McKeon Prods., Inc. v. Honeywell Safety Prods. USA, Inc.
| Decision Date | 28 January 2021 |
| Docket Number | Case No. 95-cv-76322 |
| Parties | MCKEON PRODUCTS, INC., Plaintiff, v. HONEYWELL SAFETY PRODUCTS USA, INC., successor-in-interest to HOWARD S. LEIGHT AND ASSOCIATES, INC. Defendant. |
| Court | U.S. District Court — Eastern District of Michigan |
OPINION AND ORDER GRANTING DEFENDANT HONEYWELL SAFETY PRODUCTS USA, INC.'S MOTION TO STAY NOVEMBER 25, 2020 ORDER (ECF NO. 79) UPON THE POSTING BY DEFENDANT HONEYWELL OF A $500,000.00 SUPERSEDEAS BOND
On November 25, 2020, this Court issued an Opinion and Order granting Plaintiff McKeon Products Inc.'s ("McKeon") Motion to Reopen Case and Enforce the Court's February 11, 1997 Final Judgment and Permanent Consent Order Against Honeywell Safety Products, USA, Inc. ("Honeywell"), successor-in-interest to Howard S. Leight & Associates, Inc. (ECF No. 78, Opinion and Order.) The Court concurred with the Magistrate Judge's Amended Report and Recommendation that the four corners of the parties' 1997 Consent Order preclude Honeywell from selling its Max and Max-Lite brand earplugs in the Retail Market, and ordered that:
Defendant Honeywell, successor-in-interest to Howard S. Leight & Associates, Inc., cease selling Max and Max-Lite earplugs to and through the Retail Market, consisting of all retail establishments including the Drug and Grocery Market, sporting goods stores, and retail mass merchandisers, including online retail mass merchandisers such as Amazon.com and Walmart.com.
(Id. at p. 9, PgID 921.) The Court also agreed that the doctrine of laches does not apply to bar Plaintiff McKeon's request for injunctive relief. (Id. at pp. 7-8, PgID 919-20.)
Now before the Court is Defendant Honeywell's December 2, 2020 Motion to Stay the Court's November 25, 2020 Opinion and Order. (ECF No. 79, Honeywell's Motion to Stay November 25, 2020 Order ("Honeywell Mot.").) Honeywell requests that the Court stay its November 25, 2020 Order pending appellate review. On December 16, 2020, Plaintiff filed a Response in opposition to a stay, and contended that if the Court were to grant a stay, it should require Honeywell to put up a substantial bond. On December 17, 2020, Honeywell filed a Notice of Appeal of the Court's November 25, 2020 Order to the United States Court of Appeals for the Sixth Circuit. (ECF No. 82.) This Court held a hearing on Defendant's Motion to Stay using Zoom videoconference technology on January 22, 2021. For the reasons set forth below, the Court GRANTS Honeywell's Motion to Stay November 25, 2020 Order, conditioned upon Honeywell posting a supersedeas bond in the amount of $500,000.00.
McKeon has sold its soft earplugs under the name "MACK'S" since the 1960's. (ECF No. 32, Pl.'s Mot. to Reopen Case, PgID 11.) Defendant Howard S. Leight began selling its own line of earplugs under the trademark "MAX" in 1986. (Id.) McKeon sued Howard Leight in 1995, and in 1996 moved for a preliminary injunction, alleging that Howard Leight's sales of earplugs under the registered "MAX" and "MAX-LITE" trademarks violated the Lanham Act, the Michigan Consumer Protection Act, and Michigan common law. (ECF Nos. 1, 8, 10.)
The parties settled in early 1997, and memorialized their agreement in a Final Judgment and Permanent Consent Order Against Howard S. Leight & Associates, Inc., dated February 11, 1997. (ECF No. 32-2, Consent Order.) Defendant Honeywell is a successor-in-interest to Howard Leight and thus bound by the terms of the Consent Order. The Consent Order addresses Honeywell's sale of the MAX Products, with Defendant agreeing to cease selling earplugs under the "MAX" or "MAX-LITE" trademarks in the "Retail Market." (Id.) The "Retail Market" is defined as "the market consisting of all retail establishments including the Drug and Grocery Markets, sporting goods stores and mass merchandisers." (Id. ¶ 7.) The "Drug and Grocery Market" is defined as:
[R]etail establishments where medicines and miscellaneous articles such as cosmetics, food and film and/or where food stuffs, meats,produce, dairy products and other household supplies are the principal products sold as well as any distributor or supplier who sells to these markets. Examples of establishments and distributors in the drug and grocery markets include, but by no means are limited to, Walgreens, Arbor Drugs and McKesson as such parties presently are operating.
(Id. ¶ 5, PgID 29-30.)
The Order "expressly acknowledges [Defendant's] continuing rights to use Leight's "MAX" and "MAX-LITE" trademarks in the Industrial Safety Market and elsewhere, except as expressly agreed in this Consent Order." (Id. ¶ 8, PgID 32.) "Industrial Safety Market" is defined as "the market in which manufacturing entities purchase earplugs and other hearing protection for their employees' use as well as any distributor or supplier who sells within this market." (Id. ¶ 6, PgID 30.)
