Omega World Travel, Inc. v. Omega Travel, Inc., Civ. A. No. 88-0166-R.

• Citation: 710 F. Supp. 169
• Decision Date: 06 April 1989
• Docket Number: Civ. A. No. 88-0166-R.
• Parties: OMEGA WORLD TRAVEL, INC., Plaintiff, v. OMEGA TRAVEL, INC., et al., Defendants.
• Court: U.S. District Court — Eastern District of Virginia

710 F. Supp. 169

OMEGA WORLD TRAVEL, INC., Plaintiff, v. OMEGA TRAVEL, INC., et al., Defendants.

Civ. A. No. 88-0166-R.

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

April 6, 1989.

Mark Pestronk, Pestronk & Associates, Fairfax, Va., for plaintiff.

Michele A. Haley, John F. Rick, Maloney, Yeatts, & Barr, Richmond, Va., for defendants.

MEMORANDUM

MERHIGE, District Judge.

This matter is presently before the Court pursuant to an earlier order of the Court directing plaintiff, Omega World Travel, Inc. ("World"), to show cause why it should not be held in contempt for violation of a consent decree entered in the summer of 1988. The Court proceeds under the long recognized, inherent jurisdiction of federal courts to protect and enforce their orders and judgments. See Riggs v. Johnson County, 73 U.S. (6 Wall.) 166, 187, 18 L.Ed. 768 (1867); see also Central of Ga. Ry. Co. v. U.S., 410 F.Supp. 354, 357 (D.D.C.1976).

World brought this trademark and unfair competition action against Omega Travel, Inc. ("Travel") in March of 1988. On June 8, 1988, prior to the trial of the matter, scheduled for June 15, 1988, the parties joined in a consent decree which was then entered by the Court. The decree specified various limitations on the parties' use of the word "Omega" in marketing their respective travel services in the Richmond, Virginia area. Under the consent decree, World is

enjoined and restrained from using, in connection with sale or provision of travel services, in the city of Richmond and surrounding areas, any service marks, trade names, trademarks, or other name containing the word "Omega" and identifying its services, other than all of the words in its full corporate name as of the date of this Order, except that it may omit the word "Inc." from such identification. The words "Omega" and "World" shall be in the same type face and size.

Consent Decree at 3.

On February 15, 1989, Travel brought a motion for civil contempt sanctions against World on the ground that World's 1989 advertisement in the Bell System's "Yellow Pages" phone directory for "Greater Richmond" appeared to violate the consent decree. Thereafter, on February 17, 1989, the Court entered an order "requesting that Omega World Travel, Inc. show cause why it should not be held in civil contempt for failing and refusing to obey" the consent decree. On March 14, 1989, the parties appeared before the Court at an evidentiary hearing on the issue of World's compliance with the decree.

Discussion

In order to obtain civil contempt relief for violation of a consent decree, a movant must satisfy four elements, viz., (1) the existence of a valid decree of which the alleged contemnor had actual or constructive knowledge; (2) a showing that the decree was in the movant's "favor"; (3) a showing that the alleged contemnor by its conduct violated the terms of the decree, and had knowledge (at least constructive knowledge) of such violation; and (4) a showing that movant suffered harm as a result. See McGoff v. Rapone, 78 F.R.D. 8, 30 (E.D.Pa.1978) (citing Parker v. U.S., 153 F.2d 66, 70 (1st Cir.1946)). World does not deny that the first two of these elements are satisfied and disputes only the third and fourth elements.

Contempt

Uncontroverted evidence was adduced at the hearing that in World's 1989 Yellow Pages ad, the word "Omega" appears in a typeface that is significantly bolder than the typeface of the words "World" and "Travel." In addition, the size of the word "Omega" is at least double that of "World" and "Travel." The evidence also established that the ad was placed and finalized well after the Court's entry of the consent decree. There is no question that the ad plainly violates the terms of the decree. Further, given the time elapsed between entry of the decree and placement of the ad and given the affirmative steps necessary to create and place a Yellow Pages ad, the Court concludes that World had at least constructive knowledge of the violation.

Nevertheless, at the hearing and in its brief, World asserted that it could raise a "complete defense" of substantial compliance pursuant to, e.g., Consolidated Coal Co. v. Local 1702, United Mineworkers of America, 683 F.2d 827, 832 (4th Cir.1982). World argued that its violation was "technical" and resulted from inadvertence. World claimed that it had taken "reasonable steps" to comply with the decree and asserted that the violation was clearly not intentional or willful. Citing Consolidated Coal Co., 683 F.2d at 832, World argued that "a good faith attempt to comply with a court's order is a defense to a civil contempt order, even if those attempts were ineffective."

