Money Store, Inc. v. Harriscorp Finance, Inc.

• Decision Date: 19 September 1989
• Docket Number: No. 88-3015,88-3015
• Citation: 885 F.2d 369
• Parties: , 12 U.S.P.Q.2d 1282 The MONEY STORE, INC., Plaintiff-Appellant, v. HARRISCORP FINANCE, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 369

885 F.2d 369

15 Fed.R.Serv.3d 139, 12 U.S.P.Q.2d 1282

The MONEY STORE, INC., Plaintiff-Appellant, v. HARRISCORP FINANCE, INC., Defendant-Appellee.

No. 88-3015.

United States Court of Appeals Seventh Circuit.

Argued March 29, 1989.

Decided Sept. 19, 1989.

Richard W. Young, Donald W. Rupert, Kirkland & Ellis, Washington, D.C., Daniel Vittum, Jr., Kirkland & Ellis, Chicago, Ill., William L. Mentlik, Lerner, David, Littenberg, Krumberg, & Mentlik, Westfield, N.J., for plaintiff-appellant.

Richard H. Compere, Dean A. Olds, William, Brinks, Olds, Hofer, Gilson & Lione, Chicago, Ill., for defendant-appellee.

Before POSNER, FLAUM, and RIPPLE, Circuit Judges.

RIPPLE, Circuit Judge.

In 1983, the district court entered an order enjoining The Money Store, Inc. (TMS) from using its federally registered service mark "THE MONEY STORE" in the Chicago metropolitan area because Harriscorp Finance, Inc. (Harris) was a good faith junior user of the mark. In 1988, TMS filed a motion to modify the terms of the injunction so that it could employ the service mark in the Chicago area. The district court denied the motion. We now affirm.

I. BACKGROUND

In April 1974, TMS received a service mark registration from the Patent and Trademark Office to use THE MONEY STORE in connection with moneylending services. Prior to TMS' federal registration of the mark, however, a local Chicago bank had been using the THE MONEY STORE mark. Harris purchased the mark from this bank in January 1974 and established a number of "Money Store" moneylending facilities in Chicago area shopping malls; Harris also advertised under the service mark. In 1977, upon seeking to expand its operations to the Chicago area and finding that another financial institution--Harris--was using the service mark, TMS filed an action in the district court alleging infringement by Harris on TMS' federally registered service mark THE MONEY STORE.

The district court held a bench trial and determined that Harris was a good faith junior user of the service mark and thus entitled to continue using the mark. Accordingly, it entered a permanent injunction preventing TMS from employing THE MONEY STORE in Harris' market area. See The Money Store, Inc. v. Harriscorp Finance, Inc., 212 U.S.P.Q. 436, 439 (N.D.Ill.1980). On appeal to this court (the first appeal), we vacated the judgment and remanded the case in light of an error by the district court in interpreting the validity of Harris' acquisition of the mark and TMS' registration actions taken under the Lanham Act, 15 U.S.C. Secs. 1051 et seq. See The Money Store, Inc. v. Harriscorp Finance, Inc., 689 F.2d 666 (7th Cir.1982). We noted, however, that, on the precise issue of the allocation of service mark usage between Harris and TMS, the district court had correctly determined that Harris could "assert the rights of a good faith junior user in its market area, as that area shall be determined by the district court on remand." Id. at 679. The case thus returned to the district court. Subsequently, that court entered a permanent injunction detailing Harris' rights to the service mark in the Chicago area. See R.Vol. IV at The Money Store, Inc. v. Harriscorp Finance, Inc., No. 77 C 3175 (N.D.Ill. Mar. 9, 1983) (judgment order) [hereinafter Order]. This injunction followed a hearing before the court, and the language of the judgment order completely adopted a Stipulated Motion for Entry of Judgment Order agreed upon by both parties. See Tr. of Feb. 1, 1983; R.Vol. IV at Stipulated Motion for Entry of Judgment Order (dated March 9, 1983).

This injunction stated, inter alia, that (1) TMS possessed a valid United States service mark registration in THE MONEY STORE issued on April 2, 1974, and (2) Harris, nevertheless, was a good faith junior user of the service mark in the Chicago metropolitan area. ¹ The Order also permanently enjoined Harris from using THE MONEY STORE throughout the United States except within the Chicago metropolitan area and, correspondingly, permanently enjoined TMS from using the service mark THE MONEY STORE within the Chicago metropolitan area. ²

In January 1988, TMS filed a motion pursuant to Rule 60(b) of the Federal Rules of Civil Procedure; in this motion, TMS requested that the district court modify the terms of the Order. The district court, the same judge who had overseen this case since its initial filing in 1977 presiding, conducted an evidentiary hearing to examine TMS' claim that Harris had abandoned the mark or so diminished its "Money Store" activities that a material change in circumstances had occurred, warranting modification of the Order. See Tr. of May 25, 1988. To support its motion, TMS presented the testimony of private investigator Thomas Gallo. Id. at 37-45; see also R.V at Gallo Affidavit. He testified that there was no "Money Store" listing in (1) any current Chicago area phone book, (2) the plaintiff-defendant indices of the Circuit Court of Cook County since 1983, (3) the records of the Illinois Secretary of State's office, or (4) Harris' own business directory. Moreover, Mr. Gallo stated that he visited the first floor of the Harris Bank building at 110 West Monroe Street in Chicago and inquired about the location of "The Money Store." According to Mr. Gallo, the receptionist informed him that "The Money Store" was not located there. Mr. Gallo also visited Harris' office in Summit, Illinois and similarly found no one who was aware of "The Money Store."

