Safeway Stores, Inc. v. Safeway Ins. Co.

• Decision Date: 09 May 1985
• Docket Number: No. 79-542-B.,79-542-B.
• Parties: SAFEWAY STORES, INCORPORATED v. SAFEWAY INSURANCE COMPANY.
• Court: U.S. District Court — Middle District of Louisiana

657 F. Supp. 1307

SAFEWAY STORES, INCORPORATED v. SAFEWAY INSURANCE COMPANY.

No. 79-542-B.

United States District Court, M.D. Louisiana.

May 9, 1985.

COPYRIGHT MATERIAL OMITTED

W.S. McKenzie, T/A, Nancy C. Tyler, Taylor, Porter, Brooks & Phillips, Baton Rouge, La., W. Robert Buxton, Robert H. Sloss, Pillsbury, Madison & Sutro, San Francisco, Cal., for plaintiff.

Victor A. Sachse, III, Breazeale, Sachse & Wilson, Baton Rouge, La., Jay G. McMains, Robert Parrillo, Michael J. O'Halloran, Parillo, Weiss & Moss, Chicago, Ill., for defendant.

POLOZOLA, District Judge:

Safeway Stores, Incorporated has filed this suit¹ seeking to enjoin Safeway Insurance Company from infringing its registered service mark "Safeway."² Safeway Insurance Company has denied any liability to the plaintiff and in addition, has filed a counterclaim which seeks injunctive and monetary relief.

I. Background of Dispute

This action was brought by Safeway Stores under the Lanham Act, 15 U.S.C. §§ 1051 et seq.,³ and the anti-dilution statutes of the states of Florida and Illinois.⁴ Safeway Stores contends that the use of its service mark "Safeway" by the defendant is likely to cause consumer confusion. The plaintiff also contends that it is entitled to injunctive relief under the anti-dilution statutes of Florida and Illinois because the use of its mark or trade name by the defendant creates a likelihood of injury to the plaintiff's business reputation and dilutes the distinctive quality of its mark or name even though there is no consumer confusion. Safeway Insurance Company contends that its use of the name Safeway is not a violation of the Lanham Act because it does not cause consumer confusion. Safeway Insurance also contends plaintiff's claim is barred by the doctrines of laches and abandonment. In addition, Safeway Insurance Company has filed six counterclaims against Safeway Stores. Five of these counterclaims were based on federal law and one was based on a Louisiana statute.⁵ In its first counterclaim, Safeway Insurance contends that if the Court finds that there is likelihood of confusion if the name Safeway is used by both parties to this suit, then it is entitled to an injunction under federal commerce law barring Safeway Stores from using the name in those markets where Safeway Insurance adopted or used the name prior to Safeway Stores. The second counterclaim seeks cancellation of Safeway Stores' federal service mark because of alleged misrepresentations made to the United States Patent Office when the service mark was applied for in 1960-1961.⁶ Safeway Insurance asserts a cause of action under 15 U.S.C. § 1120 in its third counterclaim⁷ and seeks attorney's fees for defending this action in its fourth counterclaim.⁸ Safeway Insurance Company's fifth counterclaim is based on 15 U.S.C. § 1125.

II. The Court's Decision

For reasons which follow the Court finds that the use of the name Safeway by Safeway Insurance Company is not likely to cause consumer confusion. The Court also finds no violation of the anti-dilution statutes of Florida and Illinois. Thus, the suit filed by Safeway Stores against Safeway Insurance must be dismissed with prejudice. The Court further finds that the five counterclaims asserted by Safeway Insurance are without merit and must also be dismissed with prejudice.

III. Findings of Fact

The Court now turns to a discussion of the facts and legal issues involved in this case.

A. Stipulated Facts

The parties have stipulated to the following facts in the pretrial order filed with the Court:⁹

Established Facts:

(A) Plaintiff, Safeway Stores, Incorporated, is a Maryland corporation with its principal place of business in California.

(B) Defendant, Safeway Insurance Company, is an Illinois insurance company with its principal place of business in Illinois.

(C) Defendant is in the insurance business presently qualified to do business in either as an admitted insuror sic or surplus line carrier in the states of Arizona, Florida, Illinois, Louisiana, Texas and Nevada.

(D) Defendant, Safeway Insurance Company, is presently writing insurance business in the states of Illinois, Florida, and Louisiana.

(E) Plaintiff, Safeway Stores, Incorporated, has registered the service mark Safeway with the United States Patent and Trademark Office as service mark registration No. 721,716.

(F) Plaintiff has registered its mark under the laws of the states of Washington, Louisiana, Arizona, Florida, and Nevada, among others.