The Court does not agree that a good faith attempt to comply is a complete defense. In a case subsequent to Consolidated Coal Co., the United States Court of Appeals for the Fourth Circuit stated that "... good faith, alone, does not immunize a party from a civil contempt sanction for noncompliance with a court order." Mclean v. Cent. States, S & S Areas. Pen. Fund., 762 F.2d 1204, 1210 (4th Cir.1985) (citing McComb v. Jacksonville Paper Co., 336 U.S. 187, 191, 69 S.Ct. 497, 499, 93 L.Ed. 599 (1949)).

In any event, based on the testimony elicited at the hearing, the Court finds no evidence that World made a good faith attempt to comply with the order. Travel's witnesses indicated that various World marketing devices other than the offending ad were also in violation of the decree as recently as the week before the hearing. In the Court's view, this additional evidence of non-compliance clearly buttresses its perception that World made, if any, only negligible efforts to comply with the consent decree. World certainly did not take reasonable steps to do so.

The other offending items included a sign on the front of World's Richmond office as well as ticket jackets and travel itineraries regularly given to World's clients. The violations by these items also arise from different typeface and size of the word "Omega" relative to the accompanying words. The fact that some of these violations were remedied only in the week before the hearing, that is, nearly a month after the date of entry of the Court's show cause order, persuades the Court that World continued to make almost no effort, much less a good faith effort to comply with the decree, even after entry of the show cause order. Similarly, the Court sees no basis for ruling that World is in "substantial compliance" with the terms of the consent decree in issue here. Cf. U.S. v. Darwin Const. Co., 679 F.Supp. 531, 536-37 (D.Md.1988). For these reasons, aggravated by the relative permanency of the Yellow Pages ad which will remain in general distribution until late 1989, the Court finds that World is in civil contempt of the consent decree of June 8, 1988.

Damages and Fine

The issue remains whether Travel suffered harm as a result of World's contempt and, if so, what would be a proper remedy. As the district court in McGoff, supra, aptly observed, a civil contempt remedy "has two possible foci: to coerce the noncomplying party into complying and to compensate his adversary for losses suffered as a result of noncompliance." 78 F.R.D. at 29. With respect to coercing future compliance, the only continuing violation is the Yellow Pages ad. However, since the Court obviously has no control over the dissemination and use of the public phone directories, ordering further compliance as a remedy for the Yellow Pages violation is not an option. Rather, the Court must consider the other "foci," i.e. some form of compensation to Travel. See Folk v. Wallace Bus. Forms, Inc., 394 F.2d 240, 244 (4th Cir.1968) ("no one seriously questions the right of the court to award civil contempt damages which have long been recognized" citing inter alia, Parker v. U.S., supra.)

At the hearing, Travel's witnesses established to the Court's satisfaction that current and potential clients of Travel have been confused by the World Yellow Pages ad. Some callers evidently have done business with World whereas their original intent had been to deal with Travel. Not surprisingly, however, Travel was unable to offer any quantification of the harm it suffered from the confusion either in lost business or in loss of good will.

Despite this failure of proof by Travel, the Court is not completely without a basis for awarding monetary relief. The action being one for contempt of a court's decree, the system as well as the movant was harmed by World's neglect of its obligations under the consent decree. An appropriate penalty, therefore, is the imposition of a monetary fine against World. See 18 U.S.C. § 401 (1982):

A court of the United States shall have power to punish by fine ... such contempt of its authority, and none other, as— ... (3) disobedience or resistance to its lawful writ, process, order, rule, decree or command.

The Court will therefore impose against the contemnor, World, a fine of $5,000.00 which, under the equities of this case, will be paid over to Travel. Accord Gordon v. S.S. Vedalin, 346 F.Supp. 1178, 1183 (D.Md.1972). In the Court's view, the pay-over to Travel of the proceeds of a fine against World will work, in part, toward accomplishing the dual objectives of compensating Travel for its losses and denying World the benefits of its wrongdoing.

However, more must be done to accomplish these objectives. The confusion from the offending Yellow Pages ad is causing a continuing reduction, albeit unquantified, in Travel's ability to communicate with existing and potential clients. Simultaneously, to an again unascertained extent, Omega is communicating, with the potential of gaining new clients, with callers who initially wish to deal with Travel.

As a remedy, World will be directed to install a recorded message at the phone number given in World's Yellow Pages ad. The gist of the message will be to inform callers that two similarly named, yet completely discrete,...