N.K. Collins, LLC v. William Grant & Sons, Inc.
| Decision Date | 17 July 2020 |
| Docket Number | Civ. No. 19-00386 ACK-RT |
| Court | U.S. District Court — District of Hawaii |
| Parties | N.K. COLLINS, LLC, Plaintiff, v. WILLIAM GRANT & SONS, INC., William Grant & Sons, Ltd., and Does 1-10, Defendants. |
Amalia L. Fenton, Mark S. Davis, Matthew C. Winter, Michael K. Livingston, Thomas M. Otake, Thomas M. Otake AAL, ALC, Julia Kimie Brotman, William G. Meyer, III, Settle Meyer Law, A Limited Liability Law Company, Honolulu, HI, for Plaintiff.
Ian R. Wesley-Smith, Steven M. Egesdal, Erika Susan Gustin, William M. Harstad, Carlsmith Ball LLP Honolulu, Honolulu, HI, for Defendant William Grant & Sons, Inc.
Erika Susan Gustin, William M. Harstad, Carlsmith Ball LLP Honolulu, Honolulu, HI, for Defendant William Grant & Sons Limited.
ORDER GRANTING DEFENDANTS’ MOTIONS FOR PARTIAL SUMMARY JUDGMENT AND JUDGMENT ON THE PLEADINGS, AND DENYING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
Norman Keith Collins was a renowned tattoo artist, known as "Sailor Jerry," who lived and worked in Hawaii until his death in 1973. First Amended Complaint, ECF No. 82 ("Compl."), ¶¶ 1, 10, 16. This case is substantially about who now has the right to use his name, image, and artwork (the "Sailor Jerry IP"). Defendants are two companies that have been using the Sailor Jerry IP for years to market the product "Sailor Jerry rum" and other related merchandise. Compl. ¶ 1. Plaintiff is an organization consisting of Sailor Jerry's heirs, who argue that they have an exclusive legal interest in the Sailor Jerry IP under the 2009 Hawaii Publicity Rights Act and under the common law. Compl. ¶ 1. Plaintiff brought this lawsuit against Defendants alleging that Defendants’ use of the Sailor Jerry IP violates the heirs’ exclusive interest.
Defendants now seek dismissal of each of the claims against them, arguing that (1) the Hawaii Publicity Rights Act cannot be retrospectively applied where Sailor Jerry died decades before its enactment; (2) Plaintiff's claim for unjust enrichment is insufficiently pled; and (3) Plaintiff unreasonably delayed bringing this lawsuit, and all of its claims should be barred under the doctrine of laches. For the reasons set forth below, the Court:
When Sailor Jerry died in 1973, his wife, Mrs. Collins, initiated a probate of his estate. Compl. ¶ 26. Sailor Jerry's personal property consisted of a motorcycle and "1 lot used tattoo machines, designs, stencils, miscellaneous odds and ends," all of which Mrs. Collins purchased for $2,425. Compl. ¶ 26; Laches Motion, Concise Statement of Facts ("CSF"), ECF No. 90, Ex. 7. Any "such property as remain[ed]" was to be distributed in a one-third share to Mrs. Collins, and in a two-thirds share equally among four of Sailor Jerry's children. Compl. ¶ 27; Laches Motion CSF, Ex. 7.
Mrs. Collins subsequently sold the contents of Sailor Jerry's tattoo shop for $20,000 to Michael Malone, an artist that Sailor Jerry had mentored. Compl. ¶ 30. The agreement was made orally and never written down. Compl. ¶ 30. Malone's then-girlfriend, Kate Hellenbrand, provided a $5,000 down payment on Malone's behalf and Malone paid the remainder over the next several years. Compl. ¶ 30. In that sale, Malone purchased "tattoo flash (and all copyright rights therein), tattoo machines, and related items such as needles, some furniture, and miscellaneous office equipment." Compl. ¶¶ 25, 30. The sale did not include "personal items" such as Sailor Jerry's photographs or letters, which Mrs. Collins asked to be returned to her. Compl. ¶ 30.
The critical point of contention now is whether Malone purchased the right to the Sailor Jerry IP. Malone died in 2007, but his 2003 affidavit asserts that he believed he had purchased that right:
Laches Motion CSF, Ex. 1 ("Malone Affidavit"). Mrs. Collins, however, claims that the sale included only physical items in the tattoo shop, and did not include any intangible intellectual property rights or the right to use Sailor Jerry's name "for any purpose."2 Compl. ¶ 30, 31.
