agreements. Con Agra did not want such language included and stated in an early draft of a consent agreement that Con Agra owned “all right title and interest in and to the marks.”

Taken in a light most favorable to Mr. Kemp, it is fair to say Con Agra's attorney's were deceptive and evasive in their communications with Mr. Kemp's attorney and with the district court in interactions leading up to the court's issuance of an order on March 31, 2001. For example, in one instance, a Con Agra attorney sent a revised draft consent agreement to Mr. Kemp's attorney stating the revisions “incorporated” Mr. Kemp's concerns. In fact, the revisions only addressed some of Mr. Kemp's concerns. In another instance, attorneys for Con Agra submitted to the court an early draft of the consent agreement that was signed by Mr. Kemp's attorney and asked the court to enter an order enforcing the early draft of the agreement. Attorneys for Con Agra, however, knew at the time that Mr. Kemp had not approved that specific draft of the agreement because Mr. Kemp had specifically rejected that draft and the parties subsequently had negotiated for months to formulate mutually acceptable language.

In the March 31, 2001 order, however, the court noted that the parties had not submitted a signed consent agreement. The court also indicated that Con Agra had acquired from Louis Kemp “only a limited right to use and register LOUIS KEMP and LOUIS KEMP SEAFOOD COMPANY in connection with surimi based seafood and related products.” The court noted that the parties had not yet reached agreement as to the propriety of dismissing declaratory judgment claims regarding the parties' relative rights in the LOUIS KEMP marks. Accordingly, although Mr. Kemp now cries foul regarding actions by Con Agra's attorneys leading up to the March 31, 2001 order, that order, in and of itself, does not contain the statements Mr. Kemp alleges to be adverse to his purported interests.

Ultimately, negotiations continued and Mr. Kemp's attorney signed a May 16, 2001 version of a consent agreement that did not include Mr. Kemp's desired language describing Con Agra's rights in the LOUIS KEMP marks as being limited. There is no allegation that Mr. Kemp's attorney or Mr. Kemp were deceived regarding the contents of the document signed in May 2001. Mr. Kemp's attorney submitted this version of the consent agreement to the court, along with a cover letter stating that the agreement was “subject to the Court's [March 31, 2001] Decision and Order ... that ‘the defendants acquired only a limited right to use and register LOUIS KEMP and LOUIS KEMP SEAFOOD COMPANY in connection with surimi-based seafood and related products.’ ” Before signing the document and submitting it to the district court, Mr. Kemp's attorney consulted with Mr. Kemp and told Mr. Kemp that, although the agreement did not contain the desired language, he nevertheless recommended accepting the agreement. The attorney also told Mr. Kemp that a reference to limited rights in the cover letter would be equivalent to placing such language in the consent agreement. The consent agreement expressly disposed of remaining declaratory judgment claims and left for trial only infringement, dilution, and unfair competition claims against Mr. Kemp. The district court entered a consent judgment based on the consent agreement.

In later May 2001, shortly after the court entered the consent judgment, counsel for Con Agra sent a letter to Mr. Kemp's attorney and to the court noting that the March 31, 2001 order preserved the declaratory judgment claims whereas the subsequent consent judgment disposed of such claims. The letter emphasized that only the infringement, dilution, and unfair competition claims against Mr. Kemp remained for trial. In response, Mr. Kemp and his attorneys did not protest to the court or suggest there was error or fraud surrounding the consent judgment.

The court subsequently held a bench trial on the remaining claims and ruled in favor of Mr. Kemp. Con Agra appealed. While the appeal was pending, Con Agra introduced a line of smoked salmon products under the LOUIS KEMP trademark. Mr. Kemp sought an injunction to stop this new use. The district court, in a March 30, 2004 order relying in part on the language of the consent judgment, stated the consent judgment was “unambiguous and simply cannot be read to include the possibility that the scope of [Con Agra's] marks continued to be limited to surimi-based products. If such a limitation was intended, it should have been included in the Consent Order.”

In February 2005, we reversed the district court's ruling from the bench trial in the infringement action against Mr. Kemp and found infringement of Con Agra's marks based on Mr. Kemp's use of LOUIS KEMP-related marks on the wild-rice and side-dish products.

Mr. Kemp did not attack the May 2001 consent judgment after the court in the injunction proceedings relied on the consent judgment and referred to Con Agra's rights as not limited to surimi-based products. Mr. Kemp did not attempt to vacate the consent judgment during his infringement trial or in his appeal to our court in the infringement case. Finally, on June 20, 2006, Louis Kemp for the first time sought to vacate the consent judgment by filing the present action.

The district court in the present action granted summary judgment in favor of Con Agra, finding that Kemp's attorney had carefully reviewed the consent agreement prior to signing in May 2001 and had advised entering into the agreement even though he would have preferred different language. The district court noted that the parties had negotiated extensively...