Moke Am. LLC v. Am. Custom Golf Cars, Inc.

• Decision Date: 06 December 2022
• Docket Number: CIVIL 3:20cv400 (DJN)
• Parties: MOKE AMERICA LLC, Plaintiff v. AMERICAN CUSTOM GOLF CARS, INC., et al., Defendants.
• Court: U.S. District Court — Eastern District of Virginia

MOKE AMERICA LLC, Plaintiff
v.
AMERICAN CUSTOM GOLF CARS, INC., et al., Defendants.

CIVIL No. 3:20cv400 (DJN)

United States District Court, E.D. Virginia, Richmond Division

December 6, 2022

MEMORANDUM OPINION

David J. Novak, United States District Judge.

This matter comes before the Court on Plaintiff and Counterclaim Defendant Moke America LLC's (“Plaintiff') Motion to Exclude Testimony from Defendants' Expert Coleman Sachs (the “Motion to Exclude” or the “Motion”) (ECF No. 154). Defendants and Counterclaim Plaintiffs American Custom Golf Cars, Inc. (“ACG”), Moke USA, LLC (“Moke USA”), and Moke International Ltd. (“Moke International”) (collectively, “Defendants”) responded in opposition (ECF No. 159), and Plaintiff replied (ECF No. 160). The Motion to Exclude now stands ripe for decision. For the reasons stated below, the Court will GRANT Plaintiffs Motion (ECF No. 154).

I. BACKGROUND

A. Factual and Procedural History^[1]

The parties, both dealers in “low-speed land vehicles,” find themselves locked in a legal battle over a disputed trademark - namely, the “MOKE” mark (the “MOKE Mark” or the “Mark”). (Amended Complaint (“Am. Compl.”) ¶ 18; Third Amended Counterclaims (“3d Am.

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Counterci.”) ¶ 27.) Plaintiff Moke America claims that it acquired common law trademark rights in the Mark via a November 2016 assignment from non-party Mini Mania, Inc. (“Mini Mania”). (Am. Compl. ¶¶ 9-15.) Defendants Moke International, Moke USA, and ACG claim that Moke International - the ultimate assignee of trademark rights initially belonging to ACG - owns trademark rights in the Mark pursuant to ACG's August 2015 trademark application with the Patent and Trademark Office (the “PTO”). (3d Am. Counterci. ¶ 27.)

The parties initially litigated their dispute before the PTO's Trademark Trial and Appeal Board (“TTAB”), where Plaintiff opposed ACG's 2015 application to register the MOKE Mark. (Complaint (“Compl.”) Ex. 6, at 1-2.) Before the TTAB, Plaintiff argued that the common law trademark rights it acquired from Mini Mania long predated ACG's 2015 trademark application, as Mini Mania first used the MOKE Mark in commerce in 1974. (Compl. Ex. 6, at 2.) Based on Mini Mania's sales records and the testimony of Plaintiff s CEO, Plaintiff maintained that it, not Defendants, rightfully claimed priority in the Moke Mark. (Compl. Ex. 6, at 2.) The proceedings before the TTAB culminated in an April 2020 opinion dismissing Plaintiffs opposition, as the TTAB found that Plaintiff “failed to prove prior use of the MOKE trademark.” (Compl. Ex. 6, at 23.)

Plaintiff commenced the current action by filing its Complaint (ECF No. 1) on June 5, 2020, wherein it appealed the TTAB's decision and sought a declaratory judgment that “all common law trademark rights in ‘MOKE' rest with Moke America.” (Compl. 12.) On July 27, 2020, Plaintiff filed its Amended Complaint (ECF No. 20), expanding its causes of action to include, inter alia, a claim for trademark infringement under the Lanham Act. (Am. Compl. ¶¶ 59-65.) In its Amended Complaint, Plaintiff alleges that Defendants infringed upon Plaintiffs

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Mark by “selling, offering for sale, and broadly and deceptively advertising their vehicles under” the MOKE mark. (Am. Compl. ¶ 60.)

Defendants filed their Answer to the Amended Complaint and Amended Counterclaims (ECF No. 21) on August 10, 2020, disputing Plaintiffs infringement claim and asserting their own counterclaim for trademark infringement based upon Plaintiffs use of the MOKE Mark. (Am. Counterci. ¶¶ 59-65.) Defendants later submitted Second Amended (ECF No. 100) and Third Amended (ECF No. 146) Counterclaims, first to reflect the assignment of Moke USA's trademark interest to Moke International and then to replead their Connecticut state law claims under Florida law.^[2]

In their Third Amended Complaint, Defendants contest Plaintiffs purported common law trademark rights, and thus Plaintiffs supposed priority in the Mark, under the “unlawful use doctrine,” which stands for the proposition that unlawful commercial activities “cannot provide the basis for a protectable trademark interest.” FNHerstal SA v. Clyde Armory Inc., 838 F.3d 1071,1086 (11th Cir. 2016). Pursuant to the unlawful use doctrine, Defendants argue that Plaintiffs alleged violations of the National Traffic and Motor Vehicle Safety Act vitiated any common law trademark rights that Plaintiff asserts in the MOKE Mark. (3d Am. Counterci. ¶¶26,66.)