After the sale, Malone proceeded on the understanding that he had purchased the rights to use the Sailor Jerry IP. He agreed to share those rights with Ed Hardy, and by 1999 the two had created the entity Sailor Jerry Limited to make and market Sailor Jerry merchandise. Compl. ¶¶ 36-38. Two years later, Sailor Jerry Limited created the product "Sailor Jerry rum" and entered into a distribution agreement with Defendant William Grant & Sons, Inc. Compl. ¶ 39.
Malone and Hardy then assigned their purported interests in the Sailor Jerry IP to the entity Sailor Jerry Limited. Compl. ¶ 40. Defendant William Grant & Sons, Ltd. later purchased Sailor Jerry Limited, including all rights assigned thereto. Compl. ¶¶ 40-42. Defendants William Grant & Sons Inc. and William Grant & Sons Ltd. (collectively, the "WGS Companies") have since continued to market and sell Sailor Jerry rum and other merchandise using the Sailor Jerry IP. Compl. ¶¶ 44-45.
Meanwhile, Mrs. Collins became aware in 1994 that Sailor Jerry's name was being used commercially. At that time, Hardy (Malone's business partner) met with Mrs. Collins to show her a book that he intended to publish about Sailor Jerry, which included letters that Sailor Jerry had written to Hardy. Laches Motion CSF, Ex. 6 ("Collins Dep."), at 37-39. Mrs. Collins was bothered by the book but took no action at that time. Id. at 39; Opp. to Laches Motion at 22 n.20.
Mrs. Collins first became aware of Sailor Jerry rum in 2008 or 2009. She went to a restaurant with her daughter's family and saw a poster of Sailor Jerry's artwork on a bottle of rum. Collins Dep. at 40-41; Ans. to Counterclaim, ECF No. 85, ¶ 20. Mrs. Collins was surprised and went to a Longs Drugstore the next day to examine a bottle of Sailor Jerry rum. Collins Dep. at 41-42. Mrs. Collins believed the use constituted identity theft and contacted several attorneys, but she did not ultimately retain counsel. Id. at 43-44; Opp. to Laches Motion at 7.
Shortly thereafter, Kate Hellenbrand—Malone's girlfriend at the time of the oral contract between Mrs. Collins and Malone—contacted Mrs. Collins. Collins Dep. at 46-47. Hellenbrand had published a book and told Mrs. Collins that the photograph on the bottle of Sailor Jerry rum had been taken from her book. Id. at 47; Opp. to Laches Motion at 6 n.6. Hellenbrand retained an attorney and organized a three-way call with her attorney and Mrs. Collins regarding the use of Sailor Jerry's artwork on the bottle of rum. Collins Dep. at 48-49. Hellenbrand's attorney subsequently sent demand letters to Defendants in 2009, stating that Hellenbrand and Malone "became owners of the Sailor Jerry tattoo business and all related intellectual property in 1973," that Defendants were misappropriating that IP, and that "all this critical information" had been confirmed with Mrs. Collins. Laches Motion CSF, Exs. 4, 5 (demand letters).3
Mrs. Collins did not take any legal action against Defendants prior to filing this lawsuit in 2019. Collins Dep. at 48-49.
In 2018, Mrs. Collins formed the Plaintiff entity N.K. Collins, LLC ("Collins LLC") and is its sole manager. Laches Motion, CSF, Ex. 17. The four children who were to receive a portion of any remainder of Sailor Jerry's estate are each members of Collins LLC, and they, along with Mrs. Collins, assigned all rights and interest in Sailor Jerry's intellectual property, including any right of publicity, to that entity. Compl. ¶ 5. Collins LLC thus alleges that it is "the sole and exclusive owner of all statutory and common law rights and interests in and to Sailor Jerry's Persona." Compl. ¶ 6.
On June 13, 2019, Collins LLC brought this action against the WGS Companies for the WGS Companies’ production and marketing of Sailor Jerry rum and related merchandise using the Sailor Jerry IP. Compl. ¶ 1. Collins LLC filed its initial complaint in Hawaii state court. ECF No. 1-2. The WGS Companies removed the case, ECF No. 1, and filed a series of dispositive motions seeking dismissal of the claims, ECF Nos. 19, 20, 28. The WGS Companies simultaneously filed a motion to stay all discovery pending the resolution of their dispositive motions, ECF No. 25, which the magistrate judge granted, ECF Nos. 39, 57, and which remains in effect.
Meanwhile, prior to the Court's hearing on the dispositive motions, Collins LLC sought leave to file an amended...
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