Singer Mgmt. Consultants Inc. v. Milgram

Decision Date15 June 2011
Docket NumberNo. 09–2238.,09–2238.
PartiesSINGER MANAGEMENT CONSULTANTS, INC.; Live Gold Operations, Inc.,v.Anne MILGRAM, Attorney General of the State of New JerseyLive Gold Operations, Inc., Appellant.
CourtU.S. Court of Appeals — Third Circuit

OPINION TEXT STARTS HERE

William L. Charron, Esquire, (Argued), Pryor Cashman, New York, NY, for Appellant.Jeffrey A. Koziar, Esquire, Andrea M. Silkowitz, Esquire, (Argued), Office of Attorney General or New Jersey, Newark, NJ, for Appellee.Before: McKEE, Chief Judge, SLOVITER, SCIRICA, RENDELL, BARRY, AMBRO, FUENTES, SMITH, FISHER, CHAGARES, JORDAN, HARDIMAN, GREENAWAY JR., VANASKIE, ALDISERT and ROTH, Circuit Judges.

OPINION OF THE COURT

AMBRO, Circuit Judge, with whom SCIRICA, RENDELL, BARRY, FUENTES, SMITH, FISHER, CHAGARES, JORDAN, HARDIMAN, GREENAWAY, JR., and VANASKIE, Circuit Judges, join.

Does a party “prevail” within the meaning of 42 U.S.C. § 1988 if it obtains a temporary restraining order the day after it files suit (after a hearing but before briefing from the opposing side), but 22 days later is denied a preliminary injunction because the opposing party's voluntary change of position moots the case? Because we believe that Supreme Court precedent requires us to answer no, we affirm the same determination by the District Court.1

I. Factual Background and Procedural History

Live Gold Operations, Inc. manages and promotes the music recording and performing groups known as “The Platters” and “The Cornell Gunter Coasters pursuant to licenses of unregistered trademarks. In August 2007, the State of New Jersey learned that Live Gold had scheduled a two-week concert, to begin on August 18, of the Platters and Coasters groups at the Hilton Hotel in Atlantic City. The State informed Live Gold that its use of the trademarks “The Platters” and “The Cornell Gunter Coasters might violate the New Jersey Truth in Music Act, which provides in pertinent part:

A person shall not advertise or conduct a live musical performance or production through the use of an affiliation, connection or association between the performing group and the recording group unless:

(a) The performing group is the authorized registrant and owner of a federal service mark for the group registered in the United States Patent and Trademark Office; or

(b) At least one member of the performing group was a member of the recording group and has a legal right by virtue of use or operation under the group name without having abandoned the name or affiliation of the group; or

(c) The live musical performance or production is identified in all advertising and promotion as a salute or tribute; or

(d) The advertising does not relate to a live musical performance or production taking place in this State; or

(e) The performance or production is expressly authorized by the recording group.

N.J. Stat. Ann. § 2A:32B–2.

Live Gold responded by providing the State with evidence of its ownership of common law unregistered trademarks in each group's name and asserting that the unregistered trademarks should be considered “express authorizations” under subsection (e). Not satisfied that ownership of an unregistered trademark could comply with the Truth in Music Act, the State advised the Hilton Hotel that it could avoid liability under the Act by ticketing and advertising the concert as a “tribute” or “salute” to the Platters and Coasters groups. Hilton complied.

On August 17, 2007, the day before the first Hilton concert, Live Gold sued the State, seeking a TRO and injunctive relief against its enforcement of the Truth in Music Act in the manner it advised. Live Gold argued, among other things, that the State's enforcement of the Act conflicted with the federal Lanham Act, 15 U.S.C. § 1125, and violated its civil rights.

At the TRO hearing before Judge Debevoise, Live Gold asserted that it had the right to conduct performances using its unregistered trademarks, and objected to the State's actions that caused the Hilton to label the groups' performances inaccurately as “tributes” or “salutes.” The State responded that, because Live Gold's unregistered trademarks were not “express authorizations” under the Act, the Hilton concert must be billed as a tribute or salute. Judge Debevoise expressed doubts about the State's position:

That is not what [Live Gold's groups] want to do. That is not what they say accurately describes them. So, in effect, the State is telling the Hilton to advertise or publicize this event in a way which is not in accordance with the description which these promoters of the events say is accurate. ...