According to Honeywell, starting in 2004, some third-party distributors began selling Leight MAX earplugs on Amazon.com. (ECF No. 79, Honeywell Mot. at p. 3, PgID 932, citing ECF No. 40-2, Declaration of Deborah J. Gendreau-Flynn ("Gendreau-Flynn Decl.") ¶ 9, PgID 173-74.) Starting in 2009, Howard Leight began directly selling its Leight MAX earplugs on Amazon.com. (Id.)
McKeon alleges that in or around September 2017, it learned that Leight MAX earplugs were being sold "in the retail market through various online retailers such as Amazon[.com], Walmart[.com], and Ebay[.com]." (ECF No. 32, Pl.'s Mot. Reopen Case pp. 3-4, PgID 13-14; ECF No. 32-7, Declaration of Devin Benner("Benner Decl.") ¶ 2, PgID 80.) When it was unable to informally resolve the dispute, McKeon filed its motion to enforce the Consent Order on March 21, 2018. (ECF No. 32.)
The Court referred Plaintiff's Motion to Reopen the Case to Magistrate Judge Elizabeth A. Stafford for initial resolution. (ECF No. 52.) Magistrate Judge Stafford issued her Report and Recommendation to this Court on November 13, 2018, recommending that the Motion be granted and that Defendant Honeywell be ordered to "cease selling Max and Max-Lite earplugs through the online retail market pursuant to the permanent injunction." (ECF No. 58, Report and Recommendation; ECF No. 59, Transcript of 11/2/18 Hearing.) The matter was recommitted by this Court to the Magistrate Judge, who issued an Amended Report and Recommendation, recommending the same resolution. (ECF No. 68, Amended Report and Recommendation.) Honeywell objected to the Amended Report. On November 27, 2019, the Court referred this matter to facilitative mediation (ECF No. 77); it did not resolve. On November 25, 2020, the Court entered an Opinion and Order overruling Defendant's objections and adopting the Amended Report, requiring Honeywell to cease selling Max and Max-Lite earplugs in the Retail Market including through online retail mass merchandisers such as Amazon.com and Walmart.com. (ECF No. 78.)
On December 2, 2020, Honeywell moved to stay the Court's November 25, 2020 Order pending its then-imminent appeal. (ECF No. 79, Honeywell Mot.) Honeywell argues that it is likely to prevail on appeal, that forcing it to comply with the Court's Order will cause it irreparable harm, and that a stay will not harm Plaintiff or the public interest.
Plaintiff filed a response in opposition to Honeywell's motion on December 16, 2020. (ECF No. 80, Pl.'s Resp.) Plaintiff argues that Honeywell has not shown a likelihood of success on appeal and that it is not facing irreparable harm. Plaintiff contends that a stay will cause it substantial injury and will also harm the public interest. Plaintiff also requests that if the Court grants a stay, that it require Honeywell to post a substantial bond pursuant to Fed. R. Civ. P. 62(d).
Honeywell filed a reply brief in support of its motion the next day, arguing that a stay will simply maintain the status quo of the past 20 years, and that a bond is not necessary in this case. (ECF No. 81.)
On December 17, 2020, Honeywell filed its Notice of Appeal of the Court's November 25, 2020 Order to the Sixth Circuit Court of Appeals. (ECF No. 82, Notice of Appeal.) On December 28, 2020, Appellant Honeywell filed a motion to expedite the appeal, which the Sixth Circuit Court of Appeals granted in part on January 12, 2021. (Case No. 20-2279, Doc Nos. 9, 12-2.) Specifically, the Court ofAppeals expedited the briefing schedule, with briefing to be concluded by March 1, 2021, but stated that "[t]he determination of whether to expedite the issuance of a decision is reserved to the merits panel to which this appeal will be assigned." (Doc. No. 12-2.)
Honeywell moves for a stay pursuant to Fed. R. Civ. P. 62. Rule 62 provides that, "unless the court orders otherwise," an appeal taken in an action for an injunction does not stay the proceedings. Fed. R. Civ. P. 62(c). The Federal Rules of Civil Procedure grant district courts the power to stay an injunction pending appeal:
While an appeal is pending from an interlocutory order or final judgment that grants, continues, modifies, refuses, dissolves, or refuses to dissolve or modify an injunction, the court may suspend, modify, restore, or grant an injunction on terms for bond or other terms that secure the opposing party's rights....
Fed. R. Civ. P. 62(d). A district court's power to stay proceedings is "incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel and for litigants." Landis v. North Am. Co., 299 U.S. 248, 254 (1936). Whether to grant a stay pending an appeal is within the sound discretion of the District Court. Mason Cnty. Med. Ass'n v. Knebel, 563 F.2d 256, 261 (6th Cir. 1977).
In deciding whether to issue a stay pursuant to Rule 62(d), the court must consider the same factors analyzed when issuing injunctive relief:
"(1) the likelihood that the party seeking the stay...
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