Nat'l Grange of the Order of Patrons of Husbandry v. Cal. State Grange

• Decision Date: 20 April 2016
• Docket Number: CIV. NO. 2:14-676 WBS AC
• Citation: 182 F.Supp.3d 1065
• Parties: The National Grange of the Order of Patrons of Husbandry, a District of Columbia nonprofit corporation, Plaintiff, v. California State Grange d/b/a "CSG," a California corporation, Defendant.
• Court: U.S. District Court — Eastern District of California

182 F.Supp.3d 1065

The National Grange of the Order of Patrons of Husbandry, a District of Columbia nonprofit corporation, Plaintiff,

v.California State Grange d/b/a "CSG," a California corporation, Defendant.

CIV. NO. 2:14-676 WBS AC

United States District Court, E.D. California.

Signed April 20, 2016

Bruce A. McDonald, PHV, James L. Bikoff, PHV, David Heasley, Smith, Gambrell & Russell, LLP, Washington, DC, Michael L. Turrill, Arent Fox LLP, Losa Angeles, CA, for Plaintiff.

Anthony J. Ellrod, Jenifer C. Wallis, Manning & Kass, Ellron, Ramirez, Trester, Los Angeles, CA, for Defendant.

MEMORANDUM AND ORDER RE: MOTION FOR INJUNCTION

WILLIAM B. SHUBB, UNITED STATES DISTRICT JUDGE

Plaintiff National Grange of the Order of Patrons of Husbandry brought this action against defendant California State Grange for trademark infringement and unfair competition under the Lanham Act. Presently before the court is plaintiff's motion for an injunction pursuant to the Lanham Act, 15 U.S.C. § 1116(a). (Docket No. 126.) For the reasons explained below, plaintiff's motion is GRANTED in part.

I. Factual and Procedural Background

Plaintiff is a national fraternal organization founded in 1867 to promote the interests of farming and agriculture. (July 14, 2015 Order at 1-2 (Docket No. 60).) Plaintiff has grown to a network of approximately 2,000 local chapters across the country, through which it provides a variety of goods and services to agricultural communities. (Id. at 2.) Plaintiff owns numerous registered numerous trademarks featuring the word "Grange," which it uses for associational, educational, and advocacy activities. (Id.)

Plaintiff chartered defendant as its affiliate California state chapter in 1873. (Id.) As a chartered affiliate, defendant collected dues from local subordinate granges and turned over a portion of those dues to plaintiff. (Id.) In 1946, defendant registered as a non-profit corporation with the California Secretary of State. (Huber Decl. ¶ 8, Mar. 22, 2016 (Docket No. 126-3).)

In 2012, a dispute arose between plaintiff and defendant. (Compl. ¶ 5 (Docket No. 1).) As a result, plaintiff revoked defendant's charter and the parties disaffiliated. (Id.¶ 7.) Plaintiff's California-based members subsequently voted to reorganize a California state chapter under the name Grange of the State of California's Order of Patrons of Husbandry, Chartered. (Id.¶ 38.)

Despite the parties' disaffiliation, defendant continued to use its registered corporate name, California State Grange, and represent itself publically as California State Grange on its website, at events, and in its newsletters. (July 14, 2015 Order at 2.) In March 2014, plaintiff filed this action, bringing claims for (1) federal trademark infringement under Section 32 of the Lanham Act, 15 U.S.C. § 1114 ; (2) unfair competition and false designation of origin under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) ; (3) federal trademark dilution under § 43(c) of the Lanham Act, 15 U.S.C. § 1125(c) ; and (4) federal trademark counterfeiting under § 32(1) of the Lanham Act, 15 U.S.C. § 1114(1). (Compl. ¶¶ 48-101.)¹

On July 14, 2015, the court granted plaintiff's motion for partial summary judgment on its claims for trademark infringement and unfair competition and false designation of origin. (July 14, 2015 Order at 12, 19.)² The court then denied plaintiff's motion to enjoin defendant from using the words "Granger," "CSG," and "CG" because summary judgment was limited to the use of "Grange." (Sept. 29, 2015 Order at 4.) On September 29, 2015, the court entered final judgment permanently enjoining "defendant and its agents, affiliates, and assigns, or any party acting in concert with defendant and its agents, affiliates, and assigns from using marks containing the word 'Grange."' (Docket No. 86.)

On October 28, 2015, defendant filed a notice of appeal from the court's judgment and its July 14 and September 29 Orders. (Docket No. 87.) Plaintiff cross-appealed the portion of the court's September 29, 2015 Order limiting injunctive relief to the word "Grange." (Docket No. 90.) The appeals are currently pending before the United States Court of Appeals for the Ninth Circuit. In January 2016, the court denied defendant's motion to stay the injunction pending appeal, holding that plaintiff "would be substantially injured by defendant's continued infringement of its trademark were the court to grant a stay of the injunction." (Jan. 12, 2016 Order at 4 (Docket No. 108).)