In its decision, the district court set forth a number of findings of fact and conclusions of law. See R.Vol. V at The Money Store, Inc. v. Harriscorp Finance, Inc., No. 77 C 3175, 1988 WL 96544 (N.D.Ill. Sept. 14, 1988) (memorandum opinion) [hereinafter Mem. op.]. The district court noted that in late 1983, Harris had sold its shopping center facilities to another financial institution, but retained the THE MONEY STORE service mark. After the sale, Harris opted to concentrate its "Money Store" operations on the tenth floor of the Harris Bank building in downtown Chicago. The district court found that the "receptionist at this downtown office answers the phone by saying 'Money Store,' and its invoices, stationery, and business cards all bear the service mark." Mem. op. at 2. Also, as of the date of the hearing, Harris' "Money Store" operation served over 700 customers with more than $20 million in outstanding loans. Furthermore, the "Money Store" had made $5-6 million in new loans within the previous six months. In light of these factors, the district court denied TMS' motion to modify the injunction because TMS had failed to demonstrate an exceptional change in circumstances warranting relief.

II. ANALYSIS

A. Governing Principles

The appellant submits that the district court erred in refusing to modify the 1983 permanent injunction. Therefore, the principles underlying the Supreme Court's decision in United States v. Swift & Co., 286 U.S. 106, 52 S.Ct. 460, 76 L.Ed. 999 (1932), must be our starting point. See United States v. City of Chicago, 663 F.2d 1354, 1359 (7th Cir.1981) (en banc). "In Swift, the Court recognized the inherent power of a court of equity to modify a decree in light of changed circumstances, 'to adapt its restraints to the needs of a new day.' " Chicago, 663 F.2d at 1359 (quoting Swift, 286 U.S. at 113, 52 S.Ct. at 462). ³ "The Swift decision has been codified in the Federal Rules of Civil Procedure." Id. at 1359 n. 16. Before the district court, TMS made its motion for modification under that codification--Rule 60(b)(5). Rule 60(b)(5) states that:

(b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, etc. On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons: ... (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application....

Fed.R.Civ.P. 60(b)(5).

We review decisions by the district court on Rule 60(b)(5) motions under an abuse of discretion standard. See Delaware Valley Citizens' Council v. Pennsylvania, 755 F.2d 38, 41 (3d Cir.), cert. denied, 474 U.S. 819, 106 S.Ct. 67, 88 L.Ed.2d 54 (1985); DeFilippis v. United States, 567 F.2d 341, 343 (7th Cir.1977). Review under this standard is, of course, deferential. However, deferential review does not mean no review at all. See Mars Steel Corp. v. Continental Bank N.A., 880 F.2d 928, 936-37 (7th Cir.1989) (en banc); In re Ronco, Inc., 838 F.2d 212, 217 (7th Cir.1988). We must be satisfied that the district court's decision was guided by established principles of law.

Two fundamental principles are readily distilled from an examination of cases applying Rule 60(b)(5). First, this court has, on numerous occasions, spoken regarding the plaintiff's burden in requesting Rule 60(b)(5) relief: "[M]odification of a permanent injunction is extraordinary relief, and requires a showing of extraordinary circumstances." Chicago, 663 F.2d at 1360; see also Daubert v. Percy, 713 F.2d 328, 329 (7th Cir.1983), cert. denied, 465 U.S. 1026, 104 S.Ct. 1283, 79 L.Ed.2d 686 (1984); Instrumentalist Co. v. Marine Corps League, 694 F.2d 145, 154 (7th Cir.1982); DeFilippis, 567 F.2d at 342; SEC v. Advance Growth Capital Corp., 539 F.2d 649, 652 (7th Cir.1976); accord Klapprott v. United States, 335 U.S. 601, 613, 69 S.Ct. 384, 389, 93 L.Ed. 266 (1949) (opinion of Black, J.). Second, and equally well settled, is the principle that consideration of a motion under Rule 60(b)(5) "does not allow relitigation of issues which have been resolved by the judgment." DeFilippis, 567 F.2d at 343-44; see also, e.g., Instrumentalist, 694 F.2d at 154.

These two principles are simply more precise articulations of the approach of Justice Cardozo in Swift. In that case, the...