(G) Plaintiff is a supermarket chain selling groceries and other goods and services based in Oakland, California, maintaining at least one retail store in the following states:

Alaska, Arizona, Arkansas, California, Colorado, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Louisiana, Maryland, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Carolina, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia, Washington and Wyoming.

Plaintiff also has locations in Canada and other foreign countries.

(H) Defendant is an insurance company selling auto casualty insurance in the State of Illinois. Defendant also sells auto casualty insurance in the States of Florida and Louisiana. Defendant sells only as a surplus line insurer in Louisiana.

(I) Plaintiff does not operate any store or maintain any office in the State of Illinois. Plaintiff has no present plans to expand in the State of Illinois.

(J) Plaintiff presently has no retail stores in the State of Florida. Plaintiff does maintain an office for the purpose of purchasing produce in the State of Florida.

(K) Plaintiff has 11 stores in the State of Louisiana. These stores are located in or near Monroe (4), West Monroe (2), Bastrop (2), Ruston (2) and Minden (1).

(L) In Louisiana, defendant sells through an employee located in Lafayette, Louisiana.

(M) In Florida, defendant sells through an independent agent located in Miami, Florida.

(N) In Illinois, defendant sells through independent agents in various locations.

(O) Plaintiff adopted the name "Safeway" in 1925 and began using it in 1925 or 1926.

(P) Safeway Mutual Insurance Company was organized, incorporated and licensed by the Illinois Department of Insurance as a mutual company on August 31, 1959.

(Q) The assets of Safeway Mutual Insurance Company were sold on December 28, 1962, and its name changed to Trans-World Mutual Insurance Company.

(R) Safeway Insurance Company was chartered in Illinois as a new company on August 28, 1962.

(S) William Parrillo was a principal in both Safeway Mutual Insurance Company and Safeway Insurance Company.

(T) At the present time the defendant conducts no business under the name "Safeway" other than the sale of auto insurance.

(U) Plaintiff has no present plans to write or market insurance under its name to the public, and defendant has no present intention to enter the business of retail grocery or drug sales.

B. The Court's Findings of Facts

In addition to the stipulated facts set forth above, the Court makes the following additional findings of fact:

Safeway Stores is a Maryland corporation with its principal place of business in Oakland, California. It is one of the largest food retailers in the United States. The plaintiff sells all goods normally expected of a grocery store including food items, non-prescription drugs, food accessories, some personal items and a variety of other merchandise. In its Super Store operation, plaintiff has a pharmacy which sells prescription drugs and other items. Plaintiff has approximately 1,900 retail stores in 25 states, including Louisiana, Arizona, Nevada, Washington, Mississippi and Texas.¹⁰ There are no Safeway Stores in Illinois or Florida. All of the plaintiff's stores display the mark "Safeway" and the associated large red "S" logo.¹¹ Safeway Stores also has approximately 2,000 truck tractors and over 4,000 truck trailers, all of which bear the name and logo of Safeway Stores. These trucks are driven millions of miles per year, particularly in Texas, Arizona, Mississippi, Nevada, Washington and Washington, D.C.¹²

Safeway Stores had an annual advertising budget of $128 million in 1982, most of which was spent on radio, newspaper and television advertising. All advertising features the name "Safeway" or its logo. Some of its advertising features only the "S" logo as is depicted in plaintiff's exhibit 43(B). The name and logo are also set forth on two billion grocery bags per year. A large part of plaintiff's advertising budget is spent on co-op advertising,¹³ and much of plaintiff's advertising is heavily product oriented.

The plaintiff maintains large stores at convenient locations to serve its customers. The stores are prominently identified as Safeway Stores.

Safeway Stores does not sell any type of insurance at its stores and as of the time the suit had not decided on any firm plans to sell insurance in the future through its retail grocery outlets.

Safeway Insurance is an Illinois corporation with its principal place of business in Chicago. It is exclusively in the business of selling automobile insurance, including casualty, collision, comprehensive and uninsured motorist's coverage. At the time of the trial, Safeway Insurance Company was qualified to do business in Illinois, Louisiana,¹⁴ Florida, Texas, Arizona, and Nevada.¹⁵ All of defendant's insurance sales are conducted through independent insurance agencies or brokers. No sales are made directly to the public by Safeway Insurance Company's employees or managing general agents.¹⁶ The defendant has no advertising budget, and does no advertising. Safeway Insurance Company attempts to promote and market its insurance packages to various independent agents. The defendant has a home office in Chicago and small offices in Louisiana and Texas. These offices are properly marked with the Safeway Insurance Company sign.¹⁷ Defendant does no outdoor advertising. Because of its marketing approach, which differs substantially from the...