Defendant additionally registered with Sacramento County to do business as "California State Guild" and "CSG." (Sept. 29, 2015 Order at 4.) To date, however, defendant continues to use "California State Grange" as its corporate name on file with the California Secretary of State. (McFarland Decl. ¶¶ 12-13, Feb. 22, 2016 ("McFarland I Decl.") (Docket No. 114-1).) Based on defendant's continued use of "California State Grange," among other things, plaintiff brought a motion for an order to show cause why defendant should not be held in contempt for violating the court's injunction. (Docket No. 109.) The court denied that motion without prejudice to plaintiff filing the pending motion and requesting to enjoin defendant's specific conduct based on the issues litigated and evidence presented to the court at the time of the injunction. (Docket Nos. 117, 120, 125.)

Plaintiff now moves to enjoin defendant, its agents, affiliates, and any party acting in concert with defendant, from: (1) using "Grange," "Granger," or "CSG" in conducting business activities or as part of a business, trade, or domain name; (2) using "Grange" in corporate registrations or other filings with any federal, state, or local government; and (3) representing themselves to be the successor to "California State Grange." (Docket No. 126-4.) Plaintiff further requests that defendant (4) remove the name "Grange" from all telephone and business directory listings; (5) include a prominent disclaimer on its website and in all future communications that it is "not affiliated with the California State Grange"; (6) include a hyperlink on its website that redirects users to plaintiff's California-based grange website; and (7) pay plaintiff reasonable attorney's fees in bringing the pending motion and its previous motion for an order to show cause why defendant should not be held in contempt. (Id.)

II. Legal Standards

A. Injunctive Relief Under the Lanham Act

Plaintiff here succeeded on its claims for trademark infringement, 15 U.S.C. § 1114, and unfair competition, 15 U.S.C. § 1125(a), under the Lanham Act. (See July 14, 2015 Order.) Defendant has conceded that its services are identical to those offered by plaintiff and that the use of "Grange" by two California organizations had caused actual confusion among consumers and "great confusion" among local granges. (Id. at 10-11; see also Compl. ¶ 44 ("Defendant's continued use of GRANGE Marks will likely lead to actual confusion among members of the public, since there are two organizations—one legitimately affiliated with the National Grange and one that is not—using the same or substantially similar Grange name and GRANGE Marks to offer the same goods and services to the same members of the public.").) The court thus found that "only one inference can be drawn: defendant's use of ‘Grange’ is likely to cause, and apparently has caused, a reasonably prudent consumer in the marketplace to be confused about the origin of defendant's services." (July 14, 2015 Order at 12.)

"Injunctive relief is the remedy of choice for trademark and unfair competition cases, since there is no adequate remedy at law for the injury caused by a defendant's continuing infringement." Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1180 (9th Cir.1988). The Lanham Act authorizes the court "to grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to prevent the violation" of trademark rights and to prevent unfair competition. 15 U.S.C. § 1116(a).

"[I]f a district court finds infringement, it retains the discretion to fashion any remedy which alleviates that confusion." Interstellar Starship Servs., Ltd. v. Epix, Inc., 304 F.3d 936, 948 (9th Cir.2002). Broad injunctions are especially appropriate where the infringing use is for a similar service. Sandlin, 846 F.2d at 1181. This court thus found that injunctive relief was appropriate to prevent defendant's continued trademark violations and unfair competition. See15 U.S.C. § 1116(a).

B. Injunctive Relief During a Pending Appeal

"[A]n injunction often requires continuing supervision by the issuing court and always a continuing willingness to apply its powers and processes on behalf of the party who obtained that equitable relief." Sys. Fed'n No. 91, Ry. Emp. Dep't, AFL – CIO v. Wright, 364 U.S. 642, 647–48, 81 S.Ct. 368, 5 L.Ed.2d 349 (1961). The court thus has continuing jurisdiction here to "supervise the injunctive relief [it had] granted." Transgo, Inc. v. Ajac Transm'n Parts Corp., 768 F.2d 1001, 1030 (9th Cir.1985).

Defendant appealed the court's judgment on October 28, 2015. (Docket No. 87.) Although an appeal ordinarily divests the district court of jurisdiction over the matters on appeal, Federal Rule of Civil Procedure 62(c) creates an exception to that rule: "While an appeal is pending from an interlocutory order or final judgment that grants, dissolves, or denies 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(c) ; see Nat. Res. Def. Council, Inc. v. Sw. Marine, Inc., 242 F.3d 1163, 1166 (9th Cir.2001).

Rule 62(c) confers upon the district court the power "it has always inherently possessed to preserve the status quo during the pendency of an appeal." Nat. Res. Def. Council, 242 F.3d at 1166. However, the Rule "does not restore jurisdiction to the district court to adjudicate anew the merits...