Pizitz, Inc. v. PIZITZ MERCANTILE CO., ETC.

• Decision Date: 02 April 1979
• Docket Number: Civ. A. No. 77-G-1582-W.
• Citation: 467 F. Supp. 1089
• Parties: PIZITZ, INC., a corporation, Plaintiff, v. PIZITZ MERCANTILE CO. OF TUSCALOOSA, INC., a corporation, Pizitz-Saks Mercantile Company, a corporation, X, Y, and Z, those persons, firms or corporations operating individually or jointly any one or more stores known by the trade name "Pizitz," Defendants.
• Court: U.S. District Court — Northern District of Alabama

467 F. Supp. 1089

PIZITZ, INC., a corporation, Plaintiff, v. PIZITZ MERCANTILE CO. OF TUSCALOOSA, INC., a corporation, Pizitz-Saks Mercantile Company, a corporation, X, Y, and Z, those persons, firms or corporations operating individually or jointly any one or more stores known by the trade name "Pizitz," Defendants.

Civ. A. No. 77-G-1582-W.

United States District Court, N. D. Alabama, W. D.

April 2, 1979.

Thad G. Long, Bradley, Arant, Rose & White, Linda A. Friedman, Birmingham, Ala., for plaintiff.

Olin W. Zeanah, Zeanah, Donald & Hust, Wilbor J. Hust, Jr., Tuscaloosa, Ala., for defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

GUIN, District Judge.

This is an action brought for declaratory and other appropriate relief pursuant to 28 U.S.C. §§ 2201 and 2202. Jurisdiction of this court is invoked under 15 U.S.C. § 1125(a) and 28 U.S.C. § 1338(b), in that plaintiff seeks a declaration of non-infringement and a judicial interpretation of the relative rights of the parties under the law of trademarks and of unfair competition.

This is a most unusual case. Both plaintiff and defendant are in the retail mercantile business. Plaintiff has no outlets within Tuscaloosa County, Alabama; defendant has none without. Plaintiff, Pizitz, Inc., brings this action for adjudication of its dispute with defendant, Pizitz of Tuscaloosa. Plaintiff seeks to enter the Tuscaloosa, Alabama retail market under some form of the name "Pizitz." Defendant contends that the opening of plaintiff's proposed branch store under any form of the name "Pizitz" will confuse and deceive the public, as well as constitute a fraud upon the defendant.

In arriving at its decision in this case, the court has relied upon the representation of Richard Pizitz, President of Pizitz, Inc., that plaintiff will be willing to take steps to minimize the confusion between plaintiff and defendant. Accordingly, the court is of the opinion that plaintiff has manifested its good faith; the court bases its decision on that finding, and in its Order simply asks plaintiff to do what its president offered to do in his testimony before the court. The proposed Order is attached hereto as Exhibit A.

A Final Order will be entered ten days after these Findings of Fact and Conclusions of Law have been filed. If the plaintiff before then files with the Clerk of the Court an affidavit of agreement to the terms of the proposed Order, the court's finding of good faith will stand and the proposed Order will be entered as a Final Order. If the plaintiff does not file its affidavit of agreement, then the court must conclude that the plaintiff is not acting in good faith, and will enter an Order barring the plaintiff from entry into the Tuscaloosa market under any form of the name "Pizitz," attached hereto as Exhibit B.

The court, after hearing the evidence and considering the briefs of counsel, enters the following Findings of Fact and Conclusions of Law:

FINDINGS OF FACT

1. Pizitz, Inc., through its predecessors, was the first business in the state of Alabama to use the name "Pizitz."

2. Pizitz, Inc., was named for its founder, Louis Pizitz, who established plaintiff's business in 1899 in Birmingham under the name "Louis Pizitz Dry Goods Company," and it or its predecessors have been owned and operated by the Birmingham Pizitz family since its establishment.

3. In 1961, at which time plaintiff Pizitz, Inc., knew of defendant's Tuscaloosa operations, the plaintiff incorporated as "Pizitz, Inc.," in the state of Delaware. Plaintiff operates under the name "Pizitz." Four descendants of Louis Pizitz, plaintiff's founder, are involved full time in the business of Pizitz, Inc., and are officers of the corporation: his son and three grandsons.

4. Plaintiff owns and operates six stores in Jefferson County: downtown Birmingham (the largest department store in the state of Alabama), Bessemer (opened in 1955), Roebuck (opened in 1961), Eastwood Mall (opened in 1966), Five Points West (opened in 1968), and Brookwood Mall (opened in 1975).

5. Plaintiff first expanded outside Jefferson County in 1963 when it opened its store in Huntsville, Alabama. Plaintiff presently owns and operates three other stores outside Jefferson County, all within the state of Alabama: Montgomery (opened in 1972 and moved in 1977), Gadsden (opened in 1974), and Florence.

6. Louis Pizitz, plaintiff's founder, was the uncle of Max Pizitz, defendant's founder. Louis Pizitz consigned merchandise to his nephew on credit to be peddled.

