McKeon Prods. v. Honeywell Safety Prods., U.S.
| Docket Number | 95-cv-76322 |
| Decision Date | 09 February 2022 |
| 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 |
On November 25, 2020, this Court issued an Opinion and Order adopting the Magistrate Judge's Amended Report and Recommendation, and 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 Granting McKeon's Motion to Reopen.) The Court 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, PageID.921.)
On January 28, 2021, the Court entered an Opinion and Order granting Defendant Honeywell's motion to stay the Court's November 25, 2020 Opinion and Order pending appeal, and subject to posting a $500, 000.00 supersedeas bond. (ECF No. 95, Order Granting Honeywell's Motion to Stay.)
On October 8, 2021, the United States Court of Appeals for the Sixth Circuit affirmed this Court's Opinion and Order granting McKeon's Motion to Reopen the Case, and remanded the case to this Court for further proceedings, including dissolution of the stay. McKeon Prods., Inc. v. Howard S. Leight & Assocs., Inc., 15 F.4th 736 (6th Cir. 2021) (also at ECF No. 100). The Sixth Circuit's mandate was issued on November 1, 2021 (ECF No. 101, Mandate), and thereafter this Court dissolved the stay of its November 25, 2020 Opinion and Order, on November 2, 2021. (ECF No. 102, Order Dissolving Stay.)
Now before the Court is Plaintiff McKeon's Motion for an Accounting, and Reimbursement for Attorney Fees and Costs: (1) requiring Defendant Honeywell to account for its retail sales and profits; (2) providing limited discovery to McKeon; (3) requiring Honeywell to disgorge profits it received from its actual sales of its Max and Max-Lite earplugs in violation of the Consent Order; (4) awarding McKeon attorney fees and costs incurred in enforcing the 1997 Consent Order against Honeywell; and (5) any other relief the Court finds just and equitable. (ECF No. 106, Pl.'s Mot.) On January 10, 2021, Honeywell filed a Response in opposition. (ECF No. 108, Def.'s Resp.) McKeon filed a Reply on January 24, 2021. (ECF No. 110, Pl.'s Reply.)
Because the Court does not believe that oral argument will aid in its disposition of the motion, it is dispensing with oral argument, pursuant to Eastern District of Michigan Local Rule 7.1(f)(2).
For the reasons that follow, the Court GRANTS McKeon's Motion for an accounting, discovery by McKeon, disgorgement of Honeywell's profits, and McKeon's request for attorney fees and costs. The Court DENIES Honeywell's request for discovery.
McKeon has sold its soft earplugs under the name “MACK'S” since the 1960's. (ECF No. 32, Pl.'s Mot. to Reopen Case, PageID.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.) The Consent Order addresses Howard Leight's sale of the MAX Products, with Howard Leight 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 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.) Defendant Honeywell, having purchased Howard Leight in 2010, is a successor-in-interest to Howard Leight and thus bound by the terms of the Consent Order.
According to Honeywell, starting in 2004, some third-party distributors began selling Leight MAX earplugs on Amazon.com. (ECF No. 79, Def.'s Mot. Stay at p. 3, PageID.932, citing ECF No. 40-2, Declaration of Honeywell's Deborah J. Gendreau-Flynn (Gendreau-Flynn Decl.) ¶ 9, PageID.173-74.)[1] Gendreau-Flynn's Declaration further states that, starting in 2009, Howard Leight began directly selling its Leight MAX earplugs on Amazon.com. (Id.) Honeywell made online sales a focus of its marketing and distribution strategies since it acquired Howard Leight, and continued the online sales, which grew by almost 70% from 2016 to 2017, after growing by 52% from 2015 to 2016. (Gendreau-Flynn Decl. ¶ 11, PageID.175). See McKeon Prods., 15 F.4th at 740.
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].” (Pl.'s Mot. Reopen Case pp. 3-4, PageID.13-14; ECF No. 32-7, Declaration of McKeon Chief Executive Officer (CEO) Devin Benner (Benner Decl.) ¶ 2, PageID.80.) McKeon informed Honeywell on September 19, 2017, that the sales violated the Consent Order and requested Honeywell to cease sales, but Honeywell refused. When it was unable to informally resolve the dispute, McKeon filed its motion to enforce the Consent Order on March 21, 2018. (Pl.'s Mot. Reopen Case.) Honeywell opposed the motion. (ECF Nos. 40, 41.)
This Court referred Plaintiff's Motion to Reopen the Case to Magistrate Judge Elizabeth A. Stafford for initial resolution. (ECF No. 52.) The parties appeared before Magistrate Judge Stafford for a hearing on November 2, 2018, and the Magistrate Judge issued her Report and Recommendation 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.) Thereafter, this Court recommitted the matter to the Magistrate Judge for further consideration. The Magistrate Judge subsequently issued an Amended Report and Recommendation on May 23, 2019, recommending the same resolution. (ECF No. 68, Amended Report and Recommendation (Amended Report).) Honeywell filed objections to the Amended Report and Recommendation.
On November 27, 2019, this Court referred this matter for facilitative mediation (ECF No. 77); the case did not resolve.
On November 25, 2020, this Court entered an Opinion and Order adopting the Amended Report, and required Honeywell to cease selling Max and Max-Lite earplugs to and through the Retail Market, including online retail mass merchandisers such as Amazon.com. (Opinion and Order Granting McKeon's Mot. to Reopen.)
On December 2, 2020, Honeywell moved to stay the Court's November 25, 2020 Opinion and Order pending Honeywell's then-imminent appeal. (Honeywell's Mot. to Stay.) McKeon opposed the motion. On January 28, 2021, the Court granted Honeywell's request to stay, and required Honeywell to post a $500, 000.00 supersedeas bond. (Opinion and Order Granting Mot. to Stay.)
On October 8, 2021, the Sixth Circuit Court of Appeals affirmed this Court's November 25, 2020 Opinion and Order. McKeon Prods., Inc. v. Howard S. Leight & Assocs., Inc., 15 F.4th 736 (6th Cir. 2021). The Sixth Circuit noted that (Id. at 739.
The Sixth Circuit answered the first two questions, by holding that while an affirmative defense of laches might be available to Honeywell, it did not apply to the facts in this case. Id. at 742-45. The Court explained that “a motion to enforce a consent decree is an equitable action subject to equitable defenses” and that “[l]egal doctrines that would apply to the underlying disputes are inapplicable.” Id. at 742. The Sixth Circuit concluded that McKeon had discovered Honeywell's sale of its earplugs on Amazon in September 2017, “when the sales began to spike, ” and that McKeon had timely moved to enforce the Consent Order in March 2018, after Honeywell had refused McKeon's attempts to resolve the dispute without resorting to the court. Id. at 743-44. The Sixth Circuit further found that Honeywell failed to show that it was prejudiced by the elapsed time, held that the Michigan six-year contract sta...
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