On top of their infringement claims, both sides allege additional causes of action under federal and state law. Plaintiff brings Lanham Act claims for unfair competition and false representation as well as multiple business tort claims under New York state law. (Am. Compl. ¶¶ 66-98.) Defendants bring a Lanham Act claim for unfair competition, a copyright

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infringement claim under the Copyright Act, and two business tort claims under Florida state law. (3d Am. Counterci. ¶¶ 75-108.) The Court denied cross-motions for partial summary judgment on June 28, 2022. (ECF No. 152.) A jury trial in this case is scheduled to begin with jury selection on January 26, 2023.

Currently before the Court is Plaintiffs Motion to Exclude Testimony from Defendants' Expert Coleman Sachs (“Mr. Sachs”) (ECF No. 154), a former National Highway Traffic Safety Administration (“NHTSA”) employee, who intends to opine about Plaintiffs alleged violations of the National Traffic and Motor Vehicle Safety Act. (Deci. Coleman Sachs (“Deci.”) ¶¶ 3-12.)

B. Mr. Sachs' Proposed Testimony

Defendants retained Mr. Sachs to “opine as to whether Moke America's vehicles have or have not complied with relevant Federal [M]otor [V]ehicle [S]afety [S]tandards.” (Deci. ¶ 5.) To that end, Mr. Sachs devotes the bulk of his Expert Witness Statement (ECF No. 159-2) to detailing the specific Federal Motor Vehicle Safety Standards (“FMVSS”) for which Plaintiff allegedly did not comply. (Expert Witness Statement (“Exp. Wit. Stmt.”) 5-10.)

Mr. Sachs begins his report, however, by outlining the regulatory landscape in which low-speed vehicles, like the ones at issue in the instant case, operate. (Exp. Wit. Stmt. 1-3.) From there, Mr. Sachs lists the specific FMVSS applicable to low-speed vehicles and the requirements that those standards entail. (Exp. Wit. Stmt. 3-4.) Mr. Sachs next offers his qualifications as an expert witness, which are not in dispute. (Exp. Wit. Stmt. 4-5.) Then, beginning on page four, Mr. Sachs sets forth the expert opinions that he will offer at trial and the factual bases for those opinions. (Exp. Wit. Stmt. 5-10.)

Mr. Sachs gleans most of the facts underlying his opinions from three sources. (Exp. Wit. Stmt. 6-9.) First, Mr. Sachs cites a 2019 report prepared by MIROX Corporation

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(“MIROX”) - a third-party that performs FMVSS inspections on low-speed land vehicles, among other services. (ECF No. 155-13.) In that report, MIROX recounts the findings of various inspections and tests that it performed on a MOKE-branded vehicle, providing photographs of the subject vehicle throughout. Second, Mr. Sachs draws facts from a separate MIROX report entitled “Issues with MOKE ‘business.'” (ECF No. 155-14.) In that report, MIROX lodges a bevy of allegations against Plaintiff, listing numerous federal code sections and FMVSS with which Plaintiff allegedly failed to comply. Third, Mr. Sachs references information gathered during his personal inspection of a MOKE-branded vehicle in November 2021. (Exp. Wit. Stmt. 7-8.)

Based on facts drawn from the above sources, Mr. Sachs concludes that neither the Moke America vehicle that MIROX inspected nor the Moke America vehicle that Mr. Sachs personally inspected complied with FMVSS No. 500, which Mr. Sachs characterizes as “[t]he principal standard that a [low-speed vehicle] needs to meet” to comply with federal law. (Exp. Wit. Stmt. 3, 5-9.) Based on his review of photographs included in the 2019 MIROX report, Mr. Sachs further opines that Plaintiff “may be deemed to be in violation of 49 U.S.C. § 30112(a)” if it imported the pictured vehicle, as the vehicle was equipped with tires that “could not be lawfully imported into the United States.” (Exp. Wit. Stmt. 7.) With respect to the vehicle that he personally inspected, Mr. Sachs also opines that the vehicle failed to comply with FMVSS No. 209, which sets forth labeling requirements for low-speed vehicles. (Exp. Wit. Stmt. 7-8.) Finally, Mr. Sachs opines that Plaintiff violated 49 U.S.C. § 30112(a) by “selling or offering for sale motor vehicles that were not properly certified to all applicable FMVSS by their actual assembler.” (Exp. Wit. Stmt. 9.) In drawing this final conclusion, Mr. Sachs largely relies on opinions offered by MIROX in its “Issues with MOKE ‘business'” report. (Exp. Wit. Stmt. 9.)

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C. Plaintiffs Motion

Plaintiff now moves to exclude Mr. Sachs' expert testimony on three grounds. First, Plaintiff contends that Department of Transportation (“DOT”) Regulations preclude Mr. Sachs, a former NHTSA official, from testifying as an expert witness in proceedings between private litigants. (Motion (“Mot.”) 2.) Second, Plaintiff argues that Mr. Sachs' testimony - which Defendants...