7. Around 1915 or 1916, Max Pizitz bought an interest in a Tuscaloosa business called Saks and Company. Its business name was changed to "Pizitz Mercantile," and in 1918 Pizitz-Saks Mercantile Company was incorporated. Max Pizitz and his son, Sam Pizitz, operated the business under the name "Pizitz Mercantile Company."

8. Defendant Pizitz Mercantile Co. of Tuscaloosa, Inc., and its predecessors have owned and operated in the city of Tuscaloosa an established retail business for more than 60 years, and defendant is the successor to the business started by Max Pizitz in 1915 or 1916.

9. Defendant has operated and advertised extensively under the name "Pizitz" for more than 50 years in Tuscaloosa, starting in the 1920's. Defendant advertises primarily under the names "Pizitz of Tuscaloosa" and "Pizitz Tuscaloosa," which appear on its shopping bags, front doors, and sales tickets.

10. Defendant's predecessor began its business in a store in downtown Tuscaloosa. The building is still in use and remains defendant's largest store. There are two other locations, all in Tuscaloosa: Alberta, in the eastern area (opened in 1966), and McFarland Mall, in the southern area (opened in 1968 or 1969).

11. In 1959 the Tuscaloosa Pizitz family sold its interest in the Tuscaloosa store, and since that time the defendant, Pizitz Mercantile Co. of Tuscaloosa, Inc., has not been owned or operated by anyone bearing the surname Pizitz. From 1959 to 1972, the defendant was owned by Jemison Investment Company of Birmingham, which sold the operation to Jack H. Fraley, who is the present owner. Defendant has acquired all rights to the trade name, goodwill, and assets of its predecessors.

12. For several years, both parties have advertised using the name "Pizitz" in script. Both had previously used block letters in displaying the name "Pizitz;" plaintiff changed its logo from block to script earlier than did defendant; plaintiff subsequently altered the form of its script.

13. Plaintiff's color scheme in the use of its logo is a yellow background, with "Pizitz" written in navy; the dot over the first "i" is colored red. This scheme is used on plaintiff's shopping bags, plastic charge cards, delivery trucks, and charge account statement envelopes.

14. Defendant's name typically appears in its advertising in white script inside a dark (black or Ben Day) rectangle; it has less frequently appeared in dark script against a light rectangular background.

15. Plaintiff Pizitz has had minimal direct contact with Tuscaloosa County in the past: it has not advertised on the radio stations there; it has not advertised on the local television station; it has never been included in the local telephone or city directories; it has never had a bank account in Tuscaloosa County; it has never owned or leased property there; it has never paid taxes in the city or county of Tuscaloosa; it has never been a member of the Tuscaloosa Chamber of Commerce or Better Business Bureau. Plaintiff Pizitz has never participated in any way in civic or community life in Tuscaloosa County or the immediate trade area.

16. Plaintiff Pizitz sends its trucks to deliver furniture and appliances to Tuscaloosa on a regular schedule, one day a week for three weeks out of every four. Plaintiff sends small packages into Tuscaloosa via United Parcel Service and U. S. Postal Service parcel post on a continuous basis.

17. Plaintiff Pizitz has approximately 178,000 of its own "Pizitz" charge card accounts in the state of Alabama. Approximately 1,000 of those customers are permanent residents of Tuscaloosa. Approximately 2,000 students at the University of Alabama in Tuscaloosa have charge privileges at Pizitz, Inc., and around 1,400 of those accounts are active. Pizitz, Inc., has more than 15,000 charge accounts bearing mailing addresses with zip codes to be found within a 40-mile radius of the city of Tuscaloosa.

18. Residents of Tuscaloosa are within about 40 miles of the nearest Pizitz, Inc., store, at Westlake Mall in Bessemer; they are within about 55 miles of any of the other five Pizitz, Inc., stores in Jefferson County.

19. Plaintiff, Pizitz, Inc., spends approximately $150,000 annually on television advertising with stations which represent approximately two-thirds of the Tuscaloosa viewing market. Defendant does little television advertising, all on WCFT-TV, Channel 33, in Tuscaloosa.

20. Plaintiff advertises on five Birmingham-based radio stations which share 22 percent of the Tuscaloosa County radio market. Defendant advertises on five local radio stations: WJRD, WTBC, WTUG, WACT, and WNPT.

21. Pizitz, Inc., spends more than $1,100,000 per year on advertising with The Birmingham News, and in recent years has been either the largest or second largest advertiser therein. The Birmingham News has a daily circulation of 1,835 and a Sunday circulation of 3,534 in Tuscaloosa County.

22. Plaintiff Pizitz advertises in The Montgomery Advertiser, which has Tuscaloosa subscribers.

23. Much of plaintiff's advertising features goods not carried by defendant.

24. Plaintiff, Pizitz, Inc., spends approximately $250,000 per year on direct mail advertising of catalogs and other materials. Defendant, Pizitz Mercantile Co. of Tuscaloosa, Inc., is required by Revlon and Estee Lauder to send their direct mail advertising promotions in defendant's billing statements as a condition to defendant's right to carry their lines. Defendant does not...