I think there is sufficient problem with the State's position so that I—there is a likelihood of success on the merits in this particular case.

...

[T]here may be substantial federal rights being impaired by the action of the State in this case, generally, under the statute ... important federal rights are at issue, both freedom of speech rights under the Lanham Act and private rights to nonregistered trademark—trade name. Consequently, the Temporary Restraining Order will issue.

...

[W]e'll have an opportunity to get to the merits of this case on September 7th.

(Emphasis added.) The TRO “temporarily restrained and enjoined [the State] from interfering in any way with [the Hilton concert], and the marketing and promotion thereof.”

On September 7, 2007, the parties returned to the District Court for a hearing on the preliminary injunction. In its written submission prior to the hearing, the State argued that an unregistered trademark satisfied the Truth in Music Act only if the performing group obtained express authorization from an original group member, included an original member, or denominated itself as a tribute or salute to the original group. The State contended that its interpretation of the Act was consistent with the Lanham Act, the First Amendment, and the Equal Protection Clause of the Fourteenth Amendment. It also objected to Live Gold's suit on jurisdictional grounds.

Judge Debevoise began the preliminary injunction hearing by asking the State why it insisted on distinguishing between registered and unregistered trademarks: “Why shouldn't they proceed on an equal basis, two valid trademarks?” In response, the State contended that because the Lanham Act accorded a rebuttable presumption of validity to registered trademarks, its action here against unregistered trademarks was consistent with federal law. Judge Debevoise repeatedly rejected this argument, explaining that the differences under federal law between registered and unregistered trademarks for purposes of validity did not authorize the State to discriminate against an unregistered trademark, once proven valid. “There's no reason for it,” he declared. Nevertheless, the State continued to press its interpretation of the Truth in Music Act. Judge Debevoise again rejected the State's position, stating, “Well, I fail to see it.”

After rejecting the State's arguments, Judge Debevoise suggested that the State reconcile the Truth in Music Act with the Lanham Act by interpreting subsection (e) of the former to permit unregistered trademark holders to perform under their group names without any additional requirements. The State suddenly capitulated, effectively adopting Live Gold's interpretation of the Act. Incredulous, Live Gold objected that the State had made “a 180 degree shift in position.” Judge Debevoise agreed, telling the State that the position in its brief was “contrary to what I [just] understood you to say.” In response, the State explained that its previous position “was inadvertently put into the brief.” The Judge then declared that the State would be “bound” by its new interpretation of the Act.

Live Gold then moved for summary disposition, contending that it “should win” because the State had “admitt[ed] the allegations” in the complaint. Judge Debevoise observed that the State's new position resolved the “basic legal problem, which was an equal protection problem, a First Amendment problem, [and] a due process problem.” He again took note of the State's “evolved” position, but saw no need to “go any further.” He then announced:

We have a statement by the State of New Jersey as to what the meaning of this statute is insofar as it relates to common law trademarks, and I think we've stated it. If there's a valid common law trademark under the Lanham Act, and if whoever has possession of it can establish a right to that possession, he is to be treated—or she is to be treated in the same way as the holder of a registered trademark. Now, no necessity of—to say or give any tribute to anybody. So we have an agreement on that.

The Court then vacated the TRO, which had already expired “by its own term [s] [after] 10 days, and ... was directed primarily to the August performance at the Hilton.” Having secured the State's position going forward, Judge Debevoise left open the option of continuing consideration of the preliminary injunction, but he found no need to convert the TRO to a preliminary injunction at that time.

Subsequently, Pryor Cashman LLP sought leave to move for an award of its attorney's fees and costs incurred in representing Live Gold. The issue was referred to Magistrate Judge Salas, who denied Pryor Cashman's application, concluding that Live Gold was not a “prevailing party under 42 U.S.C. § 1988(b) because the State had voluntarily changed its position on the meaning of the Truth in Music Act.

Live Gold sought review of Judge Salas's order by the District Court. The State filed a motion to dismiss. Judge Debevoise addressed both issues in a hearing on March 16, 2009. At that hearing, he first addressed the State's motion to dismiss. Seeking to identify any unresolved constitutional issues, he asked the State to confirm that [e]ven though...

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